Show at B the total of amounts T1 plus J.
Use examples 5 and 6 to help you calculate the gross tax amount.
Example 5: Income tax calculation: Superannuation fund showing income at R3 No-TFN quoted contributions item 10
Example 5a: Complying superannuation fund
The Natalie Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.
The fund received $10,000 in assessable contributions (shown at R item 10) all of which are employer contributions. Of that amount, $8,000 is shown at R1 item 10 for members who quoted their TFN, but $2,000 is shown at R3 item 10 for members who have not quoted their TFN and who opened their account either:
- on or after 1 July 2007
- before 1 July 2007 but the assessable contributions made for the member in the year exceeded $1,000.
The fund has also incurred $1,000 in administration expenses (Q item 11). The superannuation fund's taxable income is $9,000.
For the purposes of calculating the amount to be shown at J Tax on no-TFN quoted contributions, T1 Tax on taxable income and B Gross tax, work out the amount of tax as follows:
|
Amount |
Rate |
Tax |
|
No-TFN quoted contributions |
$2,000 |
31.5% |
$630 |
|
Assessable contributions |
$10,000 |
|||
Total assessable income |
$10,000 |
|||
less |
||||
Deductions |
||||
Administration expenses |
$1,000 |
|||
Taxable income |
$9,000 |
15% |
$1,350 |
|
Gross tax |
$1,980# |
# The amount of gross tax (shown at B item 12) is the sum of the no-TFN quoted contributions tax (shown at J item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.
See Appendix 3 for more information on the applicable tax rates.
Example 5b: Non-complying superannuation fund
Most of the income of non-complying funds is taxed at 45%, but a tax rate of 46.5% applies to no-TFN quoted contributions.
If the Natalie Superannuation Fund was a non-complying fund, you would calculate J Tax on no-TFN quoted contributions,T1 Tax on taxable income, and B Gross tax as follows:
Amount |
Rate |
Tax |
||
No-TFN quoted contributions |
$2,000 |
1.5% |
$30 |
|
Assessable income |
||||
Assessable contributions |
$10,000 |
|||
Total assessable income |
$10,000 |
|||
less |
||||
Deductions |
||||
Administration expenses |
$1,000 |
|||
Taxable income |
$9,000 |
45% |
$4,050 |
|
Gross tax |
$4,080# |
# The amount of gross tax (shown at B item 12) is the sum of the no-TFN quoted contributions tax (shown at J item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.
See Appendix 3 for more information on the applicable tax rates.
Example 5c: Nil taxable income or loss
The Natalie Superannuation Fund is a complying fund. However, it has income which must be taxed at more than 15%.
The fund received $2,000 in assessable contributions, all of which are employer contributions for members who have not quoted their TFN and whose account was opened either:
- on or after 1 July 2007
- before 1 July 2007 but the assessable contributions made for the member in the year exceeded $1,000.
Show the $2,000 at R3 item 10 and also at R item 10.
The fund has also incurred $3,000 in administration expenses (shown at Q item 11). The fund's taxable income is $1,000 loss.
Amount |
Rate |
Tax |
||
No-TFN quoted contributions |
$2,000 |
31.5% |
$630 |
|
Assessable income |
||||
Assessable contributions |
$2,000 |
|||
Total assessable income |
$2,000 |
|||
less |
||||
Deductions |
||||
Administration expenses |
$3,000 |
|||
Taxable income or loss |
0 [$1,000 (L)] |
15% |
$0 |
|
Gross tax |
$630 |
The gross tax of $630 (plus any other amounts payable) is payable even though the fund made a loss for the income year.
See Appendix 3 for more information on the applicable tax rates.
Example 6: Superannuation fund showing income at U Net non-arm's length income item 10
Example 6a: Complying superannuation fund
The Elizabeth Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.
The fund received $10,000 of assessable contributions (shown at R item 10), and $4,000 of private company dividends. All private company dividends are generally treated as non-arm's length income unless that income is consistent with an arm's length dealing. See U Net non-arm's length income for a definition of 'arm's length dealing'. Of the $4,000 private company dividends, $2,000 is treated as non-arm's length income. The net non-arm's length income is taxed at 45%.
Non-arm's length income expenses are $100. These expenses can be deducted only from the non-arm's length income. All non-arm's length income is shown on the tax return as a net amount of income. Accordingly an amount of $1,900 is shown at U item 10.
The amount of taxable income remaining after taking into account the non-arm's length income is referred to as the low tax component.
The fund has also incurred $2,500 in administration expenses (shown at Q item 11) that are not considered to be attributable to the earning of the non-arm's length income.
The superannuation fund's taxable income is $11,400 (shown at A item 11).
Amount |
Rate |
Tax |
|||
Assessable income |
|||||
Assessable contributions |
$10,000 |
||||
Net private company dividends (arm's length dealing) |
$2,000 |
||||
Net private company dividends (non-arm's length dealing) |
$1,900 |
||||
Total assessable income |
$13,900 |
||||
Deductions |
|||||
Administration expenses |
$2,500 |
||||
Taxable income (from A item 12) |
$11,400 |
||||
Components of taxable income |
|||||
Non-arm's length component |
$1,900 |
45% |
$855 |
||
Low tax component (that is other taxable income) |
$9,500 |
15% |
$1,425 |
||
Tax on taxable income (shown at T1 item 12) |
$2,280 |
||||
The amount of $2,280 is shown at T1 item 12 and also at Gross Tax B as in this example there are no No-TFN quoted contributions.
Example 6b: Non-complying superannuation fund
The income of non-complying superannuation funds is taxed at the rate of 45% (except for a tax rate of 46.5% which applies to no-TFN quoted contributions).
If the Elizabeth Superannuation Fund was a non-complying fund, all of its income would be taxed at the same rate because it does not have no-TFN quoted contributions. You would calculate its gross tax as follows:
Amount |
Rate |
Tax |
|||
Assessable income |
|||||
Assessable contributions |
$10,000 |
||||
Net private company dividends (including those treated as non-arm's length income) |
$3,900 |
||||
Total assessable income |
$13,900 |
||||
Deductions |
|||||
Administration expenses |
$2,500 |
||||
Taxable income |
$11,400 |
45% |
$5,130 |
||
Tax on taxable income (shown at T1 item 12) |
$5,130 |
||||