The foreign tax credit system begins.
The foreign source income measures relating to controlled foreign companies (CFCs) and transferor trusts are set up.
The foreign investment fund (FIF) measures, introduced by the Income Tax Assessment Amendment (Foreign Investment) Act 1992, go into operation.
Since the foreign tax credit system was introduced in 1987-88, most foreign income derived by Australian residents has been taxed in Australia, with a credit for foreign tax paid.
The foreign source income measures introduced in 1990-91 aimed to tax substantial investments or involvement by Australians in foreign companies and foreign trusts able to shelter low-taxed income.
The foreign investment fund (FIF) measures introduced in 1993 reduced the extent to which Australian residents can defer Australian tax where they hold interests in foreign entities.
The FIF measures apply to income and gains accumulating in foreign companies that are not controlled by Australians or foreign trusts that fall outside the scope of the foreign source income measures.
The FIF measures also apply when working out the income of the controlled foreign companies (CFCs) and controlled foreign trusts (CFTs), and to certain foreign life assurance policies (FLPs) that have an investment component (such as life bonds).