Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 7/16)
Character Range: 7571915–7574806

membership interests (etc.) in entities that are Australian resident companies or managed investment trusts. To obtain this exemption, the relevant sovereign entity group can hold only a portfolio interest in the entity, and cannot have relevant influence over the entity.

Table of sections

Operative provisions
880‑105 Sovereign entity's income from membership interest etc. in trust or company—non‑assessable non‑exempt income
880‑110 Sovereign entity's deduction from membership interest etc.—loss not deductible
880‑115 Sovereign entity's capital gain from membership interest etc.—gain disregarded
880‑120 Sovereign entity's capital loss from membership interest etc. in trust or company—loss disregarded
880‑125 Covered sovereign entities
880‑130 Meaning of public non‑financial entity and public financial entity

Operative provisions

880‑105  Sovereign entity's income from membership interest etc. in trust or company—non‑assessable non‑exempt income
 (1) An amount of *ordinary income or *statutory income of a *sovereign entity is not assessable income and is not *exempt income if:
 (a) the sovereign entity is covered by section 880‑125; and
 (b) the amount is a return on any of the following kinds of interest that the sovereign entity holds in another entity (the test entity):
 (i) a *membership interest;
 (ii) a *debt interest;
 (iii) a *non‑share equity interest; and
 (c) the test entity is:
 (i) a company that is an Australian resident at the time (the income time) when the amount becomes ordinary or statutory income of the sovereign entity; or
 (ii) a *managed investment trust in relation to the income year in which the income time occurs; and
 (d) the *sovereign entity group of which the sovereign entity is a member satisfies the portfolio interest test in subsection (4) in relation to the test entity:
 (i) at the income time; and
 (ii) throughout any 12 month period that began no earlier than 24 months before that time and ended no later than that time; and
 (e) the sovereign entity group of which the sovereign entity is a member does not have influence of a kind described in subsection (6) in relation to the test entity at the income time.
 (2) For the purposes of paragraph (1)(b), treat an interest that a *sovereign entity holds in another entity as a partner in a *partnership as not being an interest that the sovereign entity holds in the other entity.
 (3) If the amount is a *fund payment, subsection (1) does not apply to the extent that the amount is attributable to:
 (a) *non‑concessional MIT income (see section 12‑435 in Schedule 1 to the Taxation Administration Act 1953); or
 (b) an amount that would be non‑concessional MIT income if the following provisions were disregarded:
 (i) subsection 12‑437(5) in that Schedule;
 (ii) sections 12‑440, 12‑447, 12‑449 and 12‑451 in that Schedule.

Portfolio interest test
 (4) A *sovereign