Commonwealth Consolidated Acts Commonwealth Consolidated ActsWhere entity becomes a partner
(1) If:
(a) an entity becomes a partner (the first partner ) in a * foreign hybrid in relation to an income year; and
(b) a gain or profit of a capital nature accrues to another partner as a result of the disposal of the whole or part of that other partner's interest in an asset of the foreign hybrid that happens when the first partner becomes a partner; and
(c) apart from this subsection, the gain or profit is not * subject to foreign tax in a * listed country in any * tax accounting period; and
(d) if the foreign hybrid had disposed of the whole or an equivalent part of the asset at the time of the disposal of the whole or the part of the interest, any gain or profit of a capital nature that accrued to the foreign hybrid in respect of the disposal would have been subject to foreign tax in a listed country in a tax accounting period;
then, for the purposes of Part X of the Income Tax Assessment Act 1936 , the gain or profit mentioned in paragraph (b) is taken to be subject to foreign tax in the listed country, and in the tax accounting period, mentioned in paragraph (d).
Where partner increases its interest
(2) If:
(a) an entity is a partner (the first partner ) that increases its interest in a * foreign hybrid in relation to an income year; and
(b) a gain or profit of a capital nature accrues to another partner as a result of the disposal of the whole or part of that other partner's interest in an asset of the foreign hybrid that happens when the first partner increases its interest in the foreign hybrid; and
(c) apart from this subsection, the gain or profit is not * subject to foreign tax in a * listed country in any * tax accounting period; and
(d) if the foreign hybrid had disposed of the whole or an equivalent part of the asset at the time of the disposal of the whole or the part of the interest, any gain or profit of a capital nature that accrued to the foreign hybrid in respect of the disposal would have been subject to foreign tax in a listed country in a tax accounting period;
then, for the purposes of Part X of the Income Tax Assessment Act 1936 , the gain or profit mentioned in paragraph (b) is taken to be subject to foreign tax in the listed country, and in the tax accounting period, mentioned in paragraph (d).
Where entity ceases to be a partner
(3) If:
(a) an entity ceases to be a partner in a * foreign hybrid in relation to an income year; and
(b) a gain or profit of a capital nature accrues to the entity as a result of the disposal of its interest in an asset of the foreign hybrid that happens when the entity ceases to be a partner; and
(c) apart from this subsection, the gain or profit is not * subject to foreign tax in a * listed country in any * tax accounting period; and
(d) any gain or profit of a capital nature that accrues to the entity as a result of the disposal of its interest in the foreign hybrid that happens when the entity ceases to be a partner is subject to foreign tax in a listed country in a tax accounting period;
then, for the purposes of Part X of the Income Tax Assessment Act 1936 , the gain or profit mentioned in paragraph (b) is taken to be subject to foreign tax in the listed country, and in the tax accounting period, mentioned in paragraph (d).
Where partner disposes of part of its interest
(4) If:
(a) an entity is a partner that disposes of part of its interest in a * foreign hybrid in relation to an income year; and
(b) a gain or profit of a capital nature accrues to the entity as a result of the disposal of part of its interest in an asset of the foreign hybrid that happens when the entity disposes of the part of its interest in the foreign hybrid; and
(c) apart from this subsection, the gain or profit is not * subject to foreign tax in a * listed country in any * tax accounting period; and
(d) any gain or profit of a capital nature that accrues to the entity as a result of the disposal of the part of its interest in the foreign hybrid is subject to foreign tax in a listed country in a tax accounting period;
then, for the purposes of Part X of the Income Tax Assessment Act 1936 , the gain or profit mentioned in paragraph (b) is taken to be subject to foreign tax in the listed country, and in the tax accounting period, mentioned in paragraph (d).
Note: In the case of a foreign hybrid company, references in this Subdivision that relate to partnerships are to be read subject to Subdivision 830 - B. For example, a reference to a partner will be a reference to a shareholder in the company who is treated by Subdivision 830 - B as a partner.
Table of sections
830 - 80 Setting the tax cost of partners' interests in the assets of an entity that becomes a foreign hybrid
830 - 85 Setting the tax cost of assets of an entity when it ceases to be a foreign hybrid
830 - 90 What the expression tax cost is set means
830 - 95 What the expression tax cost setting amount means
830 - 100 What the expression tax cost means
830 - 105 What the expression asset - based income tax regime means
830 - 110 No disposal of assets etc. on entity becoming or ceasing to be a foreign hybrid
830 - 115 Tax losses cannot be transferred to a foreign hybrid
830 - 120 End of CFC's last statutory accounting period
830 - 125 How long interest in asset, or asset, held