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Control test

There are two control tests, one is in relation to private trusts and other one is in relation to private companies.

 

Control test (private companies)

An individual passes the control test in relation to a company if:

  • the aggregate of the direct voting interests in the company held by individual or their associates is 50% or more,
  • the aggregate of the direct control interests in the company held by an individual or their associates is 15% or more,
  • the company is sufficiently influenced by the individual, their associates or 2 or more entities covered by the preceding dot points, or
  • the individual, either alone or with associates is in a position to exercise control over the company.

 

Control test (private trusts)

According to section 52ZZH(2) of the VEA, an individual passes the control test in relation to a trust if:

  • the individual, or their associate (VEA section 52ZZH(2)) (other than an associate covered by paragraph 52ZQ(1)(j) of the VEA), is a trustee,
  • a group (VEA section 52ZQ(1)) in relation to the individual can remove or appoint the trustee/s,
  • a group in relation to the individual can vary the trust deed or veto the trustee's decisions,
  • the total of the direct or indirect beneficial interests in the body or income of the trust held by the individual or their associates is 50% or more,
  • a group in relation to the individual had the power (by means of the group exercising any power of appointment, revocation or otherwise) to obtain, with or without the consent of any other entity, beneficial enjoyment of trust income or assets,
  • a group in relation to the individual was able in any manner whatsoever, directly or indirectly, to control the application of the trust income or assets,
  • a group in relation to the individual is capable under a scheme of gaining beneficial enjoyment or control of the application of the trust, or
  • a trustee of the trust was accustomed, obliged (formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the individual.

 

 

A scheme means:

  • any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings, or
  • any scheme, plan, proposal, action, course of action or course of conduct, whether there are 2 or more parties or only one party involved.

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