Document ID: chunk:federal_register_of_legislation:C2010C00184:clause:1_4:p1
Version: federal_register_of_legislation:C2010C00184
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 1/3)
Character Range: 57718–61063

4                                                                                                            Other income                                                                                                                                                             (a) For a company—the amount of those excess foreign tax credits, as reduced under section 770‑225; or
                                                                                                                                                                                                                                                                                      (b) For an entity other than a company—the amount of those excess foreign tax credits

Note: Section 121EG of the 1936 Act applies the eligible fraction to assessable OB income, allowable OB deductions and foreign income tax paid on assessable OB income.

770‑225  Pre‑commencement excess foreign income tax generated for a company by excess foreign tax credits relating to other income

  Reduce the amount of the excess foreign tax credits to the extent (if any) that they are attributable to foreign tax paid in respect of amounts that would be your non‑assessable non‑exempt income if they were derived in the commencement year.

770‑230  Increase in the foreign income tax offset

 (1) This section affects the amount of your tax offset under section 770‑70 of the Income Tax Assessment Act 1997 (the 1997 Act).

Note: That section determines how much tax offset you can claim for foreign income tax you have paid.

 (2) Your tax offset for an income year (the current year) is increased in accordance with this section if:
 (a) the amount of your tax offset worked out under section 770‑70 of the 1997 Act falls short of your offset limit under section 770‑75 of that Act; and
 (b) you have pre‑commencement excess foreign income tax (see section 770‑220) from an earlier year of income that is one of the most recent 5 income years ending before the current year.

 (3) Increase your tax offset for the current year by adding your pre‑commencement excess foreign income tax covered by paragraph (2)(b) to the amount of your tax offset worked out under section 770‑70 of the 1997 Act.

 (4) Only increase the offset to the extent of the shortfall worked out under paragraph (2)(a).

 (5) You no longer have the pre‑commencement excess foreign income tax to the extent that it has been used to increase your offset limit.

Subdivision 770‑E—Transitional foreign income tax offsets (special rules for consolidated groups)

Table of sections

770‑285 Objects of this Subdivision
770‑290 Transferring subsidiary member's pre‑commencement excess foreign income tax to head company
770‑295 Where entity not subsidiary member for whole of income year
770‑300 Pre‑commencement excess foreign income tax lost on joining consolidated group
770‑305 Exit history rule does not treat leaving entity as having pre‑commencement excess foreign income tax
770‑310 Application of Subdivision to MEC groups

770‑285  Objects of this Subdivision

  The main objects of this Subdivision are:
 (a) to allow the head company of a consolidated group to apply, in relation to an income year, pre‑commencement excess foreign income tax of an entity (the joining entity) that becomes a subsidiary member