INCOME TAX RATES ACT 1986

PART II - RATES OF INCOME TAX PAYABLE UPON INCOMES OTHER THAN INCOMES OF COMPANIES, PRESCRIBED UNIT TRUSTS, SUPERANNUATION FUNDS AND CERTAIN OTHER TRUSTS  

Division 3 - Rates of tax  

Subdivision C - Resident taxpayers, resident beneficiaries and resident trust estates  

SECTION 13   RATES OF TAX WHERE DIVISION 6AA OF PART III OF THE ASSESSMENT ACT APPLIES  

13(1)  
The rates of tax in respect of the taxable income of a resident taxpayer:


(a) who is a prescribed person in relation to the year of income for the purposes of Division 6AA of Part III of the Assessment Act; and


(b) who has, for the purposes of that Division, an eligible taxable income of an amount exceeding $416;

are as set out in Part I of Schedule 11 .

13(2)  


Where the eligible taxable income of a resident taxpayer for the purposes of Division 6AA of Part III of the Assessment Act exceeds $416 but does not exceed the resident phase-out limit, the amount of tax payable under subsection (1) in respect of that eligible taxable income shall not exceed:


(a) 66% of the amount by which that eligible taxable income exceeds $416; or


(b) the amount ascertained by deducting from the amount of tax that would be payable by the taxpayer if the rates set out in Part I of Schedule 7 were applied to the taxable income of the taxpayer the amount of tax that would be payable by the taxpayer if those rates were applied to the taxable income of the taxpayer reduced by the amount of that eligible taxable income;

whichever is the greater.

13(3)  
Where:


(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a resident beneficiary of the net income of the trust estate;


(b) Division 6AA of Part III of the Assessment Act applies to a part of that share; and


(c) the part of that share to which that Division applies exceeds $416;

the rates of tax payable by the trustee in respect of that share of the net income of the trust estate are as set out in Part I of Schedule 12 .

13(4)  
Where:


(a) a trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a resident beneficiary of the net income of the trust estate;


(b) Division 6AA of Part III of the Assessment Act applies to a part of that share;


(c) the part of that share to which that Division applies does not exceed $416;


(d) Division 6AA of Part III of the Assessment Act also applies to a part of the share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates; and


(e) the sum of the part referred to in paragraph (b) and the part or parts referred to in paragraph (d) exceeds $416;

the trustee of the trust estate referred to in paragraph (a) is liable to pay tax in respect of the share of the net income of the trust estate referred to in that paragraph at the rates set out in Part I of Schedule 12 .

13(5)  
Where:


(a) the amount of tax that a trustee of a trust estate is liable to pay in respect of the share of a resident beneficiary of the net income of the trust estate is, by virtue of subsection (4), to be calculated in accordance with Part I of Schedule 12 ; and


(b) the sum of:


(i) the part of that share to which Division 6AA of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies;
does not exceed the resident phase-out limit;

the tax that, apart from this subsection, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

13(6)  
Subject to subsection (7), where:


(a) the trustee of a trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of the share of a resident beneficiary of the net income of the trust estate;


(b) Division 6AA of Part III of the Assessment Act applies to a part (in this subsection referred to as the eligible part ) of that share; and


(c) the eligible part of that share exceeds $416 but does not exceed the resident phase-out limit;

the amount of tax payable under subsection (3) in respect of the eligible part of that share shall not exceed:


(d) 66% of the amount by which the eligible part of that share exceeds $416; or


(e) the amount ascertained by deducting from the amount of tax that would be payable by the trustee if the rates referred to in Part I of Schedule 10 were applied to that share of that net income the amount of tax that would be payable by the trustee if those rates were applied to that share of that net income reduced by the amount of the eligible part of that share;

whichever is the greater.

13(7)  
Subsection (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate if Division 6AA of Part III of the Assessment Act applies to a part of a share of the beneficiary of the net income of another trust estate or to parts of the shares of the beneficiary of the net incomes of other trust estates.

13(8)  
Where:


(a) by reason of the application of subsection (7), subsection (6) does not apply in relation to the share of a beneficiary of the net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax under section 98 of the Assessment Act; and


(b) the sum of:


(i) the part of that share to which Division 6AA of Part III of the Assessment Act applies; and

(ii) the part of the share of the beneficiary of the net income of the other trust estate or the parts of the shares of the beneficiary of the net incomes of the other trust estates, as the case may be, to which that Division applies;
does not exceed the resident phase-out limit;

the tax that, apart from this subsection, would be payable by the trustee in respect of the share referred to in paragraph (a) shall be reduced by such amount (if any) as, in the opinion of the Commissioner, is fair and reasonable.

13(9)  
In forming an opinion for the purposes of subsection (5) or (8) (in this subsection referred to as the relevant subsection ) in relation to the share of a beneficiary of the net income of a trust estate of a year of income, the Commissioner shall have regard to:


(a) any limitation that would be applicable under subsection (6) on the amount of tax that would be payable by a trustee in accordance with Part I of Schedule 12 in respect of a share of the net income of a trust estate of the year of income of an amount equal to the sum of the shares referred to in paragraph (b) of the relevant subsection if:


(i) Division 6AA of Part III of the Assessment Act applied to so much of that share as is equal to the sum of the parts of the shares referred to in paragraph (b) of the relevant subsection; and

(ii) that share were a share of a resident beneficiary who is not presently entitled to a share of the income of the year of income of any other trust estate;


(b) the amount of any reduction previously granted by the Commissioner under subsection (5) or (8) in relation to the share of the beneficiary of the net income of the year of income of any other trust estate; and


(c) such other matters (if any) as the Commissioner thinks fit.

13(10)  


The resident phase-out limit is the following amount rounded down to the nearest dollar:


                $ 416 × 66 %                  
66 % - Highest rate in the table in Part I of Schedule 7




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