Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A * member of a * former exempting entity is an eligible continuing substantial member in relation to a * distribution made by the entity if the following provisions apply.
(2) At both the time when the * distribution was made, and the time immediately before the entity ceased to be an * exempting entity, the * member was entitled to not less than 5% of:
(a) where the entity is a company:
(i) if the voting shares (as defined in the Corporations Act 2001 ) in the relevant former exempting entity are not divided into classes--those voting shares; or
(ii) if the voting shares (as so defined) in the relevant former exempting entity are divided into 2 or more classes--the shares in one of those classes; and
(b) where the entity is a * public trading trust--the units in the trust; and
(c) where the entity is a * corporate limited partnership--the income of the partnership.
(3) At both the time when the * distribution was made, and the time immediately before the entity ceased to be an * exempting entity, the * member was a person referred to in one or more of the following paragraphs:
(a) a person who is a foreign resident;
(b) a * life insurance company;
(c) an exempting entity;
(d) a * former exempting entity;
(e) a trustee of a trust in which an interest was held by a person referred to in any of paragraphs (a) to (d);
(f) a partnership in which an interest was held by a person referred to in any of paragraphs (a) to (d).
(4) If the assumptions set out in subsection (5) are made:
(a) if the * member was a person referred to in any of paragraphs (3)(a) to (d)--the member; or
(b) if the member was a trustee of a trust or a partnership, being a trust or partnership in which a person referred to in any of those paragraphs held an interest--the holder of the interest;
would (if a foreign resident) be exempt from * withholding tax on the distribution or (if an Australian resident) be entitled to a * franking credit or a * tax offset in respect of the distribution.
(5) The assumptions referred to in subsection (4) are that:
(a) the relevant former exempting entity was an * exempting entity at the time it made the * distribution; and
(b) the distribution was a * franked distribution made to the member; and
(c) if the * member was a * former exempting entity--the member was an exempting entity; and
(d) if the member was a trustee of a trust or partnership in which a former exempting entity had an interest--the former exempting entity was an exempting entity.
(6) A person is taken to hold an interest in a trust, for the purposes of paragraph (3)(e), if:
(a) the person is a beneficiary under the trust; or
(b) the person * derives, or will derive, income indirectly, through interposed trusts or partnerships, from * distributions received by the trustee.
(7) A person is taken to hold an interest in a partnership, for the purposes of paragraph (3)(f), if:
(a) the person is a partner in the partnership; or
(b) the person * derives, or will derive, income indirectly, through interposed trusts or partnerships, from * distributions received by the partnership.