Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:16_5:p3
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 16 cl 5 (pt 3/6)
Character Range: 265185–267972

interposed entity is a non‑resident and the subsidiary member is a trust or partnership

 (1) This section describes, for the purposes of item 2, column 4 of the table in subsection 703‑15(2) of the Income Tax Assessment Act 1997, a set of requirements that must be met for an entity (the test entity) to be a subsidiary member of a consolidated group or a consolidatable group at a particular time (the test time).

Test entity must be a trust or partnership

 (2) At the test time, the test entity must be a trust or partnership.

At least one interposed entity must be a company that is a subsidiary member because of section 701C‑10

 (3) At the test time, one or more of the interposed entities must be companies that are subsidiary members of the group because the set of requirements in section 701C‑10 are met.

Test entity must be a subsidiary member on assumption that head company beneficially owned all membership interests beneficially owned by subsection (3) companies

 (4) At the test time, it must be the case that the test entity would be a subsidiary member of the group if the head company beneficially owned all the membership interests beneficially owned by each company described in subsection (3).

701C‑20  Transitional foreign‑held subsidiaries and transitional foreign‑held indirect subsidiaries

  If:
 (a) an entity is a subsidiary member of a consolidated group in a case where the set of requirements described in section 701C‑10 are met; and
 (b) one or more of the membership interests in the entity are held by:
 (i) a non‑resident company; or
 (ii) a non‑resident trust; or
 (iii) an entity that holds the membership interests only as a nominee of one or more entities each of which is a non‑resident company or a non‑resident trust; or
 (iv) a partnership, each of the partners in which is a non‑resident company or a non‑resident trust;
then:
 (c) the entity is a transitional foreign‑held subsidiary of the group; and
 (d) if:
 (i) the transitional foreign‑held subsidiary; or
 (ii) an entity that is a transitional foreign‑held indirect subsidiary of the group because of another application of this paragraph;
  holds one or more membership interests in another entity that:
 (iii) is a subsidiary member of the group; and
 (iv) is not a transitional foreign‑held subsidiary of the group;
  that other member is a transitional foreign‑held indirect subsidiary of the group.

Note: In order to be a subsidiary member of the group as required by subparagraph (d)(iii), the transitional foreign‑held indirect subsidiary would need to have satisfied the set of requirements in either section 701C‑10 or 701C‑15

Subdivision 701C‑C—Modifications of tax cost setting rules

Table of sections

Application and object

701C‑25 Application and object