Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 1/29)
Character Range: 2846017–2849248

3                                                           A trust (where entities do not have entitlements to all the income and capital of the trust)  This percentage:
                                                                                                                                                          (a) if the trustee makes distributions of income during the income year (the relevant year) in which that time occurs—the percentage of the distributions to which the entity was beneficially entitled; or
                                                                                                                                                          (b) if the trustee makes distributions of capital during the relevant year—the percentage of the distributions to which the entity was beneficially entitled;
                                                                                                                                                          or, if 2 different percentages are applicable, the smaller.

Companies
 (2) For item 1 of the table, ignore *redeemable shares.
 (3) Paragraph (a) of item 1 of the table does not apply if the entity holds the legal and equitable interests in the *shares jointly with another entity.

Discretionary trusts
 (4) Subsections (5) and (6) apply for the purpose of working out the *direct small business participation percentage in an entity in connection with a *CGT event that happened in an income year (the CGT event year), if:
 (a) the entity is a trust (where entities do not have entitlements to all the income and capital of the trust); and
 (b) during the relevant year mentioned in item 3 of the table in subsection (1) (disregarding subsection (5)), the trustee mentioned in that item:
 (i) does not make a distribution of income; and
 (ii) does not make a distribution of capital.
 (5) Treat the references in that item to the relevant year as being references to:
 (a) if the trustee made a distribution of income or capital during the CGT event year—the CGT event year; or
 (b) otherwise—the last income year before the CGT event year in which the trustee did make a distribution of income or capital.
 (6) Despite subsection (5), an entity holds a direct small business participation percentage of 0% in the trust at the relevant time if either:
 (a) the trust:
 (i) had a *net income for the relevant year; and
 (ii) did not have a *tax loss for the relevant year; or
 (b) the trustee did not make a distribution of income or capital at any time before the end of the CGT event year.

152‑75  Indirect small business participation percentage
 (1) Work out the indirect small business participation percentage that an entity (the holding entity) holds at a particular time in another entity (the test entity) by multiplying:
 (a) the holding entity's *direct small business participation percentage (if any) in another entity (the intermediate entity) at that time; by
 (b) the sum of:
 (i) the intermediate entity's direct small business participation percentage (if any) in the test entity at that time; and
 (ii) the intermediate entity's indirect small business participation percentage (if any) in the test entity at that