INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIAA - FRANKING OF DIVIDENDS  

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

SECTION 160APHBG   PERSONS WHO ARE TAKEN TO BE PRESCRIBED PERSONS  

160APHBG(1)   [Persons not prescribed persons under sec 160APHBF]  

This section applies to a person that:


(a) is a company, a trustee, or a partnership, that holds shares (whether accountable shares or excluded shares) or interests in shares (whether accountable interests or excluded interests) in a company (the relevant company ); and


(b) is not a prescribed person under section 160APHBF .

160APHBG(2)   [Companies]  

A company (the shareholding company ) that holds shares, or interests in shares, in the relevant company is taken to be a prescribed person in relation to the relevant company if the risks involved in, and the opportunities resulting from, holding the shares or interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

160APHBG(3)   [Trustees - risks and opportunities]  

A trustee of a trust who holds shares, or interests in shares, in the relevant company is taken to be a prescribed person in relation to the relevant company if the risks involved in, and the opportunities resulting from, holding the shares or interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

160APHBG(4)   [Trustees - control and beneficiaries]  

A trustee of a trust who holds shares, or interests in shares, in the relevant company is taken to be a prescribed person in relation to the relevant company if:


(a) unless subsection (7) applies, the trust is controlled by one or more persons who are prescribed persons; or


(b) all the beneficiaries who are presently entitled to, or during the relevant year of income become presently entitled to, income from the trust are prescribed persons.

160APHBG(5)   [Exercise of powers]  

In determining whether subsection (3) or (4) applies in respect of a trust that is controlled by a person, regard is to be had to the way in which the person, or any associate of the person, exercises powers in relation to the trust.

160APHBG(6)   [Control of a trust]  

A person controls a trust if:


(a) the person has the power, either directly, or indirectly through one or more interposed entities, to control the application of the income, or the distribution of the property, of the trust; or


(b) the person has the power, either directly, or indirectly through one or more entities, to appoint or remove the trustee of the trust; or


(c) the person has the power, either directly, or indirectly through one or more entities, to appoint or remove beneficiaries of the trust; or


(d) the trustee of the trust is accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the person or of an associate of the person.

160APHBG(7)   [Where para (4)(a) does not apply]  

Paragraph (4)(a) does not apply in relation to a trust if some of the beneficiaries receiving income from the trust are not prescribed persons and the Commissioner considers that it is reasonable to conclude that the risks involved in, and the opportunities resulting from, holding the shares and interests in the relevant company are substantially borne by, or substantially accrue to, as the case may be, one or more persons who are not prescribed persons.

160APHBG(8)   [Partnerships]  

A partnership that holds shares, or interests in shares, in the relevant company is taken to be a prescribed person in relation to the relevant company if the risks involved in, and the opportunities resulting from, holding the shares or interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

160APHBG(9)   [Companies]  

If any of the prescribed persons referred to in subsection (2), (3), (4) or (6) is a company, that subsection applies even if the risks involved in, and the opportunities resulting from, holding any of the shares, or interests in shares, in that company are substantially borne by, or substantially accrue to, as the case may be, one or more persons who are not prescribed persons.

160APHBG(10)   [Exempt institutions]  

An exempt institution whose exempt status is disregarded under subsection 160ARDAB(1) cannot be taken to be a prescribed person in relation to a company under this section.


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