Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 2/33)
Character Range: 4681059–4683568

if the entity is of a kind referred to in paragraph (8)(a) (about certain small entities):
 (i) in gaining or producing the income, the entity incurs a loss, outgoing or expenditure of an amount that is less than the amount of a loss, outgoing or expenditure that the entity might have been expected to incur if those parties had been dealing with each other at arm's length in relation to the scheme; and
 (ii) subsection (8) does not apply to the loss, outgoing or expenditure;
 (c) if the entity is of a kind referred to in paragraph (8)(a) (about certain small entities):
 (i) in gaining or producing the income, the entity does not incur a loss, outgoing or expenditure that the entity might have been expected to incur if those parties had been dealing with each other at arm's length in relation to the scheme; and
 (ii) subsection (9) does not apply to the loss, outgoing or expenditure that the entity might have been expected to incur.
This subsection does not apply to an amount to which subsection (2) applies or an amount *derived by the entity in the capacity of beneficiary of a trust.
 (2) An amount of *ordinary income or *statutory income is also non‑arm's length income of the entity if it is:
 (a) a *dividend paid to the entity by a *private company; or
 (b) ordinary income or statutory income that is reasonably attributable to such a dividend;
unless the amount is consistent with an *arm's length dealing.
 (3) In deciding whether an amount is consistent with an *arm's length dealing under subsection (2), have regard to:
 (a) the value of *shares in the company that are assets of the entity; and
 (b) the cost to the entity of the shares on which the *dividend was paid; and
 (c) the rate of that dividend; and
 (d) whether the company has paid a dividend on other shares in the company and, if so, the rate of that dividend; and
 (e) whether the company has issued any shares to the entity in satisfaction of a dividend paid by the company (or part of it) and, if so, the circumstances of the issue; and
 (f) any other relevant matters.
 (4) Income *derived by the entity as a beneficiary of a trust, other than because of holding a fixed entitlement to the income, is non‑arm's length income of the entity.
 (5) Other income *derived by the entity as a beneficiary of a trust through holding a fixed entitlement to the income of the trust is non‑arm's length income of the entity if, as a result of a *scheme the parties to which were not dealing with each other at *arm's length