(1) The * capital gain or * capital loss a company (the holding company ) that is an Australian resident makes from a * CGT event that happened at a particular time (the time of the CGT event ) to a * share in a company (the foreign disposal company ) that is a foreign resident is reduced if:
(a) the holding company held a * direct voting percentage of 10% or more in the foreign disposal company throughout a 12 month period that:
(i) began no earlier than 24 months before the time of the CGT event; and
(ii) ended no later than that time; and
(b) the share is not :
(i) an eligible finance share (within the meaning of Part X of the Income Tax Assessment Act 1936 ); or
(ii) a widely distributed finance share (within the meaning of that Part); and
(c) the CGT event is CGT event A1, B1, C2, E1, E2, G3, J1, K4, K6, K10 or K11.
(2) The gain or loss is reduced by the * active foreign business asset percentage (see sections 768- 510, 768-530 and 768-535) of the foreign disposal company in relation to the holding company at the time of the CGT event.
Active foreign business asset percentage