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INCOME TAX ASSESSMENT ACT 1997 - SECT 208.45

Persons who are taken to be prescribed persons

  (1)   This section applies to a person that:

  (a)   is a company, a trustee, or a partnership, that holds * membership interests (whether * accountable membership interests or excluded membership interests), or * partial interests (whether * accountable partial interests or excluded partial interests), in a * corporate tax entity (the relevant entity ); and

  (b)   is not a prescribed person under section   208 - 40.

  (2)   A company that holds * membership interests, or * partial interests, in the relevant entity is taken to be a prescribed person in relation to the relevant entity if the risks involved in, and the opportunities resulting from, holding the membership interests or partial interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

  (3)   A trustee of a trust who holds * membership interests, or * partial interests, in the relevant entity is taken to be a prescribed person in relation to the relevant entity if the risks involved in, and the opportunities resulting from, holding the membership interests or partial interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

  (4)   A trustee of a trust who holds * membership interests, or * partial interests, in the relevant entity is taken to be a prescribed person in relation to the relevant entity if:

  (a)   unless subsection   (7) applies, the trust is controlled by one or more persons who are prescribed persons; or

  (b)   all the beneficiaries who are presently entitled to, or during the relevant income year become presently entitled to, income from the trust are prescribed persons.

  (5)   In determining whether subsection   (3) or (4) applies in respect of a trust that is controlled by a person, have regard to the way in which the person, or any * associate of the person, exercises powers in relation to the trust.

  (6)   A person controls a trust if:

  (a)   the person has the power, either directly, or indirectly through one or more interposed entities, to control the application of the income, or the distribution of the property, of the trust; or

  (b)   the person has the power, either directly, or indirectly through one or more entities, to appoint or remove the trustee of the trust; or

  (c)   the person has the power, either directly, or indirectly through one or more entities, to appoint or remove beneficiaries of the trust; or

  (d)   the trustee of the trust is accustomed or under an obligation, whether formal or informal, to act according to the directions, instructions or wishes of the person or of an * associate of the person.

  (7)   Paragraph   (4)(a) does not apply in relation to a trust if some of the beneficiaries receiving income from the trust are not prescribed persons and the Commissioner considers that it is reasonable to conclude that the risks involved in, and the opportunities resulting from, holding the * membership interests or * partial interests in the relevant entity are substantially borne by, or substantially accrue to, as the case may be, one or more persons who are not prescribed persons.

  (8)   A partnership that holds * membership interests, or * partial interests, in the relevant entity is taken to be a prescribed person in relation to the relevant entity if the risks involved in, and the opportunities resulting from, holding the membership interests or partial interests are substantially borne by, or substantially accrue to, as the case may be, one or more prescribed persons.

  (9)   If any of the prescribed persons referred to in subsection   (2), (3), (4) or (8) is a * corporate tax entity, that subsection applies even if the risks involved in, and the opportunities resulting from, holding any of the * membership interests, or * partial interests, in that entity are substantially borne by, or substantially accrue to, as the case may be, one or more persons who are not prescribed persons.

  (10)   An * exempt institution that is eligible for a refund cannot be taken to be a prescribed person in relation to a * corporate tax entity under this section.


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