INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 17 - Rebates  

Subdivision AB - Lump sum payments in arrears  

SECTION 159ZRD   NOTIONAL TAX AMOUNT FOR DISTANT ACCRUAL YEARS  

159ZRD(1)   [Calculation of notional tax amount]  

The notional tax amount for a distant accrual year is calculated in accordance with the formula:


Arrears amount   ×   Average tax rate on recent arrears

where:

Arrears amount is the annual arrears amount in relation to the accrual year.

Average tax rate on recent arrears is the average of the rates calculated in accordance with the following formula in respect of each of the recent accrual years:


Increased normal tax - Normal tax
Arrears amount

where:

Increased normal tax is the gross tax on the normal taxable income of the recent accrual year, being that normal taxable income adjusted as follows:

  • (a) the annual arrears amount for the recent accrual year is to be added;
  • (b) if the recent accrual year is also a rebate year - the total arrears amount for the recent accrual year is to be deducted; and
  • (c) if, during the recent accrual year, there accrued an amount that is, or is part of, the total arrears amount for a rebate year before the current year - the amount that so accrued during the recent accrual year is to be added.
  • Normal tax is the gross tax on the normal taxable income of the recent accrual year, being that normal taxable income adjusted as follows (if applicable):

  • (d) if the recent accrual year is also a rebate year - the total arrears amount for the recent accrual year is to be deducted; and
  • (e) if, during the recent accrual year, there accrued an amount that is, or is part of, the total arrears amount for a rebate year before the current year - the amount that so accrued during the recent accrual year is to be added.
  • Arrears amount is the annual arrears amount for the recent accrual year.

    159ZRD(2)   [Calculation of rate]  

    A rate calculated for the purposes of subsection (1) in respect of a recent accrual year shall be calculated as a decimal fraction to 3 decimal places.

    159ZRD(3)   [Increase of rate]  

    If a rate so calculated would end with a number greater than 4 if it were calculated to 4 decimal places, the rate shall be increased by 0.001.


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