INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 80B   SPECIAL PROVISIONS RELATING TO BENEFICIAL OWNERSHIP OF, OR RIGHTS ATTACHED TO, SHARES  

80B(1)   [Operation]  

For the purposes of the application of section 80A in determining whether a loss or part of a loss incurred by a company in a year before the year of income is to be taken into account, the succeeding provisions of this section have effect.

80B(2)  

80B(3)   [Death of beneficial owner]  

Shares in the company that were beneficially owned by a person at any time shall be deemed to have been beneficially owned by the same person at a later time if the person has died and, at that later time, the shares were owned by the trustee of his estate in his capacity as trustee of that estate or were beneficially owned by a person who received the shares as a beneficiary in that estate.

80B(4)  

80B(5)   [Commissioner's power to disregard beneficial ownership]  

Where -


(a) the company claims that a person beneficially owned shares in the company at a time during the year in which the loss was incurred and also beneficially owned shares in the company at a time (in this subsection referred to as the relevant time ) during the year of income;


(b) before or during the year of income, an agreement was entered into, or a right, power or option (including a contingent right, power or option) was granted, being an agreement, right, power or option that, in any way, directly or indirectly, related to, affected, or depended for its operation on -


(i) the beneficial interest of that person in the last-mentioned shares, or the value of that interest;

(ii) the right of that person to sell, or otherwise dispose of, that interest, or any such sale or other disposition;

(iii) any rights carried by those shares, or the exercise of any such rights; or

(iv) any dividends that might be paid, or any distribution of capital that might be made, in respect of those shares, or the payment of any such dividends or the making of any such distribution of capital; and


(c) the agreement was entered into, or the right, power or option was granted or acquired, for the purpose, or for purposes that included the purpose, of enabling the company to take into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA a loss that the company had incurred in a year before the year in which the agreement was entered into or the right, power or option was granted or a loss that the company might incur in that last-mentioned year,

the Commissioner may, subject to the succeeding provisions of this section, treat those shares as not having been beneficially owned by that person at the relevant time.

80B(6)   [Shares ceasing to carry rights]  

Where the Commissioner is satisfied that, by virtue of a provision in the constituent document of the company as in force at any time during the year of income or by virtue of an agreement made before the end of the year of income between persons who at the time when the agreement was made were, or since that time have become, beneficial owners of shares in the company, shares in the company that -


(a) were beneficially owned at any time during the year of income by persons who beneficially owned any shares in the company at all times during the year in which the loss was incurred; and


(b) carried any rights at all times during the year of income,

have ceased, or will or may cease, at any time after the end of the year of income, to carry those rights, the shares shall be deemed not to have carried those rights at any time during the year of income.

80B(7)   [Shares commencing to carry rights]  

Where the Commissioner is satisfied that, by virtue of a provision in the constituent document of the company as in force at any time during the year of income or by virtue of an agreement made before the end of the year of income between persons who at the time when the agreement was made were, or since that time have become, beneficial owners of shares in the company, shares in the company have commenced, or will or may commence, at any time after the end of the year of income, to carry rights that those shares did not carry at a time during the year of income -


(a) if the shares were not beneficially owned at any time during the year of income by persons who beneficially owned any shares in the company at all times during the year in which the loss was incurred - the shares shall be deemed to have carried those rights at all times during the year of income; and


(b) in any other case - the Commissioner may, if he considers that, having regard to all the circumstances, it is reasonable to do so, treat the shares as having carried those rights at all times during the year of income.

80B(8)   [Redeemable shares disregarded]  

In ascertaining whether a person, being a person who beneficially owned shares in the company at all times during the year in which the loss was incurred, beneficially owned any shares in the company at all times during the year of income, any shares (other than shares allotted by the company before the year in which the loss was incurred) that are, or at the option of the company are to be, liable to be redeemed shall be disregarded.

80B(8A)   [Shareholder rights after certain changes in company status]  

A person is not prevented from:


(a) beneficially owning shares in a company; or


(b) having the right to exercise voting power in a company; or


(c) having the right to receive any dividends that may be paid by a company; or


(d) having the right to receive any distribution of capital of a company;

merely because:


(e) the company is or becomes:


(i) an externally-administered body corporate within the meaning of the Corporations Law (as set out in section 82 of the Corporations Act 1989 ); or

(ii) a body with a similar status, under the Companies Code of the relevant State or a foreign law, to an externally-administered body corporate; or


(f) either:


(i) a provisional liquidator is appointed to the company under section 472 of the Corporations Law (as set out in section 82 of the Corporations Act 1989 );

(ii) a person with a similar status, under the Companies Code of the relevant State or a foreign law, to a provisional liquidator is appointed to the company.

80B(8B)   [Stakeholder rights after certain changes in company status]  

A company (the stakeholding company ) is not prevented from:


(a) beneficially owning shares, or any other interests in shares, in another company; or


(b) having the right to exercise voting power in another company either directly or indirectly; or


(c) having the right to receive, either directly or indirectly, any dividends that may be paid by another company; or


(d) having the right to receive, either directly or indirectly, any distribution of capital of another company;

merely because:


(e) the stakeholding company is or becomes:


(i) an externally-administered body corporate within the meaning of the Corporations Law (as set out in section 82 of the Corporations Act 1989 ); or

(ii) a body with a similar status, under the Companies Code of the relevant State or a foreign law, to an externally-administered body corporate; or


(f) either:


(i) a provisional liquidator is appointed to the stakeholding company under section 472 of the Corporations Law (as set out in section 82 of the Corporations Act 1989 ); or

(ii) a person with a similar status, under the Companies Code of the relevant State or a foreign law, to a provisional liquidator is appointed to the stakeholding company.

80B(9)   [Application to s 80A(5)]  

In so far as subsections (5), (6), (7) and (8) have effect for the purposes of the application of subsection 80A(5) in determining whether a part of a loss incurred by a company in a year before the year of income is to be taken into account, a reference in those subsections to the year in which the loss was incurred shall be read as a reference to the part of that year referred to in subsection 80A(5) .

80B(10)   [Agreement, right, power, option]  

A reference in this section to an agreement, right, power or option shall be read as including a reference to an agreement, right, power or option that is not enforceable by legal proceedings whether or not it was intended to be so enforceable.

80B(11)   [Agreement]  

For the purposes of this section, an arrangement or understanding, whether formal or informal and whether express or implied, shall be deemed to be an agreement.


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