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Edited version of private advice
Authorisation Number: 1052318085782
Date of advice: 05 December 2024
Ruling
Subject: CGT - subdivision
Question 1
Is the capital gain made by Company A from CGT event A1 happening to its shares in Company B entirely disregarded under section 768-505 of the Income Tax Assessment Act 1997?
Answer 1
Yes.
This ruling applies for the following periods:
Income year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Company A is a company incorporated in Australia.
Company A owned more than 10% of the shares in Company B.
Company A did not exercise control over the affairs of Company B.
Company B is a company incorporated outside Australia.
Company A disposed of its entire shareholding in Company B.
The 'active foreign business asset percentage' of Company B was calculated to be 100% under section 768-520 of the Income Tax Assessment Act 1997.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 768-505