Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-F - Special provisions relating to ownership by non-fixed trusts  

SECTION 165-215   Special alternative to change of ownership test for Subdivision 165-A  

165-215(1)  
If a company does not meet the conditions in section 165-12 , it is nevertheless taken to meet the conditions if it meets the conditions in this section. First condition

165-215(2)  


At all times during the *ownership test period:


(a) both:


(i) persons must have held *fixed entitlements to all of the income and capital of the company; and

(ii) *non-fixed trusts, other than *family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or


(b) both:


(i) a *fixed trust or a company (which trust or company is the holding entity ) must have held, directly or indirectly, fixed entitlements to all of the income and capital of the company; and

(ii) non-fixed trusts, other than *family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the holding entity.
Second condition

165-215(3)  


The persons holding *fixed entitlements to shares of the income, and the persons holding fixed entitlements to shares of the capital, of:


(a) in a paragraph (2)(a) case - the company; or


(b) in a paragraph (2)(b) case - the holding entity;

at the beginning of the *loss year must have held those entitlements to those shares at all times during the *ownership test period.

Third condition

165-215(4)  
At the beginning of the *loss year:


(a) individuals must not have had (between them), directly or indirectly, and for their own benefit, *fixed entitlements to a greater than 50% share of the income of the company; or


(b) individuals must not have had (between them), directly or indirectly, and for their own benefit, fixed entitlements to a greater than 50% share of the capital of the company.

Fourth condition

165-215(5)  


It must be the case that, for each *non-fixed trust (other than an *excepted trust) that, at any time during the *ownership test period, held directly or indirectly a *fixed entitlement to a share of the income or capital of the company, section 267-20 in Schedule 2F to the Income Tax Assessment Act 1936 would not have prevented the non-fixed trust from deducting the *tax loss concerned if it, rather than the company, had incurred the tax loss.
Note:

See section 165-245 for when an entity is taken to have held or had, directly or indirectly, a fixed entitlement to a share of income or capital of a company.


 

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