TAXATION ADMINISTRATION ACT 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-5 - PAY AS YOU GO (PAYG) WITHHOLDING  

Division 12 - Payments from which amounts must be withheld  

Subdivision 12-H - Distributions of withholding MIT income  

Operative provisions

SECTION 12-436   MEANING OF ASSET ENTITY, OPERATING ENTITY, CROSS STAPLE ARRANGEMENT AND STAPLED ENTITY  

12-436(1)  
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.

12-436(5)  
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


(b) either:


(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.

12-436(7)  
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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