In this section:
Write at G the small and medium sized enterprises (SME) income component.
A PDF’s SME income component is its SME assessable income, less deductions allowable to the PDF for the income year, whether those deductions relate to the SME assessable income or not. (Allowable deductions to a PDF are offset first against SME assessable income, then applied against unregulated investment income.)
SME assessable income is the sum of:
- non-CGT assessable income derived from an SME investment or derived from the disposal of an SME investment at a time when the company was a PDF, and
- the overall capital gain allocated to the SME assessable income class.
The overall capital gain allocated to the SME assessable income class is the amount of any ordinary capital gain that would otherwise arise from a CGT event at a time the company was a PDF for an SME investment less:
- any ordinary capital loss for that class, and
- any overall capital loss from another class of assessable income, and then
- any prior year net capital losses.
Capital gains in one class of assessable income are first reduced by capital losses in that class and then by capital losses in another class. Prior-year capital losses are applied first against capital gains in the SME assessable income class.
For a company that is a PDF for the full income year, the SME income component is SME assessable income less deductions allowable to the PDF for the income year.
A company that becomes a PDF part way through the income year and is still a PDF at the end of the income year is taxed as a PDF from the day it became registered as a PDF to the end of the income year as if that period were an income year (‘the PDF period’). The PDF component is the taxable income for the PDF period. (A company’s ‘PDF component’ is its ‘adjusted taxable income’.)
The SME income component of a part-year PDF is the company’s SME assessable income less any deductions allowable to the company for the income year that relate to the PDF period.
Write at H the unregulated investment component.
The unregulated investment component of a company that is a PDF for the full income year is worked out by deducting the company’s SME income component from its taxable income for the year. The amount (if any) remaining is the company’s unregulated investment component.
The unregulated investment component of a part-year PDF is worked out by deducting the company’s SME income component for the year of income from its adjusted taxable income.