This question assesses the risk of assessable foreign income for CFCs and CFTs not being correctly accounted for under the relevant tax legislation.
The dollar amounts or values asked for in this question are all based on your tax records.
Section 456 of the ITAA 1936 includes certain amounts of attributable income of a CFC in the assessable income of an Australian resident taxpayer that is an attributable taxpayer.
Section 457 of the ITAA 1936 includes in the assessable income of a resident taxpayer, who is an attributable taxpayer in relation to a CFC, certain amounts in respect of a change of residence of the CFC from an unlisted country to a listed country or to Australia.
Section 459A of the ITAA 1936 includes amounts in an attributable taxpayer's assessable income where the amount of net income of an Australian partnership or trust accrues to the benefit of a CFC or CFT is not taxed in Australia.
To complete this question, if you have an amount of foreign income that is assessable under sections 456, 457 or 459A of the ITAA 1936, write the total amount assessable under each of the sections at the corresponding labels.
To complete labels A, B and C, you are required to identify the residency of each CFC or CFT for which you included attributable income in assessable income under section 456 of the ITAA 1936 for the income year. Work out the attributable income amounts referrable to those entities in each of the following location categories:
- listed country
- specified country
- other unlisted country.
At label A, write the attributable income included in your assessable income from your CFCs and CFTs identified as residents of listed countries.
At label B, write the attributable income included in your assessable income from your CFCs and CFTs identified as residents of specified countries.
At label C, write the attributable income included in your assessable income from your CFCs and CFTs identified as residents of other unlisted countries. Include at this label any attributable income included in assessable income under section 456 of the ITAA 1936 that you have not already included at A and B.
At label D, write the total of the amounts written at labels A, B and C.
You need to complete label E if you included an amount of foreign income in your assessable income for the income year under section 457 of the ITAA 1936. To complete label E, add all amounts included in your assessable income under section 457 of the ITAA 1936 and write the total amount at label E.
Label F
You need to complete label F if you included an amount of foreign income in your assessable income for the income year under section 459A of the ITAA 1936. To complete label F, add all amounts included in your assessable income under section 459A of the ITAA 1936 and write the total amount at label F.
For more information about working out if these provisions apply to you, including an overview of the necessary calculations, refer to the Foreign income return form guide.
For companies conducting banking or insurance activities (AFI or Australian financial institutions), there are special rules that apply. These rules are not discussed in the guide and you should refer to Subdivision F of Division 8 of Part X of the ITAA 1936.
To help work out the amounts to include, refer to:
- the Foreign income return form guide
- section 456 of the ITAA 1936
- section 457 of the ITAA 1936
- section 459A of the ITAA 1936.
For the table of:
- listed countries and codes, see Appendix 3
- specified countries and codes, refer to Appendix 1.
All foreign countries, including section 404 countries, not listed in the tables of listed countries and specified countries are included in the other unlisted country category.
End of further informationExample
An Australian resident shareholder (attributable taxpayer) includes section 456 attributable income in its assessable income from CFCs and CFTs which are resident of countries set out in the following table.
CFC or CFT country of residence |
Section 456 attributable income amount |
Canada |
1,010,000 |
Niue |
501,000 |
Panama |
629,000 |
Italy |
459,000 |
Total |
2,599,000 |
As Canada is a listed country, the section 456 amount written at label A is $1,010,000.
As Niue and Panama are specified countries, the section 456 amount written at label B is:
Niue |
$501,000 |
Panama |
$629,000 |
Total written at B |
$1,130,000 |
As Italy is another unlisted country, the section 456 amount written at label C is $459,000.
The total amount of section 456 attributable income written at label D is $2,599,000.