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INCOME TAX ASSESSMENT ACT 1997 - SECT 166.280

Controlled test companies

             (1)  A * tracing rule does not modify how the ownership tests in section 166-145 apply to the tested company in respect of all or part of the voting power in the tested company, or all or some of the rights to * dividends of, or capital in, the tested company, if:

                     (a)  either:

                              (i)  an entity (the controlling entity ) directly holds that power or has those rights; or

                             (ii)  an entity (the controlling entity ) indirectly holds that power or has those rights through one or more interposed entities; and

                     (b)  the tested company is sufficiently influenced (within the meaning of paragraph 318(6)(b) of the Income Tax Assessment Act 1936 ) by the controlling entity.

Note:          However, a tracing rule can modify how the ownership tests in section 166-145 apply to the tested company in respect of voting power or dividend or capital rights held by entities other than controlling entities.

             (2)  A * tracing rule does not modify how the ownership tests in section 166-145 apply to the tested company in respect of all or part of the voting power in the tested company if:

                     (a)  the tested company is a * widely held company; and

                     (b)  that voting power:

                              (i)  is more than 25% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a natural person, together with his or her * associates; or

                             (ii)  is more than 50% of the total voting power in the tested company and is controlled (whether directly, or indirectly through one or more interposed entities) by a trustee or company, together with its associates.

Table of Subdivisions

             Guide to Division 167

167-A   Rights to dividends or capital distributions

167-B    Voting power

Guide to Division 167



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