Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-95 - VALUE SHIFTING  

Division 727 - Indirect value shifting affecting interests in companies and trusts, and arising from non-arm ' s length dealings  

Subdivision 727-E - Key concepts  

Ultimate controller

SECTION 727-355   Control (for value shifting purposes) of a company  

50% stake test

727-355(1)  
An entity controls (for value shifting purposes) a company if the entity, or the entity and its * associates between them:


(a) can exercise, or can control the exercise of, at least 50% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or


(b) have the right to receive (either directly, or indirectly through one or more interposed entities) at least 50% of any dividends that the company may pay; or


(c) have the right to receive (either directly, or indirectly through one or more interposed entities) at least 50% of any distribution of capital of the company.

40% stake test

727-355(2)  
An entity also controls (for value shifting purposes) a company if the entity, or the entity and its * associates between them:


(a) can exercise, or can control the exercise of, at least 40% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or


(b) have the right to receive (either directly, or indirectly through one or more interposed entities) at least 40% of any dividends that the company may pay; or


(c) have the right to receive (either directly, or indirectly through one or more interposed entities) at least 40% of any distribution of capital of the company;

unless an entity (other than the first entity and its associates) either alone or together with its associates in fact controls the company.

Actual control test

727-355(3)  
An entity also controls (for value shifting purposes) a company if the entity, either alone or together with its * associates, in fact controls the company.


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