Income Tax Assessment Act 1997



Division 118 - Exemptions  

Subdivision 118-I - Look-through earnout rights  

SECTION 118-570   Extra ways a CGT asset can be an active asset  

For the purposes of this Subdivision, treat a *CGT asset as if it were an active asset of an entity at a particular time, if:

(a) the entity owns it at that time; and

(b) it is either a *share in a company, or an interest in a trust; and

(c) at that time, the entity:

(i) is a *CGT concession stakeholder of the company or trust; or

(ii) if the entity is not an individual - has a *small business participation percentage in the company or trust of at least 20%; and

(d) at that time, the company or trust:

(i) is carrying on a *business, and has been carrying on a business since the start of the most recent income year ending before that time; and

(ii) is not a *subsidiary member of a *consolidated group; and

(e) the assessable income of the company or trust for that most recent income year was greater than nil, and at least 80% of that assessable income was:

(i) from the carrying on of one or more businesses; but

(ii) not *derived (directly or indirectly) from an asset of a kind to which paragraph 152-40(4)(d) or (e) applies.

Paragraphs 152-40(4)(d) and (e) refer to financial instruments and assets used to derive interest, annuities, rent, royalties or foreign exchange gains.

For the purposes of this Subdivision, treat a *CGT asset as if it were an active asset of an entity at a particular time, if subsection 152-40(3) would have been satisfied for the asset at that time had paragraph 152-40(3)(a) only required the asset to be:

(a) a *share in a company; or

(b) an interest in a trust.


This enables shares and interests in foreign entities to be active assets for the purposes of this Subdivision.

Subsections (1) and (2) do not limit section 152-40 (about active assets).


Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.