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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of private advice

Authorisation Number: 1012640497396

Ruling

Subject: Application of section 855-10 of the Income Tax Assessment Act 1997

Question 1

Will any capital gain made by Company A on disposal of its units in the X Trust be disregarded under section 855-10 of the Income Tax Assessment Act 1997?

Answer

Yes.

Question 2

If question 1 is answered positively, does Part IVA of the Income Tax Assessment Act 1936 apply in respect of the non-inclusion in Company A's assessable income of any capital gain in respect of the disposal of its units in the X Trust?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2014

The scheme commences on:

Year ended 30 December 2012

Relevant facts and circumstances

    1. Company A held units in an Australian resident trust, which it has disposed of.

    2. Company A is a non-resident of Australia for income tax purposes.

    3. Company A does not have a permanent establishment in Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 855-10

Income Tax Assessment Act 1936 Part IVA

Reasons for decision

Question 1:

Company A meets the criteria for the application of section 855-10 of the Income Tax Assessment Act 1997. That is, the Non-Taxable Australian Real Property assets held in the Trust exceed the Taxable Australian Real Property held in the Trust.

Question 2:

On the facts of this case it is considered that Part IVA of the Income Tax Assessment Act 1936 does not apply.