Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 768 - Foreign non-assessable income and gains  

Subdivision 768-G - Reduction in capital gains and losses arising from CGT events in relation to certain voting interests in active foreign companies  

Active foreign business asset percentage

SECTION 768-510   Active foreign business asset percentage  

768-510(1)    
The active foreign business asset percentage of a company (the foreign company ) that is a foreign resident, in relation to the holding company mentioned in section 768-505 , at the time of the CGT event mentioned in that section, is worked out in accordance with this section.

Market value method

768-510(2)    
Work out that percentage under section 768-520 if:

(a) the holding company has made a choice under subsection 768-515(1) in relation to the foreign company for that time; and

(b) there is sufficient evidence of the *market value at that time of:

(i) all *assets included in the total assets of the foreign company at that time; and

(ii) all *active foreign business assets of the foreign company at that time.

Book value method

768-510(3)    
Work out that percentage under section 768-525 if:

(a) the holding company has made a choice under subsection 768-515(2) in relation to the foreign company for that time; and

(b) there are *recognised company accounts of the foreign company for a period that ends no later than that time, but no more than 12 months before that time; and

(c) if the foreign company was in existence before the start of the period mentioned in paragraph (b) - there are recognised company accounts of the foreign company for a period that ends at least 6 months, but no more than 18 months, before the end of the period mentioned in paragraph (b).

Default method

768-510(4)    
Otherwise, that percentage is:

(a) 100% (if this section is being applied for the purposes of section 768-505 to reduce a *capital loss of the holding company); or

(b) zero (in any other case).