Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009 (133 of 2009)

Schedule 1   Employee share schemes

Part 2   Consequential amendments

Income Tax Assessment Act 1936

20   Section 530A

Repeal the section, substitute:

530A Reduction of foreign investment fund income because of employee share scheme

(1) This section applies if a taxpayer acquires an ESS interest (within the meaning of the Income Tax Assessment Act 1997) to which Subdivision 83A-C of that Act (about employee share schemes) applies.

(2) The foreign investment fund income of the taxpayer for a notional accounting period of the FIF, to the extent that the income relates to the interest, is zero if, for the whole of the period, the following conditions are satisfied:

(a) the taxpayer holds the interest;

(b) the interest is an interest in the FIF;

(c) the ESS deferred taxing point (within the meaning of the Income Tax Assessment Act 1997) for the interest has not occurred.

(3) The foreign investment fund income of the taxpayer for a notional accounting period of the FIF is to be reduced by an amount equal to any increase in the market value of the interest during a period (if any):

(a) that forms part of the notional accounting period; and

(b) for the whole of which, the following conditions are satisfied:

(i) the taxpayer holds the interest;

(ii) the interest is an interest in the FIF;

(iii) the ESS deferred taxing point (within the meaning of the Income Tax Assessment Act 1997) for the interest has not occurred.

(4) Section 83A-315 of the Income Tax Assessment Act 1997 (about market values of ESS interests) applies to subsection (3) of this section in the same way as it applies to Division 83A of that Act.