Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014
No. 44, 2014
An Act to amend the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Temporary budget repair levy
Income Tax (First Home Saver Accounts Misuse Tax) Act 2008
Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014
No. 44, 2014
An Act to amend the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008, and for related purposes
[Assented to 25 June 2014]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provision(s) | Commencement | Date/Details |
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | 25 June 2014 |
2. Schedule 1 | At the same time as Schedule 1 to the Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014 commences. | 25 June 2014 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Temporary budget repair levy
Income Tax (First Home Saver Accounts Misuse Tax) Act 2008
1 At the end of the Act
Add:
8 Temporary budget repair levy
(1) This section applies to payments from an FHSA made in a temporary budget repair levy year.
(2) Increase the amount of the adjusted maximum tax rate by 2 percentage points for the purpose of working out the clawback tax amount (see section 6) for the FHSA in relation to the payment.
(3) In this section:
temporary budget repair levy year has the same meaning as in section 4‑11 of the Income Tax (Transitional Provisions) Act 1997.
[Minister’s second reading speech made in—
House of Representatives on 13 May 2014
Senate on 16 June 2014]
Overview
The Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014 was enacted by the Australian Parliament to address issues related to the misuse of First Home Saver Accounts (FHSA) by imposing a temporary budget repair levy. This Act amends the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008. The policy objective of this amendment is to ensure that the tax system is not exploited by individuals who do not genuinely intend to use their FHSA for their first home purchase, thus maintaining the integrity and effectiveness of the tax incentives designed to support first home buyers. The Act was assented to on 25 June 2014 and commenced on the same date, with specific provisions aligning with the commencement of related schedules in other Acts.
Scope and Application
The Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014 applies to the misuse of First Home Saver Accounts (FHSA) by imposing an additional tax levy during specified temporary budget repair levy years. This amendment affects individuals who have made payments from their FHSA during these designated years, resulting in an increased tax rate for the purpose of calculating the clawback tax. The Act extends to the entire Commonwealth of Australia and impacts both individuals and entities that hold or manage FHSAs. However, the Act does not explicitly outline exclusions, exemptions, or specific thresholds beyond what is defined in the referenced Income Tax (Transitional Provisions) Act 1997. The commencement of the Act's provisions aligns with its Royal Assent on 25 June 2014, with the temporary budget repair levy provisions commencing simultaneously with the relevant provisions in the Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014. The Act does not indicate any further extension or restriction of its application through subordinate instruments.
Key Provisions
The Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014 (sections 1 to 3) amends the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008 by introducing a temporary budget repair levy (Schedule 1). This levy applies specifically to payments from First Home Saver Accounts (FHSAs) made in a temporary budget repair levy year, which is defined in section 4-11 of the Income Tax (Transitional Provisions) Act 1997. The key change introduced by this Act is an increase of 2 percentage points to the adjusted maximum tax rate for the purpose of calculating the clawback tax amount on FHSA payments made in the specified years (Schedule 1, section 8(2)).
Entities and individuals subject to the provisions of the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008 must adhere to the amendments introduced by the Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014. Specifically, they must account for the increased adjusted maximum tax rate when calculating the clawback tax on FHSA payments made during the temporary budget repair levy years. This means that for these years, the tax rate applied to FHSA payments will be higher than usual, impacting the amount of tax that needs to be paid back to the government.
The Act does not explicitly state any new offences or penalties for breaching its provisions. However, it is important to note that non-compliance with the amended tax rates and calculations could potentially lead to penalties under the existing Income Tax Assessment Act 1997. For instance, failure to accurately report and pay the correct amount of clawback tax could result in penalties, including interest on the unpaid tax and potential fines.
Overall, the primary obligation of taxpayers and entities affected by this Act is to ensure that they correctly apply the increased tax rate when calculating the clawback tax on FHSA payments made in the temporary budget repair levy years. This involves careful adherence to the amended provisions of the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008, as set out in the Income Tax (First Home Saver Accounts Misuse Tax) Amendment (Temporary Budget Repair Levy) Act 2014.