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This is a Bill, not an Act. For current law, see the Acts databases.


FILM LICENSED INVESTMENT COMPANY BILL 2005

2004-2005
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Film Licensed Investment Company Bill
2005
No. , 2005
(Communications, Information Technology and the Arts)
A Bill for an Act to provide for a film licensed
investment company scheme, and for related
purposes
i Film Licensed Investment Company Bill 2005 No. , 2005
Contents
Part 1--Preliminary
1
1
Short title.......................................................................................1
2
Commencement .............................................................................2
3
Overview of Act ............................................................................2
4
Objects of the scheme ....................................................................2
5
Extraterritorial operation ................................................................3
6
Definitions.....................................................................................3
Part 2--The scheme
5
Division 1--Overview
5
7
Overview of Part............................................................................5
Division 2--Minister to make certain determinations concerning
the application process and decision-making criteria
6
8
Application rules............................................................................6
9
Minister must determine decision-making criteria and
procedures .....................................................................................6
Division 3--The application process
7
10
Rounds of applications...................................................................7
11
Applications ..................................................................................7
12
Further information........................................................................7
Division 4--Grant of licence
8
13
Conditions on grant of licence ........................................................8
14
Grant of concessional capital licence ..............................................8
15
Form of licence..............................................................................8
16
Minister is to have regard to recommendations of Selection
Advisory Panel ..............................................................................8
17
Notice of refusal to grant licence ....................................................9
Division 5--Amount of concessional capital FLIC is licensed to
raise
10
18
Amount of concessional capital FLIC is licensed to raise...............10
Division 6--Licence period
11
19
Licence period .............................................................................11
Division 7--Conditions of scheme
12
20
General........................................................................................12
21
Conditions in a legislative instrument ...........................................12
22
Fundraising conditions .................................................................12
23
Investment conditions ..................................................................13
Film Licensed Investment Company Bill 2005 No. , 2005 ii
24
Conditions relating to returns to shareholders................................13
25
Film conditions............................................................................14
26
Preconditions and conditions in the Minister's determination
under section 21...........................................................................14
27
Ownership condition ....................................................................15
28
Other conditions...........................................................................15
Division 8--Breach of conditions
16
29
Minister to notify FLIC of suspected breach of conditions.............16
30
Minister may seek information .....................................................16
31
Minister must consider FLIC's submission and information...........16
32
Powers of the Minister in relation to breaches of conditions...........16
33
Revocation of licence...................................................................18
34
FLIC must invest in provisionally certified films within 6
months if licence revoked.............................................................18
Division 9--Information and reporting requirements
20
35
Reporting requirements ................................................................20
36
Provision of information to the Commissioner of Taxation ............20
Division 10--Other requirements
22
37
Minister may determine allowable percentage for
administrative costs......................................................................22
38
Transfer of licence void................................................................22
Part 3--Offences concerning ownership restrictions
23
39
Meaning of terms used in this Part................................................23
40
Acquisitions of shares ..................................................................23
41
Anti-avoidance.............................................................................24
Part 4--General administrative matters of the scheme
25
42
Review of decisions .....................................................................25
43
Delegation ...................................................................................25
Schedule 1--Ownership definitions
26
1
Object..........................................................................................26
2
Definitions...................................................................................26
3
When foreign citizens are ordinarily resident in Australia..............29
4
Entering into an agreement or arrangement ...................................30
5
Associates....................................................................................30
6
Power to appoint director .............................................................32
7
Meaning of entitled to acquire......................................................32
8
Meaning of interest in a share ......................................................32
9
Certain interests in shares to be disregarded ..................................33
iii Film Licensed Investment Company Bill 2005 No. , 2005
10
Voting power...............................................................................34
11
Stake in a company ......................................................................35
12
Direct control interests in a company ............................................35
13
Substantial interests in trust estates ...............................................37
Film Licensed Investment Company Bill 2005 No. , 2005 1
A Bill for an Act to provide for a film licensed
1
investment company scheme, and for related
2
purposes
3
The Parliament of Australia enacts:
4
Part 1--Preliminary
5
6
1 Short title
7
This Act may be cited as the Film Licensed Investment Company
8
Act 2005.
9
Part 1 Preliminary
Section 2
2 Film Licensed Investment Company Bill 2005 No. , 2005
2 Commencement
1
This Act commences on the day after it receives the Royal Assent.
2
3 Overview of Act
3
(1) This Act sets up a scheme to encourage investment in
4
qualifying Australian films.
5
(2) The Act provides for a company to apply for a concessional
6
capital licence. While the licence is in force, the company is
7
able to raise up to $10 million in each of the 2005-06 and
8
2006-07 financial years for investment in provisionally
9
certified films.
10
(3) The shareholders who purchase shares in the company during
11
the licence period are able to obtain a 100% tax deduction for
12
that investment.
13
(4) The scheme begins on the day that the Minister grants the
14
licence and ends on 30 June 2009 (by which time all films
15
must have been completed). The concessional capital licence
16
is in force until 30 June 2007. After the licence period ends
17
the company is able to raise further capital, but those shares
18
will not attract the 100% tax deduction.
19
Note:
For qualifying Australian film see subsection 6(1).
20
4 Objects of the scheme
21
The objects of the scheme are as follows:
22
(a) to encourage the production of qualifying Australian films
23
which portray Australian perspectives and Australia's
24
cultural diversity;
25
(b) to encourage the production of qualifying Australian films
26
which are of a high standard and are likely to be
27
commercially successful;
28
Preliminary Part 1
Section 5
Film Licensed Investment Company Bill 2005 No. , 2005 3
(c) to support and promote the ongoing development of the
1
Australian film industry through encouraging the use of
2
Australia's creative resources and industry expertise;
3
(d) to encourage private sector investment in the Australian film
4
industry;
5
(e) to ensure that the level of the Commonwealth's assistance to
6
the Australian film industry is quantifiable, accountable and
7
transparent.
8
5 Extraterritorial operation
9
Subparagraph 25(a)(v), section 27, Part 3 and Schedule 1 extend to
10
acts, omissions, matters and things outside Australia, whether or
11
not in a foreign country.
12
6 Definitions
13
(1) In this Act:
14
ADI (short for authorised deposit-taking institution) means a
15
corporation that is an ADI for the purposes of the Banking Act
16
1959.
17
allowable deduction percentage has the meaning given by
18
section 37.
19
Application rules means the rules made by the Minister under
20
section 8.
21
concessional capital means money paid to the FLIC by a person
22
for the issue, during the licence period, of shares to that person.
23
concessional capital licence means the licence granted by the
24
Minister under section 14.
25
film licensed investment company means the company that has
26
been granted the concessional capital licence under section 14
27
(whether or not the licence has stopped being in force).
28
FLIC means the film licensed investment company.
29
invested in a film has the meaning given by subsection (2).
30
Part 1 Preliminary
Section 6
4 Film Licensed Investment Company Bill 2005 No. , 2005
licence period means the period described in subsection 19(3).
1
non-concessional capital means capital raised by the FLIC after
2
the end of the licence period.
3
period of the scheme means the period starting on the day the
4
Minister grants the licence under the scheme and ending on
5
30 June 2009.
6
provisionally certified film means a film that has been issued with
7
a provisional certificate under section 124ZAB of the Income Tax
8
Assessment Act 1936.
9
qualifying Australian film has the same meaning as it has in
10
Division 10BA of Part III of the Income Tax Assessment Act 1936.
11
Secretary means the Secretary of the Department.
12
Selection Advisory Panel means a body established under the
13
Application rules to advise the Minister in respect of applications
14
for the concessional capital licence.
15
unacceptable level of foreign ownership has the meaning given by
16
subsection 27(2).
17
unacceptable level of individual ownership has the meaning given
18
by subsection 27(3).
19
(2) For the purposes of this Act, money is invested in a film if it is:
20
(a) spent by the FLIC as a contribution to the cost of producing
21
the film for the purpose of becoming the first owner, or one
22
of the first owners, of the copyright in the film when the
23
copyright comes into existence; or
24
(b) if the FLIC has contributed to the cost of production of a film
25
for the purpose set out in paragraph (a)--spent by the FLIC
26
as a contribution to the cost of marketing and distributing the
27
film.
28
The scheme Part 2
Overview Division 1
Section 7
Film Licensed Investment Company Bill 2005 No. , 2005 5
1
Part 2--The scheme
2
Division 1--Overview
3
7 Overview of Part
4
(1) This Part sets out the scheme. Division 2 provides for the
5
Minister to make rules that apply to the application process
6
and to determine criteria and procedures for making decisions
7
about granting the licence.
8
(2) Division 3 sets out rules for the application process.
9
(3) Division 4 sets out the process of granting the licence.
10
(4) Division 5 sets out the amount of concessional capital that the
11
FLIC is licensed to raise.
12
(5) Division 6 defines the licence period.
13
(6) Division 7 sets out the conditions that attach to the scheme
14
(and section 21 allows the Minister to determine further
15
conditions of the scheme by legislative instrument).
16
(7) Division 8 sets out how a breach of a condition is to be dealt
17
with.
18
(8) Division 9 deals with information and reporting requirements.
19
(9) Division 10 deals with a purported transfer of the licence and
20
the allowable deduction percentage.
21
Part 2 The scheme
Division 2 Minister to make certain determinations concerning the application process
and decision-making criteria
Section 8
6 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 2--Minister to make certain determinations
2
concerning the application process and
3
decision-making criteria
4
8 Application rules
5
The Minister must, by legislative instrument, determine rules
6
concerning the application process under the scheme. The rules
7
may provide for all or any of the following matters:
8
(a) the method of calling for applications;
9
(b) the closing date for a round of applications;
10
(c) the form of the application and the documentation that must
11
accompany an application;
12
(d) the establishing of a Selection Advisory Panel to advise the
13
Minister in respect of the applications including the
14
membership of the panel and tenure of panel members;
15
(e) the rules governing the operation of the Selection Advisory
16
Panel;
17
(f) any other matter relevant to the application process under the
18
scheme.
19
9 Minister must determine decision-making criteria and procedures
20
(1) The Minister must, by legislative instrument, determine criteria to
21
be applied and procedures to be complied with by the Minister in
22
deciding whether, and to whom, to grant the concessional capital
23
licence under the scheme.
24
(2) The Minister must also determine the weight to be given to each
25
criterion.
26
The scheme Part 2
The application process Division 3
Section 10
Film Licensed Investment Company Bill 2005 No. , 2005 7
1
Division 3--The application process
2
10 Rounds of applications
3
(1) The Minister may call for applications for the concessional capital
4
licence under the scheme from interested persons.
5
(2) If, in the first round of applications, the Minister does not grant the
6
licence, the Minister may call for one or more further rounds of
7
applications.
8
11 Applications
9
(1) A company may apply for the licence to raise concessional capital
10
under the scheme.
11
(2) The application must:
12
(a) be in the form specified in the Application rules; and
13
(b) provide such information as is required by the Application
14
rules; and
15
(c) be given to the Minister.
16
(3) A person may apply under this section for the licence if:
17
(a) the person has applied to register a company under the
18
Corporations Act 2001; and
19
(b) the company will, if registered, meet the conditions set out in
20
section 13.
21
12 Further information
22
(1) The Minister may ask the applicant, in writing, to give to the
23
Minister, within the period specified in the request, further
24
information about the application.
25
(2) The Minister may refuse to consider the application unless the
26
applicant provides the information within the period specified in
27
the request.
28
Part 2 The scheme
Division 4 Grant of licence
Section 13
8 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 4--Grant of licence
2
13 Conditions on grant of licence
3
A company may only be granted the concessional capital licence if
4
all of the following conditions are met:
5
(a) the company is registered under the Corporations Act 2001;
6
(b) the company has not started business or exercised any
7
borrowing power;
8
(c) the company's central management and control is ordinarily
9
exercised in a place in Australia;
10
(d) the chair of the company (however described) and all of the
11
directors of the company are Australian citizens;
12
(e) the company's constitution provides that all of the shares in
13
the company are to be fully paid and of the same class.
14
14 Grant of concessional capital licence
15
Subject to this Part, the Minister may grant a company the licence
16
to raise concessional capital.
17
15 Form of licence
18
The concessional capital licence under the scheme must:
19
(a) be in writing; and
20
(b) set out the effect of section 18; and
21
(c) state the conditions of the scheme to which the FLIC is
22
subject; and
23
(d) state that the conditions of the scheme determined by the
24
Minister under section 21 may be altered at any time after
25
consultation with the FLIC.
26
16 Minister is to have regard to recommendations of Selection
27
Advisory Panel
28
The Minister must have regard to the recommendations of the
29
Selection Advisory Panel in deciding whether to grant the
30
The scheme Part 2
Grant of licence Division 4
Section 17
Film Licensed Investment Company Bill 2005 No. , 2005 9
concessional capital licence to a particular applicant under the
1
scheme.
2
Note:
For Selection Advisory Panel see subsection 6(1).
3
17 Notice of refusal to grant licence
4
(1) If the Minister refuses to grant an application for the concessional
5
capital licence, the Minister must notify the applicant in writing of
6
the refusal.
7
(2) The notice must include the reasons for the decision.
8
Part 2 The scheme
Division 5 Amount of concessional capital FLIC is licensed to raise
Section 18
10 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 5--Amount of concessional capital FLIC is
2
licensed to raise
3
18 Amount of concessional capital FLIC is licensed to raise
4
(1) The maximum amount of concessional capital that the FLIC is
5
licensed to raise in the financial year starting on 1 July 2005 is $10
6
million.
7
(2) The maximum amount of concessional capital that the FLIC is
8
licensed to raise in the financial year starting on 1 July 2006 is $10
9
million.
10
The scheme Part 2
Licence period Division 6
Section 19
Film Licensed Investment Company Bill 2005 No. , 2005 11
1
Division 6--Licence period
2
19 Licence period
3
(1) The concessional capital licence comes into force on the day on
4
which it is granted.
5
(2) The concessional capital licence stops being in force:
6
(a) if the licence is revoked--on the day specified by the
7
Minister under section 33 as the day on which the revocation
8
takes effect; or
9
(b) otherwise--on 30 June 2007.
10
(3) The licence period is the period during which the licence is in
11
force.
12
Part 2 The scheme
Division 7 Conditions of scheme
Section 20
12 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 7--Conditions of scheme
2
20 General
3
(1) The conditions of the scheme are set out in:
4
(a) sections 22 to 28; and
5
(b) a determination made under section 21.
6
(2) The conditions apply for the period of the scheme.
7
Note:
The scheme ends on 30 June 2009.
8
(3) The conditions do not limit the operation of the Corporations Act
9
2001 in relation to the FLIC.
10
21 Conditions in a legislative instrument
11
(1) The Minister may, by legislative instrument, determine conditions
12
that are to apply to the FLIC under the scheme.
13
(2) The Minister may revoke or vary these conditions (including
14
adding new conditions) at any time after consulting the FLIC.
15
22 Fundraising conditions
16
The FLIC must comply with the following conditions as to raising
17
capital:
18
(a) the FLIC must raise $5 million of concessional capital during
19
the period of 12 months starting on the day on which the
20
licence is granted;
21
(b) the FLIC must not, in a financial year referred to in
22
section 18, raise more than the amount of concessional
23
capital it is licensed to raise under section 18 for that
24
financial year;
25
(c) the FLIC must not issue debentures or convertible notes;
26
(d) the FLIC must not borrow money during the licence period
27
except during the financial year starting on 1 July 2005 and
28
then only for the short-term purpose of meeting the costs of
29
its administrative expenses;
30
The scheme Part 2
Conditions of scheme Division 7
Section 23
Film Licensed Investment Company Bill 2005 No. , 2005 13
(e) the FLIC must not raise non-concessional capital before
1
1 July 2007.
2
23 Investment conditions
3
The FLIC must comply with the following conditions as to
4
investment of capital raised under the scheme:
5
(a) the FLIC must invest its concessional capital (less the
6
allowable deduction percentage) in 2 or more provisionally
7
certified films on or before 30 June 2008;
8
(b) the FLIC must invest its non-concessional capital in 2 or
9
more provisionally certified films (whether or not those films
10
are the same films as those referred to in paragraph (a)) on or
11
before 30 June 2008;
12
(c) the FLIC must not start the investment referred to in
13
paragraphs (a) and (b) before:
14
(i) the FLIC has raised $5 million of concessional capital;
15
or
16
(ii) a period of 12 months has elapsed since the licence was
17
granted;
18
(d) the FLIC must not invest more than half as much capital
19
(whether concessional capital or non-concessional capital) as
20
a contribution to marketing and distributing a film as it
21
spends as a contribution to the cost of producing that film.
22
Note 1:
The Minister determines the FLIC's allowable deduction percentage
23
under section 37.
24
Note 2:
For provisionally certified film see subsection 6(1).
25
24 Conditions relating to returns to shareholders
26
(1) The FLIC must comply with the following conditions as to
27
distributions to shareholders:
28
(a) returns attributable to capital (whether concessional or
29
non-concessional capital) invested by the FLIC in a
30
provisionally certified film must be distributed to
31
shareholders;
32
(b) any distribution to shareholders must be in equal proportion
33
to the number of shares held by them.
34
Part 2 The scheme
Division 7 Conditions of scheme
Section 25
14 Film Licensed Investment Company Bill 2005 No. , 2005
(2) Despite paragraph (1)(a), returns described in that paragraph may
1
be invested in an account with an ADI for a reasonable period
2
pending a distribution to shareholders.
3
25 Film conditions
4
The FLIC must comply with the following conditions in respect of
5
a film it invests in under the scheme:
6
(a) the film must not be developed or produced by a person who
7
is:
8
(i) the holder of a licence allocated by the Australian
9
Communications and Media Authority under the
10
Broadcasting Services Act 1992; or
11
(ii) the provider of a broadcasting service in accordance
12
with a class licence determined by the Australian
13
Communications and Media Authority under
14
section 117 of the Broadcasting Services Act 1992; or
15
(iii) the Australian Broadcasting Corporation; or
16
(iv) the Special Broadcasting Service; or
17
(v) an associate of one of the persons mentioned in
18
subparagraph (i) or (ii);
19
(b) the film must receive a final certificate under
20
section 124ZAC of the Income Tax Assessment Act 1936 on
21
or before 30 June 2009.
22
Note:
For associate (and for other definitions relevant to the definition of
23
associate) see Schedule 1.
24
26 Preconditions and conditions in the Minister's determination
25
under section 21
26
The FLIC must:
27
(a) continue to comply with the conditions on grant of licence set
28
out in paragraphs 13(a), (c), (d) and (e); and
29
(b) comply with the conditions set out in a determination made
30
under section 21.
31
The scheme Part 2
Conditions of scheme Division 7
Section 27
Film Licensed Investment Company Bill 2005 No. , 2005 15
27 Ownership condition
1
(1) The FLIC must not have an unacceptable level of foreign
2
ownership or an unacceptable level of individual ownership.
3
(2) For the purposes of this Act, the FLIC has an unacceptable level of
4
foreign ownership if a group of foreign persons hold, in total, a
5
particular stake in the FLIC of more than 33%.
6
(3) For the purposes of this Act, the FLIC has an unacceptable level of
7
individual ownership if a person holds a particular stake in the
8
FLIC of more than 33%.
9
(4) Schedule 1 sets out definitions of expressions used in this section.
10
Note 1:
The limits on the ownership of the FLIC relate to a person's stake in
11
the FLIC.
12
Note 2:
For stake see Schedule 1.
13
28 Other conditions
14
The FLIC must comply with the following conditions:
15
(a) the FLIC must not purport to transfer the licence to another
16
person;
17
(b) the FLIC must comply with the reporting requirements set
18
out in a determination made under section 35 and with any
19
request for further information made under subsection 35(4);
20
(c) the FLIC must notify each shareholder in writing of any
21
decision taken by the Minister in relation to the FLIC under
22
section 32 in respect of a breach of a condition;
23
(d) the FLIC must keep concessional and non-concessional
24
capital separate and for that purpose must maintain separate
25
accounts with an ADI for its concessional capital and
26
non-concessional capital.
27
Part 2 The scheme
Division 8 Breach of conditions
Section 29
16 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 8--Breach of conditions
2
29 Minister to notify FLIC of suspected breach of conditions
3
If the Minister is of the opinion that there may be grounds for
4
deciding that the FLIC is in breach of a condition of the scheme,
5
the Minister must:
6
(a) give the FLIC written notice of the Minister's opinion
7
specifying the reasons for the opinion; and
8
(b) invite the FLIC to make a written submission to the Minister
9
within 28 days.
10
Note:
The conditions of the scheme are set out in sections 22 to 28 and a
11
determination made under section 21.
12
30 Minister may seek information
13
The Minister may ask the FLIC, in writing, to give to the Minister,
14
within the period specified in the request, information for the
15
purposes of making a decision under section 32.
16
31 Minister must consider FLIC's submission and information
17
In making a decision under section 32 in respect of the FLIC, the
18
Minister must have regard to the matters raised in the FLIC's
19
submission (if any) and any information received by the Minister
20
under section 30.
21
32 Powers of the Minister in relation to breaches of conditions
22
(1) If the Minister is satisfied that the FLIC has breached a condition
23
of the scheme the Minister may decide:
24
(a) not to take any action in respect of the breach (other than to
25
take the breach into account in determining a course of action
26
in respect of any further breaches of conditions by the FLIC);
27
or
28
(b) to take action under the following subsections.
29
The scheme Part 2
Breach of conditions Division 8
Section 32
Film Licensed Investment Company Bill 2005 No. , 2005 17
Note:
A decision of the Minister under this section is a reviewable decision
1
(see section 42).
2
(2) The Minister may take any or all of the following actions in respect
3
of the breach:
4
(a) give the FLIC written notice of a day by which the breach of
5
condition must be remedied;
6
(b) if the breach occurred during the licence period--revoke the
7
licence;
8
(c) decide to remove the concessional status of shares that were
9
issued to shareholders by the FLIC during the licence period.
10
Note:
Section 375-865 of the Income Tax Assessment Act 1997
11
provides that shareholders whose shares are affected by a
12
decision under this paragraph lose their entitlement to a
13
deduction for the shares.
14
(3) If the FLIC has been notified of a day under paragraph (2)(a) and
15
does not remedy the breach of condition by that day, the Minister
16
may make such decision under subsection (1) as the Minister
17
thinks appropriate.
18
(4) If the Minister, in respect of a breach of condition by the FLIC:
19
(a) makes a decision under paragraph 32(1)(a); or
20
(b) revokes the FLIC's licence; or
21
(c) decides to remove the concessional status of shares in the
22
FLIC;
23
the Minister must, within 28 days of making the decision, notify
24
the Commissioner of Taxation in writing of the decision.
25
(5) The Minister must:
26
(a) give written notice of a decision of the Minister under this
27
section to the FLIC; and
28
(b) include reasons for the decision in the notice.
29
Note:
The FLIC is required as a condition of the scheme to notify each of its
30
shareholders if the Minister makes a decision under this section in
31
respect of a breach by the FLIC of a condition (see paragraph 28(c)).
32
Part 2 The scheme
Division 8 Breach of conditions
Section 33
18 Film Licensed Investment Company Bill 2005 No. , 2005
33 Revocation of licence
1
(1) If the Minister decides to revoke the FLIC's licence, the notice
2
given under subsection 32(5) must specify the day on which the
3
revocation takes effect.
4
(2) The day specified by the Minister must be no earlier than the
5
seventh day after the day on which the Minister makes a decision
6
under section 32 to revoke the licence.
7
(3) The revocation of the licence takes effect on the day specified by
8
the Minister.
9
(4) If:
10
(a) the Minister decides to revoke the FLIC's licence under
11
section 32; and
12
(b) the FLIC has, at the day of the revocation, raised an amount
13
of concessional capital;
14
the revocation of the licence does not of itself remove the
15
concessional status of shares issued by the FLIC before the
16
revocation.
17
34 FLIC must invest in provisionally certified films within 6 months
18
if licence revoked
19
(1) If the Minister revokes the FLIC's licence under section 32 but
20
does not decide to remove the concessional status of the shares in
21
the FLIC, the FLIC must ensure that the concessional capital is
22
invested in provisionally certified films within 6 months from the
23
day on which the revocation of the licence took effect.
24
(2) If the Minister is of the opinion that there may be grounds for
25
deciding that the FLIC has not complied with subsection (1), the
26
Minister may ask the FLIC, in writing, to give the Minister, within
27
the period specified in the request, information for the purposes of
28
making a decision under subsection (4).
29
(3) In making a decision under subsection (4) in respect of the FLIC,
30
the Minister must have regard to the matters raised in the
31
information received by the Minister under subsection (2).
32
The scheme Part 2
Breach of conditions Division 8
Section 34
Film Licensed Investment Company Bill 2005 No. , 2005 19
(4) If the Minister is satisfied that the FLIC has not complied with
1
subsection (1), the Minister may decide to remove the concessional
2
status of shares that were issued to shareholders by the FLIC
3
during the licence period.
4
Note 1:
A decision of the Minister under this subsection is a reviewable
5
decision (see section 42).
6
Note 2:
Section 375-865 of the Income Tax Assessment Act 1997 provides that
7
shareholders whose shares are affected by a decision under this
8
subsection lose their entitlement to a deduction for the shares.
9
(5) The Minister must:
10
(a) give written notice of a decision of the Minister under
11
subsection (4) to the FLIC; and
12
(b) if the Minister decides to remove the concessional status of
13
the shares--include reasons for the decision in the notice.
14
(6) If the Minister decides under this section to remove the
15
concessional status of shares the Minister must, within 28 days of
16
doing so, notify the Commissioner of Taxation of that decision.
17
Part 2 The scheme
Division 9 Information and reporting requirements
Section 35
20 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 9--Information and reporting requirements
2
35 Reporting requirements
3
(1) For the purposes of:
4
(a) monitoring compliance with the Act; and
5
(b) evaluating the scheme;
6
the Minister may, by legislative instrument, determine reporting
7
requirements that the FLIC must comply with.
8
(2) Subject to subsection (3), the Minister may only require the FLIC
9
to give a report on 30 June 2006 and at 6 monthly intervals after
10
that.
11
(3) Reporting requirements determined under subsection (1) for the
12
purpose of monitoring compliance with section 34 may require the
13
FLIC to give a report to the Minister within 6 months of the date of
14
the revocation of the licence.
15
(4) The Minister may ask the FLIC, in writing, to give to the Minister,
16
within the period specified in the request, further information
17
concerning any report made by the FLIC.
18
36 Provision of information to the Commissioner of Taxation
19
(1) The Secretary must advise the Commissioner of Taxation as soon
20
as possible after the end of the financial years starting on 1 July
21
2005 and 1 July 2006 of the following information in respect of the
22
FLIC:
23
(a) the name and registered address of the FLIC;
24
(b) the details of any breach of conditions by the FLIC during
25
the year;
26
(c) the details of a decision taken by the Minister under
27
section 32 in respect of the breach;
28
(d) all other matters that:
29
(i) the Secretary and the Commissioner of Taxation agree
30
are to be provided; and
31
The scheme Part 2
Information and reporting requirements Division 9
Section 36
Film Licensed Investment Company Bill 2005 No. , 2005 21
(ii) are necessary to the administration of
1
Subdivision 375-H of the Income Tax Assessment Act
2
1997.
3
(2) The Secretary must advise the Commissioner of Taxation as soon
4
as possible after the end of the financial years starting on 1 July
5
2005 and 1 July 2006 of the following information in respect of the
6
FLIC:
7
(a) the number of shares issued during the year by the FLIC; and
8
(b) the names and addresses of the shareholders to whom the
9
shares were issued and the amount paid by each shareholder
10
for the shares.
11
(3) The Secretary's advice must be in writing.
12
Part 2 The scheme
Division 10 Other requirements
Section 37
22 Film Licensed Investment Company Bill 2005 No. , 2005
1
Division 10--Other requirements
2
37 Minister may determine allowable percentage for administrative
3
costs
4
(1) The Minister may, in writing, determine the FLIC's allowable
5
deduction percentage.
6
(2) The FLIC's allowable deduction percentage is a percentage of the
7
concessional capital raised by the FLIC that may be used by the
8
FLIC to meet the costs of its administration.
9
(3) The Minister may, after consultation with the FLIC, amend a
10
determination under subsection (1) to increase the allowable
11
deduction percentage.
12
38 Transfer of licence void
13
The purported transfer of the licence is void.
14
Offences concerning ownership restrictions Part 3
Section 39
Film Licensed Investment Company Bill 2005 No. , 2005 23
1
Part 3--Offences concerning ownership restrictions
2
3
39 Meaning of terms used in this Part
4
Schedule 1 sets out definitions of expressions used in this Part.
5
40 Acquisitions of shares
6
A person commits an offence if:
7
(a) either:
8
(i) the person acquires shares in a company; or
9
(ii) the person, and one or more other persons under an
10
arrangement, acquire shares in a company; and
11
(b) the acquisition has the result, in relation to the FLIC, that:
12
(i) an unacceptable foreign ownership situation comes into
13
existence in relation to the FLIC; or
14
(ii) if an unacceptable foreign ownership situation already
15
exists in relation to the FLIC because there is a group of
16
foreign persons who hold, in total, a particular type of
17
stake in the FLIC of more than 33%--there is an
18
increase in the total of any type of stake held by any
19
group of foreign persons in the FLIC; or
20
(iii) an unacceptable individual ownership situation comes
21
into existence in relation to the FLIC; or
22
(iv) if an unacceptable individual ownership situation
23
already exists in relation to the FLIC because there is
24
one or more individuals who hold a particular type of
25
stake in the FLIC of more than 33%--there is an
26
increase in the type of stake held by any of those
27
persons in the FLIC.
28
Penalty: 400 penalty units.
29
Note:
Chapter 2 of the Criminal Code sets out the general principles of
30
criminal responsibility.
31
Part 3 Offences concerning ownership restrictions
Section 41
24 Film Licensed Investment Company Bill 2005 No. , 2005
41 Anti-avoidance
1
(1) If:
2
(a) one or more persons enter into, begin to carry out or carry out
3
a scheme; and
4
(b) the Minister has reasonable grounds to believe that the
5
person, or any of the persons, who entered into, began to
6
carry out or carried out the scheme or any part of the scheme
7
did so for the sole or dominant purpose of avoiding the
8
restriction on ownership levels set out in section 27; and
9
(c) as a result of the scheme or a part of the scheme, a person
10
(the stakeholder) increases the stakeholder's stake in the
11
FLIC;
12
the Minister may give the stakeholder a written direction to cease
13
holding that stake within a reasonable time specified in the notice.
14
(2) The Minister must include in the notice the reasons for the
15
Minister's decision to give the notice.
16
(3) A person commits an offence if:
17
(a) the person has been given a direction under subsection (1);
18
and
19
(b) the person engages in conduct; and
20
(c) the person's conduct breaches the direction.
21
Penalty: 400 penalty units.
22
Note:
Chapter 2 of the Criminal Code sets out the general principles of
23
criminal responsibility.
24
General administrative matters of the scheme Part 4
Section 42
Film Licensed Investment Company Bill 2005 No. , 2005 25
1
Part 4--General administrative matters of the
2
scheme
3
4
42 Review of decisions
5
An application may be made to the Administrative Appeals
6
Tribunal for review of a decision:
7
(a) under paragraph 32(1)(a), not to take any action in respect of
8
a breach (other than to take the breach into account in
9
determining a course of action in respect of any further
10
breaches of conditions); and
11
(b) under paragraph 32(2)(a), to impose a day by which a breach
12
of a condition must be remedied; and
13
(c) under paragraph 32(2)(b), to revoke the licence; and
14
(d) under paragraph 32(2)(c), to remove the concessional status
15
of shares that were issued to shareholders by the FLIC during
16
the licence period; and
17
(e) under subsection 34(4), to remove the concessional status of
18
shares that were issued to shareholders by the FLIC during
19
the licence period.
20
43 Delegation
21
The Minister may, in writing, delegate to:
22
(a) the Secretary of the Department; or
23
(b) an SES employee, or acting SES employee, in the
24
Department;
25
the Minister's powers under sections 12 and 30 and under
26
subsections 34(2) and 35(4) to ask the FLIC for further
27
information.
28
Schedule 1 Ownership definitions
Clause 1
26 Film Licensed Investment Company Bill 2005 No. , 2005
Schedule 1--Ownership definitions
1
Note:
See section 27.
2
3
4
1 Object
5
The object of this Schedule is to define terms used in the
6
conditions of the scheme set out in subparagraph 25(a)(v) (which
7
deals with film making restrictions), section 27 (which deals with
8
ownership restrictions) and in Part 3 (which sets out offences
9
concerning ownership restrictions).
10
2 Definitions
11
In subparagraph 25(a)(v), section 27, Part 3 and in this Schedule:
12
acquisition includes an agreement to acquire, but does not include:
13
(a) an acquisition by will or by devolution by operation of law;
14
or
15
(b) an acquisition by way of enforcement of a loan security.
16
aggregate substantial interest, in relation to a trust estate, has the
17
meaning given by clause 13.
18
agreement means any agreement, whether formal or informal and
19
whether express or implied.
20
arrangement has the meaning given by clause 4.
21
associate has the meaning given by clause 5.
22
company means a body corporate.
23
constituent document, in relation to a company, means:
24
(a) the memorandum and articles of association of the company;
25
or
26
(b) any rules or other documents constituting the company or
27
governing its activities.
28
direct control interest has the meaning given by clause 12.
29
Ownership definitions Schedule 1
Clause 2
Film Licensed Investment Company Bill 2005 No. , 2005 27
director includes any person occupying the position of director of a
1
company, by whatever name called.
2
discretionary trust means a trust where:
3
(a) a person (who may include the trustee) is empowered (either
4
unconditionally or on the fulfilment of a condition) to
5
exercise any power of appointment or other discretion; and
6
(b) the exercise of the power or discretion, or the failure to
7
exercise the power or discretion, has the effect of
8
determining, to any extent, either or both of the following:
9
(i) the identities of those who may benefit under the trust;
10
(ii) how beneficiaries are to benefit, as between themselves,
11
under the trust.
12
foreign citizen means an individual who is not an Australian
13
citizen.
14
foreign company means a company incorporated outside Australia.
15
foreign person means:
16
(a) a foreign citizen not ordinarily resident in Australia; or
17
(b) a company where:
18
(i) a foreign citizen not ordinarily resident in Australia; or
19
(ii) a foreign company;
20
holds a particular type of stake in the company of more than
21
33%; or
22
(c) a company where a group of 2 or more persons, each of
23
whom is either:
24
(i) a foreign citizen not ordinarily resident in Australia; or
25
(ii) a foreign company;
26
holds, in total, a particular type of stake in the company of
27
more than 33%; or
28
(d) the trustee of a trust estate in which a foreign citizen not
29
ordinarily resident in Australia or a foreign company holds a
30
substantial interest; or
31
(e) the trustee of a trust estate in which 2 or more persons, each
32
of whom is either a foreign citizen not ordinarily resident in
33
Australia or a foreign company, hold an aggregate substantial
34
interest.
35
Schedule 1 Ownership definitions
Clause 2
28 Film Licensed Investment Company Bill 2005 No. , 2005
group includes:
1
(a) one person alone; or
2
(b) a number of persons, even if they are not in any way
3
associated with each other or acting together.
4
increase, in relation to a stake in a company, includes an increase
5
from a starting point of nil.
6
interest in a share has the meaning given by clause 8.
7
lending money includes providing non-equity finance where the
8
provision of the finance may reasonably be regarded as equivalent
9
to lending money.
10
loan security means a security held solely for the purposes of a
11
moneylending agreement.
12
moneylending agreement means an agreement entered into in
13
good faith in the ordinary course of carrying on a business of
14
lending money, but does not include an agreement dealing with
15
any matter unrelated to the carrying on of that business.
16
officer, in relation to a company, includes:
17
(a) a director, secretary or employee of the company; or
18
(b) a receiver and manager of any part of the undertaking of the
19
company appointed under a power contained in any
20
instrument; or
21
(c) a liquidator of the company appointed in a voluntary
22
winding-up.
23
ordinarily resident in Australia has the meaning given by clause 3.
24
ownership provisions means subparagraph 25(a)(v), section 27,
25
Part 3 and this Schedule.
26
power to appoint a director of a company has a meaning affected
27
by clause 6.
28
relative, in relation to a person, means:
29
(a) the person's spouse; or
30
Ownership definitions Schedule 1
Clause 3
Film Licensed Investment Company Bill 2005 No. , 2005 29
(b) another person who, although not legally married to the
1
person, lives with the person on a bona fide domestic basis as
2
the husband or wife of the person; or
3
(c) a parent or remoter lineal ancestor of the person; or
4
(d) a son, daughter or remoter issue of the person; or
5
(e) a brother or sister of the person.
6
scheme means:
7
(a) any agreement, arrangement, understanding, promise or
8
undertaking, whether express or implied and whether or not
9
enforceable, or intended to be enforceable, by legal
10
proceedings; and
11
(b) any scheme, plan, proposal, action, course of action or course
12
of conduct, whether unilateral or otherwise.
13
share, in relation to a company, means a share in the share capital
14
of the company, and includes:
15
(a) stock into which any or all of the share capital of the
16
company has been converted; or
17
(b) an interest in such a share or in such stock.
18
stake, in relation to a company, has the meaning given by
19
clause 11.
20
substantial interest, in relation to a trust estate, has the meaning
21
given by clause 13.
22
voting power has the meaning given by clause 10.
23
3 When foreign citizens are ordinarily resident in Australia
24
For the purposes of the ownership provisions, a foreign citizen is
25
ordinarily resident in Australia at a particular time if, and only if:
26
(a) the foreign citizen has been in Australia during 200 or more
27
days in the period of 12 months immediately preceding that
28
time; and
29
(b) at that time, one of the following subparagraphs applies:
30
(i) the foreign citizen is in Australia and has permission to
31
remain in Australia indefinitely;
32
Schedule 1 Ownership definitions
Clause 4
30 Film Licensed Investment Company Bill 2005 No. , 2005
(ii) the foreign citizen is not in Australia but has a right to
1
re-enter Australia and, on re-entry, to be granted
2
permission to remain in Australia indefinitely;
3
(iii) the foreign citizen is in Australia and has a special
4
category visa under section 32 of the Migration Act
5
1958;
6
(iv) the foreign citizen is not in Australia and, on re-entry to
7
Australia, would have the right to be granted a special
8
category visa under section 32 of the Migration Act
9
1958.
10
4 Entering into an agreement or arrangement
11
(1) For the purposes of the ownership provisions, a person is taken to
12
have proposed to enter into an agreement or arrangement if the
13
person takes part in, or proposes to take part in, negotiations with a
14
view to entering into the agreement or arrangement.
15
(2) A reference in the ownership provisions to entering into an
16
agreement or arrangement includes a reference to altering or
17
varying an agreement or arrangement.
18
(3) A reference in the ownership provisions to entering into an
19
arrangement is a reference to entering into any formal or informal
20
scheme, arrangement or understanding, whether expressly or by
21
implication and, without limiting the generality of the foregoing,
22
includes a reference to:
23
(a) entering into an agreement; or
24
(b) creating a trust, whether express or implied; or
25
(c) entering into a transaction;
26
and a reference in the ownership provisions to an arrangement is
27
to be construed accordingly.
28
(4) A reference in the ownership provisions to an arrangement does
29
not include a reference to a moneylending agreement.
30
5 Associates
31
(1) For the purposes of the ownership provisions, the following
32
persons are associates of a person:
33
Ownership definitions Schedule 1
Clause 5
Film Licensed Investment Company Bill 2005 No. , 2005 31
(a) a relative of the person;
1
(b) a partner of the person;
2
(c) a company of which the person is an officer;
3
(d) if the person is a company--an officer of the company;
4
(e) an employee or employer of the person;
5
(f) an officer of a company of which the person is an officer;
6
(g) an employee of an individual of whom the person is an
7
employee;
8
(h) the trustee of a discretionary trust where the person or
9
another person who is an associate of the person by virtue of
10
another paragraph of this subclause benefits, or is capable
11
(whether by the exercise of a power of appointment or
12
otherwise) of benefiting, under the trust, either directly or
13
through any interposed companies, partnerships or trusts;
14
(i) a company whose directors are accustomed or under an
15
obligation, whether formal or informal, to act in accordance
16
with the directions, instructions or wishes of the person;
17
(j) a company where the person is accustomed or under an
18
obligation, whether formal or informal, to act in accordance
19
with the directions, instructions or wishes of the company;
20
(k) a company in which the person has, apart from this
21
paragraph, a particular type of stake of more than 33%;
22
(l) if the person is a company--a person who holds, apart from
23
this paragraph, a particular type of stake in the company of
24
more than 33%;
25
(m) a person who is, because of this subclause, an associate of
26
any other person who is an associate of the person (including
27
a person who is an associate of the person by any other
28
application or applications of this paragraph).
29
(2) If a person (the first person) enters, or proposes to enter, into an
30
arrangement with another person (the second person) that relates
31
to any of the following matters:
32
(a) the first person and the second person being in a position, by
33
acting together, to control any of the voting power in a
34
company;
35
(b) the power of the first person and the second person, by acting
36
together, to appoint or remove a director of a company;
37
Schedule 1 Ownership definitions
Clause 6
32 Film Licensed Investment Company Bill 2005 No. , 2005
(c) the situation where one or more of the directors of a company
1
are accustomed or under an obligation, whether formal or
2
informal, to act in accordance with the directions,
3
instructions or wishes of the first person and the second
4
person acting together;
5
then, the second person is taken to be an associate of the first
6
person for the purposes of the application of a provision of the
7
ownership provisions in relation to the matter concerned.
8
6 Power to appoint director
9
(1) A reference in the ownership provisions to a power to appoint a
10
director includes a reference to such a power whether exercisable
11
with or without the consent or concurrence of any other person.
12
(2) For the purposes of the ownership provisions, a person is taken to
13
have the power to appoint a director if:
14
(a) the person has the power (whether exercisable with or
15
without the consent or concurrence of any other person) to
16
veto such an appointment; or
17
(b) a person's appointment as a director of the company follows
18
necessarily from that person being a director or other officer
19
of the first-mentioned person.
20
7 Meaning of entitled to acquire
21
For the purposes of the ownership provisions, a person is entitled
22
to acquire any thing if the person is absolutely or contingently
23
entitled to acquire it, whether because of any constituent document
24
of a company, the exercise of any right or option or for any other
25
reason.
26
8 Meaning of interest in a share
27
(1) Subject to this clause, for the purposes of the ownership provisions,
28
a person holds an interest in a share if the person has any legal or
29
equitable interest in the share.
30
(2) For the purposes of the ownership provisions, a person is taken to
31
hold an interest in a share if:
32
Ownership definitions Schedule 1
Clause 9
Film Licensed Investment Company Bill 2005 No. , 2005 33
(a) the person has entered into a contract to purchase the share;
1
or
2
(b) the person has a right (otherwise than because of having an
3
interest under a trust) to have the share transferred to the
4
person or to the person's order (whether the right is
5
exercisable presently or in the future and whether or not on
6
the fulfilment of a condition); or
7
(c) the person has a right to acquire the share, or an interest in
8
the share, under an option (whether the right is exercisable
9
presently or in the future and whether or not on the fulfilment
10
of a condition); or
11
(d) the person is otherwise entitled to acquire the share or an
12
interest in the share; or
13
(e) the person is entitled (otherwise than because of having been
14
appointed as a proxy or representative to vote at a meeting of
15
members of the company or of a class of its members) to
16
exercise or control the exercise of a right attached to the
17
share.
18
(3) Subclause (2) does not, by implication, limit subclause (1).
19
(4) A person is taken to hold an interest in a share even if the person
20
holds the interest in the share jointly with another person.
21
(5) For the purpose of determining whether a person holds an interest
22
in a share, it is immaterial that the interest cannot be related to a
23
particular share.
24
(6) An interest in a share is not to be disregarded only because of:
25
(a) its remoteness; or
26
(b) the manner in which it arose; or
27
(c) the fact that the exercise of a right conferred by the interest
28
is, or is capable of being made, subject to restraint or
29
restriction.
30
9 Certain interests in shares to be disregarded
31
(1) For the purposes of the ownership provisions, an interest in a share
32
held by a person whose ordinary business includes the lending of
33
Schedule 1 Ownership definitions
Clause 10
34 Film Licensed Investment Company Bill 2005 No. , 2005
money (if the person holds the interest as a loan security) must be
1
disregarded.
2
(2) For the purposes of the ownership provisions, if:
3
(a) a person holds an interest in a share as a loan security; and
4
(b) the ordinary business of the person includes the lending of
5
money; and
6
(c) the loan security is enforced; and
7
(d) as a result of the enforcement of the loan security, the person
8
becomes the holder of the share; and
9
(e) the person holds the share for a continuous period (the
10
holding period) beginning at the time when the security was
11
enforced;
12
the person's interest in the share must be disregarded at all times
13
during so much of the holding period as occurs during whichever
14
of the following periods is applicable:
15
(f) the period of 90 days beginning when the security was
16
enforced; or
17
(g) if the Minister, by written notice given to the person, allows a
18
longer period--the end of that longer period.
19
10 Voting power
20
(1) A reference in the ownership provisions to the voting power in a
21
company is a reference to the total rights of shareholders to vote, or
22
participate in any decision-making, concerning any of the
23
following:
24
(a) the making of distributions of capital or profits of the
25
company to its shareholders;
26
(b) the constituent document of the company;
27
(c) any variation of the share capital of the company.
28
(2) A reference in the ownership provisions to control of the voting
29
power in a company is a reference to control that is direct or
30
indirect, including control that is exercisable as a result of or by
31
means of arrangements or practices:
32
(a) whether or not having legal or equitable force; and
33
(b) whether or not based on legal or equitable rights.
34
Ownership definitions Schedule 1
Clause 11
Film Licensed Investment Company Bill 2005 No. , 2005 35
(3) If the percentage of total rights to vote or participate in
1
decision-making differs as between different types of voting or
2
decision-making, the highest of those percentages applies for the
3
purposes of this clause.
4
(4) If a company:
5
(a) is limited both by shares and by guarantee; or
6
(b) does not have a share capital;
7
this clause has effect as if the members or policy holders of the
8
company were shareholders in the company.
9
11 Stake in a company
10
(1) A particular type of stake that a person holds in a company at a
11
particular time is the aggregate of:
12
(a) the direct control interests in the company of that type that
13
the person holds at that time; and
14
(b) the direct control interests in the company of that type held at
15
that time by associates of the person.
16
(2) In calculating the stake that a person holds in a company, a direct
17
control interest held because of subclause 12(5) is not to be
18
counted under paragraph (1)(a) to the extent to which it is
19
calculated by reference to a direct control interest in the company
20
that is taken into account under paragraph (1)(b).
21
(3) For the purpose of calculating the total of the stakes of a particular
22
type that a group of persons holds in a company, if a particular
23
stake that a person holds in a company would be counted more
24
than once because the person is an associate of one or more other
25
persons in the group, that interest is to be counted only once.
26
12 Direct control interests in a company
27
(1) A person holds a direct control interest in a company at a
28
particular time equal to the percentage of the total paid-up share
29
capital of the company in which the person holds an interest at that
30
time.
31
Schedule 1 Ownership definitions
Clause 12
36 Film Licensed Investment Company Bill 2005 No. , 2005
(2) A person also holds a direct control interest in a company at a
1
particular time equal to the percentage of the voting power in the
2
company that the person is in a position to control at that time.
3
(3) A person also holds a direct control interest in a company at a
4
particular time equal to the percentage that the person holds, or is
5
entitled to acquire, at that time of the total rights to distributions of
6
capital or profits of the company to its shareholders on winding-up.
7
(4) A person also holds a direct control interest in a company at a
8
particular time equal to the percentage that the person holds, or is
9
entitled to acquire, at that time of the total rights to distributions of
10
capital or profits of the company to its shareholders, otherwise than
11
on winding-up.
12
(5) Subject to subsection (6), if:
13
(a) a person holds a particular type of direct control interest
14
(including a direct control interest that is taken to be held
15
because of one or more previous applications of this
16
subclause) in a company (the first level company); and
17
(b) the first level company holds the same type of direct control
18
interest in another company (the second level company);
19
the person is taken to hold that type of direct control interest in the
20
second level company equal to the percentage worked out using the
21
formula:
22
First level percentage
Second level percentage
23
where:
24
first level percentage means the percentage of the direct control
25
interest held by the person in the first level company.
26
second level percentage means the percentage of the direct control
27
interest held by the first level company in the second level
28
company.
29
(6) In determining, for the purposes of subsection 27(2) or
30
subparagraph 40(b)(ii), the total of the stakes of a particular type
31
that a group of foreign persons holds in the FLIC, if:
32
(a) a foreign company (the first company) holds that type of
33
direct control interest in the FLIC; and
34
Ownership definitions Schedule 1
Clause 13
Film Licensed Investment Company Bill 2005 No. , 2005 37
(b) in a case where that interest is held because of
1
subclause (5)--that interest was not worked out under that
2
subclause on the basis that one or more foreign companies
3
were interposed between the first company and the FLIC;
4
and
5
(c) apart from this subclause, a foreign person other than the first
6
company would be taken under subclause (5) to hold that
7
type of direct control interest in the FLIC equal to a
8
particular percentage; and
9
(d) the direct control interest mentioned in paragraph (c) was
10
worked out under subclause (5) directly or indirectly by
11
reference to the direct control interest mentioned in
12
paragraph (a);
13
the direct control interest mentioned in paragraph (c) is not to be
14
counted.
15
(7) For the purposes of subclause (6), a foreign company is a company
16
that is a foreign person.
17
13 Substantial interests in trust estates
18
(1) For the purposes of the ownership provisions:
19
(a) a person is taken to hold a substantial interest in a trust
20
estate if the person, alone or together with an associate or
21
associates, holds a beneficial interest in more than 33% of the
22
corpus or income of the trust estate; and
23
(b) 2 or more persons are taken to hold an aggregate substantial
24
interest in a trust estate if the persons, together with an
25
associate or associates, hold, in the aggregate, beneficial
26
interests in more than 33% of the corpus or income of the
27
trust estate.
28
(2) For the purposes of subclause (1), if, under the terms of a trust, a
29
trustee has a power or discretion as to the distribution of the
30
income or corpus of the trust estate to beneficiaries, each
31
beneficiary is taken to hold a beneficial interest in the maximum
32
percentage of income or corpus of the trust estate that the trustee is
33
empowered to distribute to that beneficiary.
34

 


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