Tax Laws Amendment (2011 Measures No. 2) Act 2011 (41 of 2011)

Schedule 5  

Part 20   Definitions mainly relevant to Subdivision 165-F of the Income Tax Assessment Act 1997

Income Tax Assessment Act 1997

125   Section 165-225

Repeal the section, substitute:

165-225 Special way of dividing the income year under Subdivision 165-B

(1) If:

(a) the company is required to calculate:

(i) its taxable income and *tax loss for the income year under Subdivision 165-B; and

(ii) its *net capital gain and *net capital loss for the income year under Subdivision 165-CB; and

(b) the company meets the requirements of subsections 165-220(2) and (4);

then, in dividing the income year into periods, apply subsection (2) of this section instead of subsections 165-45(3) and (4).

(2) The last period ends at the end of the income year. Each period (except the last) ends at the earliest of:

(a) the latest time that would result in the persons holding *fixed entitlements to shares of the income or shares of the capital of:

(i) if the company meets the requirements of paragraph 165-220(2)(a) - the company; or

(ii) if the company meets the requirements of paragraph 165-220(2)(b) - the holding entity mentioned in that paragraph;

and the percentages of the shares that they hold, remaining the same during the whole of the period; and

(b) the times that, for all of the *non-fixed trusts, other than *excepted trusts, holding directly or indirectly a fixed entitlement to a share of the income or capital of the company at any time during the income year, are the latest times that would result in individuals having *more than a 50% stake in their income or capital; and

(c) the earliest time in the period when a group (within the meaning of Schedule 2F to the Income Tax Assessment Act 1936) begins to *control a non-fixed trust, other than an excepted trust, that holds directly or indirectly a fixed entitlement to a share of the income or capital of the company at any time during the income year.

Note: See section 165-245 for when an entity is taken to have held or had, directly or indirectly, a fixed entitlement to a share of income or capital of a company.