INCOME TAX ASSESSMENT ACT 1997
A trust satisfies the requirements in this section if:
(a) each asset that is, or is part of, the underlying investment is:
(i) a *share, a unit in a unit trust or a stapled security; or
(ii) an interest in an entity that holds an interest in a share, a unit in a unit trust or a stapled security either directly, or indirectly through one or more interposed entities; and
(b) each such share, unit or stapled security:
(i) is listed for quotation in the official list of an *approved stock exchange; or
(ii) meets the widely held requirement set out in the applicable item of the following table.
|Widely held requirements|
Type of asset
Widely held requirement
|1||A *share in a company||The company is a *widely held company|
|2||A unit in a unit trust||The unit trust is a widely held unit trust as defined in section 272-105 in Schedule 2F to the Income Tax Assessment Act 1936|
|3||A stapled security||All companies involved are *widely held companies and all trusts involved are such widely held unit trusts|
A *share, unit in a unit trust or a stapled security that fails the widely held requirement set out in the table in subsection (1) is treated as satisfying that requirement if the failure:
(a) is of a temporary nature only; and
(b) is caused by circumstances outside the investor ' s control. 235-835(3)
In applying subsection (1), disregard an asset, or the cash proceeds from disposing of an asset, if:
(a) the trustee became entitled to the asset in respect of a *share, unit or stapled security that was, or was part of, the underlying investment just before the entitlement arose; and
(b) the asset is not a *share, unit in a unit trust, or stapled security; and
(c) if the asset is an interest in an entity, or a right, option or similar interest that gives the holder an entitlement to acquire an interest in an entity:
(i) an interest in the entity is listed for quotation in the official list of an *approved stock exchange; or
(ii) the entity meets a widely held requirement set out in column 2 of item 1 or 2 of the table in subsection (1); and
(d) the underlying investment comprises one or more other assets that are not disregarded under this subsection.
Examples of the types of assets disregarded by this subsection are:
(a) assets that represent distributions and capital payments in respect of the underlying investment; and (b) bonus rights issued in respect of the underlying investment.
Despite subsections (1) to (3), the underlying investment does not satisfy the requirement in this section if an asset that is, or is part of, the underlying investment is an *ESS interest to which Subdivision 83A-B or 83A-C (about employee share schemes) applies.
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