Income Tax Assessment Act 1997
View history note
Hide history noteSECTION 768-520 Market value method - choice made under subsection 768-515(1) 768-520(1)
The active foreign business asset percentage of the foreign company in relation to the holding company, at the time of the CGT event, is worked out under this section in this way. Method statement
Step 1.
Work out the *market value at that time of all *assets included in the total assets of the foreign company at that time.
Step 2.
Work out the *market value (see subsection (2)) at that time of all *active foreign business assets of the foreign company at that time.
Step 3.
Divide the result of step 2 by the result of step 1.
Step 4.
Express the result of step 3 as a percentage, and round that percentage to the nearest whole percentage point (rounding a number ending in .5 upwards).
Step 5.
The active foreign business asset percentage is:
Note 1:
If the foreign company is a foreign life insurance company or a foreign general insurance company, the result of step 2 is modified under section 768-530 .
Note 2:
If the foreign company is a member of a wholly-owned group, section 768-535 may modify the way in which this section operates.
768-520(2)
If, at the time of the CGT event:
(a) an *active foreign business asset of the foreign company is a *share in another company (the subsidiary company ); and
(b) the subsidiary company is a foreign resident;
then, in working out the *market value of all *active foreign business assets of the foreign company at that time for the purposes of step 2 of the method statement in subsection (1), treat the *market value of the share at that time according to the following table.
| Market value of a share in subsidiary company | ||
| Item | If: | treat the market value of the share as: |
| 1 | (a) the foreign company has a *direct voting percentage of 10% or more in the subsidiary company at that time; and
(b) the holding company has a *total voting percentage of 10% or more in the subsidiary company at that time |
the *share ' s *market value at that time, multiplied by the *active foreign business asset percentage of the subsidiary company in relation to the holding company at that time |
| 2 | item 1 does not apply | zero |
Note:
For the purposes of item 1 of the table, it is necessary to work out the active foreign business asset percentage of the subsidiary company before working out the active foreign business asset percentage of the foreign company.
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