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INCOME TAX ASSESSMENT ACT 1997 - SECT 719.30

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 * wholly-owned subsidiary of another entity, just because there are minor holdings of * membership interests in an entity issued under * arrangements for employee shareholdings.

             (2)  For the purposes of this Division, in determining whether an entity is a * wholly-owned subsidiary of another entity, disregard:

                     (a)  particular * shares in a company if the shares are covered by subsection (3) and the total number of those shares is not more than 1% of the number of ordinary shares in the company; and

                     (b)  particular * membership interests in an entity if the membership interests are covered by subsection (5) and the total number of those membership interests is not more than 1% of the number of membership interests of that kind in the entity.

             (3)  A * share or * membership interest in a company is covered by this subsection if:

                     (a)  the entity who holds the beneficial interest in the share or membership interest acquired that beneficial interest:

                              (i)  under an * employee share scheme; or

                             (ii)  by exercising a right, a beneficial interest in which was acquired under an employee share scheme; and

                     (b)  paragraphs 83A-105(1)(a) and (b) and subsection 83A-105(2) apply to the beneficial interest acquired under the scheme; and

                     (c)  in the case of a membership interest--the interest is part of a stapled security.



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