Income Tax Assessment Act 1936

PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

Division 3 - Control interests, attribution interests, attributable taxpayers and attribution percentages  

Subdivision A - Control interests  

SECTION 355   CONTROL TRACING INTEREST IN A CFT  

355(1)   [Eligible transferor holding 100% interest]  

An entity that is an eligible transferor at a particular time in relation to a CFT holds a control tracing interest in the CFT at that time equal to 100%.

355(2)   [Beneficiary in a CFT]  

Subject to subsection (4), an entity (in this subsection called the ``lower entity'' ) that is a beneficiary in a CFT holds a control tracing interest in the trust at a particular time equal to:

(a) the percentage of the income of the CFT represented by the share of the income to which the lower entity is entitled, or that the lower entity is entitled to acquire; or

(b) the percentage of the corpus of the CFT represented by the share of the corpus to which the lower entity is entitled, or that the lower entity is entitled to acquire;

or, if those percentages differ, the greater of those percentages.

355(3)   [Entitlement to income or corpus of trust]  

For the purposes of the application of subsection (2) to a trust:

(a) the percentage of the income of the trust represented by the share of the income to which the beneficiary is entitled, or that the beneficiary is entitled to acquire; or

(b) the percentage of the corpus of the trust represented by the share of the corpus to which the beneficiary is entitled, or that the beneficiary is entitled to acquire;

at a particular time (in this subsection called the ``test time'' ) in a year of income of the trust, is to be worked out by:

(c) ascertaining whichever of the following is applicable:

(i) the income of the trust for the year of income;

(ii) the corpus of the trust as at the end of the year of income; and

(d) assuming that the share to which the entity is entitled, or that the entity is entitled to acquire, at the test time was the same at all other times during the year of income; and

(e) ascertaining the percentage concerned:

(i) at the end of the year of income instead of at the test time; and

(ii) on that assumption.

355(4)   [Interest of 50% or more]  

If the percentage calculated under subsection (2) is not less than 50%, the lower entity holds a control tracing interest in the CFT equal to 100%.

355(5)   [Subsection (2) or (4) interest deemed not held]  

An entity that holds a control tracing interest in a CFT at a particular time because of subsection (1) is not to be taken to hold any control tracing interest in the CFT at that time because of subsection (2) or (4).