Document ID: chunk:federal_register_of_legislation:C2005A00147:clause:2_1:p4
Version: federal_register_of_legislation:C2005A00147
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 4/6)
Character Range: 129740–132443

an amount that is *non‑assessable non‑exempt income under section 23AJ of the Income Tax Assessment Act 1936 and that would be not be included under subsection (1).

 (4) Reduce the amount remaining after subsection (3) by these amounts:
 (a) an amount that is *non‑assessable non‑exempt income under section 23AI or 23AK of the Income Tax Assessment Act 1936;
 (b) an amount that is not included in the entity's assessable income because of the operation of paragraph 99B(2)(e) of that Act;
 (c) the amount worked out using the formula:
  where:

          available franking credit means any part of the amount remaining after subsection (3) to the extent to which a *franking credit arises or will arise for the entity.

 (5) Reduce the amount remaining after subsection (4) by any of the entity's expenses that are reasonably related to that amount, except expenses the entity has deducted or can deduct under this Act. In applying this subsection to an amount covered by paragraph (3)(a), assume that amount is *non‑assessable non‑exempt income.

 (6) The result is an amount included in the entity's conduit foreign income.

 (7) This section applies to an entity as if it had derived an amount if the amount has been applied for its benefit (including by discharging all or part of a debt it owes) or as it directs.

802‑35  Capital gains and losses

Capital gains

 (1) The entity's conduit foreign income includes these amounts:
 (a) the amount by which a *capital gain of the entity is reduced because of the operation of section 768‑505;
 (b) a capital gain that is disregarded because of the operation of subsection 23AH(3) of the Income Tax Assessment Act 1936;
 (c) the amount of a capital gain that is disregarded as a result of the operation of an international tax sharing treaty (as defined in subsection 136AA(1) of the Income Tax Assessment Act 1936).

Capital losses

 (2) The entity's conduit foreign income is reduced by these amounts:
 (a) the amount by which a *capital loss of the entity is reduced because of the operation of section 768‑505;
 (b) a capital loss that is disregarded because of the operation of subsection 23AH(4) of the Income Tax Assessment Act 1936;
 (c) the amount of a capital loss that is disregarded as a result of the operation of an international tax sharing treaty (as defined in subsection 136AA(1) of the Income Tax Assessment Act 1936).

Timing rule

 (3) The adjustments are made under this section at the end of the income year in which the *CGT event occurred.

802‑40  Effect of foreign tax credits on conduit foreign income

  The entity's conduit foreign income includes an amount if a credit arose for the entity under section 160AF of