A, T1, J and B Calculation of gross tax

Last updated 25 March 2021

A Taxable income

You wrote the SMSF's taxable income, or its loss, at O Taxable income or loss in Section C.

Is the amount at O Taxable income or loss a loss?

No	Transfer the amount from O Taxable income or loss in Section C.
Yes	Write 0 at A. Go to T1.

A is mandatory. If you leave A blank, you will have specified a zero amount.

T1 Tax on taxable income

Is the amount at A zero?

Yes	Write 0 at T1. Go to J.
No	Read on.

Is the SMSF a complying SMSF for the income year?

No	All assessable income for a non-complying SMSF is taxed at 47%, whether arm's length income, non-arm's-length income or arising from a change in the SMSF's tax status. Multiply A by 47%. Write the answer at T1.
Yes	Different tax rates apply to arm's length and non-arm's-length income. Add: 47% of U Non-arm's-length income (in Section B) and 15% of (A in Section D less U Non-arm's-length income in Section B). The result is the tax on the SMSF's taxable income before applying rebates, tax offsets, and credits. Write the result at T1, then go to J.

All assessable income for a non-complying SMSF is taxed at 47%, whether arm's length income, non-arm's-length income or arising from a change in the SMSF's tax status.

Multiply A by 47%.

Write the answer at T1.

Yes

Different tax rates apply to arm's length and non-arm's-length income. Add:

47% of U Non-arm's-length income (in Section B) and
15% of (A in Section D less U Non-arm's-length income in Section B).

The result is the tax on the SMSF's taxable income before applying rebates, tax offsets, and credits. Write the result at T1, then go to J.

T1 is mandatory. If you leave T1 blank, you will have specified a zero amount.

J Tax on no-TFN-quoted contributions

If the SMSF received no-TFN-quoted contributions (recorded at R3 No-TFN-quoted contributions in Section B), it pays extra tax on those contributions.

Did the SMSF receive contributions from a member who has not provided their TFN?

No	Write 0 at J. Go to B.
Yes	Read on.

Extra tax applies to no-TFN-quoted contributions. To work out the extra tax, multiply the no-TFN-quoted contributions by:

34% if the SMSF is a complying SMSF
2% if the SMSF is a non-complying SMSF.

Write the result at J.

All SMSFs, complying and non-complying, have an overall tax rate of 49% on no-TFN-quoted contributions:

complying SMSFs pay 15% (at T1) and 34% (at J), a total of 49%
non-complying SMSFs pay 47% (at T1) and 2% (at J), a total of 49%.

J is mandatory. If you leave J blank, you will have specified a zero amount:

B Gross tax

Write at B the total of T1 and J. If the sum is zero, write 0 at B.

Start of example

Example: Calculating B Gross tax (without non-arm's-length income)

SMSF B is a complying SMSF. It does not have any non-arm's-length income or no-TFN-quoted contributions.

SMSF B calculated its taxable income as $14,500 which it wrote in at O Taxable income or loss in Section C and also at A Taxable income in Section D.

SMSF B calculates its tax on taxable income at T1 to be $2,175 as follows:

Rate: 15%
Income: $14,500
Tax: $2,175

SMSF B does not have any no-TFN-quoted contributions so it writes $0 at J Tax on no-TFN-quoted contributions.

B Gross tax is the sum of T1 and J ($2,175 + $0).

In the SMSF annual return, SMSF B writes:

Section D Income tax calculation statement (without non-arm's-length income)
Section D: Fields	Amounts
A Taxable income	$14,500
T1 Tax on taxable income	$2,175
J Tax on no-TFN-quoted contributions	$0
B Gross tax	$2,175

Example: Calculating B Gross tax (with non-arm's-length income)

SMSF BB is a complying SMSF. It has non-arm's-length income but does not have any no-TFN-quoted contributions.

SMSF BB calculated its taxable income as $14,500 which it wrote at O Taxable income or loss in Section C and also at A Taxable income in Section D. This amount included non-arm's-length income of $4,500 which it wrote at U Non-arm's-length income in Section B.

SMSF BB's calculation of tax on taxable income to show at T1.
Description	Calculation	Tax
Tax on arm's length income	15% of $10,000	$1,500
Tax on non-arm's-length income	47% of $4,500	$2,115
T1 Tax on taxable income	$1,500 + $2,115	$3,615

SMSF BB does not have any no-TFN-quoted contributions so it writes $0 at J Tax on no-TFN-quoted contributions.

B Gross tax is the sum of T1 and J ($3,615 + $0).

In the SMSF annual return, SMSF BB writes:

Section D Income tax calculation statement (with non-arm's-length income)
Section D: Fields	Amounts
A Taxable income	$14,500
T1 Tax on taxable income	$3,615
J Tax on no-TFN-quoted contributions	$0
B Gross tax	$3,615

End of example

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