Income Tax Act 2007 section 828C

The exemption

Section 828C sets out the mechanism for calculating and applying the income tax exemption available to qualifying individuals in respect of their foreign income or gains.

• The exemption works by reducing an individual's total income tax liability by a "relevant amount" calculated under the framework of section 23 of ITA 2007.
• The "relevant amount" is the proportion of the individual's total tax liability that corresponds to their foreign income or gains for the tax year.
• If any deductions relating to foreign income or gains are applied at Step 3 of the section 23 calculation, those foreign income or gains are treated as reduced by the amount of the deduction.
• Where the individual also qualifies for a tax reduction in respect of foreign income or gains under double taxation relief provisions, the relevant amount is further reduced by the amount of that tax reduction.