Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 975.160

  (1)   An entity has an associate - inclusive control interest in a company in the circumstances set out in Subdivision A of Division   3 of Part   X of the Income Tax Assessment Act 1936 .

  (2)   However, in working out whether an entity has an associate - inclusive control interest of a particular percentage for the purposes of section   975 - 155, there are these modifications to the way Part   X of that Act operates:

  (a)   that Part   is applied to any company, including one acting as a trustee; and

  (b)   subsection   349(4) applies in all cases in working out which entity holds a direct control interest or a control tracing interest equal to 100%; and

  (c)   subsections   350(6) and (7) and 355(1) are ignored; and

  (d)   despite subsection   352(2), an interposed entity may be taken into account in calculating an indirect control interest if the interposed entity is:

  (i)   a company of which the first entity or an * associate is a controller; or

  (ii)   a partnership or a trust; and

  (e)   section   354 applies as if it referred to partnerships rather than CFP's; and

  (f)   section   355 applies as if it referred to trusts rather than CFT's.

Note 1:   Part   X of the Income Tax Assessment Act 1936 defines company to exclude a company in the capacity of a trustee.

Note 2:   The terms direct control interest and control tracing interest are relevant to working out associate - inclusive control interests in a company: see sections   350, 351, 353, 354 and 355 of that Act.

Note 3:   Under subsection   349(4) of that Act, if 2 or more entities would have a direct control interest or a control tracing interest in a company or trust equal to 100%, only one of them holds the interest.

Note 4:   Subsections   350(6) and (7) of that Act deal with direct control interests in a company. They deal with interests held by Australian entities. Under subsection   355(1), certain entities are taken to hold a control tracing interest in a trust equal to 100%.

Note 5:   Paragraphs   (2)(d), (e) and (f) of this section are necessary because Part   X of the Income Tax Assessment Act 1936 applies only to CFE's (which comprise CFC's, CFP's and CFT's).

Table of sections

975 - 300   Meaning of share capital account