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Edited version of private ruling
Authorisation Number: 1011606809259
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Ruling
Subject: National Rental Affordability Scheme Tax Offset
1. Will the incentive payments you receive from the relevant state government for the purposes of the National Rental Affordability Scheme (NRAS) be non-exempt non-assessable income?
Yes.
2. Are you entitled to the NRAS Tax Offset?
Yes.
This ruling applies for the following period
Income year ended 30 June 2011
Income year ended 30 June 2012
Income year ended 30 June 2013
Income year ended 30 June 2014
Income year ended 30 June 2015
Income year ended 30 June 2016
Income year ended 30 June 2017
Income year ended 30 June 2018
Income year ended 30 June 2019
Income year ended 30 June 2020
The scheme commenced on
1 July 2010
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:
· your application for private ruling (incorporating appendix one to the application).
You, as an approved participant under NRAS, have been granted an allocation of houses by the Housing Secretary.
You will enter a head lease arrangement with the owner of a number of residential properties.
You will subsequently sub-lease these properties to eligible tenants under NRAS.
Upon satisfactory compliance with NRAS, the Housing Secretary will issue you a certificate under NRAS. The certificate will state the amount of the tax offset and income year to which it relates.
The relevant state government will make payments to you in respect of your NRAS participation.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 380-5
Income Tax Assessment Act 1997 Section 385-35
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
NRAS is an initiative of the Australian Government intended to assist low to middle income earners secure affordable accommodation. Subject to satisfactory compliance with NRAS each reporting year, the initiative provides annual incentives to participants who provide housing at below market rates to eligible tenants. The incentives include an Australian Government contribution of $6,000 by way of a tax offset and a state government contribution of $2,000, these amounts being indexed each year subsequent to the scheme's commencement.
Section 380-5 of the ITAA 1997 provides that you are entitled to the NRAS tax offset if you are an individual, corporate tax entity or superannuation fund and the Housing Secretary issues you a certificate under NRAS. The amount of the tax offset and the income year to which it relates will be stated on the certificate.
Section 380-35 of the ITAA 1997 provides that a payment made to you by a department of a state in respect of your NRAS participation is non-exempt non-assessable (NANE) income.
In your situation, upon satisfactory compliance in respect of your NRAS participation, you will be issued a certificate by the Housing Secretary and the state government will make a payment to you as their contribution under NRAS.
Accordingly, you are entitled to the NRAS tax offset for the amounts and income years stated on your certificates and the state government payment is NANE income.