INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

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  

115-290(1)  
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).

115-290(2)  
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).

115-290(3)  
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.

115-290(4)  
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.

115-290(5)  
The company can own a *100% subsidiary if the subsidiary is a listed investment company because of subsection (2).

115-290(6)  
The company can own (directly or indirectly) any percentage of another *listed investment company that is not the company's *100% subsidiary.

115-290(7)  
Otherwise, the company cannot own (directly or indirectly) more than 10% of another company or trust.

115-290(8)  
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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