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Income Tax Act 2007

Timing and quantifying rules - Controlled foreign company and foreign investment fund rules - Attributing interests in FIFs

EX 31: Exemption for ASX-listed Australian companies

You could also call this:

“Australian companies on ASX exempt from certain foreign investment rules”

You don’t have to worry about some of your rights in a Foreign Investment Fund (FIF) being an attributing interest if they meet certain conditions. This applies to shares in Australian companies listed on the ASX (Australian Securities Exchange).

For your shares to be exempt, they need to be:

  1. Regular shares that you can sell on their own, not tied to another company’s shares.

  2. In a company that lives in Australia all year and isn’t considered to live anywhere else under any agreements Australia has with other countries.

  3. Listed on the ASX at the start of the tax year, or when you first buy the shares, or at the end of the previous year if there’s a special arrangement happening.

  4. Not in a company that’s on a special list in part B of schedule 25.

  5. In a company that has to keep a franking account under Australian tax laws.

If your shares meet all these conditions, you don’t need to treat them as an attributing interest in a FIF for that year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515516.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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EX 30: Direct income interests in FIFs, or

“Owning shares or having rights in a foreign company”

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EX 32: Exemption for Australian unit trusts with adequate turnover or distributions, or

“Australian unit trusts exempt from FIF rules if they meet turnover or distribution requirements”

Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Attributing interests in FIFs

EX 31Exemption for ASX-listed Australian companies

  1. A person's rights in a FIF in an income year are not an attributing interest if—

  2. the rights are a share; and
    1. the share is not a share that may not, or ordinarily may not, be disposed of unless together with rights in another company; and
      1. the FIF is a company that meets the requirements of subsection (2).

        1. The company must—

        2. at all times in the year when the person holds a right in the company, be resident in Australia; and
          1. at all times in the year when the person holds a right in the company, not be treated as resident in a country other than Australia under an agreement that—
            1. is between Australia and that other country; and
              1. would be a double tax agreement if negotiated between New Zealand and that other country; and
              2. be included on the official list of ASX Limited, a market licensee under Chapter 7 of the Corporations Act 2001 (Aust)—
                1. at the beginning of an income year, if subparagraphs (ii) and (iii) do not apply; or
                  1. at the earliest date in the income year on which the person owns shares in the company, if the person does not own shares in the company at the beginning of the income year; or
                    1. at the beginning of the final month of the preceding income year if, in the first month of an income year, the shares are cancelled or transferred under a scheme of arrangement entered into under Part 5.1 of the Corporations Act 2001 (Aust); and
                    2. at all times in the year when the person holds a right in the company, not be an entity described in schedule 25, part B (Foreign investment funds); and
                      1. at all times in the year when the person holds a right in the company, be required under the Income Tax Assessment Act 1997 (Aust) and Income Tax Assessment Act 1936 (Aust) to maintain a franking account.

                        Compare
                        Notes
                        • Section EX 31(1) heading: inserted, on , by section 385(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                        • Section EX 31(1): substituted, on , by section 385(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                        • Section EX 31(2) heading: replaced, on (applying for the 2017–18 and later income years), by section 38(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                        • Section EX 31(2): inserted, on , by section 385(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                        • Section EX 31(2)(c): amended, on (applying for the 2017–18 and later income years), by section 38(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                        • Section EX 31(2)(c)(i): amended (with effect on 1 April 2008), on , by section 168(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                        • Section EX 31(2)(c)(ii): replaced, on , by section 144 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                        • Section EX 31(2)(c)(iii): added (with effect on 1 April 2008), on , by section 168(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                        • Section EX 31 list of defined terms cancellation: inserted (with effect on 1 April 2008), on , by section 168(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                        • Section EX 31 list of defined terms direct income interest: repealed, on , by section 385(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                        • Section EX 31 list of defined terms income tax: repealed, on , by section 385(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).