Income Tax Assessment Amendment (Foreign Investment) Act 1992 (190 of 1992)

25   Additional notional exempt income-unlisted or listed country CFC

 

(1) Section 402 of the Principal Act is amended by omitting subsection (3) and substituting the following subsections:
        

"(2A) If:

(a) an amount would, apart from this subsection, be included in the notional assessable income of the eligible CFC for the eligible period under paragraph 384(2)(ca) or 385(2)(ca); and

(b) at the end of the eligible period the CFC was authorised under the law of its place of residence to carry on life insurance business; and

(c) at the end of that period the gross value of the CFC's assets for use in carrying on life insurance business was 50% or more of the gross value of all of the CFC's assets; and

(d) during the eligible period a FIF within the meaning of Part XI managed funds of the CFC that were maintained by the CFC in a manner similar to the manner in which companies carrying on life insurance business in Australia maintain statutory funds under Division 3 of Part III of the Life Insurance Act 1945; and

(e) the FIF was principally engaged during the eligible period in the management of funds of other persons by the investing of those funds at the discretion of the FIF;

then, so much of the amount referred to in paragraph (a) as relates to the FIF is notional exempt income of the eligible CFC in relation to the eligible period.

"(2B) A reference in paragraph (2A)(c) to the gross value of an asset of the CFC at the end of the eligible period is a reference to that value as shown in a balance-sheet of the CFC that was prepared as at the end of that period.

"(2C) If, at the end of the eligible period, any of the CFC's assets ('the relevant assets') are for use partly in carrying on life insurance business and partly for other purposes, a reference in paragraph (2A)(c) to the gross value at the end of that period of the CFC's assets for use in carrying on life insurance business is a reference to so much only of the gross value at the end of that period of the relevant assets as is proportionate to the extent to which they are for use at the end of that period in carrying on life insurance business.

"(3) If:

(a) an attribution account entity makes an attribution account payment to the eligible CFC in the eligible period; and

(b) apart from this subsection, the whole or part of the attribution account payment would be included in the notional assessable income of the eligible CFC in relation to the eligible taxpayer for the eligible period; and

(c) on the making of the attribution account payment, an attribution debit arises for the attribution account entity in relation to the eligible taxpayer;

then so much (if any) of the whole or the part of the attribution account payment as does not exceed the grossed-up amount of the attribution debit is notional exempt income of the eligible CFC for the eligible period.".

      

(2) The amendment made by subsection (1) applies to any attribution account payment made after 25 June 1992.