Tax Laws Amendment (Foreign Source Income Deferral) Act (No. 1) 2010 (114 of 2010)

Schedule 1   Repeal of the FIF and deemed present entitlement rules

Part 2   Other amendments

Income Tax Assessment Act 1936

91   Subsection 461(3)

Repeal the subsection, substitute:

(3) For the purposes of paragraph (1)(c):

(a) if the disposal of the asset or the CGT event causes the taxpayer's attribution account percentage for a surplus entity to be reduced by a proportion, then only that proportion of the attribution surplus for the entity is, subject to this subsection, to be taken into account under that paragraph; and

(b) if there is only one attribution surplus referred to in that paragraph and (after any application of paragraph (a) of this subsection) it exceeds the consideration from the disposal or the capital proceeds from the CGT event, then only so much of the surplus as does not exceed that consideration or those capital proceeds is to be taken into account under paragraph (1)(c); and

(c) where there are 2 or more attribution surpluses referred to in paragraph (1)(c) and (after any application of paragraph (a) of this subsection) their sum exceeds the consideration from the disposal or the capital proceeds from the CGT event, then:

(i) if the taxpayer makes an election that, for the purposes of this paragraph, a part of each surplus (after any application of paragraph (a)) such that the sum of the amounts to which the election relates equals that consideration or those capital proceeds - only the part to which the election relates of each surplus is to be taken into account under paragraph (1)(c); or

(ii) if subparagraph (i) does not apply - only a proportion of each surplus (after any application of paragraph (a)) is to be taken into account under paragraph (1)(c), being the proportion calculated using the formula:

where:

consideration means the amount of the consideration or the capital proceeds.

total surplus means the sum of the attribution surpluses (after any application of paragraph (a)).