Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 170.260

Linked group

             (1)  Companies that are linked to one another are a linked group .

             (2)  Two companies are linked to each other if:

                     (a)  one of them has a controlling stake in the other; or

                     (b)  the same entity has a controlling stake in each of them.

             (3)  For the purposes of this section, an entity has a controlling stake in a company at a particular time if the entity, or the entity and the entity's * associates between them:

                     (a)  are able at that time to exercise, or control the exercise of, more than 50% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or

                     (b)  have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any dividends that the company may pay; or

                     (c)  have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any distribution of capital of the company.

Note:          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.

             (4)  If:

                     (a)  apart from this subsection, an interest that gives an entity and its * associates (if any):

                              (i)  the ability to exercise, or control the exercise of, any of the voting power in a company; or

                             (ii)  the right to receive dividends that a company may pay; or

                            (iii)  the right to receive a distribution of capital of a company;

                            would, in the application of paragraph (3)(a), (b) or (c), be counted more than once; and

                     (b)  the interest is both direct and indirect;

only the direct interest is to be counted.



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