Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 3/11)
Character Range: 7529125–7531858

relation to the entity; or
 (ii) is covered by item 4 of the table in section 855‑15 in relation to the entity because it is an option or right to *acquire a CGT asset covered by item 3 of that table in relation to the entity.

Direct investment by IMR widely held entity
 (3) The requirements of this subsection in relation to the year are that:
 (a) during the whole of the year, the *IMR entity is an *IMR widely held entity; and
 (b) during the whole of the year, the interest of the entity in the issuer of, or counterparty to, the *IMR financial arrangement does not pass the *non‑portfolio interest test (see section 960‑195); and
 (c) none of the returns, gains or losses for the year from the arrangement are attributable to:
 (i) if the entity is a resident of a country that has entered into an *international tax agreement with Australia containing a *permanent establishment article—a permanent establishment (within the meaning of the relevant international tax agreement) of the entity in Australia; or
 (ii) otherwise—a *permanent establishment of the entity in Australia; and
 (d) the IMR entity does not, during the year, carry on in Australia a trading business (within the meaning of section 102M of the Income Tax Assessment Act 1936) that relates (directly or indirectly) to the arrangement; and
 (e) subsection 842‑225(2) does not apply to the IMR financial arrangement.
 (4) For the purposes of paragraph (3)(a), disregard any part of the year during which the entity did not exist.

Indirect investment through independent Australian fund manager
 (5) The requirements of this subsection in relation to the year are that:
 (a) the *IMR financial arrangement was made, on the *IMR entity's behalf, by an entity that is an *independent Australian fund manager for the IMR entity for the income year (see section 842‑245); and
 (b) if the issuer of, or counterparty to:
 (i) the IMR financial arrangement referred to in paragraph (a), if it is a *financial arrangement; or
 (ii) otherwise—the IMR financial arrangement to which that arrangement relates;
  is an Australian resident, or a *resident trust for CGT purposes—during the whole of the year, the interest of the entity in the issuer or counterparty does not pass the *non‑portfolio interest test (see section 960‑195); and
 (c) the IMR entity does not, during the year, carry on in Australia a trading business (within the meaning of section 102M of the Income Tax Assessment Act 1936) that relates (directly or indirectly) to the arrangement.

Withholding taxes etc.
 (6) If what would otherwise be the *IMR entity's assessable income is *non‑assessable non‑exempt income of the entity because of subsection (1) or (2), for the purposes of determining