Income Tax (Rates) Amendment Act 1980 (Cth)

Income Tax (Rates) Amendment Act 1980

No. 22 of 1980

An Act to amend the law declaring certain rates of income tax

[Assented to 1 May 1980]

BE IT ENACTED by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia, as follows:

Short title, &c.

1. (1) This Act may be cited as the Income Tax (Rates) Amendment Act 1980.

(2) The Income Tax (Rates) Act 1976 is in this Act referred to as the Principal Act.

Commencement

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Interpretation

3. Section 3 of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-sections:

“(2) In this Act—

(a) a reference to net income or taxable income shall be read as a reference to net income or taxable income, as the case may be, of the year of income; and

(b) a reference to eligible taxable income for the purposes of Division 6aa of Part III of the Assessment Act shall be read as a reference to eligible taxable income of the year of income for the purposes of that Division.

“(3) A reference in this Act to the part to which Division 6aa of Part III of the Assessment Act applies of the share of a beneficiary of the net income of a trust estate shall, if that Division applies to the whole of such a share, be read as a reference to the whole of that share.”.

Rates of tax and notional rates

4. Section 6h of the Principal Act is amended—

(a) by omitting from sub-section (3) “The rate” and substituting “Subject to section 6ha, the rate”; and

(b) by omitting from sub-section (4) “The rates” and substituting “Subject to section 6ha, the rates”.

5. After section 6h of the Principal Act the following section is inserted:

Rates of tax where Division 6aa of Part III of the Assessment Act applies

“6ha. (1) The rates of tax in respect of the taxable income of a person—

(a) who is a prescribed person in relation to the year of income for the purposes of Division 6aa of Part III of the Assessment Act; and

(b) who has, for the purposes of that Division, an eligible taxable income of an amount exceeding $1,040,

are as set out in Schedule 16a.

“(2) Where the eligible taxable income of a taxpayer for the purposes of Division 6aa of Part III of the Assessment Act exceeds $1,040 but does not exceed $3,625, the amount of tax payable under sub-section (1) in respect of that eligible taxable income shall not exceed—

(a) 66% of the amount by which that eligible taxable income exceeds $1,040; or

(b) the amount ascertained by deducting from the amount of the tax that would be payable by the taxpayer if the rates set out in Schedule 13 or 15, as the case requires, were applied to the taxable income of the taxpayer the amount of tax that would be payable by the taxpayer if those rates were applied to the taxable income of the taxpayer reduced by the amount of that eligible taxable income,

whichever is the greater.

“(3) Where—

(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part of that share; and

(c) the part of that share to which that Division applies exceeds $1,040,

the rates of tax payable by the trustee in respect of that share of the net income of the trust estate are as set out in Schedule 16b.

“(4) Where—

(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part of that share;

(c) the part of that share to which that Division applies does not exceed $1,040;

(d) Division 6aa of Part III of the Assessment Act also applies to a part of the share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates; and

(e) the sum of the part referred to in paragraph (b) and the part or parts referred to in paragraph (d) exceeds $1,040,

the trustee of the trust estate referred to in paragraph (a) is liable to pay tax in respect of the share of the net income of the trust estate referred to in that paragraph at the rates set out in Schedule 16b.

“(5) Where—

(a) the amount of tax that a trustee of a trust estate is liable to pay in respect of the share of a beneficiary of the net income of the trust estate is, by virtue of sub-section (4), to be calculated in accordance with Schedule 16b; and

(b) the sum of—

(i) the part of that share to which Division 6aa of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies,

does not exceed $3,625,

the tax that, apart from this sub-section, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

“(6) Subject to sub-section (7), where—

(a) the trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part (in this sub-section referred to as the ‘eligible part’) of that share; and

(c) the eligible part of that share exceeds $1,040 but does not exceed $3,625,

 

the amount of tax payable under sub-section (3) in respect of the eligible part of that share shall not exceed—

(d) 66% of the amount by which the eligible part of that share exceeds $1,040; or

(e) the amount ascertained by deducting from the amount of tax that would be payable by the trustee if the rates referred to in Schedule 16 were applied to that share of that net income the amount of tax that would be payable by the trustee if those rates were applied to that share of that net income reduced by the amount of the eligible part of that share,

whichever is the greater.

“(7) Sub-section (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate if Division 6aa of Part III of the Assessment Act applies to a part of a share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates.

“(8) Where—

(a) by reason of the application of sub-section (7), sub-section (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act; and

(b) the sum of—

(i) the part of that share to which Division 6aa of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies,

does not exceed $3,625,

the tax that, apart from this sub-section, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

“(9) In forming an opinion for the purposes of sub-section (5) or (8) (in this sub-section referred to as the ‘relevant sub-section’) in relation to the share of a beneficiary of the net income of a trust estate of a year of income, the Commissioner shall have regard to—

(a) any limitation that would be applicable under sub-section (6) on the amount of tax that would be payable by a trustee in accordance with Schedule 16b in respect of a share of the net income of a trust estate of the year of income of an amount equal to the sum of the shares referred to in paragraph (b) of the relevant sub-section if—

(i) Division 6aa of Part III of the Assessment Act applied to so much of that share as is equal to the sum of the parts of the shares referred to in paragraph (b) of the relevant sub-section; and

(ii) that share were a share of a beneficiary who is not presently entitled to a share of the income of the year of income of any other trust estate;

(b) the amount of any reduction previously granted by the Commissioner, in pursuance of sub-section (5) or (8), in relation to the share of the beneficiary of the net income of the year of income of any other trust estate; and

(c) such other matters (if any) as he thinks fit.”.

Limitation on tax payable by certain trustees

6. Section 6j of the Principal Act is amended by omitting sub-sections (1) and (2).

Rates of tax and notional rates

7. Section 6l of the Principal Act is amended—

(a) by omitting from sub-section (3) “The rate” and substituting “Subject to section 6la, the rate”; and

(b) by omitting from sub-section (4) “The rates” and substituting “Subject to section 6la, the rates”.

8. After section 6l of the Principal Act the following section is inserted:

Rates of tax where Division 6aa of Part III of the Assessment Act applies

“6la. (1) The rates of tax in respect of the taxable income of a person—

(a) who is a prescribed person in relation to the year of income for the purposes of Division 6aa of Part III of the Assessment Act; and

(b) who has, for the purposes of that Division, an eligible taxable income of an amount exceeding $1,040,

are as set out in Schedule 21.

“(2) Where the eligible taxable income of a taxpayer for the purposes of Division 6aa of Part III of the Assessment Act exceeds $1,040 but does not exceed $3,432, the amount of tax payable under sub-section (1) in respect of that eligible taxable income shall not exceed—

(a) 66% of the amount by which that eligible taxable income exceeds $1,040; or

(b) the amount ascertained by deducting from the amount of the tax that would be payable by the taxpayer if the rates set out in Schedule 17 or 19, as the case requires, were applied to the taxable income of the taxpayer the amount of tax that would be payable by the taxpayer if those rates were applied to the taxable income of the taxpayer reduced by the amount of that eligible taxable income,

whichever is the greater.

“(3) Where—

(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part of that share; and

(c) the part of that share to which that Division applies exceeds $1,040,

the rates of tax payable by the trustee in respect of that share of the net income of the trust estate are as set out in Schedule 22.

“(4) Where—

(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part of that share;

(c) the part of that share to which that Division applies does not exceed $1,040;

(d) Division 6aa of Part III of the Assessment Act also applies to a part of the share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates; and

(e) the sum of the part referred to in paragraph (b) and the part or parts referred to in paragraph (d) exceeds $1,040,

the trustee of the trust estate referred to in paragraph (a) is liable to pay tax in respect of the share of the net income of the trust estate referred to in that paragraph at the rates set out in Schedule 22.

“(5) Where—

(a) the amount of tax that a trustee of a trust estate is liable to pay in respect of the share of a beneficiary of the net income of the trust estate is, by virtue of sub-section (4), to be calculated in accordance with Schedule 22; and

(b) the sum of—

(i) the part of that share to which Division 6aa of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies,

does not exceed $3,432,

the tax that, apart from this sub-section, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

“(6) Subject to sub-section (7), where—

(a) the trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a beneficiary of the net income of the trust estate;

(b) Division 6aa of Part III of the Assessment Act applies to a part (in this sub-section referred to as the ‘eligible part’) of that share; and

(c) the eligible part of that share exceeds $1,040 but does not exceed $3,432,

the amount of tax payable under sub-section (3) in respect of the eligible part of that share shall not exceed—

(d) 66% of the amount by which the eligible part of that share exceeds $1,040; or

(e) the amount ascertained by deducting from the amount of tax that would be payable by the trustee if the rates referred to in Schedule 20 were applied to that share of that net income the amount of tax that would be payable by the trustee if those rates were applied to that share of that net income reduced by the amount of the eligible part of that share,

whichever is the greater.

“(7) Sub-section (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate if Division 6aa of Part III of the Assessment Act applies to a part of a share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates.

“(8) Where—

(a) by reason of the application of sub-section (7), sub-section (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act; and

(b) the sum of—

(i) the part of that share to which Division 6aa of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies,

does not exceed $3,432,

the tax that, apart from this sub-section, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

 

“(9) In forming an opinion for the purposes of sub-section (5) or (8) (in this sub-section referred to as the ‘relevant sub-section’) in relation to the share of a beneficiary of the net income of a trust estate of a year of income, the Commissioner shall have regard to—

(a) any limitation that would be applicable under sub-section (6) on the amount of tax that would be payable by a trustee in accordance with Schedule 22 in respect of a share of the net income of a trust estate of the year of income of an amount equal to the sum of the shares referred to in paragraph (b) of the relevant sub-section if—

(i) Division 6aa of Part III of the Assessment Act applied to so much of that share as is equal to the sum of the parts of the shares referred to in paragraph (b) of the relevant sub-section; and

(ii) that share were a share of a beneficiary who is not presently entitled to a share of the income of the year of income of any other trust estate;

(b) the amount of any reduction previously granted by the Commissioner in pursuance of sub-section (5) or (8), in relation to the share of the beneficiary of the net income of the year of income of any other trust estate; and

(c) such other matters (if any) as he thinks fit.”.

Limitation on tax payable by certain trustees

9. Section 6m of the Principal Act is amended by omitting sub-sections (1) and (2).

Operation of sections 6c and 6f

10. Section 7a of the Principal Act is amended by omitting from sub-section (1)”, sub-section 6f(1) or (2), sub-section 6j(1) or (2) or sub-section 6m(1) or (2)” and substituting “or sub-section 6f(1) or (2)”.

Indexation

11. Section 9 of the Principal Act is amended by omitting from sub-section (1) the definition of “relevant amount” and substituting the following definition:

“‘relevant amount’ means any of the amounts specified in Column 1 of the table in Schedule 17, the amount of $3,893 specified in paragraph 3(a) and in paragraph 3(b) of Part II of Schedule 18, any of the amounts specified in sub-paragraph 2(b)(ii) of Part III of Schedule 18, any of the amounts specified in paragraph 2(b) of Schedule 20, the amounts of $33,216 specified in paragraph (b) of Schedule 21 and the amounts of $33,216 specified in paragraph (b) of Schedule 22;”.

Schedule 14

12. Schedule 14 to the Principal Act is amended—

(a) by omitting sub-paragraph (i) of paragraph (a) of clause 2 of Part III and substituting the following sub-paragraph:

“(i) a share of the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act; or”; and

(b) by omitting from sub-paragraph (i) of paragraph (b) of clause 2 of Part III “98 or”.

Schedule 16

13. Schedule 16 to the Principal Act is amended—

(a) by omitting paragraph (a) of clause 1 and substituting the following paragraph:

“(a) in pursuance of section 98 of the Assessment Act in respect of a share of the net income of a trust estate; or”; and

(b) by omitting from Clause 2 “98 or”.

 

Insertion of Schedules 16a and 16b

14. The Principal Act is amended by inserting after Schedule 16 the following Schedules:

“SCHEDULE 16a Sub-section 6ha(1)

RATES OF TAX PAYABLE BY A TAXPAYER WHOSE ELIGIBLE TAXABLE INCOME EXCEEDS $1,040—FINANCIAL YEAR 1979-80

The rates of tax payable by a taxpayer whose eligible taxable income for the purposes of Division 6aa of Part III of the Assessment Act exceeds $1,040 are—

(a) in respect of that part (in this Schedule referred to as the ‘relevant part’) of the taxable income of the taxpayer other than the eligible taxable income of the taxpayer—the rates that would be payable under Schedule 13 or 15, as the case requires, if the relevant part of that taxable income were the taxable income of the taxpayer; and

(b) in respect of the eligible taxable income of the taxpayer—

(i) in a case where the taxable income of the taxpayer does not exceed $33,216—47.07%;

(ii) in a case where the taxable income of the taxpayer exceeds $33,216 but the relevant part of the taxable income of the taxpayer is less than $33,216—

(a) in respect of so much of the eligible taxable income of the taxpayer as is equal to the amount ascertained by deducting from $33,216 the amount of the relevant part of the taxable income of the taxpayer—47.07%; and

(b) in respect of the remainder of the eligible taxable income of the taxpayer—61.07%; and

(iii) in any other case—61.07%.

————

“SCHEDULE 16b Sub-sections 6ha(3) and (4)

RATES OF TAX PAYABLE BY A TRUSTEE IN PURSUANCE OF SECTION 98 OF THE ASSESSMENT ACT WHERE DIVISION 6aa OF PART III OF THAT ACT APPLIES—FINANCIAL YEAR 1979-80

The rates of tax payable by a trustee of a trust estate in pursuance of section 98 of the Assessment Act in respect of a share of the net income of the trust estate where Division 6aa of Part III of that Act applies to a part (in this Schedule referred to as the ‘eligible part’) of that share are—

(a) in respect of the part (in this Schedule referred to as the ‘relevant part’) of that share other than the eligible part of that share—the rates that would be payable under Schedule 13 or 15, as the case requires, in respect of a taxable income equal to the relevant part of that share if one individual were liable to be assessed and to pay tax on that income; and

(b) in respect of the eligible part of that share—

(i) in a case where that share does not exceed $33,216—47.07%;

(ii) in a case where that share exceeds $33,216 but the relevant part of that share is less than $33,216—

(a) in respect of so much of the eligible part of that share as is equal to the amount ascertained by deducting from $33,216 the amount of the relevant part of that share—47.07%; and

(b) in respect of the remainder of the eligible part of that share—61.07%; and

(iii) in any other case—61.07%.”.

Schedule 18

15. Schedule 18 to the Principal Act is amended—

(a) by omitting sub-paragraph (i) of paragraph (a) of clause 2 of Part III and substituting the following sub-paragraph:

“(i) a share of the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax in pursuance of section 98 of the Assessment Act; or”; and

(b) by omitting from sub-paragraph (i) of paragraph (b) of clause 2 of Part III “98 or”.

Schedule 20

16. Schedule 20 to the Principal Act is amended—

(a) by omitting paragraph (a) of clause 1 and substituting the following paragraph:

“(a) in pursuance of section 98 of the Assessment Act in respect of a share of the net income of a trust estate; or”; and

(b) by omitting from clause 2 “98 or”.

Addition of Schedules 21 and 22

17. The Principal Act is amended by adding at the end thereof the following Schedules:

“SCHEDULE 21 Sub-section 6la(1)

RATES OF TAX PAYABLE BY A TAXPAYER WHOSE ELIGIBLE TAXABLE INCOME EXCEEDS $1,040—FINANCIAL YEAR 1980-81 AND SUBSEQUENT FINANCIAL YEARS

The rates of tax payable by a taxpayer whose eligible taxable income for the purposes of Division 6aa of Part III of the Assessment Act exceeds $1,040 are—

(a) in respect of that part (in this Schedule referred to as the ‘relevant part’) of the taxable income of the taxpayer other than the eligible taxable income of the taxpayer—the rates that would be payable under Schedule 17 or 19, as the case requires, if the relevant part of that taxable income were the taxable income of the taxpayer; and

(b) in respect of the eligible taxable income of the taxpayer—

(i) in a case where the taxable income of the taxpayer does not exceed $33,216—46%;

(ii) in a case where the taxable income of the taxpayer exceeds $33,216 but the relevant part of the taxable income of the taxpayer is less than $33,216—

(a) in respect of so much of the eligible taxable income of the taxpayer as is equal to the amount ascertained by deducting from $33,216 the amount of the relevant part of the taxable income of the taxpayer—46%; and

(b) in respect of the remainder of the eligible taxable income of the taxpayer—60%; and

(iii) in any other case—60%.

————

“SCHEDULE 22 Sub-sections 6la(3) and (4)

RATES OF TAX PAYABLE BY A TRUSTEE IN PURSUANCE OF SECTION 98 OF THE ASSESSMENT ACT WHERE DIVISION 6aa OF PART III OF THAT ACT APPLIES—FINANCIAL YEAR 1980-81 AND SUBSEQUENT FINANCIAL YEARS

The rates of tax payable by a trustee of a trust estate in pursuance of section 98 of the Assessment Act in respect of a share of the net income of the trust estate where Division 6aa of Part III of that Act applies to a part (in this Schedule referred to as the ‘eligible part’) of that share are—

(a) in respect of the part (in this Schedule referred to as the ‘relevant part’) of that share other than the eligible part of that share—the rates that would be payable under Schedule 17 or 19, as the case requires, in respect of a taxable income equal to the relevant part of that share if one individual were liable to be assessed and to pay tax on that income; and

(b) in respect of the eligible part of that share—

(i) in a case where that share does not exceed $33,216—46%;

(ii) in a case where that share exceeds $33,216 but the relevant part of that share is less than $33,216—

SCHEDULE 22—continued

(a) in respect of so much of the eligible part of that share as is equal to the amount ascertained by deducting from $33,216 the amount of the relevant part of that share—46%; and

(b) in respect of the remainder of the eligible part of that share—60%; and

(iii) in any other case—60%.”.