Notional accounting period of a FLP
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The notional accounting period of a FLP is generally each period of 12 months ending on 30 June. [subsection 487(2)]
If the cash surrender values of your interest in a FLP are available on a day during the same month in each calendar year (the relevant day), you can elect that the notional accounting period of the FLP be determined under subsection 487(5). For example, if the relevant day is in February, you may elect that the accounting period begins in March (the month after the first relevant day) and ends at the end of February in the following year (in which the next relevant day occurs).
This election cannot be revoked for as long as you have an interest in the FLP. [Subsection 487(4)]
The FIF legislation refers to an interest that is generally:
- a share in a foreign company
- an interest in the capital or income of a foreign trust, or
- the holding of the legal title of a foreign life assurance policy.
If you, as an Australian resident, personally and directly own foreign investments (not through a company or a trust), the FIF legislation does not apply as it does not cover direct interests in physical assets such as land, livestock, plant and debt instruments. Other provisions of the income tax law apply to such investments.
Last modified: 01 Jul 2006QC 18507