Change of residence to Australia, example

AustCo owns 75% of a controlled foreign company that is resident in an unlisted country (CFC1). The controlled foreign company becomes a resident of Australia on 30 September. CFC1 has a statutory accounting period of 1 July to 30 June. For the period 1 July to 30 September, CFC1 earned the following income:


Portfolio dividends



Non-portfolio dividends



Tainted interest income



Tainted services income




CFC1's adjusted tainted income is $45,000. It incurs expenses of $5,000 in earning the adjusted tainted income.

CFC1's adjusted distributable profits are $40,000.

Therefore the amount attributable to AustCo under section 457 is 75% x $40,000 = $30,000.

    Last modified: 21 Feb 2012QC 25356