Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.783A

  (1)   An entity has a significant stake in another entity if:

  (a)   the first entity has one or more * stake options in the other entity; and

  (b)   the first entity would have such a stake (under section   124 - 783) if the first entity acquired * stake interests in the other entity under any of those stake options.

Note:   Paragraph   (b) is satisfied if there are any circumstances (e.g. the first entity exercises some but not all of the stake options) in which the first entity would have a significant stake in the other entity, even if in other circumstances the first entity would not have such a stake.

  (2)   An entity, or 2 or more entities, have a common stake in the original entity just before the * arrangement started and in the replacement entity just after the arrangement was completed if:

  (a)   the entities:

  (i)   had one or more * stake options in the original entity before the arrangement started; or

  (ii)   have one or more stake options in the replacement entity; and

  (b)   the entities would have such stakes (under section   124 - 783) if:

  (i)   the entities had acquired * stake interests in the original entity under any of the stake options mentioned in subparagraph   (a)(i); or

  (ii)   the entities acquired stake interests in the replacement entity under some or all of the stake options mentioned in subparagraph   (a)(ii).

  (3)   Something is a stake option an entity has in another entity if it gives the first entity, or its * associates, a right to acquire the following ( stake interests ):

  (a)   if the other entity is a company:

  (i)   voting rights in the company; or

  (ii)   the right to receive any part of any * dividends that the company may pay; or

  (iii)   the right to receive any part of any distribution of capital of the company;

  (b)   if the other entity is a trust--the right to receive any part of any distribution to beneficiaries of the trust of income or capital of the trust;

and the acquisition could occur before the end of 5 years after the * arrangement was completed.

Example 1:   An option.

Example 2:   A share that gives a voting right that is temporarily supressed.

  (4)   For the purposes of subsection   (1), treat the reference in subparagraph   (3)(a)(i) to voting rights as being a reference to * shares carrying voting rights.

  (5)   This section does not limit subsections   124 - 783(6) to (10).