INCOME TAX.
No. 23 of 1942.
An Act to impose a Tax upon Incomes.
[Assented to 7th June, 1942.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title.
1. This Act may be cited as the Income Tax Act 1942.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Incorporation.
3. The Income Tax Assessment Act 1936–1942 shall be incorporated and read as one with this Act.
Imposition of income tax.
4. Income Tax is imposed at the rates declared in this Act.
Rates of income tax.
5.—(1.) The rate of income tax in respect of a taxable income derived from personal exertion shall be as set out in the First Schedule to this Act.
(2.) The rate of income tax in respect of a taxable income derived from property shall be as set out in the Second Schedule to this Act.
(3.) The rates of income tax in respect of a taxable income derived partly from personal exertion and partly from property shall be as set out in the Third Schedule to this Act.
(4.) The rate or rates of income tax in respect of a taxable income to which Division 16 of Part III. of the Income Tax Assessment Act 1936–1942 applies shall be as set out in the Fourth Schedule to this Act.
(5.) The rate or rates of income tax in respect of a taxable income in any case where sub-section (1.) of section eighty-six of the Income Tax Assessment Act 1936–1942 applies shall be as set out in the Fifth Schedule to this Act.
(6.) Notwithstanding anything contained in the last five preceding sub-sections, where, apart from this sub-section, the amount of income tax payable in respect of a taxable income of less than One hundred and seventy pounds would, after deducting all rebates to which a taxpayer is entitled in his assessment, be greater than fifty per centum of the amount by which the taxable income exceeds One hundred and fifty-six pounds, the income tax payable in respect of that taxable income shall be fifty per centum of the amount by which the taxable income exceeds One hundred and fifty-six pounds.
(7.) Notwithstanding anything contained in the last six preceding sub-sections, where, apart from this sub-section, the amount of income tax which a person would be liable to pay, after deducting all rebates to which he is entitled in his assessment, is less than Ten shillings, the income tax payable by that person shall be Ten shillings.
(8.) The rate or rates of income tax payable by a trustee shall be as set out in the Sixth Schedule to this Act.
(9.) Subject to sub-section (8.) of this section, the rates of income tax payable by a company shall be as set out in the Seventh Schedule to this Act.
(10.) Notwithstanding anything contained in the preceding provisions of this section, if, apart from this sub-section, the income tax which a person, before deducting any rebate to which he is entitled in his assessment, would be liable to pay leaves an amount of pence remaining when expressed in pounds and shillings—
(a) if the remaining pence do not exceed six—the income tax payable by that person shall be the amount so expressed in pounds and shillings; or
(b) if the remaining pence exceed six the income tax payable by that person shall be the amount so expressed in pounds and shillings plus one shilling.
Super-tax.
6. In addition to any income tax payable under the preceding provisions of this Act, there shall be payable upon the taxable income in excess of Five thousand pounds derived by a company a super-tax at the rate of twelve pence for every pound of that excess:
Provided that this section shall not apply—
(a) to the assessment of a company as a trustee;
(b) to the income of a company to which section fourteen of the War-time (Company) Tax Assessment Act 1940–1941 provides that that Act shall not apply; or
(c) to so much of that part of the taxable income of a life assurance company which has been derived from its life assurance business as bears the same proportion to such part of the taxable income as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits of the company’s life assurance business for the same year of income.
Levy of Income tax.
7.—(1.) The tax imposed by this Act shall be levied and paid for the financial year beginning on the first day of July, One thousand nine hundred and forty-two.
(2.) Until the commencement of the Act for the levying and payment of income tax for the financial year beginning on the first day of July, One thousand nine hundred and forty-three, this Act shall also apply for all financial years subsequent to that beginning on the first day of July, One thousand nine hundred and forty-two.
THE SCHEDULES.
—
FIRST SCHEDULE. s. 3 (1.).
Rate of Tax in Respect of Taxable Income Derived from Personal Exertion.
If the taxable income does not exceed £200, the rate of tax for every pound of taxable income up to and including £150 shall be 8 pence, and the rate of tax for every pound of taxable income in excess of £150 shall be 8.12 pence increasing uniformly by 12 of one penny for every pound by which the taxable income exceeds £151.
If the taxable income exceeds £200 but does not exceed £250 the rate of tax for every pound of taxable income up to and including £200 shall be 9.5 pence, and the rate of tax for every pound of taxable income in excess of £200 shall be 50.08 pence increasing uniformly by .08 of one penny for every pound by which the taxable income exceeds £201.
If the taxable income exceeds £250 but does not exceed £600 the rate of tax for every pound of taxable income up to and including £250 shall be 18.4 pence, and the rate of tax for every pound of taxable income in excess of £250 shall be 58.02 pence increasing uniformly by .02 of one penny for every pound by which the taxable income exceeds £251.
If the taxable income exceeds £600 but does not exceed £2,500 the rate of tax for every pound of taxable income up to and including £600 shall be 45.5833 pence and the rate of tax for every pound of taxable income in excess of £600 shall be 72.033 pence increasing uniformly by .033 of one penny for every pound by which the taxable income exceeds £601.
If the taxable income exceeds £2,500 but does not exceed £4,000, the rate of tax for every pound of taxable income up to and including £2,500 shall be 113.312 pence and the rate of tax for every pound by which the taxable income exceeds £2,500 shall be 198.006 pence increasing uniformly by .006 of one penny for every pound by which the taxable income exceeds £2,501.
If the taxable income exceeds £4,000 the rate of tax for every pound of taxable income up to and including £4,000 shall be 148.445 pence, and the rate of tax for every pound of taxable income in excess of £4,000 shall be 216 pence.
SECOND SCHEDULE. s. 5 (2.).
Rate of Tax in Respect of Taxable Income Derived from Property.
If the taxable income does not exceed £200, the rate of tax for every pound of taxable income up to and including £150 shall be 10 pence, and the rate of tax for every pound of taxable income in excess of £150 shall be 10.15 pence increasing uniformly by .15 of one penny for every pound by which the taxable income exceeds £151.
If the taxable income exceeds £200 but does not exceed £250 the rate of tax for every pound of taxable income up to and including £200 shall be 11.875 pence, and the rate of tax for every pound of taxable income in excess of £200 shall be 62.6 pence increasingly uniformly by .1 of one penny for every pound by which the taxable income exceeds £201.
If the taxable income exceeds £250 but does not exceed £600 the rate of tax for every pound of taxable income up to and including £250 shall be 23 pence, and the rate of tax for every pound of taxable income in excess of £250 shall be 72.525 pence increasing uniformly by .025 of one penny for every pound by which the taxable income exceeds £251.
If the taxable income exceeds £600 but does not exceed £2,100 the rate of tax for every pound of taxable income up to and including £600 shall be 56.9791 pence and the rate of tax for every pound of taxable income in excess of £600 shall be 90.04125 pence increasing uniformly by .04125 of one penny for every pound by which the taxable income exceeds £601.
If the taxable income exceeds £2,100 the rate of tax for every pound of taxable income up to and including £2,100 shall be 124.7619 pence, and the rate of tax for every pound of taxable income in excess of £2.100 shall be 216 pence.
THIRD SCHEDULE. s. 5 (3.).
Rates of Tax in Respect of Taxable Income Derived Partly from Personal Exertion and Partly from Property.
(a) For every pound of taxable income derived from personal exertion, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under the First Schedule if the total taxable income of the taxpayer were derived exclusively from personal exertion, by the amount of the total taxable income.
(b) For every pound of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under the Second Schedule if the total taxable income of the taxpayer were derived exclusively from property, by the amount of the total taxable income.
FOURTH SCHEDULE. s. 5 (4.).
Rates of Tax by reference to an Average Income.
(a) For every pound of the taxable income derived from personal exertion by a taxpayer to whose income Division 16 of Part III. of the Income Tax Assessment Act 1936–1942 applies, the rate of tax shall be ascertained by dividing the tax that would be payable under the First Schedule upon a taxable income from personal exertion equal to his average income, by that average income.
(b) For every pound of taxable income derived by him from property the rate of tax shall be ascertained by dividing the tax that would be payable under the Second Schedule upon a taxable income from property equal to his average income, by that average income.
FIFTH SCHEDULE. s. 5 (5.).
Rate of Tax by reference to a Notional Income.
(a) For every pound of the actual taxable income from personal exertion of a taxpayer deriving a notional income, as specified by sub-section (1.) of section eighty-six of the Income Tax Assessment Act 1936–1942, the rate of tax shall be the amount obtained by dividing the tax that would be payable under the First Schedule upon a taxable income from personal exertion equal to his notional income, by that notional income.
(b) For every pound of the actual taxable income from property of a taxpayer deriving a notional income, as specified by sub-section (1.) of section eighty-six of the Income Tax Assessment Act 1936–1942, the rate of tax shall be the amount obtained by dividing the tax that would be payable under the Second Schedule upon a taxable income from property equal to his notional income, by that notional income.
SIXTH SCHEDULE. s. 5 (8.).
Rates of Tax Payable by a Trustee.
For every pound of the taxable income in respect of which a trustee is liable, pursuant to either section ninety-eight or section ninety-nine of the Income Tax Assessment Act 1936–1942, to be assessed and to pay tax, the rate of tax shall be the rate which would be payable under the First, Second, Third, Fourth or Fifth Schedules, as the case requires, if one individual were liable to be assessed and to pay tax on that taxable income.
SEVENTH SCHEDULE. s. 5 (9.).
Rates of Tax Payable by a Company.
(a) Subject to the last preceding Schedule, for every pound of the taxable income of a company the rate of tax shall be—
(i) in the case of a company which is not a life assurance company—seventy-two pence;
(ii) in the case of a company which is a mutual life assurance company—sixty pence; or
(iii) in the case of a life assurance company, other than a mutual life assurance company—
(1) in respect of so much of that part of the taxable income which has been derived from its life assurance business as bears the same proportion to such part of the taxable income as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits of the company’s life assurance business for the same year of income—sixty pence; and
(2) in respect of the remainder of the taxable income of the company—seventy-two pence.
(b) Subject to the last preceding Schedule, for every pound of that portion of the taxable income of a company which has not been distributed as dividends on which the company is liable, pursuant to Part IIIa. of the Income Tax Assessment Act 1936–1942, to pay further tax, the rate of tax shall be twenty-four pence.
(c) For every pound of interest in respect of which a company is liable, pursuant to sub-section (1.) of section one hundred and twenty-five of the Income Tax Assessment Act 1936–1942, to pay income tax, the rate of tax shall be seventy-two pence.