• Question 27

    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

    Complete by placing an 'X' in the applicable box. If you answer 'yes', you need to specify the total amount of the capital gain/losses made in respect of interests in foreign companies and the amounts of any reductions made under subdivision 768-G of ITAA 1997.

    Write the total capital gain amount at C and the total amounts of reductions at D. Write the total capital loss amounts at E and the total amounts of reductions at F.

    Information regarding capital gains and capital losses made in relation to interests in foreign companies will enable us to assess if there is a risk to revenue from foreign sourced capital gains not being returned correctly.

    Under subdivision 768-G of the ITAA 1997 if a company held a voting interest of at least 10% in a foreign company, and held that interest for a continuous period of at least 12 months in the two years before the specified capital gains tax (CGT) event, it may be entitled to apply this measure.

    Further Information

    For more information, refer to subdivision 768-G of the ITAA 1997.

    End of further information

    Example

    During the income year, AAA Co an Australian resident company, sold shares in three foreign-resident companies: BBB Co, CCC Co and DDD Co.

    The sale of the shares in BBB Co resulted in a capital gain under CGT event A1 of $750,000. This amount of capital gain was reduced by 42%, or $315,000, in accordance with subdivision 768-G of the ITAA 1997 resulting in a capital gain amount of $435,000.

    The sale of shares in CCC Co resulted in a capital loss under CGT event A1 of $769,000. This amount of capital loss was reduced by 50%, or $384,500, in accordance with subdivision 768-G of the ITAA 1997 resulting in a capital loss amount of $384,500.

    The sale of shares in DDD Co resulted in a capital loss under CGT event A1 of $50,000. This amount was not reduced by subdivision 768-G of the ITAA 1997.

    To complete this question AAA Co enters the total capital gain amount of $750,000 at C and the total capital gain reduction amount of $315,000 at D. AAA Co adds the capital loss amounts from the sale of shares in CCC Co and DDD Co together and enters the amount of $819,000 at E. AAA Co enters the total capital loss reduction amount of $384,500 at F.

    Example of question 27 completed

    Last modified: 09 Nov 2011QC 24292