Document ID: chunk:federal_register_of_legislation:C2005A00147:clause:1_79:p24
Version: federal_register_of_legislation:C2005A00147
Segment Type: clause
Provision Reference: sch 1 cl 79 (pt 24/25)
Character Range: 90274–92963

tested company, during the *test period.

Note: See subsection (11) for the definitions of direct equity interests and indirect equity interests.

Subsection (8) not to apply for purpose of determining whether an alteration time has occurred

 (9) However, subsection (8) does not apply in relation to any of the conditions in section 166‑145 in so far as those conditions have effect for the purpose of determining whether an alteration time (within the meaning of section 165‑115L) has occurred.

Time of happening of CGT event

 (10) The happening of any *CGT event in relation to a direct or indirect equity interest in the tested company that results in the failure of the tested company to satisfy a condition in section 166‑145 is taken, for the purposes of paragraph (8)(b), to have occurred during the *test period.

Note: See subsection (11) for the definitions of direct equity interests and indirect equity interests.

Meaning of direct and indirect equity interests

 (11) For the purposes of subsections (8) and (10):
 (a) the direct equity interests in the tested company are *shares in the tested company; and
 (b) the indirect equity interests in the tested company are shares or other interests in entities interposed between the tested company and stakeholder.

When the rules in this Subdivision do not apply

166‑275  Rules in this Subdivision intended to be concessional

  A company is taken to have met the conditions in section 165‑12, paragraph 165‑35(a) or section 165‑123, or a changeover time or an alteration time is taken not to have occurred in respect of a company, (as the case requires), if:
 (a) a *tracing rule modifies how the ownership tests in section 166‑145 apply to the tested company in respect of a *voting stake, a *dividend stake or a *capital stake; and
 (b) the company fails the tests (whether at the time of applying the tracing rule or at another time); and
 (c) the company believes, on reasonable grounds, that if the tracing rule did not modify how the tests apply to the company in respect of that stake, it would not fail the tests.

Example: 11 people own shareholdings of 9% in the listed company. Under section 166‑225, one notional shareholder is deemed to hold all of those shareholdings. 2 of the people sell their shareholdings so that 9 of the original 11 people now own shareholdings of 11%. Without the rule in this section, the company would fail the ownership tests (as the rule in section 166‑225 no longer applies).

166‑280  Controlled test companies

 (1) 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