New Business Tax System (Consolidation) Act (No. 1) 2002 (68 of 2002)

Schedule 5   Amendments of Dictionary

Income Tax Assessment Act 1997

1   After Subdivision 960-F

Insert:

Subdivision 960-G - Membership of entities

Table of sections

960-130 Members of entities

960-135 Membership interest in an entity

960-130 Members of entities

(1) The following table sets out who is a member of various entities.

(2) If 2 or more entities jointly hold interests or rights that give rise to membership of another entity, each of them is a member of the other entity.

(3) An entity is not a member of another entity just because the entity holds one or more interests or rights relating to the other entity that are *debt interests. This subsection has effect despite subsections (1) and (2) of this section.

Example: An entity is not a member of a company as defined in this section merely because it is a member of the company in the ordinary sense of the term because it holds a finance share in the company, if the finance share is a debt interest. However, if the entity holds other shares in the company that are not debt interests, it will be a member because of those other shares.

960-135 Membership interest in an entity

If you are a *member of an entity:

(a) each interest, or set of interests, in the entity; or

(b) each right, or set of rights, in relation to the entity;

by virtue of which you are a member of the entity is a membership interest of yours in the entity.

Note: In conjunction with subsection 960-130(3), this means that a debt interest is not a membership interest.

Example: A member of a company holds a finance share in a company that is a debt interest and some other shares in the company that are not debt interests. Only the other shares are membership interests in the company. The finance share is not, because the member is not a member of the company because of that share (see subsection 960-130(3)).