No full FITO on US capital gains as CGT discount "excludes" part of gain : taxpayer in Burton has a case. Part 3

This is the final part of a 3-part series of articles discussing the decision of the Federal Court (McKerracher J) in Burton v FCT[2018] FCA 1857 (reported at 2018 WTB 50 [1621]). Parts 1 and 2 of this article (at 2019 WTB 10 [297] and 2019 WTB 11 [335]) argued that it is extremely difficult to see how s 102-5(1) can be seen as just a normal assessable income provision, and because of that, consideration should be given to characterising capital gains (made at Step 0) that enter the s 102-5(1) method statement as assessable income. Part 3 mainly focuses on s 770- 10( 1 ). the provision within FITO (foreign income tax offset) creating an entitlement to a tax offset. This article also focuses on the FITO limitation rule and the "message it sends" regarding the assertion that a capital gain can be identified as an assessable income inclusion. For comprehensiveness, it also considers whether Article 22(2) (credit article) in the US-Australia double tax agreement (OTA) is inconsistent with FITO, and whether it "steps up" the tax offset to (or confirms it at) 100% of US tax paid.