Div 6Grouping of related corporations

Division 6—Grouping of related corporations 13G—What are related corporations? (1) For the purposes of this Division, corporations are related corporations in any of the circumstances specified in this section. (2) Corporations are related corporations if 1 of those corporations— (a) controls the composition of the board of the other corporation; or (b) is in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the other corporation; or (c) holds more than 50% of the issued share capital of the other corporation. (3) Corporations are related corporations if the same person has, or the same persons have together, a controlling interest in each of the corporations. Controlling interest is defined in section 13H. (4) Corporations are related corporations if— (a) more than 50% of the issued share capital of 1 of those corporations (corporation 1) is held by the other corporation (corporation 2) together with the shareholders of corporation 2; and (b) the percentage of the issued share capital of corporation 2 held by shareholders of corporation 1 is more than the difference between 50% and the percentage of the issued share capital of corporation 1 held by corporation 2. (5) Corporations are related corporations if 1 of the corporations (corporation 1) is the trustee of a fixed trust or a unit trust scheme and another corporation owns, or other related corporations between them own, more than 50% of— (a) where corporation 1 is the trustee of a fixed trust—the total beneficial interests in land subject to the trust; or (b) where corporation 1 is the trustee of a unit trust scheme—the total number of units held by the unit holders in the scheme. (6) Corporations are related corporations if 1 of those corporations is a related corporation of a corporation of which the other of those corporations is a related corporation (including a corporation that is a related corporation of the other of those corporations because of 1 or more other applications of this subsection). Example— If A and B are related corporations and B and C are related corporations, then by virtue of this provision A and C will also be related corporations because they are both related to B. 13H—What is a controlling interest in a corporation? For the purposes of this Division, a person has, or persons have together, a controlling interest in a corporation if— (a) that person, or those persons acting together, can control the composition of the board of the corporation; or (b) that person is, or those persons acting together are, in a position to cast or control the casting of more than 50% of the maximum number of votes that might be cast at a general meeting of the corporation; or (c) that person holds, or those persons acting together hold, more than 50% of the issued share capital of the corporation. 13I—Further provisions for determining whether corporations are related corporations (1) In determining whether corporations are related corporations, the following provisions apply: (a) corporations may be related corporations whether or not they own land in South Australia; (b) a reference to the issued share capital of a corporation does not include a reference to any part of it that carries no right to participate beyond a specified amount in a distribution of either profits or capital; (c) subject to paragraph (d), (e), (f) and (g), any shares held or power exercisable by a person or corporation as a trustee or nominee for another person or corporation are taken to be also held or exercisable by the other person or corporation; (d) any shares held or power exercisable by an excluded trust must be disregarded; (e) any shares held or power exercisable by a person or corporation by virtue of the provisions of any debentures of another corporation, or of a trust deed for securing any issue of any such debentures, must be disregarded; (f) any shares held or power exercisable by, or by a nominee for, a person or corporation (not being held or exercisable as mentioned in paragraph (e)) are taken to be not held or exercisable by that person or corporation if— (i) the ordinary business of that person or corporation includes the lending of money; and (ii) the shares are held or the power is exercisable only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money, not being a transaction entered into with an associate of that person or corporation within the meaning of the Corporations Act 2001 of the Commonwealth; (g) if a trustee holds controlling interests in 2 or more corporations on behalf of different trusts, those corporations are not related to each other only because of that control; (h) the composition of a corporation's board is taken to be controlled by a person or another corporation if the person or other corporation, by the exercise of a power exercisable whether or not with the consent or concurrence of any other person, can appoint or remove all or a majority of the members of the board. (2) Subsection (1)(h) does not limit the circumstances in which the composition of a corporation's board is to be taken to be controlled by a person or another corporation. 13J—Grouping of related corporations (1) Related corporations that own land are to be jointly assessed for land tax on the land as if it were owned by a single corporation. (2) Related corporations are jointly and severally liable for the land tax. (3) Section 42 of the Taxation Administration Act 1996 applies to the liability under this section and, accordingly, the Commissioner may issue notices of assessment for the land tax— (a) to the related corporations jointly; or (b) to the related corporations separately; or (c) to any 2 or more of the related corporations jointly and the remainder separately. (4) If 2 or more corporations are issued a notice of assessment jointly under subsection (3), those corporations will, for the purposes of that notice of assessment, be deemed to be a single corporation. (5) A corporation that is a related corporation of another corporation may apply to the Commissioner to be exempted from the application of this Division and to instead be treated as a single corporation for the purposes of assessment of land tax in relation to land held by the corporation. (6) The Commissioner may only grant an application under subsection (5) if the Commissioner is satisfied— (a) that the land is being held for the purpose of being developed as a residential development of more than 10 allotments or lots; and (b) as to any other matters prescribed by the regulations. (7) Subject to subsection (9), an exemption granted on an application under subsection (5) will be for an initial term specified by the Commissioner in the instrument of exemption (which will be based on the expected development period but may not exceed a period of 5 years). (8) The initial term of an exemption may, on application to the Commissioner, be extended for a further period specified by the Commissioner if the Commissioner is satisfied that the development of the land is occurring over a reasonable period in the circumstances. (9) An exemption will cease if the Commissioner determines that— (a) the development has been substantially completed; or (b) the development has not been substantially commenced within the period of 2 years after the grant of the application (or such longer period as the Commissioner may allow). (10) An application under subsection (5) or (8) must be in the form, and contain the information, determined by the Commissioner. (11) For the avoidance of doubt, the Commissioner may only treat a related corporation as if it were a single corporation if an exemption has been granted on an application under subsection (5).