Income Tax Assessment Act 1997
View history note
Hide history notePart 3-3 inserted by No 46 of 1998.
Div 152 inserted by No 165 of 1999 (as amended by No 173 of 2000).
152-30 (Repealed) SECTION 152-30 Meaning of connected with the entity
(Repealed by No 80 of 2007 )
S 152-30 repealed by
No 80 of 2007
, s 3 and Sch 4 item 14, applicable to CGT events happening in the 2007-08 income year and later income years. S 152-30 formerly read:
There are further rules relating to discretionary trusts in subsections (4) to (6C).
SECTION 152-30 Meaning of
connected with
the entity
152-30(1)
An entity is
connected with
another entity if:
(a)
either entity controls the other entity in the way described in this section; or
(b)
both entities are controlled in that way by the same third entity.
Control of entity: 40% or more of rights
152-30(2)
An entity (the
first entity
) controls another entity if the first entity, its *small business CGT affiliates or the first entity together with its small business CGT affiliates:
(a)
except where the other entity is a discretionary trust
-
beneficially own, or have the right to acquire the beneficial ownership of, interests in the other entity that carry between them the right to receive at least 40% (the
control percentage
) of any distribution of income or capital by the other entity; or
(b)
if the other entity is a company
-
beneficially own, or have the right to acquire beneficial ownership of, shares in the company that carry between them the right to exercise, or control the exercise of, at least 40% (the
control percentage
) of the voting power in the company; or
(c)
if the other entity is a discretionary trust:
(i)
are the trustee or trustees of the trust (other than the Public Trustee of a State or Territory); or
(ii)
have the power to determine the manner in which the trustee or trustees of the trust exercise the power to make any payment of income or capital to or for the benefit of beneficiaries of the trust.
Note:
S 152-30(2) amended by No 95 of 2004.
152-30(3)
If the control percentage in subsection (2) or (5) is at least 40%, but less than 50%, then the Commissioner may determine that the first entity does not control the other entity if the Commissioner is satisfied, or thinks it reasonable to assume, that the other entity is controlled by an entity other than, or by entities that do not include, the first entity or any of its *small business CGT affiliates.
S 152-30(3) amended by No 95 of 2004.
Exception for trusts
152-30(4)
Paragraph (2)(c) does not apply if:
(a) a beneficiary of the trust mentioned in that paragraph controls the trust in the way described in this section; and
(b) that beneficiary is not a *small business CGT affiliate of any of the trustees of that trust or of a person who has the power of determination mentioned in subparagraph (2)(c)(ii).
Control of discretionary trust
152-30(5)
An entity (the first entity ) controls a discretionary trust for an income year if, for any of the 4 income years before that year:
(a) the trustee paid to, or applied for the benefit of:
(i) the first entity; or
(ii) one or more of the first entity ' s *small business CGT affiliates; or
any of the income or capital of the trust; and
(iii) the first entity and one or more of the first entity ' s small business CGT affiliates;
(b) the amount paid or applied is at least 40% (the control percentage ) of the total amount of income or capital paid or applied by the trustee for that income year.
S 152-30(5) amended by No 55 of 2007 , s 3 and Sch 1 item 29, by substituting " for an income year if, for any of the 4 income years before that year " for " if, for any of the 4 income years before the income year for which relief is sought for a *CGT event under this Division " , applicable to CGT events happening in the 2006-07 income year or later income years.
S 152-30(5), (6), (6A), (6B) and (6C) substituted for s 152-30(5) and (6) by No 95 of 2004.
152-30(6)
An entity does not control a discretionary trust because of subsection (5) if the entity is:
(a) an *exempt entity; or
(b) a *deductible gift recipient.
S 152-30(5), (6), (6A), (6B) and (6C) substituted for s 152-30(5) and (6) by No 95 of 2004.
152-30(6A)
The trustee of a discretionary trust may nominate not more than 4 beneficiaries as being controllers of the trust for an income year for which the trustee did not make a distribution of income or capital if the trust had a *tax loss, or no taxable income, for that year.
S 152-30(6A) substituted by No 55 of 2007 , s 3 and Sch 1 item 30, applicable to CGT events happening in the 2006-07 income year or later income years. S 152-30(6A) formerly read:
152-30(6A)
The trustee of a discretionary trust may, for an income year for which the trust had a *tax loss and for which the trustee did not pay or apply any income or capital of the trust, nominate not more than 4 beneficiaries as being controllers of the trust.Note:
The trust might not have had the funds to make a distribution for that income year, which would prevent it from being controlled in that year. The trustee may wish to make the nomination to ensure that a relevant CGT asset is treated as an active asset (see section 152-40 ).
S 152-30(5), (6), (6A), (6B) and (6C) substituted for s 152-30(5) and (6) by No 95 of 2004.
152-30(6B)
This section has effect as if each nominated beneficiary controlled the trust during the relevant income year in the way described in this section.
S 152-30(5), (6), (6A), (6B) and (6C) substituted for s 152-30(5) and (6) by No 95 of 2004.
152-30(6C)
A nomination must be in writing and signed by the trustee and by each nominated beneficiary.
S 152-30(5), (6), (6A), (6B) and (6C) substituted for s 152-30(5) and (6) by No 95 of 2004.
Indirect control of entity
152-30(7)
This section applies to an entity that directly controls a second entity as if it also controlled any other entity that is directly, or indirectly by any other application or applications of this section, controlled by the second entity.
152-30(8)
However, if an entity (the first entity ) controls an entity of a kind referred to in subsection (9) (the public entity ), this section does not, merely because of subsection (7), apply to the first entity as if it controlled any other entity that is controlled by the public entity.
S 152-30(8) and (9) substituted for s 152-30(8) by No 95 of 2004.
152-30(9)
The kinds of entities are:
(a) a company *shares in which (except shares that carry the right to a fixed rate of *dividend) are listed for quotation in the official list of an *approved stock exchange; or
(b) a *publicly traded unit trust; or
(c) a *mutual insurance company; or
(d) a *mutual affiliate company; or
(e) a company (other than one covered by paragraph (a)) all the shares in which are beneficially owned by one or more of the following:
(i) a company covered by paragraph (a);
(ii) a publicly traded unit trust;
(iii) a mutual insurance company;
(iv) a mutual affiliate company.
S 152-30(8) and (9) substituted for s 152-30(8) by No 95 of 2004.
S 152-30 inserted by No 165 of 1999 (as amended by No 173 of 2000).
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