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Hide history notePart XI repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income.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Div 5 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income.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(Repealed by No 114 of 2010)
S 507 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income.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.
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