Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 166 - Income tax consequences of changing ownership or control of a widely held or eligible Division 166 company  

Subdivision 166-B - Working out the taxable income, tax loss, net capital gain and net capital loss for the income year of the change  

SECTION 166-20   How Subdivisions 165-B and 165-CB apply to a widely held or eligible Division 166 company  

166-20(1)  
This Subdivision modifies how Subdivisions 165-B and 165-CB apply to a company that is:


(a) a *widely held company at all times during the income year (the test period ); or


(b) an *eligible Division 166 company at all times during the income year (the test period ); or


(c) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year (the whole year being the test period ).

Note 1:

Subdivision 165-B is about when a company must calculate its taxable income and tax loss for the income year in a special way. Subdivision 165-CB is about when a company must calculate its net capital gain and net capital loss for the income year in a special way.

Note 2:

A company can choose that this Subdivision is not to apply to it: see section 166-35 .

Note 3:

See section 165-255 for the rule about incomplete test periods.

No corporate change etc.

166-20(2)  
If:


(a) no *corporate change in the company *ends at any time in the *test period; or


(b) a corporate change in the company *ends during the test period, but there is *substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends;

the company is taken to have met the condition in paragraph 165-35(a) (which is about there being persons having *more than a 50% stake in it during the whole of the income year).

Note:

See sections 166-145 and 166-175 to work out whether there is substantial continuity of ownership and a corporate change.

Corporate change

166-20(3)  
If:


(a) a *corporate change in the company *ends at any time in the *test period; and


(b) there is no *substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends;

then the company is taken to have failed to meet the condition in paragraph 165-35(a) .

Satisfies the business continuity test

166-20(4)  


However, if the company satisfies the *business continuity test for the rest of the income year (the business continuity test period ) after the first time (the test time ) in the *test period that a *corporate change in the company *ended, the company is taken to have satisfied the condition in paragraph 165-35(b) .
Note 1:

For the business continuity test, see Subdivision 165-E .

Note 2:

See section 165-255 for the rule about incomplete test periods.

166-20(5)  


Apply the *business continuity test to the *business that the company carried on immediately before the *test time.

 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.