Higher Education Endowment Fund (Consequential Amendments) Act 2007 (161 of 2007)

Schedule 1   Amendments

Part 1   Amendments

Future Fund Act 2006

68   After section 84

Insert:

84A Exemption from taxation

Income tax

(1) To avoid doubt, for the purposes of section 50-25 of the Income Tax Assessment Act 1997, the Board is taken to be a public authority constituted under an Australian law.

Note: This means that the Board is exempt from income tax.

State/Territory taxes

(2) To avoid doubt, the Board is not subject to taxation under a law of a State or Territory, if the Commonwealth is not subject to the taxation.

84B Franking credits

(1) For the purposes of the Income Tax Assessment Act 1997, the Board is taken to be an exempt institution that is eligible for a refund.

Note: See Division 207 of the Income Tax Assessment Act 1997 (franked distributions).

(2) Subsection (1) has effect despite subsection 207-115(1) of the Income Tax Assessment Act 1997.

(3) For the purposes of the Income Tax Assessment Act 1997, the Board's entitlement to a tax offset is to be determined as if any financial assets held by the Board were held by the Board in its own right.

84C Board must not have a significant stake in a foreign listed company

(1) The Board must take all reasonable steps to ensure that it does not hold a stake in a foreign listed company of more than 20%.

Stake

(2) The Financial Sector (Shareholdings) Act 1998 applies for the purposes of determining the Board's stake in a foreign listed company, with the following modifications:

(a) assume that the Board does not have any associates;

(b) assume that any financial assets held by the Board were held by the Board in its own right;

(c) disregard paragraph 8(1)(c) of Schedule 1 to that Act;

(d) the modification set out in subsection (3).

(3) For the purposes of determining the Board's stake in a foreign listed company, if, under a securities lending arrangement:

(a) at a particular time (the disposal time ), the Board disposed of a financial asset (the borrowed financial asset ) to another person (the borrower ); and

(b) the Board may come under an obligation to:

(i) re-acquire the borrowed financial asset from the borrower at a later time; or

(ii) acquire an identical financial asset from the borrower at a later time;

the borrowed financial asset is taken to be held by the Board during the period:

(c) beginning at the disposal time; and

(d) ending when the obligation mentioned in paragraph (b) is discharged or can no longer arise.

Validity of transactions

(4) A failure to comply with subsection (1) does not affect the validity of any transaction.