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Edited version of private advice
Authorisation Number: 1051780412756
Date of advice: 2 December 2020
Ruling
Subject: Excepted person
Question
Are you an excepted person for the income year ending 30 June 20XX under subparagraph 102AC(2)(c)(i) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes
This ruling applies for the following period(s)
Income year ended 30 June 20XX
The scheme commences on
1 July 20XX
Relevant facts and circumstances
You are considered a minor, being under 18 years old.
You had a serious illness during early childhood. A family member (your mother) is receiving a carer allowance under the Social Security Act 1991 in respect of you.
The carer allowance has been paid to your mother continually since it was granted including 30 June 20XX being the last day of the income year.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 102AC(1)
Income Tax Assessment Act 1936 Paragraph 102AC(2)(c)
Income Tax Assessment Act 1936 Subparagraph 102AC(2)(c)(i)
Reasons for decision
Summary
You are an excepted person for the income year ending 30 June 20XX under subparagraph 102AC(2)(c)(i) of the ITAA 1936.
Detailed reasoning
Division 6AA of the ITAA 1936 ensures that special rates of tax and a lower tax-free threshold apply in working out the basic income tax liability on taxable income, other than excepted income, derived by a prescribed person.
A 'prescribed person' is defined in subsection 102AC(1) of the ITAA 1936 to include any person, other than an excepted person (as defined in subsection 102AC(2) of the ITAA 1936), under 18 years of age at the end of the income year.
An 'excepted person' for a year of income is defined in subsection 102AC(2) of the ITAA 1936 and includes a person in respect of whom a carer allowance under the Social Security Act 1991 was payable in respect of a period that included the last day of the year of income (subparagraph 102AC(2)(c)(i) of the ITAA 1936).
You are an excepted person under subsection 102AC(2) of the ITAA 1936 as your mother received a carer allowance under the Social Security Act 1991 for you for a period that included 30 June 20xx. Accordingly, the special rates of tax under Division 6AA of the ITAA 1936 will not apply to income derived by you for the income year ending 30 June 20XX.