Document ID: chunk:federal_register_of_legislation:C2010C00637:clause:2_2:p2
Version: federal_register_of_legislation:C2010C00637
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 2/3)
Character Range: 8384–11166

for the income year that is or includes that period.)

Extension—nominee and bare trust situations

 (3) In determining, for the purposes of subparagraph (1)(b)(iii), how many persons hold units in a unit trust, if:
 (a) another trust (the holding trust) is a unit holder in the unit trust; and
 (b) the holding trust is a trust of the kind covered by subsection 45‑280(6); and
 (c) the beneficiary's or beneficiaries' absolute entitlement exists at all times while the holding trust is in existence;
the beneficiary or beneficiaries count as persons who hold units in the unit trust, and the trustee of the holding trust does not.

45‑287  When trusts are disqualified due to concentrated ownership

Concentrated ownership

 (1) This section applies to a trust if an individual holds, or up to 20 individuals hold between them directly or indirectly and for their own benefit, interests in the trust:
 (a) carrying fixed entitlements to:
 (i) at least 75% of the trust's income; or
 (ii) at least 75% of the trust's capital; or
 (b) if beneficiaries of the trust have a right to vote in respect of activities of the trust—carrying at least 75% of those voting rights.

Single individual

 (2) Subsection (1) operates as if all of these were a single individual:
 (a) an individual, whether or not the individual holds interests in the trust; and
 (b) the individual's *associates; and
 (c) for any interests in respect of which other individuals are nominees of the individual or of the individual's associates—those other individuals.

Concentrated ownership—potential due to possible variation of rights etc.

 (3) This section also applies to a trust if, because of:
 (a) any provision in the trust's constituent document, or in any contract, agreement or instrument:
 (i) authorising the variation or abrogation of rights attaching to any of the interests in the trust; or
 (ii) relating to the conversion, cancellation, extinguishment or redemption of any of those interests; or
 (b) any contract, *arrangement, option or instrument under which a person has power to acquire any of those interests; or
 (c) any power, authority or discretion in a person in relation to the rights attaching to any of those interests;
it is reasonable to conclude that the rights attaching to any of the interests are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that, directly or indirectly, the trust would be disqualified under subsection (1).

Tracing

 (4) In applying this section:
 (a) if a *complying superannuation fund, *approved deposit fund or *foreign superannuation fund has more than 50 members and has, directly or indirectly, a fixed entitlement to any of the trust's income or capital—that entitlement