Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 2/5)
Character Range: 6684410–6687045

the *ultimate owners who ultimately hold it, the direct and indirect ownership of all *shares in the company that carry the right to receive any distribution of capital of the company, that ownership is held by the entity to the extent of the test percentage of the distribution.

Certain shares ignored
 (5) In tracing the ownership of *shares in a company, ignore *shares whose *dividends can reasonably be regarded as being equivalent to the payment of interest on a loan having regard to:
 (a) how the dividends are calculated; and
 (b) the conditions applying to the payment of the dividends; and
 (c) any other relevant matters.

727‑410  Ultimate stake of a particular percentage in a fixed trust
 (1) This section sets out 2 tests of whether an entity has an ultimate stake of a particular percentage (the test percentage) in a *fixed trust.
Note: In applying the tests, follow the rules in section 727‑415.

Income distributions
 (2) The first test is that, after tracing, to the *ultimate owners who ultimately hold them, the direct and indirect rights to receive distributions of trust income, those rights are held by the entity to the extent of the test percentage of each such distribution.

Capital distributions
 (3) The second test is that, after tracing, to the *ultimate owners who ultimately hold them, the direct and indirect rights to receive distributions of trust capital, those rights are held by the entity to the extent of the test percentage of each such distribution.

727‑415  Rules for tracing
 (1) In applying sections 727‑400, 727‑405 and 727‑410, follow the rules in this section.

Interposed entities
 (2) Tracing is to be done through any interposed entities.

Ownership or rights held jointly
 (3) If some of the ownership or rights of a particular kind in relation to a company or trust are held by 2 or more entities jointly or in common, each of the entities is treated as holding a proportion of the ownership or rights so held. The proportion is to be worked out on a reasonable basis, so that the total of the proportions equals the total of the ownership or rights so held.

Ownership or rights held by associate
 (4) If, at a particular time:
 (a) an *ultimate owner is an *associate of another ultimate owner; and
 (b) the associate ultimately holds some of the ownership or rights of a particular kind in relation to a company or trust;
then, in determining whether the other ultimate owner is one of 2 or more ultimate owners because of whom the conditions in an item in the table in section 727‑400 are satisfied, the ownership or rights of that kind in relation to the company or trust