Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Act 1984

Overview

The Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Act 1984, enacted in 1984, was introduced to address specific tax liabilities associated with ineligible approved deposit funds under the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1983. This Act was passed by the Queen, in and with the advice and consent of the Senate and the House of Representatives of the Commonwealth of Australia. The primary policy objective is to establish a definitive tax rate for trustees of such funds, ensuring clarity and consistency in tax application. By amending the Principal Act, the legislation introduces a new definition of "ineligible approved deposit fund" and specifies a 46% tax rate for the income of these funds, which is intended to provide a precise fiscal framework for these financial entities.

Scope and Application

The Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Act 1984 applies to trustees of ineligible approved deposit funds, which are defined within Division 9b of Part III of the Income Tax Assessment Act 1936. This Act is a Commonwealth statute and its provisions extend across Australia, impacting entities involved in the management of these specific types of funds. The Act is an amendment to the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1983, and its provisions come into effect on the same day as the Income Tax Assessment Amendment Act (No. 3) 1984. The key change introduced by this Act is the imposition of a 46% tax rate on the taxable income of ineligible approved deposit funds, a rate distinct from other corporate entities and superannuation funds. The Act does not explicitly state exclusions, exemptions, or thresholds beyond those already outlined in the Income Tax Assessment Act 1936, but it extends the application of the Principal Act to this specific category of funds through its amendments.

Key Provisions

The Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Act 1984 (sections 3 and 4) amends the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1983 by introducing a new definition of “ineligible approved deposit fund” and establishing a specific tax rate for trustees of such funds. The Act provides that the rate of tax payable by trustees of an ineligible approved deposit fund in respect of the taxable income of the fund is 46% (section 8a). This is a significant alteration from the general tax rates applicable to other types of corporate entities, aiming to target and regulate income from these specific funds more stringently. Entities and individuals subject to the provisions of this Act must comply with the new tax rate specified for trustees of ineligible approved deposit funds. Trustees must ensure that the correct amount of tax, as stipulated in section 8a, is assessed and paid on the taxable income of the funds for which they are responsible. This includes accurately calculating the taxable income and applying the 46% tax rate as mandated by the Act. Failure to comply with the provisions of the Act can result in various consequences. While the Act does not explicitly state the penalties for non-compliance, breaches of tax laws generally attract civil and criminal penalties under the general tax legislation. These can include fines, interest on unpaid taxes, and in severe cases, criminal charges. Trustees may also face personal liability for the unpaid taxes if it is shown that they did not exercise due diligence in their tax obligations. The specific penalties would be determined based on the extent of non-compliance and the discretion of the Australian Taxation Office in enforcing the law.