(f) it is a designated infrastructure project entity at the particular time.
Subdivision 272‑F—Widely held unit trust
272‑105 Widely held unit trust
Basic meaning
(1) A trust is a widely held unit trust if:
(a) it is a fixed trust that is a unit trust; and
(b) it is not closely held (see subsection (2)).
A trust is also a widely held unit trust if it is an AMIT (including an AMIT arising from the operation of section 276‑20 (Trust with classes of interests—each class treated as separate AMIT)).
Closely held—income test
(2) A trust is closely held if:
(a) an individual has, or up to 20 individuals have between them; or
(b) no individual has, or no individuals have between them;
directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the income of the trust.
Closely held—capital test
(2A) A trust is also closely held if:
(a) an individual has, or up to 20 individuals have between them; or
(b) no individual has, or no individuals have between them;
directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the capital of the trust.
Single individual
(3) For the purposes of subsection (2) or (2A), all of the following are taken to be a single individual:
(a) an individual, whether or not the individual holds units in the unit trust; and
(b) the individual’s relatives; and
(c) in relation to any units in respect of which other individuals are nominees of the individual or of the individual’s relatives—those other individuals.
Exception
(4) A unit trust is not a widely held unit trust if, because of:
(a) any provision in the trust instrument, or in any contract, agreement or instrument:
(i) authorising the variation or abrogation of rights attaching to any of the units; or
(ii) relating to the conversion, cancellation, extinguishment or redemption of any of the units; or
(b) any contract, agreement, arrangement, option or instrument under which a person has power to acquire any of the units; or
(c) any power, authority or discretion in a person in relation to the rights attaching to any of the units;
it is reasonable to conclude that the rights attaching to any of the units are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that directly or indirectly the requirement in paragraph (1)(b) would not be satisfied.
Subdivision 272‑G—Unlisted widely held trust and listed widely held trust
272‑110 Unlisted widely held trust
Subject to Subdivision 272‑J, a unit trust is an unlisted widely held trust if it is a widely held unit trust whose units are not listed for quotation in the official list of an approved stock exchange.
272‑115 Listed widely held trust
A unit trust is a listed widely held trust if it is a widely held unit trust whose units are listed for quotation in the official list of an approved stock exchange.
Subdivision 272‑H—Unlisted very widely held trust
272‑120 Unlisted very widely held trust
(1) Subject to Subdivision 272‑J, a unit trust is an unlisted very widely held trust if:
(a) it is an unlisted widely held trust; and
(b) it has at least 1,000 unit holders; and
(c) all of its units carry the same rights; and
(d) if its units are redeemable, they are redeemable for a price determined on the basis of its net asset value, according to Australian accounting principles; and
(e) it engages only in qualifying activities (see subsection (2)).
Qualifying activity
(2) A qualifying activity is an activity that:
(a) is an investment or business activity; and
(b) is conducted in accordance with the trust instrument or deed, and any prospectus, of the trust; and
(c) is conducted at arm’s length.
Extended status
(3) If:
(a) at a particular time (the first qualifying time), a trust for the first time becomes an unlisted very widely held trust; and
(b) at a time (the first unit issue time) that is not more than 2 years earlier, units in the trust were first issued; and
(c) at no time during the period (the start‑up period) between the first unit issue time and the first qualifying time was there any abnormal trading, of a kind covered by subsection 269‑15(1) or section 269‑20, in the trust’s units; and
(d) at all times in the part (if any) of the start‑up period that occurred more than 90 days after it began, the trust was a widely held unit trust;
the trust is taken to have been an unlisted very widely held trust at all times from the formation of the trust until the end of the start‑up period.
Subdivision 272‑I—Wholesale widely held trust
272‑125 Wholesale widely held trust
(1) Subject to Subdivision 272‑J, a unit trust is a wholesale widely held trust at a particular time (the test time) if:
(a) it is an unlisted widely held trust at the test time; and
(b) it is not an unlisted very widely held trust at the test time; and
(c) at least 75% of its units are held at the test time by one or more qualifying holders (see subsection (2)); and
(d) at the test time, all of its units carry the same rights; and
(e) if at the test time its units are redeemable, they are redeemable for a price determined on the basis of its net asset value, according to Australian accounting principles; and
(f) the amount subscribed for units in the trust by each person to whom units have been issued was at least $500,000; and
(g) at the test time, the unit trust engages only in qualifying activities (see subsection (3)).
Qualifying holder
(2) Each of the following is a qualifying holder:
(a) a listed widely held trust;
(b) an unlisted very widely held trust;
(c) a life assurance company;
(e) a fund that is a complying approved deposit fund in relation to the year of income in which the test time occurs;
(f) a fund that is a complying superannuation fund in relation to the year of income in which the test time occurs;
(g) a trust that is a pooled superannuation trust in relation to the year of income in which the test time occurs.
Qualifying activity
(3) A qualifying activity is an activity that:
(a) is an investment or business activity; and
(b) is conducted in accordance with the trust instrument or deed, and any prospectus, of the trust; and
(c) is conducted at arm’s length.
Subdivision 272‑J—Kind of trust can be affected by ownership by higher level trust
272‑127 Kind of trust can be affected by ownership by higher level trust
(1) If:
(a) apart from this Subdivision, a trust is an unlisted widely held trust, an unlisted very widely held trust or a wholesale widely held trust; and
(b) each of one or more trusts of a higher level (see subsection (3)) has, directly or indirectly, fixed entitlements to all of the income and capital of the trust;
the trust is instead a trust of the same kind (see subsection (2)) as the trust of the highest level.
(2) For the purposes of this Subdivision, trusts are of the following kinds:
(a) unlisted widely held trust;
(b) unlisted very widely held trust;
(c) wholesale widely held trust;
(d) listed widely held trust.
(3) The kinds of trust are allocated levels in the following order (from lowest to highest): unlisted widely held trust, unlisted very widely held trust, wholesale widely held trust and listed widely held trust.
Subdivision 272‑K—Trusts beginning or ceasing to exist
272‑130 Trusts beginning or ceasing to exist
If:
(a) under any provision of this Schedule, a trust is required to meet a condition at one or more times or at all times during a period; and
(b) the trust does not exist during a part of the period;
the period does not include that part.
Subdivision 272‑L—Listed public company
272‑135 Listed public company
Basic meaning
(1) A listed public company is a company whose shares (except those that carry a right to a fixed rate of dividend) are listed for quotation in the official list of an approved stock exchange.
Exceptions
(2) However, a company is not a listed public company if:
(a) a person (who is not a company) controls, or is able to control, or up to 20 persons (none of them companies) between them control, or are able to control, 75% or more of the voting power in the company (whether directly, or indirectly through one or more interposed companies, partnerships or trusts); or
(b) a person (who is not a company) has, or up to 20 persons (none of them companies) have between them, the right to receive for their own benefit (whether directly, or indirectly through one or more interposed companies, partnerships or trusts) 75% or more of any dividends that the company may pay; or
(c) a person (who is not a company) has, or up to 20 persons (none of them companies) have between them, the right to receive for their own benefit (whether directly, or indirectly through one or more interposed companies, partnerships or trusts) 75% or more of any distribution of capital of the company.
Meaning of right to receive dividends or distribution of capital indirectly
(3) For the purposes of subsection (2), persons have the right to receive dividends or a distribution of capital of a company indirectly for their own benefit if they would receive the dividends or capital for their own benefit if:
(a) the company were to pay the dividends or distribute the capital; and
(b) the dividends or capital were then successively paid or distributed by each company, partnership or trust interposed between the company and those persons.
Meaning of distribute
(4) Section 272‑50 is disregarded in determining the meaning of distribute in paragraphs (3)(a) and (b).
Subdivision 272‑M—Various definitions
272‑140 Definitions
(1) In this Schedule:
abnormal trading has the meaning given by Subdivision 269‑B.
arrangement means any arrangement, agreement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable (or intended to be enforceable) by legal proceedings.
associate has the same meaning as in section 318.
benefit, in Division 270, has the meaning given by section 270‑20.
breakdown in the marriage or relationship of an individual: this occurs if the individual is living with another individual on a genuine domestic basis in a relationship as a couple (whether the individuals are the same sex or different sexes and whether legally married or not) and ceases to do so.
complying approved deposit fund means a complying approved deposit fund within the meaning of section 47 of the Superannuation Industry (Supervision) Act 1993.
complying superannuation fund means a complying superannuation fund within the meaning of section 45 of the Superannuation Industry (Supervision) Act 1993.
control a non‑fixed trust has the meaning given by Subdivision 269‑E.
designated infrastructure project entity has the meaning given by the Income Tax Assessment Act 1997.
directly or indirectly has a meaning affected by sections 272‑25 and 272‑30.
distribute income or capital has a meaning affected by sections 272‑45, 272‑50, 272‑55 and 272‑60.
excepted trust has the meaning given by section 272‑100.
family has the meaning given by section 272‑95.
family group has the meaning given by section 272‑90.
family trust has the meaning given by section 272‑75.
family trust distribution tax has the meaning given by section 271‑10.
family trust election has the meaning given by section 272‑80.
fixed entitlement has the meaning given by Subdivision 272‑A.
fixed trust has the meaning given by section 272‑65.
government body means:
(a) the Commonwealth, a State or a Territory; or
(b) a municipal corporation or other local governing body; or
(c) a foreign state.
group has the meaning given by subsection 269‑95(5).
income year includes a year of income.
indirectly has a meaning affected by sections 272‑20 and 272‑63.
interposed entity election has the meaning given by section 272‑85.
listed public company has the meaning given by section 272‑135.
listed widely held trust has the meaning given by section 272‑115.
loss year means the income year in which a tax loss was incurred.
member of a company includes a shareholder, stockholder or holder of a life insurance policy of the company.
more than a 50% stake has the meaning given by section 269‑50.
mutual affiliate company has the meaning given by section 121AC.
mutual insurance company has the meaning given by section 121AB.
non‑fixed trust has the meaning given by section 272‑70.
pass the 50% stake test has the meaning given by section 269‑55.
pass the business continuity test has the meaning given by Subdivision 269‑F.
pass the family control test has the meaning given by section 272‑87.
pass the pattern of distributions test has the meaning given by section 269‑60.
pooled superannuation trust means a pooled superannuation trust within the meaning of section 48 of the Superannuation Industry (Supervision) Act 1993.
scheme has the same meaning as in subsection 177A(1).
special company means:
(a) a mutual affiliate company; or
(b) a mutual insurance company; or
(c) a company whose constituent document prevents it from distributing both income and capital (within the meaning of section 272‑50) to any member of the company; or
(d) a credit union, within the meaning of section 3 of the Financial Institutions Codes (as defined in section 111AZC of the Corporations Act 2001), whose constituent documents prevent it from paying dividends to its members; or
(e) a company that is prescribed by the regulations.
specified individual in relation to a family trust election has the meaning given by subsection (2).
tax loss means:
(a) a loss within the meaning of former section 79E, 80 or 80AA; or
(b) a film loss within the meaning of former section 79F or 80AAA; or
(c) a tax loss worked out under section 36‑10 of the Income Tax Assessment Act 1997 (including such a tax loss as increased under section 415‑15 of that Act).
trading in units in a unit trust has the meaning given by section 269‑10.
unlisted very widely held trust has the meaning given by section 272‑120.
unlisted widely held trust has the meaning given by section 272‑110.
wholesale widely held trust has the meaning given by section 272‑125.
widely held unit trust has the meaning given by section 272‑105.
(2) A reference in this Schedule to a person specified in a family trust election is a reference to:
(a) if the family trust election has not been varied—the person specified for the purposes of subsection 272‑80(3); or
(b) if the family trust election has been varied—the person most recently specified under subsection 272‑80(5A) or (5C).
Schedule 2H—Demutualisation of mutual entities other than insurance companies and health insurers
Division 326—Demutualisation
Table of Subdivisions
Guide to Division 326
326‑A Application, key concepts and related expressions
326‑B How demutualisation is to be effected
326‑C CGT consequences of extinguishment of membership rights in mutual entity
326‑D CGT consequences of disposal of demutualisation shares or an interest in such shares by a member of a mutual entity where the entity or a holding company of the entity becomes a listed public company
326‑E CGT consequences of disposal of demutualisation shares or interests in such shares by a member of a mutual entity where the entity or a holding company of the entity becomes a company that is not a listed public company
326‑F Variation of amount taken to be paid for shares or an interest in shares by a member of a mutual entity who made a capital gain or capital loss from disposal of membership rights in another mutual entity
326‑G CGT consequences of disposal of rights or interests resulting from extinguishment of membership rights
326‑H CGT consequences of transfer of ordinary shares
326‑I CGT consequences of disposal of demutualisation shares or an interest in such shares by a trustee on behalf of a member
326‑J CGT consequences of change in rights attaching to special shares or replacement of special shares by ordinary shares
326‑K CGT consequences of disposal of shares or an interest in shares acquired under a roll‑over provision
326‑L CGT consequences of payment to member of demutualised entity out of accumulated surplus of the entity
326‑M Indexation
326‑N Non‑CGT consequences of issue of demutualisation shares
Guide to Division 326
326‑1 What this Division is about
This Division sets out the taxation consequences of the demutualisation of mutual entities other than insurance companies and health insurers.
Subdivision 326‑A—Application, key concepts and related expressions
Table of sections
326‑5 Application
326‑10 Mutual entity and demutualisation
326‑15 Provisions relating to listing on a stock exchange
326‑20 Demutualisation resolutions etc.
326‑25 Demutualisation shares
326‑30 Existing members and new members
326‑35 Pre‑CGT members and post‑CGT members
326‑5 Application
(1) This Division applies to the demutualisation of a mutual entity referred to in section 326‑10 if, and only if:
(a) where the demutualisation resolution day was 14 March 2002 or was or is a later day—the members of the entity have passed a resolution, in accordance with the entity’s constitution, that this Division is to apply to the demutualisation; and
(b) the entity was a resident immediately before the demutualisation resolution day; and
(c) the demutualisation has been or is implemented as mentioned in section 326‑40; and
(d) the continuity of beneficial interest test in section 326‑60 is satisfied in relation to the demutualisation; and
(e) the demutualisation of the entity was or is completed on or after 12 May 1998.
(2) For the purposes of paragraph (1)(e), the demutualisation of an entity is taken to have been or to be completed: