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 165-115L   Alteration time - alteration in ownership of company  

165-115L(1)    
A time (the test time ) is an alteration time in respect of a company if:

(a) persons who had *more than 50% of the voting power in the company at the reference time do not have more than 50% of that voting power immediately after the test time; or

(b) persons who had rights to *more than 50% of the company ' s dividends at the reference time do not have rights to more than 50% of those dividends immediately after the test time; or

(c) persons who had rights to *more than 50% of the company ' s capital distributions at the reference time do not have rights to more than 50% of those distributions immediately after the test time.

Note 1:

See section 165-150 to work out who had more than 50% of the voting power in the company.

Note 2:

See section 165-155 to work out who had rights to more than 50% of the company ' s dividends.

Note 3:

See section 165-160 to work out who had rights to more than 50% of the company ' s capital distributions.

Note 4:

Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

165-115L(2)    
The reference time is:

(a) if no alteration time occurred in respect of the company before the *test time - the commencement time; or

(b) otherwise - the time immediately after the last alteration time.

165-115L(3)    
To work out whether paragraph (1)(a), (b) or (c) applied at a particular time, apply the primary test unless subsection (4) requires the alternative test to be applied.

Note:

For the primary test see subsections 165-150(1) , 165-155(1) and 165-160(1) .

165-115L(4)    

Apply the alternative test if one or more other companies beneficially owned *shares or interests in shares in the company at any time during the period from the reference time to the *test time.

Note:

For the alternative test see subsections 165-150(2) , 165-155(2) and 165-160(2) .

165-115L(5)    

If the company is:

(a) a *non-profit company; or

(b) a *mutual affiliate company; or

(c) a *mutual insurance company;

during the whole of the period from the reference time to the *test time, the test time is taken not to be an *alteration time in respect of the company because of the application of paragraphs (1)(b) and (c).