The allowance of credits on distribution - that is, by way of a dividend - follows the credits allowed under the existing foreign tax credit system.
In addition, you are allowed a credit where the dividend is exempt because the profits out of which the dividend has been paid have been subject to attribution in a previous year. The credit is allowed on a similar basis to the credit allowed where a dividend is assessable but is limited to the amount not already allowed as a credit at the time of attribution of the FIF income. [section 160AFCJ]
Further, the provisions of the ITAA 1936 which allow for excess foreign tax credits to be carried forward for up to five years apply where excess foreign tax credits arise in relation to an interest in a FIF and, where appropriate, an indirect interest in a second tier FIF. As under the existing foreign tax credit system, there is no carry back of credits. [section 160AFE]