Tax Laws Amendment (Investment Manager Regime) Act 2012 (126 of 2012)
Schedule 1 Investment manager regime
Income Tax Assessment Act 1997
1 At the end of Division 842
Add:
Subdivision 842-I - Investment manager regime
Guide to Subdivision 842-I
842-200 What this Subdivision is about
This Subdivision includes rules about the taxation of certain foreign funds with investment income or losses which are treated as being attributable to a permanent establishment in Australia solely because the fund retains the services of an Australian based agent, manager or service provider.
Where the conditions in this Subdivision are satisfied:
• returns or gains relating to financial arrangements (known as IMR income) are non-assessable non-exempt income or disregarded; and
• deductions and losses relating to financial arrangements (known as IMR deductions) are disregarded; and
• capital gains relating to financial arrangements (known as IMR capital gains) are disregarded; and
• capital losses relating to financial arrangements (known as IMR capital losses) are disregarded.
These amounts are also disregarded if a foreign resident beneficiary of a trust, or a foreign resident partner in a partnership, receives them (or amounts attributable to them) through one or more interposed trusts or partnerships.
Table of sections
Operative provisions
842-205 Objects of this Subdivision
842-210 Treatment of IMR foreign fund that is a corporate tax entity
842-215 Treatment of foreign resident beneficiary that is not a trust or partnership
842-220 Treatment of foreign resident partner that is not a trust or partnership
842-225 Treatment of trustee of an IMR foreign fund
842-230 IMR foreign fund
842-235 Wind-down phases
842-240 Widely held test and concentration test
842-245 Financial arrangements
842-250 IMR income and IMR deduction
842-255 IMR capital gain and IMR capital loss
842-260 Non-IMR net income , non-IMR Division 6E net income and non-IMR net capital gain
842-265 Non-IMR partnership net income and non-IMR partnership loss
842-270 Pre-2012 IMR income and pre-2012 IMR capital gain
Operative provisions
842-205 Objects of this Subdivision
(1) The objects of this Subdivision are to ensure that:
(a) foreign funds are not subject to Australian income tax in respect of certain *financial arrangements solely because they engage the services of an Australian based agent, manager or service provider; and
(b) Australian resident taxpayers continue to be subject to tax on their worldwide income; and
(c) the benefits of the tax concessions in this Subdivision are only available where foreign funds are widely held and are not owned by a small group of investors.
(2) This is achieved by:
(a) treating certain *ordinary income and *statutory income as *non-assessable non-exempt income; and
(b) disregarding certain deductions; and
(c) disregarding certain *capital gains and *capital losses; and
(d) requiring foreign funds that seek to benefit from the tax concessions in this Subdivision to pass a widely held test and a concentration test to show that they are not controlled by a small group of investors.
842-210 Treatment of IMR foreign fund that is a corporate tax entity
Objects
(1) The objects of this section are to ensure that:
(a) a *corporate tax entity that is an *IMR foreign fund in relation to an income year is not subject to any Australian income tax in respect of its *IMR income and *IMR capital gain for that income year; and
(b) the corporate tax entity’s *IMR deduction or *IMR capital loss in relation to an income year cannot be applied against the corporate tax entity’s other income and gains; and
(c) this section does not provide any tax concession to an Australian resident who invests in the corporate tax entity (whether directly or indirectly through one or more interposed entities).
Application
(2) This section applies to a *corporate tax entity that is an *IMR foreign fund in relation to an income year.
Certain amounts disregarded
(3) In working out the *corporate tax entity’s taxable income, *tax loss or *net capital loss for the income year:
(a) treat its *IMR income in relation to the income year as *non-assessable non-exempt income; and
(b) disregard its *IMR deduction in relation to the income year; and
(c) disregard its *IMR capital gain in relation to the income year; and
(d) disregard its *IMR capital loss in relation to the income year.
Certain losses disregarded
(4) The *corporate tax entity cannot *utilise a *tax loss or *net capital loss in relation to the income year, or in any future income year, to the extent the loss is attributable to *IMR income, an *IMR capital gain, an *IMR deduction or an *IMR capital loss.
842-215 Treatment of foreign resident beneficiary that is not a trust or partnership
Objects
(1) The objects of this section are to ensure that:
(a) a foreign resident beneficiary of an *IMR foreign fund in relation to an income year is not subject to Australian income tax in respect of *IMR income or an *IMR capital gain of the fund (or in respect of an amount that is referable to IMR income or an IMR capital gain of the fund) for the income year; and
(b) the foreign resident beneficiary of the fund is not able to claim a deduction or*utilise a*tax loss in relation to the income year to the extent that the deduction or tax loss was incurred or made in respect of an amount that is:
(i) IMR income of the fund (or referable to IMR income of the fund); or
(ii) an IMR capital gain of the fund (or referable to an IMR capital gain of the fund); and
(c) this section does not provide any tax concession to an Australian resident that invests in the fund (whether directly or indirectly through one or more interposed entities).
Application
(2) This section applies to a beneficiary of a trust in relation to an income year if the beneficiary:
(a) is not a resident of Australia at any time during the income year; and
(b) is not a trust or partnership at any time during the income year (other than a *foreign superannuation fund).
Note: A trust that is an IMR foreign fund is subject to the general tax rules that apply to trusts, subject to the modifications in this Subdivision: see Division 6 of Part III of the Income Tax Assessment Act 1936. Also see section 842-225 of this Act, which deals with trustees of IMR foreign funds.
Adjustments to calculation of taxable income, tax loss or net capital loss
(3) In working out the beneficiary’s taxable income, *tax loss or *net capital loss for the income year:
(a) for the purposes of applying Division 6 of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace the references in that Division to share of the net income with references to share of the non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997); and
(b) for the purposes of applying subsections 98A(1) and (3) of Division 6 of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace the references in those subsections to individual interest of the beneficiary in the net income with references to individual interest of the beneficiary in the non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997); and
(c) for the purposes of applying Division 6E of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace the references in that Division to Division 6E net income with references to non-IMR Division 6E net income (within the meaning of subsection 842-260(2) of the Income Tax Assessment Act 1997); and
(d) for the purposes of applying subsection 115-215(3) to the beneficiary, replace the reference in that subsection to each *capital gain of the trust estate with a reference to each capital gain of the trust estate that is a *non-IMR net capital gain (or is referable to a non-IMR net capital gain of the trust estate); and
(e) for the purposes of applying section 115-225 to the beneficiary:
(i) replace references in that section to net income of the trust estate with references to *non-IMR net income of the trust estate; and
(ii) replace the reference in that section to *net capital gain (if any) with a reference to *non-IMR net capital gain (if any).
(4) For the purposes of applying paragraph 115-225(1)(a) to the beneficiary:
(a) disregard a *capital gain of the *IMR foreign fund to the extent the capital gain is an *IMR capital gain; and
(b) disregard an *IMR capital loss of the IMR foreign fund for the purposes of determining the amount of the capital gain remaining after applying steps 1 to 4 of the method statement in subsection 102-5(1); and
(c) disregard a *net capital loss of the IMR foreign fund to the extent that it is attributable to an IMR capital loss for the purposes of determining the amount of the capital gain remaining after applying steps 1 to 4 of the method statement in subsection 102-5(1).
842-220 Treatment of foreign resident partner that is not a trust or partnership
Objects
(1) The objects of this section are to ensure that:
(a) a foreign resident partner of an *IMR foreign fund in relation to an income year is not subject to any Australian income tax in respect of *IMR income or an *IMR capital gain (or in respect of an amount that is referable to IMR income or an IMR capital gain) for the income year; and
(b) the foreign resident partner of the fund is not able to claim a deduction or *utilise a *tax loss in relation to the income year to the extent that the deduction or tax loss was incurred or made in respect of an amount that is:
(i) IMR income of the fund (or referable to IMR income of the fund); or
(ii) an IMR capital gain (or referable to an IMR capital gain); and
(c) this section does not provide any tax concession to an Australian resident that invests in the fund (whether directly or indirectly through one or more interposed entities).
Application
(2) This section applies to a partner in a partnership in relation to an income year if the partner:
(a) is not an Australian resident at any time during the income year; and
(b) is not a trust or a partnership at any time during the income year (other than a *foreign superannuation fund).
Note: A partnership that is an IMR foreign fund is subject to the general tax rules that apply to partnerships, subject to the modifications set out in this Subdivision: see Division 5 of Part III of the Income Tax Assessment Act 1936.
Adjustments to calculation of taxable income, tax loss or net capital loss
(3) In working out the partner’s taxable income, *tax loss or *net capital loss for the income year:
(a) for the purposes of applying Division 5 of Part III of the Income Tax Assessment Act 1936 to the partner, replace the references in that Division to the individual interest of the partner in the net income of the partnership with references to the individual interest of the partner in the non-IMR partnership net income (within the meaning of section 842-265 of the Income Tax Assessment Act 1997) of the partnership; and
(b) for the purposes of applying Division 5 of Part III of the Income Tax Assessment Act 1936 to the partner, replace the references in that Division to the individual interest of the partner in the partnership loss with references to the individual interest of the partner in the non-IMR partnership loss (within the meaning of section 842-265 of the Income Tax Assessment Act 1997); and
(c) disregard an amount to the extent that it is referable to an *IMR capital gain or an*IMR capital loss.
842-225 Treatment of trustee of an IMR foreign fund
Objects
(1) The object of this section is to ensure that the following provisions interact appropriately with the tax concessions mentioned in paragraphs 842-210(1)(a) and (b), paragraphs 842-215(1)(a) and (b) and paragraphs 842-220(1)(a) and (b):
(a) subsection 115-220(2);
(b) section 115-225;
(c) section 98 of the Income Tax Assessment Act 1936;
(d) section 99E of the Income Tax Assessment Act 1936.
Note: Division 6 of Part III of the Income Tax Assessment Act 1936, Division 115 of Part 3-1 of this Act, and all other provisions of those Acts apply to the trustee of an IMR foreign fund, subject to the modifications in this section.
Applying subsection 115-220(2)
(2) For the purposes of applying subsection 115-220(2) to the beneficiary:
(a) disregard a *capital gain of the *IMR foreign fund to the extent the capital gain is an *IMR capital gain; and
(b) disregard an *IMR capital loss of the IMR foreign fund for the purposes of determining the amount of the capital gain remaining after applying steps 1 to 4 of the method statement in subsection 102-5(1); and
(c) disregard a *net capital loss of the IMR foreign fund to the extent that it is attributable to an IMR capital loss for the purposes of determining how much of a capital gain that is not an IMR capital gain remains after applying steps 1 to 4 of the method statement in subsection 102-5(1).
Note: The effect of this subsection is that the increase to the assessable amount which occurs as a result of section 115-220 is calculated with reference to the capital gains of the IMR foreign fund that are not IMR capital gains or amounts referable to IMR capital gains (rather than by calculating the increase with reference to all capital gains of the fund).
Modifications to section 115-225
(3) For the purposes of applying section 115-225 in respect of section 115-220, make the following assumptions:
(a) replace the references in section 115-225 to the net income of the trust estate with references to the *non-IMR net income of the trust estate;
(b) replace the reference in section 115-225 to net capital gain (if any) with a reference to *non-IMR net capital gain (if any).
Modifications to section 98 of the Income Tax Assessment Act 1936
(4) For the purposes of applying section 98 of the Income Tax Assessment Act 1936, replace references in that section to net income with references to non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997).
Note: The effect of this subsection is that where section 98 of the Income Tax Assessment Act 1936 applies to the trustee of a trust that is an IMR foreign fund, the trustee is only assessed and made liable to pay tax in respect of non-IMR net income of the fund (rather than in respect of all net income of the fund to which section 98 would otherwise apply).
Modifications to section 99E of the Income Tax Assessment Act 1936
(5) For the purposes of applying section 99E of the Income Tax Assessment Act 1936:
(a) replace the reference in that section to so much of the net income with a reference to so much of the net income or non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997) as the case may be; and
(b) replace the reference in that section to a part of the net income of another trust estate with a reference to a part of the non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997) of another trust estate.
Note: The effect of this subsection is that the trustee of a trust that receives a distribution of non-IMR net income from another trust is not required to apply section 98, 99 or 99A of the Income Tax Assessment Act 1936 to those amounts.
Certain losses disregarded
(6) The trust cannot *utilise a *tax loss or *net capital loss in relation to an income year, or any future income year, to the extent the loss is attributable to *IMR income, an *IMR capital gain, an *IMR deduction or an *IMR capital loss.
842-230 IMR foreign fund
An entity is an IMR foreign fund in relation to an income year if:
(a) the entity:
(i) is not an Australian resident at any time during the income year; and
(ii) is not a resident trust estate for the purposes of subsection 95(2) of the Income Tax Assessment Act 1936 at any time during the income year; and
(b) the entity does not carry on a trading business (within the meaning of section 102M of the Income Tax Assessment Act 1936) at any time during the income year; and
(c) subject to section 842-235, the entity:
(i) satisfies the widely held test at all times during the income year (see subsection 842-240(1)); and
(ii) does not breach the concentration test in subsection 842-240(4) at any time during the income year.
842-235 Wind-down phases
If:
(a) the entity ceases to exist during the income year; and
(b) the entity was an *IMR foreign fund in relation to the preceding income year;
treat the requirements in paragraph 842-230(c) as being satisfied.
842-240 Widely held test and concentration test
Widely held test
(1) The entity satisfies the widely held test for the purposes of subparagraph 842-230(c)(i) if:
(a) units or shares in the entity are listed for quotation in the official list of an *approved stock exchange; or
(b) the entity has at least 25 *members (ignoring objects of a trust); or
(c) one or more of the entities covered by subsection (3) have a *total participation interest in the entity of more than 25%; or
(d) all the membership interests in the entity are held, directly or indirectly, by one or more entities that satisfy the requirements in paragraph (a), (b) or (c); or
(e) the entity is an entity of a kind specified in the regulations made for the purposes of this paragraph.
(2) For the purposes of subsection (1):
(a) treat the following entities as together being one entity:
(i) an individual;
(ii) each of his or her relatives;
(iii) each entity acting in the capacity of nominee of an individual mentioned in subparagraph (i) or (ii); and
(b) treat the following entities as together being one entity:
(i) an entity that is not an individual;
(ii) each entity acting in the capacity of nominee of the entity mentioned in subparagraph (i).
Foreign widely held entities
(3) An entity is covered by this subsection if:
(a) it is a life insurance company that is not an Australian resident at any time during the income year; or
(b) it is a *foreign superannuation fund, being a fund that has at least 50 *members; or
(c) it is an entity that is a fund established by an *exempt foreign government agency for the principal purposes of funding pensions (including disability and similar benefits) for the citizens or other contributors of a foreign country.
Concentration test
(4) The entity breaches the concentration test if 10 or fewer entities have a *total participation interest in the entity of 50% or more.
(5) In determining the number of entities for the purposes of subsection (4), do not count the following:
(a) an *IMR foreign fund in relation to the income year;
(b) an entity that satisfies the requirement in paragraph (1)(d), (3)(a), (3)(b) or (3)(c);
(c) an entity that holds an *indirect participation interest in the entity through one or more entities covered by paragraph (a) or (b) of this subsection.
842-245 Financial arrangements covered by this section
(1) A *financial arrangement is covered by this section unless subsection (2), (3) or (4) applies.
(2) A *financial arrangement is not covered by this section if:
(a) the *IMR foreign fund has a *total participation interest in another entity of 10% or more; and
(b) the financial arrangement is:
(i) a *debt interest or an *equity interest in the entity; or
(ii) the result of a *financing arrangement for the entity that is neither a debt interest nor an equity interest; or
(iii) a *derivative financial arrangement that relates to a financial arrangement to which subparagraph (i) or (ii) applies.
(3) A *financial arrangement is not covered by this section if:
(a) the financial arrangement is a *derivative financial arrangement that relates to a *CGT asset; and
(b) the CGT asset is:
(i) *taxable Australian real property (see section 855-20); or
(ii) an *indirect Australian real property interest (see section 855-25).
(4) A *financial arrangement is not covered by this section if its terms allow the *IMR foreign fund to:
(a) vote at a meeting of the Board of Directors (or other governing body) of the issuer of the financial arrangement; or
(b) participate in making financial, operating or policy decisions in respect of the operation of the issuer of the financial arrangement; or
(c) deal with the assets of the issuer of the financial arrangement.
(5) Subsection (4) does not apply if that subsection applies solely because the issuer of the *financial arrangement breached a term of the financial arrangement.
842-250 IMR income and IMR deduction
IMR income
(1) The IMR income for an income year of an *IMR foreign fund in relation to the income year is the sum of the fund’s assessable income for the income year to the extent that:
(a) the assessable income is attributable to a return or gain from a *financial arrangement covered by section 842-245; and
(b) the fund has a *permanent establishment in Australia solely as a result of engaging an entity that is a resident of Australia to habitually exercise a general authority to negotiate and conclude contracts on its behalf; and
(c) amounts are included in the assessable income of the fund only because:
(i) in respect of a fund that is resident in a country that has entered into an agreement (within the meaning of the International Tax Agreements Act 1953) with Australia containing a *business profits article - amounts included in the assessable income of the fund are treated as having a source in Australia because they are attributable to a permanent establishment of the fund in Australia; or
(ii) in respect of a fund that is resident in a country that has not entered into an agreement (within the meaning of the International Tax Agreements Act 1953) with Australia containing a business profits article - the Commissioner makes a determination under section 136AE of the Income Tax Assessment Act 1936; or
(iii) the financial arrangement is a *CGT asset covered by item 3 of the table in section 855-15; or
(iv) the financial arrangement is a CGT asset covered by item 4 of the table in section 855-15 because it is an option or right to *acquire a CGT asset covered by item 3 of that table.
IMR deduction
(2) The IMR deduction for an income year of an *IMR foreign fund in relation to the income year is the sum of the fund’s deductions for the income year to the extent to which they are attributable to gaining *IMR income, an *IMR capital gain, *pre-2012 IMR income or a *pre-2012 IMR capital gain.
(3) Disregard the following provisions for the purposes of calculating an *IMR foreign fund’s *IMR income or *IMR deduction:
(a) subsection 842-210(3) (which is about certain amounts of an IMR foreign fund being disregarded);
(b) paragraph 842-260(1)(a) (which is about non-IMR net income);
(c) section 842-265 (which is about non-IMR partnership net income and non-IMR partnership loss).
842-255 IMR capital gain and IMR capital loss
IMR capital gain
(1) The IMR capital gain for an income year of an *IMR foreign fund in relation to the income year is the sum of the fund’s *capital gains made in the income year to the extent that:
(a) the fund has a *permanent establishment in Australia solely as a result of engaging an entity that is a resident of Australia to habitually exercise a general authority to negotiate and conclude contracts on its behalf; and
(b) the capital gains are made in respect of *CGT assets covered by subsection (3) which are also *financial arrangements covered by section 842-245.
IMR capital loss
(2) The IMR capital loss for an income year of an *IMR foreign fund for an income year is the sum of the fund’s *capital losses made in relation to the income year to the extent that:
(a) the fund has a *permanent establishment in Australia solely as a result of engaging an entity that is a resident of Australia to habitually exercise a general authority to negotiate and conclude contracts on its behalf; and
(b) the capital losses are made in respect of *CGT assets covered by subsection (3) which are also *financial arrangements covered by section 842-245.
(3) A *CGT asset of an *IMR foreign fund is covered by this subsection if:
(a) it is covered by item 3 of the table in section 855-15 in relation to the fund; or
(b) it is covered by item 4 of the table in section 855-15 in relation to the fund because it is an option or right to *acquire a CGT asset covered by item 3 of that table in relation to the fund.
Partner’s IMR capital gain or IMR capital loss
(4) Where the *IMR foreign fund is a partnership, a *capital gain or *capital loss of a partner that arises in respect of the partner’s interest in the fund is treated as an *IMR capital gain or an *IMR capital loss (as the case may be) to the extent that the capital gain or capital loss is made in respect of *CGT assets covered by subsection (3) which are also *financial arrangements covered by section 842-245.
842-260 Non-IMR net income , non-IMR Division 6E net income and non-IMR net capital gain
(1) A trust’s non-IMR net income in relation to an income year is determined by calculating the *net income of the trust as follows:
(a) disregard the *IMR income and *IMR deduction of the trust for the income year;
(b) disregard any amount that is included in the trust’s assessable income under subsection 207-35(1) to the extent that the amount is attributable to IMR income of the trust for the income year;
(c) if the trust is a beneficiary of another trust - then:
(i) for the purposes of applying Division 6 of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace the references in that Division to share of the net income with references to share of the non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997); and
(ii) for the purposes of applying Division 6E of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace references in that Division to Division 6E net income with references to non-IMR Division 6E net income (within the meaning of subsection 842-260(2) of the Income Tax Assessment Act 1997);
(d) if the trust is a partner in a partnership - for the purposes of applying Division 5 of Part III of the Income Tax Assessment Act 1936 to the partner, replace references in that Division to the individual interest of the partner in the partnership net income or partnership loss with references to the individual interest of the partner in the non-IMR partnership net income or non-IMR partnership loss (within the meaning of those terms in section 842-265 of the Income Tax Assessment Act 1997).
Note: The net income of a trust may include a share of the net income of another trust. Where there is a chain of trusts these calculations are applied to each trust in the chain.
Non-IMR Division 6E net income
(2) A trust’s non-IMR Division 6E net income in relation to an income year is determined by calculating the Division 6E net income (within the meaning of subsection 102UY(3) of the Income Tax Assessment Act 1936) of the trust as follows:
(a) disregard the *IMR income and *IMR deduction of the trust in relation to the income year;
(b) disregard the things mentioned in subparagraphs 102UW(b)(i) to (iii) of the Income Tax Assessment Act 1936 (which are about adjustments of Division 6 assessable amounts) in relation to the income year.
Non-IMR net capital gain
(3) A trust’s non-IMR net capital gain in relation to an income year is determined by calculating the *net capital gain of the trust as follows:
(a) disregard the trust’s *IMR capital gain and *IMR capital loss in relation to the income year;
(b) disregard any capital gain of the trust that is referable to an IMR capital gain of another *IMR foreign fund that is a trust.
842-265 Non-IMR partnership net income and non-IMR partnership loss
A partnership’s non-IMR partnership net income or non-IMR partnership loss in relation to an income year is determined by calculating the *net income or *partnership loss of the partnership as follows:
(a) disregard the *IMR income and *IMR deduction of the partnership for the income year;
(b) disregard any amount included in the partnership’s assessable income under subsection 207-35(1) to the extent that the amount is attributable to IMR income of the partnership for the income year;
(c) if the partnership is a beneficiary of a trust - then:
(i) for the purposes of applying Division 6 of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace the references in that Division to share of the net income with references to share of the non-IMR net income (within the meaning of subsection 842-260(1) of the Income Tax Assessment Act 1997); and
(ii) for the purposes of applying Division 6E of Part III of the Income Tax Assessment Act 1936 to the beneficiary, replace references in that Division to Division 6E net income with references to non-IMR Division 6E net income (within the meaning of subsection 842-260(2) of the Income Tax Assessment Act 1997);
(d) if the partnership is a partner in another partnership - for the purposes of applying Division 5 of Part III of the Income Tax Assessment Act 1936 to the partnership that is a partner, replace the references in that Division to the individual interest of the partner in the partnership net income or partnership loss with references to the individual interest of the partner in the non-IMR partnership net income or non-IMR partnership loss (within the meaning of those terms in section 842-265 of the Income Tax Assessment Act 1997).
Note: The net income of a partnership may include a share of the net income of another partnership. Where there is a chain of partnerships, these calculations are applied to each partnership in the chain.
842-270 Pre-2012 IMR income and pre-2012 IMR capital gain
Pre-2012 IMR income
(1) The pre-2012 IMR income for an income year that is the 2010-11 income year or an earlier income year of an *IMR foreign fund is the sum of the fund’s assessable income made in the income year in respect of*financial arrangements covered by section 842-245.
(2) Disregard subsection 842-210(3) (which is about certain amounts of an IMR foreign fund being disregarded) for the purposes of determining the *pre-2012 IMR income of the fund.
Pre-2012 IMR capital gain
(3) The pre-2012 IMR capital gain for an income year that is the 2010-11 income year or an earlier income year of an *IMR foreign fund is the sum of the fund’s *capital gains made in the income year in respect of *CGT assets that are *financial arrangements covered by section 842-245.