Although some industries such as banking, insurance and real estate are listed as ineligible activities for the purposes of the active business exemption, there are specific exemptions for certain publicly listed and widely held investments in these industries. [Divisions 4 to 7]
There are also specific exemptions for interests in FIFs that are trading stock and interests in FIFs that are multi-industry foreign companies, Lloyd's of London or resident in the United States. Another exemption may apply to your interests in FIFs, which would otherwise be caught and taxed under the measures, where the total value of your interest in those FIFs is 5% or less of the total value of all your FIF interests. [Divisions 8, 12 to 15]
New legislation has changed the FIF rules with application from 1 July 2003. One of these changes is a measure to increase the balanced portfolio FIF exemption for all taxpayers from 5% to 10%.
For more information, phone the Business Tax Reform Infoline on 13 28 66.
If you are claiming an exemption under one or more of these provisions, keep records showing how the FIF interest satisfied the conditions of the particular exemption. Read Chapter 3: Exemptions for the conditions that relate to the particular exemption.