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  

Types of assets of a foreign company

SECTION 768-545   Assets included in the total assets of a foreign company  

768-545(1)    
At a particular time, an asset is an asset included in the total assets of a company (the foreign company ) that is a foreign resident if:

(a) the asset is a *CGT asset at that time; and

(b) the foreign company owns the asset at that time; and

(c) if at that time the foreign company is not an AFI subsidiary (within the meaning of Part X of the Income Tax Assessment Act 1936 ) whose sole or principal business is financial intermediary business (within the meaning of that Part) - the asset is not a foreign company derivative asset covered by subsection (2).

768-545(2)    
An asset is a foreign company derivative asset covered by this subsection if:

(a) the asset is an *arrangement covered by subsection (3), unless the regulations declare the asset not to be a foreign company derivative asset covered by this subsection; or

(b) the regulations declare the asset to be a foreign company derivative asset covered by this subsection.

768-545(3)    
An *arrangement is covered by this subsection if:

(a) under the arrangement, a party to the arrangement must, or may be required to, provide at some future time consideration of a particular kind or kinds to someone; and

(b) that future time is not less than the number of days, prescribed by regulations made for the purposes of paragraph 761D(1)(b) of the Corporations Act 2001 , after the day on which the arrangement is entered into; and

(c) the amount of the consideration, or the value of the arrangement, is ultimately determined, *derived from or varies by reference to (wholly or in part) the value or amount of something else (of any nature whatsoever and whether or not deliverable), including, for example, one or more of the following:

(i) an asset;

(ii) a rate (including an interest rate or exchange rate);

(iii) an index;

(iv) a commodity; and

(d) subsection (4) does not apply in relation to the arrangement.

768-545(4)    
An *arrangement under which one person has an obligation to buy, and another person has an obligation to sell, property is not an arrangement covered by subsection (3) merely because the arrangement provides for the consideration to be varied by reference to a general inflation index such as the Consumer Price Index.