Income Tax Assessment Act 1936
View history note
Hide history notePart XI repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. No 114 of 2010, Sch 1 item 95 contains the following saving provisions:
95 Saving of regulations relating to stock exchanges
95
Despite the repeal of the definition of
approved stock exchange
in section 470 of the
Income Tax Assessment Act 1936
by item 37 of this Schedule, regulations made for the purposes of that definition that were in force immediately before this item commences continue in force on and after that commencement as if those regulations had been made for the purposes of the definition of
approved stock exchange
in the
Income Tax Assessment Act 1997
as inserted by item 81 of this Schedule.
96 Saving of elections relating to foreign hybrids
96
Despite the repeal of subsection 485AA(1) of the
Income Tax Assessment Act 1936
by item 37 of this Schedule, elections made under that subsection continue to have effect on and after the commencement of this Schedule as if that repeal had not happened.
Part XI inserted by No 190 of 1992.
Div 1 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
Subdiv A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 469 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 469 formerly read:
S 469(5) substituted by No 32 of 2006, s 3 and Sch 1 item 14, applicable for an income year that begins on or after 1 July 2006. S 469(5) formerly read:
There are 3 methods provided for making a determination in respect of a FIF. These are called: The method available to the taxpayer in respect of a particular notional accounting period of a FIF generally depends on the level of detailed information that the taxpayer has about the FIF
'
s income and on the method used by the taxpayer to determine whether foreign investment fund income accrued from that FIF in previous notional accounting periods. There are 2 methods provided for making a determination in respect of a FLP. These are called: S 469(8) repealed by
No 143 of 2007
, s 3 and Sch 1 item 125, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 469(8) formerly read:
SECTION 469 TAXPAYERS TO BE TAXED ON SHARE OF INCOME OF CERTAIN FOREIGN INVESTMENT FUNDS AND FOREIGN LIFE ASSURANCE POLICIES
469(1)
This Part applies to a taxpayer who has an interest or interests in what is referred to in this Part as a foreign investment fund (
"
FIF
"
). That expression refers to certain non-resident companies and non-resident trusts.
469(2)
This Part also applies to a taxpayer who has an interest in a foreign life assurance policy (
"
FLP
"
). That expression refers to certain life assurance policies issued by a non-resident. A taxpayer is regarded as having an interest in a FLP if, and only if, the taxpayer has the legal title to the FLP.
469(3)
The object of this Part is to include in a taxpayer
'
s assessable income of a year of income an amount (
"
foreign investment fund income
"
) that represents income attributable to an interest or interests in a FIF or a FLP held by the taxpayer during the accounting period (
"
notional accounting period
"
) of the FIF or FLP that ends in that year of income.
469(4)
The provision of this Act (
"
the operative provision
"
) that includes foreign investment fund income in a taxpayer
'
s assessable income is section
529
, which is contained in Division
16
.
469(5)
The operative provision does not apply, or its application is affected, in certain circumstances which are set out in:
(a)
Divisions
2 to 15
of this Part; and
(b)
section
768-965
of the
Income Tax Assessment Act 1997
.
469(5)
The operative provision does not apply, or its application is affected, in certain circumstances, which are set out in Divisions 2 to 15.
469(6)
Division
18
contains the provisions for determining whether any foreign investment fund income accrued from a FIF or a FLP to a taxpayer in respect of a notional accounting period.
(a)
the market value method;
(b)
the deemed rate of return method;
(c)
the calculation method.
(d)
the deemed rate of return method;
(e)
the cash surrender value method.
469(7)
Division
19
provides for the keeping of accounts to avoid double taxation in respect of interests in FIFs or FLPs.
469(8)
(Repealed by
No 143 of 2007
)
469(8)
Division
20
provides for the recording of the amount of the foreign tax credits allowed in respect of foreign investment fund income.
469(9)
Division
21
contains provisions that apply in certain circumstances if an interest in a FIF or a FLP is disposed of.
469(10)
Division
22
provides for the keeping of records relating to interests in FIFs and FLPs.
S 469 inserted by No 190 of 1992.
Subdiv B repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 470 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 470 formerly read:
"accounts"
"acquisition"
"approved stock exchange"
SECTION 470
SECTION 470 DEFINITIONS
470
In this Part, unless the contrary intention appears:
means ledgers, journals, profit and loss accounts and balance-sheets and includes statements, reports and notes attached to, or intended to be read with, any of the above;
, in relation to an interest in a FIF or a FLP, has the meaning given by section
488
;
means:
(a)
a stock exchange named in regulations made for the purposes of this definition; or
(b)
until regulations are so made
-
a stock exchange named in Schedule 3;
"associate"
has the meaning given by Subdivision E;
"Australian entity"
has the meaning given by section
471
;
"Australian partnership"
has the meaning given by section
472
;
"Australian tax"
means income tax or withholding tax;
"Australian trust"
has the meaning given by section
473
;
"balance-sheet"
includes any similar statement and also includes statements, reports and notes attached to, or intended to be read with, a balance-sheet or similar statement;
"calculation method"
has the meaning given by paragraph
534(2)(c)
;
"CFC"
has the same meaning as in Part
X
;
"CFT"
has the same meaning as in Part
X
;
complying superannuation entity
has the same meaning as in the
Income Tax Assessment Act 1997
.
Definition of " complying superannuation entity " inserted by No 73 of 2004.
complying superannuation/FHSA asset
has the same meaning as in the
Income Tax Assessment Act 1997
.
Definition of " complying superannuation/FHSA asset " inserted by No 45 of 2008, s 3 and Sch 7 item 4, effective 26 June 2008.
"convertible note"
:
(a) in relation to a foreign company, has the same meaning as in Division 3A of Part III ; or
(b) in relation to a foreign trust, means an instrument issued by the trustee of the trust, being an instrument that, if the trust were a company, would be a convertible note issued by the company, and includes an instrument that would be a convertible note within the meaning of Division 3A of Part III if:
(i) references in that Division to a company were references to the trust, or to the trustee of the trust, as the context requires; and
(ii) references in that Division to shares were references to interests in the trust;
"deemed rate of return method"
has the meaning given by paragraph
534(2)(b)
in relation to a FIF and the meaning given by paragraph
534(3)(a)
in relation to a FLP;
"disposal"
, in relation to an interest in a FIF or a FLP, has the meaning given by section
488
;
"distribution"
has the meaning given by section
474
;
"entitled to acquire"
has the meaning given by section
475
;
"entity"
means any of the following:
(a)a company;
(b) a partnership;
(c) a person in the capacity of trustee;
(d) any other person;
FIF
or
foreign investment fund
has the meaning given to FIF by section
481
;
fixed entitlement
has the same meaning as in the
Income Tax Assessment Act 1997
.
Definition of " fixed entitlement " inserted by No 73 of 2004.
fixed trust
has the same meaning as in the
Income Tax Assessment Act 1997
.
Definition of " fixed trust " inserted by No 73 of 2004.
"FLP"
or
"foreign life assurance policy"
has the meaning given to FLP by section
482
;
"foreign company"
has the meaning given by section
481
;
"foreign trust"
has the meaning given by section
481
;
"general insurance business"
means insurance business other than life insurance business;
"interest"
, in relation to a FIF or a FLP, has the meaning given by section
483
;
"life insurance business"
has the same meaning as in section 11 of the
Life Insurance Act 1995
;
Definition of " life insurance business " amended by No 5 of 1995.
"Lloyd
'
s"
means The Society of Lloyd
'
s incorporated by the Lloyd
'
s Act 1871 of the United Kingdom;
"market value method"
has the meaning given by paragraph
534(2)(a)
;
"notional accounting period"
:
(a) in relation to a FIF, has the meaning given by section 486 ; or
(b) in relation to a FLP, has the meaning given by section 487 ;
"Part XI Australian resident"
means a resident within the meaning of section
6
but does not include an entity if:
(a) there is a double tax agreement in force in respect of a foreign country; and
(b) that agreement contains a provision that is expressed to apply if, apart from the provision, the entity would, for the purposes of the agreement, be both a resident of Australia and a resident of the foreign country; and
(c) that provision has the effect that the entity is, for the purposes of the agreement, a resident solely of the foreign country;
"profit and loss account"
includes any similar statement and also includes statements, reports and notes attached to, or intended to be read with, a profit and loss account or similar statement;
"quoted price"
has the meaning given by section
476
;
resident superannuation entity
has the meaning given by section
477
.
Definition of " resident superannuation entity " substituted for the definition of " resident Part IX entity " by No 15 of 2007, s 3 and Sch 1 item 128, applicable to the 2007-08 income year and later years. The definition of " resident Part IX entity " formerly read:
"resident Part IX entity"
has the meaning given by section 477 ;
segregated exempt assets
has the same meaning as in the
Income Tax Assessment Act 1997
.
Definition of " segregated exempt assets " inserted by No 73 of 2004.
"share"
, in relation to a foreign company, includes any interest in the capital of the company that is in the nature of a share or stock, including such an interest in the nature of a preference share (whether or not redeemable), a bonus share or a share with deferred rights;
"statutory accounting period"
has the same meaning as in Part
X
;
"tax detriment"
has the meaning given by section
478
;
"the operative provision"
means section
529
;
"trading stock"
(Omitted by No 18 of 1993)
"trust"
means:
(a) an entity in the capacity of trustee (including an entity that manages a trust if there is no trustee); or
(b) as the case requires, a trust or a trust estate;
Definition of " trust " amended by No 15 of 2007, s 3 and Sch 1 item 129, by substituting para (a), applicable to the 2007-08 income year and later years. Para (a) formerly read:
(a) an entity in the capacity of trustee (including an entity that is taken to be a trustee because of section 268 ); or
trustee
, in relation to a fund that has no trustee, means the person who manages the fund.
Definition of " trustee " substituted by No 15 of 2007, s 3 and Sch 1 item 130, applicable to the 2007-08 income year and later years. The definition formerly read:
trustee
, in relation to a fund that has no trustee, means a person who is a trustee of the fund for the purposes of Part IX .
Definition of " trustee " inserted by No 73 of 2004.
virtual PST asset
(Repealed by No 45 of 2008)
Definition of " virtual PST asset " repealed by No 45 of 2008, s 3 and Sch 7 item 3, effective 26 June 2008. The definition formerly read:
virtual PST asset
has the same meaning as in the Income Tax Assessment Act 1997 .
Definition of " virtual PST asset " inserted by No 73 of 2004.
"wholly-owned subsidiary"
has the meaning given by section
479
.
S 470 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 471 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 471 formerly read:
SECTION 471 AUSTRALIAN ENTITY
471
For the purposes of this Part, each of the following is an Australian entity:
(a)
an Australian partnership;
(b)
an Australian trust;
(c)
an entity (other than a partnership or trust) that is a Part XI Australian resident.
S 471 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 472 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 472 formerly read:
SECTION 472 AUSTRALIAN PARTNERSHIP
472
For the purposes of this Part, a partnership is an Australian partnership at a particular time if at least one of the partners is an Australian entity at that time.
S 472 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 473 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 473 formerly read:
SECTION 473 AUSTRALIAN TRUST
473
For the purposes of this Part, a trust is an Australian trust at a particular time (
"
the test time
"
) if:
(a)
at any time in the period of 12 months immediately preceding the test time:
(i)
any trustee of the trust was a resident; or
(ii)
the central management and control of the trust was in Australia; or
(b)
assuming that period had been a year of income:
(i)
the trust would have been a corporate unit trust and a resident unit trust for the purposes of Division
6B
of Part
III
in relation to that year of income; or
(ii)
the trust would have been a public trading trust and a resident unit trust for the purposes of Division
6C
of Part
III
in relation to that year of income.
S 473 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 474 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 474 formerly read:
SECTION 474 DISTRIBUTIONS BY A FIF OR A FLP
474(1)
Some calculations made under this Part involve taking into account distributions made by a FIF or a FLP to a person who has an interest in the FIF or FLP.
474(2)
A reference in this Part to a distribution made by a FIF or a FLP to a person who has an interest in the FIF or FLP is a reference to any amount paid or credited, or any property distributed, to the person by the FIF or in relation to the FLP that constitutes income derived, or a receipt of capital, by the person and:
(a)
without limiting the generality of the above, includes a reference to:
(i)
the issue by a FIF to a person of a further interest in the FIF in satisfaction of the person's entitlement to a payment by the FIF; and
(ii)
in the case of a FLP
-
any payment to a person of a bonus or a refund of premium under or in respect of the FLP; but
(b)
does not include a reference to the issue by a FIF or a FLP to a person of a further interest in the FIF or FLP without any consideration being paid or given by the person for the interest.
S 474 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 475 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 475 formerly read:
SECTION 475 ENTITLEMENT TO ACQUIRE
475
For the purposes of this Part, a person is taken to be entitled to acquire anything that the person is absolutely or contingently entitled to acquire, whether because of any constituent document of a company, the exercise of any right or option or for any other reason.
S 475 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 476 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 476 formerly read:
SECTION 476 QUOTED PRICE
476(1)
It is necessary for the purposes of several provisions of this Part to value an interest in a FIF by reference to the quoted price on a particular day on a stock market of the class of interests in which the interest is included.
476(2)
For the purposes of such a provision, that quoted price is:
(a)
if there was more than one transaction on that stock market on that day in interests in that class
-
the last published price at which such an interest was traded on that stock market on that day; or
(b)
if information as to the price mentioned in paragraph (a) was not published or there were no transactions on that stock market on that day in such interests
-
the last price at which an offer was made on that day to buy such an interest.
S 476 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 477 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 477 formerly read:
SECTION 477 RESIDENT SUPERANNUATION ENTITY
477
For the purposes of this Part, a trust is a
resident superannuation entity
at a particular time if at that time the trust is:
(a)
an Australian superannuation fund; or
(b)
a complying approved deposit fund or a pooled superannuation trust.
S 477 substituted by No 15 of 2007, s 3 and Sch 1 item 131, applicable to the 2007-08 income year and later years. S 477 formerly read:
SECTION 477 RESIDENT PART IX ENTITY
For the purposes of this Part, a trust is a resident Part IX entity at a particular time if at that time the trust is:
(a)
a resident superannuation fund; or
(b)
a complying ADF, or a PST, as defined by subsection
267(1)
.
S 477 substituted by No 181 of 1994 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 478 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 478 formerly read:
SECTION 478 TAX DETRIMENT
478(1)
For the purposes of this Part, each of the following is a tax detriment to a partner in a partnership:
(a)
an increase in an amount included under section
92
in the partner
'
s assessable income in respect of an interest in the net income of the partnership;
(b)
a reduction in an amount allowable under section
92
as a deduction to the partner in respect of the partner
'
s interest in a partnership loss of the partnership;
(c)
a combination of such a reduction to nil and such an increase.
478(2)
For the purposes of this Part, an increase in an amount included under section
97
,
98A
or
100
in the assessable income of a beneficiary in respect of a share of the net income of a trust is a tax detriment to the beneficiary.
478(3)
For the purposes of this Part, an increase (including from nil) in an amount assessable to a trustee under section
98
in respect of a beneficiary
'
s share of, or under section
99
or
99A
in respect of the whole or a part of, the net income of a trust is a tax detriment to the trustee.
478(4)
The amount of the tax detriment is equal to the amount of the increase or reduction or, if paragraph (1)(c) applies, the sum of the amounts of the reduction and increase.
S 478 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 479 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 479 formerly read:
SECTION 479 WHOLLY-OWNED SUBSIDIARY
479(1)
For the purposes of this Part, a company (
"
the subsidiary company
"
) is taken to be a wholly-owned subsidiary of another company (
"
the holding company
"
) at a particular time if:
(a)
at that time, all the shares in the subsidiary company were owned by:
(i)
the holding company; or
(ii)
a company that is, or 2 or more companies each of which is, a wholly-owned subsidiary of the holding company; or
(iii)
the holding company and a company that is, or 2 or more companies each of which is, a wholly-owned subsidiary of the holding company; and
(b)
there was no agreement, arrangement or understanding in force at that time under which any person was in a position, or would be in a position after that time, to affect rights of the holding company or of a wholly-owned subsidiary of the holding company in relation to the subsidiary company.
479(2)
For the purposes of this section, if a company (
"
the relevant company
"
) is a wholly-owned subsidiary of another company (including a company that is such a wholly-owned subsidiary because of any other application or applications of this subsection), every company that is a wholly-owned subsidiary of the relevant company is taken to be a wholly-owned subsidiary of that other company.
479(3)
For the purposes of subsection (1), a person is taken to be in a position at a particular time to affect any rights of a company (
"
the relevant company
"
) in relation to another company if, at that time, that person has a right, power or option (whether under any provision of the constituent document of either of those companies or under any agreement or instrument or otherwise) to acquire those rights or do an act or thing that would prevent the relevant company from exercising those rights for its own benefit or receiving any benefits accruing because of those rights.
S 479 inserted by No 190 of 1992.
Subdiv C repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 480 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 480 formerly read:
SECTION 480 OUTLINE OF SUBDIVISION
480
This Subdivision explains the meanings of certain key concepts as they are used for the purposes of this Part. For those purposes it is necessary to determine:
(a)
what is meant by a FIF or a FLP (sections
481
and
482
); and
(b)
what is meant by an interest in a FIF or a FLP (section
483
); and
(c)
the taxpayers to whose interests in FIFs or FLPs this Part applies (section
485
); and
(d)
what is a notional accounting period of a FIF or a FLP (sections
486
and
487
).
S 480 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 481 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 481 formerly read:
S 481(3) amended by No 15 of 2007, s 3 and Sch 1 item 132, by substituting
"
resident superannuation entity
"
for
"
resident Part IX entity
"
in para (a), applicable to the 2007-2008 income year and later years.
SECTION 481 WHAT IS A FIF
481(1)
An entity is a FIF at a particular time if at that time the entity is:
(a)
a foreign company; or
(b)
a foreign trust.
481(2)
A company is a foreign company at a particular time if at that time the company is not a Part XI Australian resident.
481(3)
A trust is a foreign trust at a particular time if:
(a)
at that time the trust is neither an Australian trust nor a resident superannuation entity; and
(b)
the trust did not result from:
(i)
a will, a codicil or an order of a court that varied or modified the provisions of a will or a codicil; or
(ii)
an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate.
S 481 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 482 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 482 formerly read:
S 482(1) amended by No 101 of 2004 and No 5 of 1995.
"life assurance policy"
and includes: but does not include: S 482(2) amended by No 5 of 1995.
SECTION 482 WHAT IS A FLP
482(1)
A reference in this Part to a FLP or to a foreign life assurance policy in relation to a taxpayer in relation to a year of income is a reference to a life assurance policy issued by an entity that was not a resident of Australia at any time in that year of income but does not include a policy issued in Australia if the entity that issued the policy was, when the policy was issued, authorised under the
Life Insurance Act 1995
to carry on life insurance business in Australia.
482(2)
In subsection (1):
means a policy insuring payment of money:
(a)
on death (other than death by accident or expressly named sickness only); or
(b)
on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract within the meaning of the
Life Insurance Act 1995
);
(c)
an instrument evidencing a contract that is subject to payment of premiums or instalments of premiums for a term dependent on the termination or continuance of human life; or
(d)
an instrument securing the grant of an annuity for a term dependent upon human life;
(e)
such a policy or instrument:
(i)
that provides for the payment of money only on death, or death or permanent disability, and in respect of which the premium, or each of the instalments of premium, is calculated solely by reference to the period:
(A)
for which the human life concerned is expected to continue; or
(B)
within which the human life concerned is expected to terminate; or
(ii)
that was issued before 1 July 1992 but cannot be cancelled, surrendered or redeemed on or after that day and whose terms have not been altered in a material respect on or after that day; or
(f)
a contract between a non-resident and a resident:
(i)
under which the non-resident reinsures the resident against the whole or a part of the liability of the resident under a policy (
"
the relevant policy
"
) issued by the resident; and
(ii)
in respect of which the premium, or each of the instalments of premium, is calculated solely by reference to the period:
(A)
for which the human life to which the relevant policy applies is expected to continue; or
(B)
within which the human life to which the relevant policy applies is expected to terminate.
S 482 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 483 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 483 formerly read:
SECTION 483 WHAT IS AN INTEREST IN A FIF OR A FLP
483(1)
An interest in a FIF that is a foreign company is:
(a)
a share in the company other than an eligible finance share within the meaning of section
327
; or
(b)
an option, convertible note, or other instrument, that confers an entitlement to acquire such a share.
483(2)
An interest in a FIF that is a foreign trust is:
(a)
an interest in the corpus or income of the trust (including, in the case of a unit trust, an interest constituted by a unit in the unit trust); or
(b)
an option, convertible note, or other instrument, that confers an entitlement to acquire an interest referred to in paragraph (a).
483(3)
A person has an interest in a FLP if the person has the legal title to the FLP and, if only one person has the legal title to the FLP, a reference in this Part to the person
'
s interest or interests in the FLP is taken to be a reference to the FLP.
S 483 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 484 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 484 formerly read:
SECTION 484 BARE TRUSTEE
'
S INTEREST TO BE ATTRIBUTED TO BENEFICIARY
484(1)
If an interest in a FIF or a FLP is held by a person as trustee for another person who is absolutely entitled to the interest as against the trustee, this Part applies as if the interest were held by the other person and any acts of the trustee were acts of the other person.
484(2)
For the purposes of subsection (1), if a person holds an interest in a FIF or a FLP as trustee for another person, the other person is not taken not to be absolutely entitled to the interest as against the trustee merely because the other person is under a legal disability.
S 484 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 485 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 485 formerly read:
S 485(1) amended by No 18 of 1993. the operative provision applies to the taxpayer in relation to the FIF in respect of the notional accounting period of that FIF that ended in that year of income. S 485(3) amended by No 18 of 1993. then, subject to subsection (5), the operative provision applies to the taxpayer in relation to the FLP in respect of that notional accounting period. S 485(4) amended by No 18 of 1993. S 485(6) amended by No 15 of 2007, s 3 and Sch 1 item 133, by substituting
"
resident superannuation entity
"
for
"
resident Part IX entity
"
, applicable to the 2007-2008 income year and later years. S 485(6) amended by No 18 of 1993.
SECTION 485 TAXPAYERS TO WHOSE INTERESTS IN FIFs AND FLPs THIS PART APPLIES
485(1)
The operative provision applies to a taxpayer in relation to a FIF or a FLP in accordance with this section. Section
485A
also has effect when the operative provision is applied to work out the net income of a partnership or trust estate.
485(2)
The application of the operative provision to a taxpayer in relation to a FIF or a FLP is to be worked out separately in relation to each notional accounting period of the FIF or FLP.
485(3)
If:
(a)
a taxpayer had an interest or interests in a FIF at the end of a year of income; and
(b)
that year of income is the 1992-93 year of income or a later year of income; and
(c)
the taxpayer was a Part XI Australian resident at any time in that year of income;
485(4)
If:
(a)
a taxpayer had an interest or interests in a FLP at any time during the notional accounting period of the FLP that ends in a year of income; and
(b)
that year of income is the 1992-93 year of income or a later year of income; and
(c)
the taxpayer was a Part XI Australian resident at any time in that year of income;
485(5)
The operative provision does not apply to the taxpayer in relation to a FLP in respect of the 1992-93 year of income if the taxpayer did not have any interest or interests in the FLP at the end of that year of income.
485(6)
Without affecting the circumstances in which, apart from this subsection, a taxpayer would be taken to be a Part XI Australian resident at a time in a year of income, a taxpayer in the capacity of a trustee of a trust that is an Australian trust or a resident superannuation entity at a time in a year of income is taken for the purposes of subsection (3) or (4) to have been a Part XI Australian resident at that time.
485(7)
The application of the operative provision to a taxpayer in relation to a FIF or a FLP is subject to Divisions 2 to 15.
S 485 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 485AA repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 485AA formerly read:
If:
The share will be an interest in the partnership that is treated by Division
5A
of Part
III
as a share.
SECTION 485AA ELECTION TO EXCLUDE INTERESTS IN FOREIGN HYBRIDS FROM OPERATION OF THIS PART
485AA(1)
Limited partnerships that are treated as companies.
(a)
disregarding subsection
94D(6)
:
(i)
at the end of a year of income, a taxpayer has an interest in a FIF that is a corporate limited partnership in relation to the year of income; and
(ii)
the interest consists of a share in the FIF; and
Note:
(b) the entity satisfies the requirements of paragraphs 830-10(1)(a) to (d) of the Income Tax Assessment Act 1997 in relation to the year of income;
the taxpayer may elect that subsection (5) of this section applies in relation to the interest in the FIF.
S 485AA(1) amended by No 75 of 2010, s 3 and Sch 1 item 33, by omitting " for the purposes of Division 5A of Part III " after " corporate limited partnership " in para (a)(i), applicable in relation to: (a) payments made; and (b) loans made; and (c) debts forgiven; on or after 1 July 2009.
S 485AA(1) amended by No 58 of 2006 , s 3 and Sch 7 item 178, by substituting " subsection 94D(6) " for " subsection 94D(5) " in para (a), effective 30 June 2004.
485AA(2) Actual companies.
If:
(a) at the end of a year of income, a taxpayer has an interest in a FIF that consists of one or more shares in the FIF; and
(b) the interest is not one to which paragraph (1)(a) applies; and
(c) the entity satisfies the requirements of paragraphs 830-15(1)(a) to (c) of the Income Tax Assessment Act 1997 in relation to the year of income;
the taxpayer may elect that subsection (5) of this section applies in relation to the interest in the FIF.
485AA(3) Time limit for making election.
A taxpayer must make an election under this section:
(a) on or before the day on which the taxpayer lodges its return of income for the year of income; or
(b) within a further time allowed by the Commissioner.
485AA(4) When election is in force.
If the taxpayer makes the election, it is in force during the year of income and all later years of income.
485AA(5) Effect of election on interest in FIF etc.
While the election is in force, the operative provision, and any other provision of this Part relevant to the operation of that provision, does not apply to the taxpayer in relation to the interest in the FIF consisting of the share or shares or any option, convertible note, or other instrument, that confers an entitlement to acquire the share or shares.
Note:
The election will also have the effect under Division 830 of the Income Tax Assessment Act 1997 of making the company or limited partnership a foreign hybrid in relation to the taxpayer's interest in the FIF.
485AA(6) Effect of election on other interests in FIF.
However, subsection (5) does not have effect so far as that interest in the FIF is relevant for the purpose of the application of this Part in relation to the taxpayer, or any other taxpayer, in relation to any other interest in the FIF.
Note:
For example, in applying section 580 to work out other taxpayers ' shares of the calculated profit of the FIF, the interest would not be disregarded.
485AA(7) Election irrevocable.
The election is irrevocable.
S 485AA inserted by No 101 of 2004, s 3 and Sch 10 item 5, effective 30 June 2004. For application provision, see note under s 92(2).
(Repealed by No 114 of 2010)
S 485A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 485A formerly read:
S 485(1) amended by No 155 of 1997.
SECTION 485A APPLYING OPERATIVE PROVISION IN WORKING OUT NET INCOME OF PARTNERSHIP OR TRUST ESTATE
485A(1)
For the purpose of working out the net income of a partnership or of a trust estate, the operative provision applies as mentioned in section
485
, subject to the following provision.
485A(2)
The requirement in the definition of
"
net income
"
in sections
90
and
95
for assessable income to be calculated as if the partnership or trust estate concerned were a taxpayer who is a resident is, in applying the operative provision, to be taken to be a requirement to calculate that assessable income as if the taxpayer were a Part XI Australian resident.
485A(3)
-
(3A)
(Repealed by No 155 of 1997)
S 485A inserted by No 18 of 1993.
(Repealed by No 114 of 2010)
S 486 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 486 formerly read:
and ended on the next day that is the last day of a notional accounting period of the FIF under whichever of the preceding provisions of this section is applicable.
SECTION 486 NOTIONAL ACCOUNTING PERIOD OF A FIF
486(1)
This section sets out what is a notional accounting period of a FIF for the purposes of the application of this Part to a taxpayer in relation to the FIF.
486(2)
Subject to the following provisions of this section, each period that is a year of income of the taxpayer is a notional accounting period of the FIF.
486(3)
If the accounts of a FIF are made out for periods not exceeding 12 months, the taxpayer may elect that the notional accounting periods of that FIF are to be the respective periods in respect of which the accounts of the FIF are made out.
486(4)
An election made under subsection (3) is irrevocable so long as the taxpayer continues to have an interest in the FIF.
486(5)
Subject to subsection (6), if an election is made under subsection (3):
(a)
the first period (
"
the first period
"
) in respect of which the accounts of the FIF are made out that begins during the year of income of the taxpayer in which the election is made, and all later such periods, are notional accounting periods of the FIF; and
(b)
the period starting at the beginning of that year of income and ending immediately before the beginning of the first period is a notional accounting period of the FIF.
486(6)
If, after the making of an election under subsection (3), any accounts of the FIF are made out for a period exceeding 12 months:
(a)
neither that period, nor any succeeding period exceeding 12 months for which accounts of the FIF are made out, is a notional accounting period of the FIF; and
(b)
the period:
(i)
beginning at the end of the last period in respect of which accounts of the FIF were made out for a period not exceeding 12 months; and
is a notional accounting period of the FIF; and
(ii)
ending at the end of the taxpayer
'
s year of income in which that last period ends;
(c)
all later years of income of the taxpayer are notional accounting periods of the FIF.
486(7)
Despite the preceding provisions of this section, the first notional accounting period of a FIF is the period that:
(a)
in the case of a foreign company:
(i)
if the company was incorporated or established or otherwise came into existence before 1 January 1993
-
began on that day; or
(ii)
if the company was incorporated or established or otherwise came into existence on or after that day
-
began on the day of incorporation or establishment; or
(b)
in the case of a foreign trust:
(i)
if the trust was in existence immediately before l January 1993
-
began on that day; or
(ii)
if the trust came into existence on or after that day
-
began on the day on which the trust came into existence;
S 486 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 487 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 487 formerly read:
and ended on the next day that is the last day of a notional accounting period of the FLP under whichever of the preceding provisions of this section is applicable.
SECTION 487 NOTIONAL ACCOUNTING PERIOD OF A FLP
487(1)
This section sets out what is a notional accounting period of a FLP for the purposes of the application of this Part to a taxpayer in relation to the FLP.
487(2)
Subject to this section, each period of 12 months ending on 30 June is a notional accounting period of a FLP.
487(3)
If cash surrender values for interests in a FLP are available on a day (a
"
relevant day
"
) during the same month (being one of the 12 months of the calendar year) in each calendar year (whether or not cash surrender values for such interests are also available at other times), the taxpayer may elect that the notional accounting periods of the FLP are to be the periods ascertained under the following provisions of this section.
487(4)
An election made under subsection (3) is irrevocable so long as the taxpayer continues to have an interest in the FLP.
487(5)
Subject to subsection (6), if an election is made under subsection (3):
(a)
the period (
"
the first elective period
"
) beginning immediately after the end of the month in which the last relevant day before the election occurred and ending at the end of the month in which the next relevant day occurs is a notional accounting period of the FLP; and
(b)
each later period beginning after the end of the month in which a relevant day occurs and ending at the end of the month in which the next relevant day occurs is a notional accounting period of the FLP; and
(c)
the period beginning on 1 July immediately preceding the first elective period and ending immediately before the beginning of the first elective period is a notional accounting period of the FLP.
487(6)
If, after the making of an election under subsection (3), a cash surrender value is not available for the taxpayer
'
s interest in a FLP in respect of a relevant day:
(a)
neither the period of 12 months ending on that day nor any following period of 12 months ending on a relevant day is a notional accounting period of the FLP; and
(b)
the period of 12 months beginning on 1 July immediately preceding the period of 12 months first mentioned in paragraph (a) is a notional accounting period of the FLP; and
(c)
all later periods of 12 months beginning on 1 July are notional accounting periods of the FLP.
487(7)
Despite the preceding provisions of this section, the first notional accounting period of a FLP is the period that:
(a)
if the FLP was in existence before 1 January 1993
-
began on that day; or
(b)
if the FLP came into existence on or after that day
-
began on the day on which the FLP came into existence;
487(8)
If the taxpayer disposes of the taxpayer
'
s interest or all of the taxpayer
'
s interest in a FLP, the notional accounting period of the FLP during which the disposal took place ends immediately after the disposal took place.
S 487 inserted by No 190 of 1992.
Subdiv D repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 488 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 488 formerly read:
SECTION 488 WHAT IS A DISPOSAL OR ACQUISITION OF AN INTEREST IN A FIF OR A FLP
488(1)
Some of the provisions of this Part refer to an interest in a FIF or a FLP having been disposed of or acquired and this section determines what is such a disposal or acquisition for the purposes of those provisions.
488(2)
Subject to this section, if a change has occurred in the ownership of an interest in a FIF or a FLP, the change is taken to have effected a disposal of the interest by the person who owned it immediately before the change and an acquisition of the interest by the person who owned it immediately after the change.
488(3)
A change in the legal ownership of an interest is not a change in the ownership of the interest for the purposes of this section unless there is also a change in the beneficial ownership of the interest.
488(4)
A reference in subsection (2) to a change in the ownership of an interest is a reference to a change that has occurred in any way, including any of the following ways:
(a)
by the execution of an instrument;
(b)
by the entering into of a transaction;
(c)
by the transmission of the interest by operation of law;
(d)
by the doing of any other act or thing;
(e)
by the occurrence of any event.
488(5)
Without limiting the generality of subsection (4), a change is taken to have occurred in the ownership of an interest by:
(a)
a declaration of trust in relation to the interest under which the beneficiary is absolutely entitled to the interest as against the trustee; or
(b)
the release, discharge, satisfaction, surrender, forfeiture, expiry, abandonment or extinction, at law or in equity, of the interest; or
(c)
the redemption or buy-back in whole or in part, or the cancellation, of the interest.
488(6)
An issue to a person of an interest in a FIF or a FLP is an acquisition of the interest by the person.
488(7)
None of the following is an acquisition or disposal of an interest in a FIF or a FLP:
(a)
the conversion of a convertible note issued by a FIF into another interest in the FIF pursuant to a right conferred by the convertible note if no consideration is paid or payable in respect of the exercise of that right;
(b)
the exercise of any other right in relation to an interest in a FIF or a FLP if no consideration is paid or payable in respect of the exercise of that right;
(c)the exchange of an interest in a FIF or a FLP for a different interest in the FIF or FLP of the same value.
S 488 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 489 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 489 formerly read:
SECTION 489 TIME OF DISPOSAL OR ACQUISITION OF INTEREST
489
If an interest in a FIF or a FLP has been disposed of or acquired, the time of disposal or acquisition is:
(a)
if the interest was disposed of or acquired under a contract
-
the time of making of the contract; or
(b)
otherwise
-
the time of the change in the ownership of the interest that is or gave rise to the disposal or acquisition.
S 489 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 490 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 490 formerly read:
the person is taken to have received as consideration in respect of the disposal an amount equal to the market value of the interest at the time of the disposal. the person is taken to have paid or given as consideration in respect of the acquisition an amount equal to themarket value of the interest at the time of the acquisition.
SECTION 490 CONSIDERATION FOR DISPOSAL OR ACQUISITION
490(1)
In the circumstances referred to in subsections (2) and (3) it is necessary for the purposes of this Part to make special provision for the calculation of the consideration in respect of the disposal or acquisition of an interest in a FIF or a FLP.
490(2)
If a person disposed of an interest in a FIF or a FLP and:
(a)
the person did not receive any consideration in respect of the disposal; or
(b)
both of the following subparagraphs apply:
(i)
the amount that, apart from this subsection, would be taken to be the consideration received by the person in respect of the disposal is greater or less than the market value of the interest at the time of the disposal;
(ii)
the person, and the person to whom the interest was disposed of, were not dealing with each other at arm's length in connection with the disposal;
490(3)
If a person acquired an interest in a FIF or a FLP and:
(a)
the person did not pay or give any consideration in respect of the acquisition; or
(b)
both of the following subparagraphs apply:
(i)
the amount that, apart from this subsection, would be taken to be the consideration paid or given by the person in respect of the acquisition was greater or less than the market value of the interest at the time of the acquisition;
(ii)
the person, and the person from whom the person acquired the interest, were not dealing with each other at arm's length in connection with the acquisition;
S 490 inserted by No 190 of 1992.
Subdiv E repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 491 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 491 formerly read:
Section
960-255
of the
Income Tax Assessment Act 1997
may be relevant to determining relationships for the purposes of subparagraph (2)(a)(iii).
SECTION 491 ASSOCIATES OF AN ENTITY TO BE DETERMINED IN ACCORDANCE WITH SECTION 318 AS MODIFIED
491(1)
For the purposes of this Part, the associates of an entity are to be determined in accordance with section
318
subject to the modifications made by subsection (2) of this section.
491(2)
The modifications are as follows:
(a)
"
relative
"
, in relation to a person, means:
(i)
a spouse of the person other than a spouse who is legally married to the person but is living separately and apart from the person and has been so living for at least 12 months; or
(ia)
a spouse of the person, other than a spouse within the meaning of paragraph (a) of the definition of
spouse
in subsection
995-1(1)
of the
Income Tax Assessment Act 1997
who is living separately and apart from the person and has been so living for at least 12 months; or
(ii)
a child of the person; or
(iii)
if the person has not reached the age of 18 years:
(A)
a parent of the person; or
(B)
a brother or sister of the person;
(b)
"
child
"
, in relation to a person, means:
(i)
a child of the person (other than a child excluded under subsection (3); or
(ii)
a child (other than a child referred to in subparagraph (i)) of a spouse of the person, being a child who lives with the person;
(c)
"
trust
"
does not include a public unit trust, a complying superannuation fund, a non-complying superannuation fund, a complying approved deposit fund, a non-complying approved deposit fund or a pooled superannuation trust;
(d)
subsections
318(5) and (7)
are to be disregarded;
(e)
for the purposes of the application of paragraphs
318(6)(a) and (b)
in relation to an entity, the references in those paragraphs to interposed companies, partnerships or trusts are taken to be references to any such companies, partnerships or trusts that are associates of the entity.
Note:
S 491(2) amended by No 144 of 2008, s 3 and Sch 14 items 42 to 44, by inserting para (a)(ia) after para (a)(i), inserting the note at the end and substituting para (b)(i), applicable in relation to the 2009-2010 year of income and later years of income. Para (b)(i) formerly read:
(i) a child (other than a step-child) of the person; or
S 491(2) amended by No 15 of 2007, s 3 and Sch 1 item 134, by substituting " , a complying superannuation fund, a non-complying superannuation fund, a complying approved deposit fund, a non-complying approved deposit fund or a pooled superannuation trust " for " or an eligible Part IX entity " in para (c), applicable to the 2007-2008 income year and later years.
491(3)
For the purposes of subparagraph (2)(b)(i), the following children are excluded under this subsection:
(a) a step-child of the person; and
(b) someone who would be the step-child of the person except that the person is not legally married to the person ' s spouse.
S 491(3) inserted by No 144 of 2008, s 3 and Sch 14 item 45, applicable in relation to the 2009-2010 year of income and later years of income.
S 491 inserted by No 190 of 1992.
Div 2 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 492 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 492 formerly read:
SECTION 492 OBJECT OF DIVISION
492
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from certain FIFs.
S 492 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 493 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 493 formerly read:
the operative provision does not apply to the taxpayer in relation to the foreign trust in respect of the notional accounting period of the foreign trust that ends in the year of income.
SECTION 493 EXEMPTION OF ATTRIBUTABLE TAXPAYER IN RELATION TO CERTAIN TRUSTS
493
If an amount of foreign investment fund income that accrued to a taxpayer from a foreign trust in respect of a notional accounting period of the trust would, apart from this section, be included in the taxpayer's assessable income of a year of income and:
(a)
the taxpayer is an attributable taxpayer for the purposes of Division
6AAA
in relation to the year of income and in relation to a trust estate and the trust to which the trust estate relates is the same entity as the foreign trust; or
(b)
the foreign trust is a CFT and the taxpayer is an attributable taxpayer in relation to that CFT at any time during the year of income;
S 493 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 494 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 494 formerly read:
the operative provision does not apply to the taxpayer in relation to the FIF in respect of the notional accounting period of the FIF referred to in paragraph (a). the operative provision does not apply to the taxpayer in relation to the FIF in respect of the notional accounting period of the FIF referred to in paragraph (a).
SECTION 494 EXEMPTION OF ATTRIBUTABLE TAXPAYER REFERRED TO IN SECTION 456
494(1)
If:
(a)
an amount of foreign investment fund income that accrued to a taxpayer from a FIF in respect of a notional accounting period of the FIF would, apart from this subsection, be included in the taxpayer's assessable income of a year of income; and
(b)
a statutory accounting period of a CFC coincides with that notional accounting period of the FIF; and
(c)
section
456
applies to the taxpayer at the end of the statutory accounting period of the CFC; and
(d)
the CFC is the same entity as the FIF;
494(2)
If:
(a)
an amount of foreign investment fund income that accrued to a taxpayer from a FIF in respect of a notional accounting period of the FIF would, apart from this subsection, be included in the taxpayer's assessable income of a year of income; and
(b)
each of 2 or more statutory accounting periods of a CFC occurs partly within that notional accounting period of the FIF; and
(c)
section
456
applies to the taxpayer at the end of each of those statutory accounting periods of the CFC; and
(d)
the CFC is the same entity as the FIF;
S 494 inserted by No 190 of 1992.
Div 3 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 495 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 495 formerly read:
SECTION 495 OBJECT OF DIVISION
495
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a foreign company that is taken by the application of one of the methods referred to in section
498
to have been principally engaged in eligible activities at the time determined under section
497
.
S 495 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 496 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 496 formerly read:
"eligible activities"
SECTION 496 INTERPRETATION
496(1)
In this Division:
means business activities (including the provision of services) other than activities:
(a)
named in regulations made for the purposes of this section; or
(b)
until regulations are so made
-
named in Schedule 4.
496(2)
The inclusion in regulations referred to in paragraph (1)(a), or in Schedule 4, of references to banking, investment, life insurance business, general insurance business, and certain activities in connection with real property, as activities that are not eligible activities does not affect the exemptions provided for by Divisions 4, 5, 6 and 7.
S 496(2) amended by No 82 of 1994.
S 496 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 497 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 497 formerly read:
SECTION 497 EXEMPTION
497(1)
The operative provision does not apply to a taxpayer in relation to a foreign company in respect of a notional accounting period of the foreign company if the foreign company is taken by one of the methods referred to in section
498
to have been principally engaged in eligible activities at the time (
``the test time''
) applicable under subsection (2).
497(2)
The test time is:
(a)
if the taxpayer uses the stock exchange listing method referred to in section
499
-
the end of the notional accounting period; or
(b)
if the taxpayer uses the balance-sheet method referred to in section
500
:
(i)
if the notional accounting period is a period in respect of which the accounts of the company are made out
-
the end of that period; or
(ii)
if the notional accounting period is the taxpayer's year of income
-
the end of the last period in respect of which the accounts of the company were made out that ended before the end of that year of income.
S 497 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 498 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 498 formerly read:
SECTION 498 HOW TO DETERMINE WHETHER A FOREIGN COMPANY IS TAKEN TO HAVE BEEN PRINCIPALLY ENGAGED IN ELIGIBLE ACTIVITIES
498(1)
The question whether a foreign company is taken to have been principally engaged in eligible activities at the test time in relation to a notional accounting period is to be determined either:
(a)
by ascertaining, by the stock exchange listing method applicable under section
499
, the designation accorded to the company at the test time by an approved stock exchange or an international sectoral classification system; or
(b)
by ascertaining, by the balance-sheet method applicable under section
500
, the extent to which the company's assets were for use in eligible activities at the test time.
498(2)
If both of those methods are capable of being applied, the question is to be determined in relation to a particular taxpayer by whichever method the taxpayer chooses.
498(3)
If one only of those methods is capable of being applied, the question is to be determined by that method.
498(4)
If neither of those methods is capable of being applied, section
497
does not exempt the taxpayer from the application of the operative provision in relation to the company in respect of the notional accounting period.
S 498 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 499 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 499 formerly read:
then, irrespective of the extent (if any) to which the company engages in activities that are not eligible activities, the company is taken, for the purposes of the application of section
497
in relation to the taxpayer, to have been principally engaged in eligible activities at that time. included the company in a class of companies designated by the stock exchange or system as engaged in activities of an unclassified kind or of a kind designated as
"
miscellaneous
"
, the company is not taken under subsection (2) to have been principally engaged in eligible activities at that time.
SECTION 499 STOCK EXCHANGE LISTING METHOD
499(1)
The stock exchange listing method may be applied only if the taxpayer
'
s interest or any of the taxpayer
'
s interests in the foreign company at the test time in relation to a notional accounting period was included in a class of interests in the company that were quoted on the stock market of an approved stock exchange.
499(2)
Subject to subsection (3), if the stock exchange listing method applies and at the test time:
(a)
one of the following subparagraphs applies:
(i)
the company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in activities of a particular kind;
in a class of companies designated by the system as engaged in activities of a particular kind; and
(ii)
the company was included:
(A)
by an international sectoral classification system named in regulations made for the purposes of this section; or
(B)
until regulations are so made
-
by an international sectoral classification system named in Schedule 5;
(b)
activities of the kind referred to in the designation by the stock exchange or the international sectoral classification system, as the case may be, are eligible activities;
499(3)
If, at the test time:
(a)
if subparagraph (2)(a)(i) applies and subparagraph (2)(a)(ii) does not apply:
(i)
if there was only one approved stock exchange that included the company in a designated class of companies
-
that stock exchange; or
(ii)
if there were 2 or more approved stock exchanges that included the company in a designated class of companies
-
each of those stock exchanges; or
(b)
if subparagraph (2)(a)(ii) applies and subparagraph (2)(a)(i) does not apply:
(i)
if there was only one international sectoral classification system that included the company in a designated class of companies
-
that system; or
(ii)
if there were 2 or more international sectoral classification systems that included the company in a designated class of companies
-
each of those systems; or
(c)
if both subparagraphs (2)(a)(i) and (2)(a)(ii) apply
-
each approved stock exchange and each international sectoral classification system that included the company in a designated class of companies;
499(4)
For the purposes of subsection (3), the designation by an approved stock exchange or an international sectoral classification system of a class of companies as
"
conglomerates
"
or as
"
multi-industry
"
is not taken to be a designation of the companies as being engaged in activities of an unclassified kind or as being designated
"
miscellaneous
"
.
S 499 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 500 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 500 formerly read:
SECTION 500 BALANCE-SHEET METHOD
500(1)
The balance-sheet method involves determining the extent to which a foreign company's assets were for use in eligible activities by reference to a relevant balance-sheet of the company and, if appropriate, of its subsidiaries prepared as at the test time in relation to a notional accounting period.
500(2)
If, at the test time, the gross value of the foreign company's assets for use in eligible activities was 50% or more of the gross value of all of the company's assets, the company is taken, for the purposes of the application of section
497
in relation to the taxpayer, to have been principally engaged in eligible activities at that time.
500(3)
If, at the test time, a company (
``the holding company''
) was the direct or indirect owner of 50% or more of the paid-up share capital of another company (
``the subsidiary company''
), the following paragraphs apply:
(a)
the gross value at the test time of the holding company's assets for use in eligible activities includes the amount worked out using the formula:
Gross value of subsidiary's eligible assets
×
Interest in share capital
Total share capital
(b) the gross value at the test time of all the holding company's assets does not include the gross value of the shares in the subsidiary company owned by the holding company but includes the amount worked out using the formula:
| Gross value of subsidiary's assets | × |
Interest in share capital
Total share capital |
In the formulas:
`` Gross value of subsidiary's eligible assets '' means the gross value at the test time of the subsidiary company's assets for use in one or more eligible activities;
`` Gross value of subsidiary's assets '' means the gross value at the test time of all the subsidiary company's assets;
`` Interest in share capital '' means the amount of the share capital of the subsidiary company that was owned by the holding company;
`` Total share capital '' means the total amount of the share capital of the subsidiary company.
500(4)
Subsection (3) applies in relation to the subsidiary company whether the subsidiary company engages in eligible activities or activities that are not eligible activities, or both.
500(5)
In subsection (3):
(a) any reference to the holding company's assets does not include:
(i) in the case of the reference in paragraph (3)(a) - a reference to so much of the holding company's assets for use in eligible activities that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of the holding company's assets for use in eligible activities; or
(ii) in the case of the reference in paragraph (3)(b) - a reference to so much of all the holding company's assets that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of all the holding company's assets; and
(b) any reference to the subsidiary company's assets does not include a reference to:
(i) shares owned by the subsidiary company in another company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 ; or
(ii) assets comprising debts or other amounts payable to the subsidiary company by:
(A) the holding company; or
(B) any company interposed between the subsidiary company and the holding company; or
(C) any other company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 .
S 500(5) amended by No 55 of 2001.
500(6)
For the purposes of subsection (3), the percentage of the paid-up share capital of the subsidiary company of which the holding company was the owner at the test time includes the percentage (if any) of that paid-up share capital of which the holding company was the indirect owner at that time, as calculated in accordance with section 501 .
500(7)
Subsections (3) to (6) apply in relation to the ownership by a company of any of the paid-up share capital of another company whether the other company's place of incorporation or establishment is the same as, or different from, the former company's place of incorporation or establishment.
500(8)
If a company had, at the test time, an interest, as a partner in a partnership, in any assets of the partnership:
(a) the gross value at that time of all of the company's assets does not include the value of the company's interest in the partnership as shown in the company's balance-sheet but includes the gross value of the company's interest in each of the partnership's assets; and
(b) the company's assets at that time that were for use in eligible activities are taken to have included the company's interests in the assets of the partnership that were for use in one or more eligible activities.
500(9)
A reference in this section to the gross value of an asset of a company at the test time is a reference to that value as shown in a balance-sheet of the company that:
(a) was prepared in accordance with commercially accepted accounting principles; and
(b) gives a true and fair view of the company's financial position as at that time.
500(10)
For the purposes of this section, the gross value, at the test time, of an asset in which a company has an interest as a partner in a partnership is to be that value as shown in a balance-sheet of the partnership that:
(a) was prepared in accordance with commercially accepted accounting principles; and
(b) gives a true and fair view of thepartnership's financial position as at that time.
500(11)
If, at the test time, any of the company's assets ( ``the relevant assets'' ) are for use partly in one or more eligible activities and partly for other purposes, a reference in this section to the gross value at that time of the company's assets for use in one or more eligible activities is a reference to so much only of the gross value at that time of the relevant assets as is proportionate to the extent to which they are for use at that time in one or more eligible activities.
500(12)
If an amount that, under subsection (3) or (8), is to be included in:
(a) the gross value, at the test time, of all the assets of a foreign company; or
(b) the gross value, at that time, of such of those assets as were for use at that time in one or more eligible activities;
is not expressed in the currency in which the balance-sheet applicable under subsection (9) in relation to the foreign company is expressed, the amount to be so included is the equivalent amount expressed in that currency, being the equivalent amount obtained by reference to the appropriate rate of exchange between those 2 currencies in force at that time.
500(13)
A reference in this section to an asset of a company being for use in an eligible activity is a reference to the asset being for use by the company in engaging in that activity either through its directors or employees in the performance of their duties as directors or employees or through another person pursuant to a contract or arrangement.
S 500 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 501 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 501 formerly read:
and so on, ending with a multiplication by the direct ownership interest that the last interposed company holds in the bottom company.
SECTION 501 INDIRECT OWNERSHIP OF PAID-UP SHARE CAPITAL OF COMPANY
501(1)
For the purposes of this section, a company has a direct ownership interest in another company at a particular time equal to the percentage of the paid-up share capital of the other company of which the first-mentioned company is the owner at that time.
501(2)
The percentage of the paid-up share capital of a company (
``the bottom company''
) of which another company (
``the top company''
) is the indirect owner at a particular time (
``the indirect ownership interest''
) is calculated in accordance with this section.
501(3)
If there is only one company interposed between the top company and the bottom company, the indirect ownership interest is calculated by multiplying the direct ownership interest that the top company holds in the interposed company by the direct ownership interest that the interposed company holds in the bottom company.
501(4)
If there are 2 companies interposed between the top company and the bottom company, the indirect ownership interest is calculated:
(a)
by multiplying the direct ownership interest that the top company holds in the first interposed company by the direct ownership interest that the first interposed company holds in the second interposed company; and
(b)
by multiplying the result of the calculation referred to in paragraph (a) by the direct ownership interest that the second interposed company holds in the bottom company.
501(5)
If there are 3 or more companies interposed between the top company and the bottom company, the indirect ownership interest is calculated:
(a)
by multiplying the direct ownership interest that the top company holds in the first interposed company by the direct ownership interest that the first interposed company holds in the second interposed company; and
(b)
by multiplying the result of the calculation referred to in paragraph (a) by the direct ownership interest that the second interposed company holds in the third interposed company;
S 501 inserted by No 190 of 1992.
Div 4 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 502 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 502 formerly read:
SECTION 502 OBJECT OF DIVISION
502
The object of this Division is to exempt certain taxpayers from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a foreign company that is a bank or has a wholly-owned subsidiary that is a bank.
S 502 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 503 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 503 formerly read:
the interest referred to in paragraph (a) is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the foreign company in respect of that notional accounting period.
SECTION 503 EXEMPTION FOR INTEREST IN FOREIGN BANK
503
If:
(a)
at the end of the notional accounting period of a foreign company the taxpayer had an interest in the foreign company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:
(i)
shares in the foreign company were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and
(ii)
the foreign company was authorised under the law of its place of residence to carry on banking business; and
(iii)
the foreign company was principally engaged in the active carrying on of banking business;
S 503 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 504 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 504 formerly read:
the interest referred to in subparagraph (a)(i) is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.
SECTION 504 EXEMPTION FOR INTEREST IN FOREIGN HOLDING COMPANY OF FOREIGN BANK
504
If:
(a)
at the end of the notional accounting period of a foreign company (
"
the holding company
"
) that ended during a year of income:
(i)
the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(ii)
one of the following sub-subparagraphs applies:
(A)
the holding company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in activities of a kind designated as
"
banking
"
or
"
banks
"
;
(B)
the holding company was included by an international sectoral classification system named in regulations made for the purposes of section
499
, or, until regulations are so made, by an international sectoral classification system named in Schedule 5, in a class of companies designated by the system as engaged in activities of a kind designated as
"
banking
"
or
"
banks
"
; and
(b)
throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:
(i)
shares in the holding company that were included in the class referred to in subparagraph (a)(i) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and
(ii)
one or more other foreign companies were wholly-owned subsidiaries of the holding company; and
(iii)
if there was only one such subsidiary, that subsidiary was:
(A)
authorised under the law of its place of residence to carry on banking business; and
(B)
principally engaged in the active carrying on of banking business; and
(iv)
if there were 2 or more such subsidiaries:
(A)
at least one subsidiary was authorised under the law of its place of residence to carry on banking business; and
(B)
the principal activities of all the subsidiaries, considered together, were the active carrying on of banking business;
S 504 inserted by No 190 of 1992.
Div 5 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 505 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 505 formerly read:
SECTION 505 OBJECT OF DIVISION
505
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a foreign company that is taken by the application of the method in section
507
to have been principally engaged in life insurance business at the test time in relation to a notional accounting period. That method involves determining the extent to which the foreign company
'
s assets were for use in carrying on life insurance business at that time by reference to a relevant balance-sheet of the company and, if appropriate, of its subsidiaries prepared at that time.
S 505 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 506 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 506 formerly read:
SECTION 506 EXEMPTION FOR INTEREST IN FOREIGN LIFE INSURANCE COMPANY
506(1)
The operative provision does not apply to a taxpayer in relation to a foreign company in respect of a notional accounting period of the foreign company if the foreign company is taken to have been principally engaged in carrying on life insurance business at the time (
``the test time''
) applicable under subsection (2).
506(2)
The test time is:
(a)
if the notional accounting period is a period in respect of which the accounts of the company are made out
-
the end of that period; or
(b)
if the notional accounting period is the taxpayer's year of income
-
the end of the last period in respect of which the accounts of the company were made out that ended before the end of that year of income.
S 506 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 507 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 507 formerly read:
the company is taken, for the purposes of the application of section
506
in relation to the taxpayer, to have been principally engaged in carrying on life insurance business at that time.
SECTION 507 HOW TO DETERMINE WHETHER A FOREIGN COMPANY WAS PRINCIPALLY ENGAGED IN CARRYING ON LIFE INSURANCE BUSINESS
507(1)
The question whether a foreign company is taken to have been principally engaged in carrying on life insurance business at the test time is to be determined as provided by this section.
507(2)
If:
(a)
throughout the notional accounting period referred to in section
506
or the part of that period in which the taxpayer had an interest in a foreign company, the company was authorised under the law of its place of residence to carry on life insurance business; and
(b)
at the test time, the gross value of the foreign company's assets for use in carrying on life insurance business was 50% or more of the gross value of all of the company's assets;
507(3)
If, at the test time, a company (
``the holding company''
) was the direct or indirect owner of 50% or more of the paid-up share capital of another company (
``the subsidiary company''
), the following paragraphs apply:
(a)
the gross value at the test time of the holding company's assets for use in carrying on life insurance business includes the amount worked out using the formula:
Gross value of subsidiary's eligible assets
×
Interest in share capital
Total share capital
(b) the gross value at the test time of all the holding company's assets:
(i) except as provided by subsection (11), does not include the gross value of the shares in the subsidiary company owned by the holding company; but
(ii) includes the amount worked out using the formula:
Gross value of subsidiary's assets × Interest in share capital
Total share capital
In the formulas:
`` Gross value of subsidiary's eligible assets '' means the gross value at the test time of the subsidiary company's assets for use in carrying on life insurance business;
`` Gross value of subsidiary's assets '' means the gross value at the test time of all the subsidiary company's assets;
`` Interest in share capital '' means the amount of the share capital of the subsidiary company that was owned by the holding company;
`` Total share capital '' means the total amount of the share capital of the subsidiary company.
507(4)
Subsection (3) applies in relation to the subsidiary company whether the subsidiary company carries on life insurance business or not.
507(5)
In subsection (3):
(a) any reference to the holding company's assets does not include:
(i) in the case of the reference in paragraph (3)(a) - a reference to so much of the holding company's assets for use in carrying on life insurance business that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of the holding company's assets for use in carrying on life insurance business; or
(ii) in the case of the reference in paragraph (3)(b) - a reference to so much of all the holding company's assets that comprise debts due or other amounts payable to the holding company by the subsidiary company, or by any company interposed between the holding company and the subsidiary company, as are related to the subsidiary company's assets whose gross value is included in the gross value of all the holding company's assets; and
(b) any reference to the subsidiary company's assets does not include a reference to:
(i) shares owned by the subsidiary company in another company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 ; or
(ii) assets comprising debts or other amounts payable to the subsidiary company by:
(A) the holding company; or
(B) any company interposed between the subsidiary company and the holding company; or
(C) any other company that is a subsidiary of the holding company by virtue of Division 6 of Part 1.2 of the Corporations Act 2001 .
S 507(5) amended by No 55 of 2001.
507(6)
For the purposes of subsection (3), the percentage of the paid-up share capital of the subsidiary company of which the holding company was the owner at the test time includes the percentage (if any) of that paid-up share capital of which the holding company was the indirect owner at that time, as calculated in accordance with section 501 .
507(7)
Subsections (2) to (5) apply in relation to the ownership by a company of any of the paid-up share capital of another company whether the other company's place of incorporation or establishment is the same as, or different from, the former company's place of incorporation or establishment.
507(8)
A reference in this section to the gross value of an asset of a company at the test time is a reference to that value as shown in a balance-sheet of the company that:
(a) was prepared in accordance with commercially accepted accounting principles; and
(b) gives a true and fair view of the company's financial position as at that time.
507(9)
If, at the test time, any of a company's assets ( ``the relevant assets'' ) are for use partly in carrying on life insurance business and partly for other purposes, a reference in this section to the gross value at that time of the company's assets for use in carrying on life insurance business is a reference to so much only of the gross value at that time of the relevant assets as is proportionate to the extent to which they are for use at that time in carrying on life insurance business.
507(10)
If an amount that, under subsection (3), is to be included in:
(a) the gross value, at the test time, of all the assets of a foreign company; or
(b) the gross value, at that time, of such of those assets as were for use at that time in carrying on life insurance business;
is not expressed in the currency in which the balance-sheet applicable under subsection (8) in relation to the foreign company is expressed, the amount to be so included is the equivalent amount expressed in that currency, being the equivalent amount obtained by reference to the appropriate rate of exchange between those 2 currencies in force at that time.
507(11)
For the purposes of subsection (2), if, at the test time:
(a) the foreign company referred to in that subsection owned shares in another company which was not a resident of Australia at that time and which at that time managed funds of the foreign company by investing those funds at the discretion of the other company; and
(b) the funds so managed were maintained by the foreign company in a manner similar to the manner in which companies carrying on life insurance business in Australia maintain statutory funds under Part 4 of the Life Insurance Act 1995 ;
the gross value of those shares at that time is to be included in the gross value of all the foreign company's assets, and in the gross value of the foreign company's assets for use in carrying on life insurance business, at that time.
S 507(11)(b) amended by No 5 of 1995.
S 507 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 507A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 507A formerly read:
If:
the interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.
SECTION 507A EXEMPTION FOR INTEREST IN FOREIGN HOLDING COMPANY OF FOREIGN LIFE INSURANCE COMPANY
507A(1)
Interest in holding company disregarded.
(a)
at the end of the notional accounting period of a foreign company (the
"
holding company
"
), the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
the holding company requirements set out in subsection (2) are satisfied; and
(c)
the subsidiary company requirements set out in subsection (3) are satisfied;
507A(2) Holding company requirements.
The holding company requirements are that:
(a) at the end of the notional accounting period, either:
(i) the holding company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in the carrying on of life insurance business; or
(ii) the holding company was included by an international sectoral classification system named in regulations made for the purposes of section 499 or, until regulations are so made, by an international sectoral classification system named in Schedule 5, in a class of companies designated by the system as engaged in the carrying on of life insurance business; and
(b) throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be, shares in the holding company that were included in the class mentioned in paragraph (1)(a) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange.
507A(3) Subsidiary company requirements.
The subsidiary company requirements are that:
(a) throughout the notional accounting period (the " interest holding period " ), or the part (also the " interest holding period " ) of that period in which the taxpayer had the interest in the holding company, as the case may be, one or more other foreign companies were wholly-owned subsidiaries of the holding company; and
(b) if there was only one such subsidiary, that subsidiary was:
(i) throughout the interest holding period, authorised under the law of its place of residence to carry on life insurance business; and
(ii) at the test time, principally engaged in the active carrying on of life insurance business; and
(c) if there were 2 or more such subsidiaries:
(i) throughout the interest holding period, at least one subsidiary was authorised under the law of its place of residence to carry on life insurance business; and
(ii) at their test time, the principal activities of all the subsidiaries, considered together, were the active carrying on of life insurance business.
507A(4) " Test time " .
The " test time " in relation to a subsidiary is:
(a) if the notional accounting period is one in respect of which the accounts of the subsidiary are made out -the end of that period; or
(b) if the notional accounting period is the taxpayer ' s year of income - the end of the last period in respect of which the accounts of the subsidiary were made out that ended before the end of that year of income.
507A(5) Single subsidiary - " principally engaged in active carrying on of life insurance business " .
For the purposes of subparagraph (3)(b)(ii), a subsidiary was principally engaged in the active carrying on of life insurance business at the test time if at that time the gross value of its assets for use in carrying on life insurance business was 50% or more of the gross value of all of its assets. For this purpose, subsections 507(3) to (11) (inclusive) apply in the same way as they apply for the purpose of paragraph 507(2)(b) .
507A(6) More than one subsidiary - " principal activities, considered together, were active carrying on of life insurance business " .
For the purposes of subparagraph (3)(c)(ii), the question whether, at their test time, the principal activities of 2 or more subsidiaries, considered together, were the active carrying on of life insurance business is determined as follows:
(a) first, work out for each subsidiary (including by applying subsections 507(3) to (11) (inclusive) in the same way as they apply for the purpose of paragraph 507(2)(b) ):
(i) the gross value, at its test time, of the subsidiary ' s assets for use in carrying on life insurance business; and
(ii) the gross value, at its test time, of all of the subsidiary ' s assets; and
(b) secondly, work out:
(i) the sum of the gross values in subparagraph (a)(i) for all of the subsidiaries; and
(ii) the sum of the gross values in subparagraph (a)(ii) for all of the subsidiaries; and
(c) thirdly, if the sum in subparagraph (b)(i) is 50% or more of the sum in subparagraph (b)(ii), then, at their test time, the principal activities of all of the subsidiaries, considered together, were the active carrying on of life insurance business.
S 507A inserted by No 82 of 1994.
Div 6 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 508 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 508 formerly read:
SECTION 508 OBJECT OF DIVISION
508
The object of this Division is to exempt certain taxpayers from taxation in respect of certain foreign investment fund income that would otherwise be taken to accrue from a foreign company that carries on general insurance business.
S 508 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 509 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 509 formerly read:
the interest referred to in paragraph (a) is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the foreign company in respect of that notional accounting period.
SECTION 509 EXEMPTION FOR INTEREST IN FOREIGN GENERAL INSURANCE COMPANY
509
If:
(a)
at the end of the notional accounting period of a foreign company the taxpayer had an interest in the foreign company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:
(i)
shares in the foreign company that were included in that class were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and
(ii)
the foreign company was authorised under the law of its place of residence to carry on general insurance business; and
(iii)
the foreign company was principally engaged in the active carrying on of general insurance business;
S 509 amended by No 18 of 1993 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 509A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 509A formerly read:
If:
the interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.
SECTION 509A EXEMPTION FOR INTEREST IN FOREIGN HOLDING COMPANY OF FOREIGN GENERAL INSURANCE COMPANY
509A(1)
Interest in holding company disregarded.
(a)
at the end of the notional accounting period of a foreign company (the
"
holding company
"
), the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
the holding company requirements set out in subsection (2) are satisfied; and
(c)
the subsidiary company requirements set out in subsection (3) are satisfied;
509A(2) Holding company requirements.
The holding company requirements are that:
(a) at the end of the notional accounting period, either:
(i) the holding company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in the carrying on of general insurance business; or
(ii) the holding company was included by an international sectoral classification system named in regulations made for the purposes of section 499 or, until regulations are so made, by an international sectoral classification system named in Schedule 5, in a class of companies designated by the system as engaged in the carrying on of general insurance business; and
(b) throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be, shares in the holding company that were included in the class mentioned in paragraph (1)(a) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange.
509A(3) Subsidiary company requirements.
The subsidiary company requirements are that, throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be:
(a) one or more other foreign companies were wholly-owned subsidiaries of the holding company; and
(b) if there was only one such subsidiary, that subsidiary was:
(i) authorised under the law of its place of residence to carry on general insurance business; and
(ii) principally engaged in the active carrying on of general insurance business; and
(c) if there were 2 or more such subsidiaries:
(i) at least one subsidiary was authorised under the law of its place of residence to carry on general insurance business; and
(ii) the principal activities of all the subsidiaries, considered together, were the active carrying on of general insurance business.
S 509A inserted by No 82 of 1994.
Div 7 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 510 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 510 formerly read:
SECTION 510 OBJECT OF DIVISION
510
The object of this Division is to exempt certain taxpayers from taxation in respect of certain foreign investment fund income that would otherwise be taken to accrue from a foreign company that engages in certain activities connected with real property.
S 510 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 511 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 511 formerly read:
the interest referred to in paragraph (a) is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the foreign company in respect of that notional accounting period.
SECTION 511 EXEMPTION
511
If:
(a)
at the end of the notional accounting period of a foreign company the taxpayer had an interest in the foreign company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:
(i)
shares in the foreign company that were included in that class were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and
(ii)
the foreign company was principally engaged in the active carrying on of any one or more of the following:
(A)
construction;
(B)
development of real property through capital improvement;
(C)
receipt of rental income from commercial real property owned by the company, being property in respect of which the management, maintenance and security services were principally provided by directors or employees of the company or by a wholly-owned subsidiary of the company that was principally engaged in carrying on the business of providing those services through directors or employees of that subsidiary;
(D)
provision of management services in respect of real property by directors or employees of the company;
(E)
acting as agent in connection with the sale or purchase of commercial real property;
S 511 amended by No 138 of 1994 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 511A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 511A formerly read:
If:
the interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.
SECTION 511A EXEMPTION FOR INTEREST IN FOREIGN HOLDING COMPANY OF FOREIGN REAL PROPERTY COMPANY
511A(1)
Interest in holding company disregarded.
(a)
at the end of the notional accounting period of a foreign company (the
"
holding company
"
), the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
the holding company requirements set out in subsection (2) are satisfied; and
(c)
the subsidiary company requirements set out in subsection (3) are satisfied;
511A(2) Holding company requirements.
The holding company requirements are that:
(a) at the end of the notional accounting period, either:
(i) the holding company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in carrying on one or more of the activities mentioned in subparagraph 511(b)(ii) ; or
(ii) the holding company was included by an international sectoral classification system named in regulations made for the purposes of section 499 or, untilregulations are so made, by an international sectoral classification system named in Schedule 5, in a class of companies designated by the system as engaged in carrying on one or more of the activities mentioned in subparagraph 511(b)(ii) ; and
(b) throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be, shares in the holding company that were included in the class mentioned in paragraph (1)(a) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange.
511A(3) Subsidiary company requirements.
The subsidiary company requirements are that, throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be:
(a) one or more other foreign companies were wholly-owned subsidiaries of the holding company; and
(b) if there was only one such subsidiary - that subsidiary was principally engaged in the active carrying on of one or more of the activities mentioned in subparagraph 511(b)(ii) ; and
(c) if there were 2 or more such subsidiaries - the principal activities of all the subsidiaries, considered together, were the active carrying on of one or more of the activities mentioned in subparagraph 511(b)(ii) .
S 511A inserted by No 82 of 1994.
Div 8 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 512 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 512 formerly read:
SECTION 512 OBJECT OF DIVISION
512
The object of this Division is to exempt a taxpayer from taxation under this Part in respect of foreign investment fund income that would otherwise be taken to accrue from interests in certain entities that are subject to tax in the United States of America.
S 512 inserted by No 93 of 1999; repealed by No 155 of 1997 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 512A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 512A formerly read:
SECTION 512A DIVISION DOES NOT APPLY TO INTERESTS IN CFTs
512A
This Division does not apply in relation to an interest in a CFT.
S 512A inserted by No 93 of 1999.
(Repealed by No 114 of 2010)
S 513 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 513 formerly read:
SECTION 513 EXEMPTIONS
513(1)
The operative provision does not apply to a taxpayer in respect of an interest in:
(a)
an entity that is treated as a corporation, and is subject to tax on its worldwide income, under the Internal Revenue Code of 1986 of the United States of America; or
(b)
a company or trust that is treated as a regulated investment company, or a real estate investment trust, for the purposes of the Internal Revenue Code of 1986 of the United States of America.
513(2)
The operative provision does not apply to a taxpayer in respect of an interest in one of the following entities if the conditions in subsection (3) or (4) are satisfied:
(a)
an entity that is a limited partnership, or a limited liability company under a law of the United States of America or a law of a State of the United States of America;
(b)
an entity that is treated as a common trust fund for the purposes of the Internal Revenue Code of 1986 of the United States of America.
513(3)
The condition in this subsection is that the taxpayer satisfies the Commissioner that:
(a)
the interest that the taxpayer holds at the end of the entity's notional accounting period is held for the sole purpose of investing directly, or indirectly through one or more interposed entities, in:
(i)
a business conducted in the United States of America; or
(ii)
real property located in the United States of America; and
(b)
the entity does not directly, or indirectly through one or more interposed entities (other than through an entity covered by paragraph (1)(a) or (b)):
(i)
have an interest in income or gains derived from sources outside of the United States of America; or
(ii)
hold an interest in a FIF that is not resident in the United States of America; or
(iii)
hold real property that is not located in the United States of America.
513(4)
The condition in this subsection is that the taxpayer satisfies the Commissioner that:
(a)
the interest that the taxpayer holds at the end of the entity's notional accounting period is held for the sole purpose of investing directly, or indirectly through one or more interposed entities, in:
(i)
a business conducted in the United States of America; or
(ii)
real property located in the United States of America; and
(b)
throughout the entity's notional accounting period, the total value of:
(i)
any interests that the entity has in income or gains derived from sources outside the United States of America; and
(ii)
any interests that the entity has in FIFs that are not resident in the United States of America; and
being interests or real property that the entity has or holds directly, or indirectly through one or more interposed entities (other than through an entity covered by paragraph (1)(a) or (b)), does not exceed 5% of the total value of all interests held by the entity in other entities; and
(iii)
any real property held by the entity that is not located in the United States of America;
(c)
throughout the entity's notional accounting period, the value of assets held by the entity that:
(i)
produce income from sources outside the United States of America; or
do not exceed 5% of the total value of assets held by the entity.
(ii)
if disposed of would give rise to a gain from a source outside the United States of America;
513(5)
For the purposes of subsection (4), the value of FIF interests and the value of assets is to be determined using the accounting records of the entity.
S 513 inserted by No 93 of 1999; repealed by No 155 of 1997 and inserted by No 190 of 1992.
Div 9 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 514 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 514 formerly read:
SECTION 514 OBJECT OF DIVISION
514
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a FIF or a FLP if the value of the interests of the taxpayer and any associates is less than $50,000.
S 514 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 515 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 515 formerly read:
the operative provision does not apply to the taxpayer in relation to that FIF or FLP in respect of that notional accounting period of that FIF or FLP. whichever is the greater amount.
SECTION 515 EXEMPTION
515(1)
If:
(a)
a taxpayer who is a natural person (otherwise than in the capacity of a trustee) had an interest or interests in a particular FIF or FLP at the end of a notional accounting period of that FIF or FLP; and
(b)
the sum of:
(i)
the values of all the interests of the taxpayer and any associates of the taxpayer in FIFs; and
at the end of the year of income in which that notional accounting period ended did not exceed $50,000;
(ii)
the values of all FLPs in which the taxpayer and any associates of the taxpayer had interests;
515(2)
For the purposes of subsection (1), the value at the end of the year of income of a person's interest in a FIF, or of a FLP in which a person has an interest, is taken to be:
(a)
the cost incurred by the person in acquiring the interest in the FIF or FLP, as the case may be; or
(b)
the market value of the interest in the FIF or of the FLP, as the case may be, at the end of the year of income;
S 515 inserted by No 190 of 1992.
Div 10 repealed by No 32 of 2006, s 3 and Sch 1 item 15, effective 6 April 2006.
(Repealed by No 32 of 2006)
S 516 repealed by No 32 of 2006, s 3 and Sch 1 item 15, effective 6 April 2006. S 516 formerly read:
SECTION 516 OBJECT OF DIVISION
516
The object of this Division is to exempt certain taxpayers who are visitors to Australia from taxation in respect of foreign investment fund income.
S 516 inserted by No 190 of 1992.
(Repealed by No 32 of 2006)
S 517 repealed by No 32 of 2006, s 3 and Sch 1 item 15, effective 6 April 2006. S 517 formerly read:
For the purposes of this section, a person is an exempt visitor to Australia in relation to a year of income if at the end of the year of income:
S 517(2) amended by No 122 of 1997.
SECTION 517 EXEMPTION
517(1)
If a taxpayer is an exempt visitor to Australia in relation to a year of income, the operative provision does not apply to the taxpayer in relation to a FIF or FLP in respect of the notional accounting period of the FIF or FLP that ends in that year of income.
517(2)
[Who is an exempt visitor]
(a)
the person was lawfully in Australia because the person was the holder of a temporary visa (the
current visa
) granted under the
Migration Act 1958
; and
(b)
the period from the time when:
(i)
the current visa; or
was granted until the current visa is due to expire does not exceed 4 years; and
(ii)
if the current visa was granted by way of an extension of a previous temporary visa or of extensions of previous temporary entry visas
-
the earlier or earliest previous temporary visa;
(c)
the person is not awaiting the determination of an application for the grant to the person of permanent residency in Australia under that Act.
517(3)
A reference in subsection (2) to a temporary visa includes a reference to a temporary entry permit granted before 1 September 1994.
S 517(3) inserted by No 122 of 1997.
517(4)
For the purposes of this section, a person who is a citizen of New Zealand is an exempt visitor to Australia in relation to a year of income if:
(a) at the end of that year of income:
(i) the person had not been a resident of Australia for a continuous period exceeding 4 years; and
(ii) had the person not been a citizen of New Zealand, he or she would have been required to be the holder of a temporary visa; and
(b) the person has not come to live in Australia permanently.
S 517(4) inserted by No 122 of 1997.
S 517 inserted by No 190 of 1992.
Div 11 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 518 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 518 formerly read:
SECTION 518 OBJECT OF DIVISION
518
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a FIF that is an employer-sponsored superannuation fund.
S 518 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 519 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 519 formerly read:
the operative provision does not apply to the taxpayer in relation to that FIF in respect of that notional accounting period.
"employee"
SECTION 519 INTERESTS OF EMPLOYEES AND FORMER EMPLOYEES TO BE EXEMPT
519(1)
If:
(a)
a taxpayer who is a natural person had an interest or interests in a particular FIF at the end of a notional accounting period of that FIF; and
(b)
that FIF was a superannuation fund maintained by an employer, or by an associate of an employer, for the benefit of employees of the employer; and
(c)
the taxpayer had the interest or interests because he or she was such an employee;
519(2)
In this section:
, in relation to an employer, includes:
(a)
a former employee of the employer; or
(b)
if the employer is a company
-
a director or former director of the company.
S 519 inserted by No 190 of 1992.
Div 11A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
Div 11A heading substituted by No 45 of 2008, s 3 and Sch 7 item 5, effective 26 June 2008. The heading formerly read:
Division 11A - Exemption for virtual PST assets, segregated exempt assets and interests held by complying superannuation entities etc.
Div 11A inserted by No 73 of 2004.
(Repealed by No 114 of 2010)
S 519A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 519A formerly read:
SECTION 519A OBJECTS OF DIVISION
519A
The objects of this Division are:
(a)
to exempt taxpayers from taxation under this Part in respect of foreign investment fund income that would otherwise be taken to accrue from complying superannuation/FHSA assets or segregated exempt assets; and
(b)
to exempt taxpayers who are trustees of complying superannuation entities or certain fixed trusts from taxation under this Part in respect of foreign investment fund income.
S 519A amended by No 45 of 2008, s 3 and Sch 4 item 4, by substituting " complying superannuation/FHSA " for " virtual PST " in para (a), effective 26 June 2008.
S 519A inserted by No 73 of 2004.
(Repealed by No 114 of 2010)
S 519B repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 519B formerly read:
The operative provision does not apply to a taxpayer in respect of an interest in a FIF that is a complying superannuation/FHSA asset or a segregated exempt asset of the taxpayer.
S 519B(1) amended by No 45 of 2008, s 3 and Sch 4 item 5, by substituting
"
complying superannuation/FHSA
"
for
"
virtual PST
"
, effective 26 June 2008.
SECTION 519B EXEMPTION
519B(1)
Complying superannuation/FHSA assets and segregated exempt assets.
519B(2) Complying superannuation entities.
If a taxpayer is the trustee of a complying superannuation entity in relation to a year of income, the operative provision does not apply to the taxpayer in relation to a FIF in respect of the notional accounting period of the FIF that ends in the year of income.
519B(3) Fixed trusts with various fixed entitlements.
If:
(a) a taxpayer is the trustee of a fixed trust (an interposed fixed trust ) at the end of a year of income; and
(b) one of the following subparagraphs (whether or not the same subparagraph) applies in relation to each of the fixed entitlements to shares of the income and capital of the trust at the end of the year of income:
(i) it is a complying superannuation/FHSA asset;
(ii) it is a segregated exempt asset;
(iii) it is held by the trustee of a complying superannuation entity;
(iv) it is held by the trustee of an interposed fixed trust within the meaning of this subsection or subsection (4);
the operative provision does not apply to the taxpayer in relation to a FIF in respect of the notional accounting period of the FIF that ends in theyear of income.
S 519B(3) amended by No 45 of 2008, s 3 and Sch 4 item 6, by substituting " complying superannuation/FHSA " for " virtual PST " in para (b)(i), effective 26 June 2008.
519B(4) Fixed trusts with some fixed entitlements held by former complying superannuation entities.
If a taxpayer is the trustee of a fixed trust (an interposed fixed trust ) at the end of a year of income, where:
(a) some of the fixed entitlements to shares of the income and capital of the trust are held by the trustees of entities that:
(i) are not complying superannuation entities in relation to the year of income; but
(ii) acquired their fixed entitlements in previous years of income and were complying superannuation entities in relation to those years; and
(b) one of the following subparagraphs (whether or not the same subparagraph) applies in relation to each of the other fixed entitlements to shares of the income and capital of the trust at the end of the year of income:
(i) it is a complying superannuation/FHSA asset;
(ii) it is a segregated exempt asset;
(iii) it is held by the trustee of a complying superannuation entity;
(iv) it is held by the trustee of an interposed fixed trust within the meaning of this subsection or subsection (3); and
(c) the market value at the end of the year of income of the fixed entitlements to which paragraph (a) applies is not more than 5% of the market value at that time of all of the fixed entitlements to income and capital of the trust;
the operative provision does not apply to the taxpayer in relation to a FIF in respect of the notional accounting period of the FIF that ends in the year of income.
S 519B(4) amended by No 45 of 2008, s 3 and Sch 4 item 7, by substituting " complying superannuation/FHSA " for " virtual PST in para (b)(i), effective 26 June 2008.
519B(5)
In determining for the purposes of subparagraph (4)(a)(ii) whether an entity was a complying superannuation entity in relation to the year of income in which it acquired the fixed entitlements mentioned in that subparagraph, disregard any notice issued after the end of that year of income under section 40 of the Superannuation Industry (Supervision) Act 1993 to the effect that the entity was not a complying superannuation entity in relation to the year of income.
S 519B inserted by No 73 of 2004.
Div 12 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 520 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 520 formerly read:
SECTION 520 OBJECT OF DIVISION
520
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from FIFs to the extent that that income is attributable to interests in FIFs that consist of trading stock whose value to be taken into account at the end of the year of income under section
70-70
of the
Income Tax Assessment Act 1997
is its market value.
S 520 amended by No 121 of 1997 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 521 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 521 formerly read:
that interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the FIF in respect of that notional accounting period.
SECTION 521 EXEMPTION
521
If:
(a)
subsection
70-70(2)
of the
Income Tax Assessment Act 1997
applies to a taxpayer in respect of a year of income; and
(b)
at any time during the notional accounting period of a FIF that ended in that year of income the taxpayer had an interest in the FIF that was trading stock;
S 521 amended by No 121 of 1997 and inserted by No 190 of 1992.
Div 13 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 522 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 522 formerly read:
SECTION 522 OBJECT OF DIVISION
522
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a foreign company that engages in several activities.
S 522 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 523 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 523 formerly read:
then the taxpayer's interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the foreign company in respect of the notional accounting period.
SECTION 523 EXEMPTION
523
If:
(a)
at the end of the notional accounting period of a foreign company a taxpayer had an interest in the foreign company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:
(i)
shares in the foreign company that were included in that class were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and
(ii)
the foreign company was engaged in the active carrying on of any 2 or more of the following activities:
(A)
construction;
(B)
development of real property through capital improvement;
(C)
receipt of rental income from commercial real property owned by the company, being property in respect of which the management, maintenance and security services were principally provided by directors or employees of the company or by a wholly-owned subsidiary of the company that was principally engaged in carrying on the business of providing those services through directors or employees of that subsidiary;
(D)
provision of management services in respect of real property by directors or employees of the company;
(E)
acting as agent in connection with the sale or purchase of commercial real property;
(F)
general insurance business of a kind that the company was authorised under the law of its place of residence to carry on;
(G)
life insurance business of a kind that the company was authorised under the law of its place of residence to carry on;
(H)
eligible activities within the meaning of Division
3
; and
(c)
having regard to all the activities in which the company engaged in that period or that part of that period, it would be concluded that any 2 or more of the activities referred to in subparagraph (b)(ii), taken together, were the activities in which the company was principally engaged throughout that period or that part of that period, as the case may be;
S 523 amended by No 138 of 1994.
S 523 amended by No 18 of 1993 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 523A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 523A formerly read:
If:
the interest is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.
SECTION 523A EXEMPTION FOR INTEREST IN FOREIGN HOLDING COMPANY OF FOREIGN MIXED ACTIVITY COMPANY
523A(1)
Interest in holding company disregarded.
(a)
at the end of the notional accounting period of a foreign company (the
``holding company''
), the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and
(b)
the holding company requirement set out in subsection (2) is satisfied; and
(c)
the subsidiary company requirements set out in subsection (3) are satisfied;
523A(2) Holding company requirement.
The holding company requirement is that throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be, shares in the holding company that were included in the class mentioned in paragraph (1)(a) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange.
523A(3) Subsidiary company requirements.
The subsidiary company requirements are that, throughout the notional accounting period, or the part of that period in which the taxpayer had the interest in the holding company, as the case may be:
(a) one or more other foreign companies were wholly-owned subsidiaries of the holding company; and
(b) if there was only one such subsidiary - that subsidiary was principally engaged in the active carrying on of 2 or more of the activities mentioned in subparagraph 523(b)(ii) ; and
(c) if there were 2 or more such subsidiaries - the principal activities of all the subsidiaries, considered together, were the active carrying on of 2 or more activities mentioned in subparagraph 523(b)(ii) .
S 523A inserted by No 82 of 1994.
Div 14 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
Div 14 (heading) substituted by No 73 of 2004.
(Repealed by No 114 of 2010)
S 524 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 524 formerly read:
SECTION 524 OBJECT OF DIVISION
524
The object of this Division is to exempt a taxpayer from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from FIFs if the total value of the taxpayer's interests in those FIFs does not exceed 10% of the total value of all the taxpayer's interests in FIFs.
S 524 amended by No 73 of 2004 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 525 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 525 formerly read:
the operative provision does not apply to the taxpayer in relation to the FIF or FIFs referred to in paragraph (a) in respect of the notional accounting period or notional accounting periods referred to in that paragraph. S 525(1) amended by No 73 of 2004. whichever is the greater amount.
SECTION 525 EXEMPTION
525(1)
If:
(a)
at the end of the notional accounting period of a FIF, or the end of the notional accounting periods of FIFs, that ended in the year of income a taxpayer had an interest in that FIF or interests in those FIFs; and
(b)
apart from this Division the operative provision would apply to the taxpayer in relation to that FIF or those FIFs in respect of that notional accounting period or those notional accounting periods; and
(c)
the value or the sum of the values of the taxpayer's interest or interests in that FIF or those FIFs at the end of that year of income did not exceed 10% of the sum of the values of all the taxpayer's interests in FIFs at the end of that year of income (other than interests in relation to which the operative provision does not apply to the taxpayer in respect of notional accounting periods that ended in that year of income because of Division
2
or
11
);
525(2)
For the purposes of subsection (1), the value at the end of the year of income of a person's interests in a FIF is taken to be:
(a)
the cost incurred by the person in acquiring the interest in the FIF; or
(b)
the market value of the interest in the FIF at the end of the year of income;
S 525 inserted by No 190 of 1992.
Div 15 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 526 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 526 formerly read:
SECTION 526 OBJECT OF DIVISION
526
The object of this Division is to exempt a taxpayer who is an underwriting member of Lloyd's from taxation in respect of foreign investment fund income that would otherwise be taken to accrue from a Premiums Trust Fund.
S 526 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 527 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 527 formerly read:
SECTION 527 EXEMPTION
527
The operative provision does not apply to a taxpayer who is an underwriting member of Lloyd's in relation to an interest in assets that form part of a Premiums Trust Fund, as referred to in section
83
of the Insurance Companies Act 1982 of the United Kingdom.
S 527 inserted by No 190 of 1992.
Div 16 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 528 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 528 formerly read:
SECTION 528 OBJECT OF DIVISION
528
The object of this Division is to include in a taxpayer's assessable income in certain circumstances foreign investment fund income that accrued to the taxpayer.
S 528 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 529 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 529 formerly read:
SECTION 529 FOREIGN INVESTMENT FUND INCOME TO BE INCLUDED IN ASSESSABLE INCOME
529(1)
The circumstances in which this section applies to a taxpayer in relation to a FIF or FLP in respect of a notional accounting period of the FIF or FLP are as set out in section
485
.
529(2)
If foreign investment fund income accrued to a taxpayer to whom this section applies from a FIF or a FLP in respect of a notional accounting period of the FIF or FLP, the taxpayer's assessable income of the year of income in which the notional accounting period ended includes:
(a)
if the taxpayer was a resident throughout the whole of the notional accounting period
-
the foreign investment fund income; or
(b)
if the taxpayer was a resident throughout a part or parts of the notional accounting period
-
so much of the foreign investment fund income as is worked out using the formula:
Foreign investment fund income
×
Number of days of residence
Total number of days
In the formula in paragraph (b):
foreign investment fund income means the amount of the foreign investment fund income that accrued to the taxpayer from the FIF or FLP in respect of the notional accounting period.
number of days of residence means the number of days in the notional accounting period throughout which the taxpayer was a resident.
total number of days means the number of days in the notional accounting period.
S 529(2) substituted by No 76 of 1996.
S 529 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 530 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 530 formerly read:
the amount to be included (
"
the section
529
amount
"
) under that section in that assessable income is reduced by so much of the payment as: and does not exceed the section
529
amount. S 530(1) amended by No 96 of 2004, No 66 of 2003, No 76 of 1996 and No 18 of 1993. the amount included in the taxpayer
'
s assessable income under section
457
is taken for the purposes of subsection (1) of this section to be a FIF attribution account payment made by the FIF to the taxpayer.
SECTION 530 REDUCTION OF FOREIGN INVESTMENT FUND INCOME BECAUSE OF INTERIM DIVIDEND OR INTERIM DISTRIBUTION OF TRUST INCOME
530(1)
If:
(a)
a FIF attribution account payment is made by a FIF or a FLP to a taxpayer during a notional accounting period of the FIF or FLP, as the case may be; and
(b)
under section
529
an amount of foreign investment fund income that is taken to have accrued to the taxpayer from that FIF or FLP in respect of that period would be included in the taxpayer
'
s assessable income of the year of income in which that period ended;
(c)
is included in that assessable income; or
(ca)
was included in the taxpayer
'
s assessable income of the year of income that immediately preceded the year of income referred to in paragraph (b); or
(d)
is a non-portfolio dividend (as defined in section
317
) that is:
(i)
non-assessable non-exempt income under section
23AJ
; or
(ii)
notional exempt income of the taxpayer under section
23AJ
or
404
;
530(2)
If:
(a)
an amount of foreign investment fund income that accrued to a taxpayer from a FIF in respect of a notional accounting period of the FIF is included in the taxpayer
'
s assessable income of a year of income; and
(b)
a residence-change time (within the meaning of section
457
) in relation to a CFC occurs in that notional accounting period of the FIF; and
(c)
section
457
applies to the taxpayer in respect of the taxpayer
'
s assessable income of the year of income in which the residence-change time occurs; and
(d)
the CFC is the same entity as the FIF;
S 530 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 530A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 530A formerly read:
SECTION 530A REDUCTION OF FOREIGN INVESTMENT FUND INCOME BECAUSE OF EMPLOYEE SHARE SCHEME
530A(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.
530A(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.
530A(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.
530A(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.
S 530A substituted by No 133 of 2009, s 3 and Sch 1 item 20, applicable in relation to the ESS interests mentioned in subsections
83A-5(1)
and
(2)
of the
Income Tax (Transitional Provisions) Act 1997
. S 530A formerly read:
the foreign investment fund income of the taxpayer, to the extent that it relates to the share or right, for the notional accounting period is zero. S 530A(1A) inserted by No 64 of 2005. the foreign investment fund income of the taxpayer for the notional accounting period is to be reduced by an amount equal to any increase in the market value of the share or right during the reduction period. S 530A(1) amended by No 64 of 2005. S 530A(3) inserted by
No 56 of 2007
, s 3 and Sch 3 item 16, effective 12 April 2007.
No 56 of 2007
, s 3 and Sch 3 item 39 contains the following application provision:
acquisition
S 530A(4) inserted by
No 56 of 2007
, s 3 and Sch 3 item 16, effective 12 April 2007.
No 56 of 2007
, s 3 and Sch 3 item 39 contains the following application provision:
acquisition
SECTION 530A REDUCTION OF FOREIGN INVESTMENT FUND INCOME BECAUSE OF EMPLOYEE SHARE SCHEME SHARES OR RIGHTS
530A(1A)
If:
(a)
a taxpayer acquired a qualifying share or right under an employee share scheme and has not made an election under section
139E
covering the share or right; and
(b)
for the whole of a notional accounting period of a FIF the following conditions are satisfied:
(i)
the taxpayer holds the share or right;
(ii)
the share or right is an interest in the FIF;
(iii)
the cessation time for the share or right has not occurred;
530A(1)
If:
(a)
a taxpayer acquired a qualifying share or right under an employee share scheme and has not made an election under section
139E
covering the share or right; and
(b)
there is a period (the
reduction period
) forming part of a notional accounting period of a FIF in respect of which the following conditions are satisfied:
(i)
the taxpayer holds the share or right;
(ii)
the share or right is an interest in the FIF;
(iii)
the cessation time for the share or right has not occurred;
530A(2)
In the section,
cessation time, market value, qualifying right
and
qualifying share
have the same meanings as in Division
13A
of Part
III
.
530A(3)
This section applies in relation to a stapled security or right to acquire a stapled security that is treated as a qualifying share or qualifying right because of Subdivision
DB
of Division
13A
of Part
III
in the same way as it applies in relation to a share or right.
(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.
(2)
In this item:
has the same meaning as in Division
13A
of Part
III
of the
Income Tax Assessment Act 1936
.
530A(4)
The cessation time for the stapled security or right is the cessation time provided for in that Division.
(1)
The amendment applies to acquisitions of stapled securities, and of rights to acquire stapled securities, on or after 1 July 2006.
(2)
In this item:
has the same meaning as in Division
13A
of Part
III
of the
Income Tax Assessment Act 1936
.
S 530A inserted by No 169 of 1995.
Div 17 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 531 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 531 formerly read:
SECTION 531 OBJECT OF DIVISION
531
The object of this Division is to allow foreign investment fund losses incurred by a taxpayer as a result of the application of the market value method in relation to a FIF, or the cash surrender value method in relation to a FLP, to be deducted from the taxpayer's assessable income.
S 531 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 532 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 532 formerly read:
so much of that foreign investment fund loss as does not exceed that FIF attribution surplus is an allowable deduction from the taxpayer's assessable income of the year of income in which that notional accounting period ended.
SECTION 532 FOREIGN INVESTMENT FUND LOSS FROM FIF UNDER MARKET VALUE METHOD TO BE ALLOWABLE DEDUCTION
532
If:
(a)
a taxpayer incurs a foreign investment fund loss under section
541
from a FIF in respect of a notional accounting period; and
(b)
a FIF attribution surplus for the FIF under section
604
exists in relation to the taxpayer at the end of that notional accounting period;
S 532 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 533 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 533 formerly read:
so much of that foreign investment fund loss as does not exceed that FIF attribution surplus is an allowable deduction from the taxpayer's assessable income of the year of income in which that notional accounting period ended.
SECTION 533 FOREIGN INVESTMENT FUND LOSS FROM FLP UNDER CASH SURRENDER VALUE METHOD TO BE ALLOWABLE DEDUCTION
533
If:
(a)
a taxpayer incurs a foreign investment fund loss under section
599
from a FLP in respect of a notional accounting period; and
(b)
a FIF attribution surplus for the FLP under section
604
exists in relation to the taxpayer at the end of that notional accounting period;
S 533 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 533A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 533A formerly read:
SECTION 533A FOREIGN INVESTMENT FUND LOSSES TO BE EXPRESSED IN AUSTRALIAN CURRENCY
533A
For the purposes of section
532
or
533
, if the foreign investment fund loss mentioned in that subsection is not expressed in Australian currency, it is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of the notional accounting period.
S 533A inserted by No 138 of 1994.
Div 17A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
Div 17A inserted by No 83 of 2004.
(Repealed by No 114 of 2010)
S 533B repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 533B formerly read:
then the taxpayer is entitled to a deduction, for the year of income in which the transfer happened, for the lesser of: S 533B(2) repealed by No 15 of 2007, s 3 and Sch 1 item 139, applicable to the 2007-2008 income year and later years. S 533B(2) formerly read:
complying superannuation fund
eligible non-resident non-complying superannuation fund
SECTION 533B
SECTION 533B DEDUCTION FOR OVERSEAS SUPERANNUATION TRANSFERS
533B
If:
(a)
a taxpayer has an interest in a FIF that is a fund or scheme in relation to which Subdivision
305-B
of the
Income Tax Assessment Act 1997
applies (see section
305-55
of that Act) (the
paying fund
); and
(b)
the paying fund transfers an amount to a complying superannuation fund in respect of the taxpayer; and
(c)
the taxpayer chooses under section
305-80
of the
Income Tax Assessment Act 1997
that the amount, or part of the amount, is to be treated as assessable income of the complying superannuation fund; and
(d)
immediately before the transfer happens, there is a FIF attribution surplus for the paying fund under section
604
in relation to the taxpayer;
(e)
the FIF attribution surplus; and
(f)
the amount covered by the taxpayer's choice.
533B(2)
(Repealed by No 15 of 2007)
533B(2)
In this section:
has the same meaning as in Part
IX
.
has the same meaning as in Subdivision AA of Division
2
of Part
III
.
S 533B amended by No 15 of 2007, s 3 and Sch 1 items 135 to 138, by substituting " a fund or scheme in relation to which Subdivision 305-B of the Income Tax Assessment Act 1997 applies (see section 305-55 of that Act) " for " an eligible non-resident non-complying superannuation fund " in para (a), substituting para (c) and substituting " choice " for " election " in para (f), applicable to the 2007-2008 income year and later years. Para (c) formerly read:
(c) the taxpayer elects under subsection 27CAA(3) that the amount, or part of the amount, is to be treated as a taxable contribution of the complying superannuation fund; and
S 533B inserted by No 83 of 2004.
Div 18 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
Subdiv A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 534 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 534 formerly read:
SECTION 534 OBJECT OF DIVISION
534(1)
The object of this Division is to prescribe methods for determining whether any foreign investment fund income accrued from a particular FIF or FLP in respect of a notional accounting period to a taxpayer to whom the operative provision applies in relation to the FIF or FLP in respect of that period.
534(2)
Subject to this Subdivision, there are 3 alternative methods for making a determination in relation to a FIF, as follows:
(a)
the method set out in Subdivision B (
"
the market value method
"
);
(b)
the method set out in Subdivision C (
"
the deemed rate of return method
"
);
(c)
the method set out in Subdivision D (
"
the calculation method
"
).
534(3)
Subject to this Subdivision, there are 2 alternative methods for making a determination in relation to a FLP, as follows:
(a)
the method set out in Subdivision E (
"
the deemed rate of return method
"
);
(b)
the method set out in Subdivision F (
"
the cash surrender value method
"
).
S 534 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 535 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 535 formerly read:
S 535(3) amended by No 18 of 1993. S 535(4) substituted by No 18 of 1993. S 535(4A) inserted by
No 143 of 2007
, s 3 and Sch 1 item 2, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007.
SECTION 535 METHODS APPLICABLE IN RELATION TO A FIF
535(1)
Subject to this section, if it is practicable to apply the market value method in respect of the taxpayer
'
s interest, or all of the taxpayer
'
s interests in a particular class or classes, in a FIF in respect of the notional accounting period, the market value method is to be so applied.
535(2)
Subject to this section, if it is not practicable to apply the market value method in respect of the taxpayer
'
s interest, or all of the taxpayer
'
s interests in a particular class, in a FIF in respect of the notional accounting period, the deemed rate of return method is to be applied in respect of the interest or the interests in that class.
535(3)
Subject to subsections (4) and (5), the taxpayer may elect to apply the calculation method in respect of all of the taxpayer
'
s interests in a FIF in respect of a notional accounting period, and if such an election is made, the calculation method is to be so applied.
535(4)
The taxpayer is not entitled to make an election under subsection (3) in relation to a FIF in relation to a notional accounting period (
'
'
the current notional accounting period
'
'
) if:
(a)
the taxpayer has made an election under that subsection in relation to the FIF in relation to a previous notional accounting period ending after the day on which the
Taxation Laws Amendment Act (No 2) 1993
receives the Royal Assent; and
(b)
the taxpayer has not made an election under that subsection in relation to the FIF in relation to every notional accounting period (if any) in respect of which the operative provision applied that has occurred after the previous notional accounting period and before the current notional accounting period.
535(4A)
Subsection (4) does not prevent the taxpayer from making an election under subsection (3) in relation to a FIF in relation to a notional accounting period if the taxpayer also makes a choice under subsection
559A(1)
in relation to the FIF in relation to the notional accounting period.
535(5)
The taxpayer is not entitled to make an election under subsection (3) in relation to a FIF unless the taxpayer also makes an election in relation to the FIF under subsection
486(3)
.
535(6)
This section has effect subject to section
577
.
S 535 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 536 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 536 formerly read:
the amount that, apart from this subsection, would have been the foreign investment fund income that accrued to the taxpayer from the FLP in respect of the notional accounting period concerned is increased by the amount worked out using the formula:
SECTION 536 METHODS APPLICABLE IN RELATION TO FLP
536(1)
The deemed rate of return method is to be applied in respect of the taxpayer
'
s interest in a FLP in respect of a notional accounting period unless, under the following provisions of this section, the cash surrender value method is to be applied in respect of that period.
536(2)
Subject to subsection (3), the taxpayer may elect to apply the cash surrender value method in respect of the taxpayer
'
s interest in the FLP in respect of a notional accounting period (
"
the relevant notional accounting period
"
) if the deemed rate of return method has not already been applied in respect of that interest in respect of that period.
536(3)
The taxpayer is not entitled to make an election under subsection (2) in relation to a FLP unless the taxpayer also makes an election in relation to a FLP under subsection
487(3)
.
536(4)
If such an election is made, then, subject to the following provisions of this section, the cash surrender value method is to be applied in respect of the relevant notional accounting period and in respect of every later notional accounting period.
536(5)
An election under subsection (2) is irrevocable.
536(6)
If the cash surrender value method would, apart from this subsection, be required to be applied in respect of a notional accounting period but the taxpayer is unable to provide cash surrender values for the beginning and the end of that period, the cash surrender value is not to be applied in respect of that period or any later notional accounting period.
536(7)
If the deemed rate of return method is to be applied in respect of a notional accounting period because of subsection (6) and the cash surrender value method has been applied in respect of one or more previous notional accounting periods, then subsections (8) and (9) have effect.
536(8)
The application of the deemed rate of return method in respect of the first notional accounting period in respect of which it is to be applied because of subsection (6) (
"
the notional accounting period concerned
"
) is to be on the same basis as that on which it would have been applied if the cash surrender value method had not been applied in respect of any previous notional accounting period.
536(9)
However, if:
(a)
the FLP was issued after 3 November 1992; and
(b)
the amount, or the sum of the amounts, of foreign investment fund income (
"
the actual FIF income
"
) that accrued to the taxpayer from the FLP in respect of the notional accounting period or notional accounting periods in respect of which the cash surrender value method was applied is less than the amount, or the sum of the amounts, of foreigninvestment fund income (
"
the notional FIF income
"
) that would have so accrued if the deemed rate of return method had been applied in respect of that period or those periods;
The notional FIF income
−
The actual FIF income
S 536 inserted by No 190 of 1992.
Subdiv B repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 537 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 537 formerly read:
SECTION 537 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME BY MARKET VALUE METHOD
537(1)
This Subdivision applies only if it is practicable to ascertain, as at the relevant times referred to in this Subdivision, the market value of the interest, or the market values of all the interests in a particular class or classes, of a person (
``the taxpayer''
) in a FIF. For the purposes of this Subdivision as so applying, a reference to an interest in a FIF is a reference to an interest of which it is practicable to ascertain the market value as at the relevant time.
537(2)
Accordingly, this Subdivision sets out the procedure for determining by the market value method whether, in respect of the interest, or the interests in the class or classes concerned, any foreign investment fund income accrued to the taxpayer from the FIF in respect of a notional accounting period (
``the relevant period''
). There are 2 steps in this procedure, which are set out in sections
538
and
542
, respectively.
S 537 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 538 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For savingprovisions, see note under Part
XI
heading. S 538 formerly read:
S 538(2) amended by No 18 of 1993. S 538(3) amended by No 18 of 1993. S 538(4) inserted by No 18 of 1993. S 538(5) inserted by No 18 of 1993.
SECTION 538 STEP 1
-
CALCULATION OF FOREIGN INVESTMENT FUND AMOUNT
538(1)
The first step in the procedure is to work out the foreign investment fund amount in relation to the taxpayer in respect of the relevant period.
538(2)
This is done as follows:
(a)
first, determine the market value of the taxpayer
'
s interest, or the sum of the market values of all the taxpayer
'
s interests in the relevant class or classes, on the last day of the period;
(b)
secondly, add the amount or value of each distribution (if any) in respect of the interest, or any of the interests, held on that day that was made by the FIF to the taxpayer during the period;
(c)
thirdly, if the taxpayer had that interest or any of those interests on the day immediately before the first day of the period, deduct:
(i)
if subparagraph (ii) does not apply
-
the market value of the interest or interests on that day; or
(ii)
if the deemed rate of return method was applied, in respect of the taxpayer
'
s interest or interests in the FIF, in respect of the notional accounting period immediately before the relevant period
-
the value, determined under section
551
in accordance with that method, of the group or groups of interests of the taxpayer in the FIF on that day;
(d)
fourthly, if the taxpayer acquired that interest or any of those interests during the period, deduct the amount or value of the consideration paid or given by the taxpayer in respect of the acquisition;
(e)
fifthly, if the taxpayer disposed of any interest or interests in the relevant class or classes during the period, add the amount or value of each distribution (if any) in respect of that interest or those interests made by the FIF to the taxpayer during the period.
538(3)
Unless the taxpayer has made an election under subsection (4) in relation to the FIF, each amount resulting from the application of one of the paragraphs of subsection (2) is to be expressed in the currency used in determining the market value referred to in paragraph (2)(a).
538(4)
The taxpayer may elect that each amount required to be calculated under any paragraph of subsection (2) is to be expressed in Australian currency at the exchange rate applicable:
(a)
in the case of paragraph (2)(a)
-
on the day referred to in that paragraph; and
(b)
in the case of paragraph (2)(b) or (e)
-
at the time of each distribution referred to in that paragraph; and
(c)
in the case of paragraph (2)(c)
-
on the day when the taxpayer had the interests as mentioned in that paragraph; and
(d)
in the case of paragraph (2)(d)
-
at the time when the consideration referred to in that paragraph is paid or given.
538(5)
If the taxpayer makes the election:
(a)
it applies in relation to all of the taxpayer
'
s interests in the FIF in relation to the relevant period and all later relevant periods; and
(b)
it is irrevocable.
S 538 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 539 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 539 formerly read:
the market value of the interest on that day is the amount worked out on the basis of that price. S 539(3) amended by No 18 of 1993. the market value of the interest on the relevant day is the average of the 2 market values that would be applicable under paragraph (d) on the reporting days referred to in subparagraphs (d)(i) and (ii). S 539(4) amended by No 18 of 1993.
SECTION 539 HOW MARKET VALUE IS ASCERTAINED
539(1)
For the purposes of the application of section
538
in relation to the taxpayer in respect of the relevant period, the market value of an interest in the FIF on a particular day (
"
the relevant day
"
) is to be determined in accordance with this section.
539(2)
If the interest is included in a class of interests that were quoted on the relevant day on the stock market of an approved stock exchange, the market value of the interest on that day is the amount worked out on the basis of the quoted price of such an interest on that day on that stock market.
539(3)
If:
(a)
an interest in a company or trust is not included in a class of interests that were quoted on the relevant day on the stock market of an approved stock exchange; and
(b)
the interest is included in a class of interests for which, at intervals of not more than 12 months:
(i)
the company, or the trustee or manager of the trust, offered a buy-back or redemption price; or
(ii)
an associate of the company, or of the trustee or manager, offered a purchase price; and
(c)
there was on that day such a buy-back, redemption or purchase price, being a price that:
(i)
was publicly available and was offered to all persons having interests in that class; and
(ii)
was calculated by reference to the market values of the assets of the company or trust; and
(iii)
represents an arm
'
s length valuation of the interest on that day;
539(4)
If:
(a)
the relevant period started on 1 January 1993; and
(b)
the relevant day is 31 December 1992; and
(c)
neither subsection (2) nor (3) applies to the class of interests in which the interest is included; and
(d)
subsection (2) or (3) would apply to the class of interests in both of the following cases:
(i)
if the relevant day were instead the last reporting day for the FIF before 1 January 1993;
(ii)
if the relevant day were instead the next reporting day for the FIF on or after 1 January 1993, being a reporting day that is not more than 12 months after the one referred to in subparagraph (i);
539(5)
A reference in this section to a quoted price on a particular day of a class of interests on the stock market of an approved stock exchange is, if the class of interests is quoted on that day on 2 or more such stock markets, taken to be a reference to the quoted price on that day of that class of interests on whichever of those stock markets is nominated by the taxpayer.
539(6)
If the taxpayer has nominated a particular stock market for the purposes of the application of this section in respect of the taxpayer
'
s interest in a particular FIF, that stock market is taken to continue to be so nominated by the taxpayer unless and until it is no longer practicable to use that stock market for those purposes as, for example, if that stock market ceases to exist or the class of interests in the FIF in which the taxpayer
'
s interest is included ceases to be quoted on that stock market.
539(7)
A reference in subsection (4) to a reporting day for a FIF is a reference to a day on which:
(a)
in the case of a foreign company
-
the directors reported to the members on the financial position of the company; or
(b)
in the case of a foreign trust
-
the trustee or manager of the trust reported to the holders of interests in the trust on the financial position of the trust.
S 539 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 540 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 540 formerly read:
SECTION 540 GROSS FOREIGN INVESTMENT FUND INCOME
540
If the foreign investment fund amount as worked out under section
538
is a positive amount, that amount is gross foreign investment fund income in relation to the taxpayer from the FIF in respect of the relevant period.
S 540 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 541 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 541 formerly read:
SECTION 541 FOREIGN INVESTMENT FUND LOSS
541
If the foreign investment fund amount as worked out under section
538
is a minus amount, that amount is a foreign investment fund loss incurred by the taxpayer from the FIF in respect of the relevant period.
S 541 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 542 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 542 formerly read:
the following provisions have effect. S 542(3) amended by No 18 of 1993.
"undeducted amount"
"referable notional accounting period"
S 542(8) inserted by No 138 of 1994.
SECTION 542 STEP 2
-
CALCULATION OF FOREIGN INVESTMENT FUND INCOME
542(1)
The second step in the procedure is to work out under this section the amount of any foreign investment fund income in relation to the taxpayer in respect of the relevant period.
542(2)
If:
(a)
there is, under section
540
, any gross foreign investment fund income in relation to the taxpayer from the FIF in respect of the relevant period; and
(b)
that gross foreign investment fund income exceeds the total of any unapplied previous foreign investment fund losses incurred by the taxpayer from the FIF in respect of a notional accounting period or notional accounting periods before the relevant period;
542(3)
If no election is made under subsection
538(4)
in relation to the FIF, the excess referred to in paragraph (2)(b) is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of the relevant period.
542(4)
Foreign investment fund income equal to that corresponding amount is taken to have accrued to the taxpayer from the FIF in respect of the relevant period.
542(5)
The reference in paragraph (2)(b) to an unapplied foreign investment fund loss incurred by the taxpayer from the FIF in respect of a notional accounting period before the relevant period is a reference to so much of the undeducted amount of a foreign investment fund loss under section
541
that was incurred by the taxpayer from the FIF in respect of any such notional accounting period as exceeds the sum of the amounts (if any) worked out under the following paragraphs in respect of each referable notional accounting period of the FIF:
(a)
if paragraph (b) does not apply to the referable notional accounting period concerned
-
any amount that under section
540
was gross foreign investment fund income in relation to the taxpayer from the FIF in respect of that period; or
(b)
if the operative provision did not apply to the taxpayer in respect of the referable notional accounting period concerned, or the application of the operative provision to the taxpayer in respect of that period was affected, because of any of Divisions 2 to 9 and 11 to 15:
(i)
any amount that under section
540
would have been gross foreign investment fund income in relation to the taxpayer from the FIF in respect of that period; or
(ii)
any amount by which the amount that under section
540
was gross foreign investment fund income in relation to the taxpayer from the FIF in respect of that period would have been increased; or
if the operative provision had applied to the taxpayer in respect of that period or the application of the operative provision to the taxpayer in respect of that period had not been so affected, as the case may be.
(iii)
any amount by which the amount that under section
541
was a foreign investment fund loss in relation to the taxpayer from the FIF in respect of that period would have been reduced;
542(6)
In subsection (5):
, in relation to a foreign investment fund loss, means so much of that loss as has not been allowed, and is not allowable, as a deduction under section
532
from the taxpayer's assessable income of any year of income preceding the year of income in which the relevant period ends;
, in relation to a FIF, means a notional accounting period of the FIF that occurred after the notional accounting period in which the foreign investment fund loss was incurred and before the relevant period.
542(7)
In calculating under subsection (5) the extent (if any) to which a foreign investment fund loss that was incurred by the taxpayer from a FIF in respect of a notional accounting period is an unapplied previous foreign investment fund loss, an amount worked out under paragraph (5)(a) or subparagraph (5)(b)(i), (ii) or (iii) does not include any part of that amount that has been, or is to be, taken into account in calculating the extent to which a foreign investment fund loss under section
541
that was incurred by the taxpayer from the FIF in respect of a notional accounting period before the first-mentioned notional accounting period was an unapplied previous foreign investment fund loss.
542(8)
For the purposes of applying subsections (5), (6) and (7) in working out the amount of an unapplied previous foreign investment fund loss, if any amount that is to be taken into account under any of those subsections in relation to a notional accounting period is not expressed in the same currency as the gross foreign investment fund income mentioned in paragraph (2)(a), the amount is to be converted to the corresponding amount in that currency in accordance with the rate of exchange applicable at the end of that notional accounting period.
S 542 inserted by No 190 of 1992.
Subdiv C repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
FORMER SECTION 543 543 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME FROM A FIF BY DEEMED RATE OF RETURN METHOD
(Repealed by No 114 of 2010)
S 543 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 543 formerly read:
SECTION 543 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME FROM A FIF BY DEEMED RATE OF RETURN METHOD
543
This Subdivision sets out in several steps the procedure for determining by the deemed rate of return method whether any foreign investment fund income accrued to a person (
"
the taxpayer
"
) from a particular FIF in respect of a notional accounting period (
"
the relevant period
"
). In following the procedure it is necessary to determine the value of an interest in a FIF on a day called
"
the relevant day
"
, which has the meaning given by section
545
, and then to apply a specified rate of return to that value.
S 543 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 544 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 544 formerly read:
S 544(1) amended by
No 58 of 2006
, s 3 and Sch 7 item 50, by substituting
"
form a group
"
for
"
from a group
"
in para (b), effective 22 June 2006.
SECTION 544 STEP 1
-
GROUPS OF INTERESTS
544(1)
The first step in the procedure is to determine:
(a)
whether the taxpayer had only one interest, or had 2 or more interests, in the FIF during the relevant period; and
(b)
if the taxpayer had 2 or more such interests
-
whether any of the interests form a group or groups within the meaning of subsection (4) or (5).
544(2)
Subject to subsection (6), ifthe taxpayer had only one interest in a FIF during the relevant period, the procedure applies in respect of the interest and so applies as if the interest were a group.
544(3)
If the taxpayer had 2 or more interests in a FIF during the relevant period, the procedure:
(a)
applies separately in respect of each interest (if any) that is not included in a group and so applies as if each such interest were a separate group; and
(b)
if any of the interests form a group or groups
-
applies separately in respect of the group or each of the groups.
544(4)
Interests in a FIF which are of the same class and which the taxpayer had throughout the relevant period form a group.
544(5)
Subject to subsection (6), interests in a FIF which are of the same class and which the taxpayer had throughout the same part of the relevant period form a group.
544(6)
Any interest in a FIF that the taxpayer ceased to have before the end of the relevant period is to be disregarded.
S 544 inserted by No 190 of 1992.
FORMER SECTION 545 545 STEP 2 - DETERMINATION OF OPENING VALUE OF INTERESTS
(Repealed by No 114 of 2010)
S 545 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 545 formerly read:
SECTION 545 STEP 2
-
DETERMINATION OF OPENING VALUE OF INTERESTS
545
The second step is to determine the value of the interests in the group or the respective values of the interests in each group as at the day (
``the relevant day''
) referred to in whichever of the following paragraphs applies:
(a)
if the taxpayer had the interests in the FIF at the beginning of the relevant period
-
the day immediately preceding the first day of the relevant period; or
(b)
if the interests in the FIF were acquired by the taxpayer during the relevant period
-
the day on which they were acquired.
S 545 inserted by No 190 of 1992.
Archived:
S 546 to 549 repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 177, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
(Repealed by No 114 of 2010)
S 550 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 550 formerly read:
SECTION 550 IF RELEVANT PERIOD STARTS AFTER 1 JANUARY 1993
550
If the interests in the group were acquired before the start of the relevant period and that period starts on a day later than 1 January 1993, the value of the interests on the relevant day is to be determined in accordance with section
551
,
552
or
553
, as the case requires.
S 550 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 551 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 551 formerly read:
SECTION 551 VALUE OF INTERESTS AT START OF RELEVANT PERIOD (BEING LATER THAN 1 JANUARY 1993)
-
DEEMED RATE OF RETURN METHOD APPLIED FOR PREVIOUS PERIOD
551
If the deemed rate of return method was applied in respect of the notional accounting period that immediately preceded the relevant period, the value of the interests in the group on the relevant day is to be determined as follows:
(a)
first, ascertain the value, as previously determined under this Subdivision, of the interests in the group at the beginning of the immediately preceding period or, if any of the interests were acquired after that time, at the date or dates of the acquisition of the interest or interests concerned;
(b)
secondly, add so much of the foreign investment fund income determined in relation to the taxpayer in respect of the immediately preceding period as was attributable to the interests in the group;
(c)
thirdly, deduct the amount or value of so much (if any) of any distributions made by the FIF to the taxpayer during the immediately preceding period as were attributable to the interests in the group.
S 551 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 552 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 552 formerly read:
the value of the interests in the group on the relevant day is to be determined in accordance with this section.
SECTION 552 VALUE OF INTERESTS AT START OF RELEVANT PERIOD (BEING LATER THAN 1 JANUARY 1993)
-
CALCULATION METHOD APPLIED, OR INTERESTS EXEMPT, FOR PREVIOUS PERIOD
552(1)
If:
(a)
the calculation method was applied in respect of the notional accounting period immediately preceding the relevant period; or
(b)
the operative provision did not apply to the taxpayer in respect of that immediately preceding period, or the application of the operative provision to the taxpayer in respect of that notional accounting period was affected, because of any of Divisions 2 to 15;
552(2)
If the interests are included in a class of interests for which there were quoted prices on an approved stock exchange at any time during the immediately preceding period, the value of the interests in the group on the relevant day is the amount worked out on the basis of the quoted price for such an interest on the latest day during the immediately preceding period on which there was a quoted price for such an interest on such a stock exchange.
552(3)
If it is not practicable to determine the value of the interests in a group on the relevant day under subsection (2), that value is taken to be the amount that would be that value if:
(a)
this Part had been in force at all times since the interests were acquired; and
(b)
the value of each interest in the group at the date on which it was acquired was the consideration paid or given in respect of the acquisition by the taxpayer; and
(c)
subject to paragraph (b), the deemed rate of return method had been used to determine whether any foreign investment fund income accrued to the taxpayer from the FIF in respect of each notional accounting period of the FIF before the relevant period.
S 552 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 553 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 553 formerly read:
SECTION 553 VALUE OF INTERESTS AT START OF RELEVANT PERIOD (BEING LATER THAN 1 JANUARY 1993)
-
MARKET VALUE METHOD APPLIED FOR PREVIOUS PERIOD
553
If the market value method was applied in respect of the notional accounting period immediately preceding the relevant period, the value of the interests in the group on the relevant day is the value of the interests at the end of that immediately preceding period as determined in accordance with that method.
S 553 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 554 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 554 formerly read:
SECTION 554 VALUE OF INTERESTS AT TIME OF ACQUISITION (AFTER START OF RELEVANT PERIOD)
554
If the interests in the group were acquired by the taxpayer during the relevant period, the value of the interests on the relevant day is the consideration paid or given by the taxpayer in respect of the acquisition.
S 554 inserted by No 190 of 1992.
FORMER SECTION 555 555 STEP 3 - DETERMINATION OF FOREIGN INVESTMENT FUND AMOUNT
(Repealed by No 114 of 2010)
S 555 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 555 formerly read:
SECTION 555 STEP 3
-
DETERMINATION OF FOREIGN INVESTMENT FUND AMOUNT
555(1)
The third step is to determine, in relation to the taxpayer in respect of the relevant period, the foreign investment fund amount in respect of the taxpayer's interests in the group.
555(2)
The foreign investment fund amount is the amount worked out using the formula:
Opening value
×
Deemed rate of return
×
Number of days held
365
For the purposes of this subsection:
"Opening value"
means the value of the interests in the group on the relevant day;
"Deemed rate of return"
, in relation to the relevant period, means:
(a) if there is only one base interest rate in relation to the year of income in which the relevant period ends - that rate; or
(b) if there are 2 or more base interest rates in relation to that year of income - the weighted average of those rates;
increased, in either case, by 4 percentage points;
"Number of days held"
means the number of the days in the relevant period in which the taxpayer had the interests in the group.
Archived:
S 555(2) (definition of basic statutory interest rate) repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 178, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
S 555(2) amended by No 101 of 2006 , s 3 and Sch 2 item 493, by substituting " base " for " basic statutory " in para (a) and (b) of the definition of " Deemed rate of return " , effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 555(2) amended by No 11 of 1999, No 181 of 1994.
S 555 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 556 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 556 formerly read:
SECTION 556 STEP 4
-
CONVERSION OF FOREIGN INVESTMENT FUND AMOUNT TO AUSTRALIAN CURRENCY
556(1)
If the taxpayer's interests in the FIF during the relevant period form one group only, the foreign investment fund amount determined in respect of the taxpayer's interests in the group is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of that period.
556(2)
If the taxpayer's interests in the FIF during the relevant period form 2 or more groups, the sum of the foreign investment fund amounts respectively determined in respect of the taxpayer's interests in each of those groups is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of that period.
S 556 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 557 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 557 formerly read:
SECTION 557 FOREIGN INVESTMENT FUND INCOME
557
Foreign investment fund income equal to the corresponding amount calculated under subsection
556(1) or (2)
, as the case requires, is taken to have accrued to the taxpayer from the FIF in respect of the relevant period.
S 557 inserted by No 190 of 1992.
Subdiv D repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
FORMER SECTION 557A 557A CERTAIN OTHER PROVISIONS TO BE DISREGARDED IN APPLYING THIS SUBDIVISION
(Repealed by No 114 of 2010)
S 557A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 557A formerly read:
SECTION 557A CERTAIN OTHER PROVISIONS TO BE DISREGARDED IN APPLYING THIS SUBDIVISION
557A
In applying this Subdivision, disregard:
(a)
Division
974
of the
Income Tax Assessment Act 1997
; and
(b)
the operation of any provision of this Act to the extent to which that operation depends on an expression whose meaning is given by Division
974
of the
Income Tax Assessment Act 1997
; and
(c)
Division
230
of the
Income Tax Assessment Act 1997
.
S 557A amended by No 15 of 2009 , s 3 and Sch 1 item 50, by inserting para (c) at the end, effective 26 March 2009.
S 557A inserted by No 163 of 2001. For application provisions, see note under s 6AB(5B).
(Repealed by No 114 of 2010)
S 558 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 558 formerly read:
SECTION 558 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME BY CALCULATION METHOD
558(1)
This Subdivision sets out the procedure for determining by the calculation method whether any foreign investment fund income accrued to a person (
``the taxpayer''
) from a particular FIF in respect of a notional accounting period (
``the relevant period''
).
558(2)
The procedure is to be applied separately for each taxpayer.
558(3)
The procedure involves:
(a)
determining whether, for the purposes of the application of this Subdivision in relation to the taxpayer, there is any calculated profit or calculated loss in respect of the FIF in respect of the relevant period; and
(b)
if there is such a calculated profit, determining the share of that calculated profit to which the taxpayer is entitled; and
(c)
if there is such a calculated loss, taking the calculated loss into account in respect of later notional accounting periods as provided in section
572
.
S 558 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 559 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 559 formerly read:
SECTION 559 DETERMINATION OF CALCULATED PROFIT OR CALCULATED LOSS OF FIF
559(1)
The first step in the procedure referred to in paragraph
558(3)(a)
is to work out the notional income of the FIF of the relevant period.
559(2)
The second step in that procedure is to work out the notional deductions from that notional income.
559(3)
If the notional income exceeds the notional deductions, the excess is a calculated profit in respect of the FIF in respect of the relevant period.
559(4)
If the notional income is less than the notional deductions, the difference is a calculated loss in respect of the FIF in respect of the relevant period.
559(5)
All calculations for the purpose of determining whether there is a calculated profit or a calculated loss in respect of the FIF in respect of the relevant period are to be made in the currency in which the accounts of the FIF are made out.
559(6)
If an amount that is to be included in the notional income of the FIF of the relevant period or is to be a notional deduction from that notional income is expressed in a currency other than the currency referred to in subsection (5), that amount is to be converted into the corresponding amount in the currency referred to in subsection (5) at such rate of exchange as is reasonable and appropriate.
559(7)
After any calculated profit in respect of the FIF in respect of the relevant period is determined, the amount of that calculated profit is to be converted into the corresponding amount in Australian currency at the rate of exchange applicable at the end of the relevant period.
S 559 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 559A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 559A formerly read:
The actual taxpayer cannot make a choice under subsection (1) in relation to a third-tier FIF, because the calculation method is not available in respect of a third-tier FIF (see subparagraph
579(b)(ii)
).
SECTION 559A CHOICE TO WORK OUT NOTIONAL INCOME AND NOTIONAL DEDUCTIONS UNDER PART X
559A(1)
The taxpayer may choose to work out the notional income and notional deductions of the FIF in accordance with subsection (3) if:
(a)
the FIF is a foreign company; and
(b)
the taxpayer
'
s attribution percentage in relation to the FIF is 10% or more at the end of the relevant period; and
(c)
if the taxpayer has previously made a choice under this subsection in relation to the FIF in relation to a notional accounting period of the FIF
-
the taxpayer has made such a choice in relation to the FIF in relation to every notional accounting period of the FIF (if any) occurring between:
(i)
the end of the notional accounting period of the FIF for which the taxpayer first made such a choice in relation to the FIF; and
(ii)
the start of the relevant period.
559A(2)
For the purposes of this section:
(a)
treat the FIF as a FIF that is a CFC; and
(b)
treat the taxpayer as an attributable taxpayer in relation to the FIF throughout the relevant period; and
(c)
treat the relevant period as the statutory accounting period of the FIF.
Main rule
-
work out notional income and notional deductions under Part X, etc
559A(3)
For the purposes of working out the notional income and notional deductions of the FIF of the relevant period:
(a)
treat that notional income as the FIF
'
s notional assessable income worked out under Part
X
for the relevant period; and
(b)
treat those notional deductions as the FIF
'
s notional allowable deductions worked out under Part
X
for the relevant period; and
(c)
if the taxpayer is an AFI entity at a particular time in the relevant period
-
treat the FIF as an AFI subsidiary at that time.
559A(4)
In working out the FIF
'
s notional allowable deductions for the purposes of paragraph (3)(b):
(a)
disregard sections
429
and
431
(which deal with losses); and
(b)
instead, include notional deductions (if any) from the notional income of the FIF of the relevant period worked out under section
572
(which deals with notional deductions for calculated losses for prior periods).
559A(5)
For the purposes of subsection (3), treat the FIF
'
s commencing day mentioned in Subdivision
C
of Division
7
of Part
X
as the first day of the period over which, apart from this section, the profits or gains of a capital nature derived by the FIF during the relevant period would be determined.
Application of sections 575 to 579
559A(6)
For the purposes of subsection (3), apply sections
575
to
579
in relation to a taxpayer (the
actual taxpayer
), subject to the rules in subsections (7) and (8).
559A(7)
If the actual taxpayer has made a choice under subsection (1) in relation to a FIF (the
first-tier FIF
), in working out the first-tier FIF
'
s notional assessable income for the purposes of paragraph (3)(a):
(a)
disregard paragraphs
384(2)(ca)
and
385(2)(ca)
(which deal with amounts included in notional assessable income under Part
XI
); and
(b)
instead, include in that notional assessable income the first-tier FIF
'
s notional income worked out under section
576
.
559A(8)
If the taxpayer mentioned in paragraphs (1)(b) and (3)(c) is the first-tier FIF mentioned in section
576
(because of the effect of section
576
on this section):
(a)
treat the references in those paragraphs to the taxpayer as references to the actual taxpayer (and not to the first-tier FIF); and
(b)
if, as a result of paragraph (a), the actual taxpayer has made a choice under subsection (1) in relation to a FIF (the
second-tier FIF
)
-
in working out the second-tier FIF
'
s notional assessable income for the purposes of paragraph (3)(a):
(i)
disregard paragraphs
384(2)(ca)
and
385(2)(ca)
(which deal with amounts included in notional assessable income under Part
XI
); and
(ii)
instead, include in that notional assessable income the second-tier FIF
'
s notional income worked out under section
579
.
Note:
Definitions
559A(9)
In this section:
AFI entity
has the same meaning as in section
326
.
AFI subsidiary
has the same meaning as in Part
X
(see section
326
).
attributable taxpayer
has the same meaning as in Part
X
(see section
361
).
attribution percentage
has the same meaning as in Part
X
(see section
362
).
notional allowable deductions
has the same meaning as in Part
X
(see section
382
).
notional assessable income
has the same meaning as in Part
X
(see section
382
).
S 559A inserted by No 143 of 2007 , s 3 and Sch 1 item 3, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007.
No 143 of 2007 , s 3 and Sch 1 Pt 6 contains the following savings provisions:
Part 6 - Savings provisions
Object
225
The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of:
(a) any act done or omitted to be done; or
(b) any state of affairs existing; or
(c) any period ending; before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies. Making and amending assessments, and doing other things, in relation to past matters
226
Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003 ):
(a) making or amending an assessment (including under a provision that is itself repealed or amended);
(b) exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended); in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.Example:
For the 2006-07 income year, Smart Investor Pty Ltd, an Australian resident private investment company, has assessable foreign income in the passive income class on which it has paid foreign tax for which it wishes to claim a foreign tax credit. The company also has a tax loss for the year from its Australian investments. When it lodges its tax return for the year it does not elect to claim a deduction for any of the tax loss under section 79DA of the ITAA 1936, because the Australian tax payable on its passive foreign income equals the foreign tax it has paid.
In 2009 the amount of foreign tax payable in respect of some foreign rental income it had included in its return for the 2006-07 year is reduced and Smart Investor receives a refund of the difference in foreign tax. Smart Investor Pty Ltd then applies to be able to make an election under section 79DA , that is, after the Tax Laws Amendment (2007 Measures No 4) Act 2007 (which repeals section 79DA ) receives Royal Assent. The Commissioner allows Smart Investor to submit an election to claim a deduction for so much of its 2006-07 tax loss as to reduce the amount of Australian tax payable on its 2006-07 assessable foreign income to the revised foreign tax paid, by the end of 2009.
Despite the repeal of section 79DA , item 226 allows the Commissioner to permit an election to be lodged after the return for 2006-07 has been lodged, and to amend Smart Investor ' s assessment for that year, because these actions relate to a thing done, and period ending, before the repeal of section 79DA applies.
FORMER SECTION 560 560 NOTIONAL INCOME - GENERAL PROVISION
(Repealed by No 114 of 2010)
S 560 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 560 formerly read:
SECTION 560 NOTIONAL INCOME
-
GENERAL PROVISION
560(1)
The notional income of the FIF of the relevant period includes the gross income, and the profits or gains of a capital nature, derived by the FIF during that period.
560(2)
For the purposes of the application of this Subdivision to the taxpayer in relation to a FIF, an amount (
``the excluded amount''
) is not to be taken into account in determining whether an amount is to be included in the notional income of the FIF of the relevant period, or in calculating an amount to be so included, to the extent (if any) to which the excluded amount:
(a)
has been, or is to be, allowed as a notional deduction, or taken into account in the calculation of a notional deduction, from the notional income of the FIF in respect of the relevant period or a previous notional accounting period; or
(b)
would have been, or would be, allowed as a notional deduction, or taken into account in the calculation of a notional deduction, from the notional income of the FIF in respect of a previous notional accounting period if the taxpayer had been required for the purposes of this Part to work out the notional deductions from that notional income.
S 560 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 561 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 561 formerly read:
SECTION 561 SECTION 560 TO BE SUBJECT TO FOLLOWING PROVISIONS
561
Section
560
is subject to sections
562
to
566
, but those sections do not limit by implication the application of section
560
in circumstances to which those sections do not apply.
S 561 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 562 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 562 formerly read:
SECTION 562 NOTIONAL INCOME
-
DISCOUNTED SECURITIES
562(1)
Subject to subsection (2), if the FIF was the holder of a qualifying security within the meaning of Division
16E
of Part
III
during the relevant period, that Division applies, so far as it is capable of application, for the purpose of determining whether an amount is included in the notional income of the FIF of the relevant period in respect of that security as if the FIF were a taxpayer that is a resident and that period were the year of income in which that period ends.
562(2)
If the accounting standards applicable during the relevant period in the country in which the FIF is incorporated or established require part of any discount or deferred interest in respect of the qualifying security to be treated in the accounts of the FIF as having been derived by the FIF during that period on an accruing basis, and an amount is shown in those accounts as having been so derived, the amount to be included in the notional income of the FIF of that period in respect of that security is the amount so shown in those accounts.
S 562 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 563 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 563 formerly read:
the notional income of the FIF of the relevant period includes the interest of the FIF in any net income of the partnership of that accounting period.
SECTION 563 NOTIONAL INCOME
-
INTEREST IN NET INCOME FROM PARTNERSHIP
563(1)
If:
(a)
the FIF was a partner in a partnership at the end of the accounting period of the partnership; and
(b)
that accounting period of the partnership ends in the relevant period;
563(2)
For the purposes of subsection (1):
(a)
a partnership has a net income in relation to an accounting period of the partnership if the amount that, if the partnership were a FIF and that accounting period were a notional accounting period, would be the notional income of the partnership of that accounting period under this section exceeds the notional deductions that would be allowable from that notional income; and
(b)
the excess is taken to be the amount of that net income.
S 563 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 564 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 564 formerly read:
S 564(1) amended by No 93 of 1999. S 564(2) inserted by No 93 of 1999.
SECTION 564 NOTIONAL INCOME
-
EXCLUSION OF CERTAIN DIVIDENDS AND TRUST DISTRIBUTIONS
564(1)
The notional income of the FIF in respect of the relevant period does not include any dividend or distribution paid to the FIF by another FIF unless the FIF's interest in the other FIF is covered by Division
8
.
564(2)
If the FIF's interest in the other FIF is covered by Division
8
, the notional income of the FIF in respect of the relevant period does not include any dividend or distribution paid to the FIF by the other FIF to the extent of the grossed-up amount of a FIF attribution debit that arises in relation to the taxpayer as a result of the dividend or distribution.
S 564 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 565 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 565 formerly read:
SECTION 565 DERIVATION OF INCOME, PROFITS OR GAINS
565
Income, profits or gains are taken to have been derived by a FIF although the income, profits or gains are not actually paid to the FIF but are reinvested, accumulated, capitalised, carried to a reserve, sinking fund or insurance fund (however designated), or are otherwise dealt with on behalf of the FIF or as the FIF directs.
S 565 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 566 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 566 formerly read:
SECTION 566 NOTIONAL INCOME TO BE PRE-TAX
566
An amount included in the notional income of a FIF is an amount before the payment of any foreign tax or Australian tax in respect of that amount.
S 566 inserted by No 190 of 1992.
FORMER SECTION 567 567 NOTIONAL DEDUCTIONS - GENERAL PROVISION
(Repealed by No 114 of 2010)
S 567 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 567 formerly read:
SECTION 567 NOTIONAL DEDUCTIONS
-
GENERAL PROVISION
567
Subject to sections
568 to 574
, any losses or outgoings of a revenue or capital nature incurred by the FIF during the relevant period, to the extent to which they relate to income, or to profits or gains of a revenue nature, are notional deductions from the notional income of the FIF of that period.
S 567 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 567A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 567A formerly read:
SECTION 567A NOTIONAL DEDUCTIONS: NET CAPITAL LOSSES
567A(1)
Any net capital losses incurred by the FIF during the relevant period (other than losses taken into account under section
567
) are notional deductions from the notional income of the FIF of that period.
567A(2)
For the purposes of the application of this Subdivision to the taxpayer in relation to a FIF, an amount (the
excluded amount
) is not taken into account in determining whether an amount is a notional deduction from the notional income of the FIF of the relevant period, or in calculating the amount of such a deduction, to the extent (if any) to which the excluded amount:
(a)
has been, or is to be, allowed as a notional deduction, or taken into account in the calculation of a notional deduction, from the notional income of the FIF in respect of the relevant period or a previous notional accounting period; or
(b)
would have been, or would be, allowed as a notional deduction, or taken into account in the calculation of a notional deduction, from the notional income of the FIF in respect of a previous notional accounting period if the taxpayer had been required for the purposes of this Part to work out the notional deductions from that notional income.
S 567A inserted by No 122 of 1997.
(Repealed by No 114 of 2010)
S 568 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 568 formerly read:
SECTION 568 NOTIONAL DEDUCTIONS
-
EXPENDITURE IN ACQUIRING TRADING STOCK
568
Without limiting the generality of section
567
, expenditure incurred by the FIF during the relevant period in the acquisition of trading stock (not being securities within the meaning of the
Corporations Act 2001
) is, subject to section
574
, a notional deduction from the notional income of the FIF of that period.
S 568 amended by No 55 of 2001, No 18 of 1993 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 569 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 569 formerly read:
SECTION 569 NOTIONAL DEDUCTIONS
-
EXCLUSION OF EXPENDITURE IN ACQUIRING SECURITIES OR PARTNERSHIP INTEREST
569
Expenditure incurred by the FIF during the relevant period in the acquisition of shares or interests in shares in a company, an interest in a trust, other securities, or an interest in a partnership, is not a notional deduction from the notional income of the FIF of that period.
S 569 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 570 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 570 formerly read:
the amount so included is, subject to section
574
, a notional deduction from the notional income of the FIF of the relevant period. S 570(1)(a)(i) and (ii) substituted by
No 101 of 2006
, s 3 and Sch 2 item 494, effective 14 September 2006. For
application and savings provisions
and for former wording see the
CCH Australian Income Tax Legislation archive
. S 570(1) amended by No 164 of 2007, s 3 and Sch 10 item 47, by inserting
"
former
"
after
"
meaning of
"
in para (a)(ii), effective 1 July 2010. S 570(1) amended by
No 101 of 2006
, s 3 and Sch 2 item 495, by omitting
"
plant, articles
"
before
"
depreciating asset
"
in para (b), effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
. S 570(1) amended by No 77 of 2001, No 46 of 1998, No 121 of 1997, No 18 of 1993. then subsection (1) must be applied, in relation to each notional accounting period that is appropriate, as if the accounts had amortised the expenditure in relation to the class or the category on the basis of the prescribed annual amortisation percentage. S 570(1A) inserted by No 18 of 1993.
SECTION 570 NOTIONAL DEDUCTIONS
-
AMORTISATION OF EXPENDITURE IN ACQUIRING PROPERTY
570(1)
Subject to subsection (1A), if:
(a)
the accounts of the FIF in respect of the relevant period include an amount in respect of the amortisation of the expenditure incurred in the acquisition of:
(i)
a depreciating asset within the meaning of Division
40
of the
Income Tax Assessment Act 1997
; or
(ii)
industrial property within the meaning of former Division
10B
of Part
III
of this Act; or
(iii)
any other prescribed class of property; and
(b)
the amortisation is based on the effective life of the depreciating asset or industrial or other property; and
(c)
the accounts were prepared in accordance with generally accepted accounting principles and give a true and fair view of the financial position of the FIF;
Archived:
570(1A)
If:
(a)
the accounts of the FIF in respect of one or more accounting periods include an amount in respect of the amortisation of the expenditure incurred in the acquisition of a class of property prescribed for the purposes of subparagraph (1)(a)(iii); and
(b)
the regulations prescribing the class also prescribe a percentage as the annual amortisation percentage in relation to the class, or a category of property included in the class;
570(2)
Except as provided in subsection (1), no amount in respect of the amortisation of expenditure in the acquisition of any property is a notional deduction from the notional income of the FIF of the relevant period.
S 570 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 571 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 571 formerly read:
the interest of the FIF in a partnership loss of the partnership of that accounting period is, subject to section
574
, a notional deduction from the notional income of the FIF of the relevant period.
SECTION 571 NOTIONAL DEDUCTIONS
-
INTEREST IN PARTNERSHIP LOSS
571(1)
If:
(a)
the FIF was a partner in a partnership at the end of an accounting period of the partnership; and
(b)
that accounting period of the partnership ends in the relevant period;
571(2)
For the purposes of subsection (1):
(a)
a partnership has a partnership loss in relation to an accounting period of the partnership if the amount of the deductions that, if the partnership were a FIF and that accounting period were a notional accounting period, would be notional deductions under this section from the notional income of the FIF of that period exceeds that notional income; and
(b)
the excess is taken to be the amount of that partnership loss.
S 571 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 572 repealed byNo 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 572 formerly read:
SECTION 572 NOTIONAL DEDUCTIONS
-
PAST CALCULATED LOSSES
572(1)
If there was any calculated loss, or there were any calculated losses, in respect of the FIF under subsection
559(4)
in respect of any notional accounting period or notional accounting periods of the FIF that preceded the relevant period (other than such a preceding notional accounting period that ended before the taxpayer first acquired an interest in the FIF), so much of that calculated loss or of those calculated losses as has not been allowed as a notional deduction from the notional income of the FIF of any of those preceding notional accounting periods is a notional deduction from the notional income of the FIF of the relevant period.
572(2)
If 2 or more calculated losses are notional deductions under subsection (1), the calculated losses are to be taken into account in the order in which they were incurred.
S 572 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 573 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 573 formerly read:
SECTION 573 NOTIONAL DEDUCTIONS
-
TAXES
573
An amount paid by the FIF in respect of Australian tax or foreign tax is a notional deduction from the notional income of the FIF in respect of the relevant period to the extent to which the tax or foreign tax relates to an amount or amounts included in that notional income.
S 573 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 574 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 574 formerly read:
S 574(1) amended by No 77 of 2001.
SECTION 574 NOTIONAL DEDUCTIONS
-
CERTAIN AMOUNTS TO BE EXCLUDED
574(1)
The following expenditure incurred by the FIF during the relevant period is not a notional deduction from the notional income of the FIF of that period:
(a)
expenditure incurred in the acquisition of:
(i)
plant, articles, depreciating asset or industrial or other property referred to in paragraph
570(1)(a)
; or
(ii)
land or buildings; or
(iii)
goodwill; or
(iv)
gold, silver or other precious metals; or
except to the extent that the expenditure is incidental to the acquisition;
(v)
any other capital asset;
(b)
repayments of debts;
(c)
any other prescribed expenditure.
574(2)
For the purposes of the application of this Subdivision to the taxpayer in relation to a FIF, an amount is not to be a notional deduction from the notional income of the FIF of the relevant period to the extent (if any) to which the amount:
(a)
has been, or is to be, taken into account in the calculation, in relation to the taxpayer, of an amount included, or to be included, in the notional income of the FIF in respect of the relevant period or in respect of a previous notional accounting period; or
(b)
would have been, or would be, taken into account in the calculation, in relation to the taxpayer, of an amount that would have been, or would be, included in the notional income of the FIF in respect of a previous notional accounting period if the taxpayer had been required for the purposes of this Part to work out that notional income.
S 574 inserted by No 190 of 1992.
FORMER SECTION 575 575 APPLICATION
(Repealed by No 114 of 2010)
S 575 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 575 formerly read:
S 575(2) amended by No 93 of 1999.
SECTION 575 APPLICATION
575(1)
Sections
576 to 579
apply if a FIF (
``the first tier FIF''
) had an interest in another FIF (
``the second tier FIF''
) or in a FLP during the whole or the part of the notional accounting period of the second tier FIF or of the FLP that ended in the relevant period.
575(2)
For the purposes of the application of the sections referred to in subsection (1), it is to be assumed that:
(a)
the relevant period was a year of income; and
(b)
the first tier FIF was a taxpayer that was a resident in relation to that year of income; and
(c)
Divisions 2 to 7 and 9 to 15 were disregarded; and
(d)
references in this Part to assessable income were references to notional income.
S 575 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 576 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 576 formerly read:
SECTION 576 NOTIONAL INCOME OF FIF TO INCLUDE FOREIGN INVESTMENT FUND INCOME FROM SECOND TIER FIF OR FROM FLP
576
The notional income of the first tier FIF in respect of the relevant period includes any amount of foreign investment fund income that would, on the assumptions referred to in subsection
575(2)
, be taken under this Part to have accrued to the first tier FIF from the second tier FIF or from the FLP in respect of the relevant period.
S 576 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 577 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 577 formerly read:
S 577(1) amended by No 16 of 1998. the taxpayer is taken not to have made anelection under subsection
535(3)
, as that subsection applies because of paragraph (1)(a), to use the calculation method in respect of the second non-controlled FIF.
SECTION 577 HOW TO DETERMINE WHETHER FOREIGN INVESTMENT FUND INCOME ACCRUED FROM SECOND TIER FIF OR FROM FLP
577(1)
Subject to subsection (2), in determining whether any foreign investment fund income would be taken to have accrued to the first tier FIF from the second tier FIF or from the FLP in respect of the relevant period:
(a)
any declaration, election, choice or selection that could be made, any notice that could be given, or any option that could be exercised, under this Act by the first tier FIF apart from this section is not to be made, given or exercised by the first tier FIF but instead may be made, given or exercised by the taxpayer; but
(b)
if the first tier FIF is not a CFC
-
the taxpayer is not entitled to make an election under subsection
535(3)
, as that subsection applies because of paragraph (a), to use the calculation method in respect of the second tier FIF unless:
(i)
the taxpayer has also made an election under subsection
535(3)
to use that method in respect of the first tier FIF; and
(ii)
the taxpayer also makes the election in relation to the second tier FIF under subsection
486(3)
that the taxpayer is entitled to make because of paragraph (a) of this subsection.
577(2)
If:
(a)
a FIF that is a CFC had an interest in a FIF that is not a CFC (
``the first non-controlled FIF''
); and
(b)
the first non-controlled FIF had an interest in another FIF that is not a CFC (
``the second non-controlled FIF''
);
S 577 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 578 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 578 formerly read:
SECTION 578 WHAT HAPPENS IF THERE IS A CALCULATED LOSS IN RESPECT OF SECOND TIER FIF
578
If there was a calculated loss in respect of the second tier FIF under subsection
559(4)
in respect of the second tier FIF's notional accounting period, that calculated loss is taken into account as provided in section
572
for the purpose of determining whether any amount of foreign investment fund income would be taken under this Part to accrue to the first tier FIF from the second tier FIF in subsequent notional accounting periods of the first tier FIF.
S 578 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 579 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 579 formerly read:
SECTION 579 IF SECOND TIER FIF HAS INTEREST IN A THIRD TIER FIF OR IN A FLP
579
If the taxpayer elects to use the calculation method in respect of the second tier FIF, and the second tier FIF had an interest in another FIF (
``the third tier FIF''
) or in a FLP during the whole or a part of the notional accounting period of the third tier FIF or of the FLP that ended in a notional accounting period of the second tier FIF, the following provisions have effect:
(a)
the notional income of the second tier FIF includes any amount of foreign investment fund income that would, if the assumptions referred to in subsection
575(2)
applied to the second tier FIF, be taken under this Part to have accrued to the second tier FIF from the third tier FIF or from the FLP in respect of the second tier FIF's or the FLP's notional accounting period;
(b)
in calculating the foreign investment fund income referred to in paragraph (a):
(i)
any declaration, election, selection or choice that could be made, any notice that could be given, or any option that could be exercised, under this Act by the second tier FIF or by the FLP apart from this subparagraph is not to be made, given or exercised by the second tier FIF or by the FLP but instead may be made, given or exercised by the taxpayer; and
(ii)
the taxpayer is taken not to have made an election under subsection
535(3)
, as that subsection applies because of paragraph (a), to use the calculation method in respect of the third tier FIF.
S 579 amended by No 16 of 1998 and inserted by No 190 of 1992.
FORMER SECTION 580 580 PROCEDURE TO BE FOLLOWED
(Repealed by No 114 of 2010)
S 580 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 580 formerly read:
and to add up the amounts so worked out.
SECTION 580 PROCEDURE TO BE FOLLOWED
580(1)
The procedure for determining the share of the calculated profit of a foreign company in respect of the relevant period to which the taxpayer is entitled is to work out in accordance with this section:
(a)
the part of the taxpayer's share of the calculated profit that is attributable to any interest or interests that the taxpayer had in the company throughout the whole of the relevant period; and
(b)
the part or parts of the taxpayer's share of the calculated profit that is or are attributable to any interest or interests that the taxpayer had in the company throughout a particular part or particular parts of the relevant period;
580(2)
If the taxpayer had an interest or interests in the company throughout the whole of the relevant period, the part of the taxpayer's share of the calculated profit that is attributable to that interest or those interests is the amount worked out using the formula:
Calculated profit
×
Attribution percentage
580(3)
If the taxpayer had an interest or interests in the company throughout a particular part of the relevant period, the part of the taxpayer's share of the calculated profit that is attributable to that interest or those interests is the amount worked out using the formula:
| Calculated profit | × | Attribution percentage | × |
Number of days held
Total number of days |
580(4)
In the formulas in this section:
"Calculated profit"
means the calculated profit of the company in respect of the relevant period;
"Attribution percentage"
means the attribution percentage applicable to the taxpayer in respect of the company at the end of the relevant period;
"Number of days held"
means the number of days in the part of the relevant period throughout which the taxpayer had the interest or interests;
"Total number of days"
means the number of days in the relevant period.
580(4A)
If:
(a) because of the taxpayer's election under subsection 486(3) , the relevant period ends at the same time as a period ( ``the real accounting period'' ) in respect of which the accounts of the company are made out; and
(b) because of paragraph 486(5)(b) or subparagraph 486(7)(a)(i) , the relevant period does not begin at the same time as the real accounting period;
then, for the purposes of this section:
(c) the relevant period is taken to begin when the real accounting period does; and
(d) any interest or interests that the taxpayer had in the company immediately before the time when the relevant period began (disregarding its extension under paragraph (c)) are taken to have been acquired by the taxpayer at that time.
S 580(4A) inserted by No 18 of 1993.
580(5)
A reference in this section to an interest that a taxpayer had in a foreign company throughout a particular part of the relevant period does not include a reference to such an interest that the taxpayer ceased to have before the end of that period.
S 580 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 581 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 581 formerly read:
or, if different percentages are applicable under the preceding paragraphs, the greater or greatest of those percentages.
SECTION 581 HOW TO WORK OUT ATTRIBUTION PERCENTAGE APPLICABLE TO TAXPAYER IN RESPECT OF INTEREST OR INTERESTS IN FOREIGN COMPANY
581(1)
The attribution percentage applicable to the taxpayer in respect of the taxpayer's interest or interests in a foreign company at the end of the relevant period is the percentage that, because of that interest or those interests, as the case may be, the taxpayer had, or was entitled to acquire, at that time of:
(a)
the total paid-up share capital of the company; or
(b)
the total rights of shareholders to vote, or participate in any decision-making, concerning any of the following:
(i)
the making of distributions of capital or profits of the company to its shareholders;
(ii)
the constituent document of the company;
(iii)
any variation of the share capital of the company; or
(c)
the total rights to distributions of capital or profits of the company to its shareholders on winding-up; or
(d)
the total rights to distributions of capital or profits of the company to its shareholders, otherwise than on winding-up;
581(2)
If the percentage of total rights to vote or participate in decision-making differs as between differing types of decision-making, the highest of those percentages applies for the purposes of paragraph (1)(b).
581(3)
For the purposes of subsection (1), the percentage that the taxpayer had, or was entitled to acquire, at the end of the relevant period, because of an interest or interests in the company, of the total rights to distributions of capital or profits of the company to its shareholders on winding-up, or of the total rights to distributions of capital or profits of the company to its shareholders otherwise than on winding-up, is to be worked out in either case by:
(a)
ascertaining whichever of the following is applicable:
(i)
the capital of the company as at the end of the relevant period;
(ii)
the profits of the company for the relevant period; and
(b)
assuming that the rights to such distributions that the taxpayer had, or was entitled to acquire, at the end of the relevant period because of the interest or interests were the same at all other times during the relevant period; and
(c)
ascertaining the percentage concerned on that assumption.
581(4)
If, apart from this subsection, the sum of the attribution percentages at the end of the relevant period in relation to the company of all the taxpayers to whom the operative provision applies in relation to the company in relation to the relevant period would exceed 100%, the attribution percentage of each taxpayer is the percentage worked out using the formula:
Attribution percentage of the taxpayer concerned
×
100%
Sum of attribution percentages of all of the taxpayers to whom the operative provision applies
S 581(4) inserted by No 138 of 1994.
S 581 inserted by No 190 of 1992.
FORMER SECTION 582 582 PROCEDURE TO BE FOLLOWED
(Repealed by No 114 of 2010)
S 582 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 582 formerly read:
the share of the calculated profit of the trust in respect of the relevant period to which the taxpayer is entitled is the amount worked out using the formula:
SECTION 582 PROCEDURE TO BE FOLLOWED
582(1)
The share of the calculated profit of a foreign trust in respect of the relevant period to which the taxpayer is entitled is to be worked out in accordance with this section.
582(2)
If all of the income, profits or gains derived by the trust during the relevant period consisted of either or both of the following:
(a)
income, profits or gains to which beneficiaries of the trust were presently entitled; or
(b)
income, profits or gains to which beneficiaries of the trust were not presently entitled but which were distributed to beneficiaries of the trust during the relevant period or within 2 months after the end of that period;
Calculated profit
×
Attribution percentage
In the formula:
" Calculated profit " means the calculated profit of the trust of the relevant period;
" Attribution percentage " means the percentage of the total income, profits and gains derived by the trust during the relevant period to which the taxpayer was presently entitled or to which the taxpayer was not presently entitled but which was distributed to the taxpayer during the relevant period or within 2 months after the end of the relevant period.
582(3)
If subsection (2) does not apply, the share of the calculated profit of the trust in respect of the relevant period to which the taxpayer is entitled is the amount determined by calculating:
(a) the part of the share of the calculated profit to which the taxpayer is entitled that is attributable to any interest or interests that the taxpayer had in the trust throughout the whole of the relevant period; and
(b) the part or parts of the share of the calculated profit to which the taxpayer is entitled that is or are attributable to any interest or interests that the taxpayer had in the trust throughout a particular part or particular parts of the relevant period;
and adding up the amounts so calculated.
582(4)
The part of the share of the calculated profit of the trust in respect of the relevant period to which the taxpayer is entitled that is attributable to an interest or interests that the taxpayer had in the trust throughout the whole of the relevant period is the amount worked outusing the formula:
| Calculated profit × Attribution percentage |
582(5)
The part of the share of the calculated profit of the trust in respect of the relevant period to which the taxpayer is entitled that is attributable to an interest or interests that the taxpayer had in the trust throughout a particular part of the relevant period is the amount worked out using the formula:
| Calculated profit | × | Attribution percentage | × |
Number of days held
Total number of days |
582(6)
For the purposes of the formulas in subsections (4) and (5):
"Calculated profit"
means the calculated profit of the trust of the relevant period;
"Attribution percentage"
means:
(a) the percentage of the income of the trust represented by the share of the income to which the taxpayer was entitled, or was entitled to acquire, at the end of the relevant period because of:
(i) the taxpayer ' s interest or interests in the trust; and
(ii) any interest or interests in the trust that the taxpayer was entitled to acquire; or
(b) the percentage of the corpus of the trust represented by the share of the corpus to which the taxpayer was entitled, or was entitled to acquire, at the end of the relevant period because of:
(i) the taxpayer ' s interest or interests in the trust; and
(ii) any interest or interests in the trust that the taxpayer was entitled to acquire;
or, if those percentages differ, the greater of those percentages;
"Number of days held"
means the number of days in the part of the relevant period throughout which the taxpayer had the interest;
"Total number of days"
means the number of days in the relevant period.
582(6A)
If, apart from this subsection, the sum of the attribution percentages at the end of the relevant period in relation to the trust of all the taxpayers to whom the operative provision applies in relation to the trust in relation to the relevant period would exceed 100%, the attribution percentage of each taxpayer is the percentage worked out using the formula:
|
Attribution percentage of the taxpayer concerned |
× 100% | ||
| Sum of attribution percentages of all of the taxpayers to whom the operative provision applies |
S 582(6A) inserted by No 138 of 1994.
582(7)
For the purposes of subsection (6):
(a) the percentage of the income of the trust represented by the share of the income to which the taxpayer was entitled, or was entitled to acquire, at the end of the relevant period because of the interest or interests referred to in subparagraph (a)(i) or (ii) of the definition of " attribution percentage " in that subsection; or
(b) the percentage of the corpus of the trust represented by the share of the corpus to which the taxpayer was entitled, or was entitled to acquire, at the end of the relevant period because of the interest or interests referred to in subparagraph (b)(i) or (ii) of the definition of " attribution percentage " in that subsection;
is to be worked out by:
(c) ascertaining whichever of the following is applicable:
(i) the income of the trust for the year of income;
(ii) the corpus of the trust as at the end of the year of income; and
(d) assuming that the share to which the taxpayer is entitled, or became entitled to acquire, at the end of the relevant period because of the interest or interests was the same at all other times during the year of income; and
(e) ascertaining the percentage concerned on that assumption.
582(7A)
If:
(a) because of the taxpayer ' s election under subsection 486(3) , the relevant period ends at the same time as a period ( " the real accounting period " ) in respect of which the accounts of the trust are made out; and
(b) because of paragraph 486(5)(b) or subparagraph 486(7)(b)(i) , the relevant period does not begin at the same time as the real accounting period;
then, for the purposes of this section:
(c) the relevant period is taken to begin when the real accounting period does; and
(d) any interest or interests that the taxpayer had in the trust immediately before the time when the relevant period began (disregarding its extension under paragraph (c)) are taken to have been acquired by the taxpayer at that time.
S 582(7A) inserted by No 18 of 1993.
582(8)
A reference in this section to income, profits or gains having been distributed to a taxpayer is a reference to an amount included in such income, profits or gains having been paid or credited to, or applied for the benefit of, the taxpayer.
582(9)
A reference in this section to an interest that a taxpayer had in a foreign trust throughout a particular part of the relevant period does not include a reference to such an interest that the taxpayer ceased to have before the end of that period.
S 582 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 583 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 583 formerly read:
SECTION 583 FOREIGN INVESTMENT FUND INCOME
583
If the taxpayer is entitled to a share of the calculated profit of the FIF in respect of the relevant period, foreign investment fund income equal to the amount of that share is taken to have accrued to the taxpayer from the FIF in respect of that period.
S 583 inserted by No 190 of 1992.
Subdiv E repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
FORMER SECTION 584 584 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME FROM FLP BY DEEMED RATE OF RETURN METHOD
(Repealed by No 114 of 2010)
S 584 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 584 formerly read:
SECTION 584 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME FROM FLP BY DEEMED RATE OF RETURN METHOD
584
This Subdivision sets out in several steps the procedure for determining by the deemed rate of return method whether any foreign investment fund income accrued to a person (
``the taxpayer''
) from a particular FLP in respect of a notional accounting period (
``the relevant period''
). In following the procedure it is necessary to determine the value of a FLP on a day called
``the relevant day''
, which has the meaning given by section
586
, and then to apply a specified rate of return to that value.
S 584 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 585 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 585 formerly read:
SECTION 585 STEP 1
-
INTERESTS IN A FLP
585(1)
The first step in the procedure is to determine whether the taxpayer had only one interest, or had 2 or more interests, in the FLP during the relevant period.
585(2)
If the taxpayer had 2 or more interests that were acquired at different times during the relevant period, the procedure applies separately in respect of each such interest.
585(3)
The following provisions involve determining the value of the FLP at the relevant times referred to in those provisions.
S 585 inserted by No 190 of 1992.
FORMER SECTION 586 586 STEP 2 - DETERMINATION OF OPENING VALUE
(Repealed by No 114 of 2010)
S 586 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 586 formerly read:
SECTION 586 STEP 2
-
DETERMINATION OF OPENING VALUE
586
The second step is to determine the value of the FLP as at the day (
``the relevant day''
) referred to in whichever of the following paragraphs applies:
(a)
if the taxpayer had the interests in the FLP at the beginning of the relevant period
-
the day immediately preceding the first day of the relevant period; or
(b)
if the interests in the FLP were acquired by the taxpayer during the relevant period
-
the day on which they were acquired.
S 586 inserted by No 190 of 1992.
Archived:
S 587 and 588 repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 179, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
(Repealed by No 114 of 2010)
S 589 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 589 formerly read:
SECTION 589 IF RELEVANT PERIOD STARTS AFTER 1 JANUARY 1993
589
If the interests in the FLP were acquired before the start of the relevant period and that period starts on a day later than 1 January 1993, the value of the FLP on the relevant day is to be determined in accordance with section
590
.
S 589 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 590 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 590 formerly read:
SECTION 590 VALUE AT START OF RELEVANT PERIOD (BEING LATER THAN 1 JANUARY 1993)
590
The value of the FLP on the relevant day is to be determined as follows:
(a)
first, ascertain the value, as previously determined under this Subdivision, of the FLP at the beginning of the notional accounting period that immediately preceded the relevant period;
(b)
secondly, add so much of the foreign investment fund income determined in relation to the taxpayer in respect of the immediately preceding period as was attributable to the FLP;
(c)
thirdly, add the amount of any premium or instalment of premium (excluding the first premium or an instalment of the first premium) paid by the taxpayer in respect of the FLP in the immediately preceding period;
(d)
fourthly, deduct the amount or value of any distributions made to the taxpayer during the immediately preceding period in relation to the FLP.
S 590 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 591 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 591 formerly read:
SECTION 591 VALUE AT TIME OF ACQUISITION (AFTER START OF RELEVANT PERIOD)
591
If the interests in the FLP were acquired by the taxpayer during the relevant period, the value of the FLP on the relevant day is:
(a)
if the taxpayer had paid the whole of the consideration in respect of the acquisition
-
the amount of that consideration; or
(b)
otherwise
-
the amount of the first premium paid by the taxpayer in respect of the FLP.
S 591 inserted by No 190 of 1992.
FORMER SECTION 592 592 STEP 3 - DETERMINATION OF FOREIGN INVESTMENT FUND AMOUNT
(Repealed by No 114 of 2010)
S 592 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 592 formerly read:
SECTION 592 STEP 3
-
DETERMINATION OF FOREIGN INVESTMENT FUND AMOUNT
592(1)
The third step is to determine, in relation to the taxpayer in respect of the relevant period, the foreign investment fund amount in respect of the taxpayer
'
s interest or interests in the FLP.
592(2)
The foreign investment fund amount is the amount worked out using the formula:
Opening value
×
Deemed rate of return
×
Number of days held
365
For the purposes of the formula:
"Opening value"
means the value of the FLP on the relevant day;
"Deemed rate of return"
, in relation to the relevant period, means:
(a) if there is only one base rate in relation to the year of income in which the relevant period ends - that rate; or
(b) if there are 2 or more base interest rates in relation to that year of income - the weighted average of those rates;
increased, in either case, by 4 percentage points;
"Number of days held"
means the number of days in the relevant period in which the taxpayer had the interests in the FLP.
Archived:
S 592(2) (definition of basic statutory interest rate) repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 180, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
S 592(2) amended by No 101 of 2006 , s 3 and Sch 2 item 496, by substituting " base " for " basic statutory " in para (a) and (b) of the definition of " Deemed rate of return " , effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 592(2) amended by No 11 of 1999, No 181 of 1994.
S 592 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 593 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 593 formerly read:
SECTION 593 STEP 4
-
CONVERSION OF FOREIGN INVESTMENT FUND AMOUNT TO AUSTRALIAN CURRENCY
593
The foreign investment fund amount determined in respect of the taxpayer
'
s interests in a FLP during the relevant period is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of that period.
S 593 inserted by No 190 of 1993.
(Repealed by No 114 of 2010)
S 594 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 594 formerly read:
SECTION 594 FOREIGN INVESTMENT FUND INCOME
594
Foreign investment fund income equal to the corresponding amount calculated under section
593
is taken to have accrued to the taxpayer from the FLP in respect of the relevant period.
S 594 inserted by No 190 of 1992.
Subdiv F repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 595 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 595 formerly read:
SECTION 595 PROCEDURE FOR DETERMINING FOREIGN INVESTMENT FUND INCOME BY CASH SURRENDER VALUE METHOD
595(1)
This Subdivision applies only if it is practicable to ascertain, as at the relevant time referred to in this Subdivision, the cash surrender value of the interest of a person (
``the taxpayer''
) in a FLP. For the purposes of this Subdivision as so applying, a reference to an interest in a FLP is a reference to an interest of which it is practicable to ascertain the cash surrender value as at the relevant time.
595(2)
Accordingly, this Subdivision sets out the procedure for determining by the cash surrender value method whether, in respect of the interest, any foreign investment fund income accrued to the taxpayer from the FLP in respect of a notional accounting period (
``the relevant period''
). There are 2 steps in this procedure, which are set out in sections
596
and
600
, respectively.
S 595 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 596 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 596 formerly read:
S 596(2) amended by No 18 of 1993.
SECTION 596 STEP 1
-
CALCULATION OF FOREIGN INVESTMENT FUND AMOUNT
596(1)
The first step in the procedure is to work out the foreign investment fund amount in relation to the taxpayer in respect of the relevant period.
596(2)
This is done as follows:
(a)
first, determine the cash surrender value of the taxpayer's interest at the end of the period;
(b)
secondly, add the amount or value of each distribution (if any) in respect of the taxpayer's interest in the FLP that was made by the FLP to the taxpayer during the period;
(c)
thirdly, if the taxpayer disposed of any interest in the FLP during the period, add:
(i)
the amount or value of each distribution (if any) in respect of that interest made by the FLP to the taxpayer during the period; and
(ii)
the amount or value of any consideration received or receivable by the taxpayer in respect of the disposal;
(d)
fourthly, if the taxpayer had an interest in the FLP on the day immediately before the first day of the period, deduct:
(i)
if subparagraph (ii) does not apply
-
the cash surrender value of the interest on that day; or
(ii)
if the deemed rate of return method was applied, in respect of the taxpayer's interest in the FLP, in respect of the notional accounting period immediately before the relevant period
-
the value, determined under Subdivision E in accordance with that method, of the interest on that day;
(e)
fifthly, if the taxpayer contributed to the interest in the FLP during the period, deduct the amount or value of the consideration paid or given by the taxpayer in respect of the contribution.
596(3)
Each amount resulting from the application of one of the paragraphs of subsection (2) is to be expressed in the currency used in determining the cash surrender value referred to in paragraph (2)(a).
S 596 inserted by No 190 of 1992.
Archived:
S 597 repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 181, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
(Repealed by No 114 of 2010)
S 598 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 598 formerly read:
SECTION 598 GROSS FOREIGN INVESTMENT FUND INCOME
598
If the foreign investment fund amount as worked out under section
596
is a positive amount, that amount is gross foreign investment fund income in relation to the taxpayer from the FLP in respect of the relevant period.
S 598 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 599 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 599 formerly read:
SECTION 599 FOREIGN INVESTMENT FUND LOSS
599
If the foreign investment fund amount as worked out under section
596
is a minus amount, that amount is a foreign investment fund loss incurred by the taxpayer from the FLP in respect of the relevant period.
S 599 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 600 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 600 formerly read:
the following provisions have effect.
"undeducted amount"
"referable notional accounting period"
S 600(8) inserted by No 138 of 1994.
SECTION 600 STEP 2
-
CALCULATION OF FOREIGN INVESTMENT FUND INCOME
600(1)
The second step in the procedure is to work out under this section the amount of any foreign investment fund income in relation to the taxpayer in respect of the relevant period.
600(2)
If:
(a)
there is, under section
598
, any gross foreign investment fund income in relation to the taxpayer from the FLP in respect of the relevant period; and
(b)
that gross foreign investment fund income exceeds the total of any unapplied previous foreign investment fund losses that were incurred by the taxpayer from the FLP in respect of a notional accounting period or notional accounting periods before the relevant period;
600(3)
The excess referred to in paragraph (2)(b) is to be converted to the corresponding amount in Australian currency in accordance with the rate of exchange applicable at the end of the relevant period.
600(4)
Foreign investment fund income equal to that corresponding amount is taken to have accrued to the taxpayer from the FLP in respect of the relevant period.
600(5)
The reference in paragraph (2)(b) to an unapplied previous foreign investment fund loss incurred by the taxpayer from the FLP in respect of a notional accounting period before the relevant period is a reference to so much of the undeducted amount of a foreign investment fund loss under section
599
that was incurred by the taxpayer from the FLP in respect of any such notional accounting period as exceeds the sum of the amounts (if any) worked out under the following paragraphs in respect of each referable notional accounting period of the FLP:
(a)
if paragraph (b) does not apply to the referable notional accounting period concerned
-
any amount that under section
598
was gross foreign investment fund income in relation to the taxpayer from the FLP in respect of that period; or
(b)
if the operative provision did not apply to the taxpayer in respect of the referable notional accounting period concerned, or the application of the operative provision to the taxpayer in respect of that period was affected, because of any of Divisions 2 to 9 and 11 to 15:
(i)
any amount that under section
598
would have been gross foreign investment fund income in relation to the taxpayer from the FLP in respect of that period; or
(ii)
any amount by which the amount that under section
598
was gross foreign investment fund income in relation to the taxpayer from the FLP in respect of that period would have been increased; or
if the operative provision had applied to the taxpayer in respect of that period or the application of the operative provision to the taxpayer in respect of that period had not been affected, as the case may be.
(iii)
any amount by which the amount that under section
599
was a foreign investment fund loss in relation to the taxpayer from the FLP in respect of that period would have been reduced;
600(6)
In subsection (5):
, in relation to a foreign investment fund loss, means so much of that loss as has not been allowed, and is not allowable, as a deduction under section
533
from the taxpayer's assessable income of any year of income preceding the year of income in which the relevant period ends;
, in relation to a FLP, means a notional accounting period of the FLP that occurred after the notional accounting period in which the foreign investment fund loss was incurred and before the relevant period.
600(7)
In calculating under subsection (5) the extent (if any) to which a foreign investment fund loss that was incurred by the taxpayer from a FLP in respect of a notional accounting period is an unapplied previous foreign investment fund loss, an amount worked out under paragraph (5)(a) or subparagraph (5)(b)(i), (ii) or (iii) does not include any part of that amount that has been, or is to be, taken into account in calculating the extent to which a foreign investment fund loss under section
599
that was incurred by the taxpayer from the FLP in respect of a notional accounting period before the first-mentioned notional accounting period was an unapplied previous foreign investment fund loss.
600(8)
For the purposes of applying subsections (5), (6) and (7) in working out the amount of an unapplied previous foreign investment fund loss, if any amount that is to be taken into account under any of those subsections in relation to a notional accounting period is not expressed in the same currency as the gross foreign investment fund income mentioned in paragraph (2)(a), the amount is to be converted to the corresponding amount in that currency in accordance with the rate of exchange applicable at the end of that notional accounting period.
S 600 inserted by No 190 of 1992.
Div 19 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 601 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 601 formerly read:
SECTION 601 FIF ATTRIBUTION ACCOUNT ENTITY
601
Each of the following is a FIF attribution account entity:
(a)
a company that is not a resident of Australia;
(b)
a partnership;
(c)
a trust;
(d)
a FLP.
S 601 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 602 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 602 formerly read:
SECTION 602 FIF ATTRIBUTION ACCOUNT PERCENTAGE
602
The FIF attribution account percentage of a taxpayer in relation to a FIF attribution account entity is the interest that the taxpayer has in the income or profits of the entity, whether directly, or indirectly through one or more interposed FIF attribution account entities.
S 602 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 603 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 603 formerly read:
S 603(1) amended by No 12 of 2012, s 3 and Sch 6 items 30 and 31, by inserting
"
section
27H
of this Act,
"
before
"
Division
82
"
in para (h), applicable to the 2007-08 income year and later income years. S 603(1) amended by No 15 of 2007, s 3 and Sch 1 item 140, by substituting
"
Division 82, 301, 302, 304 or 305 of the
Income Tax Assessment Act 1997
, or Division 82 of the
Income Tax (Transitional Provisions) Act 1997
"
for
"
Subdivision AA of Division 2 of Part III
"
in para (h), applicable on or after 1 July 2007. S 603(1) amended by No 181 of 1994. and, in any such case, to be made at the end of the year of income.
SECTION 603 FIF ATTRIBUTION ACCOUNT PAYMENTS
603(1)
Each of the following is a FIF attribution account payment:
(a)
a dividend paid by a company to a shareholder;
(b)
interest paid on a convertible note to the holder of the note;
(c)
the individual interest of a partner in the net income (within the meaning of section
90
) of a partnership of a year of income;
(d)
if a beneficiary of a trust is presently entitled to a share of the income of the trust
-
that share of the net income (within the meaning of section
95
) of the trust of a year of income;
(e)
the whole or part of the net income of a trust of a year of income that is assessable to the trustee under section
99
or
99A
;
(f)
an amount of trust property that would be included in the assessable income of a beneficiary of a year of income under section
99B
if:
(i)
the beneficiary were a resident, within the meaning of section
6
, at a time during the year of income; and
(ii)
paragraph
99B(2)(c)
were replaced by a paragraph referring to any FIF attribution account payment under paragraph (d) or (e) of this subsection;
(g)
a payment made by the person who issued a FLP to a person who has an interest in the FLP;
(h)
an amount that is included in assessable income under section
27H
of this Act, Division
82
,
301
,
302
,
304
or
305
of the
Income Tax Assessment Act 1997
, or Division
82
of the
Income Tax (Transitional Provisions) Act 1997
.
603(2)
The FIF attribution account payment is taken to be made:
(a)
in a paragraph (1)(c) case
-
by the partnership to the partner; and
(b)
in a paragraph (1)(d) or (f) case
-
by the trust to the beneficiary; and
(c)
in a paragraph (e) case
-
by the trust to the trustee;
S 603 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 604 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 604 formerly read:
SECTION 604 FIF ATTRIBUTION SURPLUS
604
A FIF attribution surplus for a FIF attribution account entity in relation to a taxpayer exists at a particular time if the entity's total FIF attribution credits arising before that time in relation to the taxpayer exceed its total FIF attribution debits arising before that time in relation to the taxpayer.
S 604 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 605 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 605 formerly read:
SECTION 605 FIF ATTRIBUTION CREDIT
605(1)
A FIF attribution credit arises for a FIF attribution account entity (
the eligible entity
) in relation to a taxpayer if:
(a)
an amount is included in the taxpayer
'
s assessable income under section
529
in respect of the foreign investment fund income of the eligible entity in respect of a notional accounting period of the eligible entity; or
(b)
both of the following conditions apply:
(i)
an amount is included in the taxpayer
'
s assessable income under section
529
in respect of the foreign investment fund income of another FIF attribution account entity (
the other entity
) in respect of a notional accounting period of the other entity;
(ii)
that amount was calculated by reference to another amount (
the section
576
amount
) that under section
576
was included in the notional income of the other entity because the other entity had an interest in the eligible entity; or
(c)
each of the following conditions applies:
(i)
the amount (
the section
529
amount
) is included in the taxpayer
'
s assessable income under section
529
in respect of another FIF attribution account entity (
the first tier FIF
) in respect of a notional accounting period of the first tier FIF;
(ii)
that amount was calculated by reference to another amount (
the section 576 amount
) that under section
576
was included in the notional income of the first tier FIF because the first tier FIF had an interest in another FIF attribution account entity (
the second tier FIF
);
(iii)
the section
576
amount was calculated by reference to an amount (
the section
579
amount
) that under section
579
was included in the notional income of the second tier FIF because the second tier FIF had an interest in the eligible entity; or
(d)
a FIF attribution account payment that requires a FIF attribution debit for another entity in relation to the taxpayer is made to the eligible entity.
605(2)
Subject to the following provisions of this section, the amount of the FIF attribution credit is equal to the amount included in the assessable income or to the amount of the FIF attribution debit, as the case may be.
605(3)
If a FIF attribution credit arises under paragraph (1)(b) for an eligible entity, the amount of the FIF attribution credit is to be worked out using the formula:
FIF income
×
Section 529 amount
Notional income
In the formula:
FIF income means the amount of the foreign investment income included, in relation to the eligible entity, in the foreign investment fund income of the other entity for the notional accounting period referred to in paragraph (1)(b) of the other entity;
Section 529 amount means the amount included in the taxpayer ' s assessable income under section 529 in respect of the notional accounting period referred to in paragraph (1)(b) of the other entity;
Notional income means the notional income of the other entity under this Part in respect of the notional accounting period referred to in paragraph (1)(b) of the other entity.
605(4)
If a FIF attribution credit arises under paragraph (1)(c) for an eligible entity, the amount of the FIF attribution credit is to be worked out using the formula:
|
FIF income
×
Section 529 amount
Notional income of the first tier FIF |
For the purposes of this subsection:
FIF income means the amount worked out using the formula:
|
Section 579 amount
×
Section 576 amount
Notional income of the second tier FIF |
Section 579 amount means the section 579 amount referred to in subparagraph (1)(c)(iii);
Section 576 amount means the section 576 amount referred to in subparagraph (1)(c)(ii);
Notional income of the second tier FIF means the notional income of the second tier FIF referred to in subparagraph (1)(c)(ii) under the calculation method for the notional accounting period of the first tier FIF referred to in subparagraph (1)(c)(i);
Section 529 amount means the section 529 amount referred to in subparagraph (1)(c)(i);
Notional income of the first tier FIF means the notional income of the first tier FIF referred to in subparagraph (1)(c)(i) under the calculation method for the notional accounting period referred to in that subparagraph.
605(5)
If subsection (3) applies to a taxpayer in respect of one or more eligible entities in respect of a particular section 529 amount, the amount of the FIF attribution credit arising under paragraph (1)(a) for the other entity referred to in paragraph (1)(b) is reduced by the FIF attribution credit or the sum of the FIF attribution credits that, except for subsection (6), would arise to the eligible entity or eligible entities under subsection (3).
605(6)
If subsection (4) applies to a taxpayer in respect of one or more eligible entities in respect of a particular amount included in the notional income of the second tier FIF referred to in subparagraph (1)(c)(ii), the amount of the FIF attribution credit arising under paragraph (1)(b) for the second tier FIF is to be reduced by the FIF attribution credit or the sum of the FIF attribution credits arising for the eligible entity or eligible entities under subsection (4).
605(7)
The FIF attribution credit arises:
(a) in a paragraph (1)(a) case - at the end of the notional accounting period referred to in that paragraph; or
(b) in a paragraph (1)(b) case - at the end of the notional accounting period of the eligible entity that gave rise to the section 576 amount referred to in subparagraph (1)(b)(ii); or
(c) in a paragraph (1)(c) case - at the end of the notional accounting period of the eligible entity that gave rise to the section 579 amount referred to in subparagraph (1)(c)(iii); or
(d) in a paragraph (1)(d) case - when the FIF attribution account payment referred to in that paragraph is made.
605(8)
If, apart from this subsection, a FIF attribution credit would arise in relation to a FIF attribution account entity for an Australian partnership or an Australian trust in respect of an amount included in the assessable income of the partnership or trust of a year of income under section 529 , then, subject to subsection (11):
(a) the FIF attribution credit does not arise for the partnership or trust; and
(b) a FIF attribution credit arises in relation to the FIF attribution account entity for:
(i) any taxpayer for whom, as a result of the amount being so included, a tax detriment would arise in circumstances set out in subsection (9); and
(ii) any taxpayer if, as a result of the amount being so included, a tax detriment would arise for the trustee of a trust in which the taxpayer is a beneficiary, in respect of an amount assessable to the trustee under section 98 in respect of the taxpayer ' s share of the net income of the trust, in circumstances set out in subsection (10); and
(iii) any taxpayer in the capacity of trustee of a trust if, as a result of the amount being so included, a tax detriment would arise for the taxpayer in respect of an amount assessable to the taxpayer under section 99 or 99A , in circumstances set out in subsection (10); and
(c) the amount of the FIF attribution credit referred to in paragraph (b) equals the amount of the tax detriment; and
(d) the FIF attribution credit referred to in paragraph (b) arises at the time when the FIF attribution credit referred to in paragraph (a) would, apart from this subsection, have arisen.
605(9)
The circumstances referred to in subparagraph (8)(b)(i) are:
(a) the circumstances set out in the following subparagraphs:
(i) as a result of the amount being included as mentioned in subsection (1), there is a tax detriment for:
(A) a partner in the Australian partnership; or
(B) a partner in another partnership ( the ultimate partnership ), if the tax detriment occurred because there were one or more partnerships or trusts (but not companies) interposed between the partner and the Australian partnership or the Australian trust; and
(ii) the partner is not, in respect of his or her interest in the net income or partnership loss of the Australian partnership or the ultimate partnership, in the capacity of trustee of a trust; or
(b) the circumstances set out in the following subparagraphs:
(i) as a result of the amount being included as mentioned in subsection (1), there is a tax detriment for:
(A) a beneficiary in the Australian trust; or
(B) a beneficiary in another trust ( the ultimate trust ), if the tax detriment occurred because there were one or more partnerships or trusts (but not companies) interposed between the beneficiary and the Australian partnership or the Australian trust; and
(ii) the beneficiary is not a partnership and is not, in respect of his or her share of the net income of the Australian trust or the ultimate trust, in the capacity of trustee of another trust.
605(10)
The circumstances referred to in subparagraph (8)(b)(ii) or (iii) are that, as a result of the amount being included as mentioned in subsection (1), there is a tax detriment for:
(a) the trustee of the Australian trust; or
(b) the trustee of another trust ( the ultimate trust ), if the tax detriment occurred because there were one or more partnerships or trusts (but not companies) interposed between the trustee and the Australian partnership or the Australian trust.
605(11)
Subsection (8) does not apply to an Australian trust that is, in relation to the year of income referred to in that subsection:
(a) a corporate unit trust within the meaning of Division 6B of Part III ; or
(b) a public trading trust within the meaning of Division 6C of that Part; or
(c) a complying superannuation fund, a non-complying superannuation fund, a complying approved deposit fund, a non-complying approved deposit fund or a pooled superannuation trust; or
(d) a resident public unit trust within the meaning of subsection 96A(4) .
S 605(11) amended by No 15 of 2007, s 3 and Sch 1 item 141, by substituting para (c), applicable to the 2007-2008 income year and later years. Para (c) formerly read:
(c) an eligible entity within the meaning of Part IX ; or
S 605 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 606 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 606 formerly read:
S 606(2) amended by No 18 of 1993.
SECTION 606 FIF ATTRIBUTION DEBIT
606(1)
A FIF attribution debit arises for a FIF attribution account entity (
the eligible entity
) in relation to a taxpayer if:
(a)
the eligible entity makes a FIF attribution account payment to the taxpayer or to a FIF attribution account entity; and
(b)
immediately before the eligible entity makes the FIF attribution account payment, there is a FIF attribution surplus for the eligible entity in relation to the taxpayer.
606(2)
The amount of the FIF attribution debit is the lesser of:
(a)
the FIF attribution surplus; and
(b)
whichever of the following is applicable:
(i)
if the attribution account payment is made to the taxpayer
-
the FIF attribution account payment;
reduced by any attribution debit that arises under section
372
for the entity in relation to the taxpayer as a result of the making of the payment.
(ii)
in any other case
-
the taxpayer's FIF attribution account percentage (for the FIF attribution account entity to which the payment is made) of the FIF attribution account payment;
606(3)
The FIF attribution debit arises when the FIF attribution account payment is made.
S 606 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 607 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 607 formerly read:
SECTION 607 ADDITIONAL FIF ATTRIBUTION DEBIT
607(1)
A FIF attribution debit also arises for a FIF attribution account entity in relation to a taxpayer if the whole or a part of a foreign investment fund loss incurred by the taxpayer under section
541
or
599
in respect of a notional accounting period is an allowable deduction from the taxpayer's assessable income of a year of income.
607(2)
The amount of the FIF attribution debit is the amount of the allowable deduction.
607(3)
The FIF attribution debit arises at the end of the notional accounting period.
S 607 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 607AA repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 607AA formerly read:
SECTION 607AA ADDITIONAL FIF ATTRIBUTION DEBIT
-
DEDUCTION FOR OVERSEAS SUPERANNUATION TRANSFERS
607AA(1)
If a taxpayer is entitled to a deduction under section
533B
, a FIF attribution debit also arises for a FIF attribution account entity (referred to in section
533B
as the paying fund) in relation to the taxpayer.
607AA(2)
The amount of the FIF attribution debit is the amount of the deduction.
607AA(3)
The FIF attribution debit arises immediately after the time that the taxpayer becomes entitled to the deduction.
S 607AA inserted by No 83 of 2004.
(Repealed by No 114 of 2010)
S 607A repealed by No 114 of 2010, s 3 and Sch 1 sitem 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 607A formerly read:
SECTION 607A GROSSED-UP AMOUNT OF A FIF ATTRIBUTION DEBIT
607A
The grossed-up amount in relation to a FIF attribution debit is:
(a)
where subparagraph
606(2)(b)(i)
applied in relation to the debit
-
the amount of the debit; or
(b)
where subparagraph
606(2)(b)(ii)
applied in relation to the debit
-
the amount of the debit, divided by the FIF attribution account percentage referred to in that subparagraph.
S 607A inserted by No 18 of 1993.
Div 20 repealed by No 143 of 2007 , s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s 559A .
(Repealed by No 143 of 2007 )
S 608 repealed by
No 143 of 2007
, s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 608 formerly read:
SECTION 608 FIF ATTRIBUTED TAX ACCOUNT SURPLUS
608
A FIF attributed tax account surplus for a FIF in relation to a taxpayer exists at a particular time if the FIF
'
s total attributed tax account credits arising before that time in relation to the taxpayer exceed its total FIF attributed tax account debits arising before that time in relation to the taxpayer.
S 608 inserted by No 190 of 1992.
(Repealed by No 143 of 2007 )
S 609 repealed by
No 143 of 2007
, s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 609 formerly read:
SECTION 609 FIF ATTRIBUTED TAX ACCOUNT CREDIT
609(1)
A FIF attributed tax account credit arises for a FIF in relation to a taxpayer if, on the assumption that the references in sections
160AFCE
and
160AFCG
to a notional deduction under Subdivision D of Division
18
did not include a reference to a deduction in respect of Australian tax, the taxpayer would be taken by those sections to have paid, and to have been personally liable for, an amount of foreign tax in respect of an amount included in the taxpayer
'
s assessable income under section
529
in respect of a notional accounting period of the FIF.
609(2)
The amount of the credit is equal to the amount of the foreign tax.
609(3)
The FIF attributed tax account credit arises at the end of the notional accounting period referred to in subsection (1).
S 609 inserted by No 190 of 1992.
(Repealed by No 143 of 2007 )
S 610 repealed by
No 143 of 2007
, s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 610 formerly read:
SECTION 610 FURTHER FIF ATTRIBUTED TAX ACCOUNT CREDIT
610(1)
A FIF attributed tax account credit arises in relation to a taxpayer for a FIF that is the second tier foreign company referred to in section
160AFCF
or the second tier foreign trust referred to in section
160AFCH
if, on the assumption that the references in those sections to a notional deduction under Subdivision D of Division
18
did not include a reference to a deduction in respect of Australian tax, the taxpayer would be taken by those sections to have paid, and to have been personally liable for, an amount of foreign tax in respect of an amount included in the taxpayer
'
s assessable income under section
529
in respect of a notional accounting period of a FIF that is the first tier foreign company referred to in section
160AFCF
or the first tier foreign trust referred to in section
160AFCH
, as the case may be.
610(2)
The amount of the credit is equal to the amount of the foreign tax.
610(3)
The FIF attributed tax account credit arises at the end of the notional accounting period referred to in subsection (1).
S 610 inserted by No 190 of 1992.
(Repealed by No 143 of 2007 )
S 611 repealed by
No 143 of 2007
, s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 611 formerly read:
SECTION 611 FIF ATTRIBUTED TAX ACCOUNT CREDIT FLOWING THROUGH MORE THAN ONE FIF
611(1)
A FIF attributed tax account credit arises for a FIF attribution account entity (
"
the eligible entity
"
) in relation to a taxpayer if, as a result of a FIF attribution account payment made to the eligible entity, a FIF attributed tax account debit arises for another entity in relation to the taxpayer.
611(2)
The amount of the credit is equal to the amount of the FIF attributed tax account debit.
611(3)
The FIF attributed tax account credit arises when the FIF attribution account payment is made.
S 611 inserted by No 190 of 1992.
(Repealed by No 143 of 2007 )
S 612 repealed by
No 143 of 2007
, s 3 and Sch 1 item 126, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
559A
. S 612 formerly read:
SECTION 612 FIF ATTRIBUTED TAX ACCOUNT DEBIT
612(1)
A FIF attributed tax account debit arises for a FIF in relation to another FIF attribution account entity or in relation to a taxpayer if:
(a)
the FIF makes a FIF attribution account payment to the taxpayer or to another FIF attribution account entity; and
(b)
the FIF attribution account payment requires a FIF attribution debit for the FIF in relation to the taxpayer.
612(2)
The amount of the FIF attributed tax account debit is the amount worked out using the formula:
FIF attribution debit
FIF attribution surplus
×
FIF attributed tax account surplus.
In the formula:
FIF attribution debit means the amount of the FIF attribution debit;
FIF attribution surplus means the amount of the FIF attribution surplus, for the FIF making the FIF attribution account payment, in relation to the taxpayer immediately before the FIF attribution debit arose;
FIF attributed tax account surplus means the amount of the FIF attributed tax account surplus.
612(3)
The FIF attributed tax account debit arises when the FIF attribution account payment is made.
S 612 inserted by No 190 of 1992.
Div 21 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 613 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 613 formerly read:
then, for the purposes of this Act:
SECTION 613 REDUCTION OF DISPOSAL CONSIDERATION OR CAPITAL PROCEEDS IF FIF ATTRIBUTED INCOME NOT DISTRIBUTED
613(1)
If:
(a)
it is necessary, for the purposes of applying a provision of this Act in the assessment of a taxpayer for a year of income, to take into account:
(i)
the amount of consideration received, entitled to be received or taken to have been received, by the taxpayer in respect of the disposal of an asset; or
being an asset that is an interest in a FIF attribution account entity; and
(ii)
the capital proceeds from a CGT event happening in relation to a CGT asset;
(b)
immediately before the disposal or CGT event takes place there is a FIF attribution surplus for the FIF attribution account entity in relation to the taxpayer;
(c)
the consideration or capital proceeds that, apart from this section, would be taken into account under the provision referred to in paragraph (a) in respect of the disposal or CGT event is taken to be reduced by so much of the amount of the FIF attribution surplus as does not exceed the consideration or capital proceeds; and
(d)
a FIF attribution debit is taken to arise at the time of the disposal or the CGT event under section 606, in relation to the taxpayer, for the FIF attribution account entity; and
(e)
the amount of the FIF attribution debit is equal to so much of the surplus as is taken into account under paragraph (c).
613(2)
For the purposes of paragraph (1)(c), if the disposal of the asset or the CGT event causes the taxpayer
'
s FIF attribution account percentage for the FIF attribution account entity to be reduced by a proportion, then only that proportion of the FIF attribution surplus for the entity is to be taken into account under that paragraph.
S 613 substituted by No 114 of 2010, s 3 and Sch 1 item 92, applicable to assessments for the 2006-07 income year and later income years. S 613 formerly read:
then, for the purposes of this Act: S 613(1) amended by
No 101 of 2006
, s 3 and Sch 2 item 497 to 502, by omitting
"
to take into account the amount of consideration received, entitled to be received or taken to have been received, by the taxpayer in respect of the disposal of an asset,
"
after
"
year of income,
"
in para (a), substituting
"
CGT event
"
for
"
disposal
"
in para (b), and omitting
"
consideration or
"
before
"
capital proceeds
"
(twice occurring) in para (c),
"
disposal or
"
before
"
CGT event
"
in para (c), and
"
the disposal or
"
before
"
the CGT event
"
in para (d), effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
. S 613(1) amended by No 46 of 1998. S 613(2) repealed as inoperative by
No 101 of 2006
, s 3 and Sch 1 item 182, effective 14 September 2006. For
application and savings provisions
and for former wording see the
CCH Australian Income Tax Legislation archive
. S 613(3) amended by
No 101 of 2006
, s 3 and Sch 2 item 503, by omitting
"
the disposal of the asset or
"
before
"
the CGT event
"
, effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
.
SECTION 613 REDUCTION OF CAPITAL PROCEEDS IF FIF ATTRIBUTED INCOME NOT DISTRIBUTED
613(1)
If:
(a)
it is necessary, for the purposes of applying a provision of this Act in the assessment of a taxpayer for a year of income, or to take into account the capital proceeds from a CGT event happening in relation to a CGT asset, being an interest in a FIF attribution account entity; and
(b)
immediately before the CGT event takes place there is a FIF attribution surplus for the FIF attribution account entity in relation to the taxpayer;
(c)
the capital proceeds that, apart from this section, would be taken into account under the provision referred to in paragraph (a) in respect of the CGT event is taken to be reduced by so much of the amount of the FIF attribution surplus as does not exceed the capital proceeds; and
(d)
a FIF attribution debit is taken to arise at the time of the CGT event under section
606
, in relation to the taxpayer, for the FIF attribution account entity; and
(e)
the amount of the FIF attribution debit is equal to so much of the surplus as is taken into account under paragraph (c).
Archived:
613(3)
For the purposes of paragraph (1)(c), if the CGT event causes the taxpayer's FIF attribution account percentage for the FIF attribution account entity to be reduced by a proportion, then only that proportion of the FIF attribution surplus for the entity is to be taken into account under that paragraph.
S 613 amended by No 46 of 1998 and inserted by No 190 of 1992.
Div 22 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.
(Repealed by No 114 of 2010)
S 614 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 614 formerly read:
SECTION 614 APPLICATION OF DIVISION
614
This Division applies to a taxpayer who:
(a)
had an interest or interests in a FIF at the end of a year of income ending on or after 1 January 1993; or
(b)
had an interest in a FLP at any time during a year of income ending on or after that date.
S 614 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 615 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 615 formerly read:
There is an administrative penalty if you do not keep or retain records as required by this Division: see section
288-25
in Schedule
1
to the
Taxation Administration Act 1953
.
SECTION 615 RECORDS OF ACTS, TRANSACTIONS ETC.
615
The taxpayer must make and keep records in Australia containing particulars of:
(a)
the acts, transactions and other circumstances that resulted in the taxpayer having:
(i)
the interest or interests in the FIF at the end of the year of income; or
(ii)
the interest in the FLP during the year of income; and
(b)
except in the case of a taxpayer who, because of any of Divisions 2 to 15, is wholly exempt from taxation in respect of the interest or interests in respect of the notional accounting period of the FIF or FLP that ended in the year of income
-
the basis of the calculation of the interest or the interests at that time.
Note:
S 615 amended by No 91 of 2000 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 616 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 616 formerly read:
SECTION 616 INTEREST IN FIF
-
IF MARKET VALUE METHOD WAS APPLIED
616
If, in the case of an interest or interests in a FIF, the market value method was applied to determine whether foreign investment fund income accrued to the taxpayer from the FIF in respect of the notional accounting period of the FIF that ended in the year of income, the taxpayer must make and keep records in Australia containing particulars of:
(a)
if any foreign investment fund income accrued to the taxpayer from the FIF in respect of that notional accounting period
-
the basis of the calculation of:
(i)
that foreign investment fund income; and
(ii)
any unapplied previous foreign investment fund loss referred to in subsection
542(2)
; or
(b)
if any foreign investment fund loss was incurred by the taxpayer from the FIF in respect of that notional accounting period
-
the basis of the calculation of that foreign investment fund loss.
S 616 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 617 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 617 formerly read:
SECTION 617 INTEREST IN FIF
-
IF DEEMED RATE OF RETURN METHOD WAS APPLIED
617
If, in the case of an interest or interests in a FIF, the deemed rate of return method was applied to determine whether foreign investment fund income accrued to the taxpayer from the FIF in respect of the notional accounting period of the FIF that ended in the year of income, the taxpayer must make and keep records in Australia containing particulars of the basis of the calculation of the foreign investment fund income that accrued to the taxpayer from the FIF in respect of that period.
S 617 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 618 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 618 formerly read:
SECTION 618 INTEREST IN FIF
-
IF CALCULATION METHOD WAS APPLIED
618
If, in the case of an interest or interests in a FIF, the calculation method was applied to determine whether foreign investment fund income accrued to the taxpayer from the FIF in respect of the notional accounting period of the FIF that ended in the year of income, the taxpayer must make and keep records in Australia containing particulars of:
(a)
if there is a calculated profit in respect of the FIF in respect of that notional accounting period
-
the basis of the calculation of:
(i)
that calculated profit; and
(ii)
so much (if any) of any calculated loss or calculated losses in respect of a preceding notional accounting period or preceding notional accounting periods of the FIF as was taken into account under section
572
in determining that calculated profit; and
(b)
the basis of the calculation of any foreign investment fund income that accrued to the taxpayer from the FIF in respect of that period.
S 618 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 619 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 619 formerly read:
SECTION 619 INTEREST IN FLP
619
In the case of an interest in a FLP, the taxpayer must make and keep records in Australia containing particulars of:
(a)
if the cash surrender value method was applied to determine whether foreign investment fund income accrued to the taxpayer from the FLP in respect of the notional accounting period of the FLP that ended in the year of income:
(i)
if any foreign investment fund income accrued to the taxpayer from the FLP in respect of that notional accounting period
-
the basis of the calculation of:
(A)
that foreign investment fund income; and
(B)
any unapplied previous foreign investment fund loss referred to in subsection
600(2)
; or
(ii)
if any foreign investment fund loss was incurred by the taxpayer from the FLP in respect of that notional accounting period
-
the basis of the calculation of that foreign investment fund loss.
(b)
if the deemed rate of return method was applied to determine whether foreign investment fund income accrued to the taxpayer from the FLP in respect of the notional accounting period of the FLP that ended in the year of income
-
the basis of the calculation of the foreign investment fund income that accrued to the taxpayer from the FLP in respect of that period.
S 619 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 620 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 620 formerly read:
SECTION 620 INTEREST IN FIF OR FLP
-
IF EXEMPTION APPLIED
620
If the taxpayer is wholly or partly exempt from taxation under this Part in respect of the interest or interests in a FIF or a FLP in respect of the notional accounting period of the FIF or FLP that ended in the year of income, the taxpayer must make and keep records in Australia containing particulars of the basis on which the exemption applied, including any acts, transactions, calculations and other circumstances relevant to the application of the exemption.
S 620 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 621 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 621 formerly read:
See section
4AA
of the
Crimes Act 1914
for the current value of a penalty unit.
SECTION 621 OFFENCE OF FAILING TO KEEP RECORDS
621(1)
A person who contravenes section
615
,
616
,
617
,
618
,
619
or
620
is guilty of an offence punishable on conviction by a fine not exceeding 30 penalty units.
Note:
621(2)
An offence under section
615
,
616
,
617
,
618
,
619
or
620
is an offence of strict liability.
Note:
For strict liability , see section 6.1 of the Criminal Code .
S 621(2) inserted by No 146 of 2001.
S 621 amended by No 91 of 2000 and inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 622 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 622 formerly read:
SECTION 622 MANNER IN WHICH RECORDS REQUIRED TO BE KEPT
622
A person who is required by this Division to make and keep records must:
(a)
make and keep the records in writing in the English language or so as to enable the records to be readily accessible and convertible into writing in the English language; and
(b)
make and keep the records so as to enable the person's liability under this Act to be readily ascertained.
S 622 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 623 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 623 formerly read:
SECTION 623 IF CALCULATION METHOD WAS APPLIED
-
DEFENCE FOR FAILING TO KEEP RECORDS IF INFORMATION UNOBTAINABLE
623
In a prosecution of a person for an offence against section
618
for failing to keep a record containing particulars of the basis of a calculation, it is a defence if the person proves that the calculation was based on information that the person believed to be contained in the accounts (other than published accounts) of a FIF and that the person made all reasonable efforts to obtain particulars of the accounts or the relevant parts of the accounts but was unable to obtain them.
S 623 inserted by No 190 of 1992.
(Repealed by No 114 of 2010)
S 624 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part
XI
heading. S 624 formerly read:
SECTION 624 TREATMENT OF PARTNERSHIPS
624(1)
Subject to subsections (2) and (3), the following provisions apply to a partnership as if the partnership were a person:
(a)
sections
614 to 623
;
(b)
subsections
262A(4) and (5)
, in so far as those subsections apply to records kept under or for the purposes of this Division;
(c)
Part
III
of the
Taxation Administration Act 1953
, in so far as that Part of that Act relates to the provisions covered by paragraph (a) or (b) of this subsection.
624(2)
If, because of subsection (1), an offence is taken to have been committed by a partnership, that offence is taken to have been committed by each of the partners.
624(3)
In a prosecution of a person for an offence because of subsection (2), it is a defence if the person proves that the person:
(a)
did not aid, abet, counsel or procure the act or omission because of which the offence was taken to have been committed; and
(b)
was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, an act or omission because of which the offence is taken to have been committed.
S 624 inserted by No 190 of 1992.
Archived:
Pt XII and Sch 1 repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 items 183 and 184, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .