Document ID: chunk:federal_register_of_legislation:C2025C00014:section:121d:p3
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 121D (pt 3/4)
Character Range: 1128765–1131554

standards (within the meaning of that Act).
 (4B) For the purposes of subsection (4A), disregard rights on winding‑up.

Investment activity
 (6) For the purposes of paragraph (1)(e), an investment activity is making (but not managing), as broker or agent for, or trustee for the benefit of, an offshore person to whom paragraph 121E(a) applies, an investment with an offshore person to whom that paragraph applies, where:
 (a) the currency in which the investment is made is not Australian currency; and
 (b) if the investment involves the purchase of any thing:
 (i) if the thing is a share in a company—the company is a non‑resident company; or
 (ii) if the thing is a unit in a unit trust—the unit trust is a non‑resident trust; or
 (iii) if the thing is land or a building—the land or building is not in Australia; or
 (iv) in any other case—the thing is located outside Australia.

Investment activity—portfolio investment
 (6A) For the purposes of paragraph (1)(e), an investment activity is also the managing by an OBU of a portfolio investment (see subsection 121DA(1)) for the whole or part (the investment management period) of a year of income, where:
 (a) the portfolio investment is managed as broker, agent or custodian for, or trustee for the benefit of, a non‑resident; and
 (b) the portfolio investment was made by the OBU or the non‑resident; and
 (c) the portfolio investment was made with a non‑resident (except to the extent that making the investment consisted of making a loan or purchasing an Australian thing); and
 (d) the currency in which the portfolio investment was made was not Australian currency; and
 (e) if the portfolio investment consists of only a single thing—the thing is not an Australian thing (see subsection 121DA(5)).

Investment activity—portfolio investment for overseas charitable institutions
 (6B) For the purposes of paragraph (1)(e), an investment activity is also the managing by an OBU of a portfolio investment (see subsection 121DA(1)) for the whole or part (the investment management period) of a year of income, where:
 (a) the portfolio investment is managed as broker, agent or custodian for, or trustee for the benefit of, an overseas charitable institution; and
 (b) the portfolio investment was made by the OBU or the overseas charitable institution.

Hedging activities
 (8) For the purposes of paragraph (1)(g), a hedging activity is entering into a financial arrangement (within the meaning of the Income Tax Assessment Act 1997) with an offshore person for the sole purpose of eliminating or reducing the risk of adverse financial consequences that might result to the OBU from:
 (a) interest rate exposure of the OBU in respect of borrowing or lending activities (described in subsection (2)) of the OBU; or
 (b) currency