• Assumption about income and gains

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    The assumptions made for amounts derived by a partnership mirror the assumptions made for working out the income and gains of a CFC. The amounts taken into account in working out the net income of the partnership depends on whether the CFC passes the active income test. The amounts also depend on whether the CFC is a resident of a listed country or an unlisted country.

    If a CFC resident in an unlisted country:

    • passes the active income test - the only amounts taken into account in determining the net income of the partnership are trust amounts arising for the partnership and amounts of FIF income.
    • fails the active income test - only the following amounts are taken into account in determining the net income of the partnership:
      • adjusted tainted income
      • trust amounts arising for the partnership, and
      • FIF income.
       

    If a CFC resident in a listed country:

    • passes the active income test - only the following amounts are taken into account in determining the net income of the partnership:
      • low-taxed third country income of a kind specified in the Regulations
      • FIF income, and
      • trust amounts arising for the partnership that are not subject to comparable tax in a listed country
       
    • fails the active income test - only the following amounts are taken into account in determining the net income of the partnership:
      • eligible designated concession income that is adjusted tainted income
      • low-taxed third country income of a kind specified in the Regulations
      • FIF income, and
      • trust amounts arising for the partnership that are not subject to comparable tax in a listed country.
       
    Last modified: 05 Dec 2006QC 18000