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INCOME TAX ASSESSMENT ACT 1997 - SECT 727.800

Uplift under the attributable increase method

             (1)  This section sets out how to work out the amount (if any) by which the * adjustable value of an * affected interest in the * gaining entity is uplifted.

             (2)  First, work out under section 727- 805 whether the * indirect value shift has produced for the owner of the interest a * disaggregated attributable increase in the * market value of the interest.

             (3)  If it has not, the interest's * adjustable value is not uplifted because of the * indirect value shift.

             (4)  If it has, the * adjustable value is uplifted by the amount worked out using the scaling-down formula in section 727- 810, subject to the rest of this section.

Note:          The uplift will be less than or equal to the disaggregated attributable increase.

Cap if interest has both a disaggregated attributable increase and a disaggregated attributable decrease

             (5)  If the * indirect value shift has also produced for the owner of the interest a * disaggregated attributable decrease in the * market value of the interest, the interest's * adjustable value:

                     (a)  is not uplifted if it is not also reduced under this Division because of the indirect value shift; and

                     (b)  if it is also reduced under this Division because of the indirect value shift--is not uplifted by more than the reduction.

Cap based on notional distribution by gaining entity of dividends or capital equal to total reductions in adjustable value of affected interests in losing entity

             (6)  However, the interest's * adjustable value is not uplifted by more than the greater of these amounts:

                     (a)  the amount (if any) that the * affected owner of the interest would receive (directly, or indirectly through one or more interposed entities) in respect of the interest if:

                              (i)  the * gaining entity were to pay as * dividends, at the time (the payment time ) immediately before the * IVS time, an amount (the total reduction amount ) equal to the total of the amounts by which the * adjustable values of * equity or loan interests in the * losing entity are reduced under this Subdivision because of the * indirect value shift; and

                             (ii)  those dividends were successively paid or distributed at the payment time by each entity interposed between the gaining entity and that affected owner; and

                     (b)  the amount (if any) that the * affected owner of the interest would receive (directly, or indirectly through one or more interposed entities) in respect of the interest if:

                              (i)  the gaining entity were to pay the total reduction amount at the payment time as a distribution of capital; and

                             (ii)  that capital was successively paid or distributed at the payment time by each entity interposed between the gaining entity and that affected owner.

          (6A)  The reduction of * adjustable value that is to be taken into account under subparagraph (6)(a)(i) for an * equity or loan interest in the * losing entity is:

                     (a)  if the interest is * trading stock immediately before the * IVS time--the one worked out on the basis of the interest's adjustable value under subsection 727-835(2); or

                     (b)  otherwise--the greater or greatest of these:

                              (i)  the reduction of the interest's * cost base;

                             (ii)  the reduction of the interest's * reduced cost base;

                            (iii)  the reduction (if any) worked out on the basis of the interest's adjustable value under subsection 727-840(2) (about revenue assets).

Uplift not to exceed reasonable amount

             (7)  If the uplift worked out as provided in subsections (4), (5) and (6) is not reasonable in the circumstances, having regard to the objects of this Division, the interest's * adjustable value is instead uplifted by an amount that is reasonable in the circumstances, having regard to those objects.

Note:          The main object of this Division is set out in section 727- 95.



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