This Subdivision applies to a company (the tested company ) that is:

(a) a ^* widely held company at all times during the income year; or
(b) an ^* eligible Division 166 company at all times during the income year; 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.

Note: See section 165-255 for the rule about incomplete income years.

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if:

(a) a ^* voting stake that carries rights to less than 10% of the voting power in the company is held directly in the company; or
(b) a ^* dividend stake that carries the right to receive less than 10% of any dividends that the company may pay is held directly in the company; or
(c) a ^* capital stake that carries the right to receive less than 10% of any distribution of capital of the company is held directly in the company.

Note: Other rules might affect this provision: see sections 166-270, 166-275 and 166-280.

Notional shareholder

(2)

The tests are applied to the tested company as if, at the ^* ownership test time, a single notional entity:

(a) directly controlled the voting power that is carried by each such ^* voting stake; and
(b) had the right to receive, for its own benefit and directly:
(i) any ^* dividends the tested company may pay in respect of each such ^* dividend stake; and
(ii) any distributions of capital of the tested company in respect of each such ^* capital stake; and
(c) were a person (other than a company).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

(3)

To avoid doubt, the single notional entity mentioned in subsection (2) is a different single notional entity from the one mentioned in section 165-207 and the one mentioned in section 166-255.

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if it is the case, or it is reasonable to assume that:

(a) an entity (the stakeholder ) indirectly holds any of these stakes in the tested company:
(i) a ^* voting stake that carries rights to less than 10% of the voting power in the company; or
(ii) a ^* dividend stake that carries the right to receive less than 10% of any dividends that the company may pay; or
(iii) a ^* capital stake that carries the right to receive less than 10% of any distribution of capital of the company; and
(b) either:
(i) the stakeholder indirectly holds the stake in the tested company by holding ^* shares directly in a company (the top interposed entity ) that is interposed between the stakeholder and the tested company; or
(ii) the stakeholder indirectly holds the stake in the tested company by holding another interest directly in an entity (the top interposed entity ) that is not a company and that is interposed between the stakeholder and the tested company.

Note 1: There might also be other entities interposed between the top interposed entity and the tested company.

Note 2: Other rules might affect this provision: see subsection (3) and sections 166-272, 166-275 and 166-280.

Top interposed entity deemed to hold stakes directly in the tested company

(2)

The tests are applied to the tested company as if, at the ^* ownership test time:

(a) if the stake is a ^* voting stake—the top interposed entity controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and
(b) if the stake is a ^* dividend stake—the top interposed entity ^* indirectly had the right to receive, for its own benefit, any ^* dividends the tested company may pay in respect of that stake at that time; and
(c) if the stake is a ^* capital stake—the top interposed entity indirectly had the right to receive, for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and
(d) in any case—the top interposed entity were a person (other than a company).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

Acquisition of top interposed entity by another entity

(3)

If:

(a) a new entity (the new interposed entity ) acquires all the ^* shares or other interests in the top interposed entity (the old interposed entity ); and
(b) the new interposed entity has the same classes of shares or other interests as the old interposed entity; and
(c) if the new interposed entity is a company—the shares are not ^* redeemable shares; and
(d) in any case—each stakeholder holds the same proportion of the total ^* voting stakes, ^* dividend stakes or ^* capital stakes in the new interposed entity immediately after the acquisition as the stakeholder held in the old interposed entity immediately before the acquisition;

then, at all times that the old interposed entity held or is taken to have held a stake in the tested company, the new interposed entity is taken to have held that stake.

(4)

Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165-115L), section 166-272 (which is about the same shares or interests) is to be disregarded when applying subsection (3).

Meaning of voting stake

(1)

An entity holds a voting stake in a company if:

(a) the entity is the registered holder of ^* shares in the company; and
(b) the shares carry rights to exercise voting power in the company.

(2)

An entity (the stakeholder ) also holds a voting stake in a company if:

(a) one or more other entities are interposed between the company and the stakeholder; and
(b) the stakeholder controls, or is able to control, voting power in the company indirectly through the interposed entity or entities.

Meaning of dividend stake

(3)

An entity holds a dividend stake in a company if:

(a) the entity is the registered holder of ^* shares in the company; and
(b) the shares carry rights to all or any ^* dividends that the company may pay.

(4)

An entity (the stakeholder ) also holds a dividend stake in a company if:

(a) one or more other entities are interposed between the company and the stakeholder; and
(b) the stakeholder has the right to receive, for its own benefit and ^* indirectly through the interposed entity or entities, all or any ^* dividends that the company may pay.

Meaning of capital stake

(5)

An entity holds a capital stake in a company if:

(a) the entity is the registered holder of ^* shares in the company; and
(b) the shares carry rights to all or any of a distribution of capital of the company.

(6)

An entity (the stakeholder ) also holds a capital stake in a company if:

(a) one or more other entities are interposed between the company and the stakeholder; and
(b) the stakeholder has the right to receive, for its own benefit and ^* indirectly through the interposed entity or entities, all or any of a distribution of capital of the company.

Stakes held by nominees

(7)

For the purposes of sections 166-225 and 166-230, if:

(a) an entity (the nominee entity ) holds a ^* voting stake, a ^* dividend stake, or a ^* capital stake, in a company; and
(b) the nominee entity is itself a company; and
(c) the nominee entity holds the stake as a nominee for more than one other entity;

then, for each entity for whom a part of the stake is held by the nominee entity, that entity's part of the stake may be treated instead as a separate stake.

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if a ^* widely held company directly or indirectly (through one or more interposed entities), or both directly and indirectly, holds any of the following:

(a) a ^* voting stake that carries rights to between 10% and 50% (inclusive) of the voting power in the company;
(b) a ^* dividend stake that carries the right to receive between 10% and 50% (inclusive) of any dividends that the company may pay;
(c) a ^* capital stake that carries the right to receive between 10% and 50% (inclusive) of any distribution of capital of the company.

Note: Other rules might affect this provision: see subsections (3) and (4) and sections 166-272, 166-275 and 166-280.

(2)

The tests are applied to the tested company as if, at the ^* ownership test time:

(a) if the stake is a ^* voting stake—the ^* widely held company controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and
(b) if the stake is a ^* dividend stake—the widely held company had the right to receive (whether directly or ^* indirectly), for its own benefit, any ^* dividends the tested company may pay in respect of that stake at that time; and
(c) if the stake is a ^* capital stake—the widely held company had the right to receive (whether directly or indirectly), for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and
(d) in any case—the widely held company were a person (other than a company).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

Exception

(3)

This section does not apply in respect of a ^* widely held company if the company is not a widely held company for the whole income year in which the ^* ownership test time occurs.

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

Acquisition of widely held company by another entity

(4)

If:

(a) a new company acquires all the ^* shares in the ^* widely held company; and
(b) immediately before the acquisition, the shares in the widely held company were listed for quotation in the official list of an ^* approved stock exchange; and
(c) immediately after the acquisition, the shares in the new company are listed for quotation in the official list of an approved stock exchange; and
(d) the new company has the same classes of shares (not being ^* redeemable shares) as the widely held company; and
(e) each entity that held stakes in the widely held company immediately before the acquisition holds the same proportion of the total ^* voting stakes, ^* dividend stakes or ^* capital stakes in the new company immediately after the acquisition as the entity held in the widely held company immediately before the acquisition;

then, at all times that the widely held company held or is taken to have held a stake in the tested company, the new company is taken to have held that stake.

(5)

Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165-115L), section 166-272 (which is about same shares or interests) is to be disregarded when applying subsection (4).

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if:

(a) an entity mentioned in subsection (2) directly or indirectly (through one or more interposed entities) holds a ^* voting stake, a ^* dividend stake or a ^* capital stake in the company; and
(b) neither the entity nor another entity has, under section 166-225, 166-230 or 166-240, been taken to control voting power or have rights in respect of the stake; and
(c) the entity mentioned in subsection (2) satisfies the condition in subsection (3).

Note: Other rules might affect this provision: see sections 166-272, 166-275 and 166-280.

(2)

For the purposes of subsection (1), these are the entities:

(a) a ^* superannuation fund; and
(b) an ^* approved deposit fund; and
(c) a ^* special company; and
(d) a ^* managed investment scheme; and
(e) any other entity, or entity of a kind, prescribed by the regulations.

(3)

For the purposes of paragraph (1)(c), an entity satisfies the condition in this subsection if at all times during the income year of the tested company in which the ^* ownership test time occurs:

(a) if the entity is a ^* superannuation fund:
(i) the fund is a ^* complying superannuation fund; or
(ii) the fund is a superannuation fund that is established in a foreign country and is regulated under a ^* foreign law; or
(b) if the entity is an ^* approved deposit fund—the fund is a ^* complying approved deposit fund; or
(c) if the entity is a ^* special company—the company is a special company; or
(d) if the entity is a ^* managed investment scheme:
(i) the scheme is registered under the Corporations Act 2001 ; or
(ii) the entity is recognised, under a ^* foreign law relating to corporate regulation, as an entity with a similar status to a managed investment scheme; or
(e) if the entity is an entity, or an entity of a kind, prescribed by the regulations—the entity meets any conditions prescribed by the regulations.

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

If the entity has 10 members or fewer

(4)

If the entity has 10 ^* members or fewer, the tests are applied to the tested company as if, at the ^* ownership test time:

(a) if the stake is a ^* voting stake—each member controls, or is able to control, an equal proportion of the voting power in the tested company that is carried by that stake at that time; and
(b) if the stake is a ^* dividend stake—each member had the right to receive (whether directly or ^* indirectly), for its own benefit, an equal proportion of any ^* dividends the tested company may pay in respect of that stake at that time; and
(c) if the stake is a ^* capital stake—each member had the right to receive (whether directly or indirectly), for its own benefit, an equal proportion of any distributions of capital of the tested company in respect of that stake at that time; and
(d) in any case—each member were a person (other than a company or a trustee).

Note 1: If each member's proportion of the voting power, the dividends or the distributions is less than 10%, then subsections (5) and

(6)

apply instead.

Note 2: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

If the entity has more than 10 members etc.

(5)

The ownership tests are applied as set out in subsection (6) if:

(a) the entity has more than 10 ^* members; or
(b) under subsection (4):
(i) the proportion of the voting power in the company that each member controls, or is able to control, is less than 10% of the total voting power; or
(ii) the proportion of the ^* dividends that the tested company may pay for the benefit of each member is less than 10% of the total dividends; or
(iii) the proportion of the distributions of capital that the tested company may pay for the benefit of each member is less than 10% of the total distributions.

(6)

The ownership tests are applied to the tested company as if, at the ^* ownership test time:

(a) if the stake is a ^* voting stake—the entity controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and
(b) if the stake is a ^* dividend stake—the entity had the right to receive (whether directly or ^* indirectly), for its own benefit, any ^* dividends the tested company may pay in respect of that stake at that time; and
(c) if the stake is a ^* capital stake—the entity had the right to receive (whether directly or indirectly), for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and
(d) in any case—the entity were a person (other than a company or a trustee).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if:

(a) at the ^* ownership test time, it is the case, or it is reasonable to assume, that persons (none of them companies or trustees) hold a ^* voting stake, a ^* dividend stake or a ^* capital stake in the tested company; and
(b) an entity has not, under section 166-225, 166-230, 166-240 or 166-245, been taken to control voting power or have rights in respect of the stake; and
(c) another company (the foreign listed company ) is interposed, at that time, between those persons and the tested company; and
(d) at all times during the income year of the tested company in which the ownership test time occurs, the ^* principal class of shares in the foreign listed company is listed for quotation in the official list of an ^* approved stock exchange; and
(e) at the ownership test time:
(i) voting stakes that carry rights to 50% or more of the voting power in the foreign listed company; or
(ii) dividend stakes that carry rights to receive 50% or more of any dividends that the foreign listed company may pay; or
(iii) capital stakes that carry rights to receive 50% or more of any distribution of capital of the foreign listed company;
as the case requires, are directly held by way of bearer shares; and
(f) the beneficial owners of some or all of those bearer shares have not been disclosed to the foreign listed company.

Note 1: See section 165-255 for the rule about incomplete test periods.

Note 2: Other rules might affect this provision: see sections 166-270, 166-275 and 166-280.

(2)

The tests are applied to the tested company as if, at the ^* ownership test time, for each of those bearer shares whose owners have not been disclosed:

(a) a single notional entity controls, or is able to control, the voting power in the tested company that is carried by those shares at that time; and
(b) the entity ^* indirectly had the right to receive, for its own benefit:
(i) any ^* dividends the tested company may pay in respect of those shares at that time; and
(ii) any distributions of capital of the tested company in respect of those shares at that time; and
(c) the entity were a person (other than a company).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

(3)

To avoid doubt, the single notional entity mentioned in subsection (2) is a different single notional entity from the one mentioned in section 165-207 and the one mentioned in section 166-225.

(1)

This section modifies how the ownership tests in section 166-145 are applied to the tested company if:

(a) at the ^* ownership test time, it is the case, or it is reasonable to assume, that persons (none of them companies or trustees) have a ^* voting stake, a ^* dividend stake or a ^* capital stake in the tested company; and
(b) an entity has not, under section 166-225, 166-230, 166-240, 166-245 or 166-255, been taken to control voting power or have rights in respect of the stake; and
(c) another company (the foreign listed company ) is interposed, at that time, between those persons and the tested company; and
(d) at all times during the income year of the tested company in which the ownership test time occurs, the ^* principal class of shares in the foreign listed company is listed for quotation in the official list of an ^* approved stock exchange; and
(e) at the ownership test time:
(i) voting stakes that carry rights to 50% or more of the voting power in the foreign listed company; or
(ii) dividend stakes that carry rights to receive 50% or more of any dividends that the foreign listed company may pay; or
(iii) capital stakes that carry rights to receive 50% or more of any distribution of capital of the foreign listed company;
as the case requires, are directly held by one or more ^* depository entities (see subsection (3)); and
(f) a law of a foreign country, or a part of a foreign country, in which the approved stock exchange is located, prevents the disclosure of the beneficial owners of some or all of those shares that are held by the depository entities; and
(g) the beneficial owners of some or all of the shares held by the depository entities have not been disclosed to the foreign listed company.

Note 1: See section 165-255 for the rule about incomplete test periods.

Note 2: This rule might not apply in all circumstances: see sections 166-275 and 166-280.

(2)

The tests are applied to the tested company as if, at the ^* ownership test time, for each of those ^* shares held by a ^* depository entity whose owners have not been disclosed, the depository entity:

(a) controls, or is able to control, the voting power in the tested company that is carried by those shares at that time; and
(b) ^* indirectly had the right to receive, for its own benefit:
(i) any ^* dividends the tested company may pay in respect of those shares at that time; and
(ii) any distributions of capital of the tested company in respect of those shares at that time; and
(c) were a person (other than a company).

Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166-265.

(3)

If the effect of subsection (2) is that the ^* depository entity is taken to hold:

(a) a ^* voting stake that carries rights to less than 10% of the voting power in the tested company; or
(b) a ^* dividend stake that carries the right to receive less than 10% of any dividends that the tested company may pay; or
(c) a ^* capital stake that carries the right to receive less than 10% of any distribution of capital of the tested company;

then neither section 166-225 nor section 166-230 applies in respect of that stake.

(4)

If the ^* depository entity (the old depository entity ) is subsequently replaced by another depository entity (the new depository entity ), then, at all times that the old depository entity held or is taken to have held a stake in the tested company, the new entity is taken to have held that stake.

(5)

A depository entity is an entity:

(a) that is a central securities repository; and
(b) that provides custody of share certificates; and
(c) that provides services for the exchange of shares.

If any of sections 166-225, 166-230, 166-240, 166-245, 166-255 or 166-260 apply, the ownership tests in section 166-145 are also applied to the tested company as if, at the ^* ownership test time:

(a) the persons who control, or are able to control, the voting power in the tested company (whether directly, or indirectly through one or more interposed entities) that is carried by each ^* voting stake in the tested company mentioned in that section had not had that control; and
(b) the persons who have the right to receive for their own benefit (whether directly, or ^* indirectly through one or more interposed entities):
(i) any ^* dividends that the tested company may pay in respect of each ^* dividend stake in the tested company mentioned in that section; and
(ii) any distributions of capital of the tested company in respect of each ^* capital stake in the tested company mentioned in that section;
had not had that right.

Minimum control of voting power

(1)

If:

(a) the ^* ownership test time is after the start of the ^* test period; and
(b) a single notional entity mentioned in section 166-225 or 166-255 has voting power in a company; and
(c) the voting power that the entity has at the ownership test time is greater than the voting power that the entity had at the start of the test period;

then the entity is taken to have voting power in the company at the ownership test time only to the extent that it had it at the start of the test period.

Minimum percentage of rights to dividends and capital

(2)

If:

(a) the ^* ownership test time is after the start of the ^* test period; and
(b) a single notional entity mentioned in section 166-225 or 166-255 has a percentage of rights to the ^* dividends or distributions of capital of a company; and
(c) the percentage that the entity has rights to at the ownership test time is greater than the percentage (the lower percentage ) of the dividends or distributions of capital of the company that the entity had rights to at the start of the test period;

then the entity is taken to have rights to the lower percentage of the dividends or distributions of capital at the ownership test time.

Application

(1)

This section modifies how the ownership tests in section 166-145 are applied to a ^* voting stake, a ^* dividend stake or a ^* capital stake in the tested company held by one of the following entities (the stakeholder ):

(a) a top interposed entity mentioned in section 166-230 (which is about indirect stakes of less than 10%);
(b) a ^* widely held company mentioned in section 166-240;
(c) an entity mentioned in subsection 166-245(2) (which is about stakes held by other entities);
(d) a ^* depository entity mentioned in section 166-260;

(whether directly, or ^* indirectly through one or more interposed entities).

Exactly the same shares or interests must continue to be held

(2)

For the purpose of determining whether the tested company has satisfied a condition or whether a time is a changeover time or an alteration time in respect of the tested company:

(a) a condition that has to be satisfied is not satisfied; or
(b) a time that, apart from this subsection, would not be a changeover time or alteration time is taken to be a changeover time or alteration time, as the case may be;

unless, at all relevant times:

(c) the only ^* shares in the tested company that are taken into account are exactly the same shares and are held by the same persons; and
(d) the only interests (including shares) in any other entity that is interposed between the stakeholder and the tested company that are taken into account are exactly the same interests and are held by the same persons.

What happens in case of share splitting

(3)

If:

(a) a particular ^* share (an old share ) in a company of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the ^* test period is divided into 2 or more new shares during that period; and
(b) the stakeholder or entity becomes the holder of each of the new shares immediately after the division takes place and remains the holder until the end of that period;

the new shares are taken to be exactly the same shares as the old share.

What happens in case of splitting of units in a unit trust

(4)

If:

(a) a particular unit (an old unit ) in a unit trust of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the ^* test period is divided into 2 or more new units during that period; and
(b) the stakeholder or entity becomes the holder of each of the new units immediately after the division takes place and remains the holder until the end of that period;

the new units are taken to be exactly the same units as the old unit.

What happens in case of consolidation of shares

(5)

If:

(a) a particular ^* share (an old share ) in a company of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the ^* test period, and other shares (each of which is also called an old share ) in the company of which the stakeholder or entity is the holder at the start of that period, are consolidated into a new share during that period; and
(b) the stakeholder or entity becomes the holder of the new share immediately after the consolidation takes place;

the new share is taken to be exactly the same share as the old shares.

What happens in case of consolidation of units in a unit trust

(6)

If:

(a) a particular unit (an old unit ) in a unit trust of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the ^* test period and other units (each of which is also called an old unit ) in the trust of which the stakeholder or entity is the holder at the start of that period are consolidated into a new unit during that period; and
(b) the stakeholder or entity becomes the holder of the new unit immediately after the consolidation takes place;

the new unit is taken to be exactly the same unit as the old units.

Totals of shares or rights not affected

(7)

This section does not affect how ^* shares, and rights carried by shares, are counted for the purpose of determining:

(a) the total voting power in the tested company; or
(b) the total dividends that the tested company may pay; or
(c) the total distributions of capital of the tested company.

Conditions in section 166-145 may be treated as having been satisfied in certain circumstances

(8)

If any of the conditions in section 166-145 have not been satisfied, those conditions are taken to have been satisfied if:

(a) they would have been satisfied except for the operation of subsection (2) of this section; and
(b) the tested company has information from which it would be reasonable to conclude that less than 50% of:
(i) the ^* tax loss; or
(ii) the ^* notional loss; or
(iii) the bad debt; or
(iv) the unrealised net loss (within the meaning of section 165-115E);
as the case requires, has been reflected in deductions, capital losses, or reduced assessable income, that occurred, or could occur in future, because of the happening of any ^* CGT event in relation to any direct or indirect equity interests held in the tested company by the stakeholder, or an entity interposed between the stakeholder and the tested company, during the ^* test period.

Note: See subsection (11) for the definitions of direct equity interests and indirect equity interests .

Subsection (8) not to apply for purpose of determining whether an alteration time has occurred

(9)

However, subsection (8) does not apply in relation to any of the conditions in section 166-145 in so far as those conditions have effect for the purpose of determining whether an alteration time (within the meaning of section 165-115L) has occurred.

Time of happening of CGT event

(10)

The happening of any ^* CGT event in relation to a direct or indirect equity interest in the tested company that results in the failure of the tested company to satisfy a condition in section 166-145 is taken, for the purposes of paragraph (8)(b), to have occurred during the ^* test period.

Note: See subsection (11) for the definitions of direct equity interests and indirect equity interests .

Meaning of direct and indirect equity interests

(11)

For the purposes of subsections (8) and (10):

(a) the direct equity interests in the tested company are ^* shares in the tested company; and
(b) the indirect equity interests in the tested company are shares or other interests in entities interposed between the tested company and stakeholder.

A company is taken to have met the conditions in section 165-12, paragraph 165-35(a) or section 165-123, or a changeover time or an alteration time is taken not to have occurred in respect of a company, (as the case requires), if:

(a) a ^* tracing rule modifies how the ownership tests in section 166-145 apply to the tested company in respect of a ^* voting stake, a ^* dividend stake or a ^* capital stake; and
(b) the company fails the tests (whether at the time of applying the tracing rule or at another time); and
(c) the company believes, on reasonable grounds, that if the tracing rule did not modify how the tests apply to the company in respect of that stake, it would not fail the tests.

Example: 11 people own shareholdings of 9% in the listed company. Under section 166-225, one notional shareholder is deemed to hold all of those shareholdings. 2 of the people sell their shareholdings so that 9 of the original 11 people now own shareholdings of 11%. Without the rule in this section, the company would fail the ownership tests (as the rule in section 166-225 no longer applies).

(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.

Omit "carrying on the same business", substitute "satisfying the same business test".

Add:

Note: Companies whose total income for an income year is more than $100 million cannot meet the condition in section 165-13 in respect of that year: see section 165-212A.

Add:

Note: Section 175-100 allows the Commissioner to disallow an excluded loss of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow an excluded loss of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow a deduction of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.

Omit "or ^* net capital loss".

Omit "or net capital loss".

Omit "carrying on the same business", substitute "satisfying the same business test".

Repeal the note, substitute:

Note 1: Subdivision 165-A deals with the deductibility of a company's tax loss for an earlier income year if there has been a change in the ownership or control of the company in the period from the start of the loss year to the end of the income year.

Note 2: Companies whose total income for an income year is more than $100 million cannot meet the condition in section 165-13 in respect of that year: see section 165-212A.

Omit "or ^* net capital loss".

Add:

Note: Section 175-100 allows the Commissioner to disallow an excluded loss of an insolvent company.

Omit "or ^* net capital loss".

Add:

Note: Section 175-100 allows the Commissioner to disallow an excluded loss of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow capital losses or parts of capital losses of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow a capital loss of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.

Omit "carrying on the same business", substitute "satisfying the same business test".

Add:

Note: Companies whose total income for an income year is more than $100 million cannot meet the condition in section 165-126 for the second continuity period: see section 165-212A.

Add:

Note: Section 175-100 allows the Commissioner to disallow some or all of a deduction of an insolvent company.

Add:

Note: Section 175-100 allows the Commissioner to disallow some or all of a deduction of an insolvent company.

Repeal the heading, substitute:

Add:

Despite a subsection listed in column 1, the Commissioner may, under a subsection listed in column 2, disallow some or all of an ^* excluded loss, deduction, or ^* capital loss, of a company (as the case requires) if:

(a) the company is or becomes:
(i) an externally-administered body corporate within the meaning of the Corporations Act 2001 ; or
(ii) an entity with a similar status under a ^* foreign law to an externally-administered body corporate; and
(b) the company is insolvent (within the meaning of section 9 of the Corporations Act 2001 ) when the administration begins.

Omit "or ^* net capital loss".

Add:

Note 3: Section 165-212E overrides this rule for the purposes of the same business test.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for that year (even if the company carries on the same business): see section 165-212A.

Add:

Note: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test throughout the trial year (even if the company carries on the same business): see section 716-805.

Omit "166-5(4) or (5)", substitute "166-5(5) or (6)".

Add:

Note: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "subsection 166-5(4)", substitute "subsection 166-5(5)".

Omit "subsection 166-5(5)", substitute "subsection 166-5(6)".

Repeal the note, substitute:

Note 1: Subdivision 166-A applies to widely held companies and eligible Division 166 companies unless they choose that Subdivision 165-A apply to them without the modifications made by Subdivision 166-A.

Note 2: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Repeal the paragraph, substitute:

(a) the income year in which occurred the first time mentioned in subsection 166-5(6); or

Add:

Note: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "subsection 166-5(1)", substitute "subsection 166-5(2)".

Omit "or abnormal trading".

Omit "subsection 166-5(5)", substitute "subsection 166-5(6)".

Repeal the subsection, substitute:

Same business test applying to latest transferee under Division 166

(6)

If subsection 166-5(5) affects whether the latest transferee can ^* utilise the loss for the income year because the latest transferee is a ^* widely held company or an ^* eligible Division 166 company, or both, during the year, subsection 166-5(6) operates as if it required the ^* same business test to be applied to the ^* business the latest transferee carried on just before the time described in subsection (5) of this section.

Note: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test (even if the company carries on the same business): see section 165-212A.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Add:

Note: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Repeal the note, substitute:

Note 1: For provisions about making one of these choices, see sections 715-175 to 715-185.

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Omit "Note", substitute "Note 1".

Add:

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Add:

Note 3: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 716-805.

Insert:

(1)

For the purposes of this Part (other than subparagraphs 707-125(2)(a)(ii) and (4)(a)(ii), Subdivision 709-D and Division 715), a company does not satisfy the ^* same business test for the ^* same business test period if the ^* total income of the company for the income year mentioned in paragraph (a) or (b) is more than $100 million:

(a) unless paragraph (b) applies—the income year whose last day falls within the ^* trial year; or
(b) if there is no such day in the trial year—the income year in which the joining time occurs.

Note: Section 165-212C sets out how to work out the total income of a company that is not able to work out its total income for a 12 month period.

(2)

For the purposes of subparagraph 707-125(2)(a)(ii) or (4)(a)(ii), a company does not satisfy the ^* same business test for the ^* same business test period if the ^* total income of the company for the income year mentioned in that subparagraph is more than $100 million.

(3)

For the purposes of Subdivision 709-D, a company does not satisfy the ^* same business test for the ^* same business test period if the ^* total income of the company for the following income year is more than $100 million:

(a) if item 1 of the table in subsection 709-215(3) applies—the income year in which the write-off time occurs;
(b) if item 2 of the table in subsection 709-215(3) applies—the income year in which the debt test period ends.

(4)

For the purposes of Division 715, a company does not satisfy the ^* same business test for the ^* same business test period if the ^* total income of the company for the following income year is more than $100 million:

(a) for the purposes of section 715-95 (unless paragraph (c) of this section applies)—the income year whose last day falls within the 12 months before the leaving time;
(b) for the purposes of the rest of Division 715 (unless paragraph (c) of this subsection applies)—the income year whose last day falls within the ^* trial year;
(c) if paragraph (a) or (b) of this subsection applies but there is no such day in those 12 months or the trial year—the income year in which the joining time or the leaving time occurs.

Omit "Note", substitute "Note 1".

Add:

Note 2: This section does not apply to section 165-212A or 716-805: see section 165-212C.

Omit "subsection 166-5(5)", substitute "subsection 166-5(6)".

Add "(However, companies whose total income for the claim year is more than $100 million cannot satisfy the same business test for that year: see section 165-212A.)".

Repeal the subsection, substitute:

Same business test for focal company under Division 166

(3)

If subsection 166-5(5) affects whether the focal company can ^* utilise the loss for the claim year because the focal company is a ^* widely held company or an ^* eligible Division 166 company, or both, during the year, subsection 166-5(6) operates as if it required the ^* same business test to be applied to the ^* business the focal company carried on just before the time described in subsection (2) of this section.

Note: Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for the same business test period (even if the company carries on the same business): see section 165-212A.

Omit "subsection 166-5(5)", substitute "subsection 166-5(6)".

Add "(Companies whose total income for an income year is more than $100 million cannot satisfy the same business test for the same business test period: see section 165-212A.)".

Insert:

Repeal the definition.

Insert:

Insert:

Insert:

Repeal the definition.

Insert:

Insert:

Insert:

Repeal the definition.

Insert:

Insert:

Repeal the definition.

Repeal the definition.

Repeal the definition.

Insert:

Repeal the definition.

Repeal the definition.

Insert:

Insert:

Insert:

Omit "166-170", substitute "166-80".

Omit "166-85,".

Insert:

Insert:

Repeal the definition.

Insert:

Insert:

(1) The amendments made by items 1, 2 and 3 of this Schedule apply to assessments, made on or after 1 July 1997, for any year of income.
(2) The amendments made by items 73 and 78 of this Schedule (other than section 165-209 of the Income Tax Assessment Act 1997 as inserted by item 73) apply:

(a) to any tax loss that is claimed in an income year commencing on or after 1 July 1997; and
(b) to any net capital loss that is applied in an income year commencing on or after 1 July 1998; and
(c) to any deduction in respect of a bad debt that is claimed in an income year commencing on or after 1 July 1998; and
(d) in determining whether any changeover time or alteration time occurs at or after 1 pm (by legal time in the Australian Capital Territory) on 11 November 1999.

(1) The amendments made by items 10, 11, 17, 30, 47, 50, 58, 68 to 71, 73, 79, 109, 111, 112, 114, 118, 119, 136, 138, 139, 141 to 151, 153 to 158, 159, 161, 162, 163 and 165 to 168 of this Schedule (other than section 165-208 of the Income Tax Assessment Act 1997 as inserted by item 73) apply:

(a) to any tax loss that is incurred in an income year commencing on or after 1 July 2002; and
(b) to any net capital loss that is made in an income year commencing on or after 1 July 2002; and
(c) to any deduction in respect of a bad debt that is claimed in an income year commencing on or after 1 July 2002; and
(d) in determining whether any changeover time or alteration time occurred on or after 1 July 2002.

(2) However, if:

(a) a tax loss of a company is incurred; or
(b) a net capital loss of a company is made; or
(c) a deduction in respect of a bad debt of a company is claimed; or
(d) a changeover time or alteration time in respect of a company occurs;

in an income year that ends before this Act receives the Royal Assent, then the company may choose that the amendments made by the items mentioned in subitem (1) not apply in respect of the loss, deduction or time.

(3) The company must make the choice under subitem (2) on or before the day it lodges its first income tax return after this Act receives the Royal Assent, or before a later day if the Commissioner allows.
(4) The amendments made by items mentioned in subitem (1) also apply to:

(a) any tax loss of a company:
(i) that is incurred in an income year commencing on or before 30 June 2002; and
(ii) that could have been deducted, in accordance with Divisions 165 and 166 as in force at that time, in the first income year commencing after 30 June 2002 if the deduction had not been limited by the company's income for that income year; and
(b) any net capital loss of a company:
(i) that is made in an income year commencing on or before 30 June 2002; and
(ii) that could have been applied, in accordance with Divisions 165 and 166 as in force at that time, in the first income year commencing after 30 June 2002 if the application of the loss had not been limited by the company's capital gains for that income year .

(1) The amendments made by items 16, 29 and 57 of this Schedule apply to:

(a) any tax loss that is claimed in an income year ending after 21 September 1999; and
(b) any net capital loss that is applied in an income year ending after 21 September 1999; and
(c) any deduction in respect of a bad debt that is claimed in an income year ending after 21 September 1999.

(2) The amendment made by item 46 of this Schedule applies in determining whether a changeover time occurs at or after 1 pm (by legal time in the Australian Capital Territory) on 11 November 1999.
(3) The amendment made by item 49 of this Schedule applies in determining whether an alteration time occurs at or after 1 pm (by legal time in the Australian Capital Territory) on 11 November 1999.

(1) The amendments made by items 19, 60, 74, 76, 133 and 164 of this Schedule (other than sections 165-212D and 165-212E of the Income Tax Assessment Act 1997 as inserted by item 76) apply in respect of:

(a) any tax loss that is incurred in an income year commencing on or after 1 July 2005; and
(b) any net capital loss that is made in an income year commencing on or after 1 July 2005; and
(c) any deduction in respect of a bad debt that is incurred in an income year commencing on or after 1 July 2005.

Exceptions

(2) However, the amendments made by the items mentioned in subitem (1) do not apply to:

(a) a loss that is incurred by a head company in an income year commencing on or after 1 July 2005 because of the operation of section 707-140 of the Income Tax Assessment Act 1997 if the loss was actually incurred by the joining entity or another entity in an income year commencing before that date; or
(b) any tax loss or net capital loss, incurred or made in an income year commencing on or after 1 July 2005, but only to the extent that it would be taken to be a tax loss or net capital loss of the company for an earlier income year under subsection 165-115B(1) or (2) of the Income Tax Assessment Act 1997 if:
(i) the day before the start of that year were a changeover time for the purposes of Subdivision 165-CC of that Act; and
(ii) no changeover time actually occurred after that time.

Note: Section 707-140 of the Income Tax Assessment Act 1997 is about the effect of transferring a loss from a joining entity to a head company of a consolidated group.

The amendment made by item 72 of this Schedule applies in accordance with subitem 17(3) of Schedule 10 to the Taxation Laws Amendment Act (No. 2) 2000 .

Section 165-212D of the Income Tax Assessment Act 1997 (as inserted by item 76 of this Schedule), and items 152 and 160 of this Schedule, apply in respect of:

(a) any tax loss that is incurred in an income year (whether before or after the commencement of this item); and
(b) any net capital loss that is made in an income year (whether before or after the commencement of this item); and
(c) any deduction in respect of a bad debt that is claimed in an income year (whether before or after the commencement of this item).

Section 165-212E of the Income Tax Assessment Act 1997 (as inserted by item 76 of this Schedule) applies on and after 1 July 2002.

The amendment made by item 103 of this Schedule applies in respect of administrations that begin on or after the day on which this Act receives the Royal Assent.