A, T1, J and B Calculation of gross tax
Warning:
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attentionA Taxable income
You wrote the SMSF's taxable income, or its loss, at O Taxable income or loss in Section C.
Is the amount at O Taxable income or loss a loss?
No
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Transfer the amount from O Taxable income or loss in Section C.
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Yes
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Write 0 at A. Go to T1.
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A is mandatory. If you leave A blank, you will have specified a zero amount.
T1 Tax on taxable income
Is the amount at A zero?
Yes
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Write 0 at T1. Go to J.
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No
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Read on.
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Is the SMSF a complying SMSF for 2014-15?
No
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All assessable income for a non-complying SMSF is taxed at 47%, whether arm's length income, non-arm's-length income or arising from a change in the SMSF's tax status.
Multiply A by 47%.
Write the answer at T1.
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Yes
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Different tax rates apply to arm's length and non-arm's-length income. Add:
- 47% of U Non-arm's-length income (in Section B) and
- 15% of (A in Section D less U Non-arm's-length income in Section B).
The result is the tax on the SMSF's taxable income before applying rebates, tax offsets, and credits. Write the result at T1, then go to J.
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T1 is mandatory. If you leave T1 blank, you will have specified a zero amount.
J Tax on no-TFN-quoted contributions
If the SMSF received no-TFN-quoted contributions (recorded at R3 No-TFN-quoted contributions in Section B), it pays extra tax on those contributions.
Did the SMSF receive contributions from a member who has not provided their TFN?
No
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Write 0 at J. Go to B.
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Yes
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Read on.
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Extra tax applies to no-TFN-quoted contributions. To work out the extra tax, multiply the no-TFN-quoted contributions by:
- 34% if the SMSF is a complying SMSF
- 2% if the SMSF is a non-complying SMSF.
Write the result at J.
All SMSFs, complying and non-complying, have an overall tax rate of 49% on no-TFN-quoted contributions:
- complying SMSFs pay 15% (at T1) and 34% (at J), a total of 49%
- non-complying SMSFs pay 47% (at T1) and 2% (at J), a total of 49%
J is mandatory. If you leave J blank, you will have specified a zero amount.
B Gross tax
Write at B the total of T1 and J. If the sum is zero, write 0 at B.
Example: Calculating B Gross tax (without non-arm's-length income)
SMSF B is a complying SMSF. It does not have any non-arm's-length income or no-TFN-quoted contributions.
SMSF B calculated its taxable income as $14,500 which it wrote in at O Taxable income or loss in Section C and also at A Taxable income in Section D.
SMSF B calculates its tax on taxable income at T1 to be $2,175 as follows:
Description
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Rate
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Income
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Tax
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T1 Tax on taxable income
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15%
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$14,500
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$2,175
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SMSF B does not have any no-TFN-quoted contributions so it writes $0 at J Tax on no-TFN-quoted contributions.
B Gross tax is the sum of T1 and J ($2,175 + $0).
In the SMSF annual return, SMSF B writes:
Section D: Income tax calculation statement
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Amounts
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A Taxable income
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$14,500
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T1 Tax on taxable income
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$2,175
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J Tax on no-TFN-quoted contributions
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$0
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B Gross tax
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$2,175
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Example: Calculating B Gross tax (with non-arm's-length income)
SMSF BB is a complying SMSF. It has non-arm's-length income but does not have any no-TFN-quoted contributions.
SMSF BB calculated its taxable income as $14,500 which it wrote at O Taxable income or loss in Section C and also at A Taxable income in Section D. This amount included non-arm's-length income of $4,500 which it wrote at U Non-arm's-length income in Section B.
SMSF BB calculates its tax on taxable income at T1 to be $3,615 as follows:
Description
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Calculation
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Tax
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Tax on arm's length income
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15% of $10,000
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$1,500
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Tax on non-arm's-length income
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47% of $4,500
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$2,115
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T1 Tax on taxable income
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$3,615
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SMSF BB does not have any no-TFN-quoted contributions so it writes $0 at J Tax on no-TFN-quoted contributions.
B Gross tax is the sum of T1 and J ($3,615 + $0).
In the SMSF annual return, SMSF BB writes:
Section D: Income tax calculation statement
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Amounts
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A Taxable income
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$14,500
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T1 Tax on taxable income
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$3,615
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J Tax on no-TFN-quoted contributions
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$0
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B Gross tax
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$3,615
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End of example