Income Tax Act 1940 (NSW)

INCOME TAX ACT.

Act No. 35, 1940.

An Act to impose an Income Tax; and for

purposes connected therewith.	[Assented
to, 15th November, 1940.]

BE it enacted by the King's Most Excellent Majesty, lative Council and Legislative Assembly of New South by and with the advice and consent of the Legis-	Wales in Parliament assembled, and by the authority of
the same, as follows :—
1 . This Act may be cited as the "Income Tax Act, 1940," and shall be construed with the Income Tax (Management) Act, 1936, as amended by subsequent Acts, in this Act hereinafter referred to as the Principal Act.
2 . In respect of the taxable income wbich has been derived by any person during the year of income ended on the thirtieth day of June, one thousand nine hundred and forty, or such other period as may be accepted by the Commissioner in lieu thereof, there shall be charged, levied,

levied, collected and paid under the provis ions of the P r inc ipa l Act and in the manner there in prescribed, income tax a t the respective ra tes in this Act provided.

3. (1) I n the case of any person (other than a com­ p a n y or a p r i m a r y producer to whom the provis ions of Division 18 of P a r t I I I of the Pr inc ipa l Act app ly ) , then subject to section four of this Act—

(a)	the rate of income tax in respect of income derived from p rope r ty shall bo as set out in the
F i r s t Schedule to this Ac t ;
(b)	the rate of income tax in respect of income derived from personal exert ion shall be as set out in the Second Schedule to this Ac t ;
(c)	the rate of income tax in respect of a total taxable income, p a r t being income derived from personal exert ion and the remainder being income derived from proper ty , shall be as set out in the Th i rd Schedule to this A c t :

P rov ided tha t where it is necessary for the purposes of section ninety-seven, section ninety-eight or section one hundred and ten of the Pr inc ipa l Act to ascer tain the r a t e of tax applicable to a taxable income equal to an amount o ther than the actual taxable income tha t r a t e shall be ascer ta ined by dividing the r a t e applicable under this Act in respect of a taxable income from p r o p e r t y of that amount (if the amount is wholly income derived from p rope r ty ) or in respect of the app rop r i a t e remainder of a taxable income of tha t amount (if the amount is only	in p a r t income derived from p rope r ty ) by the actual
taxable income and then mul t ip lying the resul t by the
actual taxable income (where the same is wholly income derived from p rope r ty ) or by an amount obtained by reducing the actual taxable income (where the same is only in p a r t income der ived from p rope r ty ) by one-fifth of the p a r t of the actual taxable income which is income from persona l exert ion or by nine hundred pounds, whichever is the less.
(2) Subject to section four of this Act the r a t e of income tax payable by a p r i m a r y producer to whom the

provis ions

provis ions of Division 18 of P a r t I I I of the Pr inc ipa l Act app ly shall be as set out in the F o u r t h Schedule to this Act.

(3) Subject to section four of this Act the r a t e of income t a x payable by a t rus tee shall be as set out in the F i f th Schedule to th is Act .

(4) Subject to subsection three of this section, the r a t e of income t ax payable by a company shall be as set out in the Six th Schedule to th is Act.

4. I n respect of the taxable income which has been derived by any person (other t han a company) , the r a t e of income t ax fixed by the F i r s t Schedule to this Act shall be reduced by eight per centum and the provisions of the Second, Thi rd , F o u r t h and F i f th Schedules to this Act shall be applied hav ing r e g a r d to such reduction.

5 . (1) W h e r e a t r u s t es ta te falls to be dis t r ibuted or

a person is about to leave this S ta te or the Commissioner, p u r s u a n t to Division 15 of P a r t I I I of the P r inc ipa l Act, requi res a r e t u r n to be made by or on behalf of a person (other t han a company) , and the es ta te or person h a s der ived taxable income after the close of the year of income ended on the th i r t i e th day of June , one thousand nine hundred and forty, and an assessment of income t ax becomes necessary before the commencement of an Act fixing the r a t e s of income t ax in respect of taxable income der ived af ter such yea r of income, the r a t e s of t ax to be pa id in respect of such taxable income shall, subject to section four of this Act, be those set out in the F i r s t , Second, Th i rd , F o u r t h or F i f th Schedule to this

Act, as the case requi res .

(2) W h e r e a company is being wound u p or the Commissioner , p u r s u a n t to Division 15 of P a r t I I I of the P r inc ipa l Act, requi res a r e t u r n to be made by or on behalf of a company, and the company has der ived taxable income af ter the close of the year of income ended on the th i r t i e th day of J u n e , one thousand nine hundred and forty, and an assessment of income t ax becomes necessary before the commencement of a n Act fixing the ra tes of income tax in respect of taxable income

derived

der ived af ter such yea r of income, the r a t e of t ax to be pa id in respect of such taxable income shall be tha t set out in the Sixth Schedule to this Act.

6. I n addi t ion to the income t ax payable under the preceding provis ions of this Act the re shall be payable , as and by way of income tax, a super t ax of one shilling in the pound upon so much of the taxable income derived by any person (other t han a company) as exceeds two

thousand pounds .

W h e r e , p r io r to the commencement of the Income T a x Act, 1939, an assessment has been made and income t ax has been charged a t the ra tes provided by the Income T a x Act, 1936, upon income derived after the yea r of income ended on the th i r t ie th day of J u n e , one thousand nine hundred and thir ty-nine, or such other per iod as has , unde r the provisions of the P r inc ipa l Act, been accepted by the Commissioner in lieu of t ha t yea r—

7.

(a) by a t r u s t estate which has been d i s t r ibu ted ;

(b)	by a non-resident whilst temporarily in this S ta t e who has pa id income tax upon tha t income
before leaving A u s t r a l i a ;
(c)	by a person by whom or on whose behalf the Commissioner, p u r s u a n t to Division 15 of P a r t I I I of the Pr inc ipa l Act, has requi red a r e tu rn
to be m a d e ; or

(d) by a company which has been wound up,

the ra tes so charged shall apply in lieu of those provided

in this Act.

S C H E D U L E S .

F I R S T SCHEDULE.

Rate of Tax upon Income Derived from Property.

1. If the taxable income does not exceed five thousand five hundred pounds, the rate of tax per pound of the taxable income shall be nine- pence plus as many times three five-hundredths of one penny as there are pounds in the taxable income.

2. If the taxable income exceeds five thousand five hundred pounds
the rate of tax per pound of the taxable income shall be ascertained

by calculating the total amount of tax which would be payable upon

the

the taxable income at a rate of forty-two pence on every pound of the first five thousand five hundred pounds and at a rate of sixty pence on every pound of the taxable income in excess of five thousand five hundred pounds and dividing that total by the amount of the taxable income.

SECOND SCHEDULE.

Rale of Tax upon Income Derived from Personal Exertion.

The taxable income shall be reduced by an amount equal to one- fifth of the taxable income or by nine hundred pounds whichever is the less and the rate of tax on each pound of the remainder of the taxable income shall be the rate which would be payable under the First Schedule to this Act in respect of a taxable income derived from property equal to that remainder.

THIRD SCHEDULE.

Bate of Tax Payable in Respect of a Total Taxable Income, part being

Income Derived from Personal Exertion and the remainder being

Income Derived from Property.

The taxable income shall be reduced by an amount equal to one- fifth of the part of the taxable income which is income derived from personal exertion or by nine hundred pounds whichever is the less and the rate of tax on each pound of the remainder of the taxable income shall be the rate which would be payable under the First Schedule to this Act in respect of a taxable income derived from Property equal to that remainder.

FOURTH SCHEDULE.

Rate of Tax upon Income Derived by a Primary Producer to whom

the provisions	of Divis ion 18 of Part III of the Principal	Act
apply.

The taxable income shall be reduced by an amount equal to one- fifth of the part of the taxable income which is income derived from personal exertion or one-fifth of the whole of the taxable income if it is all so derived or by nine hundred pounds whichever is the less and the rate of tax on each pound of the remainder of the taxable income shall be the rate which would under the First Schedule to this Act be payable in respect of a taxable income from property equal to the amount which would be the average income of the taxpayer if for each average year the part of the taxable income derived in that year which is income from personal exertion (or the

whole

whole of the taxable income if it is all income from personal exertion), or the excess of allowable deductions over assessable income brought into account in arriving at the average income were reduced by one- fifth or by nine hundred pounds whichever is the less.

F I F T H SCHEDULE.

Rate of Tax Payable by a Trustee.

For every pound of the taxable income in respect of which a trustee is liable to be separately assessed and to pay tax, the rate of tax shall be the rate which would be payable—

(a)	where the trustee qua trustee is not a primary producer to whom the provisions of Division 18 of Part I I I of the Principal Act apply—under the First, Second or Third Schedule to this Act, as the case requires; and
(b)	where the trustee qua trustee is a primary producer to whom the provisions of Division 18 of Part I I I of the Principal Act apply—under the Fourth Schedule to this Act,

if one individual were liable to be separately assessed and to pay tax

on that taxable income.

S I X T H SCHEDULE.

Rates of Tax Payable by a Company.

1. The rate of tax per pound of the taxable income of a company
shall, except as is hereinafter specifically provided, be thirty pence.

2. The rate of tax per pound of the taxable income of every mutual

life assurance company shall be eighteen pence.
3. The rate of tax per pound of the taxable income of a company (other than a mutual life assurance company) carrying on the busi­ ness of life assurance in this State shall be as follows:—

(a)	On so much of that part of the taxable income of the com­ pany which has been derived from its life assurance business as bears the same proportion to such part of the taxable
year of income amongst the life assurance policy holders of income as the amount of the profits divided for the same the company bears to the total profits of the company's life

assurance business for the same year of income, the rate of tax per pound of the taxable income shall be eighteen pence.

(b) On the remainder of the taxable income of the company the rate of tax per pound shall be thirty pence.

4. For every pound of the taxable income of a company as is assessed under the provisions of subsection one of section one hundred and sixty-eight of the Principal Act the rate of tax shall be eighteen pence.

S Y D N E Y