Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_3:p1
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 1/5)
Character Range: 52891–55665

3                                             A *corporate unit trust or a *public trading trust for the income year                        The trust must be a resident unit trust (as defined in whichever one of sections 102H and 102Q of the Income Tax Assessment Act 1936 is relevant) for the income year

703‑30  When is one entity a wholly‑owned subsidiary of another?

 (1) One entity (the subsidiary entity) is a wholly‑owned subsidiary of another entity (the holding entity) if all the *membership interests in the subsidiary entity are beneficially owned by:
 (a) the holding entity; or
 (b) one or more wholly‑owned subsidiaries of the holding entity; or
 (c) the holding entity and one or more wholly‑owned subsidiaries of the holding entity.

 (2) An entity (other than the subsidiary entity) is a wholly‑owned subsidiary of the holding entity if, and only if:
 (a) it is a wholly‑owned subsidiary of the holding entity; or
 (b) it is a wholly‑owned subsidiary of a wholly‑owned subsidiary of the holding entity;
because of any other application or applications of this section.

Note: This Part also operates in some cases as if an entity were a wholly‑owned subsidiary of another entity, even though the entity is not covered by the definition in this section because of:

(a) ownership of shares under certain arrangements for employee shareholding (see section 703‑35); or

(b) interposed trusts that are not fixed trusts (see section 703‑40).

703‑35  Treating entities as wholly‑owned subsidiaries by disregarding employee shares

 (1) The object of this section is to ensure that an entity is not prevented from being a *subsidiary member of a *consolidated group or *consolidatable group just because there are minor holdings of *shares in a company issued under *arrangements for employee shareholdings. (It does not matter whether the company is the entity or is interposed between the entity and a *member of the group.)

Note: A company that is prevented from being a subsidiary member of a consolidated group may be a head company (so there could be 2 consolidated or consolidatable groups, instead of the one that this section ensures exists).

 (2) This Part (except Division 719) operates as if a company that meets the requirement of subsection (3) at a particular time were a *wholly‑owned subsidiary of an entity (the holding entity) at the time.

 (3) The company must be one that would be a *wholly‑owned subsidiary of the holding entity at the time if the *shares in the company that are to be disregarded under subsection (4) did not exist.

 (4) Disregard each of the *shares described in subsection (5) if the total number of those shares is not more than 1% of the number of ordinary shares in the company.

 (5) A *share in the company