Income Tax Assessment Act 1997

s 165-115ZD — Adjustment (or further adjustment) for interest realised at a loss after global method has been used

(1) This section affects how sections 165 ‑ 115ZA and 165 ‑ 115ZB apply to an interest (the equity ) in, or a debt owed by, a company if, apart from this section, a loss (the realised loss ): (a) would be * realised for income tax purposes by a * realisation event that happens to the equity or debt; or (b) would be so realised but for Subdivision 170 ‑ D (which defers realisation of capital losses and deductions); and the company chose to use the * global method of working out whether it had an adjusted unrealised loss at the last alteration time: (c) that happened for the company before the realisation event; and (d) immediately before which the equity or debt was, or was part of: (i) if the company was a * loss company at that alteration time—a relevant equity interest, or a relevant debt interest, that an entity had in the company; or (ii) otherwise—what would have been such an interest if the company had been a loss company at that alteration time. Note: If that last alteration time is before the day on which the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 received the Royal Assent, the owner of the equity or debt may choose to apply section 165 ‑ 115ZD of the Income Tax (Transitional Provisions) Act 1997 instead of this section. (2) In addition to any application to the equity or debt, in relation to that last alteration time, that sections 165 ‑ 115ZA and 165 ‑ 115ZB have apart from this section, those sections apply (and are taken always to have applied) to the equity or debt, in relation to that last alteration time, as if: (a) the company had an adjusted unrealised loss at that time worked out under this section; and (b) the company were therefore a * loss company at that time; and (c) that adjusted unrealised loss were the company’s overall loss at that time. (3) For the purposes of how sections 165 ‑ 115ZA and 165 ‑ 115ZB apply because of this section, the adjustment amount under section 165 ‑ 115ZB is to be worked out and applied in accordance with subsection 165 ‑ 115ZB(6) (the non ‑ formula method). Adjusted unrealised loss worked out under this section (4) The adjusted unrealised loss referred to in paragraph (2)(a) is worked out using this method statement: Method statement Step 1. Add up the amount or value of each thing covered by subsection (5). (If the total exceeds the realised loss, reduce the total by the excess.) Step 2. Reduce the step 1 amount by so much of the realised loss as it is reasonable to conclude is attributable to none of these: (a) a notional capital loss, or a notional revenue loss, that the company has at that last alteration time in respect of a * CGT asset; (b) a trading stock decrease in relation to that time for a CGT asset that was * trading stock of the company at that time. Note: If the equity or debt is a revenue asset, the realised loss is different from the loss referred to in subsection (1): see subsection (9). (5) This subsection covers each thing covered by an item in the table, except to the extent that: (a) it is reasonable to conclude that the thing was not attributable to value that is reflected in what would, if that last alteration time had been a * changeover time for the company, be a notional capital gain or notional revenue gain that the company had under section 165 ‑ 115F at that changeover time in respect of a * CGT asset; or (b) the thing has resulted in a reduction of the * reduced cost base of the equity or debt. Things that might expose an unrealised loss netted off by use of global method Item Thing covered 1 A * dividend that the company pays during the period referred to in subsection (6) 2 A thing that is taken under this Act to be a dividend and that the company pays during the period referred to in subsection (6) 3 A distribution of income or capital to a * member that the company makes during the period referred to in subsection (6) and is not covered by item 1 or 2 4 An amount of income tax to which the company becomes liable at any time, to the extent that it is reasonably attributable to a realisation event that happens, during the period referred to in subsection (6), to a * CGT asset (in its character as a CGT asset, * trading stock or a * revenue asset) that the company owned at that last alteration time and * acquired for not less than $10,000 5 A loss or outgoing to which the company becomes liable at any time, to the extent that it is reasonably attributable to a realisation event of the kind referred to in item 4 6 The difference between: (a) the * capital proceeds (as worked out under subsection (7)) of a * CGT event: (i) that happens, during the period referred to in subsection (6), to a * CGT asset that the company owned at that last alteration time and * acquired for not less than $10,000; and (ii) as a result of which the asset is * acquired by an entity that is an * associate of the company at the time of the CGT event; and (b) the * market value of the asset at the time of the CGT event; but only if those capital proceeds are less than that market value (6) The period starts at that last alteration time and ends at the earlier of: (a) the time of the * realisation event referred to in paragraph (1)(a); or (b) the time immediately before the earliest time when the equity or debt is no longer, or is no longer part of: (i) if the company was a * loss company at that last alteration time—a relevant equity interest, or a relevant debt interest, that an entity has in the company; or (ii) otherwise—what would have been such an interest if the company had been a loss company at that last alteration time. (7) For the purposes of item 6 of the table in subsection (5), the * capital proceeds of the * CGT event are to be worked out: (a) under subsection 116 ‑ 20(1) only; and (b) disregarding subsection 103 ‑ 10(1) and paragraph 103 ‑ 10(2)(a) (about entitlement to receive money or property). Notices under section 165 ‑ 115ZC not affected (8) To avoid doubt: (a) a notice need not be given under section 165 ‑ 115ZC because of this section; and (b) this section does not affect the requirements that apply to a notice that otherwise must be given under that section. If equity or debt is a revenue asset (9) If the equity or debt is a * revenue asset at the time of the * realisation event, subsection (4) applies on the basis that the realised loss is the total of: (a) the loss (if any) * realised for income tax purposes by the realisation event happening to the equity or debt in its character as a * CGT asset; and (b) the loss (if any) realised for income tax purposes by the realisation event happening to the equity or debt in its character as a revenue asset.

Amendment history: Inserted by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3) | Amended by No 16 of 2003, effective s 4: 11 Apr 2003 (s 2(1) item 1) Sch 1 (items 1–6, 9–26), Sch 2, 3, Sch 4 (items 1–7), Sch 5 (items 2–5), Sch 6 (items 1–9), Sch 7 (items 1, 2, 4–29), Sch 8, Sch 9 (items 1, 2, 13–21), Sch 10 (item 2), Sch 11 (items 1–3), Sch 12, 13, Sch 14 (items 1–7), Sch 16 (items 1–3), Sch 19 (items 1–3), Sch 21, 22, Sch 23 (items 10–13) and Sch 24 (items 20–23): 24 Oct 2002 (s 2(1) items 1A, 2–11, 13, 14) Sch 7 (item 3): ( see Sch 10 (item 224) of Act No. 41, 2005) Sch 25 (items 1–10), Sch 26 (items 1–4, 8), Sch 27 (items 1–19, 21), Sch 28 (items 1–12, 19), Sch 29 (items 12, 13) and Sch 30 (items 1, 2): 29 June 2002 (s 2(1) items 15–19, 21, 23) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 165-117 — What this Subdivision is about

A company cannot deduct a bad debt unless: (a) if the debt was incurred in an earlier income year—the company had the same owners and the same control throughout the period from the day on which the debt was incurred to the end of the income year in which it writes off the debt as bad; or (b) if the debt was incurred in the current year—the company had the same owners and the same control during the income year both before and after the debt was incurred; or, if there has been a change of ownership or control, the company satisfies the business continuity test by carrying on the same business (including entering into no new kinds of transactions and conducting no new kinds of business), or by carrying on a similar business (on or after 1 July 2015). Note: The exceptions mentioned in this section apply differently in relation to designated infrastructure project entities: see section 415 ‑ 40. Table of sections Operative provisions 165 ‑ 119 Application of Subdivision 165 ‑ 120 To deduct a bad debt 165 ‑ 123 Company must maintain the same owners 165 ‑ 126 Alternatively, the company must satisfy the business continuity test 165 ‑ 129 Same people must control the voting power, or the company must satisfy the business continuity test 165 ‑ 132 When tax losses resulting from bad debts cannot be deducted

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-119 — Application of Subdivision

This Subdivision applies to a debt only to the extent (if any) to which Subdivision 165 ‑ CC does not apply in respect of the debt. Note: Subdivision 165 ‑ CC applies to certain capital losses or tax losses of a company to the extent to which the capital loss or tax loss does not exceed the company’s unrealised net loss.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 165-120 — To deduct a bad debt

(1) A company cannot deduct a debt (or part of a debt) that it writes off as bad in the * current year unless: (a) it meets the conditions in section 165 ‑ 123 (which is about the company maintaining the same owners); or Note: See section 165 ‑ 230 for a special alternative to the condition in this paragraph. (b) the Commissioner thinks it would be unreasonable to require the company to meet the conditions in that section, having regard to the entities that beneficially owned the shares in the company when (in the Commissioner’s opinion) the debt (or part) became bad; or (c) the company meets the condition in section 165 ‑ 126 (which is about the company satisfying the business continuity test). Note 1: In the case of a widely held or eligible Division 166 company, Subdivision 166 ‑ C modifies how this Subdivision applies, unless the company chooses otherwise. Note 2: Normally bad debts are deductible under section 8 ‑ 1 or 25 ‑ 35. Note 3: Subdivisions 709 ‑ D and 719 ‑ I modify how this Subdivision operates in relation to a company that used to be a member of a consolidated group or MEC group and that writes off as bad a debt that used to be owed to a member of the group. (2) The conditions in section 165 ‑ 123 or 165 ‑ 126 apply to different periods, depending on whether the debt was incurred in the * current year or an earlier income year: Meaning of first continuity period and second continuity period In this case: the first continuity period : and the second continuity period : the debt was incurred in an earlier income year • starts on the day when the debt was incurred; and • ends at the end of that income year is the * current year the debt was incurred in the * current year (but not on the last day of it) • starts on the first day of the * current year; and • ends on the day when the debt was incurred • starts on the day after the debt was incurred; and • ends on the last day of the * current year (3) A company cannot deduct a debt (or part of a debt) that it writes off as bad on the last day of the * current year if the debt was also incurred on that day.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 162 of 2005, effective Schedule 2 (items 1–13), Schedule 3 (items 1–3, 16–19, 33) and Schedule 6 (items 28–32): Royal Assent Schedule 6 (items 1–5, 7–13): 1 July 2005 Sch 6 (items 6, 16–25): 1 July 2001 (s 2(1) items 4, 6) | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-123 — Company must maintain the same owners

Ownership test period (1) In determining whether section 165 ‑ 120 prevents a company from deducting a debt or a part of a debt, the ownership test period is the period from the start of the * first continuity period to the end of the * second continuity period. Note: See section 165 ‑ 255 for the rule about incomplete test periods. Voting power (2) There must be persons who had * more than 50% of the voting power in the company at all times during the * ownership test period. Note 1: See section 165 ‑ 150 to work out who had more than 50% of the voting power. Note 2: Subdivision 167 ‑ B has special rules for working out voting power in a company whose shares do not all carry the same voting rights, or do not carry all of the voting rights in the company. Rights to dividends (3) There must be persons who had rights to * more than 50% of the company’s dividends at all times during the * ownership test period. Note 1: See section 165 ‑ 155 to work out who had rights to more than 50% of the company’s dividends. Note 2: Subdivision 167 ‑ A has special rules for working out rights to dividends in a company whose shares do not all carry the same rights to dividends. Rights to capital distributions (4) There must be persons who had rights to * more than 50% of the company’s capital distributions at all times during the * ownership test period. Note 1: See section 165 ‑ 160 to work out who had rights to more than 50% of the company’s capital distributions. Note 2: Subdivision 167 ‑ A has special rules for working out rights to capital distributions in a company whose shares do not all carry the same rights to capital distributions. When to apply the primary test (5) To work out whether a condition in this section was satisfied at all times during the * ownership test period, apply the primary test for that condition unless subsection (6) requires the alternative test to be applied. Note: For the primary test, see subsections 165 ‑ 150(1), 165 ‑ 155(1) and 165 ‑ 160(1). When to apply the alternative test (6) Apply the alternative test for that condition if one or more other companies beneficially owned * shares or interests in shares in the company at any time during the * ownership test period. Note: For the alternative test, see subsections 165 ‑ 150(2), 165 ‑ 155(2) and 165 ‑ 160(2). Conditions in subsections (2), (3) and (4) may be treated as having been satisfied in certain circumstances (7) If any of the conditions in subsections (2), (3) and (4) have not been satisfied, those conditions are taken to have been satisfied if: (a) they would have been satisfied except for the operation of section 165 ‑ 165; and (b) the company has information from which it would be reasonable to conclude that less than 50% of the debt or of the part of a debt has been reflected in deductions, capital losses, or reduced assessable income, that occurred, or could occur in future, because of the happening of any * CGT event in relation to any * direct equity interests or * indirect equity interests in the company during the * ownership test period. (7A) If the company is: (a) a * non ‑ profit company; or (b) a * mutual affiliate company; or (c) a * mutual insurance company; during the whole of the * ownership test period, the conditions in subsections (3) and (4) are taken to have been satisfied by the company. Time of happening of CGT event (8) The happening of any * CGT event in relation to a * direct equity interest or * indirect equity interest in the company that results in the failure of the company to satisfy a condition in subsection (2), (3) or (4) is taken, for the purposes of paragraph (7)(b), to have occurred during the * ownership test period.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 143 of 2007, effective Schedule 1 (items 1, 4, 128–194, 222, 223, 225, 226), Schedule 2, Schedule 5 (items 1–16, 48(1)–(3)), Schedule 6 and Schedule 7 (items 18–68): Royal Assent Schedule 5 (items 31–46): 15 Mar 2007 (s 2(1) item 6) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 165-126 — Alternatively, the company must satisfy the business continuity test

(1) This section sets out the condition that a company must meet to be able to deduct a debt or part of a debt that it writes off as bad in the * current year if: (a) either: (i) the company fails to meet a condition in subsection 165 ‑ 123(2), (3) or (4); or (ii) it is not practicable to show that the company meets the conditions in those subsections; and (b) paragraph 165 ‑ 120(1)(b) (about the Commissioner thinking it is unreasonable to require the company to meet the conditions in section 165 ‑ 123) does not apply. Note Other provisions may treat the company as meeting, or failing to meet, the conditions in subsections 165 ‑ 123(2), (3) and (4). (2) The company must satisfy the * business continuity test for the * second continuity period (the business continuity test period ). Apply the test to the * business the company carried on immediately before the time (the test time ) shown in the relevant item of the table. Test time Item If: The test time is: 1 It is practicable to show there is a period that meets these conditions: (a) the period starts at the start of the * first continuity period; (b) the company would meet the conditions in subsections 165 ‑ 123(2), (3) and (4) if the period were the * ownership test period for the purposes of this Act The latest time that it is practicable to show is in the period 2 Item 1 does not apply and either: (a) the debt was incurred before the * current year; or (b) the company came into being during the current year The end of the day on which the debt was incurred 3 All these conditions are met: (a) item 1 does not apply; (b) the debt was incurred in the * current year; (c) the company was in being throughout the current year The start of the current year For the business continuity test: see Subdivision 165 ‑ E.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-129 — Same people must control the voting power, or the company must satisfy the business continuity test

(1) Even if section 165 ‑ 120 does not prevent a company from deducting a bad debt (or part of one), it cannot deduct the bad debt (or that part of it) if: (a) for some or all of the part of the * ownership test period that started at the end of the * first continuity period, a person controlled, or was able to control, the voting power in the company (whether directly, or indirectly through one or more interposed entities); and (b) for some or all of the * first continuity period, that person did not control, and was not able to control, that voting power (directly, or indirectly in that way); and (c) that person began to control, or became able to control, that voting power (directly, or indirectly in that way) for the purpose of: (i) getting some benefit or advantage in relation to how this Act applies; or (ii) getting such a benefit or advantage for someone else; or for purposes including that purpose. Note 1: A person can still control the voting power in a company that is in liquidation etc.: see section 165 ‑ 250. Note 2: Subdivision 167 ‑ B has special rules for working out voting power in a company whose shares do not all carry the same voting rights, or do not carry all of the voting rights in the company. (2) However, that person’s control of the voting power, or ability to control it, does not prevent the company from deducting the bad debt (or that part of it) if the company satisfies the * business continuity test for the * second continuity period (the business continuity test period ). (3) Apply the * business continuity test to the * business that the company carried on immediately before the time (the test time ) when the person began to control that voting power, or became able to control it. For the business continuity test: see Subdivision 165 ‑ E.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-132 — When tax losses resulting from bad debts cannot be deducted

(1) If: (a) a company can deduct a debt (or part of a debt) that it wrote off as bad in an income year; and (b) because the company failed to meet a condition in section 165 ‑ 123 (about the company maintaining the same owners), it could not have deducted the debt (or part) apart from section 165 ‑ 126 (about the company satisfying the business continuity test); and (c) the company wrote off the debt after the * test time worked out under section 165 ‑ 126; and (d) because of the deduction, the company has a * tax loss for that income year, or there was an increase in the amount of its * tax loss for that income year; and (e) the company carried on a * business during that income year for the purpose, or for purposes including the purpose, of securing a deduction for the debt (or part) by relying on section 165 ‑ 126; the company cannot deduct the * tax loss for a later income year, or cannot deduct it to the extent of the increase, unless it also satisfies the * business continuity test for the later income year (the business continuity test period ). (2) Apply the test to the * business that the company carried on immediately before the * test time worked out for section 165 ‑ 126. For the business continuity test: see Subdivision 165 ‑ E.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-150 — Who has more than 50% of the voting power in the company

The primary test (1) Applying the primary test: if there are persons who, at a particular time, beneficially own (between them) * shares that carry (between them) the right to exercise more than 50% of the voting power in the company, those persons have more than 50% of the voting power in the company at that time. The alternative test (2) Applying the alternative test: if it is the case, or it is reasonable to assume, that there are persons (none of them companies or * trustees) who (between them) at a particular time control, or are able to control (whether directly, or indirectly through one or more interposed entities) the voting power in the company, those persons have more than 50% of the voting power in the company at that time.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 165-155 — Who has rights to more than 50% of the company’s dividends

The primary test (1) Applying the primary test: if there are persons who, at a particular time, beneficially own (between them) * shares that carry (between them) the right to receive more than 50% of any * dividends that the company may pay, those persons have rights to more than 50% of the company’s dividends at that time. The alternative test (2) Applying the alternative test: if it is the case, or it is reasonable to assume, that there are persons (none of them companies) who (between them) at a particular time have the right to receive for their own benefit (whether directly or * indirectly) more than 50% of any * dividends that the company may pay, those persons have rights to more than 50% of the company’s dividends at that time.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 165-160 — Who has rights to more than 50% of the company’s capital distributions

The primary test (1) Applying the primary test: if there are persons who, at a particular time, beneficially own (between them) * shares that carry (between them) the right to receive more than 50% of any distribution of capital of the company, those persons have rights to more than 50% of the company’s capital distributions at that time. The alternative test (2) Applying the alternative test: if it is the case, or it is reasonable to assume, that there are persons (none of them companies) who (between them) at a particular time have the right to receive for their own benefit (whether directly or * indirectly) more than 50% of any distribution of capital of the company, those persons have rights to more than 50% of the company’s capital distributions at that time.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 165-165 — Rules about tests for a condition or occurrence of a circumstance

Exactly the same shares or interests must continue to be held (1) For the purpose of determining whether a company has satisfied a condition or whether a time is a changeover time or an alteration time in respect of a company: (a) a condition that has to be satisfied is not satisfied; or (b) a time that, apart from this subsection, would not be a changeover time or alteration time is taken to be a changeover time or alteration time, as the case may be; unless, at all relevant times: (c) the only * shares in the company that are taken into account are exactly the same shares and are held by the same persons; and (d) the only interests in any other entity (including shares in another company) that are taken into account are exactly the same interests and are beneficially owned by the same persons. What happens in case of share splitting (2) If: (a) a particular * share (an old share ) in a company of which a person is the beneficial owner at the start of a * test period is divided into 2 or more new shares; and (b) the person becomes the beneficial owner of each of the new shares immediately after the division takes place and remains the beneficial owner until the end of that period; the new shares are taken to be exactly the same shares as the old share. What happens in case of splitting of units in a unit trust (3) If: (a) a particular unit (the old unit ) in a unit trust of which a person is the holder at the start of a * test period is divided into 2 or more new units; and (b) the person becomes the holder of each of the new units immediately after the division takes place and remains the holder until the end of that period; the new units are taken to be exactly the same units as the old unit. What happens in case of consolidation of shares (4) If: (a) a particular * share (an old share ) in a company of which a person is the beneficial owner at the start of a * test period, and other shares (each of which also called an old share ) in the company of which the person is the beneficial owner at the start of that period, are consolidated into a new share; and (b) the person becomes the beneficial owner of the new share immediately after the consolidation takes place; the new share is taken to be exactly the same share as the old shares. What happens in case of consolidation of units in a unit trust (5) If: (a) a particular unit (an old unit ) in a unit trust of which a person is the holder at the start of a * test period and other units (each of which also called an old unit ) in the trust of which the person is the holder at the start of that period are consolidated into a new unit; and (b) the person becomes the holder of the new unit immediately after the consolidation takes place; the new unit is taken to be exactly the same unit as the old units. Test period (6) A test period is: (a) for the purpose of determining whether a condition in section 165 ‑ 12 has been satisfied—the * ownership test period; or (b) for the purpose of determining whether a test time is a changeover time for the purposes of section 165 ‑ 115C—the period between the reference time referred to in subsection 165 ‑ 115A(2A) and the test time; or (c) for the purpose of determining whether a test time is an alteration time for the purposes of section 165 ‑ 115L—the period between the reference time referred to in subsection 165 ‑ 115L(2) and the test time. Satisfaction by primary test by public company (7) A * public company is taken to satisfy the primary test if it is reasonable to assume that the test is satisfied.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 165-175 — Tests can be satisfied by a single person

To avoid doubt, a test for a condition can be satisfied by one person.

s 165-180 — Arrangements affecting beneficial ownership of shares

(1) For the purposes of a test, the Commissioner may treat a person as not having beneficially owned particular * shares at a particular time if the conditions in subsections (2) and (3) are met. Example: The Commissioner may treat a person as not having beneficially owned redeemable shares at a particular time if the conditions in subsections (2) and (3) are met in respect of those shares. (2) An * arrangement must have been entered into at some time that in any way (directly or indirectly) related to, affected, or depended for its operation on: (a) the beneficial interest in the * shares, or the value of that beneficial interest; or (b) a right carried by, or relating to, the shares; or (c) the exercise of such a right. (3) The * arrangement must also have been entered into for the purpose, or for purposes including the purpose, of eliminating or reducing a liability of an entity to pay income tax for a * financial year.

Amendment history: Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 165-185 — Shares treated as not having carried rights

(1) In applying a test for the purposes of this Division other than Subdivision 165 ‑ CC, * shares are taken not to have carried particular rights during a part of the * ownership test period if the Commissioner is satisfied that: (a) the shares stopped carrying those rights after the ownership test period; or (b) the shares will or may stop carrying those rights after the ownership test period; because of: (c) the company’s * constitution as in force at some time during the ownership test period; or (d) an * arrangement entered into before or during the ownership test period. (2) In applying a test for the purposes of Subdivision 165 ‑ CC, * shares are taken not to have carried particular rights after a particular time if the Commissioner is satisfied that: (a) the shares stopped carrying those rights after that time; or (b) the shares will or may stop carrying those rights after that time; because of: (c) the company’s * constitution as in force at any time; or (d) an * arrangement entered into at any time.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 165-190 — Shares treated as always having carried rights

(1) In applying a test for the purposes of this Division other than Subdivision 165 ‑ CC, * shares are taken to have carried particular rights at all times during a part of the * ownership test period if the Commissioner is satisfied that: (a) the shares started to carry those rights after the ownership test period; or (b) the shares will or may start to carry those rights after the ownership test period; because of: (c) the company’s * constitution as in force at some time during the ownership test period; or (d) an * arrangement entered into before or during the ownership test period. (2) In applying a test for the purposes of Subdivision 165 ‑ CC, * shares are taken to have carried particular rights after a particular time if the Commissioner is satisfied that: (a) the shares started to carry those rights after that time; or (b) the shares will or may start to carry those rights after that time; because of: (c) the company’s * constitution as in force at any time; or (d) an * arrangement entered into at any time.

Amendment history: Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 165-200 — Rules do not affect totals of shares, units in unit trusts or rights carried by shares and units

(1) Sections 165 ‑ 165, 165 ‑ 180, 165 ‑ 185 and 165 ‑ 190 do not affect how * shares, and rights carried by * shares, are counted for the purposes of determining: (a) the total voting power in the company; or (b) the total * dividends that the company may pay; or (c) the total distributions of capital of the company. (2) Section 165 ‑ 165 does not affect how units in a unit trust, or the rights carried by such units, are counted for the purposes of determining the total rights, or the total rights of a particular kind, in the trust of the holders of such units.

Amendment history: Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 165-202 — Shares held by government entities and charities etc.

(1) For the purposes of a test, * shares that are beneficially owned by each of the following entities are taken to be beneficially owned instead by a person (who is not a company): (a) the Commonwealth, a State or a Territory; (b) a municipal corporation; (c) a * local governing body; (d) the government of a foreign country, or of part of a foreign country; (e) a company, established under a law, in which no person has a * membership interest; (f) a * non ‑ profit company; (g) a charity that is not a trust; (h) a * complying superannuation fund; (i) a superannuation fund that is established in a foreign country and is regulated under a * foreign law; (j) a * complying approved deposit fund; (k) a * special company; (l) a * managed investment scheme. (2) For the purposes of a test, * shares that are beneficially owned through a charity that is a trust are taken to be beneficially owned instead by a person (who is neither a company nor a trustee).

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 169 of 2012, effective Sch 2 (items 4–23, 28–39, 187–189) and Sch 4 (items 4–7): 3 Dec 2012 (s. 2(1) items 3, 7, 12) Sch 4 (items 8–10, 21, 22): never commenced (s 2(1) items 13, 14) Sch 5: 4 Dec 2012 (s 2(1) item 15) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5) | Amended by No 15 of 2017, effective Sch 1 (item 1): 1 Mar 2017 (s 2(1) item 2) Sch 2 and Sch 4 (items 26–69, 71–83): 1 Apr 2017 (s 2(1) items 3, 8, 10) Sch 4 (item 70): 19 Mar 2015 (s 2(1) item 9)

s 165-203 — Companies where no shares have been issued

For the purposes of a test, if no * shares have been issued in a company, each * membership interest in the company is taken to be a share in the company.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 165-205 — Death of share owner

(1) If an individual beneficially owns * shares in a company when he or she dies, this section applies if and while the shares: (a) are owned by the trustee of the deceased’s estate; or (b) are beneficially owned by someone who receives them as a beneficiary of the deceased’s estate. (2) For the purposes of a test: (a) the * shares are taken to continue to be beneficially owned by the deceased; and (b) as a result of being taken to continue to beneficially own the shares, the deceased is taken to continue: (i) to have any rights to exercise, or to be able to control (whether directly, or indirectly through one or more interposed entities), any of the voting power in the company; and (ii) to have any rights to receive for the deceased’s own benefit (whether directly or * indirectly) any * dividends that the company may pay; and (iii) to have any rights to receive for the deceased’s own benefit (whether directly or indirectly) any distributions of capital of the company.

Amendment history: Repealed and substituted by No 110 of 2014, effective Sch 1 and Sch 2 (items 2–5, 13–23): 17 Oct 2014 (s 2(1) item 2) Sch 3, Sch 4 (items 1, 3) and Sch 5 (items 16–67, 74–76, 84–91, 98–121): 16 Oct 2014 (s 2(1) items 3–5, 7)

s 165-207 — Trustees of family trusts

(1) This section applies if one or more trustees of a * family trust: (a) owns * shares in a company; or (b) controls, or is able to control, (whether directly, or indirectly through one or more interposed entities) voting power in a company; or (c) has a right to receive (whether directly, or * indirectly through one or more interposed entities) a percentage of a * dividend or a distribution of capital of a company. (2) For the purposes of a primary test, a single notional entity that is a person (but is neither a company nor a trustee) is taken to own the * shares beneficially. Note: For a primary test, see subsections 165 ‑ 150(1), 165 ‑ 155(1) and 165 ‑ 160(1). (3) For the purposes of an alternative test, a single notional entity that is a person (but is neither a company nor a trustee) is taken: (a) to control, or have the ability to control, the voting power in the company; or (b) to have the right to receive (whether directly or * indirectly) the percentage of the * dividend or distribution for the entity’s own benefit. Note: For an alternative test, see subsections 165 ‑ 150(2), 165 ‑ 155(2) and 165 ‑ 160(2). (4) If a trustee of the trust is subsequently replaced by another trustee of the trust, the same single notional entity is taken: (a) to own the * shares beneficially; or (b) to control, or have the ability to control, the voting power in the company; or (c) to have the right to receive (whether directly or * indirectly) the percentage of the * dividend or distribution for the entity’s own benefit.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 165-208 — Companies in liquidation etc.

(1) For the purposes of a primary test or an alternative test, an entity is not prevented from: (a) beneficially owning * shares in a company; or (b) having the right to exercise, controlling, or being able to control, voting power in a company; or (c) having the right to receive any * dividends that a company may pay; or (d) having the right to receive any distribution of capital of a company; merely because: (e) the company is or becomes: (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or (ii) an entity with a similar status under a * foreign law to a Chapter 5 body corporate; or (f) either: (i) a provisional liquidator is appointed to the company under section 472 of the Corporations Act 2001 ; or (ii) a person with a similar status under a foreign law to a provisional liquidator is appointed to the company. Note 1: For a primary test, see subsections 165 ‑ 150(1), 165 ‑ 155(1) and 165 ‑ 160(1). Note 2: For an alternative test, see subsections 165 ‑ 150(2), 165 ‑ 155(2) and 165 ‑ 160(2). (2) For the purposes of a primary test or an alternative test, a company (the stakeholding company ) is not prevented from: (a) beneficially owning * shares in another company, or any other interest in another entity; or (b) having the right to exercise, controlling, or being able to control, voting power in another company or any other entity; or (c) having the right to receive any * dividends that another company or any other entity may pay; or (d) having the right to receive any distribution of capital of another company or of any other entity; merely because: (e) the stakeholding company is or becomes: (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or (ii) an entity with a similar status under a * foreign law to a Chapter 5 body corporate; or (f) either: (i) a provisional liquidator is appointed to the stakeholding company under section 472 of the Corporations Act 2001 ; or (ii) a person with a similar status under a foreign law to a provisional liquidator is appointed to the stakeholding company.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 11 of 2016, effective Sch 2 (items 274–277): 1 Mar 2017 (s 2(1) item 5)

s 165-209 — Dual listed companies

Section 165 ‑ 150 does not apply to * shares that are * dual listed company voting shares.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 165-210 — The business continuity test—carrying on the same business

(1) A company satisfies the business continuity test if throughout the * business continuity test period it carries on the same * business as it carried on immediately before the * test time. (2) However, the company does not satisfy the * business continuity test under this section if, at any time during the * business continuity test period, it * derives assessable income from: (a) a * business of a kind that it did not carry on before the * test time; or (b) a transaction of a kind that it had not entered into in the course of its business operations before the * test time. (3) The company also does not satisfy the * business continuity test under this section if, before the * test time, it: (a) started to carry on a * business it had not previously carried on; or (b) in the course of its business operations, entered into a transaction of a kind that it had not previously entered into; and did so for the purpose, or for purposes including the purpose, of being taken to have carried on throughout the * business continuity test period the same business as it carried on immediately before the test time. (4) So far as the * business continuity test under this section is applied for the purpose of Subdivision 165 ‑ B (which is about working out the taxable income and * tax loss for the income year of change of ownership or control), the company also does not satisfy the test if, at any time during the * business continuity test period, it incurs expenditure: (a) in carrying on a * business of a kind that it did not carry on before the * test time; or (b) as a result of a transaction of a kind that it had not entered into in the course of its business operations before the test time.

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-211 — The business continuity test—carrying on a similar business

(1) A company also satisfies the business continuity test in relation to: (a) a * tax loss for an income year starting on or after 1 July 2015; or (b) taxable income for an income year starting on or after 1 July 2015; or (c) a * net capital loss for an income year starting on or after 1 July 2015; or (d) a debt, incurred in an income year starting on or after 1 July 2015, that the company writes off as bad; if throughout the * business continuity test period it carries on a business (its current business ) that is similar to the * business it carried on immediately before the * test time (its former business ). (2) Without limiting the matters that may be taken into account in ascertaining whether the company’s current business is similar to its former business, the following must be taken into account: (a) the extent to which the assets (including goodwill) that are used in its current business to generate assessable income throughout the * business continuity test period were also used in its former business to generate assessable income; (b) the extent to which the activities and operations from which its current business generated assessable income throughout the business continuity test period were also the activities and operations from which its former business generated assessable income; (c) the identity of its current business and the identity of its former business; (d) the extent to which any changes to its former business result from development or commercialisation of assets, products, processes, services or marketing or organisational methods of the former business. (3) However, the company does not satisfy the * business continuity test under this section if, before the * test time, it: (a) started to carry on a * business it had not previously carried on; or (b) in the course of its business operations, entered into a transaction of a kind that it had not previously entered into; and did so for the purpose, or for purposes including the purpose, of being taken to have carried on throughout the * business continuity test period a business that is similar to the business it carried on immediately before the test time.

Amendment history: Inserted by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-212D — Restructure of MDOs etc.

(1) An * MDO does not fail to satisfy the * business continuity test merely because, before 1 July 2003: (a) the MDO restructured the way it * provides medical indemnity cover; or (b) the MDO ceased to provide medical indemnity cover; in order to comply with the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 . (2) A * general insurance company which is an * associate of an * MDO does not fail to satisfy the * business continuity test merely because, before 1 July 2003: (a) the MDO restructured the way it * provides medical indemnity cover; or (b) the MDO ceased to provide medical indemnity cover; in order to comply with the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 .

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-212E — Entry history rule does not apply for the purposes of sections 165 ‑ 210 and 165 ‑ 211

For the purposes of sections 165 ‑ 210 and 165 ‑ 211, section 701 ‑ 5 (the entry history rule) does not operate in relation to an entity becoming a * subsidiary member of a * consolidated group or a * MEC group.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Repealed and substituted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 165-215 — Special alternative to change of ownership test for Subdivision 165 ‑ A

(1) If a company does not meet the conditions in section 165 ‑ 12, it is nevertheless taken to meet the conditions if it meets the conditions in this section. First condition (2) At all times during the * ownership test period: (a) both: (i) persons must have held * fixed entitlements to all of the income and capital of the company; and (ii) * non ‑ fixed trusts, other than * family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or (b) both: (i) a * fixed trust or a company (which trust or company is the holding entity ) must have held, directly or indirectly, fixed entitlements to all of the income and capital of the company; and (ii) non ‑ fixed trusts, other than * family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the holding entity. Second condition (3) The persons holding * fixed entitlements to shares of the income, and the persons holding fixed entitlements to shares of the capital, of: (a) in a paragraph (2)(a) case—the company; or (b) in a paragraph (2)(b) case—the holding entity; at the beginning of the * loss year must have held those entitlements to those shares at all times during the * ownership test period. Third condition (4) At the beginning of the * loss year: (a) individuals must not have had (between them), directly or indirectly, and for their own benefit, * fixed entitlements to a greater than 50% share of the income of the company; or (b) individuals must not have had (between them), directly or indirectly, and for their own benefit, fixed entitlements to a greater than 50% share of the capital of the company. Fourth condition (5) It must be the case that, for each * non ‑ fixed trust (other than an * excepted trust) that, at any time during the * ownership test period, held directly or indirectly a * fixed entitlement to a share of the income or capital of the company, section 267 ‑ 20 in Schedule 2F to the Income Tax Assessment Act 1936 would not have prevented the non ‑ fixed trust from deducting the * tax loss concerned if it, rather than the company, had incurred the tax loss. 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.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 57 of 2002, effective Sch 2: 1 July 2002 (s 2(1) item 3) Sch 4 (items 3, 4): 1 July 2000 (s 2(1) item 5) Sch 4 (items 5–8), Sch 7, Sch 9 (items 9, 11, 12, 15–20, 22–40, 45), Sch 11 (items 2–5), Sch 12 (items 16–18, 20, 25, 26): 3 July 2002 (s 2(1) items 6, 7, 9, 11, 13, 15, 16, 18, 28, 30, 33) Sch 9 (items 10, 13, 14, 21) and Sch 12 (items 23, 24): 1 July 1997 (s 2(1) items 10, 12, 14, 32) Sch 12 (item 19): 30 June 1998 (s 2(1) item 29) Sch 12 (items 21, 22): 22 June 1998 (s 2(1) item 31) Sch 12 (items 27, 28): 16 Apr 1998 (s 2(1) item 34) Sch 12 (item 29): 19 Sept 1997 (s 2(1) item 35) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-220 — Special alternative to change of ownership test for Subdivision 165 ‑ B

(1) If the company does not meet the condition in paragraph 165 ‑ 35(a), it is nevertheless taken to meet the condition if it meets the conditions in this section. First condition (2) At all times during the income year: (a) both: (i) persons must have held * fixed entitlements to all of the income and capital of the company; and (ii) * non ‑ fixed trusts, other than * family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or (b) both: (i) a * fixed trust or a company (which trust or company is the holding entity ) must have held, directly or indirectly, fixed entitlements to all of the income and capital of the company; and (ii) non ‑ fixed trusts, other than family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the holding entity. Second condition (3) The persons holding * fixed entitlements to shares of the income, and the persons holding fixed entitlements to shares of the capital, of: (a) in a paragraph (2)(a) case—the company; or (b) in a paragraph (2)(b) case—the holding entity; at the beginning of the income year must have held those entitlements to those shares at all times during the income year. Third condition (4) At the beginning of the income year: (a) individuals must not have had (between them), directly or indirectly, and for their own benefit, * fixed entitlements to a greater than 50% share of the income of the company; or (b) individuals must not have had (between them), directly or indirectly, and for their own benefit, fixed entitlements to a greater than 50% share of the capital of the company. Fourth condition (5) It must be the case that, for each * non ‑ fixed trust (other than an * excepted trust) that, at any time in the income year, held directly or indirectly a * fixed entitlement to a share of the income or capital of the company, section 267 ‑ 60 in Schedule 2F to the Income Tax Assessment Act 1936 does not require the non ‑ fixed trust to work out its net income and * tax loss for the income year under Division 268. 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.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-225 — Special way of dividing the income year under Subdivision 165 ‑ B

(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). (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.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Repealed and substituted by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-230 — Special alternative to change of ownership test for Subdivision 165 ‑ C

(1) If a company does not meet the conditions in section 165 ‑ 123, it is nevertheless taken to meet the conditions if it meets the conditions in this section. First condition (2) At all times during the * ownership test period: (a) both: (i) persons must have held * fixed entitlements to all of the income and capital of the company; and (ii) * non ‑ fixed trusts, other than * family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the company; or (b) both: (i) a * fixed trust or a company (which trust or company is the holding entity ) must have held, directly or indirectly, fixed entitlements to all of the income and capital of the company; and (ii) non ‑ fixed trusts, other than family trusts, must have held fixed entitlements to a 50% or greater share of the income or a 50% or greater share of the capital of the holding entity. Second condition (3) The persons holding * fixed entitlements to shares of the income, and the persons holding fixed entitlements to shares of the capital, of: (a) in a paragraph (2)(a) case—the company; or (b) in a paragraph (2)(b) case—the holding entity; at the beginning of the * first continuity period must have held those entitlements to those shares at all times during the * ownership test period. Third condition (4) At the beginning of the * first continuity period: (a) individuals must not have had (between them), directly or indirectly, and for their own benefit, * fixed entitlements to a greater than 50% share of the income of the company; or (b) individuals must not have had (between them), directly or indirectly, and for their own benefit, fixed entitlements to a greater than 50% share of the capital of the company. Fourth condition (5) It must be the case that, for each * non ‑ fixed trust (other than an * excepted trust) that, at any time during the * ownership test period, held directly or indirectly a * fixed entitlement to a share of the income or capital of the company, section 267 ‑ 25 in Schedule 2F to the Income Tax Assessment Act 1936 would not have prevented the non ‑ fixed trust from deducting the amount in respect of the debt if it, rather than the company, would otherwise be entitled to deduct the amount. 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.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 57 of 2002, effective Sch 2: 1 July 2002 (s 2(1) item 3) Sch 4 (items 3, 4): 1 July 2000 (s 2(1) item 5) Sch 4 (items 5–8), Sch 7, Sch 9 (items 9, 11, 12, 15–20, 22–40, 45), Sch 11 (items 2–5), Sch 12 (items 16–18, 20, 25, 26): 3 July 2002 (s 2(1) items 6, 7, 9, 11, 13, 15, 16, 18, 28, 30, 33) Sch 9 (items 10, 13, 14, 21) and Sch 12 (items 23, 24): 1 July 1997 (s 2(1) items 10, 12, 14, 32) Sch 12 (item 19): 30 June 1998 (s 2(1) item 29) Sch 12 (items 21, 22): 22 June 1998 (s 2(1) item 31) Sch 12 (items 27, 28): 16 Apr 1998 (s 2(1) item 34) Sch 12 (item 29): 19 Sept 1997 (s 2(1) item 35) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-235 — Information about non ‑ fixed trusts with interests in company

Notice about foreign resident non ‑ fixed trust (1) The Commissioner may give the company a notice in accordance with section 165 ‑ 240 if the requirements of subsections (2) to (5) of this section are met. Tax detriment under Division 165 (2) In its * income tax return for the income year: (a) the company must have deducted a * tax loss from a * loss year where it would not be allowed to deduct the tax loss unless it met the conditions in section 165 ‑ 215; or (b) the company must not have calculated: (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; where it would have been required to calculate them unless it met the conditions in section 165 ‑ 220; or (c) the company must have applied a net capital loss for an earlier income year in working out its net capital gain where it would not have been allowed to apply the loss unless it met the conditions in section 165 ‑ 215 as applied on the assumption mentioned in subsection 165 ‑ 96(1); or (d) the company must have deducted a debt that it wrote off as bad in the income year where it would not be allowed to deduct the debt unless it met the conditions in section 165 ‑ 230. Information about non ‑ fixed trust (3) In order to determine whether it meets the conditions concerned, the Commissioner must need information about a * non ‑ fixed trust mentioned in: (a) if paragraph (2)(a) applies—subsection 165 ‑ 215(5); or (b) if paragraph (2)(b) applies—subsection 165 ‑ 220(5); or (c) if paragraph (2)(c) applies—subsection 165 ‑ 215(5) as applied on the assumption mentioned in subsection 165 ‑ 96(1); or (d) if paragraph (2)(d) applies—subsection 165 ‑ 230(5). Foreign resident trust (4) When the Commissioner gives the notice: (a) a trustee of the * non ‑ fixed trust must be a foreign resident; or (b) the central management and control of the non ‑ fixed trust must be outside Australia. When notice must be given (5) The Commissioner must give the notice before the later of: (a) 5 years after the income year; and (b) the end of the period during which the company is required by section 262A of the Income Tax Assessment Act 1936 to retain records in relation to that income year.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-240 — Notices where requirements of section 165 ‑ 235 are met

Information required (1) The notice that the Commissioner may give if the requirements of subsections 165 ‑ 235(2) to (5) are met must require the company to give the Commissioner specified information that is relevant in determining whether: (a) if paragraph 165 ‑ 235(2)(a) applies—the requirements of subsection 165 ‑ 215(5); or (b) if paragraph 165 ‑ 235(2)(b) applies—the requirements of subsection 165 ‑ 220(5); or (c) if paragraph 165 ‑ 235(2)(c) applies—the requirements of subsection 165 ‑ 215(5) as applied on the assumption mentioned in subsection 165 ‑ 96(1); or (d) if paragraph 165 ‑ 235(2)(d) applies—the requirements of subsection 165 ‑ 230(5); are satisfied in relation to the * non ‑ fixed trust mentioned in subsections 165 ‑ 235(3) and (4). Company knowledge (2) The information need not be within the knowledge of the company at the time the notice is given. Period for giving information (3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice. Consequence of not giving the information (4) If the company does not give the information within the period or within such further period as the Commissioner allows, the company is taken not to meet, and never to have met, the conditions mentioned in whichever paragraph of subsection 165 ‑ 235(2) is applicable. Application of Subdivision 165 ‑ B (5) If, because of subsection (4), the company is required to calculate under Subdivision 165 ‑ B its taxable income and * tax loss for the income year concerned, that Subdivision is to be applied as if it required the income year to be divided into such periods as would result in the highest possible taxable income for the income year. Application of Subdivision 165 ‑ CB (6) If, because of subsection (4), the company is required to calculate under Subdivision 165 ‑ CB its * net capital gain and * net capital loss for the income year concerned, that Subdivision is to be applied as if it required the income year to be divided into such periods as would result in the highest net capital gain for the income year.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-245 — When an entity has a fixed entitlement to income or capital of a company

For the purposes of this Act, 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 at a time if and only if the entity held or had, directly or indirectly, that fixed entitlement at that time for the purposes of Schedule 2F to the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Repealed and substituted by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 165-250 — Control of companies in liquidation etc.

(1) For the purposes of sections 165 ‑ 15, 165 ‑ 40, 165 ‑ 115D, 165 ‑ 115M and 165 ‑ 129, a person is not prevented from controlling, or being or becoming able to control, voting power in a company merely because: (a) the company is or becomes: (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or (ii) an entity with a similar status under a * foreign law to a Chapter 5 body corporate; or (b) either: (i) a provisional liquidator is appointed to the company under section 472 of the Corporations Act 2001 ; or (ii) a person with a similar status under a foreign law to a provisional liquidator is appointed to the company. (2) For the purposes of sections 165 ‑ 15, 165 ‑ 40, 165 ‑ 115D, 165 ‑ 115M and 165 ‑ 129, a company (the stakeholding company ) is not prevented from controlling, or being or becoming able to control, voting power in another company merely because: (a) the stakeholding company is or becomes: (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or (ii) an entity with a similar status under a * foreign law to a Chapter 5 body corporate; or (b) either: (i) a provisional liquidator is appointed to the stakeholding company under section 472 of the Corporations Act 2001 ; or (ii) a person with a similar status under a foreign law to a provisional liquidator is appointed to the stakeholding company.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 11 of 2016, effective Sch 2 (items 274–277): 1 Mar 2017 (s 2(1) item 5)

s 165-255 — Incomplete periods

(1) If: (a) this Division or Division 166 requires a company to meet or satisfy a condition or test, or work out an amount, for a period; and (b) the company is only in existence after the beginning of the period; then the period is taken to start on the first day that the company is in existence. (2) If: (a) this Division or Division 166 requires a company to meet or satisfy a condition or test, or work out an amount, for a period; and (b) the company ceases to be in existence before the end of the period; then the period is taken to end on the day the company ceases to be in existence.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-1 — What this Division is about

This Division modifies the way the rules in Division 165 apply to a widely held or eligible Division 166 company by making it easier for the company to apply the rules. If the company has maintained the same owners as between certain points of time, it does not need to prove it has maintained the same owners throughout the periods in between. In certain cases, special concessional tracing rules deem entities to hold voting, dividend or capital stakes in the company so that the company does not have to trace through to the ultimate beneficial owners of the stakes.

Amendment history: Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-3 — The object of this Division

(1) The object of this Division is to make it easier for a * widely held company, or an * eligible Division 166 company, to apply the rules in Division 165 (because of the difficulty the company might have under that Division in actually tracing through to the ultimate beneficial owners of * voting stakes, * dividend stakes and * capital stakes in the company). (2) This Division makes it easier to apply the rules in Division 165 by: (a) making it unnecessary for the company to prove that it has maintained the same owners throughout a period, if the company had the same owners at certain test times; and (b) making it unnecessary for the company to trace through to the ultimate beneficial owners of: (i) * voting stakes, * dividend stakes and * capital stakes in the company held by certain entities (whether directly, or * indirectly through one or more interposed entities); and (ii) small voting stakes, dividend stakes and capital stakes in the company.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5)

s 166-5 — How Subdivision 165 ‑ A applies to a widely held or eligible Division 166 company

(1) This Subdivision modifies the way Subdivision 165 ‑ A applies to a company that is: (a) a * widely held company at all times during the income year; or (b) an * eligible Division 166 company at all times during the income year; or (c) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year. Note 1: Subdivision 165 ‑ A is about the conditions a company must meet before it can deduct a tax loss for an earlier income year. Note 2: A company can choose that this Subdivision is not to apply to it: see section 166 ‑ 15. Note 3: See section 165 ‑ 255 for the rule about incomplete income years. Meaning of test period (2) The company’s test period is the period consisting of the * loss year, the income year and any intervening period. Note: See section 165 ‑ 255 for the rule about incomplete test periods. Substantial continuity of ownership (3) The company is taken to have met the conditions in section 165 ‑ 12 (which is about the company maintaining the same owners) if there is * substantial continuity of ownership of the company as between the start of the * test period and: (a) the end of each income year in that period; and (b) the * end of each * corporate change in that period. Note: See sections 166 ‑ 145 and 166 ‑ 175 to work out whether there is substantial continuity of ownership and a corporate change. No substantial continuity of ownership (4) The company is taken to have failed to meet the conditions in section 165 ‑ 12 if there is no * substantial continuity of ownership of the company as between the start of the * test period and: (a) the end of an income year in that period; or (b) the * end of a * corporate change in that period. Satisfies the business continuity test (5) However, if the company satisfies the * business continuity test for the income year (the business continuity test period ), it is taken to have satisfied the condition in section 165 ‑ 13. Note 1: For the business continuity test, see Subdivision 165 ‑ E. Note 2: See section 165 ‑ 255 for the rule about incomplete test periods. (6) Apply the * business continuity test to the * business that the company carried on immediately before the earlier of the following times (the test time ): (a) the end of the first income year; (b) the first time in the test period that a * corporate change in the company * ends; for which there is no * substantial continuity of ownership of the company as between the start of the * test period and that time.

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 166-15 — Companies can choose that this Subdivision is not to apply to them

(1) The company can choose that Subdivision 165 ‑ A is to apply to it for the income year without the modifications made by this Subdivision. (2) The company must choose on or before the day it lodges its * income tax return for the income year, or before a later day if the Commissioner allows.

Amendment history: Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-20 — How Subdivisions 165 ‑ B and 165 ‑ CB apply to a widely held or eligible Division 166 company

(1) This Subdivision modifies how Subdivisions 165 ‑ B and 165 ‑ CB apply to a company that is: (a) a * widely held company at all times during the income year (the test period ); or (b) an * eligible Division 166 company at all times during the income year (the test period ); or (c) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year (the whole year being the test period ). Note 1: Subdivision 165 ‑ B is about when a company must calculate its taxable income and tax loss for the income year in a special way. Subdivision 165 ‑ CB is about when a company must calculate its net capital gain and net capital loss for the income year in a special way. Note 2: A company can choose that this Subdivision is not to apply to it: see section 166 ‑ 35. Note 3: See section 165 ‑ 255 for the rule about incomplete test periods. No corporate change etc. (2) If: (a) no * corporate change in the company * ends at any time in the * test period; or (b) a corporate change in the company * ends during the test period, but there is * substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends; the company is taken to have met the condition in paragraph 165 ‑ 35(a) (which is about there being persons having * more than a 50% stake in it during the whole of the income year). Note: See sections 166 ‑ 145 and 166 ‑ 175 to work out whether there is substantial continuity of ownership and a corporate change. Corporate change (3) If: (a) a * corporate change in the company * ends at any time in the * test period; and (b) there is no * substantial continuity of ownership as between the start of the test period and immediately after the corporate change ends; then the company is taken to have failed to meet the condition in paragraph 165 ‑ 35(a). Satisfies the business continuity test (4) However, if the company satisfies the * business continuity test for the rest of the income year (the business continuity test period ) after the first time (the test time ) in the * test period that a * corporate change in the company * ended, the company is taken to have satisfied the condition in paragraph 165 ‑ 35(b). Note 1: For the business continuity test, see Subdivision 165 ‑ E. Note 2: See section 165 ‑ 255 for the rule about incomplete test periods. (5) Apply the * business continuity test to the * business that the company carried on immediately before the * test time.

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 166-25 — How to work out the taxable income, tax loss, net capital gain and net capital loss

(1) If the company must calculate its taxable income and * tax loss for the income year under Subdivision 165 ‑ B, and its * net capital gain and * net capital loss under Subdivision 165 ‑ CB, then, in dividing the income year into periods, apply subsection (2) of this section instead of subsection 165 ‑ 45(3). (2) The last period ends at the end of the income year. Each period (except the last) ends at the earlier of: (a) the earliest time when: (i) a * corporate change in the company * ends; and (ii) there is no * substantial continuity of ownership of the company as between the start of the * test period and that time; or (b) the earliest time when a person begins to control, or becomes able to control, the voting power in the company (whether directly, or indirectly through one or more interposed entities) for the purpose, or for purposes including the purpose, of: (i) getting some benefit or advantage to do with how this Act applies; or (ii) getting such a benefit or advantage for someone else. Note: See sections 166 ‑ 145 and 166 ‑ 175 to work out whether there is substantial continuity of ownership and a corporate change.

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-35 — Companies can choose that this Subdivision is not to apply to them

(1) The company can choose that Subdivisions 165 ‑ B and 165 ‑ CB are to apply to it for the income year without the modifications made by this Subdivision. (2) The company must choose on or before the day it lodges its * income tax return for the income year, or before a later day if the Commissioner allows.

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-40 — How Subdivision 165 ‑ C applies to a widely held or eligible Division 166 company

(1) This Subdivision modifies the way Subdivision 165 ‑ C applies to a company that is: (a) a * widely held company at all times during the * current year; or (b) an * eligible Division 166 company at all times during the current year; or (c) a widely held company for a part of the current year and an eligible Division 166 company for the rest of the current year. Note 1: Subdivision 165 ‑ C is about the conditions a company must meet before it can deduct a bad debt. Note 2: A company can choose that this Subdivision is not to apply to it: see section 166 ‑ 50. Note 3: See section 165 ‑ 255 for the rule about incomplete current years. Meaning of test period (2) The company’s test period is the period: (a) that begins at whichever of the following times the company chooses: (i) the start of the income year in which the debt was incurred; (ii) the start of the * first continuity period; and (b) that ends at the end of the * second continuity period; and includes any intervening period. Note: See section 165 ‑ 255 for the rule about incomplete test periods. Substantial continuity of ownership (3) The company is taken to have met the conditions in section 165 ‑ 123 (about the company maintaining the same owners) if there is * substantial continuity of ownership of the company as between the start of the * test period and: (a) the end of each income year in that period; and (b) the * end of each * corporate change in that period. Note: See sections 166 ‑ 145 and 166 ‑ 175 to work out whether there is substantial continuity of ownership and a corporate change. No substantial continuity of ownership (4) The company is taken to have failed to meet the conditions in section 165 ‑ 123 if there is no * substantial continuity of ownership of the company as between the start of the * test period and: (a) the end of an income year in that period; or (b) the * end of a * corporate change in that period. Satisfies the business continuity test (5) However, if the company satisfies the * business continuity test for the * second continuity period (the business continuity test period ), it is taken to have satisfied the condition in section 165 ‑ 126. Note 1: For the business continuity test, see Subdivision 165 ‑ E. Note 2: See section 165 ‑ 255 for the rule about incomplete test periods. (6) Apply the * business continuity test to the * business that the company carried on immediately before the earlier of the following times (the test time ): (a) the end of the first income year; (b) the first time in the test period that a * corporate change in the company * ends; for which there is no * substantial continuity of ownership of the company as between the start of the * test period and that time.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 166-50 — Companies can choose that this Subdivision is not to apply to them

(1) The company can choose that Subdivision 165 ‑ C is to apply to it for the income year without the modifications made by this Subdivision. (2) The company must choose on or before the day it lodges its * income tax return for the income year, or before a later day if the Commissioner allows.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-80 — How Subdivision 165 ‑ CC or 165 ‑ CD applies to a widely held or eligible Division 166 company

(1) This Subdivision modifies the way in which: (a) Subdivision 165 ‑ CC applies in determining whether a changeover time (within the meaning of section 165 ‑ 115C) has occurred; or (b) Subdivision 165 ‑ CD applies in determining whether an alteration time (within the meaning of section 165 ‑ 115L) has occurred; in relation to a company that is: (c) a * widely held company at all times during the income year; or (d) an * eligible Division 166 company at all times during the income year; or (e) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year. Note 1: Subdivision 165 ‑ CC is about the conditions a company that has an unrealised net loss must satisfy before it can have capital losses taken into account or deduct revenue losses. Subdivision 165 ‑ CD provides for reductions in cost bases and certain other reductions after alterations have occurred in the ownership or control of a loss company. Note 2: A company can choose that this Subdivision is not to apply to it: see section 166 ‑ 90. Note 3: See section 165 ‑ 255 for the rule about incomplete income years. Meaning of test period and test time (2) The company’s test period is the period starting at the time that is the reference time for the purposes of Subdivision 165 ‑ CC or section 165 ‑ 115L, as the case may be, and ending at each of the following times (the test time ): (a) the end of the income year in which the reference time occurred; (b) the end of a later income year; (c) the * end of a * corporate change in the company. Note 1: See section 165 ‑ 255 for the rule about incomplete test periods. Note 2: See section 166 ‑ 175 to work out whether there is a corporate change. Substantial continuity of ownership (3) A changeover time or an alteration time is taken not to have occurred in respect of the company during the test period if there is * substantial continuity of ownership of the company as between the start of the * test period and the * test time. Note: See section 166 ‑ 145 to work out whether there is substantial continuity of ownership. No substantial continuity of ownership (4) Subsections (5) and (6) have effect if there is no * substantial continuity of ownership of the company as between the start of the * test period and the * test time. (5) The * test time is taken to have been a changeover time or an alteration time, as the case may be, in respect of the company. (6) No other time during the * test period is a changeover time or an alteration time in respect of the company.

Amendment history: Inserted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-90 — Companies can choose that this Subdivision is not to apply to them

(1) The company can choose that Subdivision 165 ‑ CC or 165 ‑ CD is to apply to it in respect of a * test period for the purposes of section 166 ‑ 80 without the modifications made by this Subdivision. (2) The company must choose on or before the day it lodges its * income tax return for the income year in which the * test period begins, or before a later day if the Commissioner allows.

Amendment history: Inserted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-135 — What this Subdivision is about

This Subdivision has the tests to work out whether a widely held or eligible Division 166 company has maintained the same owners as between different times. (Subdivision 166 ‑ E has rules which make it easier for the company to satisfy these tests.) This Subdivision also defines when there has been a corporate change in the company. Table of sections The ownership tests: substantial continuity of ownership 166 ‑ 145 The ownership tests: substantial continuity of ownership 166 ‑ 165 Relationship with rules in Division 165 Corporate change in a company 166 ‑ 175 Corporate change in a company

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-145 — The ownership tests: substantial continuity of ownership

(1) There is substantial continuity of ownership of the company as between the start of the * test period and another time in the test period if (and only if) the conditions in this section are met. Note: Section 166 ‑ 165, and Subdivision 166 ‑ E, affect how this section is applied. Voting power (2) There must be persons (none of them companies or trustees) who had * more than 50% of the voting power in the company at the start of the * test period. Also, those persons must have had * more than 50% of the voting power in the company immediately after the other time in the test period. Note 1: To work out who had more than 50% of the voting power, see section 165 ‑ 150. Note 2: Subdivision 167 ‑ B has special rules for working out voting power in a company whose shares do not all carry the same voting rights, or do not carry all of the voting rights in the company. Rights to dividends (3) There must be persons (none of them companies) who had rights to * more than 50% of the company’s dividends at the start of the * test period. Also, those persons must have had rights to * more than 50% of the company’s dividends immediately after the other time in the test period. Note 1: To work out who had rights to more than 50% of the company’s dividends, see section 165 ‑ 155. Note 2: Subdivision 167 ‑ A has special rules for working out rights to dividends in a company whose shares do not all carry the same rights to dividends. Rights to capital distributions (4) There must be persons (none of them companies) who had rights to * more than 50% of the company’s capital distributions at the start of the * test period. Also, those persons must have had rights to * more than 50% of the company’s capital distributions immediately after the other time in the test period. Note 1: To work out who had rights to more than 50% of the company’s capital distributions, see section 165 ‑ 160. Note 2: Subdivision 167 ‑ A has special rules for working out rights to capital distributions in a company whose shares do not all carry the same rights to capital distributions. When to apply the test (5) To work out whether a condition in this section was satisfied at a time (the ownership test time ), apply the alterative test for that condition. Note: For the alternative test, see subsections 165 ‑ 150(2), 165 ‑ 155(2) and 165 ‑ 160(2). Conditions in subsections (3) and (4) satisfied by non ‑ profit and mutual companies (6) If the company is: (a) a * non ‑ profit company; or (b) a * mutual affiliate company; or (c) a * mutual insurance company; during the whole of the * test period, the conditions in subsections (3) and (4) are taken to have been satisfied by the company.

Amendment history: Amended by No 16 of 1998, effective s 4, Sch 3–5, Sch 10 (items 1–19) and Sch 11: 16 Apr 1998 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-165 — Relationship with rules in Division 165

(1) The provisions of Subdivision 165 ‑ D (other than section 165 ‑ 165) apply for the purposes of the tests in section 166 ‑ 145. (2) The following provisions apply for the purposes of the tests in section 166 ‑ 145 as if the reference to a particular time were a reference to the * ownership test time: (a) section 165 ‑ 180 (which is about arrangements affecting beneficial ownership of shares); (b) subsection 165 ‑ 185(2) (which treats some shares as never having carried rights); (c) subsection 165 ‑ 190(2) (which treats some shares as always having carried rights).

Amendment history: Amended by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Repealed and substituted by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-175 — Corporate change in a company

Meaning of corporate change (1) There is a corporate change in a company if: (a) there is a * takeover bid for * shares in the company; or (b) there is a scheme of arrangement, involving more than 50% of the company’s shares, that has been approved by a court; or (c) there is any other arrangement, involving the acquisition of more than 50% of the company’s shares, that is regulated under the Corporations Act 2001 or a * foreign law; or (d) there is an issue of * shares in the company that results in an increase of 20% or more in: (i) the issued share capital of the company; or (ii) the number of the company’s shares on issue; or (e) there is a corporate change in another company which beneficially owns one or more of the following stakes in the first company: (i) a * voting stake that carries rights to more than 50% of the voting power of the first company; (ii) a * dividend stake that carries rights to receive more than 50% of any dividends the first company may pay; (iii) a * capital stake that carries rights to receive more than 50% of any distribution of capital of the first company; (whether the other company owns those stakes directly, or * indirectly through one or more interposed entities). Note: For paragraph (e), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. When a corporate change ends (2) A * corporate change ends : (a) if paragraph (1)(a) applies (or paragraph (1)(e) applies because of paragraph (1)(a))—at the latest time when a * bid period of the * takeover bid ends; and (b) if paragraph (1)(b) or (c) applies (or paragraph (1)(e) applies because of paragraph (1)(b) or (c))—when the scheme of arrangement or other arrangement ends; and (c) if paragraph (1)(d) applies (or paragraph (1)(e) applies because of paragraph (1)(d))—when the offer period for the issue of * shares ends.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-215 — What this Subdivision is about

This Subdivision has rules which make it easier for a widely held or eligible Division 166 company to satisfy the ownership tests in Subdivision 166 ‑ D. Special concessional tracing rules deem entities to hold the following stakes in the company so that the company does not have to trace through to the beneficial owners of the stakes: (a) stakes of less than 10% in the company; (b) stakes of between 10% and 50% that are held by widely held companies; (c) stakes that are held by complying superannuation funds, complying approved deposit funds, special companies and managed investment schemes; (d) stakes in interposed foreign listed companies that are held as bearer shares; (e) stakes in interposed foreign listed companies that are held by depository entities. Table of sections Application of this Subdivision 166 ‑ 220 Application of this Subdivision Stakes of less than 10% in the tested company 166 ‑ 225 Direct stakes of less than 10% in the tested company 166 ‑ 230 Indirect stakes of less than 10% in the tested company 166 ‑ 235 Voting, dividend and capital stakes Stakes held directly and/or indirectly by widely held companies 166 ‑ 240 Stakes held directly and/or indirectly by widely held companies 166 ‑ 245 Stakes held by other entities When identity of foreign stakeholders is not known 166 ‑ 255 Bearer shares in foreign listed companies 166 ‑ 260 Depository entities holding stakes in foreign listed companies Other rules relating to voting power and rights 166 ‑ 265 Persons who actually control voting power or have rights are taken not to control power or have rights 166 ‑ 270 Single notional entity stakeholders taken to have minimum voting control, dividend rights and capital rights 166 ‑ 272 Same shares or interests to be held When the rules in this Subdivision do not apply 166 ‑ 275 Rules in this Subdivision intended to be concessional 166 ‑ 280 Controlled test companies

Amendment history: Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-220 — Application of this Subdivision

This Subdivision applies to a company (the tested company ) that is: (a) a * widely held company at all times during the income year; or (b) an * eligible Division 166 company at all times during the income year; or (c) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year. Note: See section 165 ‑ 255 for the rule about incomplete income years.

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-225 — Direct stakes of less than 10% in the tested company

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if: (a) a * voting stake that carries rights to less than 10% of the voting power in the company is held directly in the company; or (b) a * dividend stake that carries the right to receive less than 10% of any dividends that the company may pay is held directly in the company; or (c) a * capital stake that carries the right to receive less than 10% of any distribution of capital of the company is held directly in the company. Note 1: Other rules might affect this provision: see sections 166 ‑ 270, 166 ‑ 275 and 166 ‑ 280. Note 2: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. Notional shareholder (2) The tests are applied to the tested company as if, at the * ownership test time, a single notional entity: (a) directly controlled the voting power that is carried by each such * voting stake; and (b) had the right to receive, for its own benefit and directly: (i) any * dividends the tested company may pay in respect of each such * dividend stake; and (ii) any distributions of capital of the tested company in respect of each such * capital stake; and (c) were a person (other than a company). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. (3) To avoid doubt, the single notional entity mentioned in subsection (2) is a different single notional entity from the one mentioned in section 165 ‑ 207 and the one mentioned in section 166 ‑ 255.

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-230 — Indirect stakes of less than 10% in the tested company

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if it is the case, or it is reasonable to assume that: (a) an entity (the stakeholder ) indirectly holds any of these stakes in the tested company: (i) a * voting stake that carries rights to less than 10% of the voting power in the company; or (ii) a * dividend stake that carries the right to receive less than 10% of any dividends that the company may pay; or (iii) a * capital stake that carries the right to receive less than 10% of any distribution of capital of the company; and (b) either: (i) the stakeholder indirectly holds the stake in the tested company by holding * shares directly in a company (the top interposed entity ) that is interposed between the stakeholder and the tested company; or (ii) the stakeholder indirectly holds the stake in the tested company by holding another interest directly in an entity (the top interposed entity ) that is not a company and that is interposed between the stakeholder and the tested company. Note 1: There might also be other entities interposed between the top interposed entity and the tested company. Note 2: Other rules might affect this provision: see subsection (3) and sections 166 ‑ 272, 166 ‑ 275 and 166 ‑ 280. Note 3: For paragraph (a), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. Top interposed entity deemed to hold stakes directly in the tested company (2) The tests are applied to the tested company as if, at the * ownership test time: (a) if the stake is a * voting stake—the top interposed entity controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and (b) if the stake is a * dividend stake—the top interposed entity * indirectly had the right to receive, for its own benefit, any * dividends the tested company may pay in respect of that stake at that time; and (c) if the stake is a * capital stake—the top interposed entity indirectly had the right to receive, for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and (d) in any case—the top interposed entity were a person (other than a company). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. Acquisition of top interposed entity by another entity (3) If: (a) a new entity (the new interposed entity ) acquires all the * shares or other interests in the top interposed entity (the old interposed entity ); and (b) the new interposed entity has the same classes of shares or other interests as the old interposed entity; and (c) if the new interposed entity is a company—the shares are not * redeemable shares; and (d) in any case—each stakeholder holds the same proportion, or a reasonably equivalent proportion, of the total * voting stakes, * dividend stakes or * capital stakes in the new interposed entity immediately after the acquisition as the stakeholder held in the old interposed entity immediately before the acquisition; then, at all times that the old interposed entity held or is taken to have held a stake in the tested company, the new interposed entity is taken to have held that stake. (4) Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165 ‑ 115L), section 166 ‑ 272 (which is about the same shares or interests) is to be disregarded when applying subsection (3). Acquisition of tested company by new interposed entity (5) If: (a) a new entity (the new interposed entity ) that is a company acquires all the * shares in the tested company; and (b) assuming that the time immediately before the acquisition had been an * ownership test time, section 166 ‑ 225 would have applied the tests to the tested company as if there were a single notional entity as described in subsection 166 ‑ 225(2) in respect of some or all of the * voting stakes, * dividend stakes or * capital stakes in the tested company; and (c) the new interposed entity has the same classes of shares as the tested company; and (d) the shares are not * redeemable shares; and (e) each entity that held a proportion of the voting stakes, dividend stakes or capital stakes in the tested company immediately before the acquisition (disregarding section 166 ‑ 225) holds the same proportion, or a reasonably equivalent proportion, of that kind of stake in the new interposed entity immediately after the acquisition; then, at all times that the single notional entity mentioned in paragraph (b) held or is taken to have held a stake in the tested company, the new interposed entity is taken to have held that stake. (6) Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165 ‑ 115L), section 166 ‑ 272 (which is about the same shares or interests) is to be disregarded when applying subsection (5) of this section.

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5) | Amended by No 64 of 2020, effective Sch 3 (items 72–122): 1 July 2020 (s 2(1) item 5) Sch 3 (items 228–239, 325, 326): 1 Oct 2020 (s 2(1) item 6) Sch 3 (items 327–330): 1 July 2017 (s 2(1) item 7)

s 166-235 — Voting, dividend and capital stakes

Meaning of voting stake (1) An entity holds a voting stake in a company if: (a) the entity is the registered holder of * shares in the company; and (b) the shares carry rights to exercise voting power in the company. (2) An entity (the stakeholder ) also holds a voting stake in a company if: (a) one or more other entities are interposed between the company and the stakeholder; and (b) the stakeholder controls, or is able to control, voting power in the company indirectly through the interposed entity or entities. Note: For working out the size of a voting stake (for example, for paragraph 166 ‑ 225(1)(a)), Subdivision 167 ‑ B has special rules for working out voting power in a company whose shares do not all carry the same voting rights, or do not carry all of the voting rights in the company. Meaning of dividend stake (3) An entity holds a dividend stake in a company if: (a) the entity is the registered holder of * shares in the company; and (b) the shares carry rights to all or any * dividends that the company may pay. (4) An entity (the stakeholder ) also holds a dividend stake in a company if: (a) one or more other entities are interposed between the company and the stakeholder; and (b) the stakeholder has the right to receive, for its own benefit and * indirectly through the interposed entity or entities, all or any * dividends that the company may pay. Note: For working out the size of a dividend stake (for example, for paragraph 166 ‑ 225(1)(b)), Subdivision 167 ‑ A has special rules for a company whose shares do not all carry the same rights to dividends. Meaning of capital stake (5) An entity holds a capital stake in a company if: (a) the entity is the registered holder of * shares in the company; and (b) the shares carry rights to all or any of a distribution of capital of the company. (6) An entity (the stakeholder ) also holds a capital stake in a company if: (a) one or more other entities are interposed between the company and the stakeholder; and (b) the stakeholder has the right to receive, for its own benefit and * indirectly through the interposed entity or entities, all or any of a distribution of capital of the company. Note: For working out the size of a capital stake (for example, for paragraph 166 ‑ 225(1)(c)), Subdivision 167 ‑ A has special rules for a company whose shares do not all carry the same rights to capital distributions. Stakes held by nominees (7) For the purposes of sections 166 ‑ 225 and 166 ‑ 230, if: (a) an entity (the nominee entity ) holds a * voting stake, a * dividend stake, or a * capital stake, in a company; and (b) the nominee entity is itself a company; and (c) the nominee entity holds the stake as a nominee for more than one other entity; then, for each entity for whom a part of the stake is held by the nominee entity, that entity’s part of the stake may be treated instead as a separate stake.

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-240 — Stakes held directly and/or indirectly by widely held companies

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if a * widely held company directly or indirectly (through one or more interposed entities), or both directly and indirectly, holds any of the following: (a) a * voting stake that carries rights to between 10% and 50% (inclusive) of the voting power in the company; (b) a * dividend stake that carries the right to receive between 10% and 50% (inclusive) of any dividends that the company may pay; (c) a * capital stake that carries the right to receive between 10% and 50% (inclusive) of any distribution of capital of the company. Note 1: Other rules might affect this provision: see subsections (3) and (4) and sections 166 ‑ 272, 166 ‑ 275 and 166 ‑ 280. Note 2: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (2) The tests are applied to the tested company as if, at the * ownership test time: (a) if the stake is a * voting stake—the * widely held company controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and (b) if the stake is a * dividend stake—the widely held company had the right to receive (whether directly or * indirectly), for its own benefit, any * dividends the tested company may pay in respect of that stake at that time; and (c) if the stake is a * capital stake—the widely held company had the right to receive (whether directly or indirectly), for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and (d) in any case—the widely held company were a person (other than a company). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. Exception (3) This section does not apply in respect of a * widely held company if the company is not a widely held company for the whole income year in which the * ownership test time occurs. Note: See section 165 ‑ 255 for the rule about incomplete periods. Acquisition of widely held company by another entity (4) If: (a) a new company acquires all the * shares in the * widely held company; and (b) immediately before the acquisition, the shares in the widely held company were listed for quotation in the official list of an * approved stock exchange; and (c) immediately after the acquisition, the shares in the new company are listed for quotation in the official list of an approved stock exchange; and (d) the new company has the same classes of shares (not being * redeemable shares) as the widely held company; and (e) each entity that held stakes in the widely held company immediately before the acquisition holds the same proportion of the total * voting stakes, * dividend stakes or * capital stakes in the new company immediately after the acquisition as the entity held in the widely held company immediately before the acquisition; then, at all times that the widely held company held or is taken to have held a stake in the tested company, the new company is taken to have held that stake. (5) Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165 ‑ 115L), section 166 ‑ 272 (which is about same shares or interests) is to be disregarded when applying subsection (4).

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-245 — Stakes held by other entities

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if: (a) an entity mentioned in subsection (2) directly or indirectly (through one or more interposed entities) holds a * voting stake, a * dividend stake or a * capital stake in the company; and (b) neither the entity nor another entity has, under section 166 ‑ 225, 166 ‑ 230 or 166 ‑ 240, been taken to control voting power or have rights in respect of the stake; and (c) the entity mentioned in subsection (2) satisfies the condition in subsection (3). Note: Other rules might affect this provision: see sections 166 ‑ 272, 166 ‑ 275 and 166 ‑ 280. (2) For the purposes of subsection (1), these are the entities: (a) a * superannuation fund; and (b) an * approved deposit fund; and (c) a * special company; and (d) a * managed investment scheme; and (e) any other entity, or entity of a kind, prescribed by the regulations. (3) For the purposes of paragraph (1)(c), an entity satisfies the condition in this subsection if at all times during the income year of the tested company in which the * ownership test time occurs: (a) if the entity is a * superannuation fund: (i) the fund is a * complying superannuation fund; or (ii) the fund is a superannuation fund that is established in a foreign country and is regulated under a * foreign law; or (b) if the entity is an * approved deposit fund—the fund is a * complying approved deposit fund; or (c) if the entity is a * special company—the company is a special company; or (d) if the entity is a * managed investment scheme: (i) the scheme is registered under the Corporations Act 2001 ; or (ii) the entity is recognised, under a * foreign law relating to corporate regulation, as an entity with a similar status to a managed investment scheme ; or (e) if the entity is an entity, or an entity of a kind, prescribed by the regulations—the entity meets any conditions prescribed by the regulations. Note: See section 165 ‑ 255 for the rule about incomplete periods. If the entity has 10 members or fewer (4) If the entity has 10 * members or fewer, the tests are applied to the tested company as if, at the * ownership test time: (a) if the stake is a * voting stake—each member controls, or is able to control, an equal proportion of the voting power in the tested company that is carried by that stake at that time; and (b) if the stake is a * dividend stake—each member had the right to receive (whether directly or * indirectly), for its own benefit, an equal proportion of any * dividends the tested company may pay in respect of that stake at that time; and (c) if the stake is a * capital stake—each member had the right to receive (whether directly or indirectly), for its own benefit, an equal proportion of any distributions of capital of the tested company in respect of that stake at that time; and (d) in any case—each member were a person (other than a company or a trustee). Note 1: If each member’s proportion of the voting power, the dividends or the distributions is less than 10%, then subsections (5) and (6) apply instead. Note 2: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. If the entity has more than 10 members etc. (5) The ownership tests are applied as set out in subsection (6) if: (a) the entity has more than 10 * members; or (b) under subsection (4): (i) the proportion of the voting power in the company that each member controls, or is able to control, is less than 10% of the total voting power; or (ii) the proportion of the * dividends that the tested company may pay for the benefit of each member is less than 10% of the total dividends; or (iii) the proportion of the distributions of capital that the tested company may pay for the benefit of each member is less than 10% of the total distributions. (6) The ownership tests are applied to the tested company as if, at the * ownership test time: (a) if the stake is a * voting stake—the entity controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and (b) if the stake is a * dividend stake—the entity had the right to receive (whether directly or * indirectly), for its own benefit, any * dividends the tested company may pay in respect of that stake at that time; and (c) if the stake is a * capital stake—the entity had the right to receive (whether directly or indirectly), for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and (d) in any case—the entity were a person (other than a company or a trustee). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265.

Amendment history: Amended by No 156 of 1999, effective Sch 5 (items 17–21): 13 Mar 2000 (s 2(2)(b) and gaz 2000, No S114) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 55 of 2001, effective s 4–14 and Sch 3 (items 264–275): 15 July 2001 (s 2(1), (3)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 45 of 2008, effective 26 June 2008 | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015

s 166-255 — Bearer shares in foreign listed companies

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if: (a) at the * ownership test time, it is the case, or it is reasonable to assume, that persons (none of them companies or trustees) hold a * voting stake, a * dividend stake or a * capital stake in the tested company; and (b) an entity has not, under section 166 ‑ 225, 166 ‑ 230, 166 ‑ 240 or 166 ‑ 245, been taken to control voting power or have rights in respect of the stake; and (c) another company (the foreign listed company ) is interposed, at that time, between those persons and the tested company; and (d) at all times during the income year of the tested company in which the ownership test time occurs, the * principal class of shares in the foreign listed company is listed for quotation in the official list of an * approved stock exchange; and (e) at the ownership test time: (i) voting stakes that carry rights to 50% or more of the voting power in the foreign listed company; or (ii) dividend stakes that carry rights to receive 50% or more of any dividends that the foreign listed company may pay; or (iii) capital stakes that carry rights to receive 50% or more of any distribution of capital of the foreign listed company; as the case requires, are directly held by way of bearer shares; and (f) the beneficial owners of some or all of those bearer shares have not been disclosed to the foreign listed company. Note 1: See section 165 ‑ 255 for the rule about incomplete test periods. Note 2: Other rules might affect this provision: see sections 166 ‑ 270, 166 ‑ 275 and 166 ‑ 280. Note 3: For paragraph (e), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (2) The tests are applied to the tested company as if, at the * ownership test time, for each of those bearer shares whose owners have not been disclosed: (a) a single notional entity controls, or is able to control, the voting power in the tested company that is carried by those shares at that time; and (b) the entity * indirectly had the right to receive, for its own benefit: (i) any * dividends the tested company may pay in respect of those shares at that time; and (ii) any distributions of capital of the tested company in respect of those shares at that time; and (c) the entity were a person (other than a company). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. (3) To avoid doubt, the single notional entity mentioned in subsection (2) is a different single notional entity from the one mentioned in section 165 ‑ 207 and the one mentioned in section 166 ‑ 225.

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-260 — Depository entities holding stakes in foreign listed companies

(1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to the tested company if: (a) at the * ownership test time, it is the case, or it is reasonable to assume, that persons (none of them companies or trustees) have a * voting stake, a * dividend stake or a * capital stake in the tested company; and (b) an entity has not, under section 166 ‑ 225, 166 ‑ 230, 166 ‑ 240, 166 ‑ 245 or 166 ‑ 255, been taken to control voting power or have rights in respect of the stake; and (c) another company (the foreign listed company ) is interposed, at that time, between those persons and the tested company; and (d) at all times during the income year of the tested company in which the ownership test time occurs, the * principal class of shares in the foreign listed company is listed for quotation in the official list of an * approved stock exchange; and (e) at the ownership test time: (i) voting stakes that carry rights to 50% or more of the voting power in the foreign listed company; or (ii) dividend stakes that carry rights to receive 50% or more of any dividends that the foreign listed company may pay; or (iii) capital stakes that carry rights to receive 50% or more of any distribution of capital of the foreign listed company; as the case requires, are directly held by one or more * depository entities (see subsection (3)); and (f) a law of a foreign country, or a part of a foreign country, in which the approved stock exchange is located, prevents the disclosure of the beneficial owners of some or all of those shares that are held by the depository entities; and (g) the beneficial owners of some or all of the shares held by the depository entities have not been disclosed to the foreign listed company. Note 1: See section 165 ‑ 255 for the rule about incomplete test periods. Note 2: This rule might not apply in all circumstances: see sections 166 ‑ 275 and 166 ‑ 280. Note 3: For paragraph (e), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (2) The tests are applied to the tested company as if, at the * ownership test time, for each of those * shares held by a * depository entity whose owners have not been disclosed, the depository entity: (a) controls, or is able to control, the voting power in the tested company that is carried by those shares at that time; and (b) * indirectly had the right to receive, for its own benefit: (i) any * dividends the tested company may pay in respect of those shares at that time; and (ii) any distributions of capital of the tested company in respect of those shares at that time; and (c) were a person (other than a company). Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166 ‑ 265. (3) If the effect of subsection (2) is that the * depository entity is taken to hold: (a) a * voting stake that carries rights to less than 10% of the voting power in the tested company; or (b) a * dividend stake that carries the right to receive less than 10% of any dividends that the tested company may pay; or (c) a * capital stake that carries the right to receive less than 10% of any distribution of capital of the tested company; then neither section 166 ‑ 225 nor section 166 ‑ 230 applies in respect of that stake. Note: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (4) If the * depository entity (the old depository entity ) is subsequently replaced by another depository entity (the new depository entity ), then, at all times that the old depository entity held or is taken to have held a stake in the tested company, the new entity is taken to have held that stake. (5) A depository entity is an entity: (a) that is a central securities repository; and (b) that provides custody of share certificates; and (c) that provides services for the exchange of shares.

Amendment history: Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 166-265 — Persons who actually control voting power or have rights are taken not to control power or have rights

If any of sections 166 ‑ 225, 166 ‑ 230, 166 ‑ 240, 166 ‑ 245, 166 ‑ 255 or 166 ‑ 260 apply, the ownership tests in section 166 ‑ 145 are also applied to the tested company as if, at the * ownership test time: (a) the persons who control, or are able to control, the voting power in the tested company (whether directly, or indirectly through one or more interposed entities) that is carried by each * voting stake in the tested company mentioned in that section had not had that control; and (b) the persons who have the right to receive for their own benefit (whether directly, or * indirectly through one or more interposed entities): (i) any * dividends that the tested company may pay in respect of each * dividend stake in the tested company mentioned in that section; and (ii) any distributions of capital of the tested company in respect of each * capital stake in the tested company mentioned in that section; had not had that right.

Amendment history: Amended by No 16 of 1998, effective s 4, Sch 3–5, Sch 10 (items 1–19) and Sch 11: 16 Apr 1998 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-270 — Single notional entity stakeholders taken to have minimum voting control, dividend rights and capital rights

Minimum control of voting power (1) If: (a) the * ownership test time is after the start of the * test period; and (b) a single notional entity mentioned in section 166 ‑ 225 or 166 ‑ 255 has voting power in a company; and (c) the voting power that the entity has at the ownership test time is greater than the voting power that the entity had at the start of the test period; then the entity is taken to have voting power in the company at the ownership test time only to the extent that it had it at the start of the test period. Minimum percentage of rights to dividends and capital (2) If: (a) the * ownership test time is after the start of the * test period; and (b) a single notional entity mentioned in section 166 ‑ 225 or 166 ‑ 255 has a percentage of rights to the * dividends or distributions of capital of a company; and (c) the percentage that the entity has rights to at the ownership test time is greater than the percentage (the lower percentage ) of the dividends or distributions of capital of the company that the entity had rights to at the start of the test period; then the entity is taken to have rights to the lower percentage of the dividends or distributions of capital at the ownership test time. Acquisition of tested company by new interposed entity—minimum control of voting power (3) If: (a) the * ownership test time is after the start of the * test period; and (b) at the start of the test period, a single notional entity mentioned in section 166 ‑ 225 had voting power in a company (disregarding subsection 166 ‑ 230(5)); and (c) under subsection 166 ‑ 230(5), a new interposed entity is taken to have held that voting power at the start of the test period; and (d) at the ownership test time, the voting power in the company held indirectly by stakeholders covered by subsection 166 ‑ 230(1) is greater than the voting power that the single notional entity had at the start of the test period; then the stakeholders referred to in paragraph (d) are, collectively, taken to have indirect voting power in the company at the ownership test time only to the extent that the single notional entity had it at the start of the test period. Acquisition of tested company by new interposed entity—minimum percentage of rights to dividends and capital (4) If: (a) the * ownership test time is after the start of the * test period; and (b) at the start of the test period, a single notional entity mentioned in section 166 ‑ 225 had a percentage of rights to the * dividends or distributions of capital of a company (disregarding subsection 166 ‑ 230(5)); and (c) under subsection 166 ‑ 230(5), a new interposed entity is taken to have had those rights at the start of the test period; and (d) the percentage that stakeholders covered by subsection 166 ‑ 230(1) have rights to indirectly at the ownership test time is greater than the percentage (the lower percentage ) of the dividends or distributions of capital of the company that the single notional entity had rights to at the start of the test period; then the stakeholders referred to in paragraph (d) are, collectively, taken to have indirect rights to the lower percentage of the dividends or distributions of capital at the ownership test time.

Amendment history: Amended by No 16 of 1998, effective s 4, Sch 3–5, Sch 10 (items 1–19) and Sch 11: 16 Apr 1998 (s 2(1)) | Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 64 of 2020, effective Sch 3 (items 72–122): 1 July 2020 (s 2(1) item 5) Sch 3 (items 228–239, 325, 326): 1 Oct 2020 (s 2(1) item 6) Sch 3 (items 327–330): 1 July 2017 (s 2(1) item 7)

s 166-272 — Same shares or interests to be held

Application (1) This section modifies how the ownership tests in section 166 ‑ 145 are applied to a * voting stake, a * dividend stake or a * capital stake in the tested company held by one of the following entities (the stakeholder ): (a) a top interposed entity mentioned in section 166 ‑ 230 (which is about indirect stakes of less than 10%); (b) a * widely held company mentioned in section 166 ‑ 240; (c) an entity mentioned in subsection 166 ‑ 245(2) (which is about stakes held by other entities); (d) a * depository entity mentioned in section 166 ‑ 260; (whether directly, or * indirectly through one or more interposed entities). Exactly the same shares or interests must continue to be held (2) For the purpose of determining whether the tested company has satisfied a condition or whether a time is a changeover time or an alteration time in respect of the tested company: (a) a condition that has to be satisfied is not satisfied; or (b) a time that, apart from this subsection, would not be a changeover time or alteration time is taken to be a changeover time or alteration time, as the case may be; unless, at all relevant times: (c) the only * shares in the tested company that are taken into account are exactly the same shares and are held by the same persons; and (d) the only interests (including shares) in any other entity that is interposed between the stakeholder and the tested company that are taken into account are exactly the same interests and are held by the same persons. What happens in case of share splitting (3) If: (a) a particular * share (an old share ) in a company of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the * test period is divided into 2 or more new shares during that period; and (b) the stakeholder or entity becomes the holder of each of the new shares immediately after the division takes place and remains the holder until the end of that period; the new shares are taken to be exactly the same shares as the old share. What happens in case of splitting of units in a unit trust (4) If: (a) a particular unit (an old unit ) in a unit trust of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the * test period is divided into 2 or more new units during that period; and (b) the stakeholder or entity becomes the holder of each of the new units immediately after the division takes place and remains the holder until the end of that period; the new units are taken to be exactly the same units as the old unit. What happens in case of consolidation of shares (5) If: (a) a particular * share (an old share ) in a company of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the * test period, and other shares (each of which is also called an old share ) in the company of which the stakeholder or entity is the holder at the start of that period, are consolidated into a new share during that period; and (b) the stakeholder or entity becomes the holder of the new share immediately after the consolidation takes place; the new share is taken to be exactly the same share as the old shares. What happens in case of consolidation of units in a unit trust (6) If: (a) a particular unit (an old unit ) in a unit trust of which the stakeholder, or an entity interposed between the stakeholder and the tested company, is the holder at the start of the * test period and other units (each of which is also called an old unit ) in the trust of which the stakeholder or entity is the holder at the start of that period are consolidated into a new unit during that period; and (b) the stakeholder or entity becomes the holder of the new unit immediately after the consolidation takes place; the new unit is taken to be exactly the same unit as the old units. Totals of shares or rights not affected (7) This section does not affect how * shares, and rights carried by shares, are counted for the purpose of determining: (a) the total voting power in the tested company; or (b) the total dividends that the tested company may pay; or (c) the total distributions of capital of the tested company. Conditions in section 166 ‑ 145 may be treated as having been satisfied in certain circumstances (8) If any of the conditions in section 166 ‑ 145 have not been satisfied, those conditions are taken to have been satisfied if: (a) they would have been satisfied except for the operation of subsection (2) of this section; and (b) the tested company has information from which it would be reasonable to conclude that less than 50% of: (i) the * tax loss; or (ii) the * notional loss; or (iii) the bad debt; or (iv) the unrealised net loss (within the meaning of section 165 ‑ 115E); as the case requires, has been reflected in deductions, capital losses, or reduced assessable income, that occurred, or could occur in future, because of the happening of any * CGT event in relation to any * direct equity interests or * indirect equity interests held in the tested company by the stakeholder, or an entity interposed between the stakeholder and the tested company, during the * test period. Subsection (8) not to apply for purpose of determining whether an alteration time has occurred (9) However, subsection (8) does not apply in relation to any of the conditions in section 166 ‑ 145 in so far as those conditions have effect for the purpose of determining whether an alteration time (within the meaning of section 165 ‑ 115L) has occurred. Time of happening of CGT event (10) The happening of any * CGT event in relation to a * direct equity interest or * indirect equity interest in the tested company that results in the failure of the tested company to satisfy a condition in section 166 ‑ 145 is taken, for the purposes of paragraph (8)(b), to have occurred during the * test period.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 143 of 2007, effective Schedule 1 (items 1, 4, 128–194, 222, 223, 225, 226), Schedule 2, Schedule 5 (items 1–16, 48(1)–(3)), Schedule 6 and Schedule 7 (items 18–68): Royal Assent Schedule 5 (items 31–46): 15 Mar 2007 (s 2(1) item 6)

s 166-275 — Rules in this Subdivision intended to be concessional

A company is taken to have met the conditions in section 165 ‑ 12, paragraph 165 ‑ 35(a) or section 165 ‑ 123, or a changeover time or an alteration time is taken not to have occurred in respect of a company, (as the case requires), if: (a) a * tracing rule modifies how the ownership tests in section 166 ‑ 145 apply to the tested company in respect of a * voting stake, a * dividend stake or a * capital stake; and (b) the company fails the tests (whether at the time of applying the tracing rule or at another time); and (c) the company believes, on reasonable grounds, that if the tracing rule did not modify how the tests apply to the company in respect of that stake, it would not fail the tests. Example: 11 people own shareholdings of 9% in the listed company. Under section 166 ‑ 225, one notional shareholder is deemed to hold all of those shareholdings. 2 of the people sell their shareholdings so that 9 of the original 11 people now own shareholdings of 11%. Without the rule in this section, the company would fail the ownership tests (as the rule in section 166 ‑ 225 no longer applies).

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 166-280 — Controlled test companies

(1) A * tracing rule does not modify how the ownership tests in section 166 ‑ 145 apply to the tested company in respect of all or part of the voting power in the tested company, or all or some of the rights to * dividends of, or capital in, the tested company, if: (a) either: (i) an entity (the controlling entity ) directly holds that power or has those rights; or (ii) an entity (the controlling entity ) indirectly holds that power or has those rights through one or more interposed entities; and (b) the tested company is sufficiently influenced (within the meaning of paragraph 318(6)(b) of the Income Tax Assessment Act 1936 ) by the controlling entity. Note: However, a tracing rule can modify how the ownership tests in section 166 ‑ 145 apply to the tested company in respect of voting power or dividend or capital rights held by entities other than controlling entities. (2) A * tracing rule does not modify how the ownership tests in section 166 ‑ 145 apply to the tested company in respect of all or part of the voting power in the tested company if: (a) the tested company is a * widely held company; and (b) that voting power: (i) is more than 25% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a natural person, together with his or her * associates; or (ii) is more than 50% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a trustee or company, together with its associates.

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 167-1 — What this Division is about

This Division modifies the way conditions relating to this Part apply to companies whose shares: (a) do not all carry the same rights to dividends or capital distributions; or (b) do not all carry the same voting rights, or do not carry all of the voting rights in the company.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-5 — What this Subdivision is about

Companies whose shares do not all carry the same rights to dividends or capital distributions may test the possession of those rights similarly to companies whose shares are all of a single class with the same rights.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-7 — Simplified outline of this Subdivision

If a condition of the continuity of ownership test cannot be worked out for a company: (a) because of its unequal share structure; or (b) because of a holding company’s unequal share structure; an entity can choose to reconsider that condition in up to 3 ways. The first way involves disregarding debt interests. The second way involves disregarding debt interests and secondary share classes. The third way involves disregarding those shares, and treating the remaining shares as carrying certain percentages of the rights to receive dividends and capital distributions. The second way can only be tried after the first way, while the third way can only be tried after the second way. Table of sections Operative provisions 167 ‑ 10 When this Subdivision applies 167 ‑ 15 First way—disregard debt interests 167 ‑ 20 Second way—also disregard secondary share classes 167 ‑ 25 Third way—treat remaining shares as having fixed rights to dividends and capital distributions 167 ‑ 30 Fixing rights if practicable to work out market values 167 ‑ 35 Fixing rights if impracticable to work out market values etc. 167 ‑ 40 The valuing times for conditions listed in subsection 167 ‑ 10(1)

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-10 — When this Subdivision applies

When this Subdivision applies (1) This Subdivision applies in relation to a company if: (a) as described in the following table, a condition (the unsatisfied condition ) cannot be worked out for the company for a particular period (the test period ); and (b) at one or more times during the test period: (i) the company; or (ii) a company that has a * shareholding interest in it; (an unequally structured company ) has an * unequal share structure. Conditions that can be reconsidered under this Subdivision Item Column 1 Each of the following provisions contains a condition: Column 2 that cannot be worked out for: 1 (a) subsection 165 ‑ 12(3) or (4); (b) paragraph 165 ‑ 37(1)(b) or (c); (c) subsection 165 ‑ 123(3) or (4); (d) paragraph 175 ‑ 10(3)(b) or (c), 175 ‑ 45(3)(b) or (c) or 175 ‑ 85(3)(b) or (c); (e) subparagraph (b)(ii) or (iii) of the definition of eligible Division 166 company in subsection 995 ‑ 1(1) a period that is all or part of the period to which that provision relates Note: Each of these conditions is about rights to the company’s dividends or capital distributions. (2) This Subdivision also applies in relation to a company if: (a) as described in the following table, a condition (the unsatisfied condition ) cannot be worked out for the company for a particular time (the test time ); and (b) at the test time, the company, or a company that has a * shareholding interest in it, (an unequally structured company ) has an * unequal share structure. Conditions that can be reconsidered under this Subdivision Item Column 1 Each of the following provisions contains a condition: Column 2 that cannot be worked out for: 1 (a) paragraph 165 ‑ 115C(1)(b) or (c) or 165 ‑ 115L(1)(b) or (c); (b) subparagraph 165 ‑ 115X(1)(b)(ii) or (iii); (c) paragraph 165 ‑ 115Z(1)(b) or (c); (d) subsection 166 ‑ 145(3) or (4); (e) subparagraph 166 ‑ 175(1)(e)(ii) or (iii); (f) paragraph 166 ‑ 225(1)(b) or (c); (g) subparagraph 166 ‑ 230(1)(a)(ii) or (iii); (h) paragraph 166 ‑ 240(1)(b) or (c); (i) subparagraph 166 ‑ 255(1)(e)(ii) or (iii) or 166 ‑ 260(1)(e)(ii) or (iii); (j) paragraph 166 ‑ 260(3)(b) or (c) or 166 ‑ 270(2)(c); (k) paragraph 170 ‑ 260(3)(b) or (c) or 170 ‑ 265(2)(b) or (c) a time that is the time, or one of the times, to which that provision relates Note 1: Each of these conditions is about rights to the company’s dividends or capital distributions. Note 2: If a condition cannot be worked out for several of the times to which the provision relates, apply this Subdivision separately for each of those times. Meaning of unequal share structure (3) A company has an unequal share structure at a particular time if, at that time: (a) the company’s * shares do not all carry the same rights to * dividends, or capital distributions, of the company; or (b) some or all of the company’s shares carry discretionary rights to dividends, or capital distributions, of the company; or (c) the company is a * co ‑ operative company that has * on issue one or more interests (other than shares) in the company’s capital.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-15 — First way—disregard debt interests

(1) The unsatisfied condition may be reconsidered by disregarding any * debt interests in each unequally structured company. (2) The way an entity prepares its * income tax return is sufficient evidence of it choosing to work out the unsatisfied condition under subsection (1).

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-20 — Second way—also disregard secondary share classes

(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. (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). (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. (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).

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-25 — Third way—treat remaining shares as having fixed rights to dividends and capital distributions

When this section applies (1) This section applies if, despite sections 167 ‑ 15 and 167 ‑ 20, the unsatisfied condition cannot be worked out for the test period or test time (as appropriate). How to fix rights to dividends and capital distributions (2) The unsatisfied condition may be reconsidered by applying subsections (3) and (4) to each unequally structured company. When doing this for an unsatisfied condition listed in subsection 167 ‑ 10(1), assume: (a) that the test period consists only of the valuing times worked out under section 167 ‑ 40; and (b) that each of those valuing times is a test time. (3) Firstly, disregard any * debt interests in that company and any of its * shares that can be disregarded under subsection 167 ‑ 20(3). (4) Secondly, treat each of that company’s remaining * shares * on issue at the test time as having at that time the percentage of the rights to receive * dividends, and capital distributions, worked out either: (a) under section 167 ‑ 30; or (b) under section 167 ‑ 35 if: (i) it is not reasonably practicable to work out the market values of each of those remaining shares; or (ii) the sum of the * market values of all of those remaining shares is nil. Note: The remaining shares are those remaining after disregarding the shares mentioned in subsection (3). Evidence of a choice under this section (5) The way an entity prepares its * income tax return is sufficient evidence of it choosing to work out the unsatisfied condition under this section.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-30 — Fixing rights if practicable to work out market values

Each remaining * share is treated at the test time as carrying the following percentage of the rights to receive * dividends, and capital distributions, from the company: where market value is worked out at the test time.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-35 — Fixing rights if impracticable to work out market values etc.

(1) Each remaining * share is treated at the test time as carrying such a percentage of the rights to receive * dividends, and capital distributions, from the company as is reasonable worked out: (a) at the test time; and (b) having regard to the purpose of the unsatisfied condition. (2) In working out what is reasonable for subsection (1), have regard to the following: (a) the company’s * constitution; (b) any agreements between the company and either or both of the following: (i) any or all of the shareholders in the company; (ii) any or all of the * associates of a shareholder in the company; (c) any statement by the company of its policy in paying * dividends or making capital distributions; (d) the ability of an entity to control (whether directly, or indirectly through one or more interposed entities) how the company pays dividends or makes capital distributions; (e) how the company has previously paid dividends or made capital distributions; (f) whether all classes of * shares carry substantially the same rights to receive dividends and capital distributions; (g) the principle that: (i) a * tax loss or bad debt should only be deductible; and (ii) a * net capital loss should only be applied; if a majority of the persons entitled to the benefits of dividend and capital distributions of the company is maintained.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-40 — The valuing times for conditions listed in subsection 167 ‑ 10(1)

(1) For the purposes of subsection 167 ‑ 25(2), the valuing times for the test period are: (a) the time the test period starts; and (b) the time just before, and the time just after, any of the following events that happen during the test period: (i) the issue of * shares of a class of remaining shares; (ii) the variation of rights attached to any remaining shares to receive * dividends or capital distributions; (iii) the redemption or cancellation of any remaining shares; and (c) the time the test period ends. (2) For paragraph (1)(b), disregard a time if it is outside the test period.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-75 — What this Subdivision is about

Companies whose shares: (a) do not all carry the same voting rights; or (b) do not carry all of the voting rights in the company; may test the possession of voting rights similarly to companies whose shares are all of a single class with the same rights. Table of sections Operative provisions 167 ‑ 80 When this Subdivision applies 167 ‑ 85 Different method for working out voting power 167 ‑ 90 Dual listed companies

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-80 — When this Subdivision applies

(1) For the purposes of this Part, voting power in a company at one or more times can be worked out under section 167 ‑ 85 if: (a) the company’s * shares do not all, at those times, carry the same voting rights for all matters affecting the company; or (b) the company’s shares do not carry all of the voting rights in the company; whether this is because of the company’s * constitution, an * arrangement or some other reason. Note: Disregard dual listed company voting shares (see section 167 ‑ 90). (2) Further, if those times are consecutive times during a period, the voting power in the company can be worked out under section 167 ‑ 85 as if that period consists only of: (a) the time that period starts; and (b) each later time (if any) during that period when there is a change in the maximum number of votes any entity could cast on a poll described in paragraph 167 ‑ 85(1)(a) or (b).

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-85 — Different method for working out voting power

(1) An entity may choose whether voting power in the company at a particular time is worked out solely by reference to: (a) the maximum number of votes that could be cast on a poll on the election of a director of the company, if such a poll were to be held at that time; or (b) the maximum number of votes that could be cast on a poll on an amendment to the company’s * constitution, other than an amendment altering: (i) the rights carried by any of the company’s * shares; or (ii) other forms of voting power in the company; if such a poll were to be held at that time. (2) The way the entity prepares its * income tax return is sufficient evidence of it making a choice under subsection (1).

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 167-90 — Dual listed companies

For the purposes of this Subdivision, disregard * shares that are * dual listed company voting shares.

Amendment history: Inserted by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 170-1 — What this Subdivision is about

A company can transfer a surplus amount of its tax loss to another company so that the other company can deduct the amount in the income year of the transfer. One of the companies must be an Australian branch of a foreign bank, and both companies must be members of the same wholly ‑ owned group. Table of sections 170 ‑ 5 Basic principles for transferring tax losses Effect of transferring a tax loss 170 ‑ 10 When a company can transfer a tax loss 170 ‑ 15 Income company is taken to have incurred transferred loss 170 ‑ 20 Who can deduct transferred loss 170 ‑ 25 Tax treatment of consideration for transferred tax loss Conditions for transfer 170 ‑ 30 Companies must be in existence and members of the same wholly ‑ owned group etc. 170 ‑ 32 Tax loss incurred by the loss company because of a transfer under Subdivision 707 ‑ A 170 ‑ 33 Alternative test of relations between the loss company and other companies 170 ‑ 35 The loss company 170 ‑ 40 The income company 170 ‑ 42 If the income company has become the head company of a consolidated group or MEC group 170 ‑ 45 Maximum amount that can be transferred 170 ‑ 50 Transfer by written agreement 170 ‑ 55 Losses must be transferred in order they are incurred 170 ‑ 60 Income company cannot transfer transferred tax loss Effect of agreement to transfer more than can be transferred 170 ‑ 65 Agreement transfers as much as can be transferred 170 ‑ 70 Amendment of assessments Australian permanent establishments of foreign financial entities 170 ‑ 75 Treatment like Australian branches of foreign banks

Amendment history: Repealed and substituted by No 68 of 2002, effective 24 Oct 2002 ( see s. 2)

s 170-5 — Basic principles for transferring tax losses

(1) A company can transfer a tax loss to another company so that the other company can deduct it in the income year of the transfer. (2) Both companies must be members of the same wholly ‑ owned group. There are other eligibility requirements that they must also satisfy. (2A) One of the companies must be an Australian branch of a foreign bank. The other company must be: (a) the head company of a consolidated group or MEC group; or (b) not a member of a consolidatable group. Note: This Subdivision applies to Australian permanent establishments of foreign entities that are financial entities in the same way as it applies to Australian branches of foreign banks. See section 170 ‑ 75. (3) The transferred loss must be “surplus” in the sense that the transferring company cannot use it because there is not enough assessable income to offset it. The other company must have enough assessable income to offset the transferred tax loss. (4) Neither company must be prevented from deducting the loss by Division 165 or 175. Note: Division 165 deals with the income tax consequences of changing ownership or control of a company. Division 175 deals with using a company’s tax losses to avoid income tax. (5) The tax loss is transferred by an agreement between the 2 companies. (6) The tax loss can be transferred in the same year as it is incurred. In that case different rules apply.

Amendment history: Amended by No 121 of 1997, effective s 4: 8 July 1997 (s 2(1)) Sch 1, Sch 2 (items 3–17), Sch 3 (items 3–30), Sch 4 (items 5–62, Sch 5 (items 3–42), Sch 6 (items 3–67), Sch7 (items 2–4), Sch 8 (items 2–31), Sch 9 (items 3–15), Sch 10 (items 2–11), Sch 11 (items 2–36) and Sch 12 (items 1–14): 1 July 1997 (s 2(2), (3), (4) (5)) | Amended by No 108 of 1998, effective 7 Dec 1998 ( see s. 2) | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9)

s 170-10 — When a company can transfer a tax loss

(1) A company (the loss company ) can transfer an amount of its * tax loss for an income year (the loss year ) to another company (the income company ) if the conditions in this Subdivision are met. (2) The amount transferred can be the whole or part of the * tax loss. Note: A PDF cannot transfer a tax loss, except one for a period before it became a PDF: see section 195 ‑ 10.

s 170-15 — Income company is taken to have incurred transferred loss

(1) If an amount of a * tax loss is transferred, the amount is taken to be a tax loss incurred by the * income company in the * loss year. (2) However, if the * loss year is the same as the income year of the transfer, the * income company is taken to have incurred the * tax loss in the income year before the loss year. Note: This rule is needed because Division 36 allows a tax loss to be deducted only if it was incurred in an earlier income year. (3) Despite subsection (1), if the * tax loss is transferred because the conditions in section 170 ‑ 32 are met, the * income company is taken to have incurred the tax loss for the income year for which the first prior transferor mentioned in that section incurred the tax loss. (4) Despite subsection (1), if the * tax loss is transferred because the condition in subsection 170 ‑ 42(4) is met, the * income company is taken to have incurred the tax loss for the income year for which that subsection assumes the income company incurred the tax loss.

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-20 — Who can deduct transferred loss

(1) If an amount of a * tax loss is transferred, the * income company can deduct the amount in accordance with section 36 ‑ 17 (which is about how to deduct a tax loss), but only for the income year of the income company for which the amount is transferred. That income year is called the deduction year . (2) The * loss company can no longer * utilise the transferred amount and is taken not to have incurred the * tax loss to the extent of that amount.

Amendment history: Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Amended by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15)

s 170-25 — Tax treatment of consideration for transferred tax loss

(1) If the * loss company receives any consideration from the * income company for the amount of the * tax loss: (a) so much of the consideration as is given for the amount of the tax loss is neither assessable income nor exempt income of the loss company; and (b) a * capital gain does not accrue to the loss company because of the receipt of the consideration. Note: However, the consideration may affect how section 170 ‑ 210 modifies the cost base of direct and indirect interests in the loss company. (2) If the * income company gives any consideration to the * loss company for the amount of the * tax loss: (a) the income company cannot deduct the amount or value of the consideration; and (b) the income company does not incur a * capital loss because of the giving of the consideration. Note: However, the consideration may affect how section 170 ‑ 215 modifies the cost base of direct and indirect interests in the income company.

Amendment history: Repealed and substituted by No 147 of 1997, effective s 4 and Sch 2 (items 2–7): 14 Oct 1997 (s 2(1)) Sch 6 (items 10–13): 1 July 1997 (s 2(3)) Sch 14 (items 43–60): 1 July 1997 (s 2(7)) Sch 15 (items 7–13): 1 July 1997 (s 2(9)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent

s 170-30 — Companies must be in existence and members of the same wholly ‑ owned group etc.

(1) Both companies must be in existence during at least part of each of the following income years: (a) the * loss year; and (b) the * deduction year; and (c) any intervening income year. Note: In some cases, this condition may not apply, or may be taken to be met even if it is not actually met. See sections 170 ‑ 32 and 170 ‑ 33. (2) Also, both companies must be members of the same * wholly ‑ owned group during the whole or part of those income years when both companies were in existence. Note: In some cases, this condition may not apply, or may be taken to be met even if it is not actually met. See sections 170 ‑ 32 and 170 ‑ 33. (3) One of the companies must be an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank. Note: The Australian branch can be taken to be a separate entity from the foreign bank for this Subdivision. See Part IIIB of the Income Tax Assessment Act 1936 . (4) The other company must be covered by an item of this table. The other company Item The other company must: At this time: 1 Be the * head company of a * consolidated group The end of the * deduction year or, if the company ceases to be in existence during the deduction year, just before the cessation 2 Be the * head company of a * MEC group The end of the * deduction year or, if the group ceases to exist during the deduction year because the company ceases to be in existence, just before the cessation 3 Not be a * member of a * consolidatable group The end of the * deduction year or, if the company ceases to be in existence during the deduction year, just before the cessation

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 170-32 — Tax loss incurred by the loss company because of a transfer under Subdivision 707 ‑ A

When the conditions in this section apply (1) The conditions in this section apply instead of the conditions in subsections 170 ‑ 30(1) and (2) if: (a) the * income company is an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank; and (b) the * loss company incurred the * tax loss because of one or more transfers of the tax loss under Subdivision 707 ‑ A. Conditions (2) Each transferor ( prior transferor ) of the * tax loss under Subdivision 707 ‑ A must have been a company. (3) It must have been possible to meet the conditions in subsections 170 ‑ 30(1) and (2) in relation to the * loss company and the * income company assuming: (a) the * loss year were so much of the income year in which the * tax loss was transferred to the loss company under Subdivision 707 ‑ A as occurred after the transfer; and (b) so much (if any) of the * deduction year as occurred before the transfer were disregarded. (4) The * income company and each prior transferor must both be in existence during at least part of each of these periods: (a) the period consisting of: (i) if the prior transferor incurred the * tax loss apart from Subdivision 707 ‑ A—the * loss year; or (ii) if the prior transferor incurred the tax loss because of a transfer under Subdivision 707 ‑ A (other than a transfer from the prior transferor to itself)—so much of the income year in which the transfer occurred as was after the transfer (but before any later transfer of the loss from the prior transferor under that Subdivision); (b) so much of the income year during which the tax loss was transferred under Subdivision 707 ‑ A from the prior transferor to another company as occurs before the transfer (but after the start of the period described in paragraph (a)); (c) any intervening income year. (5) The * income company must be a member of the same * wholly ‑ owned group as each prior transferor during the whole or part of the periods described in subsection (4) for the prior transferor when both were in existence.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)