Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-B - Working out the taxable income and tax loss for the income year of the change  

When a company must work out its taxable income and tax loss under this Subdivision

SECTION 165-37   Who has more than a 50% stake in the company during a period  

165-37(1)  


If:


(a) there are persons who had *more than 50% of the voting power in the company during the whole of a period (the ownership test period ) consisting of the income year or a part of it; and


(b) there are persons who had rights to *more than 50% of the company ' s dividends during the whole of the ownership test period; and


(c) there are persons who had rights to *more than 50% of the company ' s capital distributions during the whole of the ownership test period;

those persons had more than a 50% stake in the company during the ownership test period.

Note:

Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

165-37(2)  
To work out whether a condition in subsection (1) was satisfied during the *ownership test period, apply the primary test for that condition unless subsection (3) requires the alternative test to be applied.

For the primary tests: see subsections 165-150(1) , 165-155(1) and 165-160(1) .

165-37(3)  


Apply the alternative test for that condition if one or more other companies beneficially owned *shares, or interests in shares, in the company at any time during the *ownership test period.

For the alternative tests: see subsections 165-150(2) , 165-155(2) and 165-160(2) .

Conditions in subsection (1) may be treated as having been satisfied in certain circumstances

165-37(4)  


If any of the conditions in subsection (1) have not been satisfied, those conditions are taken to have been satisfied if:


(a) they would have been satisfied except for the operation of section 165-165 ; and


(b) the company has information from which it would be reasonable to conclude that less than 50% of the *notional loss for the *ownership test period has been reflected in deductions, capital losses, or reduced assessable income, that occurred, or could occur in future, because of the happening of any *CGT event in relation to any *direct equity interests or *indirect equity interests in the company during that period.

165-37(4A)  


If the company is:


(a) a *non-profit company; or


(b) a *mutual affiliate company; or


(c) a *mutual insurance company;

during the whole of the *ownership test period, the conditions in paragraphs (1)(b) and (c) are taken to have been satisfied by the company.

Time of happening of CGT event

165-37(5)  


The happening of a *CGT event in relation to a *direct equity interest or *indirect equity interest in the company that results in the failure of the company to satisfy a condition in subsection (1) is taken, for the purposes of paragraph (4)(b), to have occurred during the *ownership test period.

165-37(6)  
(Repealed by No 143 of 2007 )


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