50 National rental affordability scheme tax offset
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The National rental affordability scheme (NRAS) is designed to encourage large-scale investment in affordable housing. The NRAS offers incentives to providers of new dwellings on the condition that they are rented to low and moderate income households at 20% below market rates. Entities participating in the NRAS may claim their share of the refundable tax offset in their tax return.
Refundable NRAS tax offsets may flow indirectly to certain beneficiaries of a trust or to the trustee of the trust provided the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs has issued the trust (or a trust through which their interest is ultimately obtained) a certificate under NRAS and the income year of that trust begins in the NRAS year to which the certificate relates.
The amount of the tax offset is the amount stated in the certificate shared between the beneficiaries of the trust (or the trustee) according to their share of the NRAS rent of the trust for the NRAS year and the total NRAS rent derived by rental dwellings covered by the certificate for the relevant income year.
If a trustee is assessed under section 98 of the ITAA 1936 on behalf of a beneficiary who is entitled to a share of the NRAS rent, then the trustee is entitled to that percentage share of the NRAS offset.
If the trustee is assessed under section 99 or 99A of the ITAA 1936, the trustee may also be entitled to a share of the NRAS offset.
In circumstances where the trust has no net income for the year, for the purposes of the NRAS provisions, no beneficiary can receive a share of NRAS rent indirectly and, as a result, no NRAS tax offset can flow indirectly the beneficiaries. In these circumstances, the trustee may be able to claim the refundable tax offset.
Show at F the total NRAS tax offset available to the beneficiaries or trustee (including any NRAS tax offset received indirectly through a partnership or other trust) for the income year.
The beneficiaries and trustee's share of the NRAS tax offset must be shown at this item and at item 54 Statement of distribution.
The amount of the trust’s tax offset is the amount stated in the certificate issued by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs. However, if the Secretary issues the entity with an amended certificate under the National Rental Affordability Scheme Act 2008External Link, the amount of the trust’s tax offset is the amount stated in the amended certificate.
Last modified: 13 Feb 2019QC 35444