Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 768 - Foreign non-assessable income and gains  

Subdivision 768-G - Reduction in capital gains and losses arising from CGT events in relation to certain voting interests in active foreign companies  

Operative provisions

SECTION 768-505   Reducing a capital gain or loss from certain CGT events in relation to certain voting interests  

768-505(1)  


The *capital gain or *capital loss a company (the holding company ) that is an Australian resident makes from a *CGT event that happened at a particular time (the time of the CGT event ) to a *share in a company (the foreign disposal company ) that is a foreign resident is reduced if:


(a) the holding company held a *direct voting percentage of 10% or more in the foreign disposal company throughout a 12 month period that:


(i) began no earlier than 24 months before the time of the CGT event; and

(ii) ended no later than that time; and


(b) the share is not :


(i) an eligible finance share (within the meaning of Part X of the Income Tax Assessment Act 1936 ); or

(ii) a widely distributed finance share (within the meaning of that Part); and


(c) the CGT event is CGT event A1, B1, C2, E1, E2, G3, J1, K4, K6, K10 or K11.

768-505(2)  
The gain or loss is reduced by the *active foreign business asset percentage (see sections 768-510 , 768-530 and 768-535 ) of the foreign disposal company in relation to the holding company at the time of the CGT event.


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