Income Tax Assessment Act 1997



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

Subdivision 166-E - Concessional tracing rules  

When identity of foreign stakeholders is not known

SECTION 166-255   Bearer shares in foreign listed companies  

This section modifies how the ownership tests in section 166-145 are applied to the tested company if:

(a) at the *ownership test time, it is the case, or it is reasonable to assume, that persons (none of them companies or trustees) hold a *voting stake, a *dividend stake or a *capital stake in the tested company; and

(b) an entity has not, under section 166-225 , 166-230 , 166-240 or 166-245 , been taken to control voting power or have rights in respect of the stake; and

(c) another company (the foreign listed company ) is interposed, at that time, between those persons and the tested company; and

(d) at all times during the income year of the tested company in which the ownership test time occurs, the *principal class of shares in the foreign listed company is listed for quotation in the official list of an *approved stock exchange; and

(e) at the ownership test time:

(i) voting stakes that carry rights to 50% or more of the voting power in the foreign listed company; or

(ii) dividend stakes that carry rights to receive 50% or more of any dividends that the foreign listed company may pay; or

(iii) capital stakes that carry rights to receive 50% or more of any distribution of capital of the foreign listed company;
as the case requires, are directly held by way of bearer shares; and

(f) the beneficial owners of some or all of those bearer shares have not been disclosed to the foreign listed company.

Note 1:

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

Note 2:

Other rules might affect this provision: see sections 166-270 , 166-275 and 166-280 .

Note 3:

For paragraph (e), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

The tests are applied to the tested company as if, at the *ownership test time, for each of those bearer shares whose owners have not been disclosed:

(a) a single notional entity controls, or is able to control, the voting power in the tested company that is carried by those shares at that time; and

(b) the entity *indirectly had the right to receive, for its own benefit:

(i) any *dividends the tested company may pay in respect of those shares at that time; and

(ii) any distributions of capital of the tested company in respect of those shares at that time; and

(c) the entity were a person (other than a company).


The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265 .

To avoid doubt, the single notional entity mentioned in subsection (2) is a different single notional entity from the one mentioned in section 165-207 and the one mentioned in section 166-225 .


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