Tax Laws Amendment (Foreign Source Income Deferral) Act (No. 1) 2010 (114 of 2010)

Schedule 1   Repeal of the FIF and deemed present entitlement rules

Part 2   Other amendments

Income Tax Assessment Act 1936

88   Subsection 401(1)

Repeal the subsection, substitute:

(1) If:

(a) it is necessary, for the purposes of applying a provision of this Act in calculating the attributable income of the eligible CFC in relation to the eligible taxpayer, to take into account:

(i) the amount of consideration received, entitled to be received or taken to have been received, by the eligible CFC in respect of the disposal of an asset; or

(ii) the capital proceeds from a CGT event happening in relation to a CGT asset;

being an asset that is an interest in an attribution account entity (the disposal entity ); and

(b) immediately before the disposal or CGT event takes place, either or both of the following conditions are satisfied:

(i) there is an attribution surplus for the disposal entity in relation to the eligible taxpayer;

(ii) there is an attribution surplus for one or more other attribution account entities in relation to the eligible taxpayer, where each such entity is one in which the eligible taxpayer has an indirect attribution account interest held through the disposal entity;


(c) for the purpose of calculating the attributable income, the consideration or capital proceeds that, apart from this section, would be taken into account under the provision referred to in paragraph (a) in respect of the disposal or CGT event is, subject to subsection (3), taken to be reduced by the grossed-up amount of the attribution surplus, or the sum of the grossed-up amounts of the attribution surpluses, as the case requires; and

(d) for the purposes of this Act, attribution debits and credits arise in accordance with subsection (5).

Note: The heading to section 401 is replaced by the heading " Reduction of disposal consideration or capital proceeds if attributed income not distributed ".