Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 1 - General  

SECTION 23AK   AMOUNTS PAID OUT OF ATTRIBUTED FOREIGN INVESTMENT FUND INCOME NOT ASSESSABLE  

When this section applies

23AK(1)    
This section applies if:

(a) either:

(i) a FIF attribution account payment of a kind referred to in former paragraph 603(1)(a), (b), (c), (d), (f), (g) or (h) is made to a taxpayer (other than a partnership or taxpayer in the capacity of trustee of a trust); or

(ii) a FIF attribution account payment of a kind referred to in former paragraph 603(1)(e) is made to a taxpayer; and

(b) on the making of the payment, a post FIF abolition debit arises, for the FIF attribution account entity making the payment, in relation to the taxpayer.

Post FIF abolition debit arises

23AK(2)    

A post FIF abolition debit arises for a FIF attribution account entity (the eligible entity ) in relation to a taxpayer if:

(a) the eligible entity makes a FIF attribution account payment to the taxpayer or to a FIF attribution account entity; and

(b) immediately before the eligible entity makes the FIF attribution account payment, there is a post FIF abolition surplus for the eligible entity in relation to the taxpayer.

Amount of post FIF abolition debit

23AK(3)    

The amount of the post FIF abolition debit is the lesser of:

(a) the post FIF abolition surplus; and

(b) whichever of the following is applicable:

(i) if the attribution account payment is made to the taxpayer - the FIF attribution account payment;

(ii) in any other case - the taxpayer ' s FIF attribution account percentage (for the FIF attribution account entity to which the payment is made) of the FIF attribution account payment;

reduced by any attribution debit that arises under section 372 for the entity in relation to the taxpayer as a result of the making of the payment.

When the post FIF abolition debit arises

23AK(4)    
The post FIF abolition debit arises when the FIF attribution account payment is made.

When a post FIF abolition surplus exists

23AK(5)    
A post FIF abolition surplus for a FIF attribution account entity in relation to a taxpayer exists at a particular time (the relevant time ) if the sum of:

(a) the entity ' s total FIF attribution credits (within the meaning of former section 605 ) that arose before the commencement of Schedule 1 to the Tax Laws Amendment (Foreign Source Income Deferral) Act (No. 1) 2010 ; and

(b) the entity ' s total post FIF abolition credits arising before the relevant time in relation to the taxpayer;

exceeds the sum of:

(c) the entity ' s total FIF attribution debits (within the meaning of former section 606 ) that arose before that commencement in relation to the taxpayer; and

(d) the entity ' s total post FIF abolition debits arising before the relevant time in relation to the taxpayer.

Post FIF abolition credit arises

23AK(6)    
A post FIF abolition credit arises for a FIF attribution account entity (the eligible entity ) in relation to a taxpayer if a FIF attribution account payment that requires a post FIF abolition debit for another entity in relation to the taxpayer is made to the eligible entity.

Amount of post FIF abolition credit

23AK(7)    
The amount of the post FIF abolition credit is equal to the amount of the post FIF abolition debit for the other entity.

When the post FIF abolition credit arises

23AK(8)    
The post FIF abolition credit arises when the FIF attribution account payment referred to in subsection (6) is made.

Effect of this section applying

23AK(9)    
If this section applies, the following provisions have effect:

(a) if the payment is of a kind referred to in former paragraph 603(1)(a) or (b) - the payment is not assessable income, and is not exempt income, to the extent of the debit;

(b) if the payment is of a kind referred to in former paragraph 603(1)(c) and, apart from this section, an amount would be included in the taxpayer ' s assessable income under section 92 in respect of an individual interest in the net income of the partnership of the year of income referred to in that paragraph - that amount is not assessable income, and is not exempt income, to the extent of the debit;

(c) if the payment is of a kind referred to in former paragraph 603(1)(d) and, apart from this section, an amount would be included in the taxpayer ' s assessable income under section 97 , 98A or 100 in respect of a share of the net income of the trust of the year of income referred to in that paragraph - that amount is not assessable income, and is not exempt income, to the extent of the debit;

(d) if the payment is of a kind referred to in former paragraph 603(1)(d) and, apart from this section, an amount would be assessable to the trustee of the trust referred to in that paragraph under section 98 in respect of a share of the net income of the trust of the year of income referred to in that paragraph - that amount is not so assessable to the extent of the debit;

(e) if the payment is of a kind referred to in former paragraph 603(1)(e) - the payment is not, to the extent of the debit, assessable to the taxpayer as mentioned in that paragraph;

(f) if the payment is of a kind referred to in former paragraph 603(1)(f) and, apart from this section, an amount would be included in the taxpayer ' s assessable income, of the year of income referred to in that paragraph, under section 99B in respect of the trust property referred to in that paragraph - that amount is not assessable income, and is not exempt income, to the extent of the debit;

(g) if the payment is of a kind referred to in former paragraph 603(1)(g) - the payment is not assessable income, and is not exempt income, to the extent of the debit;

(h) if the payment is of a kind referred to in former paragraph 603(1)(h) - the payment is not assessable income, and is not exempt income, to the extent of the debit.

23AK(10)   [ Other deduction provisions]  

This section is to be disregarded for the purposes of applying any other provision of this Act to determine allowable deductions.

23AK(11)   [ Interpretation]  

In this section:

FIF attribution account entity
has the same meaning as in former Part XI .

FIF attribution account payment
has the same meaning as in former Part XI .

FIF attribution account percentage
has the same meaning as in former Part XI .

trust
has the same meaning as in former Part XI , but does not include a trust covered by former subsection 605(11) .

Note:

A remade version of section 23AL is included in the Income Tax Assessment Act 1997 by item 748 of Schedule 2 to this Act.