Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 3/5)
Character Range: 6778078–6780870

is reduced by a percentage that reflects the degree to which the assets of the foreign company are used in an active business.

Table of sections

Operative provisions
768‑505 Reducing a capital gain or loss from certain CGT events in relation to certain voting interests

Active foreign business asset percentage
768‑510 Active foreign business asset percentage
768‑515 Choices to apply market value method or book value method
768‑520 Market value method—choice made under subsection 768‑515(1)
768‑525 Book value method—choice made under subsection 768‑515(2)
768‑530 Active foreign business asset percentage—modifications for foreign life insurance companies and foreign general insurance companies
768‑533 Foreign company that is a FIF using CFC calculation method—treatment as AFI subsidiary under this Subdivision
768‑535 Modified rules for foreign wholly‑owned groups

Types of assets of a foreign company
768‑540 Active foreign business assets of a foreign company
768‑545 Assets included in the total assets of a foreign company

Voting percentages in a company
768‑550 Direct voting percentage in a company
768‑555 Indirect voting percentage in a company
768‑560 Total voting percentage in a company

Operative provisions

768‑505  Reducing a capital gain or loss from certain CGT events in relation to certain voting interests
 (1) The *capital gain or *capital loss a company (the holding company) that is an Australian resident makes from a *CGT event that happened at a particular time (the time of the CGT event) to a *share in a company (the foreign disposal company) that is a foreign resident is reduced if:
 (a) the holding company held a *direct voting percentage of 10% or more in the foreign disposal company throughout a 12 month period that:
 (i) began no earlier than 24 months before the time of the CGT event; and
 (ii) ended no later than that time; and
 (b) the share is not:
 (i) an eligible finance share (within the meaning of Part X of the Income Tax Assessment Act 1936); or
 (ii) a widely distributed finance share (within the meaning of that Part); and
 (c) the CGT event is CGT event A1, B1, C2, E1, E2, G3, J1, K4, K6, K10 or K11.
 (2) The gain or loss is reduced by the *active foreign business asset percentage (see sections 768‑510, 768‑530 and 768‑535) of the foreign disposal company in relation to the holding company at the time of the CGT event.

Active foreign business asset percentage

768‑510  Active foreign business asset percentage
 (1) The active foreign business asset percentage of a company (the foreign company) that is a foreign resident, in relation to the holding company mentioned in section 768‑505, at the time of the CGT event mentioned in that section, is worked out in accordance with this section.

Market value method
 (2)