INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 16 - Averaging of incomes  

SECTION 156   REBATE OF TAX FOR, OR COMPLEMENTARY TAX PAYABLE BY, CERTAIN PRIMARY PRODUCERS  

156(1)  


In this section:

actual taxable income from primary production
, in relation to a taxpayer in relation to a year of income, means the amount (if any) remaining after deducting from the assessable primary production income of the taxpayer of the year of income so much of the aggregate of the relevant primary production deductions of the taxpayer of the year of income as does not exceed that assessable income;

assessable primary production income
, in relation to a taxpayer in relation to a year of income, means so much of the assessable income of the taxpayer of the year of income as was derived from the carrying on of a primary production business by the taxpayer or was included in the assessable income of the taxpayer of the year of income in consequence of the carrying on of a primary production business by the taxpayer;

deemed taxable income from primary production
, in relation to a taxpayer in relation to a year of income, means:


(a) if the taxpayer did not have a non-primary production profit in relation to the year of income - the taxable income of the taxpayer; and


(b) in any other case - the sum of the actual taxable income from primary production of the taxpayer of the year of income and the notional taxable income from primary production of the taxpayer of the year of income;

notional taxable income from primary production
, in relation to a taxpayer in relation to a year of income, being a taxpayer who had a non-primary production profit in relation to the year of income, means:


(a) where the taxpayer did not incur a primary production loss in relation to the year of income:


(i) in a case to which subparagraph (ii) does not apply - the amount ascertained by deducting from the taxable income of the taxpayer of the year of income the actual taxable income from primary production of the taxpayer of the year of income; and

(ii) where the taxable income of the taxpayer of the year of income exceeds the actual taxable income from primary production of the taxpayer of the year of income and that excess is greater than $5,000 - $5,000 reduced by $1 for each whole dollar by which the amount of that excess exceeds $5,000; and


(b) where the taxpayer incurred a primary production loss in relation to the year of income:


(i) in a case where the sum of the taxable income of the taxpayer of the year of income and the amount of the primary production loss is less than or equal to $5,000 - the taxable income of the taxpayer of the year of income; and

(ii) in a case where the sum of the taxable income of the taxpayer of the year of income and the amount of the primary production loss (which sum is in this subparagraph referred to as the non-farm income ) exceeds $5,000 - an amount ascertained by deducting from $5,000 one dollar for each whole dollar by which so much of the non-farm income as does not exceed $10,000 exceeds $5,000 and deducting from the resultant amount so much (if any) of the amount of the primary production loss as does not exceed that resultant amount;

relevant primary production deductions ,
in relation to a taxpayer in relation to a year of income, means:


(a) any deductions allowed or allowable in the taxpayer's assessment in respect of income of the year of income that relate exclusively to assessable primary production income of the taxpayer of a year of income;


(b) so much of any other deductions (other than apportionable deductions) allowed or allowable in the taxpayer's assessment in respect of income of the year of income as, in the opinion of the Commissioner, may appropriately be related to assessable primary production income of the taxpayer of a year of income; and


(c) the amount that bears to the apportionable deductions allowed or allowable in the taxpayer's assessment the same proportion as the amount ascertained by deducting from the assessable primary production income of the taxpayer of the year of income any deductions allowable from that assessable income in accordance with paragraphs (a) and (b) bears to the sum of the taxable income of the taxpayer of the year of income and the apportionable deductions.

156(2)  
For the purposes of subsection (1), a taxpayer shall be taken to have a non-primary production profit in relation to a year of income if the assessable income of the taxpayer of the year of income other than assessable primary production income exceeds the aggregate of the deductions (other than relevant primary production deductions) allowable to the taxpayer in respect of the year of income.

156(3)  
For the purposes of subsection (1), a taxpayer shall be taken to have incurred a primary production loss in relation to a year of income if the aggregate of the relevant primary production deductions in relation to the year of income exceeds the assessable primary production income of the taxpayer of the year of income, and the amount of that loss shall be taken to be the amount of the excess.

156(5)  


Where:


(a) this Division applies to a share of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of subsection 98(1) or (2) or to the net income or a part of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of section 99 (which share, net income or part, as the case may be, is in this subsection referred to as the eligible net income ); and


(b) the amount of tax that would, apart from this section, section 94 , Division 6AA and Part VIIB and but for any rebate or credit to which the trustee is entitled, be payable by the trustee in respect of the eligible net income exceeds the amount of tax that would, apart from this section, section 94 , Division 6AA and Part VIIB and but for any rebate or credit to which the trustee is entitled, be payable by the trustee in respect of the eligible net income if the notional rates declared by the Parliament for the purposes of this section were the rates of tax payable by the trustee in respect of the eligible net income,

the trustee is entitled, in his or her assessment in respect of the eligible net income, to a rebate of tax of an amount ascertained in accordance with the formula


AB
C

where:

A is the number of whole dollars in the amount of the deemed net income from primary production;

B is the excess referred to in paragraph (b); and

C is the number of whole dollars in the eligible net income.

156(5A)  


Where:


(a) this Division applies to a share of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of subsection 98(1) or (2) or to the net income or a part of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of section 99 (which share, net income or part, as the case may be, is in this subsection referred to as the eligible net income ); and


(b) the amount of tax that would, apart from this section, section 94 , Division 6AA and Part VIIB and but for any rebate or credit to which the trustee is entitled, be payable by the trustee in respect of the eligible net income if the notional rates declared by the Parliament for the purposes of this section were the rates of tax payable by the trustee in respect of the eligible net income exceeds the amount of tax that would, apart from this section, section 94 , Division 6AA and Part VIIB and but for any rebate or credit to which the trustee is entitled, be payable by the trustee in respect of the eligible net income,

the trustee is liable to pay complementary tax, at the rate declared by the Parliament for the purposes of this subsection, on so much of the net income of the trust estate as is equal to the deemed net income from primary production.

156(6)  


For the purposes of the application of this section in relation to a share of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of subsection 98(1) or (2) or in relation to the net income or a part of the net income of a trust estate of a year of income in respect of which a trustee is liable to be assessed and to pay tax in pursuance of section 99 (which share, net income or part, as the case may be, is in this subsection referred to as the eligible net income ):

actual net income from primary production
means so much of the net income from primary production of the trust estate as is included in the eligible net income;

assessable primary production income
means so much of the assessable income of the trust estate of the year of income as was derived from the carrying on of a primary production business by the trustee or was included in the assessable income of the trust estate of the year of income in consequence of the carrying on of a primary production business by the trustee;

deemed net income from primary production
means:


(a) if the trust estate did not have a non-primary production profit in relation to the year of income - the eligible net income; and


(b) in any other case - the sum of the actual net income from primary production of the trust estate of the year of income and the notional net income from primary production of the trust estate of the year of income;

eligible part of the primary production loss
, in relation to a primary production loss incurred by the trust estate in the year of income, means so much of the primary production loss as is equal to the amount by which the eligible net income would have been increased if the aggregate of the relevant primary production deductions allowable in calculating the amount of the net income of the trust estate of the year of income had been equal to the assessable primary production income of the trust estate of the year of income;

net income from primary production
means the amount (if any) remaining after deducting from the assessable primary production income of the trust estate of the year of income so much of the aggregate of the relevant primary production deductions allowable in calculating the net income of the trust estate as does not exceed that assessable primary production income;

notional net income from primary production
means:


(a) where the trust estate had a non-primary production profit in relation to the year of income and did not incur a primary production loss in relation to the year of income:


(i) in a case to which subparagraph (ii) does not apply - the amount ascertained by deducting from the eligible net income the actual net income from primary production (if any); and

(ii) where the eligible net income exceeds the actual net income from primary production in relation to the year of income and that excess is greater than $5,000 - $5,000 reduced by $1 for each whole dollar by which the amount of that excess exceeds $5,000; and


(b) where the trust estate had a non-primary production profit in relation to the year of income and incurred a primary production loss in relation to the year of income:


(i) in a case where the sum of the eligible net income and the eligible part of the primary production loss is less than or equal to $5,000 - the eligible net income; and

(ii) in a case where the sum of the eligible net income and the eligible part of the primary production loss (which sum is in this subparagraph referred to as the non-farm income ) exceeds $5,000 - an amount ascertained by deducting from $5,000 one dollar for each whole dollar by which so much of the non-farm income as does not exceed $10,000 exceeds $5,000 and deducting from the resultant amount so much (if any) of the eligible part of the primary production loss as does not exceed that resultant amount;

relevant primary production deductions
means:


(a) any deductions allowed or allowable in calculating the amount of the net income of the trust estate of the year of income that relate exclusively to assessable primary production income of a year of income;


(b) so much of any other deductions (other than apportionable deductions) allowed or allowable in calculating the amount of that net income as, in the opinion of the Commissioner, may appropriately be related to assessable primary production income of the trust estate of a year of income; and


(c) the amount that bears to the apportionable deductions allowed or allowable in calculating the amount of that net income the same proportion as the amount ascertained by deducting from the assessable primary production income of the trust estate of the year of income any deductions allowable from that assessable primary production income in accordance with paragraphs (a) and (b) bears to the sum of the net income of the trust estate and the apportionable deductions.

156(7)  
For the purposes of subsection (6), a trust estate shall be taken to have incurred a primary production loss in relation to a year of income if the aggregate of the relevant primary production deductions allowable in calculating the amount of the net income of the trust estate of the year of income exceeds the assessable primary production income of the trust estate of the year of income, and the amount of that loss shall be taken to be the amount of the excess.

156(8)  
For the purposes of subsection (6), a trust estate shall be taken to have a non-primary production profit in relation to a year of income if the assessable income of the trust estate of the year of income other than assessable primary production income exceeds the aggregate of the deductions (other than relevant primary production deductions) allowable in calculating the amount of the net income of the trust estate of the year of income.


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