Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1936 - SECT 577

             (1)  Subject to subsection (2), in determining whether any foreign investment fund income would be taken to have accrued to the first tier FIF from the second tier FIF or from the FLP in respect of the relevant period:

                     (a)  any declaration, election, choice or selection that could be made, any notice that could be given, or any option that could be exercised, under this Act by the first tier FIF apart from this section is not to be made, given or exercised by the first tier FIF but instead may be made, given or exercised by the taxpayer; but

                     (b)  if the first tier FIF is not a CFC--the taxpayer is not entitled to make an election under subsection 535(3), as that subsection applies because of paragraph (a), to use the calculation method in respect of the second tier FIF unless:

                              (i)  the taxpayer has also made an election under subsection 535 (3) to use that method in respect of the first tier FIF; and

                             (ii)  the taxpayer also makes the election in relation to the second tier FIF under subsection 486(3) that the taxpayer is entitled to make because of paragraph (a) of this subsection.

             (2)  If:

                     (a)  a FIF that is a CFC had an interest in a FIF that is not a CFC ( the first non‑controlled FIF ); and

                     (b)  the first non‑controlled FIF had an interest in another FIF that is not a CFC ( the second non‑controlled FIF );

the taxpayer is taken not to have made an election under subsection 535(3), as that subsection applies because of paragraph (1) (a), to use the calculation method in respect of the second non‑controlled FIF.