Commonwealth Consolidated Acts

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Reducing a capital gain or loss from certain CGT events in relation to certain voting interests

             (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

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