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10. Income

Last updated 12 February 2019

The taxable income of complying superannuation funds is split into a non-arm's length component and a low tax component.

The non-arm's length component (previously referred to as ‘special income’) for an income year is the fund's non-arm's length income for that year less any deductions to the extent that they are attributable to that income.

If any assessable income is non-arm’s length income of a complying fund, complying ADF or PST that amount should be included at U Net non-arm’s length income and not at any other label.

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See U Net non-arm’s length income.

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The low tax component (previously referred to as ‘standard component’) is any remaining part of the fund's taxable income for the income year.

Ensure that you show the correct income components against the corresponding income labels, as different rates of tax apply to different income components.

A concessional rate applies to the low tax component, while the non-arm's length component is taxed at the highest marginal tax rate. The rates are set out in Appendix 3: Rates of tax.