Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-CD - Reductions after alterations in ownership or control of loss company  

Operative provisions

SECTION 165-115Q   Notional alteration time - disposal of interests in company earlier than 12 months before alteration time  

165-115Q(1)    
This section applies if:

(a) an alteration time occurs in respect of a *loss company; and

(b) an entity that *disposed of an interest in the company (the later equity ) or a debt (the later debt ) at, or within 12 months before, the alteration time also disposed of an interest in the company (the earlier equity ) or a debt (the earlier debt ) at a time (the earlier disposal time ) earlier than 12 months before the alteration time but not earlier than the commencement time; and

(c) the disposal of the later equity or later debt and the disposal of the earlier equity or earlier debt occurred as part of an *arrangement; and

(d) immediately before the earlier disposal time, the entity had a relevant equity interest or a relevant debt interest in the company that included the earlier equity or earlier debt, or would have had such an interest if any previous disposals of interests or debts by the entity had not occurred; and

(e) immediately before the alteration time, the entity had a relevant equity interest or a relevant debt interest in the company, or would have had such an interest if any previous disposals of interests or debts by the entity had not occurred.

165-115Q(2)    
The references in paragraphs (1)(d) and (e) to previous *disposals of interests or debts by the entity are references to:

(a) previous disposals within the period referred to in paragraph (1)(b); and

(b) previous disposals before that period if those previous disposals and any one or more of the following:

(i) the disposal of the equity or debt;

(ii) a disposal referred to in paragraph (a);

(iii) a disposal at the alteration time;

occurred as part of an *arrangement.

165-115Q(3)    
The time immediately before the *disposal of the earlier equity or earlier debt is taken to have been an alteration time (a notional alteration time ) in respect of the company.

165-115Q(4)    
The entity:

(a) is taken to have had, immediately before the notional alteration time, a relevant equity interest in the company constituted by the earlier equity or a relevant debt interest in the company constituted by the earlier debt, as the case may be; and

(b) is taken not to have had, immediately before the notional alteration time, any other relevant equity interest or relevant debt interest in the company.

165-115Q(5)    
No entity (other than the entity referred to in paragraph (1)(b)) is taken to have had a relevant equity interest or a relevant debt interest in the company immediately before the notional alteration time.

165-115Q(6)    
In applying this Subdivision in relation to the company in respect of a time after a notional alteration time, the notional alteration time is taken not to have occurred.

Note:

For relevant equity interests and relevant debt interests , see sections 165-115X and 165-115Y .