Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p6
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 6/34)
Character Range: 5091619–5094257

of the first entity's *affiliates; or
 (iii) the first entity and any of its affiliates;
  any of the income or capital of the trust; and
 (b) the percentage (the control percentage) of the income or capital paid or applied is at least 40% of the total amount of income or capital paid or applied by the trustee for that year.
Note: Section 328‑112 of the Income Tax (Transitional Provisions) Act 1997 affects the operation of this subsection in relation to the 2007‑08, 2008‑09, 2009‑10 and 2010‑11 income years.
 (5) An entity does not control a discretionary trust because of subsection (4) if the entity is:
 (a) an *exempt entity; or
 (b) a *deductible gift recipient.

Commissioner may determine that an entity does not control another entity
 (6) If the control percentage referred to in subsection (2) or (4) is at least 40%, but less than 50%, the Commissioner may determine that the first entity does not control the other entity if the Commissioner thinks that the other entity is controlled by an entity other than, or by entities that do not include, the first entity or any of its *affiliates.

Indirect control of an entity
 (7) This section applies to an entity (the first entity) that directly controls another entity (the second entity) as if the first entity also controlled any other entity that is directly, or indirectly by any other application or applications of this section, controlled by the second entity.
 (8) However, subsection (7) does not apply if the second entity is an entity of any of the following kinds:
 (a) a company *shares in which (except shares that carry the right to a fixed rate of *dividend) are listed for quotation in the official list of an *approved stock exchange;
 (b) a *publicly traded unit trust;
 (c) a *mutual insurance company;
 (d) a *mutual affiliate company;
 (e) a company (other than one covered by paragraph (a)) all the shares in which are owned by one or more of the following:
 (i) a company covered by paragraph (a);
 (ii) a publicly traded unit trust;
 (iii) a mutual insurance company;
 (iv) a mutual affiliate company.

328‑130  Meaning of affiliate
 (1) An individual or a company is an affiliate of yours if the individual or company acts, or could reasonably be expected to act, in accordance with your directions or wishes, or in concert with you, in relation to the affairs of the *business of the individual or company.
 (2) However, an individual or a company is not your affiliate merely because of the nature of the business relationship you and the individual or company share.
Note: For small business relief purposes, a spouse or a child under 18 years