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INCOME TAX ASSESSMENT ACT 1997 - SECT 165.215

Special alternative to change of ownership test for Subdivision 165 - A

  (1)   If a company does not meet the conditions in section   165 - 12, it is nevertheless taken to meet the conditions if it meets the conditions in this section.

First condition

  (2)   At all times during the * ownership test period:

  (a)   both:

  (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

  (b)   both:

  (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.

Second condition

  (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 * loss year must have held those entitlements to those shares at all times during the * ownership test period.

Third condition

  (4)   At the beginning of the * loss 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.

Fourth condition

  (5)   It must be the case that, for each * non - fixed trust (other than an * excepted trust) that, at any time during the * ownership test period, held directly or indirectly a * fixed entitlement to a share of the income or capital of the company, section   267 - 20 in Schedule   2F to the Income Tax Assessment Act 1936 would not have prevented the non - fixed trust from deducting the * tax loss concerned if it, rather than the company, had incurred the tax loss.

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.


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