It did not take long to discover that the Controlled Foreign Company and Transferor Trust provisions were being subverted and so another swag of anti avoidance provisions were inserted into the tax law.

SECT <<529 Foreign investment fund income to be included in

assessable income

(1) The circumstances in which this section applies to a taxpayer in relation to a

FIF or FLP in respect of a notional accounting period of the FIF or FLP are as

set out in section 485.

(2) If foreign investment fund income accrued to a taxpayer to whom this

section applies from a FIF or a FLP in respect of a notional accounting period

of the FIF or FLP, the taxpayer's assessable income of the year of income in

which the notional accounting period ended includes:

(a) if the taxpayer was a resident throughout the whole of the notional

accounting period--the foreign investment fund income; or

(b) if the taxpayer was a resident throughout a part or parts of the

notional accounting period--so much of the foreign investment fund

income as is worked out using the formula:

In the formula in paragraph (b):

foreign investment fund income means the amount of the foreign investment

fund income that accrued to the taxpayer from the FIF or FLP in respect of the

notional accounting period.

number of days of residence means the number of days in the notional

accounting period throughout which the taxpayer was a resident.

total number of days means the number of days in the notional accounting

period.