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INCOME TAX ASSESSMENT ACT 1997 - SECT 725.320

Consequences for down interest or up interest as a revenue asset

  (1)   The consequences of the * direct value shift for your * revenue assets are of one or more of these 3 kinds:

  (a)   the * adjustable values of * down interests of which you are an * affected owner are reduced (see subsection   (2));

  (b)   the adjustable values of * up interests of which you are an affected owner are uplifted (see subsection   (3));

  (c)   one or more * taxing events generating a gain for down interests of which you are an affected owner (see subsection   (5)).

Effect of reduction or uplift of adjustable value

  (2)   If the * adjustable value of a * down interest that is your * revenue asset is decreased under section   725 - 335, you are treated as if:

  (a)   * immediately before the * decrease time, you had sold the interest to someone else for its * adjustable value immediately before the decrease time; and

  (b)   immediately afterwards, you had bought the interest back for the reduced adjustable value; and

  (c)   from the time when you bought it back, the interest continued to be a revenue asset, for the same reasons as it was a revenue asset before you sold it.

  (3)   If the * adjustable value of an * up interest that is your * revenue asset is uplifted under section   725 - 335, you are treated as if:

  (a)   * immediately before the * increase time, you had sold the interest to someone else for its * adjustable value immediately before the increase time; and

  (b)   immediately afterwards, you had bought the interest back for the uplifted adjustable value; and

  (c)   from the time when you bought it back, the interest continued to be a revenue asset, for the same reasons as it was a revenue asset before you sold it.

  (4)   However, the uplift in * adjustable value is taken into account only to the extent that the amount of the uplift is still reflected in the * market value of the interest when it is disposed of or otherwise realised.

Taxing event generating a gain

  (5)   For each * taxing event generating a gain under an item in the table in subsection   725 - 335(3), the gain is included in your assessable income for the income year in which the * decrease time happens.


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