Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1936 - SECT 504

                   If:

                     (a)  at the end of the notional accounting period of a foreign company ( the holding company ) that ended during a year of income:

                              (i)  the taxpayer had an interest in the holding company that consisted of shares included in a class of shares that were quoted on the stock market of an approved stock exchange; and

                             (ii)  one of the following sub‑subparagraphs applies:

                                        (A)  the holding company was included by an approved stock exchange in a class of companies designated by the stock exchange as engaged in activities of a kind designated as  banking or banks ;

                                        (B)  the holding company was included by an international sectoral classification system named in regulations made for the purposes of section 499, or, until regulations are so made, by an international sectoral classification system named in Schedule 5, in a class of companies designated by the system as engaged in activities of a kind designated as banking or banks ; and

                     (b)  throughout that period, or the part of that period in which the taxpayer had that interest, as the case may be:

                              (i)  shares in the holding company that were included in the class referred to in subparagraph (a)(i) were widely held, and actively traded on a regular basis, on a stock market of an approved stock exchange; and

                             (ii)  one or more other foreign companies were wholly‑owned subsidiaries of the holding company; and

                            (iii)  if there was only one such subsidiary, that subsidiary was:

                                        (A)  authorised under the law of its place of residence to carry on banking business; and

                                        (B)  principally engaged in the active carrying on of banking business; and

                            (iv)  if there were 2 or more such subsidiaries:

                                        (A)  at least one subsidiary was authorised under the law of its place of residence to carry on banking business; and

                                        (B)  the principal activities of all the subsidiaries, considered together, were the active carrying on of banking business;

the interest referred to in subparagraph (a)(i) is disregarded for the purposes of the application of the operative provision to the taxpayer in relation to the holding company in respect of that notional accounting period.