• #### Reduction of the attribution percentage where the total percentage is more than 100%

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In some cases, the total of the attribution percentage of all attributable taxpayers may be more than 100%. In these cases, the aggregate is reduced to 100% by reducing proportionately the interest of each attributable taxpayer.

Example 8

Reduction where attribution percentage is more than 100%

A foreign company has two classes of shares on issue. Class A carries the right to vote but no income rights. Class B carries the right to income and is non-voting. An Australian resident - Res1 - owns 25% of the Class A shares and 75% of the Class B shares. Another resident owns the remaining shares in each class. The foreign company is a CFC and both residents are attributable taxpayers.

 Res1's attribution percentage(greater of 25% and 75% ) 75% Res2's attribution percentage(greater of 75% and 25% ) 75% Total interest of residents 150%

Each attributable taxpayer's attribution percentage is reduced in proportion, so that the aggregate interests of all attributable taxpayers is 100%.

 Res1's reduced attribution percentage = attribution percentage            total interest of attributable taxpayers = 75 /[divided by]150 = 50% Res2's reduced attribution percentage = attribution percentage            total interest of attributable taxpayers = 75 /[divided by] 150 = 50%