Tax Laws Amendment (2006 Measures No. 2) Act 2006 (58 of 2006)
Schedule 7 Technical corrections and improvements
Part 1 Amendments commencing on Royal Assent
Income Tax Assessment Act 1997
64 After Division 61
Insert:
Division 63 - Common rules for tax offsets
Guide to Division 63
63-1 What this Division is about
This Division sets out some rules that are common to all tax offsets.
Table of sections
63-10 Priority rules
63-10 Priority rules
(1) If you have one or more *tax offsets for an income year, apply them against your basic income tax liability in the order shown in the table. To the extent that an amount of a tax offset remains, the table tells you what happens to it.
|
Order of applying tax offsets |
||
|
Item |
Tax offset |
What happens to any excess |
|
5 |
*Tax offset under section 160AAAA of the Income Tax Assessment Act 1936 (tax offset for low income aged persons) |
Your entitlement to it is transferred in accordance with regulations made under that Act |
|
10 |
*Tax offset under section 160AAAB of the Income Tax Assessment Act 1936 (tax offset for low income aged persons - trustee assessed under section 98) |
Your entitlement to it is transferred in accordance with regulations made under that Act |
|
15 |
*Tax offset under section 160AAA of the Income Tax Assessment Act 1936 (tax offset in respect of certain pensions) |
Your entitlement to it is transferred in accordance with regulations made under that Act |
|
20 |
Any *tax offset not covered by another item in this table |
You cannot get a refund of it, you cannot transfer it and you cannot carry it forward to a later income year |
|
25 |
Child care *tax offset under Subdivision 61-IA |
You may transfer your entitlement to it to your *spouse (under sections 61-496 and 61-497) |
|
30 |
Landcare and water facility *tax offset under the former Subdivision 388-A |
You may carry it forward to a later income year (under Division 65) |
|
35 |
Foreign tax credit under Division 18 of Part III of the Income Tax Assessment Act 1936 |
You may carry it forward to a later income year (under section 160AFE of that Act) |
|
40 |
*Tax offset that is subject to the refundable tax offset rules in Division 67 |
You can get a refund of the remaining amount |
|
45 |
*Tax offset arising from payment of *franking deficit tax (see section 205-70) |
You may carry it forward to a later income year (under section 205-70) |
Note 1: Section 13-1 lists tax offsets.
Note 2: Former Division 388 was repealed by the New Business Tax System (Capital Allowances - Transitional and Consequential) Act 2001.
Note 3: Section 160AFE of the Income Tax Assessment Act 1936 also affects how much of a foreign tax credit can be applied against your basic income tax liability.
Note 4: The remaining amount of a carry forward tax offset may be reduced by section 65-30 or 65-35 to take account of net exempt income.
Note 5: Tax offsets mentioned in items 5 and 10 are more commonly referred to as the Senior Australians Tax Offset.
(2) Within each item, apply the tax offsets in the order in which they arose.
Note: This would be relevant if you have carry forward tax offsets of the same category for different income years.