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 167-25   Third way - treat remaining shares as having fixed rights to dividends and capital distributions  

When this section applies

167-25(1)  
This section applies if, despite sections 167-15 and 167-20 , the unsatisfied condition cannot be worked out for the test period or test time (as appropriate). How to fix rights to dividends and capital distributions

167-25(2)  
The unsatisfied condition may be reconsidered by applying subsections (3) and (4) to each unequally structured company. When doing this for an unsatisfied condition listed in subsection 167-10(1) , assume:


(a) that the test period consists only of the valuing times worked out under section 167-40 ; and


(b) that each of those valuing times is a test time.

167-25(3)  
Firstly, disregard any *debt interests in that company and any of its *shares that can be disregarded under subsection 167-20(3) .

167-25(4)  
Secondly, treat each of that company ' s remaining *shares *on issue at the test time as having at that time the percentage of the rights to receive *dividends, and capital distributions, worked out either:


(a) under section 167-30 ; or


(b) under section 167-35 if:


(i) it is not reasonably practicable to work out the market values of each of those remaining shares; or

(ii) the sum of the *market values of all of those remaining shares is nil.
Note:

The remaining shares are those remaining after disregarding the shares mentioned in subsection (3).

Evidence of a choice under this section

167-25(5)  
The way an entity prepares its *income tax return is sufficient evidence of it choosing to work out the unsatisfied condition under this section.


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