Income Tax Regulations (Amendment) (Cth)

Statutory Rules 1997

No. 148 1

__________________

Income Tax Regulations 2(Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Income Tax Assessment Act 1936.

Dated 25 June 1997.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

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1.   Amendment

1.1   The Income Tax Regulations are amended as set out in these Regulations.

[NOTE: These Regulations commence on gazettal: see Acts Interpretation Act 1901, s. 48.]

2.   Application

2.1   The amendments made by these Regulations apply in relation to a year of income ending after 30 June 1996.

3.   Part 8 (Rebate in respect of certain pensions and benefits)

3.1   Omit the heading, substitute:

“PART 8—REBATE FOR LOW INCOME AGED PERSONS AND IN RESPECT OF CERTAIN PENSIONS AND BENEFITS”.

4.   Regulation 148 (Interpretation)

4.1   Definition of “tax-free threshold”:

Omit the definition, substitute:

“‘tax-free threshold’, in relation to a year of income, means an amount of income equal to the lowest amount mentioned in the table in Part 1 of Schedule 7 to the Income Tax Rates Act 1986 as that table would apply to the year of income of a person if the effect of Division 5 of that Act were disregarded in relation to the person;”.

4.2   Insert the following definitions:

“‘illness-separated-rate social security pension’ means a rebatable pension under SSA91 that is payable in the circumstances referred to in:

1. (a)

   column 2 of item 3 in table B in point 1064-B1 of SSA91; or

2. (b)

   column 2 of item 3 in table B in point 1065-B1 of SSA91;

‘partnered-rate social security pension’ means a rebatable pension under SSA91 that is payable in the circumstances referred to in:

1. (a)

   column 2 of item 2 of Table B at point 1064-B1 of SSA91; or

2. (b)

   column 2 of item 2 of Table B at point 1065-B1 of SSA91;

‘single-rate social security pension’ means a rebatable pension under SSA91 that is payable in the circumstances:

1. (a)

   referred to in column 2 of item 1 in Table B in point 1064-B1 of SSA91; or

2. (b)

   referred to in column 2 of item 1 in Table B in point 1065-B1 of SSA91; or

3. (c)

   to which the rate at point 1066-B1 of SSA91 is applicable.”.

5.   Regulation 149 (Amount of rebate of tax)

5.1   Omit the regulation, substitute:

Amount of rebate of tax

 “149. (1) For sections 160AAAA and 160AAAB of the Act, the amount of an entitlement to a rebate of tax is ascertained in accordance with Division 1A of this Part.

 “(2) For section 160AAA of the Act, the amount of an entitlement to a rebate of tax is ascertained in accordance with Divisions 2 and 3 of this Part.”.

6.   Regulation 150 (Application of this Part)

6.1   Omit the regulation.

7.   New Division 1A of Part 8

7.1   After Division 1 of Part 8, insert:

“Division 1A—Rebate under sections 160AAAA and 160AAAB of the Act

Definitions

 “150AA. In this Division:

‘equivalent circumstances income limit’ has the meaning given by regulation 150AC;

‘rebate amount’ has the meaning given by subregulation 150AB (2);

‘rebate threshold’ has the meaning given by subregulation 150AB (3);

‘relevant income-recipient’ means:

1. (a)

   the taxpayer, if the taxpayer is an individual (except in the capacity of a trustee); and

2. (b)

   the beneficiary of a trust, if the trustee in relation to the trust:

   1. (i)

      is the taxpayer; and

   2. (ii)

      is liable to be assessed under section 98 of the Act in respect of the beneficiary’s share of the net income of the trust estate.

Eligibility—amount of taxable income

 “150AB.(1) For paragraph 160AAAA (3) (a) or 160AAAB (3) (a) of the Act, the amount mentioned is:

+ taxpayer’s rebate threshold

where:

‘rebate amount’ has the meaning given by subregulation (2);

‘rebate threshold’ has the meaning given by subregulation (3).

 “(2) For this regulation, a rebate amount for a year of income is:

lowest marginal tax rate ´ [ equivalent circumstances income limit – tax-free threshold ]

where:

‘equivalent circumstances income limit’ is, in relation to the taxpayer, the equivalent circumstances income limit of the relevant income-recipient.

 “(3) For this regulation, a rebate threshold for a year of income is:

tax-freethreshold+

where:

‘rebate amount’ has the meaning given by subregulation (2).

[NOTE: ‘lowest marginal tax rate’ and ‘tax-free threshold’ are defined in regulation 148.]

 “(4) If an amount worked out under subregulation (1), (2) or (3) is not an amount of whole dollars, the amount must be rounded up to the nearest whole dollar.

Equivalent circumstances income limit

 “150AC.(1) Subject to subregulations (2) and (3), for regulation 150AB, the equivalent circumstances income limit of a relevant income-recipient for a year of income is:

1. (a)

   if the relevant income-recipient, at any time in the year of income, is not the spouse of another person—an amount equal to the sum of:

   1. (i)

      the amount that would have been included in his or her assessable income of the year of income if he or she had received a single-rate social security pension throughout that year; and

   2. (ii)

      the amount applicable under item 1 of column 2 in Table E-1 at point 1064-E4 of SSA91 indexed in accordance with Division 2 of Part 3.16 of that Act; and

2. (b)

   if the relevant income-recipient (other than a relevant income-recipient mentioned in paragraph (c)), at any time in the year of income, is the spouse of another person—an amount equal to the sum of:

   1. (i)

      the amount that would have been included in his or her assessable income of the year of income if he or she had received a partnered-rate social security pension throughout that year; and

   2. (ii)

      the amount applicable under item 4 of column 2 in Table E-1 at point 1064-E4 of SSA91, indexed in accordance with Division 2 of Part 3.16 of that Act; and

3. (c)

   if the relevant income-recipient, at any time in the year of income, is the spouse of another person from whom he or she is separated in circumstances in which, if the relevant income-recipient was otherwise entitled to receive a partnered-rate social security pension, he or she would be entitled to receive an illness-separated-rate social security pension—an amount equal to the sum of:

   1. (i)

      the amount that would have been included in his or her assessable income of the year of income if he or she had received an illness-separated-rate social security pension throughout that year; and

   2. (ii)

      the amount applicable under item 4 of column 2 in Table E-1 at point 1064-E4 of SSA91, indexed in accordance with Division 2 of Part 3.16 of that Act.

 “(2) If an amount worked out under paragraph (1) (a), (b) or (c) is not an amount of whole dollars, the amount must be rounded down to the nearest whole dollar.

 “(3) If, in a year of income, a relevant income-recipient is a person to whom more than one of paragraphs (1) (a), (b) or (c) applies, the equivalent circumstances income limit of that person for that year of income is the limit that, having regard to regulation 150AD, gives the taxpayer the greatest rebate entitlement.

Rebate for low income aged persons

 “150AD.Subject to regulations 150AE and 150AF, a taxpayer who, under section 160AAAA or 160AAAB of the Act, is eligible, in a year of income, for a rebate of tax is entitled, in respect of income, or trust income, of the year of income, to a rebate of tax amounting to:

1. (a)

   for the year of income ending on 30 June 1997:

   1. (i)

      if the relevant income-recipient’s taxable income of the year of income does not exceed his or her rebate threshold—half the taxpayer’s rebate amount; or

   2. (ii)

      if the relevant income-recipient’s taxable income of the year of income exceeds his or her rebate threshold—half the taxpayer’s rebate amount as reduced by 12.5 cents for each $1 of the amount of the excess; and

2. (b)

   for a later year of income:

   1. (i)

      if the relevant income-recipient’s taxable income of the year of income does not exceed his or her rebate threshold—the taxpayer’s rebate amount; or

   2. (ii)

      if the relevant income-recipient’s taxable income of the year of income exceeds his or her rebate threshold—the taxpayer’s rebate amount, reduced by 12.5 cents for each $1 of the amount of the excess.

Transfer of unused rebate from taxpayer other than trustee

 “150AE. (1) Regulation 150AD is affected by subregulation (2) if, in relation to a year of income:

1. (a)

   a taxpayer (‘TP1’) and a person who is, at any time in that year of income, TP1’s spouse (‘TP2’) are each:

   1. (i)

      under section 160AAAA of the Act—entitled to a rebate of tax; and

   2. (ii)

      in relation to the rebate to which he or she is entitled—the relevant income-recipient; and

2. (b)

   TP1’s rebate amount for the year of income exceeds the tax payable by TP1 in respect of income of that year (disregarding any credits or rebates); and

3. (c)

   the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAA of the Act for the year of income is less than TP2’s rebate amount for that year.

 “(2) In the circumstances mentioned in subregulation (1), the rebate amount for the year of income is:

1. (a)

   for TP1—the amount ascertained under subregulation 150AB (2) reduced by the amount of the excess rebate amount mentioned in paragraph (1) (b); and

2. (b)

   for TP2—the amount ascertained under subregulation 150AB (2) increased by the amount of the excess rebate amount mentioned in paragraph (1) (b).

 “(3)Regulation 150AD is affected by subregulation (4) if, in relation to a year of income:

1. (a)

   a taxpayer (‘TP1’) is:

   1. (i)

      under section 160AAAA of the Act—entitled to a rebate of tax; and

   2. (ii)

      in relation to the rebate to which he or she is entitled—the relevant income-recipient; and

2. (b)

   TP1 is, at any time in that year of income, the spouse of a person who is a relevant income-recipient in relation to a taxpayer (‘TP2’) who is entitled under section 160AAAB to a rebate of tax; and

3. (c)

   TP1’s rebate amount for the year of income exceeds the tax payable by TP1 in respect of income of that year (disregarding any credits or rebates); and

4. (d)

   the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAB for the year of income in relation to TP1’s spouse is less than TP2’s rebate amount for that year in relation to TP1’s spouse.

 “(4) In the circumstances mentioned in subregulation (3), the rebate amount for the year of income is:

1. (a)

   for TP1—the amount ascertained under subregulation 150AB (2) reduced by the amount of the excess rebate amount mentioned in paragraph (3) (c); and

2. (b)

   for TP2—the amount ascertained under subregulation 150AB (2) increased by the amount of the excess rebate amount mentioned in paragraph (3) (c).

 “(5) For paragraphs (1) (c) and (3) (d), if the year of income concerned is the year of income ending on 30 June 1997, the amount of rebate to which TP2 is entitled is taken to be the amount mentioned in paragraph 150AD (b).

 “(6) If the year of income mentioned in subregulation (1) or (3) is the year of income ending on 30 June 1997, the amount ascertained under paragraph (2) (b) or (4) (b) is limited to the amount of tax payable by TP2 in respect of income of that year.

 “(7) This regulation applies whether TP1 is, or is not, the same person as TP2.

 “(8) For this regulation, a taxpayer’s rebate amount for a year of income is calculated as if the equivalent circumstances income limit of the relevant income-recipient is the amount ascertained under paragraph 150AC (1) (b) or (c), as the case requires.

 “(9) For paragraphs 2 (b) and 4 (b), the amount ascertained under subregulation 150AB (2) is calculated as if the equivalent circumstances income limit of the relevant income-recipient is the amount ascertained under paragraph 150AC (1) (b) or (c), as the case requires.

Transfer of unused rebate from taxpayer who is trustee

 “150AF.(1) Regulation 150AD is affected by subregulation (2) if, in relation to a year of income:

1. (a)

   a taxpayer (‘TP1’) is entitled to a rebate under section 160AAAB of the Act; and

2. (b)

   the relevant income-recipient in relation to that rebate is, at any time in that year of income, the spouse of a taxpayer (‘TP2’) who is entitled to a rebate of tax under section 160AAAA of the Act; and

3. (c)

   TP1’s rebate amount in relation to the relevant income‑recipient mentioned in paragraph (b) exceeds the tax payable by TP1 in relation to that relevant income‑recipient for income of that year (disregarding any credits or rebates); and

4. (d)

   the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAA of the Act for the year of income is less than TP2’s rebate amount for that year.

 “(2) In the circumstances mentioned in subregulation (1), the rebate amount for the year of income is:

1. (a)

   for TP1—the amount ascertained under subregulation 150AB (2) reduced by the amount of the excess rebate amount mentioned in paragraph (1) (c); and

2. (b)

   for TP2—the amount ascertained under subregulation 150AB (2) increased by the amount of the excess rebate amount mentioned in paragraph (1) (c).

 “(3) Regulation 150AD is affected by subregulation (4) if, in relation to a year of income:

1. (a)

   a taxpayer (‘TP1’) is entitled to a rebate under section 160AAAB of the Act; and

2. (b)

   the relevant income-recipient in relation to TP1 (‘RIR1’) is, at any time in that year of income, the spouse of a person (‘RIR2’) who is the relevant income-recipient in relation to a taxpayer (‘TP2’) who is entitled to a rebate of tax under section 160AAAB of the Act; and

3. (c)

   TP1’s rebate amount in relation to RIR1 exceeds the tax payable by TP1 in relation to RIR1 for income of that year (disregarding any credits or rebates); and

4. (d)

   the amount of the rebate to which, apart from this subregulation, TP2 is entitled under section 160AAAB of the Act for the year of income in relation to RIR2 is less than TP2’s rebate amount for that year in relation to RIR2.

 “(4) In the circumstances mentioned in subregulation (3), the rebate amount for the year of income:

1. (a)

   for TP1—is the amount ascertained under subregulation 150AB (2) reduced by the amount of the excess rebate amount mentioned in paragraph (3) (c); and

2. (b)

   for TP2—is the amount ascertained under subregulation 150AB (2) increased by the amount of the excess rebate amount mentioned in paragraph (3) (c).

 “(5) For paragraphs (1) (d) and (3) (d), if the year of income concerned is the year of income ending on 30 June 1997, the amount of rebate to which TP2 is entitled is taken to be the amount mentioned in paragraph 150AD (b).

 “(6) If the year of income mentioned in subregulation (1) or (3) is the year of income ending on 30 June 1997 the amount ascertained under paragraph (2) (b) or (4) (b) is limited to the tax payable by TP2 in respect of income of that year.

 “(7) This regulation applies whether TP1 is, or is not, the same person as TP2.

 “(8) For this regulation, a taxpayer’s rebate amount for a year of income is calculated as if the equivalent circumstances income limit of the relevant income-recipient is the amount ascertained under paragraph 150AC (1) (b) or (c), as the case requires.

 “(9) For paragraphs 2 (b) and 4 (b), the amount ascertained under subregulation 150AB (2) is calculated as if the equivalent circumstances income limit of the relevant income-recipient is the amount ascertained under paragraph 150AC (1) (b) or (c), as the case requires.”.

8.   Regulation 150A (Definitions)

8.1   Definition of “illness-separated-rate social security pension”:

Omit the definition.

8.2   Definition of “partnered-rate social security pension”:

Omit the definition.

8.3   Definition of “single-rate social security pension”:

Omit the definition.

9.   Regulation 152 (Rebate of tax in respect of rebatable benefits)

9.1   Omit the words after “formula:”, substitute:

1. “(a)

   if the taxpayer’s benefit amount is not more than $20,700:

A ´ [B – C]; or

1. (b)

   if the taxpayer’s benefit amount is more than $20,700:

A ´ [B – C] + 0.14 ´ [B – $20,700]

where:

A is the ‘lowest marginal tax rate’;

B is the ‘taxpayer’s benefit amount’, beingthe amount of rebatable benefit received by the taxpayer during the year of income, rounded down to the nearest whole dollar;

C is the ‘tax-free threshold’.

[NOTE: ‘lowest marginal tax rate’ and ‘tax-free threshold’ are defined in regulation 148.]”.

9.2   Add at the end:

 “(2) If an amount worked out under subregulation (1) is not an amount of whole dollars, the amount must be rounded up to the nearest whole dollar.”.

NOTES

1. Notified in the Commonwealth of Australia Gazette on 25 June 1997.

2. Statutory Rules 1936 No. 94 as amended by 1939 Nos. 6 and 42; 1940 Nos. 138 and 289; 1941 Nos. 120 and 327; 1942 Nos. 339 and 553; 1943 Nos. 80, 127 and 151; 1944 Nos. 90 and 124; 1945 Nos. 12, 85, 169 and 192; 1946 No. 135; 1947 Nos. 77 and 173; 1948 Nos. 115 and 162; 1949 Nos. 25 and 50; 1950 Nos. 63 and 101; 1951 Nos. 136 and 157; 1952 Nos. 89, 90 and 102; 1953 Nos. 55 and 88; 1954 Nos. 11, 99 and 112; 1955 No. 23; 1956 Nos. 34, 35 (repealed by 1956 No. 96) and 96; 1957 Nos. 39 and 74; 1958 Nos. 27 and 70; 1959 Nos. 25 and 81; 1960 Nos. 44 and 74; 1962 Nos. 15, 44 and 112; 1963 Nos. 53 and 92; 1964 Nos. 74, 121 and 134; 1965 Nos. 133 and 187; 1966 No. 156; 1967 Nos. 112 and 126; 1968 No. 1; 1969 No. 68; 1970 Nos. 43, 126, 168 and 213; 1971 Nos. 120 and 148; 1972 Nos. 48, 50 and 137; 1973 No. 266; 1974 Nos. 193, 226 and 267; 1975 Nos. 88, 89, 99, 101 and 213; 1976 Nos. 115, 188 and 212; 1977 Nos. 77, 107 and 248; 1978 Nos. 85 and 193; 1979 Nos. 126 and 239; 1980 Nos. 86, 137 and 149; 1981 Nos. 116 and 360; 1982 Nos. 115, 128, 267 and 280; 1983 Nos. 79, 87, 111, 213 and 319; 1984 Nos. 172, 286, 408 and 416; 1985 Nos. 21, 148, 274 and 278; 1986 No. 325; Acts Nos. 28, 49 and 112, 1986; Statutory Rules 1987 Nos. 92 and 120; 1988 Nos. 196, 208, 262, 381, 382, 383 and 384; Act No. 97, 1988; Statutory Rules 1989 Nos. 67, 80, 115 (as amended by 1989 No. 358), 123, 124, 141, 250 and 358; 1990 Nos. 19, 126, 151, 152, 192, 347, 390, 398 and 468; 1991 Nos. 20, 121, 156, 158, 240, 300, 301, 390 and 391; 1992 Nos. 38, 129, 216, 313 and 449; 1993 Nos. 15, 46, 47, 65, 91, 159, 202, 216, 275, 288 and 370; 1994 Nos. 95, 96, 127, 174, 195, 219, 399, 412, 460, 461 and 462; 1995 Nos. 58, 107, 139, 152, 153, 194, 316, 356, 381, 382, 383 and 447; Act No. 30, 1995; Statutory Rules 1996 Nos. 38, 56, 114, 124, 133, 150, 185, 274, 320, 345 and 346; 1997 Nos. 68 and 141.