Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 9A - Offshore banking units  

Subdivision C - Operative provisions  

SECTION 121ELB   ADJUSTMENT OF CAPITAL GAINS AND LOSSES FROM DISPOSAL OF UNITS IN OBU OFFSHORE INVESTMENT TRUSTS  

Trust with subsection 121D(6) investment activities

121ELB(1)  
If:

(a) an OBU is a trustee, or is the central manager and controller, of a unit 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) all units in the trust are held by non-residents; and

(d) 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) ; and

(e) a non-resident disposes of a unit in the trust;

then the non-resident makes no capital gain or capital loss from a CGT event happening in relation to the disposal.

Trust with subsection 121D(6A) investment activities

121ELB(2)  
If:

(a) an OBU is a trustee, or is the central manager and controller, of a unit 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) all units in the trust are held by non-residents; and

(d) 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(6A) ; and

(e) a non-resident disposes of a unit in the trust; and

(f) the average Australian asset percentage for the portfolio investment concerned was 10% or less;

then if, apart from this section, the non-resident would make a capital gain or capital loss from a CGT event happening in relation to the disposal, the non-resident makes only the average Australian asset percentage of the gain or loss.

121ELB(3)  
In working out the average Australian asset percentage for the purposes of subsection (2), the investment management period is taken to be the period during the 12 months before the disposal during which the non-resident held the unit.