Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 296 - Better targeted superannuation concessions  

Subdivision 296-B - Better targeted superannuation concessions  

Taxable superannuation earnings and related concepts

SECTION 296-60   Division 296 fund earnings  

Superannuation entities (not including RSA providers or pooled superannuation trusts)

296-60(1)    
The Division 296 fund earnings for an income year for an entity to which Division 295 (about taxation of superannuation entities) applies is the amount worked out using the following formula:

Relevant taxable income or loss

−

Assessable contributions

+

Net exempt current pension income

−

* The entity ' s non-arm ' s length component for the year (if any)

+

Pooled superannuation trust component

where:

assessable contributions
is the total of the contributions that are included in the entity ' s assessable income under Subdivision 295-C for the year.

net exempt current pension income
is the result of:

(a) working out the total amount of the entity ' s * exempt income under sections 295-385 and 295-390 for the year; and

(b) subtracting the total deductions the entity could make if the exempt income were assessable income, to the extent attributable to the exempt income.

Note 1:

Sections 295-385 and 295-390 are about income from assets set aside or otherwise used to meet current pension liabilities.

Note 2:

Sections 296-50 , 296-60 and 296-65 of the Income Tax (Transitional Provisions) Act 1997 , which provide for certain adjustments relating to CGT for the purposes of working out Division 296 fund earnings, may be relevant to working out net exempt current pension income under this subsection in some circumstances.

pooled superannuation trust component
is the total of any amounts for the year the entity has under subsection (2) .

relevant taxable income or loss
is:

(a) the entity ' s taxable income for the year; or

(b) for an income year that is a * loss year - the amount of the entity ' s * tax loss for the year, expressed as a negative amount.

Note 1:

Adjustments may apply in relation to the cost base or reduced cost base of a CGT asset that is an asset of a small superannuation fund at the end of 30 June 2026: see section 296-50 of the Income Tax (Transitional Provisions) Act 1997 .

Note 2:

Adjustments apply in relation to net capital gains of complying superannuation funds if relevant to working out a person ' s relevant superannuation earnings for a superannuation interest for the 2026-27 income year to the 2029-30 income year: see section 296-60 of the Income Tax (Transitional Provisions) Act 1997 .

Note 3:

Deferred notional gains are disregarded for the purposes of working out the entity ' s relevant taxable income or loss under this subsection: see subsection 296-65(1) of the Income Tax (Transitional Provisions) Act 1997 .

Note 4:

Certain matters are to be disregarded in working out the entity ' s relevant taxable income or loss: see subsection (3) of this section.

296-60(2)    
For the purposes of the definition of pooled superannuation trust component in subsection (1) , the entity has an amount under this subsection equal to the amount worked out using the following formula if it holds any units in a * pooled superannuation trust at any time during the trust ' s income year (the relevant year ):

(a)    that is the same period as the entity ' s income year mentioned in subsection (1) ; or

(b)    that, of the trust ' s income years, covers the most of the entity ' s income year:

where:

entity ' s average units
is the average number of units in the trust during the relevant year as attributable to the holdings of the entity.

total average units
is the average number of units in the trust during the relevant year.

296-60(3)    
In working out the entity ' s relevant taxable income or loss in relation to an income year for the purposes of subsection (1) :

(a)    disregard paragraph 295-100(2)(c) ; and

(b)    disregard paragraph 70B(2A)(b) of the Income Tax Assessment Act 1936 ; and

(c)    in determining any * net capital gain or * net capital loss for the year, or any deductions to the extent they are attributable to a net capital gain for the year, disregard the following (except in determining any previously unapplied net capital losses from earlier income years):

(i) section 118-12 (about assets used to produce exempt income or non-assessable non-exempt income) of this Act, to the extent it applies to a * capital gain or * capital loss that a * complying superannuation entity makes from a * segregated current pension asset;

(ii) section 118-320 (about segregated current pension assets of a complying superannuation entity).

Note 1:

Paragraph 295-100(2)(c) is about deductions for fees and charges for units in a pooled superannuation trust that are segregated current pension assets.

Note 2:

Paragraph 70B(2A)(b) of the Income Tax Assessment Act 1936 is about deductions for a loss on the disposal or redemption of certain securities that are segregated current pension assets.

Note 3:

The provisions mentioned in paragraph (c) of this subsection still apply for the purposes of working out the entity ' s net exempt current pension income under subsection (1) of this section.

Pooled superannuation trusts

296-60(4)    
Despite subsection (1) , the Division 296 fund earnings for an income year for a * pooled superannuation trust is the amount worked out using the following formula:

Relevant taxable income or loss

−

Assessable transferred contributions

+

Net exempt current pension income

−

The trust ' s * non-arm ' s length component for the year

where:

assessable transferred contributions
is the total of the amounts included in the assessable income of the trust under item 1 of the table in section 295-320 (about certain amounts included in assessable income) for the year.

net exempt current pension income
is the result of:

(a) working out the total amount of the trust ' s * exempt income under section 295-400 for the year; and

(b) subtracting the total deductions the entity could make if the exempt income were assessable income, to the extent attributable to the exempt income.

Note 1:

Section 295-400 is about income of a pooled superannuation trust attributable to current pension liabilities.

Note 2:

Sections 296-50 , 296-60 and 296-65 of the Income Tax (Transitional Provisions) Act 1997 , which provide for certain adjustments relating to CGT for the purposes of working out Division 296 fund earnings, may be relevant to working out net exempt current pension income under this subsection in some circumstances.

relevant taxable income or loss
is:

(a) the trust ' s taxable income for the year; or

(b) for an income year that is a * loss year - the amount of the trust ' s * tax loss for the year, expressed as a negative amount.

Note 1:

A person will not have relevant superannuation earnings in relation to a pooled superannuation trust. However, Division 296 fund earnings of pooled superannuation trusts are included in the Division 296 fund earnings of certain entities under subsection (1) of this section.

Note 2:

Adjustments apply in relation to net capital gains of pooled superannuation trusts if relevant to working out a person ' s relevant superannuation earnings for a superannuation interest for the 2026-27 income year to the 2029-30 income year: see section 296-60 of the Income Tax (Transitional Provisions) Act 1997 .

Note 3:

Deferred notional gains are disregarded for the purposes of working out the trust ' s relevant taxable income or loss under this subsection: see subsection 296-65(2) of the Income Tax (Transitional Provisions) Act 1997 .

RSA providers that are not life insurance companies

296-60(5)    
Despite subsection (1) of this section, the Division 296 fund earnings for an income year for an * RSA provider that is not a * life insurance company is the amount worked out using the following formula:

The RSA provider ' s * RSA component for the year

−

Assessable contributions

+

Relevant exempt income

where:

assessable contributions
is the total of the contributions that are included in the * RSA provider ' s assessable income under Subdivision 295-C for the year.

relevant exempt income
is the total amount of the * RSA provider ' s * exempt income under items 2 and 3 of the table in section 295-405 (about other exempt income) for the year.

RSA providers that are life insurance companies

296-60(6)    
The Division 296 fund earnings for an income year for an * RSA provider that is a * life insurance company is the amount worked out using the following formula:

Relevant taxable income

+

Relevant annuity income

where:

relevant annuity income
is the total of the amounts of the * RSA provider ' s assessable income mentioned in paragraphs 320-137(3)(d) and (e) (about amounts credited to * RSAs from which * annuities are paid) for the year.

relevant taxable income
is the total of the amounts included in the assessable income of the * RSA provider under paragraph 320-137(2)(f) (about amounts credited and debited to * RSAs) for the year.

Other matters

296-60(7)    
The Division 296 fund earnings for an income year for an entity is nil if, apart from this subsection, it would be negative.