Income Tax Assessment Act 1997

CHAPTER 6 - THE DICTIONARY  

PART 6-1 - CONCEPTS AND TOPICS  

Division 960 - General  

Subdivision 960-GP - Participation interests in entities  

SECTION 960-190   Direct participation interest  

960-190(1)    

Use the following table to work out the direct participation interest that one entity holds in another entity.

Direct participation interest
	If the other entity is this kind of entity:	the direct participation interest that the first entity holds in the other entity is:
1	A company (within the meaning of Part X of the Income Tax Assessment Act 1936 )	the direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936 ) that the first entity holds in the other entity
2	A trust (within the meaning of Part X of the Income Tax Assessment Act 1936 )	the direct control interest (within the meaning of section 351 of the Income Tax Assessment Act 1936 ) that the first entity holds in the other entity
3	A partnership	the direct control interest (within the meaning of section 350 of the Income Tax Assessment Act 1936 ) that the first entity would hold in the other entity, if the assumptions in subsection (3) of this section were made

960-190(2)    
For the purposes of subsection (1):

(a) apply sections 350 and 351 of the Income Tax Assessment Act 1936 as if those sections apply for the purposes of this Division rather than only for the purposes of Part X of that Act; and

(b) do not apply subsections 350(6) and (7) and 351(3) and (4) of that Act.

960-190(3)    
For the purposes of item 3 of the table in subsection (1), assume that:

(a) the *partnership is a company; and

(b) the partners in the partnership are shareholders in the company; and

(c) the total amount of assets or capital contributed to the partnership is the total paid-up share capital of the company; and

(d) a partner's right of distribution of capital, assets or profits on the dissolution of the partnership is a shareholder's right to distribution of capital or profits of the company on winding-up; and

(e) a partner's right of distribution of capital, assets or profits otherwise than on the dissolution of the partnership is a shareholder's right to distribution of capital or profits of the company otherwise than on winding-up.