Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS

Division 167 - Companies whose shares carry unequal rights to dividends, capital distributions or voting power

History

Div 167 inserted by No 130 of 2015, s 3 and Sch 4 item 1, effective 17 September 2015. No 130 of 2015, s 3 and Sch 4 item 53 contains the following application provision:

167-1 Application of provisions
167-1(1)
Division 167 of the Income Tax Assessment Act 1997 applies:

(a) to any tax loss that is incurred in an income year commencing on or after 1 July 2002; and

(b) to any net capital loss that is made in an income year commencing on or after 1 July 2002; and

(c) to any deduction in respect of a bad debt that is claimed in an income year commencing on or after 1 July 2002; and

(d) in determining whether any changeover time or alteration time occurred on or after 1 July 2002.

167-1(2)
Division 167 of the Income Tax Assessment Act 1997 also applies:

(a) to any tax loss of a company:

(i) that is incurred in an income year commencing on or before 30 June 2002; and

(ii) that could have been deducted, in accordance with Divisions 165 and 166 of that Act as in force at that time, in the first income year commencing after 30 June 2002 if the deduction had not been limited by the company ' s income for that income year; and

(b) to any net capital loss of a company:

(i) that is made in an income year commencing on or before 30 June 2002; and

(ii) that could have been applied, in accordance with Divisions 165 and 166 of that Act as in force at that time, in the first income year commencing after 30 June 2002 if the application of the loss had not been limited by the company ' s capital gains for that income year.

Subdivision 167-A - Rights to dividends or capital distributions

View history reference

View history note

Operative provisions

SECTION 167-20 Second way - also disregard secondary share classes

View history reference

167-20(1)
This section applies in relation to each unequally structured company if:

(a) despite section 167-15 , the unsatisfied condition cannot be worked out; and

(b) on the last day of the test period or at the test time (as appropriate), there is *on issue in that company one or more classes of *shares (the secondary share classes ) other than:

(i) the class or classes of ordinary or common shares that represent the majority of that company ' s value; and

(ii) *debt interests; and

(c) it is reasonable to conclude that the total *market value of the secondary share classes does not exceed 25% of the total market value of all of that company ' s shares (other than debt interests); and

(d) for one or more of the secondary share classes, it is reasonable to conclude that the market value of each of them does not exceed 10% of the total market value of all of that company ' s shares (other than debt interests).

Note:

This section can apply separately for each unequally structured company.

167-20(2)
For the purposes of subsection (1), use *market values on the last day of the test period, or at the test time, (as appropriate).

167-20(3)
The unsatisfied condition may be reconsidered by disregarding:

(a) those of the secondary share classes that, under paragraph (1)(d), caused this section to apply; and

(b) any *debt interests in that company.

167-20(4)
The way an entity prepares its *income tax return is sufficient evidence of it choosing to work out the unsatisfied condition under subsection (3).

View history note

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.