Commonwealth Consolidated Acts

TAXATION LAWS AMENDMENT ACT (NO. 1) 1997 - SCHEDULE 8

1  Paragraph 128TH(b)

Omit "in the course of carrying on a business of lending money, or otherwise in connection with such a business,".

2  After paragraph 128TH(b)

Insert:

                    (ba)  the disposal takes place:

                              (i)  in any case--in the course of the taxpayer carrying on a business of lending money or otherwise in connection with such a business of the taxpayer; or

                             (ii)  if the taxpayer is a company that is a subsidiary of another company--while the one or more members of the direct ownership group of the taxpayer (see subsection 128TL(3)) are each carrying on a business of lending money; and

3  Paragraphs 128TJ(a) and (b)

Repeal the paragraphs, substitute:

                     (a)  ordinary shares in an SME (see section 128TK) are issued to the taxpayer; and

                     (b)  the shares are issued:

                              (i)  in any case--in the course of the taxpayer carrying on a business of lending money or otherwise in connection with such a business of the taxpayer; or

                             (ii)  if the taxpayer is a company that is a subsidiary of another company--while the one or more members of the direct ownership group of the taxpayer (see subsection 128TL(3)) are each carrying on a business of lending money; and

4  Paragraph 128TJ(c)

Omit "company", substitute "SME".

5  At the end of Division 11B of Part III

Add:

128TL   Subsidiary and direct ownership group

             (1)  A company (the first company ) is a subsidiary of another company (the second company ) if all the shares in the first company are beneficially owned by:

                     (a)  the second company; or

                     (b)  a company that is, or 2 or more companies each of which is, a subsidiary of the second company; or

                     (c)  the second company and a company that is, or 2 or more companies each of which is, a subsidiary of the second company.

             (2)  For the purposes of subsection (1), if a company is a subsidiary of another company (including a company that is such a subsidiary because of a previous application or applications of this subsection), every company that is a subsidiary of the first‑mentioned company is taken to be a subsidiary of that other company.

             (3)  The one or more companies in whichever of paragraph (1)(a), (b) or (c) applies are the direct ownership group of the first company.

6  Application

The amendments made by this Part apply where the taxpayer acquired a threshold interest in an SME on or after 1 July 1996.