Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) An entity (not an individual) has a relevant equity interest in a * loss company at a particular time if:
(a) at that time the entity has a controlling stake in the loss company (see section 165 - 115Z); and
(b) at that time the entity has an interest (an equity ) that gives, or interests (each of which is also called an equity ) that between them give, the entity:
(i) the control of, or the ability to control, 10% or more of the voting power in the loss company (either directly, or indirectly through one or more interposed entities); or
(ii) the right to receive (either directly, or indirectly through one or more interposed entities) 10% or more of any dividends that the loss company may pay; or
(iii) the right to receive (either directly, or indirectly through one or more interposed entities) 10% or more of any distribution of capital of the loss company; and
(c) the equity or each equity is either:
(i) an interest (including a * share or shares, or an option or right to acquire a share or shares) in the loss company; or
(ii) an interest (including an option or right to acquire an interest) held by the entity directly in another entity that has a relevant equity interest or relevant debt interest in the loss company.
Note: For paragraph (b), 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) The equity or equities constitute the entity's relevant equity interest in the * loss company.
(2A) A * widely held company that, apart from this subsection, would have a relevant equity interest in a * loss company at a particular time does not have such an interest at that time.
(2B) Subsection (2A) does not apply if:
(a) an entity has a controlling stake in the loss company (see section 165 - 115Z); and
(b) that entity has a direct or indirect interest in, or is owed a debt by, the * widely held company, being an interest or debt in respect of which:
(i) the entity could, if a * CGT event happened in respect of the interest or debt, make a * capital loss (other than a capital loss that would be disregarded) that reflects any part of the loss company's overall loss; or
(ii) the entity has deducted or can deduct, or could deduct at a later time, an amount in respect of the cost of the * acquisition, or a net loss on the * disposal, of the interest or debt, where the deduction reflected or would have reflected, or would reflect, as the case may be, any part of the company's overall loss.
(2C) Subsection (2A) does not apply in respect of a particular time if an entity that had a direct or indirect interest in, or was owed a debt by, the * widely held company at an earlier time, and had a controlling stake in the loss company (see section 165 - 115Z) at the earlier time:
(a) made a capital loss (other than a capital loss that was disregarded) because a * CGT event happened in respect of the interest or debt, where the capital loss reflected any part of the * loss company's overall loss; or
(b) has deducted or could have deducted at an earlier time, or could deduct at a later time, an amount in respect of the cost of the * acquisition, or a net loss on the * disposal, of the interest or debt, where the deduction reflected or would have reflected, or would reflect, as the case may be, any part of the company's overall loss.
(3) An entity (the first entity ) that, apart from this subsection, would have a relevant equity interest in a * loss company at a particular time does not have such an interest if, at that time, there is no other entity that has a direct or indirect interest in, or is owed a debt by, the first entity, being an interest or debt in respect of which:
(a) the other entity could, if a * CGT event happened in respect of the interest or debt, make a * capital loss (other than a capital loss that would be disregarded) that reflects any part of the loss company's overall loss; or
(b) the other entity has deducted or can deduct, or could deduct at a later time:
(i) an amount in respect of the cost of the * acquisition of the interest or debt; or
(ii) a net loss on the * disposal of the interest or debt;
where the deduction reflected, or would reflect, any part of the loss company's overall loss.
(3A) Subsection (3) does not apply if the first entity is a * widely held company.
(4) Subsection (3) does not apply to the first entity in respect of a particular time if an entity that had a direct or indirect interest in, or was owed a debt by, the first entity at an earlier time:
(a) made a capital loss (other than a capital loss that was disregarded) because a * CGT event happened in respect of the interest or debt, where the capital loss reflected any part of the * loss company's overall loss; or
(b) has deducted or could have deducted at an earlier time, or could deduct at a later time, an amount in respect of the cost of the * acquisition, or a net loss on the * disposal, of the interest or debt, where the deduction reflected or would have reflected, or would reflect, as the case may be, any part of the company's overall loss.
(5) An individual is not taken to have a relevant equity interest in a * loss company at any time.
(6) A partnership that consists only of individuals is not taken to have a relevant equity interest in a * loss company at any time.
(7) If section 106 - 30, 106 - 50 or 106 - 60 would treat
an act referred to in that section that is done in relation to an interest as
having been done by an individual, the interest is not a relevant equity
interest.