INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)
A shareholder is an eligible continuing substantial shareholder in relation to a dividend paid by a former exempting company (the relevant former exempting company ) if the following provisions apply.160APHBJ(2) [Relevant times]
At both of the following times:
(a) the time when the dividend was paid; and
(b) the time immediately before the relevant former exempting company ceased to be an exempting company;
(c) was entitled to not less than the prescribed percentage of:
(i) if the voting shares (as defined in the Corporations Act 2001 ) in the relevant former exempting company are not divided into classes - those voting shares; or
(ii) if the voting shares (as so defined) in the relevant former exempting company are divided into 2 or more classes - the shares in one of those classes; and
(d) was a person referred to in one or more of the following subparagraphs:
(i) a non-resident; or
(ii) a life assurance company; or
(iii) an exempting company; or
(iv) a former exempting company; or
(v) a trustee of a trust in which an interest was held by a person referred to in any of subparagraphs (i) to (iv); or
(vi) a partnership in which an interest was held by a person referred to in any of subparagraphs (i) to (iv).
If the assumptions set out in subsection (4) are made:
(a) if the shareholder was a person referred to in any of subparagraphs (2)(d)(i) to (iv) - the shareholder; or
(b) if the shareholder was a trustee of a trust or a partnership, being a trust or partnership in which a person referred to in any of those subparagraphs held an interest - the holder of the interest;
would (if a non-resident) be exempt from dividend withholding tax on the dividend or (if a resident) be entitled to a franking credit or a franking rebate in respect of the dividend.160APHBJ(4) [Assumptions]
The assumptions referred to in subsection (3) are that:
(a) the relevant former exempting company was an exempting company at the time it paid the dividend; and
(b) the dividend was a franked dividend paid to the shareholder; and
(c) if the shareholder was a former exempting company - the shareholder was an exempting company; and
(d) if the shareholder was a trustee of a trust or partnership in which a former exempting company had an interest - that former exempting company was an exempting company. 160APHBJ(5) [Determination of entitlement]
The question whether a person was entitled at a particular time to not less than the prescribed percentage of voting shares or a class of voting shares in a company is to be determined in the same way as that question is determined under subsection 708(5) of the Corporations Act 2001 .
A person is taken to hold an interest in a trust if:
(a) the person is a beneficiary under the trust; or
(b) the person derives, or will derive, income indirectly, through interposed trusts or partnerships, from dividends received by the trustee. 160APHBJ(7) [Holding of interest in partnership]
A person is taken to hold an interest in a partnership if:
(a) the person is a partner in the partnership; or
(b) the person derives, or will derive, income indirectly, through interposed trusts or partnerships, from dividends received by the partnership.
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