Document ID: chunk:federal_register_of_legislation:C2019A00034:clause:4_6:p3
Version: federal_register_of_legislation:C2019A00034
Segment Type: clause
Provision Reference: sch 4 cl 6 (pt 3/6)
Character Range: 67114–69759

(b) the amount is a return on any of the following kinds of interest that the sovereign entity holds in another entity (the test entity):
 (i) a *membership interest;
 (ii) a *debt interest;
 (iii) a *non‑share equity interest; and
 (c) the test entity is:
 (i) a company that is an Australian resident at the time (the income time) when the amount becomes ordinary or statutory income of the sovereign entity; or
 (ii) a *managed investment trust in relation to the income year in which the income time occurs; and
 (d) the *sovereign entity group of which the sovereign entity is a member satisfies the portfolio interest test in subsection (4) in relation to the test entity:
 (i) at the income time; and
 (ii) throughout any 12 month period that began no earlier than 24 months before that time and ended no later than that time; and
 (e) the sovereign entity group of which the sovereign entity is a member does not have influence of a kind described in subsection (6) in relation to the test entity at the income time.
 (2) For the purposes of paragraph (1)(b), treat an interest that a *sovereign entity holds in another entity as a partner in a *partnership as not being an interest that the sovereign entity holds in the other entity.
 (3) If the amount is a *fund payment, subsection (1) does not apply to the extent that the amount is attributable to:
 (a) *non‑concessional MIT income (see section 12‑435 in Schedule 1 to the Taxation Administration Act 1953); or
 (b) an amount that would be non‑concessional MIT income if the following provisions were disregarded:
 (i) subsection 12‑437(5) in that Schedule;
 (ii) sections 12‑440, 12‑447, 12‑449 and 12‑451 in that Schedule.

Portfolio interest test
 (4) A *sovereign entity group satisfies the portfolio interest test in this subsection in relation to the test entity at a time if, at that time, the sum of the *total participation interests that each *member of the group holds in the test entity:
 (a) is less than 10%; and
 (b) would be less than 10% if, in working out the *direct participation interest that any entity holds in a company:
 (i) an *equity holder were treated as a shareholder; and
 (ii) the total amount contributed to the company in respect of *non‑share equity interests were included in the total paid‑up share capital of the company.
 (5) For the purposes of subsection (4), in working out the sum of the *total participation interests held by each *member of the group in the test entity, take into account:
 (a) a particular *direct participation interest; or
 (b) a particular *indirect participation interest;
held in the entity only once if it would