INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

Division 1AA - Interpretative provisions relating to exempting companies and former exempting companies  

SECTION 160APHBD   ACCOUNTABLE INTERESTS  

160APHBD(1)   [Identifying relevant interests]  

The purpose of this section is to identify which interests in shares in a company are relevant in determining whether the company is effectively owned by prescribed persons.

160APHBD(2)   [``accountable interest'']  

An interest in a share in a company is an accountable interest if it is not an excluded interest.

160APHBD(3)   [``excluded interest'']  

An interest in a share in a company is an excluded interest if, having regard to:

(a) the purposes for which the interest was granted; and

(b) the nature of the interest; and

(c) any special or limited rights connected with or arising from:

(i) the interest; or

(ii) other shares, or interests in other shares, in the company held by the holder of the interest; or

(iii) shares, or interests in shares, in the company held by persons other than the holder of the interest;

including rights that are conferred or exercisable only if the holder of the interests or shares concerned is, or is not, a prescribed person; and

(d) the extent to which the interest is similar to or differs from beneficial ownership; and

(e) the relationship between the value of the interest and the value of the company; and

(f) any relationship or connection (whether of a personal or business nature) between holders of interests in shares in the company, and the holders of shares in the company, of which the company is aware; and

(g) any arrangement in respect of shares (including unissued shares) in the company, or interests in shares in the company, of which the company is aware;

it would be reasonable to conclude that the interest is not relevant in determining whether the company is effectively owned by prescribed persons because holding the share to which the interest relates does not involve the holder bearing the risks, or result in the accrual to the holder of the opportunities, of ownership of the company that ordinarily arise from, or are ordinarily attached to, the holding of ordinary shares in a company.

160APHBD(4)   [Trustees]  

In applying subsection (3), the fact that a person is a trustee is to be disregarded.

160APHBD(5)   [Excluded interest on other grounds]  

Without limiting subsection (3), an interest in an accountable share in a company is also an excluded interest if it was granted or otherwise created, or was transferred or acquired, for a purpose (other than an incidental purpose) of ensuring that the company is not effectively owned by prescribed persons.