Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 166.280

  (1)   A * tracing rule does not modify how the ownership tests in section   166 - 145 apply to the tested company in respect of all or part of the voting power in the tested company, or all or some of the rights to * dividends of, or capital in, the tested company, if:

  (a)   either:

  (i)   an entity (the controlling entity ) directly holds that power or has those rights; or

  (ii)   an entity (the controlling entity ) indirectly holds that power or has those rights through one or more interposed entities; and

  (b)   the tested company is sufficiently influenced (within the meaning of paragraph   318(6)(b) of the Income Tax Assessment Act 1936 ) by the controlling entity.

Note:   However, a tracing rule can modify how the ownership tests in section   166 - 145 apply to the tested company in respect of voting power or dividend or capital rights held by entities other than controlling entities.

  (2)   A * tracing rule does not modify how the ownership tests in section   166 - 145 apply to the tested company in respect of all or part of the voting power in the tested company if:

  (a)   the tested company is a * widely held company; and

  (b)   that voting power:

  (i)   is more than 25% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a natural person, together with his or her * associates; or

  (ii)   is more than 50% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a trustee or company, together with its associates.

Table of Subdivisions

  Guide to Division   167

167 - A   Rights to dividends or capital distributions

167 - B   Voting power