ATO Interpretative Decision

ATO ID 2004/130 (Withdrawn)

Superannuation

• This ATO ID is withdrawn from the database because it contains a view in respect of Division 14 of Part III of the Income Tax Assessment Act 1936 and Part 5A of the Income Tax Regulations 1936 (the RBL provisions). The RBL provisions do not apply for the 2007-08 income year and later income years. This ATO ID continues to be a precedential view in respect of decisions for income years up to, and including, the 2006-07 income years.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Can a 'trust distribution' made to the applicant be included in the calculation of the applicant's highest average salary (HAS) for reasonable benefit limit (RBL) purposes?

Decision

No. A 'trust distribution' made to the applicant cannot be included in the calculation of the applicant's HAS.

Facts

The applicant lodged a Transitional Reasonable Benefit Limit (TRBL) application form and now requests that the TRBLs be calculated on the basis that the HAS was understated in the original application.

The applicant requests that trust distributions received in the three years be included in the calculation of the HAS.

Reasons for Decision

The term 'salary' is defined in subregulation 47(1) of the Income Tax Regulations 1936 (ITR 1936) as:

'salary' , subject to subregulations (3) and (4), means salary, wages, commissions, bonuses, fees, allowances or gratuities paid to a person during a financial year, and includes:

(a)

subject to paragraph (k), other earnings; and

(b)

the amount that would be the value of a benefit to which section 57, 57A or 58 of the Fringe Benefits Tax Assessment Act 1986 applies if that benefit were not an exempt benefit; and

(c)

a payment made by a company by way of remuneration to a director of a company; and

(d)

in the case of a person who is an Australian citizen, or a resident of Australia- any amounts paid to the person from a source outside of Australia that would fall within this definition if they had been paid from a source in Australia;

but does not include:

(e)

a distribution from a trust estate; or...

Paragraph (e) of subregulation 47(1) of the ITR 1936 specifically excludes from the definition of 'salary', a distribution from a trust estate. Consequently, the applicant's salary for the purposes of determining HAS does not include the trust distributions.

Year of income:  Year ended 30 June 2003

Legislative References:
Income Tax Assessment Act 1936
   section 26AC.
   section 26AD.

Keywords
Highest average salary
Reasonable benefit limits
Salary
Superannuation Business Line
Transitional RBLs
Upper Mt Gravatt ATO

Business Line:  Superannuation

Date of publication:  6 February 2004

ISSN: 1445-2782