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  • What if a CFC passes the active income test?
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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If a CFC passes the active income test, amounts that would be assessable if the CFC were a resident are included in attributable income to the extent they represent the following:

    • low-taxed third country income (only where it is of a kind specified in the Regulations)
    • trust amounts arising to the CFC directly that are not subject to tax in a listed country
    • trust amounts arising to the CFC indirectly because the CFC is a partner in a partnership, provided that the amounts are not subject to tax in a listed country, or
    • FIF income derived by the CFC directly or indirectly as a partner in a partnership.

    Any other income is notional exempt income.

    Diagram 2: Amounts taken into account – listed country CFC

    Other income is not included; tainted EDCI derived directly or indirectly via a partnership is only included if CFC fails the active income and de minimis tests; low-taxed third-country income (of a kind specified in the Income Tax Regulations 1936) is always included unless the de minimis test is satisfied; trust (including transferor trust) income derived directly or indirectly via a partnership is always included.

    Last modified: 05 Dec 2006QC 18000