If you have an interest in a FIF or FLP which is wholly or partly exempt from FIF taxation for a notional accounting period ending in your income year, keep records showing why the exemption applied. [SECTION 620]
In addition to the records indicated below, you must keep records for each interest in a FIF or FLP for which you are claiming an exemption.
Active business exemption
Stock exchange listing method
If you are claiming an exemption from the FIF measures under the active business exemption using the stock exchange listing method, keep records relating to:
- the name of the approved stock exchange in which the class of interests to which your FIF interest belongs was listed
- the class of the company designated by:
- the approved stock exchange, or
- the approved international sectoral classification system
- the activities that the company is engaged in.
Balance sheet method
If you are claiming an active business exemption from the FIF measures using the balance sheet method, keep records of the gross value of all of the company's assets shown in the balance sheet and to what extent the assets are held at the balance date for use in eligible activities.
Where the foreign holding company is the direct or indirect owner of 50% or more of the paid-up share capital of another company-subsidiary-the holding company may use the gross value of the subsidiary's assets for the balance sheet method. Keep records of the subsidiary's assets as shown in its balance sheet and of the extent to which the assets are held at the balance date for use in eligible activities. For more information, read appendix 2 Business activities that are not eligible activities.
Employer-sponsored foreign superannuation fund exemption
If you are claiming an employer-sponsored foreign superannuation fund exemption, keep details such as the name and location of the foreign superannuation fund and whether you are an employee or past employee, a director or an associate.
Exclusion of a FIF that is a CFC, CFT or a transferor trust
If you have an interest in a FIF which is also a CFC or CFT to which Part X of the Act applies, Part X requires you to keep records for the CFC measures.
Although some industries such as banking, insurance and real estate are listed as ineligible activities for the purposes of the active business test, 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, multi-industry foreign companies and Lloyd's of London. Your interests in FIFs which would otherwise be caught and taxed under the measures are exempt where the total value of those FIFs is 5% or less of the total value of all your FIF interests. [DIVISIONS 12 to 15]
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.
Small investor exemption
Direct interests in FIFs and FLPs
For the small investor exemption, keep a record of how you worked out your aggregate interests and those of your associates in foreign companies, foreign trusts and foreign life policies. The aggregate must show that the amount of those interests is $A50,000 or less at the end of the notional accounting period.
Direct interests in resident public unit trusts
The small investor exemption does not include FIF income from the assessable income of a resident public unit trust. The exemption applies where you hold direct interests in resident public unit trusts and, at the end of your income year, your total interests and those of any of your associates in
- FIFs and FLPs, and
- resident public unit trusts where, for that income year, the income of one or more of those resident public unit trusts includes any FIF income
are $A50,000 or less.
Keep a record of how you and your associates worked out your aggregate interests in any FIFs, FLPs and resident public unit trusts.
If you are a short-term resident claiming exemption from the FIF measures as an exempt visitor, you must keep your contract of employment, passport, visa information and details of your date of arrival in Australia.