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  • Interests in foreign entities

    If you have interests in a foreign company, trust or life insurance policy, include income you receive from them in your tax return.

    This income can be attributed to you even if it hasn't yet been distributed and is known as Attributed foreign income.

    Example: Investing overseas

    Jenny is an Australian executive in a large corporation that is based in Hong Kong but also operates in Australia. She buys shares in the parent company because she's confident about the company's prospects.

    Jenny regularly travels to Hong Kong for work and, after making the investment, she opens a bank account there. She intends to use any future dividends as additional spending money during her trips to the country.

    In her next tax return, Jenny fails to include a HKD $5760 (AUD $1000) dividend she received. It is her first overseas investment and she is not familiar with the reporting obligations.

    Later that year, Jenny discovers that she must declare all dividends and interest from overseas. She calls the ATO and asks for her tax return to be amended to include the income amount she left out. After she explains that she didn't intentionally omit the overseas income, we decide to waive the penalty amount. But she still must pay interest charges.

    End of example
      Last modified: 09 Jun 2022QC 17031