Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p12
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 12/46)
Character Range: 3083500–3086121

has a fixed entitlement to income or capital of a company

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.

165‑220  Special alternative to change of ownership test for Subdivision 165‑B
 (1) If the company does not meet