Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

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PART 4-5 - GENERAL  

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Division 830 - Foreign hybrids  

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Subdivision 830-C - Special rules applicable while an entity is a foreign hybrid  

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Note:

In the case of a foreign hybrid company, references in this Subdivision that relate to partnerships are to be read subject to Subdivision 830-B . For example, a reference to a partner will be a reference to a shareholder in the company who is treated by Subdivision 830-B as a partner.

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SECTION 830-60   Meaning of loss exposure amount  

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830-60(1)    
The loss exposure amount of a partner in a *foreign hybrid for an income year is worked out as follows: Method statement


Step 1.

Work out the sum of the amounts or *market values of the contributions made by the partner to the *foreign hybrid that, as at the end of the income year:

  • (a) have not been repaid or returned to the partner; and
  • (b) have been contributed for at least 180 days, or are intended by the partner to remain contributed for at least 180 days.


    • Step 2.

    Subtract the sum of the amounts of:

  • (a) all *limited recourse debts owed by the partner at the end of the income year, to the extent that the *borrowings concerned were for the purpose of enabling the partner to make contributions to the *foreign hybrid and the debts were secured by the partner's interest in the foreign hybrid; and
  • (b) all the partner's *foreign hybrid revenue loss amounts in respect of the foreign hybrid for previous income years, after any reduction under subsection 830-45(2) ; and
  • (c) all the partner's *foreign hybrid net capital loss amounts in relation to the partnership for previous income years, after any reduction under subsection 830-45(2) ; and
  • (d) all deductions allowed to the partner under subsection 830-50(2) or (3) in respect of the foreign hybrid for previous income years; and
  • (e) all *capital losses that, as a result of subsection 830-50(2) or (3), the partner made in respect of *CGT event K12 in respect of the foreign hybrid for previous income years.



    • Contribution in case of foreign hybrid company

    830-60(2)    
    For the purposes of step 1 in the method statement in subsection (1), if:


    (a) the *foreign hybrid is a *foreign hybrid company; and


    (b) the partner *acquired its *shares in the company from another shareholder; and


    (c) the payment or other consideration for the acquisition of the shares did not constitute the making of a contribution by the partner to the foreign hybrid;

    the payment or other consideration is taken:


    (d) to be a contribution by the partner to the foreign hybrid; and


    (e) to be so contributed for as long as the partner holds the shares; and


    (f) to have been repaid to the partner to the extent of any payment that:


    (i) the foreign hybrid makes to the partner in respect of the share; and

    (ii) the foreign hybrid describes as a return of capital; and

    (iii) is attributable to the period during which the partner has held the shares.

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