Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 5/11)
Character Range: 7534020–7536880

satisfied the requirements of paragraph (a), but investment in the entity is being actively marketed with the intention that the entity satisfies the requirements of that paragraph; or
 (c) the reason for failing to satisfy the requirements of paragraph (a) relates to the entity's activities and investments being wound down.

842‑235  Rules for determining total participation interests for the purposes of the widely held test
 (1) For the purposes of subsection 842‑230(2), apply the rules in this section in determining an entity's *total participation interest in another entity (the test entity).
 (2) If an entity has, through one or more interposed entities, an *indirect participation interest in the test entity, treat each of those interposed entities as having a *total participation interest in the test entity of nil.
 (3) If the test entity is a trust, do not treat an object of the trust as having a *direct participation interest or *indirect participation interest in the test entity.
 (4) Treat the following (the affiliated entities):
 (a) an entity;
 (b) each of the entity's *affiliates;
as together being one entity, that has all of the interests and rights of the affiliated entities.
Note: Such interests and rights may give rise to a participation interest in the test entity.
 (5) If an entity (the nominee) has interests and rights in the capacity of nominee of another entity:
 (a) treat the nominee as not having those interests and rights; and
 (b) instead, treat the other entity as having those interests and rights (in addition to the other entity's interests and rights apart from this subsection).
 (6) If an entity that has a *direct participation interest or *indirect participation interest in the test entity is an entity covered by:
 (a) paragraph 842‑230(1)(a), (b) or (c); or
 (b) paragraph 275‑20(4)(f) (foreign collective investment vehicles with a wide membership);
treat the entity's *total participation interest in the test entity as nil.
 (7) The application of subsection (6) to an entity that has a *direct participation interest or *indirect participation interest in the test entity does not affect the *total participation interest in the test entity of any other entity that has a direct participation interest or indirect participation interest in the test entity.
 (8) In determining a *direct participation interest of one entity in another entity, disregard paragraph 350(1)(b) of the Income Tax Assessment Act 1936 (rights of shareholders to vote or participate in certain decision‑making).
 (9) If the test entity is an *IMR entity and another entity is an independent fund manager for the test entity, in determining the *total participation interest of the other entity, or any entity *connected with the other entity, in the test entity, disregard any direct or indirect entitlements (including