Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) An entity holds a direct small business participation percentage at the relevant time in an entity equal to the percentage worked out using this table:
An entity's direct small business participation percentage | ||
| In this entity: | Is: |
1 | A company | This percentage that the entity has because of holding the legal and equitable interests in * shares in the company: (a) the percentage of the voting power in the company; or (b) the percentage of any * dividend that the company may pay; or (c) the percentage of any distribution of capital that the company may make; or, if they are different, the smaller or smallest. |
2 | A trust (where entities have entitlements to all the income and capital of the trust) | This percentage: (a) the percentage of any distribution of income that the trustee may make to which the entity would be beneficially entitled; or (b) the percentage of any distribution of capital that the trustee may make to which the entity would be beneficially entitled; or, if they are different, the smaller. |
3 | A trust (where entities do not have entitlements to all the income and capital of the trust) | This percentage: (a) if the trustee makes distributions of income during the income year (the relevant year ) in which that time occurs--the percentage of the distributions to which the entity was beneficially entitled; or (b) if the trustee makes distributions of capital during the relevant year--the percentage of the distributions to which the entity was beneficially entitled; or, if 2 different percentages are applicable, the smaller. |
Companies
(2) For item 1 of the table, ignore * redeemable shares.
(3) Paragraph (a) of item 1 of the table does not apply if the entity holds the legal and equitable interests in the * shares jointly with another entity.
Discretionary trusts
(4) Subsections (5) and (6) apply for the purpose of working out the * direct small business participation percentage in an entity in connection with a * CGT event that happened in an income year (the CGT event year ), if:
(a) the entity is a trust (where entities do not have entitlements to all the income and capital of the trust); and
(b) during the relevant year mentioned in item 3 of the table in subsection (1) (disregarding subsection (5)), the trustee mentioned in that item:
(i) does not make a distribution of income; and
(ii) does not make a distribution of capital.
(5) Treat the references in that item to the relevant year as being references to:
(a) if the trustee made a distribution of income or capital during the CGT event year--the CGT event year; or
(b) otherwise--the last income year before the CGT event year in which the trustee did make a distribution of income or capital.
(6) Despite subsection (5), an entity holds a direct small business participation percentage of 0% in the trust at the relevant time if either:
(a) the trust:
(i) had a * net income for the relevant year; and
(ii) did not have a * tax loss for the relevant year; or
(b) the trustee did not make a distribution of income or capital at any time before the end of the CGT event year.