Private ruling: Application of Division 149 of the ITAA 1997
Date of advice: 26 November 2018
Published: February 2019
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20YY | Year ending 30 June 20ZZ
Date scheme commenced: XX May 20XX

Ruling: Q1: Would the Commissioner be satisfied or find it reasonable to assume that, for the purposes of Division 149 of the Income Tax Assessment Act 1997 ( ITAA 1997 ), the majority of underlying interests held in the pre-CGT assets of Company A have been maintained? | A1: No.

Relevant facts and circumstances: Background 1. On XX November 19XX, Company A was incorporated. 2. Company A holds shares in Company B, comprising parcels of shares acquired before 20 September 1985 (pre-CGT assets) and after 20 September 1985. 3. On XX December 20XX, Company A’s Memorandum and Articles of Association were replaced with a Constitution, which subsequently allowed Company A to issue Dividend Access Shares ( DAS ). Company shareholding before 20 September 1985 4. The shareholders of Company A which existed before 20 September 1985 were: Shareholder Number of shares Type of shares Individual X 1 Ordinary Individual X 2,000 Cumulative preference (7%) Company C (atf the C Trust) 500 Ordinary The C Trust 5. The trust instrument for the C Trust ( the C Trust Indenture ) states that the beneficiaries include: (a) Individual Y (spouse of the settlor); (b) Any children of the settlor, and their spouses; (c) Any grandchildren of the settlor, and their spouses; and, (d) Any charitable institution, person or persons, body corporate or incorporate or howsoever constituted whom the trustee in their absolute discretion considers worthy of receipt of funds either for charitable or educational purposes etc. 6. The C Trust Indenture states that Individual X (child of the settlor) is the default beneficiary. Company shareholding after 20 September 1985 7. The following changes occurred after 20 September 1985: (a) On XX May 19XX: (i) 6,000 additional ordinary shares were issued to Individual X; and, (ii) 3,000,000 additional ordinary shares were issued to Company C. (b) On XX May 20XX: (i) One DAS was issued to Company D; (ii) One DAS was issued to Company E; and, (iii) One DAS was issued to Company F. 8. Therefore, the respective shareholding of Company A which exists after 20 September 1985 is: Shareholder Number of shares Type of shares Individual X 6,001 Ordinary Individual X 2,000 Cumulative preference (7%) Company C (atf the C Trust) 3,000,500 Ordinary Company D 1 DAS Company E 1 DAS Company F 1 DAS 9. In relation to the issue of the DAS to Company D, Company E and Company F: (a) Company D is wholly owned (indirectly through another wholly owned company) by Company G, as trustee for the D Trust; (b) Company E is wholly owned (indirectly through another wholly owned company) by Company H, as trustee for the E Trust; and, (c) Company F is wholly owned (indirectly through another wholly owned company) by Company I, as trustee for the F Trust. The D, E and F Trusts 10. Each Trust Deed is substantially similar in terms. 11. The ‘specified beneficiaries’ for the respective trusts are defined as meaning: (a) Individual A (for the D Trust); (b) Individual B (for the E Trust); and, (c) Individual C (for the F Trust). 12. The ‘eligible beneficiaries’ for the respective trusts is broader than the beneficiaries listed in C Trust Indenture. Rights attaching to shares 13. As highlighted above, Company A’s assets are divided into ordinary shares, cumulative preference (7%) shares and the DAS. 14. Under Company A’s Constitution ( the Constitution ), each ordinary share carries a right to: (a) Receive notice of, attend and vote at a meeting of Members; (b) Payment in cash of the amount then paid up on the Share, on a winding up of the Company; (c) Payment of any dividend determined to be paid on that class by the Directors; and, (d) Participate in surplus assets or profits of the Company. 15. Under the Constitution, each cumulative preference share carries a right: (a) To a fixed cumulative preferential dividend of seven per centum per annum on the capital paid up or deemed to be paid up thereon respectively in priority to any dividend payable on any other class of shares in the Company. (b) In winding up to have the capital paid up or deemed to be paid up paid off in priority to any payment off of capital on any other class of shares in the Company but shall not entitle the holders to participate further in any surplus assets or profits of the Company. (c) To receive all such notices, account balance sheets and reports as the holders of Ordinary Shares in the Company are entitled to receive and the right of attending all annual and extraordinary general meetings of the Company and voting thereat. (d) To two thousand votes for every one 7% preference share held. 16. The DAS carry the right to: (a) Payment of dividends other than in proportion to shareholding; and, (b) Receive a distribution of capital, limited to the amount of capital paid in relation to the share (ie $1 per share fully paid up). Dividend history 17. The amount of dividends paid on the DAS as a percentage of the total dividends paid follows: Year DAS Dividends as % of Total Dividends 20XX 18.30% 20XX 51.31% 20XX 43.83% 20XX 39.21% 20XX 35.72% 20XX 0.00% 20XX 0.00% 20XX 0.00% 20XX 0.00% 20XX 16.33% 20XX 51.91% 20XX 8.01% 20XX 19.67% Total 24.08%

Relevant legislative provisions: Income Tax Assessment Act 1936 section 44 | Income Tax Assessment Act 1936 section 160ZZS | Income Tax Assessment Act 1936 section 272-80 | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 Division 149 | Income Tax Assessment Act 1997 section 149-15 | Income Tax Assessment Act 1997 section 149-25 | Income Tax Assessment Act 1997 section 149-30 | Income Tax Assessment Act 1997 section 149-50 | Income Tax Assessment Act 1997 Subdivision 149-C | Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision: Detailed Reasoning - Application of Division 149: 1. Division 149 of the ITAA 1997 outlines the circumstances when an asset acquired before 20 September 1985 stops being a pre-CGT asset. 2. As Company A is not a public entity or any other entity listed in subsection 149-50 of the ITAA 1997, Subdivision 149-C of the ITAA 1997 will apply: pursuant to section 149-25 of the ITAA 1997. 3. Subsection 149-30(1) of the ITAA 1997 provides that: The asset stops being a *pre-CGT asset at the earliest time when *majority underlying interests in the asset were not had by *ultimate owners who had *majority underlying interests in the asset immediately before 20 September 1985. 4. This means that ultimate owners who held majority underlying interests in an asset immediately before 20 September 1985 must retain those interests after that date, otherwise Division 149 of the ITAA 1997 will operate to convert the asset into a post-CGT asset. 5. Subsection 149-15(3) of the ITAA 1997 states that: An ultimate owner is: (a) an individual; or (b) a company whose *constitution prevents it from making any distribution, whether in money, property or otherwise, to its members; or (c) … (d) … (e) … (f) … 6. As a result, this definition does not include trusts or companies who pay dividends to their members. 7. Subsection 149-15(2) of the ITAA 1997 states that: An underlying interest in a *CGT asset is a beneficial interest that an *ultimate owner has (whether directly or *indirectly) in the asset or any *ordinary income that may be *derived from the asset. 8. Subsection 149-15(1) of the ITAA 1997 states that: Majority underlying interests in a *CGT asset consist of: (a) more than 50% of the beneficial interests that *ultimate owners have (whether directly or *indirectly) in the asset; and (b) more than 50% of the beneficial interests that ultimate owners have (whether directly or *indirectly) in any *ordinary income that may be *derived from the asset. | Detailed Reasoning - Overview: 9. Pursuant to subsection 149-15(1) of the ITAA 1997, Company A is required to identify the ultimate owners who held, directly or indirectly, at least 50% of the beneficial interests in: (a) its pre-CGT assets, and (b) any ordinary income that could be derived from the assets. 10. The term ‘beneficial interest’ is not defined in the ITAA 1997. 11. Under its ordinary meaning, a shareholder would not have legal or equitable interests in the assets of the company until the trustee exercises its discretion to distribute income or capital to that beneficiary: pursuant to Charles v. Federal Commissioner of Taxation (1954) 90 CLR 598; 10 ATD 328; 6 AITR 85. 12. Despite this, the ATO has formed the view in NTLG CGT Sub-Committee Meeting (dated 1 December 1993) that section 160ZZS of the Income Tax Assessment Act 1936 ( ITAA 1936 ) necessarily supplants ordinary legal concepts of beneficial interests in an asset. Section 160ZZS of the ITAA 1936 is the predecessor to Division 149 of the ITAA 1997. 13. For the purposes of section 160ZZS of the ITAA 1936, a shareholder may be treated as having a beneficial interest in the company’s assets: pursuant to Case Y59 91 ATC 502; AAT Case 7529 (1991) 22 ATR 3532. 14. Similarly, a beneficiary of a discretionary trust is treated as having a beneficial interest in the assets of a trust for the purposes of section 160ZZS of the ITAA 1936. | Detailed Reasoning - Beneficial interests in the assets of Company A: 15. Before 20 September 1985, the assets of the company were as follows: | Detailed Reasoning - Type of shares: Individual X 1 Ordinary Individual X 2,000 Cumulative preference (7%) Company C (atf the C Trust) 500 Ordinary 16. In order to identify the ultimate owners who held beneficial interests in the assets of Company A immediately before 20 September 1985, it is necessary to identify the ultimate owners that have a direct or indirect interest in any capital distribution made by Company A at that time. | Detailed Reasoning - Direct beneficial interests in the assets of Company A: 17. Firstly, it is necessary to identify the ultimate owners who have a direct beneficial interest in the assets of Company A. 18. As highlighted above, Individual X is an owner of the pre-20 September 1985 ordinary shares and the 7% cumulative preference shares. They will be treated as an ultimate owner considered to have held direct beneficial interests in the assets of Company A immediately before 20 September 1985. 19. This is because the ordinary share carries a right to payment in cash of the amount then paid up on the share on the winding up of the company. 20. The Constitution also provides that the 7% cumulative preference shares carries the right to have paid off any capital paid up or deemed to have been paid up in winding up the company. | Detailed Reasoning - Indirect beneficial interests in the assets of Company A: 21. Secondly, it is necessary to identify the ultimate owners who have an indirect beneficial interest in the assets of Company A. 22. Subsection 149-15(4) of the ITAA 1997 states that: An *ultimate owner indirectly has a beneficial interest in a *CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her of its own benefit any of the capital of the other entity if: (a) the other entity were to distribute any of its capital; and (b) the capital were then successively distributed by each entity interposed between the other entity and the ultimate owner. 23. Company C, as trustee for the C Trust (a discretionary trust), holds the ordinary shares on behalf of the C Trust. As above, the Constitution provides that the ordinary shares carries a right to payment in cash of the amount then paid up on the share on the winding up of the company. 24. Therefore, the ultimate owners of the C Trust acquired a beneficial interest in the assets of Company A indirectly immediately before 20 September 1985. 25. The C Trust does not satisfy the definition of an ‘ultimate owner’, pursuant to subsection 149-15(3) of the ITAA 1997. 26. Paragraph 2 of Taxation Ruling IT 2340 Income tax: capital gains: deemed acquisition of assets by a taxpayer after 19 September 1985 where a change occurs in the underlying ownership of assets acquired by the taxpayer on or before that date ( IT 2340 ) states that: …underlying interests in relation to assets concerned mean beneficial interests held by natural persons, whether directly or through one or more interposed companies, partnerships or trusts. The clear policy of the law thus permits and requires that, for the purposes of the relevant provisions, chains or companies, partnerships and trusts are to be ‘looked through’ in order to determine whether there has been a change in the effective interests of natural persons in the assets. 27. Therefore, it is necessary to ‘look through’ the C Trust to determine whether there has been a change in the effective interests of the ultimate owners in the assets of Company A. Similarly, where the beneficiaries of the C Trust do not satisfy the definition of an ‘ultimate owner’, those entities must be ‘looked through’ in order to identify the ultimate owner. 28. The beneficiaries of the C Trust are outlined above. They comprise individuals and a charitable institution. As highlighted above, the charitable institution will need to be ‘looked through’. 29. Therefore, the ultimate owners who held more than 50% of the beneficial interests in the assets of Company A immediately before 20 September 1985 included: (a) Individual X, (b) Any individual beneficiaries of the C Trust, and (c) Any individual beneficiaries of the charitable institution. | Detailed Reasoning - Beneficial interest in the income of Company A: 30. In order to identify the ultimate owners who held beneficial interests in the income of Company A immediately before 20 September 1985, it is necessary to identify the ultimate owners that have a direct or indirect interest in any ordinary income that may be derived from the CGT assets. 31. The ordinary shares confer upon the holder the right to participate in surplus assets or profits of the company. 32. The 7% cumulative preference shares confer upon the holder the right to a fixed cumulative preferential dividend of 7% per annum on the capital paid up or deemed to be paid up in priority to any dividend payable on any other class of shares. | Detailed Reasoning - Direct beneficial interests in the income of Company A: 33. Firstly, it is necessary to identify the ultimate owners who have a direct beneficial interest in the ordinary income that may be derived from the CGT assets of Company A. 34. Paragraph 149-15(1)(b) of the ITAA 1997 relevantly states: Majority underlying interests in a *CGT asset consist of: (a) ... (b) more than 50% of the beneficial interests that ultimate owners have (whether directly or indirectly) in any *ordinary income that may be *derived from the asset. 35. It must be determined whether the reference to ‘any ordinary income that may be derived from the asset’ in paragraph 149-15(1)(b) of the ITAA 1997 includes a dividend. 36. Subsection 995-1(1) of the ITAA 1997 defines ‘ordinary income’ as having the meaning given by section 6-5 of the ITAA 1997. 37. Subsection 6-5(1) of the ITAA 1997 states that ordinary income is income according to ordinary concepts. 38. A ‘dividend’, as a normal English word, is income according to ordinary concepts. Therefore, a ‘dividend’ includes a dividend under the concept of ordinary income in addition to the statutory provision found in section 44 of the ITAA 1936. 39. As a result, a reference to a ‘dividend’ in either the ITAA 1997 or the ITAA 1936 is a reference to a dividend as ordinary income and statutory income. 40. As an individual owner of pre-CGT ordinary shares and 7% preference shares, Individual X will be an ultimate owner considered to have held direct beneficial interests in ordinary income derived from the CGT assets of Company A immediately before 20 September 1985. | Detailed Reasoning - Indirect beneficial interests in the income of Company A: 41. Secondly, it is necessary to identify the ultimate owners who have an indirect beneficial interest in the ordinary income that may be derived from the CGT assets of Company A. 42. Subsection 149-15(5) of the ITAA 1997 states: An *ultimate owner indirectly has a beneficial interest in *ordinary income that may be *derived from a *CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her or its own benefit any of a *dividend or income if: (a) the other entity were to pay that dividend, or otherwise distribute that income; and (b) the dividend or income were then successively paid or distributed by each entity interposed between the other entity and the ultimate owner. 43. Relevantly here, the ultimate owners of the C Trust will indirectly have a beneficial interest in the ordinary income that may be derived from the CGT assets of Company A because they would receive for their own benefit any dividend or income if: (a) the company were to pay that dividend or otherwise distribute income; and, (b) the dividend or income was successively paid or distributed by the C Trust to the ultimate owner (directly or by each entity interposed between the C Trust and the ultimate owner). 44. As highlighted in paragraph 27, the C Trust and any beneficiaries that do not satisfy the definition of an ‘ultimate owner’ must be ‘looked through’ in order to determine whether there has been a change in the effective interests of the natural persons in the assets: pursuant to paragraph 2 of IT 2340. 45. Therefore, the ultimate owners who held more than 50% of the beneficial interests in the assets of Company A immediately before 20 September 1985 included: (a) Individual X, (b) Any individual beneficiaries of the C Trust, and (c) Any individual beneficiaries of the charitable institution. | Detailed Reasoning - Majority underlying interests after 20 September 1985: 46. In order for the assets of Company A to maintain their pre-CGT status, the majority of underlying interests in Company A’s pre-CGT assets and income on and after 20 September 1985 must have been held, at all times, by the same ultimate owners who held majority underlying interests just before 20 September 1985. 47. The following changes occurred after 20 September 1985: (a) On XX May 19XX: (i) 6,000 additional ordinary shares were issued to Individual X; and, (ii) 3,000,000 additional ordinary shares were issued to Company C. (b) On XX May 20XX: (i) One DAS was issued to Company D; (ii) One DAS was issued to Company E; and, (iii) One DAS was issued to Company F. 48. Company D, Company E and Company F do not satisfy the definition of an ‘ultimate owner’ as provided in paragraph 149-15(3)(b) of the ITAA 1997 as their respective company constitutions do not prohibit them from making distributions to their members. As a result, they must be ‘looked through’ to determine whether there has been a change in the effective interests of the natural persons in the assets: pursuant to paragraph 2 of IT 2340. 49. As highlighted above: (a) Company D is wholly owned (indirectly through another wholly owned company) by Company G, as trustee for the D Trust; (b) Company E is wholly owned (indirectly through another wholly owned company) by Company H, as trustee for the E Trust; and, (c) Company F is wholly owned (indirectly through another wholly owned company) by Company I, as trustee for the F Trust. 50. The D, E and F Trusts are discretionary trusts. As a result, they do not satisfy the definition of an ‘ultimate owner’ provided in subsection 149-15(3) of the ITAA 1997. Therefore, they must be ‘looked through’ to determine whether there has been a change in the effective interests of the natural persons in the assets: pursuant to paragraph 2 of IT 2340. 51. The beneficiaries of the D, E and F Trusts are outlined above. 52. The specified beneficiaries are individuals and will be ultimate owners. 53. The eligible beneficiaries are individuals and will be ultimate owners. It is noted that class of beneficiaries is wider due to the terms ‘remoter issue’. 54. The remaining eligible beneficiaries are individuals and other entities (like charities, corporations etc). As a result, this class of beneficiaries must be ‘looked through’ in order to identify the ultimate owners. Therefore, the ultimate owners will be broader than the class of beneficiaries originally included in the C Trust and is not confined to the same individuals as ultimate owners when ‘looking through’ the C Trust. 55. The fact that the respective Trusts have made family trust elections in accordance with section 272-80 of Schedule 2F of the ITAA 1936 does not impact who would otherwise be defined as an ultimate owner for the purposes of section 149-15 of the ITAA 1997. | Detailed Reasoning - Beneficial interests in the assets of Company A: 56. Individual X and the other ultimate owners of the C Trust have continuously maintained their beneficial interests in the assets of Company A: ie their ownership of the ordinary shares and cumulative preference shares have remained the same since just before 20 September 1985. 57. The additional beneficial interests (the ordinary shares) issued to Individual X and the ultimate owners of the C Trust can be included in their majority underlying interest calculations on or after 20 September 1985. 58. Following the issued DAS to Company D, Company E and Company F on XX May 20XX, the ultimate owners of the D, E and F Trusts indirectly acquired a beneficial interest in the assets of Company A without having held such an interest immediately before 20 September 1985. 59. However, the beneficial interests acquired by the ultimate owners of the respective Trusts are minimal. Under the DAS, the rights of the ultimate owners in relation to the assets of Company A on winding up is limited to the amount paid up in relation to the share. Relevantly here, the amount paid up on each DAS is $1. 60. This would be regardless of whether there would be surplus assets to distribute on winding up. 61. Therefore, the Commissioner is satisfied that more than 50% of the beneficial interests in the assets of Company A were at all times held by the same ultimate owners who would have been entitled to more than 50% of any capital distribution made immediately before 20 September 1985. | Detailed Reasoning - Beneficial interest in the income of Company A: 62. Individual X and the other ultimate owners of the C Trust have continuously maintained their beneficial interests in the income of Company A: ie their ownership of the ordinary shares and cumulative preference shares have remained the same since just before 20 September 1985, including the dividend and income rights attached to those shares. 63. The additional beneficial interests (the ordinary shares) issued to Individual X and the ultimate owners of the C Trust can be included in their majority underlying interest calculations on or after 20 September 1985. 64. On XX May 20XX, three new shareholders were issued DAS: Company D, Company E and Company F. As a result, the ultimate owners of the D, E and F Trusts will have an indirect beneficial interest in the ordinary income that may be derived from the assets of Company A as they could receive for their own benefit the payment of dividends or distribution of income successively paid or distributed by each entity interposed between the company and the ultimate owners. 65. As highlighted by paragraph 54 of this reasoning, the DAS introduced a broader class of beneficiaries than the class of beneficiaries originally outlined in the C Trust. Due to the nature of the DAS, payment of dividends by Company A could be made to this new class of beneficiaries in proportions other than their shareholding. 66. The fact that the respective Trusts have made family trust elections in accordance with section 272-80 of Schedule 2F of the ITAA 1936 does not impact who would otherwise be defined as an ultimate owner for the purposes of section 149-15 of the ITAA 1997. 67. Additionally, the pattern of distributions evidenced in previous income tax years does not alter the rights attached to the respective classes of shares. It is the rights attached to the shares which determine the beneficial interests in the income that may be derived from the assets of the company. | Detailed Reasoning - ATO Interpretative Decision ATO ID 2011/107: 68. This reflects the approach taken in ATO Interpretative Decision ATO ID 2011/107 Income tax: capital gains tax: Division 149 majority underlying interests – new shareholder ( ATO ID 2011/107 ). It was determined that, due to the discretionary right to dividends carried by each share, the company could pay 100% of any dividend to the new company, which could in turn pay 100% of any dividend to the trustee, which in turn could pay 100% of any benefit to any beneficiary within the class of beneficiaries. 69. As a result, the Commissioner concluded in ATO ID 2011/107 that he could not be satisfied or find it reasonable to assume that more than 50% of the beneficial interests in the income of the company, and therefore majority underlying interests, had been held at all times by the same ultimate owners who held such interests immediately before 20 September 1985. | Detailed Reasoning - Application of IT 2340 and ATO ID 2011/107: 70. The Commissioner is not satisfied that the administrative concession provided in paragraphs 4 to 8 of IT 2340 can apply to entities other than discretionary trusts. Therefore, the administrative concession will not be applied in this instance. 71. Instead, we consider this matter is analogous to ATO ID 2011/107 and the arrangement described therein. We consider it is a fair and reasonable inference in ATO ID 2011/107 that the arrangement is administered for the benefit of a family group, namely the family group of X (as referred to in the facts of that interpretative decision). This is because individual X and his family are within the class of beneficiaries of the non-fixed trust that hold the post-19 September 1985 shares that have discretionary rights to dividends in Company B. 72. As a result, the Commissioner is of the view that the ultimate owners of the pre-20 September 1985 ordinary shares and the cumulative preference shares no longer hold, between them, the right to receive more than 50% of the beneficial interests in the income of Company A. Following the issuing of the DAS, the directors of Company A have the discretion to determine that dividends can be paid on one class of share but not another. As a result, the ultimate owners of the D, E and F Trusts could potentially benefit from more than 50% of any dividends paid by the company (being indirect income of the company). This is so even though the cumulative preference shares carry a right to a fixed cumulative preferential dividend of 7% per annum on the capital paid up in priority to any dividend payable on any other class of shares in the company. 73. Due to the discretionary nature of the income rights attached to the DAS, the Commissioner does not consider that the proportion of an ultimate owner’s shareholding is a reasonable basis for measuring the extent to which the underlying interests in income have changed. 74. In light of the factors outlined above, the Commissioner cannot be satisfied or find it reasonable to assume that more than 50% of the beneficial interests in the income of Company A had been held at all times by the same ultimate owners who held such interests immediately before 20 September 1985. | Detailed Reasoning - Conclusion: 75. As a result of the DAS being issued on XX May 20XX, the following occurred: (a) Company D, Company E and Company F acquired an indirect beneficial interest in the assets of Company A without having held such an interest immediately before 20 September 1985. (i) The beneficial interests acquired by the ultimate owners of Company D, Company E and Company F are minimal. Under the DAS, the rights of the ultimate owners in relation to the assets of Company A on winding up is limited to the amount paid up in relation to the share. (ii) The amount paid on each DAS is $1. (iii) Therefore, this change in shareholding will not affect the ultimate owners who held majority underlying interests in the assets of Company A before 20 September 1985. (b) Company D, Company E and Company F acquired an indirect beneficial interest in the income that may be derived from the assets of Company A without having held such an interest immediately before 20 September 1985. (i) The DAS introduced a broader class of beneficiaries than the class of beneficiaries originally outlined in the C Trust. (ii) Due to the discretionary nature of the income rights attached to the DAS, the directors of Company A have the discretion to determine that dividends can be paid on one class of share but not another. (iii) This discretion is subject to the rights of shareholders who hold the cumulative preference shares as they have a right to a fixed cumulative preferential dividend of 7% per annum on the capital paid up in priority to any dividend payable on any other class of shares in Company A. (iv) Therefore, the company could pay more than 50% of any dividends to one or more of the holders of the DAS, who in turn could distribute it to any of the corporate trustees of the respective trusts, who in turn could distribute it to any of the individuals who are members of the class of beneficiaries (including those ultimate owners which would be ‘looked through’). 76. Having regard to the effect of the change in shareholding following the issue of the DAS, the Commissioner cannot be satisfied or find it reasonable to assume that more than 50% of the beneficial interests in the income of Company A, and therefore majority underlying interests, had been held at all times by the same ultimate owners who held such interests immediately before 20 September 1985. 77. Therefore, the assets acquired by Company A before 20 September 1985 are treated as having been acquired on XX May 20XX, being the date when the DAS were issued to Company D, Company E and Company F: pursuant to subsection 149-30(1) of the ITAA 1997.