INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision B - Development allowance  

SECTION 82AJA   DISPOSALS WITHIN COMPANY GROUP  

82AJA(1)   [Exclusion of s 82AG(1)(a)]  

Paragraph 82AG(1)(a) does not apply in relation to a disposal of property by a taxpayer being a company, being a disposal occurring before the expiration of a particular period of 12 months, if:

(a) the disposal by the taxpayer was to another company (in this subsection referred to as the transferee ) that was, at the time of the disposal, related to the taxpayer;

(b) the property was not, at any time (in this paragraph referred to as the relevant time ) during that period of 12 months, owned by a person other than:

(i) in a case where the transferee was the holding company of the taxpayer - the transferee or a company related to the transferee at the relevant time;

(ii) in a case where the transferee was a wholly-owned subsidiary of the taxpayer - the taxpayer or a company related to the taxpayer at the relevant time;

(iii) in a case where the transferee was a wholly-owned subsidiary of another company (in this subparagraph referred to as the holding company ) of which the taxpayer was also a wholly-owned subsidiary - the holding company or a company related to the holding company at the relevant time; or

(iv) in a case where the transferee was a wholly-owned subsidiary of other companies (in this subparagraph referred to as the parent companies ) of which the taxpayer was also a wholly-owned subsidiary - a company that, at the relevant time, was a wholly-owned subsidiary of the parent companies;

(c) at any time during that period of 12 months when the property was owned by:

(i) in a case where the transferee was the holding company of the taxpayer - the transferee;

(ii) in a case where the transferee was a wholly-owned subsidiary of the taxpayer - the taxpayer; or

(iii) in a case where the transferee was a wholly-owned subsidiary of another company of which the taxpayer was also a wholly-owned subsidiary - that other company,

the transferee, the taxpayer, or that other company, as the case may be, was an eligible public company in relation to the year of income in which that time occurred; and

(d) at no time during that period of 12 months did a person who owned the property -

(i) lease the property; or

(ia) let the property on hire under a hire-purchase agreement; or

(ib) otherwise grant a right to another person to use the property; or

(ii) use the property outside Australia or for a purpose other than the purpose of producing assessable income.

82AJA(1A)   [Property used in entertainment/tourism operations]  

Subparagraphs (1)(d)(i) and (ib) do not apply if the person leased the property, or granted rights to use the property, in the person's capacity as an eligible entertainment/tourism operator.

82AJA(1B)   [Use of property by related company]  

For the purposes of subsection (1), if the requirements set out in subsection (1C) are satisfied:

(a) subparagraph (1)(d)(i) does not apply to the leasing of the property to a company (the related company ) that is related to the person who owned the property and is an eligible public company in relation to the year of income in which the leasing occurs; or

(b) subparagraph (1)(d)(ib) does not apply to the granting of rights to use the property to a company (also the related company ) that is related to the person who owned the property and is an eligible public company in relation to the year of income in which the granting of rights occurs.

82AJA(1C)   [Requirements]  

For the purposes of subsection (1B), the requirements are:

(a) that, if the time (the test time ) when the earlier of:

(i) the end of the term of the lease or period of the grant; and

(ii) the end of the period of 12 months mentioned in paragraph (1)(d);

occurs is in a year of income after the one in which the leasing or the granting of rights occurs, the related company is also an eligible public company in relation to that later year of income; and

(b) that, at all times during the period ending at the test time, the related company remains related to the person who owned the property and uses the property wholly and exclusively both in Australia and for the purpose of producing assessable income other than by leasing the property or otherwise granting a right to another person to use the property.

82AJA(2)   [Dissolution pursuant to court order]  

Where:

(a) pursuant to an order of a court made under the law of a State or Territory relating to companies:

(i) the whole of the undertaking, property and liabilities of a company (in this subsection referred to as the relevant company ) is vested in another company (in this subsection referred to as the substituted company );

(ii) the persons who beneficially owned shares in the relevant company become the beneficial owners of all of the shares in the substituted company without reduction in their respective interests; and

(iii) the relevant company is dissolved; and

(b) for the purpose of the application of subsection (1), the relevant company is the transferee referred to in subparagraph (1)(b)(i), the taxpayer referred to in subparagraph (1)(b)(ii), the holding company referred to in subparagraph (1)(b)(iii) or one of the parent companies referred to in subparagraph (1)(b)(iv);

paragraphs (b) and (c) of that subsection apply, in relation to any time after the time when the conditions specified in paragraph (a) of this subsection were satisfied, as if the substituted company were the transferee, the taxpayer, that holding company or that parent company, as the case may be.

82AJA(3)   [Related company]  

For the purposes of this section, a company (in this subsection referred to as the first company ) shall be taken to be related to another company (in this subsection referred to as the second company ) at a particular time if, at that time:

(a) the first company is the holding company of the second company;

(b) the first company is a wholly-owned subsidiary of the second company;

(c) the first company is a wholly-owned subsidiary of another company of which the second company is also a wholly-owned subsidiary; or

(d) the first company is a wholly-owned subsidiary of other companies of which the second company is also a wholly-owned subsidiary.

82AJA(4)   [Holding company]  

For the purposes of this section, a company (in this subsection referred to as the holding company ) shall be taken to have been the holding company of another company (in this subsection referred to as the relevant subsidiary ) at a particular time (in this subsection referred to as the relevant time ) if:

(a) the holding company is an eligible public company in relation to its year of income in which the relevant time occurred;

(b) the relevant subsidiary is an eligible subsidiary in relation to its year of income in which the relevant time occurred;

(c) at the relevant time, all of the shares in the relevant subsidiary were beneficially owned by:

(i) the holding company;

(ii) another company that is an eligible subsidiary in relation to its year of income in which the relevant time occurred; or

(iii) 2 or more companies of the kind referred to in subparagraph (ii) or the holding company and a company or companies of the kind referred to in that subparagraph; and

(d) where, at the relevant time, any of the shares in the relevant subsidiary were beneficially owned by a company other than the holding company - if the relevant subsidiary had declared a dividend at the relevant time and there had been successive distributions of the relative parts of that dividend to and by each company and any trustee interposed between the relevant subsidiary and the holding company, the holding company would have had a right to receive, indirectly, or directly and indirectly, for its own benefit, the whole of the amount of that dividend.

82AJA(5)   [Wholly-owned subsidiary of one company]  

For the purposes of this section, a company shall be taken to be a wholly-owned subsidiary of another company at a particular time if, at that time, the other company is the holding company of the first-mentioned company.

82AJA(6)   [Wholly-owned subsidiary of two or more companies]  

For the purposes of this section, a company (in this subsection referred to as the relevant subsidiary ) shall be taken to have been a wholly-owned subsidiary of 2 or more other companies (in this subsection referred to as the parent companies ) at a particular time (in this subsection referred to as the relevant time ) if:

(a) the relevant subsidiary is an eligible subsidiary in relation to its year of income in which the relevant time occurred;

(b) each of the parent companies is an eligible public company in relation to its year of income in which the relevant time occurred;

(c) at the relevant time, all of the shares in the relevant subsidiary were beneficially owned by:

(i) the parent companies;

(ii) another company that is an eligible subsidiary in relation to its year of income in which the relevant time occurred; or

(iii) 2 or more companies of the kind referred to in subparagraph (ii) or any one or more of the parent companies and a company or companies of the kind referred to in that subparagraph; and

(d) where, at the relevant time, any of the shares in the relevant subsidiary were beneficially owned by a company other than one of the parent companies - if the relevant subsidiary had declared a dividend at the relevant time and there had been successive distributions of the relative parts of that dividend to and by each company and any trustee interposed between the relevant subsidiary and the parent companies, the parent companies would have had rights between them to receive, indirectly, or directly and indirectly, for their own benefit, the whole of the amount of that dividend.

82AJA(7)   [Eligible subsidiary]  

For the purposes of this section, a company shall be taken to be an eligible subsidiary in relation to a year of income if, by virtue of subsection 103A(4) , the company is a subsidiary of a public company in relation to the year of income for the purposes of subparagraph 103A(2)(d)(v) .

82AJA(8)   [Eligible public company]  

For the purposes of this section, a company shall be taken to be an eligible public company in relation to a year of income if, by virtue of paragraph 103A(2)(a) , the company is a public company in relation to the year of income for the purposes of subsection 103A(1) .