Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 1/8)
Character Range: 7276339–7279175

2                                                                            Subsections 351(3) and (4)                                                                                                           The subsections do not apply

 (3) In addition, for the purposes of determining whether or not an entity (other than a trust mentioned in paragraph (a) or (b)) is a *foreign controlled Australian entity:
 (a) if a trust is covered by paragraph 820‑790(1)(c)—a foreign entity that is an object of the trust at a particular time is taken to hold, at that time, a TC direct control interest in the trust that is equal to 100%; and
 (b) if a trust is covered by paragraph 820‑790(1)(d)—a foreign entity that is in a position to control the trust at a particular time is taken to hold, at that time, a *TC direct control interest in the trust that is equal to 100%.
Note: The foreign entity therefore holds a TC control tracing interest in the trust (see section 820‑875). That interest may then be taken into account in calculating any TC indirect control interest that the foreign entity holds in another entity in relation to which the trust is an interposed entity (see section 820‑870). As a result, that other entity may become a foreign controlled Australian entity.

820‑865  TC direct control interest in a partnership
  A thin capitalisation direct control interest (or a TC direct control interest) that an entity holds in a partnership at a particular time is whichever of the following percentages is applicable, and if there are 2 or more such percentages, the greatest of them:
 (a) in the case of a *corporate limited partnership—100% if the entity is a *general partner of the partnership;
 (b) in the case of a partnership that is not a corporate limited partnership—the percentage of the control of voting power in the partnership that the entity has at that time;
 (c) in any case—the percentage that the entity holds, or is entitled to acquire, at that time, of any of the following:
 (i) the total amount of assets or capital contributed to the partnership;
 (ii) the total rights of partners to distributions of capital, assets or profits on the dissolution of the partnership;
 (iii) the total rights of partners to distributions of capital, assets or profits otherwise than on the dissolution of the partnership.

820‑870  TC indirect control interest in a company, trust or partnership

What is a TC indirect control interest?
 (1) An entity holds a thin capitalisation indirect control interest (or a TC indirect control interest) in a company, trust or partnership at a particular time if, and only if:
 (a) there is an interposed entity, or a continuous series of at least 2 interposed entities, between that entity and the company, trust or partnership; and
 (b) the interposed entity, or each of the