Section FE 40 — Income Tax Act 2007: Tiered ownership interests

FE 40 Tiered ownership interests When this section applies (1) This section applies when a person has a direct ownership interest in a company ( company A ), and that company has an ownership interest in another company ( company B ). When ownership interest less than 50% (2) If the person’s direct ownership interest in company A is less than 50%, they are treated as holding an indirect ownership interest in company B. The interest is calculated by multiplying the percentage that is the person’s direct ownership interest in company A by the percentage that is company A’s ownership in company B. When ownership interest more than 50% (3) If the person’s direct ownership interest in company A is equal to or more than 50%, they are treated as holding an indirect ownership interest in company B that is equal to company A’s ownership interest in company B. Defined in this Act: company , Compare: 2004 No 35 s FG 2(4)