Section YC 15 — Income Tax Act 2007: Directors’ knowledge of failure to meet requirements of continuity provision

YC 15 Directors’ knowledge of failure to meet requirements of continuity provision When this section applies (1) This section applies if— (a) for a company at a time, the requirements of a continuity provision would not have been met but for the application of section YC 10 , YC 11 , or both; and (b) the failure, but for that concessionary application, to meet the requirements would have occurred in the absence of transactions of the following types: (i) the sale of shares in a company in the ordinary course of trading on a recognised exchange between less than 10% holders: (ii) the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the definition of widely-held trust , held by less than 10% holders: (iii) the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the definition of widely-held trust , which were acquired from less than 10% holders by the manager or trustee of the unit trust in the ordinary course of their activities in relation to the unit trust: (iv) the transfer of shares in a company other than in the ordinary course of trading on a recognised exchange between persons, each of which is not a company associated with the company and has a direct voting interest or direct market value interest of less than 5%, calculated before the application of section YC 4 as modified by section YC 11 : (v) the issue, redemption, or cancellation by a company, or the transfer to or from the company, or the transfer to an employee of the company from a trustee of a trust with no beneficiary other than the company and the company's employees, of shares in the company, or options over shares in the company, that in total for the company's income year would be a direct voting interest or direct market value interest of less than 5% if held by a single person; and (c) the directors of the company know or could reasonably be expected to know, without making enquiries specifically for the purposes of applying the continuity provisions, that the requirements of the continuity provision would not have been met but for that concessionary application. Requirements of continuity provision treated as not met (2) The requirements of the continuity provision are treated as not met at the time. Meaning of less than 10% holder (3) In this section, less than 10% holder means a person whose direct voting interest or direct market value interest is, at all relevant times, an interest to which section YC 10 applies. Defined in this Act: company , continuity provision , director , less than 10% holder , recognised exchange , share , trustee , unit trust , widely-held trust , Compare: 2004 No 35 s OD 5(8) Section YC 15(1)(b): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section YC 15(1)(b)(iii): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section YC 15(1)(b)(iv): added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section YC 15(1)(b)(iv): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section YC 15(1)(b)(v): added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section YC 15(1)(b)(v): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).