Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-45
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RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS
Division 392
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Long-term averaging of primary producers
'
tax liability
Compare:
(a) the amount (the income tax you would pay at the comparison rate ) worked out using the formula:
(b) the amount of income tax that you would pay on your * basic taxable income for the * current year at * basic rates.
You are entitled to a * tax offset equal to the * averaging adjustment worked out under Subdivision 392-C if the income tax you would pay at the comparison rate is less than the amount of income tax you would pay at * basic rates. Extra income tax 392-35(3)
You must pay extra income tax on the * averaging component of your * basic taxable income if the income tax you would pay at the comparison rate is more than the amount of income tax you would pay at * basic rates.
The basic rates at which you would pay income tax are:
(a) if you are a resident taxpayer as defined in the Income Tax Rates Act 1986 - the rates of income tax in paragraph (1)(b) of Part I of Schedule 7 to that Act, taking into account the way it would apply with any changes to your tax-free threshold under section 20 of that Act; or
(b) if you are a non-resident taxpayer as defined in the Income Tax Rates Act 1986 - the rates of income tax in paragraph 1(b) of Part II of Schedule 7 to that Act.
Work out the amount of income tax mentioned in paragraph (1)(b) as if:
(a) the following provisions did not apply:
(b) you were not entitled to any rebate or credit under the Income Tax Assessment Act 1936 or to any * tax offset under this Act. No adjustment 392-35(6)
This Division does not affect your income tax for the * current year if the income tax you would pay at the * comparison rate equals the amount of income tax you would pay at * basic rates.•
your basic taxable income and your average income are both below the tax-free threshold; or
•
your average income equals your basic taxable income for the current year.
Subdivision 392-B
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What kind of averaging adjustment must you make?
Tax offset or extra income tax
SECTION 392-35
Will you get a tax offset or have to pay extra income tax?
392-35(1)
Compare:
(a) the amount (the income tax you would pay at the comparison rate ) worked out using the formula:
*Basic taxable income
for *current year |
× | *Comparison rate |
(b) the amount of income tax that you would pay on your * basic taxable income for the * current year at * basic rates.
Note:
You must disregard some provisions of this Act in working out amounts of income tax for the purposes of this subsection: see subsection (5).
Tax offset 392-35(2)You are entitled to a * tax offset equal to the * averaging adjustment worked out under Subdivision 392-C if the income tax you would pay at the comparison rate is less than the amount of income tax you would pay at * basic rates. Extra income tax 392-35(3)
You must pay extra income tax on the * averaging component of your * basic taxable income if the income tax you would pay at the comparison rate is more than the amount of income tax you would pay at * basic rates.
Note 1:
Section 12A of the Income Tax Rates Act 1986 sets the rate at which you must pay extra income tax on the averaging component of your basic taxable income.
Note 2:
It does so in such a way that, generally, the extra income tax you must pay equals the averaging adjustment worked out under Subdivision 392-C .
Meaning of basic rates
392-35(4)
The basic rates at which you would pay income tax are:
(a) if you are a resident taxpayer as defined in the Income Tax Rates Act 1986 - the rates of income tax in paragraph (1)(b) of Part I of Schedule 7 to that Act, taking into account the way it would apply with any changes to your tax-free threshold under section 20 of that Act; or
(b) if you are a non-resident taxpayer as defined in the Income Tax Rates Act 1986 - the rates of income tax in paragraph 1(b) of Part II of Schedule 7 to that Act.
Disregard certain provisions in working out amounts
392-35(5)
Work out the amount of income tax mentioned in paragraph (1)(b) as if:
(a) the following provisions did not apply:
(i) this Division;
(ii) section 94 (Partner not having control and disposal of share in partnership income) of the Income Tax Assessment Act 1936 ;
(iii) Division 6AA (Income of certain children) of Part III of the Income Tax Assessment Act 1936 ;
(iv) Part VIIB (Medicare levy) of the Income Tax Assessment Act 1936 ; and
(b) you were not entitled to any rebate or credit under the Income Tax Assessment Act 1936 or to any * tax offset under this Act. No adjustment 392-35(6)
This Division does not affect your income tax for the * current year if the income tax you would pay at the * comparison rate equals the amount of income tax you would pay at * basic rates.
Note:
The 2 amounts will be equal if:
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