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INCOME TAX ASSESSMENT ACT 1997 - SECT 768.5

Foreign equity distributions on participation interests

Foreign equity distributions received directly

             (1)  A * foreign equity distribution is not assessable income, and is not * exempt income, of the entity to which it is made if:

                     (a)  the entity is an Australian resident and a * corporate tax entity; and

                     (b)  at the time the distribution is made, the entity satisfies the participation test in section 768-15 in relation to the company that made the distribution; and

                     (c)  the entity:

                              (i)  does not receive the distribution in the capacity of a trustee; or

                             (ii)  receives the distribution in the capacity of a trustee of a * public trading trust; and

                     (d)  the distribution is not one to which section 768-7 (which is about foreign income tax deductions) applies.

Foreign equity distributions received through interposed trusts and partnerships

             (2)  An amount is not assessable income, and is not * exempt income, of an entity if:

                     (a)  the entity is a beneficiary of a trust or a partner in a partnership, an Australian resident and a * corporate tax entity; and

                     (b)  the amount is all or part of the * net income of the trust or partnership that would, apart from this subsection, be included in the entity's assessable income because of:

                              (i)  Division 276; or

                             (ii)  Division 5 or 6 of Part III of the Income Tax Assessment Act 1936 ; and

                     (c)  the amount can be attributed (either directly or indirectly through one or more interposed trusts or partnerships that are not * corporate tax entities) to a * foreign equity distribution; and

                     (d)  at the time the distribution is made, the entity satisfies the participation test in section 768-15 in relation to the company that made the distribution; and

                     (e)  the entity:

                              (i)  does not receive the distribution in the capacity of a trustee; or

                             (ii)  receives the distribution in the capacity of a trustee of a * public trading trust; and

                      (f)  the distribution is not one to which section 768-7 (which is about foreign income tax deductions) applies.

             (3)  An amount that is * non-assessable non-exempt income under subsection (2) is taken, for the purpose of section 25-90 (about deductions relating to foreign non-assessable non-exempt income) to be derived from the same source as the * foreign equity distribution.



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