Income Tax Rates Amendment Act 1989

Administered by Department of the Treasury

Legislation au C2004A03846 Not in force Act

Legislation content

Income Tax Rates Amendment Act 1989

No. 98 of 1989

 

An Act to amend the Income Tax Rates Act 1986, and for related purposes

[Assented to 30 June 1989]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title etc.

1. (1) This Act may be cited as the Income Tax Rates Amendment Act 1989.

(2) In this Act, “Principal Act” means the Income Tax Rates Act 19861.

Commencement

2. This Act commences on the day on which it receives the Royal Assent.


Interpretation

3. Section 3 of the Principal Act is amended:

(a) by omitting from subsection (1) the definitions of “approved deposit fund”, “ineligible approved deposit fund”, “investment income” and “superannuation fund”;

(b) by inserting in subsection (1) the following definitions:

“ ‘complying ADF’ has the same meaning as in Part IX of the Assessment Act;

‘complying superannuation fund’ has the same meaning as in Part IX of the Assessment Act;

‘eligible ADF’ has the same meaning as in Part IX of the Assessment Act;

‘eligible superannuation fund’ has the same meaning as in Part IX of the Assessment Act;

‘non-complying ADF’ has the same meaning as in Part IX of the Assessment Act;

‘non-complying superannuation fund’ has the same meaning as in Part IX of the Assessment Act;

‘pooled superannuation trust’ has the same meaning as in Part IX of the Assessment Act;

‘special component’ has the same meaning as in Part IX of the Assessment Act;

‘standard component’ has the same meaning as in Part IX of the Assessment Act;”;

(c) by omitting from paragraph (2) (a) “investment income,” (wherever occurring).

Interpretation

4. Section 5 of the Principal Act is amended:

(a) by omitting from subparagraphs (a) (i) and (b) (i) “a superannuation fund” and substituting “an eligible superannuation fund”;

(b) by omitting from subparagraphs (a) (iii) and (b) (iii) “approved deposit fund” and substituting “eligible ADF”;

(c) by omitting “or” from the end of subparagraphs (a) (iii) and (b) (iii);

(d) by inserting after subparagraph (a) (iii) the following subparagraph:

“(iiia) a person in the capacity of a trustee of a pooled superannuation trust; or”;

(e) by inserting after subparagraph (b) (iii) the following subparagraph:

“(iiia) a company in the capacity of a trustee of a pooled superannuation trust; or”.


5. Sections 26 and 27 of the Principal Act are repealed and the following sections are substituted:

Rates of tax payable by trustees of superannuation funds

“26. (1) The rates of tax payable by a trustee of a complying superannuation fund in respect of the taxable income of the fund are:

(a) in respect of the standard component—15%; and

(b) in respect of the special component—49%.

“(2) The rate of tax payable by a trustee of a non-complying superannuation fund in respect of the taxable income of the fund is 49%.

Rates of tax payable by trustees of approved deposit funds

“27. (1) The rates of tax payable by a trustee of a complying ADF in respect of the taxable income of the fund are:

(a) in respect of the standard component—15%; and

(b) in respect of the special component—49%.

“(2) The rate of tax payable by a trustee of a non-complying ADF in respect of the taxable income of the fund is 49%.

Rates of tax payable by trustees of pooled superannuation trusts

“27a. The rates of tax payable by a trustee of a pooled superannuation trust in respect of the taxable income of the trust are:

(a) in respect of the standard component—15%; and

(b) in respect of the special component—49%.”.

Application of amendments

6. The amendments made by this Act apply for the year of income in which 1 July 1988 occurred and for all subsequent years of income.

Transitional

7. Notwithstanding the amendments made by this Act, the Principal Act continues to apply in relation to the repealed Division 9b of Part III of the Assessment Act (in its application by virtue of section 14 of the Taxation Laws Amendment Act (No. 2) 1989) as if those amendments had not been made.

 

NOTE

1. No. 107, 1986, as amended. For previous amendments, see Nos. 60 and 138, 1987; and Nos. 11, 78 and 118, 1988.

[Minister’s second reading speech made in—

House of Representatives on 30 November 1988

Senate on 23 May 1989]

Overview

The Income Tax Rates Amendment Act 1989 (C2004A03846) was enacted to address inconsistencies and gaps in the tax treatment of various types of superannuation funds, specifically approved deposit funds and superannuation funds. This Act amends the Income Tax Rates Act 1986, clarifying the definitions of various superannuation-related terms and modifying the tax rates applicable to different components of superannuation funds. The policy objective of this Act is to ensure that the tax treatment of superannuation funds is fair and consistent, and it was assented to by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia on 30 June 1989. The amendments introduced by this Act apply from the year of income in which 1 July 1988 occurred and for all subsequent years of income, ensuring that the changes in tax rates are effective from that period onwards.

Scope and Application

The Income Tax Rates Amendment Act 1989 applies to the taxation of superannuation funds and approved deposit funds in Australia. Specifically, it amends the Income Tax Rates Act 1986 by altering the definitions of certain terms and establishing different tax rates for complying and non-complying superannuation funds, approved deposit funds, and pooled superannuation trusts. This Act applies to trustees of these funds and is in effect from the year of income in which 1 July 1988 occurred. While the Act primarily impacts superannuation fund trustees, the definitions it provides extend to other related entities and transactions within the superannuation and approved deposit fund sectors. The Act's reach is national, as it pertains to the Commonwealth's income tax legislation, but it specifically tailors its application to the tax treatment of superannuation funds and approved deposit funds. The Act does not explicitly state any exclusions or exemptions but focuses on the reclassification and taxation of these financial instruments.

Key Provisions

The Income Tax Rates Amendment Act 1989 (section 1) primarily amends the Income Tax Rates Act 1986 by updating the definitions of certain terms related to superannuation and approved deposit funds (sections 3 and 5). The Act introduces new definitions such as "complying ADF" and "eligible superannuation fund," and removes outdated terms like "investment income" (section 3(a), (b)). It also adjusts references to "eligible superannuation fund" instead of "a superannuation fund" and replaces "approved deposit fund" with "eligible ADF" (section 5(a), (b), (c), (d)). This Act introduces new tax rates for different types of superannuation funds and approved deposit funds, specifying that the tax rates payable by a trustee of a complying superannuation fund or an approved deposit fund are 15% for the standard component and 49% for the special component (sections 26 and 27). For non-complying funds, the tax rate is uniformly 49% (sections 26(2) and 27(2)). Additionally, the Act introduces a new tax rate for pooled superannuation trusts, where the trustee is required to pay 15% for the standard component and 49% for the special component of the taxable income (section 27a). Entities governed by this Act, such as trustees of superannuation funds, approved deposit funds, and pooled superannuation trusts, must ensure compliance with the new definitions and tax rates (section 6). Trustees of complying funds must adhere to the specified tax rates of 15% for the standard component and 49% for the special component, while trustees of non-complying funds must pay a flat rate of 49%. Trustees of pooled superannuation trusts must also comply with the new rates of 15% and 49% for the standard and special components, respectively. Failure to comply with these tax obligations could result in the imposition of penalties or other legal consequences, as outlined under the Income Tax Rates Act 1986 and other related legislation. The specific penalties for non-compliance are not detailed in this Act but can be found in the relevant tax laws.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Definitions & Interpretation
Offence Provisions
Rates of tax payable by trustees of superannuation funds

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.