ATO Interpretative Decision
ATO ID 2001/404
Income Tax
Low income aged persons tax offset - thresholdFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the taxpayer entitled to the low income aged persons tax offset under section 160AAAA of the Income Tax Assessment Act 1936 (ITAA 1936) where half of the combined taxable incomes of the taxpayer and their spouse exceed the married cut-out threshold for the year of income?
Decision
No, the taxpayer is not entitled to the low income aged persons tax offset under section 160AAAA of the ITAA 1936 where half of the combined taxable incomes of the taxpayer and their spouse exceed the married cut-out threshold for the year of income.
Facts
The taxpayer is of pension age during the year of income.
The taxpayer has at least 10 years of qualifying Australian residence.
The taxpayer was not in gaol for the entire year of income.
The taxpayer is not entitled to a pensioner or beneficiary tax offset.
The combined taxable income of the taxpayer and their spouse when halved, exceeds the married couple cut-out threshold for the year of income.
Reasons for decision
A low income aged person with a taxable income below the pensioner tax offset threshold is entitled to a tax offset under section 160AAAA of the ITAA 1936.
Section 160AAAA of the ITAA 1936 provides that the tax offset is available to persons who:
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- are of age pension age for at least one day in the income year;
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- are not entitled to a pensioner or beneficiary tax offset;
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- has 10 years qualifying Australian residence or has a qualifying residence exemption for an age pension
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- are not in gaol for the entire income year; and
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- have a taxable income below the relevant pensioner tax offset cut-out threshold.
The pensioner tax offset thresholds are indexed annually and vary according to the taxpayer's marital status and whether spouses are separated because of illness or infirmity.
If the taxpayer has a spouse, half the couple's combined taxable incomes must be less than the married couple cut-out threshold. If one spouse does not have enough taxable income to use all of the tax offset, the unused part of the tax offset can be transferred to the other spouse (regulations 150AE and 150AF of the Income Tax Regulations 1936).
As the combined taxable incomes of the taxpayer and their spouse when halved, exceed the married couple cut-out threshold, the taxpayer is not entitled under section 160AAAA of the ITAA 1936 to the low income aged persons tax offset.
Date of decision: 22 June 2001
Legislative References:
Income Tax Assessment Act 1936
section 160AAAA
regulation 150AE
regulation 150AF
Keywords
Low income aged persons' rebate
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 22 June 2001 | Original statement |
| 26 August 2005 | Archived |
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