Document ID: chunk:federal_register_of_legislation:C2005A00021:clause:1_6:p2
Version: federal_register_of_legislation:C2005A00021
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 2/2)
Character Range: 5155–7174

to an interest in a *fixed trust (the first trust) and the interest has the *necessary connection with Australia at the time of the CGT event.

 (2) At least 90% (by *market value) of the *CGT assets of:
 (a) the first trust; or
 (b) a *fixed trust in which the first trust has an interest (directly, or indirectly through a *chain of fixed trusts);
must not have the *necessary connection with Australia at the time of the relevant *CGT event.

 (3) If the condition in subsection (2) is not satisfied for the first trust (but is satisfied for a trust covered by paragraph (2)(b)), the condition in subsection (4) must be satisfied for the first trust, and for each other trust in the *chain of trusts between the first trust and the trust that satisfied the condition in subsection (2).

 (4) The condition is that, assuming any interest in a *fixed trust in that *chain not to have the *necessary connection with Australia, at least 90% (by *market value) of the *CGT assets of the trust must not have the necessary connection with Australia.

768‑615  Foreign resident companies

  If a company's assessable income for an income year includes an amount under subsection 98A(1) of the Income Tax Assessment Act 1936 because it is a beneficiary described in subsection 98(3) of that Act, the company can deduct for the income year the amount of a *capital gain that would be disregarded for it under this Subdivision for that year had section 115‑215 of this Act applied to it for that year.

Note 1: Section 98A of the Income Tax Assessment Act 1936 deals with taxing beneficiaries who are foreign residents at the end of an income year.

Note 2: Subsection 98(3) of that Act makes the trustee liable for tax on the share of the income of the trust to which a foreign resident company is presently entitled.

Note 3: Section 115‑215 treats a portion of a trust's capital gain as a capital gain made by a beneficiary, and applies the CGT discount to that portion as if the gain were made directly by the beneficiary.