Low income tax offset - changes for minors

From 1 July 2011, minors (children under 18 years of age) will no longer receive the low income tax offset to reduce tax payable on their unearned income (for example, distributions from discretionary trusts, dividends, interest, rent, royalties and other income from property).

This measure will not affect those minors who are, for example, disabled, an orphan, or were engaged in a full time occupation at the end of the income year.

In addition, income earned by minors from the investment of any property transferred to them as a result of compensation payments, inheritances or marriage breakdown will also not be affected by this measure.

Minors will still be able to use the low income tax offset to reduce tax payable on their earned income such as salary and wages.

Media release

For more information, refer to media release no 072 'Changes to the low income tax offset for non-work income of minors' issued on 10 May 2011 by the Assistant Treasurer.

Legislation and supporting material

The Tax Laws Amendment (2011 Measures No. 4) Act No. 43 2011 received royal assent on 27 June 2011.

More information For more information please refer to Federal Budget Paper No 2 - Revenue Measures.