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Draft Taxation Determination

TD 93/D51

Income tax : can a taxpayer who earned foreign employment income exempt under section 23AG and taxable income including Job Search or New Start allowances during an income tax year be entitled to a beneficiary rebate?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 93/84.

FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes. A taxpayer would be entitled to a beneficiary rebate according to the amount of taxable income of the taxpayer of a year of income. A full beneficiary rebate would be allowed where the taxable income is equal to or less than the rebate threshold.

2. Subsection 23AG(3) would apply to determine the amount of tax (if any) payable in respect of other income received where income of a taxpayer of a year of income consists of exempt income (ie. under subsection 23AG) and non-exempt income. From the amount of tax calculated under subsection 23AG(3), an amount of beneficiary rebate (if any) will be deducted to give the net tax payable on the taxable income where it includes a payment under job search or new start allowance.

Example:

During the income year of 1992-93, a taxpayer is over 21 years, single with no dependent children and has the following income:
foreign employment income(exempt under 23AG) $25,000
job search or new start allowance $ 5,500
other assessable income eg.wages in Australia $ 500
As the taxable income of $6,000 is less than the rebate threshold of $7,640, the taxpayer is entitled to the full beneficiary rebate of $448.
The amount of tax payable in respect of the taxable income (job search or new start allowance and wages in Australia) using the personal income tax rates applicable for the 1992/93 financial year is:

(Notional gross tax / Notional gross taxable income) * Other taxable income

= ($7,361 / $31,000) * $6000

= $1,424.71 less beneficiary rebate of $448

= $976.71

If the taxable income of the taxpayer is more than the cut-out threshold (in the example, $11,124) no beneficiary rebate will be allowed and the taxpayer will be liable to pay tax in accordance with subsection 23AG(3).

Commissioner of Taxation
4 March 1993

References


BO 92/9413-9

ISSN 1038 - 8982

Subject References:
beneficiary rebate
exempt income
social security benefits

Legislative References:
ITAA 160AAA
ITAA 23AG
ITR Reg152


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