H6 Credit for interest on no-TFN tax offset

Show at H6 the total calculated interest amount of 50 cents or more for interest payable on the no-TFN tax offset claimed at E2.

Interest on the no-TFN tax offset is only payable if all the following conditions are met:

• a member of the fund provided their TFN to their employer before the end of an income year (the past year, for example 2014–15)
• the employer was required by section 299C of the SISA to inform the fund of the individual’s TFN by the end of the past year, but did not do so
• as a result, the contributions made in respect of that member were no-TFN-quoted contributions income of the fund in that past year
• an amount of additional tax (which is the interest-bearing tax) that was payable in respect of the no-TFN-quoted contributions income counts towards the no-TFN tax offset under Subdivision 295-J of the ITAA 1997 for an income year (the current year, for example 2015–16) for the fund
• the no-TFN tax offset under that subdivision is applied when assessing the fund for the current year.

The interest is payable on each amount of interest-bearing tax.

Interest on tax that counts towards the no-TFN tax offset is calculated for the period between the later of:

• the day on which the amount of interest-bearing tax was paid
• the day by which the amount of interest-bearing tax was required to be paid

and

• the day on which the fund lodges its tax return for the current year (which is deemed to be the day on which the current year assessment is made).

The date of payment of the interest-bearing tax is either:

• the date shown on the receipt
• the date the payment is mailed to us plus three business days.

If the relevant interest period extends over two or more quarters, calculate the interest for the number of days in each quarter. Example 9 has more information on how to calculate the amount of interest in such circumstances.

The rate of interest payable on the interest-bearing tax is the base interest rate determined under section 8AAD of the TAA 1953. Table 5 at H1 Credit for interest on early payments - amount of interest provides the applicable interest rates up to 30 June 2016.

For information on interest rates after that date and on calculating the interest to be applied on tax that counts towards the no-TFN tax offset, and for a calculator to help you work out the amount of interest, see Individuals Superannuation.

Keep a record of the amount of interest payable on tax that counts towards the no-TFN tax offset. This interest is assessable income of the fund in the income year in which it is paid to the fund or credited against another fund liability.

Example 9: Superannuation fund showing a credit at H6 Credit for interest on no-TFN tax offset

The Caron Superannuation Fund is a complying fund and included $10,000 no-TFN-quoted contributions in its 2014–15 tax return. An additional 34% tax amounting to $3,400 was paid on these contributions. The fund’s due date for lodgment of its 2014–15 tax return and payment of tax was 31 March 2016. The fund was slightly overdue lodging its return and in paying its tax. It paid the full amount of tax owing including the additional $3,400 tax on the no-TFN-quoted contributions on 7 April 2016.

During 2015–16, Ian, a member of the fund, provided his TFN to the fund after he noticed that his account had been debited with $1,000 which was the amount of the additional tax paid on his no-TFN-quoted contributions. Ian made a statement to the fund saying he gave his TFN to his employer Adrian Pty Ltd when he completed a TFN declaration on 10 September 2014.

Caron Superannuation Fund prepares its 2015–16 tax return in March 2017 and anticipates that the return will be lodged on 31 March 2017.

At E2 on the fund’s 2015–16 tax return, Caron Superannuation Fund claims as a no-TFN tax offset the $1,000 additional tax that was attributable to Ian’s no-TFN-quoted contributions. (Ian’s no-TFN-quoted contributions formed part of the $10,000 reported in the fund’s 2014–15 tax return and on which the fund paid the additional $3,400 tax.)

Interest on the $1,000 additional tax that was paid and is now claimed as a no-TFN tax offset is calculated for the period from 7 April 2016 (the day on which the fund paid the tax) until 31 March 2017 (the day on which the fund lodges its 2015–16 tax return and the day on which the assessment is deemed to be made).

Quarter	Number of days and interest rate calculation					Total^
Apr–Jun 2016	$1,000	x	85 365	x	2.28% 100	$ 5.310
Jul–Sep 2016	$1,000	x	92 365	x	*2.28% 100	$ 5.747
Oct–Dec 2016	$1,000	x	92 365	x	*2.28% 100	$ 5.747
Jan–Mar 2017	$1,000	x	90 365	x	*2.28% 100	$ 5.622
Total interest	(rounded to the nearest cent)					$22.43

^ The total for each quarter is rounded to three decimal places.

*The base interest rate applied for each of the quarters above was not available at the time of publishing. Consequently, the rate for the period Apr–Jun 2016, 2.28%, is used for the purpose of this example.

The fund is entitled to claim $22.43 interest at H6.