ATO Interpretative Decision
ATO ID 2001/421 (Withdrawn)
Income Tax
Income Tax Exemption - State or Territory BodyFOI status: may be released
-
This ATO ID is a restatement of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Whether the income of the taxpayer is exempt from income tax under section 24AM of Division 1AB of the Income Tax Assessment Act 1936 (ITAA 1936).
Decision
The taxpayer is a State Territory Body (STB) in terms of section 24AO of the ITAA 1936.
The taxpayer is not an excluded STB in terms of section 24AT of the ITAA 1936.
The income of the taxpayer is exempt from income tax pursuant to section 24AM of the ITAA 1936.
Facts
The taxpayer was registered under the Corporations Law as a proprietary company limited by shares.
A Trustee Company was directed to acquire and hold as custodian trustee for the State in its own name the whole of the issued shares in the capital of the taxpayer.
Reasons for Decision
Subdivision A of Division 1AB of the ITAA 1936 provides for certain STBs to be exempt from income tax in respect of income derived after 1 July 1994- refer key principles set out in section 24AK of the ITAA 1936.
The income of an STB will be exempt from income tax if it is not an excluded STB or a State Government Insurance Office (SGIO) - refer sections 24AM, 24AN and 24AT.
There are five ways in which body can be an STB. The first way is set out in section 24AO in the following terms:
A body is an "STB" if:
- (a)
- it is a company limited solely by shares; and
- (b)
- all of the shares in it are beneficially owned by one or more government entities.
A "government entity" includes a State - refer section 24AT of the ITAA 1936.
The taxpayer was registered under the Corporations Law as a proprietary company limited by shares. A Trustee Company was directed to acquire and hold as custodian trustee for the State in its own name the whole of the issued shares in the capital of the taxpayer.
The taxpayer is an STB in terms of section 24AO of the ITAA 1936, it is not an excluded STB in terms of section 24AT of the ITAA 1936 nor an SGIO. Therefore, the income of the taxpayer is exempt from income tax pursuant to section 24AM of the ITAA 1936.
Date of decision: 13 September 2001
Legislative References:
Income Tax Assessment Act 1936
Division 1AB
section 24AM
section 24AO
section 24AT
Keywords
Income tax general exemption
ISSN: 1445-2782
| Date: | Version: | |
| 13 September 2001 | Original statement | |
| You are here | 1 April 2010 | Archived |
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
