Income Tax Assessment Act 1936

PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

Division 7 - Calculation of attributable income of CFC  

Subdivision D - Modifications relating to losses  

SECTION 425   SOMETIMES-EXEMPT INCOME ETC.  

425(1)   [ " Sometimes-exempt income " defined]  

Where an amount is not included in the eligible CFC's notional assessable income for a statutory accounting period (being the eligible period or an earlier period) in relation to the eligible taxpayer because:

(a) the eligible CFC passes the active income test for the period in relation to the eligible taxpayer; or

(b) subsection 385(4) applies;

then the amount is sometimes-exempt income of the eligible CFC for the period in relation to the eligible taxpayer.

425(2)   [Sometimes-exempt deduction]  

Where an amount would, disregarding section 431 , only be a notional allowable deduction of the eligible CFC for a statutory accounting period (being the eligible period or an earlier period) in relation to the eligible taxpayer if the eligible CFC's sometimes-exempt income for the period in relation to the eligible taxpayer were instead notional assessable income, then the amount is a sometimes-exempt deduction of the eligible CFC for the period in relation to the eligible taxpayer.

425(3)   [(Sometimes-exempt income) loss]  

Where the eligible CFC's sometimes-exempt deductions for a statutory accounting period (being the eligible period or an earlier period) in relation to the eligible taxpayer exceed its sometimes-exempt income for the period in relation to the taxpayer, the excess is a (sometimes-exempt income) loss of the eligible CFC for the period in relation to the eligible taxpayer.

425(4)   [(Sometimes-exempt income) gain]  

Where an eligible CFC's sometimes-exempt income for a statutory accounting period (being the eligible period or an earlier period) in relation to the eligible taxpayer exceeds its sometimes-exempt deductions for the period in relation to the taxpayer, the excess is a (sometimes-exempt income) gain of the eligible CFC for the period in relation to the eligible taxpayer.