INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 701C - Modified application etc. of provisions of Income Tax Assessment Act 1997: transitional foreign-held membership structures  

Subdivision 701C-B - Membership rules allowing foreign holding  

SECTION 701C-20   701C-20   Transitional foreign-held subsidiaries and transitional foreign-held indirect subsidiaries  


If:


(a) an entity is a subsidiary member of a consolidated group in a case where the set of requirements described in section 701C-10 are met; and


(b) one or more of the membership interests in the entity are held by:


(i) a non-resident company; or

(ii) a non-resident trust; or

(iii) an entity that holds the membership interests only as a nominee of one or more entities each of which is a non-resident company or a non-resident trust; or

(iv) a partnership, each of the partners in which is a non-resident company or a non-resident trust;

then:


(c) the entity is a transitional foreign-held subsidiary of the group; and


(d) if:


(i) the transitional foreign-held subsidiary; or

(ii) an entity that is a transitional foreign-held indirect subsidiary of the group because of another application of this paragraph;
holds one or more membership interests in another entity that:

(iii) is a subsidiary member of the group; and

(iv) is not a transitional foreign-held subsidiary of the group;
that other member is a transitional foreign-held indirect subsidiary of the group.
Note:

In order to be a subsidiary member of the group as required by subparagraph (d)(iii), the transitional foreign-held indirect subsidiary would need to have satisfied the set of requirements in either section 701C-10 or 701C-15 .




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