(1) This section modifies how the ownership tests in section 166-145 are applied to the tested company if it is the case, or it is reasonable to assume that:
(a) an entity (the stakeholder ) indirectly holds any of these stakes in the tested company:
(i) a * voting stake that carries rights to less than 10% of the voting power in the company; or
(ii) a * dividend stake that carries the right to receive less than 10% of any dividends that the company may pay; or
(iii) a * capital stake that carries the right to receive less than 10% of any distribution of capital of the company; and
(i) the stakeholder indirectly holds the stake in the tested company by holding * shares directly in a company (the top interposed entity ) that is interposed between the stakeholder and the tested company; or
(ii) the stakeholder indirectly holds the stake in the tested company by holding another interest directly in an entity (the top interposed entity ) that is not a company and that is interposed between the stakeholder and the tested company.
Note 1: There might also be other entities interposed between the top interposed entity and the tested company.
Note 2: Other rules might affect this provision: see subsection (3) and sections 166-272, 166- 275 and 166-280.
Note 3: For paragraph (a), Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.
Top interposed entity deemed to hold stakes directly in the tested company
(2) The tests are applied to the tested company as if, at the * ownership test time:
(a) if the stake is a * voting stake--the top interposed entity controls, or is able to control, the voting power in the tested company that is carried by that stake at that time; and
(b) if the stake is a * dividend stake--the top interposed entity * indirectly had the right to receive, for its own benefit, any * dividends the tested company may pay in respect of that stake at that time; and
(c) if the stake is a * capital stake--the top interposed entity indirectly had the right to receive, for its own benefit, any distributions of capital of the tested company in respect of that stake at that time; and
(d) in any case--the top interposed entity were a person (other than a company).
Note: The persons who actually control the voting power and have rights to dividends and capital are taken not to control that power or have those rights: see section 166- 265.
Acquisition of top interposed entity by another entity
(a) a new entity (the new interposed entity ) acquires all the * shares or other interests in the top interposed entity (the old interposed entity ); and
(b) the new interposed entity has the same classes of shares or other interests as the old interposed entity; and
(c) if the new interposed entity is a company--the shares are not * redeemable shares; and
(d) in any case--each stakeholder holds the same proportion of the total * voting stakes, * dividend stakes or * capital stakes in the new interposed entity immediately after the acquisition as the stakeholder held in the old interposed entity immediately before the acquisition;
then, at all times that the old interposed entity held or is taken to have held a stake in the tested company, the new interposed entity is taken to have held that stake.
(4) Except for the purposes of determining whether a time is an alteration time (within the meaning of section 165-115L), section 166-272 (which is about the same shares or interests) is to be disregarded when applying subsection (3).