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Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019 (34 of 2019)

Schedule 1 Non-concessional MIT income

Part 1 Main amendments

Taxation Administration Act 1953

11 At the end of Subdivision 12-H of Part 2-5 in Schedule 1

Add:

12-435 Meaning of non-concessional MIT income

Non-concessional MIT income means any of the following:

(a) *MIT cross staple arrangement income;

(b) *MIT trading trust income;

(d) *MIT residential housing income.

12-436 Meaning of asset entity , operating entity , cross staple arrangement and stapled entity

(1) An asset entity in relation to an income year is a trust or partnership that is not covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year.

(2) An operating entity in relation to an income year is a trust, partnership or company that is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997 in relation to the income year.

(3) For the purposes of this section, in determining whether a partnership or company is covered by subsection 275-10(4) of the Income Tax Assessment Act 1997, treat the partnership or company as a trust.

(4) A cross staple arrangement is an *arrangement that is entered into by 2 or more entities (the arrangement entities ) if:

(a) at least one of the arrangement entities is an *asset entity; and

(b) at least one of the arrangement entities is an *operating entity; and

(i) one or more other entities (the external entities )each hold a *total participation interest in each arrangement entity;

(ii) the sum of the total participation interests held by the external entities in each arrangement entity is 80% or more.

(5) For the purposes of subparagraph (4)(c)(ii), in working out the sum of the *total participation interests held by the external entities in each arrangement entity, take into account:

(a) a particular *direct participation interest; or

(b) a particular *indirect participation interest;

held in the arrangement entity only once if it would otherwise be counted more than once.

(6) Subsection (7) applies if:

(a) an external entity holds *total participation interests in 2 or more arrangement entities; and

(b) either:

(i) the amount (the lowest participation interest amount ) of one of those participation interests falls short of the amount of each of the other participation interests; or

(ii) the amount (the lowest participation interest amount ) of 2 or more of those participation interests is the same but falls short of the amount of each of the other participation interests.

(7) For the purposes of paragraph (4)(c), treat the amount of the *total participation interest held by the external entity in each of the arrangement entities as being equal to the lowest participation interest amount.

(8) Each of the entities that entered into the *cross staple arrangement is a stapled entity in relation to the cross staple arrangement.

12-437 Meaning of MIT cross staple arrangement income

(1) This section applies if:

(a) an amount is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust's *net income, or in the case of an *AMIT, the trust's total assessable income, for the income year); and

(b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and

(2) The amount is MIT cross staple arrangement income of the *managed investment trust if:

(a) either:

(i) the *managed investment trust is an *asset entity in relation to the income year and is a *stapled entity in relation to a *cross staple arrangement; or

(ii) the second entity is an asset entity in relation to the income year and is a stapled entity in relation to a cross staple arrangement; and

(b) either:

(i) if subparagraph (a)(i) applies - the second entity is an *operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; or

(ii) if subparagraph (a)(ii) applies - another entity (the third entity ) is an operating entity in relation to the income year and is a stapled entity in relation to the cross staple arrangement; and

(i) if subparagraph (a)(i) applies - the amount is derived, received or made by the managed investment trust from the second entity; or

(ii) if subparagraph (a)(ii) applies - the amount is attributable to an amount derived, received or made by the second entity from the third entity.

(3) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it isattributable to an amount that satisfies the following requirements:

(a) the amount is derived, received or madeby a *stapled entity in relation to the *cross staple arrangement from an entity that is not a stapled entity in relation to the cross staple arrangement;

(b) the amount mentioned in paragraph (a) is *rent from land investment.

(4) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is, or is attributable to,an amount covered by subsection 12-438(1).

Note: The managed investment trust may be an asset entity in relation to the cross staple arrangement. If so, it may have no MIT cross staple arrangement income for the income year as a result of the operation of this subsection.

(5) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is, or is attributable to, *rent from land investment that is:

(a) attributable to a facility, or an improvement to a facility; and

(b) referable to a time in the income year when the facility, or the improvement to the facility, is covered by section 12-439.

(6) Subsection (7) applies if:

(a) an *asset entity in relation to the income year mentioned in paragraph (1)(a) makes a *capital gain because an *operating entity in relation to the income year *acquires an asset from the asset entity; and

(b) the asset entity and the operating entity are *stapled entities in relation to the *cross staple arrangement.

(7) The amount is not MIT cross staple arrangement income of the *managed investment trust under subsection (2) to the extent that it is attributable to the *capital gain.

12-438 MIT cross staple arrangement income - de minimis exception

(1) For the purposes of subsection 12-437(4), this subsection covers an amount if:

(a) the amount is *MIT cross staple arrangement income for the income year of an *asset entity in relation to the *cross staple arrangement; and

(b) the MIT cross staple arrangement income of the asset entity for the previous income year does not exceed 5% of the amount mentioned in subsection (3).

(2) For the purposes of subsection (1), in working out the *MIT cross staple arrangement income of the *asset entity for the previous income year, disregard subsections 12-437(4) and (5).

(3) The amount is:

(a) if the *asset entity is not an *AMIT for the income year - the assessable income of the asset entity for the previous income year (worked out for the purposes of determining the *net income of the asset entity for the income year); or

(b) if the asset entity is an AMITfor the income year - the total assessable income (as mentioned in subsection 276-265(2) of the Income Tax Assessment Act 1997) of the asset entity for the previous income year.

(4) For the purposes of subsection (3), in working out the assessable income, or the total assessable income, of the *asset entity for the previous income year, disregard any *net capital gain of the asset entity for that year.

(5) If the *asset entity did not exist in the previous income year:

(a) treat references in this section to the previous income year as instead being references to the income year; and

(b) treat references in this section to the *MIT cross staple arrangement income of the asset entity as instead being references to a reasonable estimate of the MIT cross staple arrangement income of the asset entity; and

(c) treat references in this section to the assessable income of the asset entity as instead being references to a reasonable estimate of the assessable income of the asset entity; and

(d) treat references in this section to the total assessable income of the asset entity as instead being references to a reasonable estimate of the total assessable income of the asset entity.

(6) If the *asset entity exists in an income year, but is not a *managed investment trust in relation to that income year, for the purposes of this section, treat it as a managed investment trust in relation to that income year that is not an *AMIT for that income year.

12-439 MIT cross staple arrangement income - approved economic infrastructure facility exception

(1) This section covers a facility at a time if:

(a) the facility is covered by an approval of the Treasurer under this section that is in force at that time; and

(b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use.

(2) This section covers an improvement to a facility at a time if:

(a) the improvement to the facility is covered by an approval of the Treasurer under this section that is in force at that time; and

(b) that time is no later than the end of the period of 15 years beginning on the day on which an asset that is part of the facility is first put to use after it has been improved under the improvement.

(3) An *Australian government agency (other than the Commonwealth) may make an application to the Treasurer in respect of a facility, or an improvement to a facility, specified in the application.

(4) The Treasurer may approve the facility, or the improvement to the facility, specified in the application under subsection (2) if the Treasurer is satisfied that the following criteria are met:

(a) the facility is an *economic infrastructure facility;

(b) in the case of an application in respect of a facility:

(i) the estimated capital expenditure on the facility is $500 million or more; and

(ii) the facility is yet to be constructed; and

(iii) the facility will significantly enhance the long-term productive capacity of the economy; and

(iv) approving the facility is in the national interest;

(i) the estimated capital expenditure on the improvement is $500 million or more; and

(ii) the improvement is yet to be constructed; and

(iii) the improvement will significantly enhance the long-term productive capacity of the economy; and

(iv) approving the improvement is in the national interest.

(5) An economic infrastructure facility is a facility that is any of the following:

(a) transport infrastructure;

(b) energy infrastructure;

(d) water infrastructure.

(6) An approval under subsection (4):

(a) must be in writing; and

(b) must specify the facility, or the improvement, that is approved; and

(d) may contain any other information that the Treasurer considers appropriate.

(7) The Treasurer may publish an approval under subsection (4) in any way that he or she considers appropriate.

(8) If the Treasurer decides not to approve the facility, or the improvement to a facility, specified in the application under subsection (3), the Treasurer must notify the applicant of the decision, in writing, as soon as practicable after making the decision.

12-440 Transitional - MIT cross staple arrangement income

(1) This section applies if:

(a) before 27 March 2018, an *Australian government agency:

(i) decided to approve the *acquisition, creation or lease of a facility; and

(ii) publicly announced that decision; and

(iii) took significant preparatory steps to implement that decision; and

(b) either:

(i) a *cross staple arrangement was entered into in relation to the facility before 27 March 2018; or

(ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and

(c) all the entities that are *stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and

(d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5).

(2) This section also applies if:

(a) any of the following applies:

(i) an entity entered into a contract before 27 March 2018 for the *acquisition, creation or lease of a facility;

(ii) an entity owns, or is the lessee of, a facility at a time before 27 March 2018; and

(b) either:

(i) a *cross staple arrangement was entered into in relation to the facility before 27 March 2018; or

(ii) it was reasonable on 27 March 2018 to conclude that a cross staple arrangement will be entered into in relation to the facility; and

(c) all the entities that are *stapled entities in relation to the cross staple arrangement already existed before 27 March 2018; and

(d) each entity that is a stapled entity in relation to the cross staple arrangement has made a choice in accordance with subsection (5).

(3) An amount included in the assessable income for an income year of a *managed investment trust is not MIT cross staple arrangement income of the managed investment trust if:

(a) the amount is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and

(b) the amount relates to the facility; and

(d) either:

(i) if subparagraph 12-437(2)(a)(i) applies - the amount is *rent from land investment paid from an *operating entity in relation to the cross staple arrangement to the managed investment trust; or

(ii) if subparagraph 12-437(2)(a)(ii) applies - the amount is attributable to rent from land investment paid from an operating entity in relation to the cross staple arrangement to an *asset entity in relation to the cross staple arrangement; and

(e) the time when the amount was derived, received or made by the managed investment trust meets the requirements in subsection (4).

(4) The time meets the requirements in this subsection if:

(a) where the facility to which the *cross staple arrangement relates is not an *economic infrastructure facility - the time is before 1 July 2031 and before the later of:

(i) 1 July 2026; and

(ii) the end of the period of 7 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income; or

(b) where the facility to which the cross staple arrangement relates is an economic infrastructure facility - the time is before 1 July 2039 and before the later of:

(i) 1 July 2034; and

(ii) the end of the period of 15 years beginning on the earliest day on which an asset that is part of that facility is first put to use for the purpose of producing assessable income.

(5) An entity makes a choice in accordance with this subsection if:

(a) the entity makes the choice in the *approved form; and

(b) the entity makes the choice no later than:

(i) 30 June 2019; or

(ii) a later time allowed by the Commissioner; and

(6) The choice cannot be revoked.

12-441 Integrity rule - concessional cross staple rent cap

(1) This section applies if:

(a) a *managed investment trust in relation to an income year derives, receives or makes an amount of *excepted MIT CSA income for the income year; and

(b) if the amount is excepted MIT CSA income because of subsection 12-440(3) - paragraph 12-440(4)(b) applies (15 year concession); and

(c) the amount of excepted MIT CSA income is, or is attributable to, *rent from land investment under a lease (the cross staple lease ) entered into by:

(i) the *asset entity mentioned in paragraph 12-437(2)(a) (the relevant asset entity ); and

(ii) the *operating entity mentioned in paragraph 12-437(2)(b) (the relevant operating entity ).

(2) To the extent (if any) that the amount of the relevant asset entity's *excepted MIT CSA income exceeds its *concessional cross staple rent cap for the income year, the following provisions do not apply to the amount of the *managed investment trust's excepted MIT CSA income mentioned in paragraph (1)(a):

(a) subsection 12-437(5);

(b) subsection 12-440(3).

(3) If the relevant asset entity is not a *managed investment trust in relation to the income year, for the purposes of subsection (2), treat it as a managed investment trust in relation to the income year.

12-442 Meaning of excepted MIT CSA income

An amount is excepted MIT CSA income of a *managed investment trust in relation to an income year if it would be *MIT cross staple arrangement income of the managed investment trust but for any of the following provisions:

(a) subsection 12-437(5);

(b) subsection 12-440(3).

12-443 Concessional cross staple rent cap - existing lease with specified rent or rent method

(1) This section applies if:

(a) the amount mentioned in subsection 12-441(1) is *excepted MIT CSA income because of subsection 12-440(3); and

(b) the cross staple lease was entered into before 27 March 2018; and

(i) the amount of annual rent under the lease for the first year of the lease that ends after 27 March 2018;

(ii) an objective method for determining the amount of annual rent under the lease; and

(d) if subparagraph (c)(ii) applies - the method is set out in the cross staple lease, or the associated documents, before 27 March 2018.

(2) If subparagraph (1)(c)(ii) applies, the concessional cross staple rent cap for an income year of the *managed investment trust is the amount of annual rent determined for the income year under the method mentioned in that subparagraph.

(3) If subparagraph (1)(c)(ii) does not apply, the concessional cross staple rent cap for an income year of the *managed investment trust is:

(a) for an income year where the lease, or the associated documents, specify the amount of annual rent for the corresponding year of the lease under subsection (4) - that amount; or

(b) for an income year where that amount is not so specified - the amount worked out under paragraph (a) in relation to the most recent year of the lease for which an amount is so specified, indexed annually in accordance with Subdivision 960-M of the Income Tax Assessment Act 1997.

(4) An income year and a year of the lease correspond to each other under this subsection if both of those years end:

(a) after a particular 27 March; and

(b) on or before the next 27 March.

12-444 Concessional cross staple rent cap - general

(1) This section applies if section 12-443 does not apply.

(2) The concessional cross staple rent cap for an income year of the *managed investment trust is worked out as follows:

(a) first, work out a reasonable estimate of whichever of the following is applicable:

(i) if the relevant asset entity is a trust that is not an *AMIT - the relevant asset entity's *net income, or *tax loss, for the income year;

(ii) if the relevant asset entity is an AMIT - the sum of the relevant asset entity's *trust components with the character of assessable income, or the relevant asset entity's tax loss, for the income year;

(iii) if the relevant asset entity is a partnership - the relevant asset entity's net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), for the income year;

(b) next, work out a reasonable estimate of whichever of the following is applicable:

(i) if the relevant operating entity is a trust that is not an AMIT - the operating asset entity's net income, or tax loss, for the income year;

(ii) if the relevant operating entity is a partnership - the relevant operating entity's net income, or partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), for the income year;

(iii) otherwise - the relevant operating entity's taxable income or tax loss for the income year;

(d) next, multiply the result of paragraph (c) by 0.8;

(e) next, subtract the result of paragraph (a) from the result of paragraph (d);

(f) next, add the amount of *excepted MIT CSA income mentioned in subsection 12-441(1) to the result of paragraph (e).

If the result of paragraph (f) is a positive number, the concessional cross staple rent cap is that result. Otherwise, the concessional cross staple rent cap is nil.

(3) For the purposes of paragraphs (2)(a) and (b):

(a) treat the amount of a *tax loss, or of a partnership loss (within the meaning of section 90 of the Income Tax Assessment Act 1936), as a negative number; and

(b) disregard any *tax loss for a previous income year of the relevant asset entity or relevant operating entity.

12-445 Asset entity to allocate deductions first against rental income that is not MIT cross staple arrangement income

(1) This section applies if:

(a) an entity is an *asset entity in relation to an income year and is a *stapled entity in relation to a *cross staple arrangement; and

(b) the entity is entitled to a deduction for the income year against its assessable income that arises from *rent from land investment that it derives or receives in the income year; and

(c) the entity derives, receives or makes an amount of *excepted MIT CSA income in the income year (disregarding this section and subsection 12-441(2)); and

(d) the amount of that excepted MIT CSA income exceeds the entity's *concessional cross staple rent cap for the income year.

(2) The amount of the deduction can only be deducted against an amount of assessable income of the *asset entity as follows:

(a) first, the amount can only be deducted against an amount of assessable income that is *excepted MIT CSA income, to the extent that the excepted MIT CSA income does not exceed the entity's *concessional cross staple rent cap for the income year;

(b) next, if an amount of the deduction remains after applying the rule in paragraph (a), the amount can only be deducted against an amount of assessable income that is *MIT cross staple arrangement income;

(c) next, if an amount of the deduction remains after applying the rules in paragraphs (a) and (b), the amount can be deducted against an amount of assessable income in accordance with other provisions of this Act.

(3) If the *asset entity is not a *managed investment trust in relation to the income year, for the purposes of determining whether an amount of its assessable income for the income year is *MIT cross staple arrangement income, treat it as a managed investment trust in relation to the income year.

12-446 Meaning of MIT trading trust income

(1) This section applies if:

(b) the amount mentioned in paragraph (a) is, or is attributable to, an amount derived, received or made from another entity (the second entity ); and

(2) The amount is MIT trading trust income of the *managed investment trust if:

(a) the managed investment trust holds a *total participation interest in the second entity of greater than nil; and

(b) the amount arises because of that total participation interest; and

(i) is a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to the income year; or

(ii) is a partnership or a trust that is not a unit trust, but would be such a trading trust in relation to the income year if it were a unit trust throughout the income year; and

(d) the second entity is not a *public trading trust in relation to the income year.

(3) The amount is not MIT trading trust income of the *managed investment trust under subsection (2) to the extent that it is attributable to a *capital gain made from *CGT event E4 or *CGT event E10.

12-447 Transitional - MIT trading trust income

(1) This section applies if:

(a) an amount (the relevant amount ) included in the assessable income for an income year of a *managed investment trust is *MIT trading trust income of the managed investment trust (disregarding this section); and

(b) immediately before 27 March 2018, the managed investment trust held a *total participation interest (the pre-announcement TPI ) of greater than nil in the second entity mentioned in subsection 12-446(1) (the second entity ); and

(2) Treat part of the relevant amount as not being *MIT trading trust income of the *managed investment trust.

(3) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (4) and (5).

(4) If the *total participation interest (the post-announcement TPI ) held by the *managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre-announcement TPI, work out that fraction by dividing:

(a) the pre-announcement TPI;

by:

(b) the post-announcement TPI.

(5) Otherwise, the fraction is 1.

12-448 Meaning of MIT agricultural income , Australian agricultural land for rent and Division 6C land

(1) This section applies if:

(b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12-405(1)(a), (b), (c), (d) or (e).

(2) The amount is MIT agricultural income of the *managed investment trust to the extent that it is attributable to an asset that is *Australian agricultural land for rent (whether or not held by the managed investment trust).

(3) Australian agricultural land for rent is *Division 6C land situated in Australia that:

(a) is used, or could reasonably be used, for carrying on a *primary production business; and

(b) is held primarily for the purposes of deriving or receiving rent.

(4) For the purposes of this section, if an *economic infrastructure facility is a fixture on *Australian agricultural land for rent:

(a) treat the economic infrastructure facility as being separate from the Australian agricultural land for rent; and

(b) treat the economic infrastructure facility as not being Australian agricultural land for rent.

(5) Division 6C land is land (within the meaning of Division 6C of Part III of the Income Tax Assessment Act 1936), and includes a thing if an investment in the thing would be an investment in land under subsection 102MB(1) of that Act.

12-449 Transitional - MIT agricultural income

(1) This section applies if:

(a) an amount (the relevant amount ) is included in the assessable income for an income year of a *managed investment trust in relation to the income year (worked out for the purposes of determining the trust's *net income, or in the case of an *AMIT, the trust's total assessable income, for the income year); and

(b) the relevant amount would be *MIT agricultural income (disregarding this section) of the managed investment trust because it is attributable to an asset that is *Australian agricultural land for rent; and

(d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the asset:

(i) the managed investment trust held the asset just before 27 March 2018; or

(ii) before 27 March 2018, the managed investment trust entered into a contract for the *acquisition or lease of the asset; and

(e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity ) held the asset:

(i) the second entity held the asset just before 27 March 2018; or

(ii) before 27 March 2018, the second entity entered into a contract for the acquisition or leaseof the asset; and

(f) if paragraph (e) applies - immediately before 27 March 2018, the managed investment trust held a *total participation interest (the pre-announcement TPI ) of greater than nil in the second entity.

(2) If paragraph (1)(d) applies, treat the relevant amount as not being *MIT agricultural income of the *managed investment trust.

(3) If paragraph (1)(e) applies, treat part of the relevant amount as not being *MIT agricultural income of the *managed investment trust.

(4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6).

(5) If the *total participation interest (the post-announcement TPI ) held by the *managed investment trust in the second entity at the end of the most recent income year ending before it derived, received or made the relevant amount exceeds the pre-announcement TPI, work out that fraction by dividing:

(a) the pre-announcement TPI;

by:

(b) the post-announcement TPI.

(6) Otherwise, the fraction is 1.

12-450 Meaning of MIT residential housing income

(1) This section applies if:

(b) the amount mentioned in paragraph (a) is not an amount mentioned in paragraph 12-405(1)(a), (b), (c), (d) or (e).

(2) The amount is MIT residential housing income of the *managed investment trust to the extent that it is attributable to a *residential dwelling asset (whether or not held by the managed investment trust).

Asset used to provide affordable housing

(3) The amount is not MIT residential housing income of the *managed investment trust under subsection (2) to the extent that it is referable to the use of the *residential dwelling asset to *provide affordable housing.

(4) If the amount is, or is attributable to, a *capital gain from a *CGT event, subsection (3) applies only if:

(a) the entity that held the *residential dwelling asset just before the time (the CGT event time ) when the CGT event happened had held it for at least 3,650 days (consecutive or not); and

(b) each of those days satisfies the following requirements:

(i) the day is on or after 1 July 2017 and before the CGT event time;

(ii) the residential dwelling asset was used on the day to *provide affordable housing.

12-451 Transitional - MIT residential housing income

(1) This section applies if:

(b) the relevant amount would be *MIT residential housing income (disregarding this section) of the *managed investment trust because it is attributable to a facility that consists of or contains a *residential dwelling asset; and

(d) if the managed investment trust derived, received or made the relevant amount because the managed investment trust held the facility:

(i) the managed investment trust held the facility just before the time mentioned in subsection (7); or

(ii) before the time mentioned in subsection (7), the managed investment trust entered into a contract for the *acquisition, creation or lease of the facility; and

(e) if the managed investment trust derived, received or made the relevant amount because another entity (the second entity ) held the facility:

(i) the second entity held the facility just before the time mentioned in subsection (7); or

(ii) before the time mentioned in subsection (7), the second entity entered into a contract for the acquisition, creation or lease of the facility; and

(f) if paragraph (e) applies - immediately before the time mentioned in subsection (7), the managed investment trust held a *total participation interest (the pre-announcement TPI ) of greater than nil in the second entity.

(2) If paragraph (1)(d) applies, treat the relevant amount as not being *MIT residential housing income of the *managed investment trust.

(3) If paragraph (1)(e) applies, treat part of the relevant amount as not being *MIT residential housing income of the *managed investment trust.

(4) That part is equal to the relevant amount multiplied by the fraction worked out under subsections (5) and (6).

(a) the pre-announcement TPI;

by:

(b) the post-announcement TPI.

(6) Otherwise, the fraction is 1.

(7) The time is 4.30 pm, by legal time in the Australian Capital Territory, on 14 September 2017.

12-452 Meaning of residential dwelling asset

(1) A residential dwelling asset is an asset that:

(a) is a *dwelling; and

(b) is *taxable Australian real property; and

(d) is not a dwelling that:

(i) is used primarily to provide specialist disability accommodation (within the meaning of the National Disability Insurance Scheme (Specialist Disability Accommodation Conditions) Rule 2018); and

(ii) is enrolled in accordance with section 6 of that Rule; and

(e) is not a dwelling that:

(i) is used primarily to provide disability accommodation; and

(ii) is a dwelling of a kind prescribed by the regulations for the purposes of this subparagraph.

(2) Section 118-120 (Extension to adjacent land) applies in relation to this section in the same way as it applies in relation to Subdivision 118-B.

(3) To avoid doubt, for the purposes of applying section 118-120 in relation to this section, a *dwelling's *adjacent land may include land used primarily for private or domestic purposes in association with the dwelling and with one or more other dwellings.

12-453 MIT agricultural income and MIT residential housing income - capital gains in relation to membership interests

(1) Subsection (2) applies if:

(a) any of the following provisions apply in relation to an amount:

(i) section 12-448;

(ii) section 12-450; and

(b) the amount is, or is attributable to, a *capital gain from a *CGT event in relation to an asset that is a *membership interest in an entity; and

(c) just before the CGT event happened, the entity held, directly or indirectly, one or more assets that are any of the following;

(i) *Australian agricultural land for rent;

(ii) a *residential dwelling asset.

(2) For the purposes of subsections 12-448(2) and 12-450(2):

(a) in a case where the *membership interest mentioned in subsection (1) passes the principal asset test in section 855-30 of the Income Tax Assessment Act 1997 immediately before the time the *CGT event happens:

(i) if the assets mentioned in paragraph (1)(c) are all *Australian agricultural land for rent - treat the *capital gain as being wholly attributable to the Australian agricultural land for rent; or

(ii) if the assets mentioned in paragraph (1)(c) are all *residential dwelling assets - treat the capital gain as being wholly attributable to residential dwelling assets; or

(iii) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the *market value of the membership interest that is attributable to Australian agricultural land for rent equals or exceeds the market value of the membership interest that is attributable to residential dwelling assets - treat the capital gain as being wholly attributable to Australian agricultural land for rent; or

(iv) if all the assets mentioned in paragraph (1)(c) are Australian agricultural land for rent and residential dwelling assets, and the market value of the membership interest that is attributable to Australian agricultural land for rent falls short of the market value of the membership interest that is attributable to residential dwelling assets - treat the capital gain as being wholly attributable to residential dwelling assets; or

(b) in any other case - treat the capital gain:

(i) as not being attributable to Australian agricultural land for rent; and

(ii) as not being attributable to residential dwelling assets.

(3) For the purposes of subsection (2), in determining whether the *membership interest passes the principal asset test, treat references in section 855-30 of the Income Tax Assessment Act 1997 to *taxable Australian real property as instead being references to an asset that is any of the following:

(a) *Australian agricultural land for rent;

(b) a *residential dwelling asset.

(4) For the purposes of this section, in working out the *market value of an asset, work out that market value just before the time the *CGT event mentioned in paragraph (1)(b) happens.

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