INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 166 - Income tax consequences of changing ownership or control of a widely held or eligible Division 166 company  

Subdivision 166-D - Tests for finding out whether the widely held or eligible Division 166 company has maintained the same owners  

Corporate change in a company

SECTION 166-175   Corporate change in a company  

Meaning of corporate change

166-175(1)  
There is a corporate change in a company if:


(a) there is a *takeover bid for *shares in the company; or


(b) there is a scheme of arrangement, involving more than 50% of the company ' s shares, that has been approved by a court; or


(c) there is any other arrangement, involving the acquisition of more than 50% of the company ' s shares, that is regulated under the Corporations Act 2001 or a *foreign law; or


(d) there is an issue of *shares in the company that results in an increase of 20% or more in:


(i) the issued share capital of the company; or

(ii) the number of the company ' s shares on issue; or


(e) there is a corporate change in another company which beneficially owns one or more of the following stakes in the first company:


(i) a *voting stake that carries rights to more than 50% of the voting power of the first company;

(ii) a *dividend stake that carries rights to receive more than 50% of any dividends the first company may pay;

(iii) a *capital stake that carries rights to receive more than 50% of any distribution of capital of the first company;
(whether the other company owns those stakes directly, or *indirectly through one or more interposed entities).
Note:

For paragraph (e), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

When a corporate change ends

166-175(2)  
A *corporate change ends :


(a) if paragraph (1)(a) applies (or paragraph (1)(e) applies because of paragraph (1)(a)) - at the latest time when a *bid period of the *takeover bid ends; and


(b) if paragraph (1)(b) or (c) applies (or paragraph (1)(e) applies because of paragraph (1)(b) or (c)) - when the scheme of arrangement or other arrangement ends; and


(c) if paragraph (1)(d) applies (or paragraph (1)(e) applies because of paragraph (1)(d)) - when the offer period for the issue of *shares ends.


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