Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 768.5

Foreign equity distributions received directly

  (1)   A * foreign equity distribution is not assessable income, and is not * exempt income, of the entity to which it is made if:

  (a)   the entity is an Australian resident and a * corporate tax entity; and

  (b)   at the time the distribution is made, the entity satisfies the participation test in section   768 - 15 in relation to the company that made the distribution; and

  (c)   the entity:

  (i)   does not receive the distribution in the capacity of a trustee; or

  (ii)   receives the distribution in the capacity of a trustee of a * public trading trust; and

  (d)   the distribution is not one to which section   768 - 7 (which is about foreign income tax deductions) applies.

Foreign equity distributions received through interposed trusts and partnerships

  (2)   An amount is not assessable income, and is not * exempt income, of an entity if:

  (a)   the entity is a beneficiary of a trust or a partner in a partnership, an Australian resident and a * corporate tax entity; and

  (b)   the amount is all or part of the * net income of the trust or partnership that would, apart from this subsection, be included in the entity's assessable income because of:

  (i)   Division   276; or

  (ii)   Division   5 or 6 of Part   III of the Income Tax Assessment Act 1936 ; and

  (c)   the amount can be attributed (either directly or indirectly through one or more interposed trusts or partnerships that are not * corporate tax entities) to a * foreign equity distribution; and

  (d)   at the time the distribution is made, the entity satisfies the participation test in section   768 - 15 in relation to the company that made the distribution; and

  (e)   the entity:

  (i)   does not receive the distribution in the capacity of a trustee; or

  (ii)   receives the distribution in the capacity of a trustee of a * public trading trust; and

  (f)   the distribution is not one to which section   768 - 7 (which is about foreign income tax deductions) applies.

  (3)   An amount that is * non - assessable non - exempt income under subsection   (2) is taken, for the purpose of section   25 - 90 (about deductions relating to foreign non - assessable non - exempt income) to be derived from the same source as the * foreign equity distribution.