Income Tax Assessment Act 1997



Division 115 - Discount capital gains and trusts ' net capital gains  

Subdivision 115-D - Tax relief for shareholders in listed investment companies  

Operative provisions

SECTION 115-290   Meaning of listed investment company  

A listed investment company is a company:

(a) that is an Australian resident; and

(b) *shares in which are listed for quotation on the official list of ASX Limited or of a body corporate that is approved as a stock exchange under section 769 of the Corporations Act 2001 ; and

(c) at least 90% of the *market value of whose *CGT assets consists of investments permitted by subsection (4).

A company is also a listed investment company if:

(a) it is a 100% subsidiary of a company that is a *listed investment company because of subsection (1); and

(b) the subsidiary would be a listed investment company because of subsection (1) if it were able to comply with paragraph (1)(b).

This Subdivision applies to a company that does not comply with paragraph (1)(c) as if it did comply if the failure:

(a) was of a temporary nature only; and

(b) was caused by circumstances outside its control.

The permitted investments are:

(a) *shares, units, options, rights or similar interests to the extent permitted by subsections (5), (6), (7) and (8); or

(b) financial instruments (such as loans, debts, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts and a right or option in respect of a share, security, loan or contract); or

(c) an asset whose main use by the company in the course of carrying on its *business is to *derive interest, an annuity, rent, royalties or foreign exchange gains unless:

(i) the asset is an intangible asset and has been substantially developed, altered or improved by the company so that its *market value has been substantially enhanced; or

(ii) its main use for deriving rent was only temporary; or

(d) goodwill.

The company can own a *100% subsidiary if the subsidiary is a listed investment company because of subsection (2).

The company can own (directly or indirectly) any percentage of another *listed investment company that is not the company's *100% subsidiary.

Otherwise, the company cannot own (directly or indirectly) more than 10% of another company or trust.

In working out whether a company indirectly owns any part of another company or trust:

(a) disregard any ownership it has indirectly through a *listed public company or a *publicly traded unit trust; and

(b) if the company owns not more than 50% of another *listed investment company - disregard any ownership it has indirectly through the other company.


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