• B Gross tax

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    Show at B the total of the amounts at T1 and 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, or
    • before 1 July 2007 but the assessable contributions made for the member in the income year exceeded $1,000.

    The fund has also incurred $1,000 in deductible administration expenses (shown at Q item 11). The superannuation fund’s taxable income is $9,000 (shown at O item 11).

    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

     

    Assessable income

     

     

     

     

     

    No-TFN quoted contributions
    (amount from R3 item 10, tax amount shown at J item 12)

    $2,000

    31.5%

    $630

     

     

    Assessable employer contributions
    (from R1 item 10)

    $8,000

     

     

     

     

    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.

    For more information on the applicable tax rates, see Appendix 3.

    Example 5b: Non-complying superannuation fund

    If the Natalie Superannuation Fund is a non-complying fund, most of its income is taxed at the rate of 45%, but a tax rate of 46.5% applies to any no-TFN quoted contributions.

    You would calculate J Tax on no-TFN quoted contributions, T1 Tax on taxable income, and B Gross tax as follows:

     

     

    Amount

    Rate

    Tax

     

    Assessable income

     

     

     

     

     

    No-TFN quoted contributions
    (amount from R3 item 10,tax amount shown at J item 12)

    $2,000

    1.5%

    $30

     

     

    Assessable employer contributions
    (from R1 item 10)

    $8,000

     

     

     

     

    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

    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.

    For more information on the applicable tax rates, see Appendix 3.

    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, or
    • before 1 July 2007 but the assessable contributions made for the member in the income 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 deductible administration expenses (shown at Q item 11). The fund's taxable income is $1,000 loss (shown at O item 11). The taxable income shown at A item 12 is $0.

     

     

    Amount

    Rate

    Tax

     

    Assessable income

     

     

     

     

     

    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)

    $2,000

     

     

     

     

    Total assessable income
    (from V item 10)

    $2,000

     

     

     

    less

     

     

     

     

    Deductions

     

     

     

     

     

    Administration expenses
    (from Q item 11)

    $3,000

     

     

     

     

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

    $0

    15%

    $0

     

     

    Gross tax
    (shown at B item 12)

     

     

    $630#

     

    # Gross tax of $630 is payable even though the fund made a loss for the income year.

    For more information on the applicable tax rates, see Appendix 3.

    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. 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 deductible 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 fund’s taxable income is $11,400 (shown at A item 12).

     

     

    Amount

    Rate

    Tax

     

    Assessable income

     

     

     

     

     

    Assessable contributions
    (from R item 10)
    plus

    $10,000

     

     

     

     

    Private company dividends (arm’s length income)
    (from J item 10)
    plus

    $2,000

     

     

     

     

    Net private company dividends (non-arm’s length income)
    (from U item 10)

    $1,900

     

     

     

     

    Total assessable income
    (from V item 10)

    $13,900

     

     

     

    less

     

     

     

     

    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 B Gross Tax as in this example there are not any no-TFN quoted contributions.

    Example 6b: Non-complying superannuation fund

    If the Elizabeth Superannuation Fund is a non-complying fund, its income is taxed at a rate of 45% (although a tax rate of 46.5% would apply to no-TFN quoted contributions if it had any).

    You 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)

    $13,900

     

     

     

    less

     

     

     

     

    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

     

    Last modified: 05 Nov 2014QC 40267