Residency for tax purpose – Part 9
Foreign income – general
If you were an Australian resident and you received income from overseas, you must declare your assessable foreign income even if tax was taken out in the country from which the income came. Foreign income that is exempt from Australian tax may still be taken into account to work out the amount of tax you have to pay on your other income.
What Payments are taxable
If you were an Australian resident, you must show the following amounts on your tax return:
- an assessable dividend (or non-share dividend) from a New Zealand company and any attached Australian franking credits
- a supplementary dividend from a New Zealand company and any attached Australian franking credits
- an assessable distribution from a trust or partnership (or share of a partnership loss) that includes Australian franking credits attached to a dividend (or non-share dividend) from a New Zealand company
Dividends from New Zealand Companies
If you have received dividends (including non-share dividends) from a New Zealand company, include those amounts in the calculation of your assessable foreign income.
Also include any amounts of supplementary dividends and any income that you received or became entitled to during the income year from a partnership or a trust that is attributable to dividend income (or non-share dividends) from a New Zealand company.
Do not include any amount referable to Australian franking credits from a New Zealand company that you received directly or indirectly through a trust or partnership. Reduce the income you received or became entitled to by that amount. If you had foreign tax (including New Zealand non-resident withholding tax) taken away from this income, add it back to the amount you received.
A dividend from a New Zealand company may also carry New Zealand imputation credits. An Australian resident cannot claim any New Zealand imputation credits on an Australian tax return.
Working out your Australian franking credits from a New Zealand company
Add up all amounts of Australian franking credits from a New Zealand company that you are entitled to – whether directly by way of franked dividends (or franked non-share dividends) paid to you by the company, or indirectly through a trust or partnership.
Do not include here Australian franking credits that you are not entitled to (for example, because the dividend, non-share dividend, or income from the trust or partnership is exempt, or because you fail the holding period rule or trigger the related payments rule).
You will have worked out supplementary dividends that are paid in connection with dividends paid by a New Zealand company with Australian franking credits attached (franked dividends). If you are entitled to a foreign income tax offset because of the franked dividends, or because of their inclusion in your assessable income, the amount of Australian franking credits you would otherwise be entitled to is reduced. The amount of the reduction is the amount of the supplementary dividends (or your share of the supplementary dividends if you receive them through a trust or partnership).
