INCOME TAX ASSESSMENT ACT 1997 - SECT 165.220 Special alternative to change of ownership test for Subdivision 165 - B
INCOME TAX ASSESSMENT ACT 1997 - SECT 165.220
Special alternative to change of ownership test for Subdivision 165 - B(1) If the company does not meet the condition in paragraph 165 - 35(a), it is nevertheless taken to meet the condition if it meets the conditions in this section.
(2) At all times during the income year:
(i) persons must have held * fixed entitlements to all of the income and capital of the company; and
(ii) * non - fixed trusts, other than * family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or
(i) a * fixed trust or a company (which trust or company is the holding entity ) must have held, directly or indirectly, fixed entitlements to all of the income and capital of the company; and
(ii) non - fixed trusts, other than family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the holding entity.
(3) The persons holding * fixed entitlements to shares of the income, and the persons holding fixed entitlements to shares of the capital, of:
(a) in a paragraph (2)(a) case--the company; or
(b) in a paragraph (2)(b) case--the holding entity;
at the beginning of the income year must have held those entitlements to those shares at all times during the income year.
(4) At the beginning of the income year:
(a) individuals must not have had (between them), directly or indirectly, and for their own benefit, * fixed entitlements to a greater than 50% share of the income of the company; or
(b) individuals must not have had (between them), directly or indirectly, and for their own benefit, fixed entitlements to a greater than 50% share of the capital of the company.
(5) It must be the case that, for each * non - fixed trust (other than an * excepted trust) that, at any time in the income year, held directly or indirectly a * fixed entitlement to a share of the income or capital of the company, section 267 - 60 in Schedule 2F to the Income Tax Assessment Act 1936 does not require the non - fixed trust to work out its net income and * tax loss for the income year under Division 268.
Note: See section 165 - 245 for when an entity is taken to have
held or had, directly or indirectly, a fixed entitlement to a share of income
or capital of a company.