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B Gross tax

Last updated 12 February 2019

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
(amount from R3 item 10, tax amount shown at J item 12)

$2,000

31.5%

$630

 

Assessable contributions
(from R item 10)

$10,000

   
 

Total assessable income
(from V item 10)

$10,000

   
 

less

     
 

Deductions

     
 

Administration expenses
(from Q item 11)

$1,000

   
 

Taxable income
(from A item 12, tax amount shown at T1 item 12)

$9,000

15%

$1,350

 

Gross tax
(shown at B item 12)

   

$1,980#

# The amount of gross tax (shown at B item 12) is the sum of the no-TFN quoted contributions tax (shown at 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
(amount from R3 item 10, tax amount shown at J item 12)

$2,000

1.5%

$30

 

Assessable income

     
 

Assessable contributions
(from t R item 10)

$10,000

   
 

Total assessable income
(from V item 10)

$10,000

   
 

less

     
 

Deductions

     
 

Administration expenses
(from Q item 11)

$1,000

   
 

Taxable income
(from A item 12, tax amount shown at T1 item 12)

$9,000

45%

$4,050

 

Gross tax
(shown at B item 12)

   

$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
(amount from R3 item 10, tax amount shown at J item 12)

$2,000

31.5%

$630

 

Assessable income

     
 

Assessable contributions
(from R item 10)

$2,000

   
 

Total assessable income
(from V item 10)

$2,000

   
 

less

     
 

Deductions

     
 

Administration expenses
(from Q item 11)

$3,000

   
 

Taxable income or loss
(from A item 12, tax amount shown at T1 item 12)

0

[$1,000 (L)]

15%

$0

 

Gross tax
(shown at B item 12)

   

$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
(from R item 10)
plus

$10,000

   
   

Net private company dividends (arm's length dealing)
(from J item 10)
plus

$2,000

   
   

Net private company dividends (non-arm's length dealing)
(from U item 10)

$1,900

   
 

Total assessable income
(from V item 10)
less

$13,900

   
 

Deductions

     
   

Administration expenses
(from Q item 11)

$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
(from R item 10)
plus

$10,000

   
   

Net private company dividends (including those treated as non-arm's length income)
(from J and U item 10)

$3,900

   
 

Total assessable income
(from V item 10)
less

$13,900

   
 

Deductions

     
   

Administration expenses
(from Q item 11)

$2,500

   
 

Taxable income
(from A item 12)

$11,400

45%

$5,130

 

Tax on taxable income (shown at T1 item 12)

   

$5,130

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