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-F - Special provisions relating to ownership by non-fixed trusts

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

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165-225(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) .

165-225(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.

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History

S 165-225 substituted by No 41 of 2011, s 3 and Sch 5 item 125, effective 27 June 2011. S 165-225 formerly read:

SECTION 165-225 SECTION 165-225 Special way of dividing the income year under Subdivision 165-B
165-225
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) ;
section 165-45 is replaced by the following section:

SECTION 165-45 First, divide the income year into periods
165-45(1)
Divide the income year into periods as follows.

165-45(2)
The first period starts at the start of the income year. Each later period starts immediately after the end of the previous period.

165-45(3)
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 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.

S 165-225 inserted by No 58 of 2000.

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