INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17B - Disposal of small business assets: proceeds used for retirement  

Subdivision E - Definitions  

SECTION 160ZZPZP   CONTROLLING INDIVIDUAL  

160ZZPZP(1)   [Meaning set out]  

This section sets out the meaning of controlling individual of (in turn) a company, a fixed trust and any other trust.

160ZZPZP(2)   Companies.  

An individual is the controlling individual of a company at a particular time if, at that time, the individual:

(a) is an employee (see subsection (6)) of the company; and

(b) holds all of the legal and equitable interests in shares that carry (between them) the right to exercise at least 50% of the voting power in the company; and

(c) holds all of the legal and equitable interests in shares that carry (between them) the right to receive at least 50% of any dividends that the company may pay; and

(d) holds all of the legal and equitable interests in shares that carry (between them) the right to receive at least 50% of any distribution of capital of the company.

160ZZPZP(3)   Control of fixed trusts.  

An individual is the controlling individual of a fixed trust (see subsection (5)) at a particular time if, at that time, the individual:

(a) is an employee (see subsection (6)) of the trust; and

(b) has, for his or her own benefit, entitlements to at least a 50% share of the income of the trust; and

(c) has, for his or her own benefit, entitlements to at least a 50% share of the capital of the trust.

160ZZPZP(4)   Control of other trusts.  

An individual is the controlling individual of a trust, other than a fixed trust, at a particular time (the test time ) if:

(a) the individual is an employee (see subsection (6)) of the trust at the test time; and

(b) the trust passes the pattern of distributions test, for the test year, in relation to the individual (see section 160ZZPZQ ).

160ZZPZP(5)   Fixed trust.  

A trust is a fixed trust if persons have entitlements to all of the income and capital of the trust.

160ZZPZP(6)   Employee.  

In this section:

employee
has the same meaning as in the Superannuation Guarantee (Administration) Act 1992 , except that subsection 12(11) of that Act is to be disregarded.

160ZZPZP(7)   Redeemable shares to be disregarded.  

For the purposes of subsection (2), a person who, at a particular time, holds a legal or equitable interest in a share:

(a) that is liable to be redeemed; or

(b) that, at the option of the company that issued it, is liable to be redeemed;

is taken not to hold the interest at that time.