Controlled private companies 043-04010070

When a company that the customer is involved in is assessed as a controlled private company then the income and assets of the company may be attributed to the customer if they are assessed as an attributable stakeholder. This assessment is made by a Complex Assessment Officer (CAO), based on information provided in the Private Company form (MOD PC) and accompanying documents.

If the company is not a controlled private company in relation to the customer, the assessment of the customer's interest in the company will be in accordance with pre 1 January 2002 rules for trusts and companies.

The control test looks at both formal and informal control and is applied on the grounds that the controller of a structure can use the assets for their own benefit or that of their family. The control test is used to determine if the customer (alone or with associates) holds:

• 50 percent or more of the direct voting interests, or
• a controlling interest (along with associates) of 15 percent or more in the income or capital

The source test only applies where a customer has transferred assets or services to a company after 7.30 pm AEST on 9 May 2000. The source test recognises that a customer transferring assets or services to a structure generally retains some means of control. It is used to determine if a company is under an obligation or could reasonably be expected to act in accordance with the directions or wishes of the customer.