Question 26

This question seeks information regarding capital gains and capital losses made in relation to non portfolio interests in foreign companies which will enable us to assess if there is a risk to revenue from foreign sourced capital gains and capital losses not being returned correctly.

To complete this question you need to show the total amount of the capital gain/losses made in respect of non portfolio interests in foreign companies and the amount of any reductions made under Subdivision 768-G of ITAA 1997.

Under Subdivision 768-G of the ITAA 1997, if a company held a voting interest of at least 10% in a foreign company, and held that interest for a continuous period of at least 12 months in the two years before the specified capital gains tax (CGT) event, it may be entitled to apply this measure. Refer to Subdivision 768-G of the ITAA 1997 for guidance.

If you had a CGT event in relation to your interest in a foreign company, answer 'Yes' at label A of question 26 and complete the required label fields:

• At item 26, label B, write the total of your capital gain amounts in respect of your interests in foreign companies (before any reduction under Subdivision 768-G).
• At item 26, label C, write the total amount of any capital gain reduction under Subdivision 768-G.
• At item 26, label D, write the total of your capital loss amounts in respect of your interests in foreign companies (before any reduction under Subdivision 768-G).
• At item 26, label E, write the total amount of any capital loss reduction under Subdivision 768-G.

Example

During the income year, AAA Co, an Australian resident company, sold shares in three foreign-resident companies BBB Co, CCC Co and DDD Co.

The sale of the shares in BBB Co resulted in a capital gain under CGT event A1 of $750,000. This amount of capital gain was reduced by 42%, or $315,000, in accordance with Subdivision 768-G of the ITAA 1997 resulting in a capital gain amount of $435,000.

The sale of shares in CCC Co resulted in a capital loss under CGT event A1 of $769,000. This amount of capital loss was reduced by 50%, or $384,500, in accordance with Subdivision 768-G of the ITAA 1997 resulting in a capital loss amount of $384,500.

The sale of shares in DDD Co resulted in a capital loss under CGT event A1 of $50,000. This amount was not reduced by Subdivision 768-G of the ITAA 1997.

To complete this question AAA Co writes the total capital gain amount of $750,000 at label B and the total capital gain reduction amount of $315,000 at label C. AAA Co adds the capital loss amounts from the sale of shares in CCC Co and DDD Co and writes the total amount of $819,000 at label D. AAA Co writes the total capital loss reduction amount of $384,500 at label E.