INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17A - Roll-over relief for certain disposals of assets related to small businesses  

Subdivision A - Interpretative provisions  

SECTION 160ZZPNA   CONTROLLING INDIVIDUAL  

160ZZPNA(1)   Explanation of section.  

This section sets out the meaning of controlling individual of a company and of a unit trust.

160ZZPNA(2)   Control of companies.  

An individual is the controlling individual of a company at a particular time if, at that time, the individual:

(a) is a director and an employee (see subsection (4)) of the company; and

(b) holds all of the legal and equitable interests in shares that carry (between them) the right to exercise at least 50% of the voting power in the company; and

(c) holds all of the legal and equitable interests in shares that carry (between them) the right to receive at least 50% of any dividends that the company may pay; and

(d) holds all of the legal and equitable interests in shares that carry (between them) the right to receive at least 50% of any distribution of capital of the company.

160ZZPNA(3)   Control of unit trusts.  

An individual is the controlling individual of a unit trust at a particular time if, at that time, the individual:

(a) is an employee (see subsection (4)) of the trust; and

(b) has, for his or her benefit, entitlements to at least a 50% share of the income of the trust; and

(c) has, for his or her benefit, entitlements to at least a 50% share of the capital of the trust.

160ZZPNA(4)   Employee.  

In this section:

employee
has the same meaning as in the Superannuation Guarantee (Administration) Act 1992 , except that subsection 12(11) of that Act is to be disregarded.

160ZZPNA(5)   Redeemable shares to be disregarded.  

For the purposes of subsection (2), a person who, at a particular time, holds a legal or equitable interest in a share:

(a) that is liable to be redeemed; or

(b) that, at the option of the company that issued it, is liable to be redeemed;

is taken not to hold the interest at that time.

160ZZPNA(6)   Individual becoming director or employee within 3 months.  

If an individual:

(a) nominates a replacement asset that is a share in a private company or a unit in a unit trust; and

(b) becomes a director and employee of the company, or an employee of the trust, as the case may be, within 3 months after he or she acquires the share or unit;

the individual is taken, for the purposes of this Division, to have been such a director and employee, or such an employee, as the case may be, at all times during that period.