Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 701A - Modified application of provisions of Income Tax Assessment Act 1997 for entities with continuing majority ownership from 27 June 2002 until joining a consolidated group  

SECTION 701A-1   Continuing majority-owned entity, designated group etc.  

Continuing majority-owned entity and designated group

701A-1(1)    
If:

(a) an entity becomes a subsidiary member of a consolidated group at any time on or after 1 July 2002; and

(b) a person or persons continued to be the majority owners (see subsection (2)) of the entity from the start of 27 June 2002 until the entity became a subsidiary member of the group;

the entity is a continuing majority-owned entity and the group is the entity's designated group .

Majority owners of an entity

701A-1(2)    
A person or persons are the majority owners of an entity if they beneficially own, directly or indirectly through one or more interposed entities, membership interests in the entity whose market value is more than 50% of the market value of all of the membership interests in the entity.

Interposed non-fixed trust to be treated as fixed trust

701A-1(3)    
For the purposes of subsection (2), if the interposed entity or any of the interposed entities is a trust that is not a fixed trust:

(a) it is treated as if it were a fixed trust; and

(b) all of its objects are treated as if they were beneficiaries of that trust with equal interests in it.