RE: What is the correct Foreign Income Tax Offset ?

(Taxicorn)Taxicorn

7 May 2026

Best to see a tax agent or ask ATO's technical assistance

should my Foreign Income Tax Offset be equal to the Australian Tax payable on Net Foreign Income or the Foreign Tax Available ?

I think the missing piece of information was you didn't calculate your Foreign Income Tax Offset LIMIT. It might be equal to the tax payable, can't say for sure since you only said "Tax Payable on Taxable Income excluding Net Foreign Income is 0"
- https://www.ato.gov.au/forms-and-instructions/foreign-income-tax-offset-rules-guide-2025/calculate-your-fito-or-offset-limit#Howtocalculateyouroffsetlimit
You do seem to understand correctly, that the foreign tax paid would need to be portioned to match the portion of the assessable capital gain
Claim the foreign tax available, maximum can claim is your Foreign income tax offset limit i.e. if FITO limit > foreign tax available, claim foreign tax available. if FITO limit < foreign tax available then claim up to FITO limit.

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