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Capital gains and losses taken into account in working out attributable income for a CFC are those arising on:
- the disposal of non-taxable Australian assets for the purposes of Part IIIA of the Income Tax Assessment Act 1936 (ITAA 1936), and
- 'non-CGT assets having the necessary connection with Australia' for the purposes of Subdivision 136A of Chapter 3 of the Income Tax Assessment Act 1997 (ITAA 1997).
(A capital gain or loss on the disposal of a taxable Australian asset or a CGT asset having the necessary connection with Australia will be taken into account in working out the real assessable income of the CFC as a non-resident taxpayer and is therefore excluded from the calculation of the CFC's attributable income. Note: This exclusion applies even where the relevant asset is not subject to capital gains tax because it was acquired before 20 September 1985.)
Last modified: 05 Dec 2006QC 17522