INCOME TAX ASSESSMENT ACT 1997 - SECT 165.37 Who has more than a 50% stake in the company during a period

INCOME TAX ASSESSMENT ACT 1997 - SECT 165.37

  (1)   If:

  (a)   there are persons who had * more than 50% of the voting power in the company during the whole of a period (the ownership test period ) consisting of the income year or a part of it; and

  (b)   there are persons who had rights to * more than 50% of the company's dividends during the whole of the ownership test period; and

  (c)   there are persons who had rights to * more than 50% of the company's capital distributions during the whole of the ownership test period;

those persons had more than a 50% stake in the company during the ownership test period.

Note:   Division   167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

  (2)   To work out whether a condition in subsection   (1) was satisfied during the * ownership test period, apply the primary test for that condition unless subsection   (3) requires the alternative test to be applied.

For the primary tests: see subsections   165 - 150(1), 165 - 155(1)
and 165 - 160(1).

  (3)   Apply the alternative test for that condition if one or more other companies beneficially owned * shares, or interests in shares, in the company at any time during the * ownership test period.

For the alternative tests: see subsections   165 - 150(2), 165 - 155(2)
and 165 - 160(2).

Conditions in subsection   (1) may be treated as having been satisfied in certain circumstances

  (4)   If any of the conditions in subsection   (1) have not been satisfied, those conditions are taken to have been satisfied if:

  (a)   they would have been satisfied except for the operation of section   165 - 165; and

  (b)   the company has information from which it would be reasonable to conclude that less than 50% of the * notional loss for the * ownership test period has been reflected in deductions, capital losses, or reduced assessable income, that occurred, or could occur in future, because of the happening of any * CGT event in relation to any * direct equity interests or * indirect equity interests in the company during that period.

  (4A)   If the company is:

  (a)   a * non - profit company; or

  (b)   a * mutual affiliate company; or

  (c)   a * mutual insurance company;

during the whole of the * ownership test period, the conditions in paragraphs   (1)(b) and (c) are taken to have been satisfied by the company.

Time of happening of CGT event

  (5)   The happening of a * CGT event in relation to a * direct equity interest or * indirect equity interest in the company that results in the failure of the company to satisfy a condition in subsection   (1) is taken, for the purposes of paragraph   (4)(b), to have occurred during the * ownership test period.