Any excess amount of foreign tax that cannot be recouped as an offset in an income year cannot be carried forward (unlike the previous system of foreign tax credits). However, transitional rules enable a taxpayer with pre-existing excess foreign tax credits to use some of these amounts in certain circumstances.
Attributed foreign income
If you have interests in a foreign entity, your share of its income may be attributed to you for income tax purposes, even if the income has not yet been distributed.
If you have attributed foreign income, you may be entitled to a foreign income tax offset for foreign income tax, income tax, or withholding tax paid by a controlled foreign company (CFC) or foreign investment fund (FIF) in which you hold an interest. The treatment of attributed foreign income under the foreign income tax offsets system is simpler than under the previous foreign credits system. Also, attributable taxpayers will no longer need to maintain attributed tax accounts.
For more information on the tax treatment of attributed income, refer to the publication Attributed foreign income.