INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 167 - Companies whose shares carry unequal rights to dividends, capital distributions or voting power  

Subdivision 167-A - Rights to dividends or capital distributions  

Operative provisions

SECTION 167-20   Second way - also disregard secondary share classes  

167-20(1)  
This section applies in relation to each unequally structured company if:


(a) despite section 167-15 , the unsatisfied condition cannot be worked out; and


(b) on the last day of the test period or at the test time (as appropriate), there is *on issue in that company one or more classes of *shares (the secondary share classes ) other than:


(i) the class or classes of ordinary or common shares that represent the majority of that company ' s value; and

(ii) *debt interests; and


(c) it is reasonable to conclude that the total *market value of the secondary share classes does not exceed 25% of the total market value of all of that company ' s shares (other than debt interests); and


(d) for one or more of the secondary share classes, it is reasonable to conclude that the market value of each of them does not exceed 10% of the total market value of all of that company ' s shares (other than debt interests).

Note:

This section can apply separately for each unequally structured company.

167-20(2)  
For the purposes of subsection (1), use *market values on the last day of the test period, or at the test time, (as appropriate).

167-20(3)  
The unsatisfied condition may be reconsidered by disregarding:


(a) those of the secondary share classes that, under paragraph (1)(d), caused this section to apply; and


(b) any *debt interests in that company.

167-20(4)  
The way an entity prepares its *income tax return is sufficient evidence of it choosing to work out the unsatisfied condition under subsection (3).


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