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Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS

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Division 119 - Minimum rate of tax on capital gains

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Operative provisions

SECTION 119-10 When extra income tax is payable on your minimum tax capital gain

119-10(1)
You must pay extra income tax on your * minimum tax capital gain for an income year if:

(a) you are an individual; and

(b) you are an Australian resident at any time during the income year; and

(c) you have a * minimum tax gap amount for the income year.

Note:

Section 12AA of the Income Tax Rates Act 1986 sets the rate at which you must pay extra income tax on your minimum tax capital gain. It does so in such a way that the extra income tax you must pay equals the minimum tax gap amount.

119-10(2)
Use this method statement to work out whether you have a minimum tax gap amount for the income year: Method statement

Step 1.

Multiply your * minimum tax capital gain for the income year by 30%.

Step 2.

Work out your basic income tax liability for the income year under step 2 of the method statement in subsection 4-10(3) , disregarding this Division.

Step 3.

Work out what the amount at step 2 of this method statement would be if your taxable income for the income year were reduced (but not below nil) by the amount of your * minimum tax capital gain.

Step 4.

Subtract the amount at step 3 from the amount at step 2.

Step 5.

Subtract the amount at step 4 from the amount at step 1.

Step 6.

Round the result down to the nearest whole dollar if the result is not already a number of whole dollars.

Step 7.

If the result (as rounded) is more than nil, you have a minimum tax gap amount for the income year equal to that amount.

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