Taxation Administration Amendment Regulations 2010 (No. 3) (Cth)

Taxation Administration Amendment Regulations 2010 (No. 3)¹

Select Legislative Instrument 2010 No. 189

I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Taxation Administration Act 1953.

Dated 29 June 2010

QUENTIN BRYCE

Governor-General

By Her Excellency’s Command

NICK SHERRY

Assistant Treasurer

Name of Regulations

These Regulations are the Taxation Administration Amendment Regulations 2010 (No. 3).

Commencement

These Regulations commence on the commencement of Part 1 of Schedule 2 to the Tax Laws Amendment (2010 Measures No. 2) Act 2010.

Amendment of Taxation Administration Regulations 1976

Schedule 1 amends the Taxation Administration Regulations 1976.

Schedule 1 Amendments

(regulation 3)

[1] Regulation 2, after definition of tax-related liability

insert

top rate means the sum of:

(a)the highest rate specified in the table in Part I of Schedule 7 to the Income Tax Rates Act 1986; and

(b)the rate of levy specified in subsection 6 (1) of the Medicare Levy Act 1986.

[2] Subregulation 34 (4), definition of top rate

omit

[3] Subregulation 34 (4), at the foot

insert

Note For top rate, see regulation 2.

[4] Subregulation 37 (2), at the foot

insert

Note For top rate, see regulation 2.

[5] Subregulation 37 (3)

omit

[6] Subregulation 38 (2), at the foot

insert

Note For top rate, see regulation 2.

[7] Subregulation 38 (3)

omit

[8] Part 5, after Division 3

insert

Division 3A Withholding arrangements — closely held trusts

38APrescribed trusts

(1)For subparagraph 12-175 (1) (c) (iii) in Schedule 1 of the Act, the following trusts are prescribed:

(a)a trust that is a discretionary mutual fund;

(b)an employee share trust for an employee share scheme;

(c)a law practice trust.

(2)In this regulation:

discretionary mutual fund means:

(a)a discretionary mutual fund (within the meaning of subsections 5 (5) and (6) of the Financial Sector (Collection of Data) Act 2001); or

(b)a fund that provides professional indemnity insurance or insurance like cover to a legal practitioner, including a fund established under legislation or by a State or Territory law society to provide professional indemnity cover to its members.

employee share trust, for an employee share scheme, has the meaning given by subsection 130-85 (4) of the Income Tax Assessment Act 1997.

law practice trust means a trust that is:

(a)created and maintained for the purposes of, or in connection with:

(i)the provision of legal services by a duly qualified legal practitioner; or

(ii)the deposit of money of a kind described in column 1 of item 4 of the table in subsection 202D (1) of the Income Tax Assessment Act 1936; and

(b)regulated by a State or Territory law for the regulation of legal practices or legal services.

38BThreshold amounts for exceptions

For subsection 12-185 (1) of the Act, the amount of the threshold, below which payments are not required to be withheld under sections 12-175 and 12-180 of the Act, is:

(a)if the payment is for the whole of a financial year — $120;

(b)if the payment is for part of a financial year — the amount worked out using the formula:

where:

P is the number of days in the financial year for which the amount is payable.

38CAmount to be withheld from distribution of income of closely held trust

For subsection 15-10 (2) of the Act, the amount to be withheld by a trustee of a closely held trust from a distribution to a beneficiary of the trust under subsection 12-175 (2) of the Act is the amount worked out using the formula:

Note 1 The amount of a distribution in a financial year is affected by the operation of subsection 12-175 (4) of the Act.

Note 2 For top rate, see regulation 2.

38DAmount to be withheld if beneficiary is presently entitled to income of closely held trust

For subsection 15-10 (2) of the Act, the amount to be withheld by a trustee of a closely held trust from a beneficiary’s share of the net income of the trust under subsection 12-180 (2) of the Act is the amount worked out using the formula:

Note 1 The amount of an entitlement in a financial year is affected by the operation of subsection 12-180 (4) of the Act.

Note 2 For top rate, see regulation 2.

Note

All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See