• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/23/2013

Australia - Repeal of foreign investment fund regime, foreign trusts 

July 23:  As an indirect result of the repeal of the foreign investment fund (FIF) regime, an Australian investor in any foreign trust now must calculate the Australian net income of the foreign trust and include in its assessable income its share of that income.


Many foreign funds are established as limited partnerships and corporate entities; however, certain funds are established as trusts.

Australia’s taxation of the income of a non-resident trust is generally the same as for a resident trust. When an Australian beneficiary of a trust (whether resident or non-resident) is not under a legal disability and is presently entitled to a share of the trust income, the beneficiary is assessed on its share of the trust net income under section 97.

With the repeal of the FIF regime, an Australian beneficiary in a non-resident trust will be assessed on its share of the net income of the non-resident trust—even if it was previously exempt from the FIF attribution, e.g. a complying superannuation fund.

Read a July 2013 report prepared by the KPMG member firm in Australia: Foreign trusts and consequences of section 96A repeal

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