• Update 1999-2000

    Exemption for interests in certain FIFs resident in the United States

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    An exemption is available for your FIF interests in:

    • an entity that is treated as a corporation and is subject to trust on his worldwide income, and
    • a company or trust that is treated as a regulated investment company or real estate investment trust

    for the purposes of the United States internal revenue code 1986.

    Subject to the conditions outlined below, an exemption is available for your FIF interests in:

    • a limited partnership or a limited liability company formed under a United States law or United States State law, and
    • a common trust fund recognised under the United States internal revenue code 1986.

    'Entity' in the following text refers to limited partnerships, limited liability companies and common trust funds.

    Your FIF interests in the entity are exempt if:

    • your interest in the entity is held for the sole purpose of investing in:
      • a business conducted in the United States of America (USA), or
      • real property located in the USA, and
       
    • the entity does not:
      • have an interest in income or gains from non-USA sources
      • hold an interest in a FIF not resident in the USA, or
      • hold real property outside the USA.
       

    Your FIF interests in the entity are also exempt where:

    • the above interests and property do not exceed 5 per cent of the value of the entity's total interests, and
    • property and the value of assets held by the entity that:
      • produce income from sources outside the USA, or
      • if disposed of would give rise to a gain from a source outside the USA,
       

    do not exceed 5 per cent of the value of assets held by the entity.

    The exemption is also available when determining FIF income under the calculation method. The amendments to the calculation method apply to assessments for income years ending on and after 2 July 1998.

    Last modified: 08 Jun 2005QC 27386