Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p45
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 45/46)
Character Range: 3163090–3165921

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.

Division 167—Companies whose shares carry unequal rights to dividends, capital distributions or voting power

Table of Subdivisions
 Guide to Division 167
167‑A Rights to dividends or capital distributions
167‑B Voting power

Guide to Division 167

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.

Subdivision 167‑A—Rights to dividends or capital distributions

Guide to Subdivision 167‑A

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.

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