For more information on the calculation of the amounts shown at labels M, U and X, refer to the Foreign income return form guide (NAT 1840).
Where the trust is a member of a consolidated group for the whole income year and derived foreign income, the responsibility for preparing the schedule will rest on the head company of the consolidated group.
Where a return is required because the trust had a period in the income year when it was not a member of a consolidated group (a non-membership period) the trust should complete an International dealings schedule where it has derived foreign income attributable to the non-membership period.
If the trust was a subsidiary member of a consolidated group at any time during the income year and has completed Z2 item 2, an International dealings schedule is not required.
International dealings schedule
Where the appropriate information is reported in the Trust tax return you must complete an International dealings schedule 2018. The International dealings schedule may be lodged via PLS. Refer to the International dealings schedule (ids).
Label S - Did you have either a direct or indirect interest in a foreign trust?
With the repeal of the foreign investment fund rules, the term 'foreign trust' in this context refers to a controlled foreign trust.
Direct or indirect interests in a controlled foreign company or a foreign trust are taken to have the same meaning as set out in Division 3 of Part X of the ITAA 1936. For the purposes of the controlled foreign company rules, do not trace interests through another Australian entity. For instance, if your trust has an interest in an Australian trust which owns a controlled foreign company, your trust is not regarded as having a direct or indirect interest in the controlled foreign company although your trust must still include any attributable income to which it was presently entitled at item 22 Attributable foreign income.
A trust has an interest in a transferor trust if the trust has ever made, or caused to be made, a transfer of property or services to a non-resident trust. Transfer of property and services is defined in section 102AAB of the ITAA 1936.
Sections 102AAJ and 102AAK of the ITAA 1936 provide guidance in relation to whether there was a transfer, or a deemed transfer, of property or services to a non-resident trust.
If the answer to this question is yes, select Y from the list at label S and complete an International dealings schedule 2018.
If the answer to this question is no, select N at label S and do not complete an International dealings schedule.
Refer to the International dealings schedule available on the ATO website.
Label M - Listed country
Show at label M the amount of gross attributed foreign income from controlled foreign entities and transferor trusts of listed countries. Listed countries are set out in Part 1 of Schedule 10 to the Income Tax Regulations 1936.
Attributed foreign income is the income attributed to the taxpayer from controlled foreign entities, calculated in accordance with Division 7 of Part X of the ITAA 1936, and includes an amount grossed-up under section 392 of the ITAA 1936, as appropriate, to the extent of any foreign taxes paid.
Also show at label M the amount of income attributed from a transferor trust that is a listed country trust estate, calculated in accordance with Subdivision D of Division 6AAA of the ITAA 1936.
A listed country trust estate is defined in section 102AAE of the ITAA 1936.
Label X - Unlisted country
Show at label X the amount of attributed foreign income from controlled foreign entities in unlisted countries. Unlisted countries are countries that are not listed in Schedule 10 to the Income Tax Regulations.
You should also show at label X the amount of income attributed from a transferor trust if the amount has not been shown at labels M or U.
CCH References
6-130 Distributions of trust income
21-110 Scope of CFC rules
21-130 Listed countries
21-140 Attributable taxpayer
21-190 Attribution of CFC Income to Attributable Taxpayers
21-200 Attributable Income of a CFC
21-290 Accruals Taxation of Non-Resident Trust Income
21-310 Attributable Taxpayers - Non-resident family trusts
21-360 Foreign investment funds
