(1) The object of this section is to disregard, for the purpose of calculating the assessable income of a corporate tax entity that is an IMR foreign fund, certain gains and losses that arise in the 2010-11 income year, or an earlier income year, in respect of certain kinds of financial arrangements.
(2) This section applies to a corporate tax entity that is an IMR foreign fund in relation to an income year if:
(a) the income year is the 2010-11 income year or an earlier income year; and
(b) the corporate tax entity has pre-2012 IMR income, a pre-2012 IMR deduction, a pre-2012 IMR capital gain or a pre-2012 IMR capital loss in relation to the income year; and
(c) the corporate tax entity has not lodged an income tax return in relation to the 2010-11 income year, or any earlier income year, before the day that item 1 of Schedule 1 to the Tax Laws Amendment (Investment Manager Regime) Act 2012 commences; and
(d) the Commissioner did not, before 18 December 2010, make an assessment of the taxable income of the corporate tax entity for any income year.
Note 1: For the purposes of this Act, pre-2012 IMR income is defined in subsections 842-270(1) and (2) of the Income Tax Assessment Act 1997 and pre-2012 IMR capital gain is defined in subsection 842-270(3) of that Act.
Note 2: Pre-2012 IMR deduction is defined in subsections 842-230(1) and (2) of this Act and pre-2012 IMR capital loss is defined in section 842-235 of this Act.
Certain amounts disregarded
(3) In working out the corporate tax entity's taxable income, tax loss or net capital loss for the income year:
(a) treat the corporate tax entity's pre-2012 IMR income for the income year as non-assessable non-exempt income; and
(b) disregard the corporate tax entity's pre-2012 IMR deduction for the income year; and
(c) disregard the corporate tax entity's pre-2012 IMR capital gain for the income year; and
(d) disregard the corporate tax entity's pre-2012 IMR capital loss for the income year.
(4) Subsection (3) does not apply if the Commissioner has reason to believe that there has been fraud by the corporate tax entity in relation to any income year.
Audit or compliance review
(5) Subsection (3) does not apply if before 18 December 2010 the Commissioner notified the corporate tax entity that an audit or compliance review would be undertaken in relation to any income year.