You are exempt from the FIF measures if you are an Australian resident and also:
- an attributable taxpayer of a transferor trust or controlled foreign trusts [SECTION 493]
- a beneficiary of a deceased estate-see What is a FIF? [SECTION 481]
- an exempt small investor-see Exemption for an interest of $50,000 or less [SECTION 515]
- an exempt visitor-see Exemption for visitors to Australia [SECTION 517]
- a member of an employer-sponsored foreign superannuation fund-see Exemption for employer-sponsored foreign superannuation. [SECTION 519]
Exempt attributable taxpayer
An attributable taxpayer of a transferor trust or controlled foreign trust is not taxed under the FIF measures because they are attributed income from the foreign trust under other provisions of the Act. See Exemption for attributable taxpayers. [SECTIONS 102AAA, 102 AAZG, 342, 348 and 493]
Small investor exclusion
Certain small investors are exempt from the FIF measures. See Exemption for an interest of $A50,000 or less for more information.
Consistent with this exemption, the FIF measures excluded FIF income from the assessable income of a resident public unit trust when working out a small investor's share of the net income of the trust estate. This exclusion applies only to natural persons and will apply to you if the sum of your interests and those of your associates in FIFs, FLPs and resident public unit trusts at the end of the income year are $50,000 or less. [SUBSECTION 96A(2)]
In a subsequent year of income, you must work out the trust's net income by ignoring attribution credits which arose during income years when you were exempt because of this small investor's exemption. [PARAGRAPH 96A(2)(d)]
This means that you as the beneficiary will not benefit from:
- the exemption, which applies for amounts previously attributed under the FIF measures [SECTION 23AK]
- a reduction in the disposal consideration of the FIF interest because of an unused FIF attribution account surplus from income attributed but not distributed before disposal of the FIF interest. [SECTION 613]
These two benefits arise because FIF income was included in the net income of the trust in a year when you as a beneficiary of the public unit trust were not taxed on that FIF income because of the small investor's exclusion. [PARAGRAPHS 96A(2)(d) to (e)]
Exempt beneficiaries of a foreign deceased estate
The measures do not apply to an Australian resident beneficiary of a foreign trust arising in relation to the estate of deceased persons. The estate of a deceased person who made or did not make a will is not covered by the FIF measures. The measures do not apply even where a court has made an order in respect of the estate of a deceased person. For further information, see What is a FIF?. Also see Deceased estates for an exemption from an interest charge.
Exempt member of an employer-sponsored foreign superannuation fund
For your exemption from FIF taxation on your interest in an employer-sponsored foreign superannuation fund see Exemption for employer-sponsored foreign superannuation.