Tax Laws Amendment (2007 Measures No. 4) Act 2007 (143 of 2007)

Schedule 1   New foreign income tax offset rules

Part 4   Consequential and other amendments

Income Tax Assessment Act 1936

18   Subsection 6(1)

Insert:

interest income , in relation to a taxpayer, means income consisting of interest, or a payment in the nature of interest, in respect of:

(a) money lent, advanced or deposited; or

(b) credit given; or

(c) any other form of debt or liability;

whether security is given or not, other than:

(d) an amount to the extent to which it is a return on an equity interest in a company; or

(e) interest derived by the taxpayer from a transaction directly related to the active conduct of a trade or business; or

(f) interest derived by the taxpayer from carrying on a banking business or any other business whose income is principally derived from the lending of money; or

(g) interest received by the taxpayer during a year of income from a foreign company, where:

(i) at any time during the year of income, the taxpayer had (or would have had, if the taxpayer were a company and a resident), a voting interest, within the meaning of section 334A, amounting to at least 10% of the voting power, within the meaning of that section, in that company; and

(ii) during the year of income or the preceding year of income, the company has not derived an amount of interest income exceeding 10% of the total profits derived by the company during the same year.