INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 9A - Offshore banking units  

Subdivision C - Operative provisions  

SECTION 121EL   EXEMPTION OF INCOME ETC. OF OBU OFFSHORE INVESTMENT TRUSTS  

121EL(1)   [Exemption for non-residents - general]  

If:


(a) an OBU is a trustee, or is the central manager and controller, of a trust estate; and


(b) the only persons who benefit, or are capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust are non-residents; and


(c) the terms of the trust are to the effect that income, profits or capital gains of the trust estate may only come from investment activities covered by subsection 121D(6) or (6A) ;

then:


(d) any income of the trust estate derived from an investment activity covered by subsection 121D(6) is exempt from income tax; and


(e) any capital gain or capital loss made by the trust estate from a CGT event happening in relation to a CGT asset of the trust estate in the course of, or in connection with, an investment activity covered by subsection 121D(6) is disregarded; and


(f) any income of the trust estate derived from an investment activity covered by subsection 121D(6A) is exempt from income tax, in so far as the income exceeds the average Australian asset percentage (within the meaning of subsection 121DA(2) ) for the portfolio investment concerned; and


(g) if, apart from this section, the trust estate would make a capital gain or capital loss from a CGT event happening in relation to a CGT asset of the trust estate in the course of, or in connection with, an investment activity covered by subsection 121D(6A) - the trust estate makes only the average Australian asset percentage (for the portfolio investment concerned) of the gain or loss.

121EL(2)   [Overseas charitable institutions]  

If:


(a) an OBU is a trustee, or is the central manager and controller, of a trust estate; and


(b) the only person who benefits, or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust is an overseas charitable institution; and


(c) the terms of the trust are to the effect that income, profits or capital gains of the trust estate may only come from investment activities covered by subsection 121D(6B) ;

then:


(d) any income of the trust estate derived from an investment activity covered by subsection 121D(6B) is exempt from income tax; and


(e) any capital gain or capital loss made by the trust estate from a CGT event happening in relation to a CGT asset of the trust estate in the course of, or in connection with, an investment activity covered by subsection 121D(6B) is disregarded.


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