Document ID: chunk:federal_register_of_legislation:C2025C00014:section:121b
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 121B
Character Range: 1118156–1119201

121B  Simplified outline

Scope of section
 (1) The following is a simplified outline of the Division.

Main concepts
 (2) Subdivision B sets out the concepts used in the Division, the most important being:
 (a) OB activity (sections 121D, 121EA and 121EAA) together with the related definition of offshore person (section 121E); and
 (b) special income and allowable deduction definitions relating to OB activities (sections 121EDA to 121EF).

Operative provisions
 (3) Subdivision C contains the operative provisions. Basically, they provide as follows:
 (d) income from OB activities is taken to be Australian sourced;
 (e) a deemed interest penalty applies to equity provided by an OBU's resident owner;
 (f) income of OBU offshore investment trusts is exempt from tax;
 (g) income derived by overseas charitable institutions from OBUs is exempt from tax;
 (h) certain adjustments are made to the capital gains and losses that flow from disposals of certain interests in trusts of which an OBU is the trustee.

Subdivision B—Interpretation