Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 2) 1992No. 80, 1992 - SECT 6

6. Section 23AH of the Principal Act is amended:

   (a)  by omitting subsection (3) and substituting the following subsection:

"(3) If:

   (a)  the original taxpayer in relation to the foreign branch income is the
        trustee of a trust estate or a partnership; and

   (b)  the following conditions are satisfied in relation to another taxpayer
        (in this subsection called the 'actual taxpayer'):

        (i)    the actual taxpayer is a company;

        (ii)   either:

                (A)  the actual taxpayer is a beneficiary of the trust estate
                     or a partner in the partnership; or

                (B)  one or more partnerships or trusts are interposed between
                     the original taxpayer and the actual taxpayer; and

   (c)  assuming that:

        (i)    the foreign branch income derived by the original taxpayer was
               the only amount included in the original taxpayer's assessable
               income of the year of income; and

        (ii)   no deductions were allowable to the original taxpayer for the
               year of income; and

        (iii)  in a case where one or more partnerships or trusts are
               interposed between the original taxpayer and the actual
               taxpayer:

                (A)  the only amounts that are included in the assessable
                     incomes of those interposed partnerships and trusts are
                     amounts that are attributable (either directly or
                     indirectly through one or more interposed trusts or
                     partnerships) to the foreign branch income; and

                (B)  no deductions were allowable to any of the interposed
                     partnerships or trusts; the following conditions would
                     have been satisfied in relation to the actual taxpayer:

        (iv)   an amount would have been included in the assessable income of
               the actual taxpayer of a year of income under subsection 92(1)
               or section 97, 98A or 100;

        (v)    the whole or a part of the amount so included in the actual
               taxpayer's assessable income would have been attributable
               (either directly or indirectly through one or more interposed
               trusts or partnerships) to the foreign branch income; then, for
               the purposes of the application of Divisions 5 and 6 to the
               actual taxpayer in relation to any year of income:

   (d)  the assessable income of the original taxpayer does not include so
        much of the foreign branch income as is attributable to a period when
        the actual taxpayer was a resident; and

   (e)  section 160AFD does not apply to a loss incurred by the original
        taxpayer to the extent that the loss is attributable to:

        (i)    any foreign branch income derived by the original taxpayer
               during any year of income; or

        (ii)   any foreign branch capital gain which accrued to the original
               taxpayer during any year of income.";

   (b)  by omitting subsections (9) and (9A) and substituting the following
        subsections:

"(9) If:

   (a)  the original taxpayer in relation to the foreign branch capital gain
        is the trustee of a trust estate; and

   (b)  the following conditions are satisfied in relation to another taxpayer
        (in this subsection called the 'actual taxpayer'):

        (i)    the actual taxpayer is a company;

        (ii)   either:

                (A)  the actual taxpayer is a beneficiary of the trust estate;
                     or

                (B)  one or more partnerships or trusts are interposed between
                     the original taxpayer and the actual taxpayer; and

   (c)  assuming that:

        (i)    the only amount included in the original taxpayer's assessable
               income of the year of income concerned is an amount (in this
               subsection called the 'foreign branch capital gain amount')
               attributable to the foreign branch capital gain; and

        (ii)   no deductions were allowable to the original taxpayer for that
               year of income; and

        (iii)  no capital loss was incurred by the original taxpayer under
               Part IIIA during that year of income; and

        (iv)   in a case where one or more partnerships or trusts are
               interposed between the original taxpayer and the actual
               taxpayer:

                (A)  the only amounts that are included in the assessable
                     incomes of those interposed partnerships and trusts are
                     amounts that are attributable (either directly or
                     indirectly through one or more interposed trusts or
                     partnerships) to the foreign branch capital gain amount;
                     and

                (B)  no deductions were allowable to any of the interposed
                     partnerships or trusts; and

                (C)  no capital losses were incurred by any of the interposed
                     partnerships or trusts under Part IIIA; the following
                     conditions would have been satisfied in relation to the
                     actual taxpayer:

        (v)    an amount would have been included in the assessable income of
               the actual taxpayer of a year of income under subsection 92(1)
               or section 97, 98A or 100;

        (vi)   the whole or a part of the amount so included in the actual
               taxpayer's assessable income would have been attributable
               (either directly or indirectly through one or more interposed
               trusts or partnerships) to the foreign branch capital gain
               amount; then, for the purposes of the application of Divisions
               5 and 6 to the actual taxpayer in relation to any year of
               income:

   (d)  the assessable income of the original taxpayer does not include so
        much of the foreign branch capital gain as is attributable to a period
        when the actual taxpayer was a resident; and

   (e)  section 160AFD does not apply to a loss incurred by the original
        taxpayer to the extent that the loss is attributable to:

        (i)    any foreign branch capital gain which accrued to the original
               taxpayer during any year of income; or

        (ii)   any foreign branch income derived by the original taxpayer
               during any year of income.

"(9A) If:

   (a)  a taxpayer (in this subsection called the 'original taxpayer'), being
        the trustee of a trust estate, disposes of an asset; and

   (b)  a loss of a capital nature is incurred by the original taxpayer in
        respect of the disposal; and

   (c)  if, instead, a gain or profit of a capital nature had accrued to the
        original taxpayer in respect of the disposal, that gain or profit
        (which gain or profit is in this subsection called the 'notional
        foreign branch capital gain') would be a foreign branch capital gain;
        and

   (d)  a capital loss is incurred by the original taxpayer under Part IIIA in
        respect of the disposal of the asset; and

   (e)  the following conditions are satisfied in relation to another taxpayer
        (in this subsection called the 'actual taxpayer'):

        (i)    the actual taxpayer is a company;

        (ii)   either:

                (A)  the actual taxpayer is a beneficiary of the trust estate;
                     or

                (B)  one or more partnerships or trusts are interposed between
                     the original taxpayer and the actual taxpayer; and

   (f)  assuming that:

        (i)    the only amount included in the original taxpayer's assessable
               income of the year of income concerned is an amount (in this
               subsection called the 'notional foreign branch capital gain
               amount') attributable to the notional foreign branch capital
               gain; and

        (ii)   no deductions were allowable to the original taxpayer for that
               year of income; and

        (iii)  no capital loss was incurred by the original taxpayer under
               Part IIIA during that year of income; and

        (iv)   in a case where one or more partnerships or trusts are
               interposed between the original taxpayer and the actual
               taxpayer:

                (A)  the only amounts that are included in the assessable
                     incomes of those interposed partnerships and trusts are
                     amounts that are attributable (either directly or
                     indirectly through one or more interposed trusts or
                     partnerships) to the notional foreign branch capital gain
                     amount; and

                (B)  no deductions were allowable to any of the interposed
                     partnerships or trusts; and

                (C)  no capital losses were incurred by any of the interposed
                     partnerships or trusts under Part IIIA; the following
                     conditions would have been satisfied in relation to the
                     actual taxpayer:

        (v)    an amount would have been included in the assessable income of
               the actual taxpayer of a year of income under subsection 92(1)
               or section 97, 98A or 100;

        (vi)   the whole or a part of the amount so included in the actual
               taxpayer's assessable income would have been attributable
               (either directly or indirectly through one or more interposed
               trusts or partnerships) to the notional foreign branch capital
               gain amount; and then, for the purposes of the application of
               Divisions 5 and 6 to the actual taxpayer in relation to any
               year of income, the assessable income of the original taxpayer
               is to be worked out on the basis that no such capital loss had
               been incurred by the original taxpayer.".