TAXATION ADMINISTRATION ACT 1953
Note: See section 3AA .Chapter 2 - Collection, recovery and administration of income tax
An asset entity in relation to an income year is a trust or partnership that is not covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year. 12-436(2)
An operating entity in relation to an income year is a trust, partnership or company that is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year. 12-436(3)
For the purposes of this section, in determining whether a partnership or company is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 , treat the partnership or company as a trust. 12-436(4)
A cross staple arrangement is an *arrangement that is entered into by 2 or more entities (the arrangement entities ) if:
(a) at least one of the arrangement entities is an *asset entity; and
(b) at least one of the arrangement entities is an *operating entity; and
(c) the following conditions are satisfied:
(i) one or more other entities (the external entities ) each hold a *total participation interest in each arrangement entity;
(ii) the sum of the total participation interests held by the external entities in each arrangement entity is 80% or more.
For the purposes of subparagraph (4)(c)(ii), in working out the sum of the *total participation interests held by the external entities in each arrangement entity, take into account:
(a) a particular *direct participation interest; or
(b) a particular *indirect participation interest;
held in the arrangement entity only once if it would otherwise be counted more than once.12-436(6)
Subsection (7) applies if:
(a) an external entity holds *total participation interests in 2 or more arrangement entities; and
(i) the amount (the lowest participation interest amount ) of one of those participation interests falls short of the amount of each of the other participation interests; or
(ii) the amount (the lowest participation interest amount ) of 2 or more of those participation interests is the same but falls short of the amount of each of the other participation interests.
For the purposes of paragraph (4)(c), treat the amount of the *total participation interest held by the external entity in each of the arrangement entities as being equal to the lowest participation interest amount. 12-436(8)
Each of the entities that entered into the *cross staple arrangement is a stapled entity in relation to the cross staple arrangement.
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