INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 703 - Consolidated groups and their members  

Basic concepts  

SECTION 703-30   When is one entity a wholly-owned subsidiary of another?  

703-30(1)  
One entity (the subsidiary entity ) is a wholly-owned subsidiary of another entity (the holding entity ) if all the * membership interests in the subsidiary entity are beneficially owned by:


(a) the holding entity; or


(b) one or more wholly-owned subsidiaries of the holding entity; or


(c) the holding entity and one or more wholly-owned subsidiaries of the holding entity.

703-30(2)  
An entity (other than the subsidiary entity) is a wholly-owned subsidiary of the holding entity if, and only if:


(a) it is a wholly-owned subsidiary of the holding entity; or


(b) it is a wholly-owned subsidiary of a wholly-owned subsidiary of the holding entity;

because of any other application or applications of this section.

Note:

This Part also operates in some cases as if an entity were a wholly-owned subsidiary of another entity, even though the entity is not covered by the definition in this section because of:

  • (a) ownership of shares under certain arrangements for employee shareholding (see section 703-35 ); or
  • (aa) ownership of certain preference shares following an ADI restructure (see section 703-37 ); or
  • (b) interposed trusts that are not fixed trusts (see section 703-40 ).
  • 703-30(3)  


    For the purposes of this section, one entity is not prevented from being the beneficial owner of a * membership interest in another entity merely because the first entity is or becomes:


    (a) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or


    (b) an entity with a status under a * foreign law similar to the status of a Chapter 5 body corporate under the Corporations Act 2001 .


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