Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 166.20

  (1)   This Subdivision modifies how Subdivisions   165 - B and 165 - CB apply to a company that is:

  (a)   a * widely held company at all times during the income year (the test period ); or

  (b)   an * eligible Division   166 company at all times during the income year (the test period ); or

  (c)   a widely held company for a part of the income year and an eligible Division   166 company for the rest of the income year (the whole year being the test period ).

Note 1:   Subdivision   165 - B is about when a company must calculate its taxable income and tax loss for the income year in a special way. Subdivision   165 - CB is about when a company must calculate its net capital gain and net capital loss for the income year in a special way.

Note 2:   A company can choose that this Subdivision is not to apply to it: see section   166 - 35.

Note 3:   See section   165 - 255 for the rule about incomplete test periods.

No corporate change etc.

  (2)   If:

  (a)   no * corporate change in the company * ends at any time in the * test period; or

  (b)   a corporate change in the company * ends during the test period, but there is * substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends;

the company is taken to have met the condition in paragraph   165 - 35(a) (which is about there being persons having * more than a 50% stake in it during the whole of the income year).

Note:   See sections   166 - 145 and 166 - 175 to work out whether there is substantial continuity of ownership and a corporate change.

Corporate change

  (3)   If:

  (a)   a * corporate change in the company * ends at any time in the * test period; and

  (b)   there is no * substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends;

then the company is taken to have failed to meet the condition in paragraph   165 - 35(a).

Satisfies the business continuity test

  (4)   However, if the company satisfies the * business continuity test for the rest of the income year (the business continuity test period ) after the first time (the test time ) in the * test period that a * corporate change in the company * ended, the company is taken to have satisfied the condition in paragraph   165 - 35(b).

Note 1:   For the business continuity test, see Subdivision   165 - E.

Note 2:   See section   165 - 255 for the rule about incomplete test periods.

  (5)   Apply the * business continuity test to the * business that the company carried on immediately before the * test time.