Document ID: chunk:federal_register_of_legislation:C2010C00603:clause:3_5:p1
Version: federal_register_of_legislation:C2010C00603
Segment Type: clause
Provision Reference: sch 3 cl 5 (pt 1/2)
Character Range: 103990–106618

5  At the end of Subdivision 975‑A
Add:

975‑155  When is an entity a controller (for CGT purposes) of a company?

  An entity (the first entity) is a controller (for CGT purposes) of a company if:
 (a) the first entity has an *associate‑inclusive control interest in the company of at least 50%; or
 (b) the first entity has an associate‑inclusive control interest in the company of at least 40% and entities other than the first entity or associates of the first entity do not control the company; or
 (c) the first entity controls the company (alone or with an *associate).

975‑160  When an entity has an associate‑inclusive control interest

 (1) An entity has an associate‑inclusive control interest in a company in the circumstances set out in Subdivision A of Division 3 of Part X of the Income Tax Assessment Act 1936.

 (2) However, in working out whether an entity has an associate‑inclusive control interest of a particular percentage for the purposes of section 975‑155, there are these modifications to the way Part X of that Act operates:
 (a) that Part is applied to any company, including one acting as a trustee; and
 (b) subsection 349(4) applies in all cases in working out which entity holds a direct control interest or a control tracing interest equal to 100%; and
 (c) subsections 350(6) and (7) and 355(1) are ignored; and
 (d) despite subsection 352(2), an interposed entity may be taken into account in calculating an indirect control interest if the interposed entity is:
 (i) a company of which the first entity or an *associate is a controller; or
 (ii) a partnership or a trust; and
 (e) section 354 applies as if it referred to partnerships rather than CFP's; and
 (f) section 355 applies as if it referred to trusts rather than CFT's.

Note 1: Part X of the Income Tax Assessment Act 1936 defines company to exclude a company in the capacity of a trustee.

Note 2: The terms direct control interest and control tracing interest are relevant to working out associate‑inclusive control interests in a company: see sections 350, 351, 353, 354 and 355 of that Act.

Note 3: Under subsection 349(4) of that Act, if 2 or more entities would have a direct control interest or a control tracing interest in a company or trust equal to 100%, only one of them holds the interest.

Note 4: Subsections 350(6) and (7) of that Act deal with direct control interests in a company. They deal with interests held by Australian entities. Under subsection 355(1), certain entities are taken to hold a control tracing interest in a trust equal to 100%.

Note 5: Paragraphs (2)(d), (e) and (f) of this section are