Income Tax Assessment Act 1997

Chapter 3—Specialist liability rules

Part 3‑25—Particular kinds of trusts

Division 275—Australian managed investment trusts: general

Table of Subdivisions

Guide to Division 275

275‑A Meaning of managed investment trust

275‑B Choice for capital treatment of managed investment trust gains and losses

275‑C Carried interests in managed investment trusts

275‑L Modification for non‑arm’s length income

Guide to Division 275

275‑1 What this Division is about

The trustee of certain Australian managed investment trusts may make a choice that certain assets of the trust be dealt with under CGT rules. If the trustee does not make such a choice, those assets will be treated as revenue assets (see Subdivision 275‑B).

Gains and profits from carried interests held in entities that are or were Australian managed investment trusts (or certain other trusts) are included in the assessable income of the holder of the interests. The holder is entitled to a deduction from losses from such interests (see Subdivision 275‑C).

Subdivision 275‑A—Meaning of managed investment trust

Guide to Subdivision 275‑A

275‑5 What this Subdivision is about

This Subdivision sets out the requirements for a trust to be a managed investment trust in relation to an income year.

Table of sections

Operative provisions

275‑10 Meaning of managed investment trust

275‑15 Trusts with wholesale membership

275‑20 Widely‑held requirements—ordinary case

275‑25 Widely‑held requirements for registered MIT—special case for entities covered by subsection 275‑20(4)

275‑30 Closely‑held restrictions

275‑35 Licensing requirements for unregistered MIS

275‑40 MIT participation interest

275‑45 Meaning of managed investment trust—every member of trust is a managed investment trust etc.

275‑50 Extended definition of managed investment trust—no fund payment made in relation to the income year

275‑55 Extended definition of managed investment trust—temporary circumstances outside the control of the trustee

Operative provisions

275‑10 Meaning of managed investment trust

(1) A trust is a managed investment trust in relation to an income year if any of the following requirements are met:

(a) the trust is covered under subsection (3) of this section in relation to the income year (ordinary case);

(b) the trust is covered under section 275‑45 in relation to the income year (only members of trust are managed investment trusts etc.).

(2) A trust is also a managed investment trust in relation to an income year if any of the following requirements are met:

(a) the trust is covered under section 275‑50 in relation to the income year (no fund payment made in relation to the income year);

(b) the trust is covered under section 275‑55 in relation to the income year (temporary circumstances outside the control of the trustee).

(3) A trust is covered under this subsection in relation to an income year if:

(a) at the time the trustee of the trust makes the first *fund payment in relation to the income year, or at an earlier time in the income year:

(i) the trustee of the trust was an Australian resident; or

(ii) the central management and control of the trust was in Australia; and

(b) the trust is not a trust covered by subsection (4) (trading trust etc.) in relation to the income year; and

(c) at the time the payment is made, the trust is a managed investment scheme (within the meaning of section 9 of the Corporations Act 2001); and

(d) at the time the payment is made:

(i) the trust is covered by section 275‑15 (trusts with wholesale membership); or

(ii) if the trust is not covered by section 275‑15—the trust is registered under section 601EB of the Corporations Act 2001; and

(e) the trust satisfies, in relation to the income year:

(i) if, at the time the payment is made, the trust is registered under section 601EB of the Corporations Act 2001 and is covered by section 275‑15—either or both of the widely‑held requirements in subsections 275‑20(1) and 275‑25(1); or

(ii) if, at the time the payment is made, the trust is so registered and is not covered by section 275‑15—either or both of the widely‑held requirements in subsections 275‑20(2) and 275‑25(1); or

(iii) if, at the time the payment is made, the trust is not so registered and is covered by section 275‑15—the widely‑held requirements in subsection 275‑20(1); and

(f) the trust satisfies the closely‑held restrictions in subsection 275‑30(1) in relation to the income year; and

(g) if the trust is covered by section 275‑15 at the time the payment is made—it satisfies the licensing requirements in section 275‑35 in relation to the income year.

Trading unit trust or other trust carrying on trading business etc. cannot be managed investment trust

(4) A trust is covered by this subsection in relation to an income year if:

(a) in the case of a unit trust—the trust is a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to the income year; or

(b) in any other case—the trust at any time in the income year:

(i) carried on a trading business (within the meaning of that Division); or

(ii) controlled, or was able to control, directly or indirectly, the affairs or operations of another person in respect of the carrying on by that other person of a trading business (within the meaning of that Division).

(4A) In determining whether a trust is covered by subsection (4), disregard any interest that the trust has in an *AFOF, an *ESVCLP or a *VCLP unless:

(a) the trust is a *general partner of the AFOF, ESVCLP or VCLP; or

(b) the trust has *committed capital in the partnership that, taken together with the sum of the amounts of committed capital in the partnership of any of that partner’s *associates (other than associates to whom subsection (4B) applies), exceeds 30% of the partnership’s committed capital.

(4B) This subsection applies to:

(a) an *ADI; or

(b) a *life insurance company; or

(i) that is constituted by a law of a State or internal Territory; and

(ii) that carries on life insurance business within the meaning of section 11 of the Life Insurance Act 1995; or

(d) a widely‑held complying superannuation fund within the meaning of section 4A of the Pooled Development Funds Act 1992; or

(e) a *widely held foreign venture capital fund of funds.

Crown entities etc.

(5) For the purposes of paragraphs (3)(d) and (e), treat an entity as registered under section 601EB of the Corporations Act 2001 at the time the payment is made if at that time the trust is operated by:

(a) an entity that would, but for subsection 5A(4) of that Act (about the Crown not being bound by Chapter 6CA or 7 of that Act), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme; or

(b) an entity that:

(i) is a *wholly‑owned subsidiary of an entity of a kind mentioned in paragraph (a); and

(ii) would, but for any instrument issued by ASIC under that Act that has effect in relation to the entity and operation of the scheme mentioned in paragraph (3)(c), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act) whose licence would cover operating such a managed investment scheme.

Start‑up and wind‑down phases

(6) Treat the requirements in paragraphs (3)(e) and (f) as being satisfied if:

(a) the trust is created during the period:

(i) starting 12 months before the start of the income year; and

(ii) ending at the end of the income year; or

(b) the trust ceases to exist during the income year, and was a *managed investment trust (disregarding paragraph (a) of this section) in relation to the previous income year.

275‑15 Trusts with wholesale membership

A trust is covered by this section at a time if, at that time:

(a) the trust is not required to be registered in accordance with section 601ED of the Corporations Act 2001 (whether or not it is actually so registered) because of subsection 601ED(2) of that Act (no product disclosure statement required) or because it is operated or managed by an entity covered by subsection 275‑35(2) (Crown entities); and

(b) the total number of entities that had become a *member of the trust because a financial product or a financial service was provided to, or acquired by, the entity as a retail client (within the meaning of sections 761G and 761GA of the Corporations Act 2001) is no more than 20; and

275‑20 Widely‑held requirements—ordinary case

(1) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 275‑10(3)(a) is made, the trust has at least 25 *members.

(2) The trust satisfies the requirements in this subsection in relation to the income year if, at the time the payment mentioned in paragraph 275‑10(3)(a) is made:

(a) units in the trust are listed for quotation in the official list of an *approved stock exchange in Australia; or

(b) the trust has at least 50 *members (ignoring objects of a trust).

(3) For the purposes of subsection (1) and paragraph (2)(b), determine the number of *members of the trust as follows:

(a) first, by applying the rules in subsection (5), identify:

(i) the members of the trust that are not entities covered by subsection (4); and

(ii) the members of the trust that are entities covered by subsection (4);

(b) next, work out the number of members mentioned in subparagraph (a)(i);

(i) work out the *MIT participation interest in the trust of each entity mentioned in subparagraph (a)(ii); and

(ii) for each of those entities, multiply the total of its MIT participation interest in the trust by 50 and round the result upwards to the nearest whole number; and

(iii) work out the total of the results of subparagraph (ii) for all of those entities;

(d) next, work out the total of the results of paragraphs (b) and (c).

(4) This subsection covers the following kinds of entity:

(a) a *life insurance company;

(b) a *foreign life insurance company that is regulated under a *foreign law;

(c) a *complying superannuation fund, a *complying approved deposit fund or a *foreign superannuation fund, being a fund that has at least 50 *members;

(d) a *pooled superannuation trust that has at least one member that is a complying superannuation fund that has at least 50 members;

(e) a *managed investment trust in relation to the income year;

(f) an entity:

(i) that is recognised under a foreign law as being used for collective investment by pooling the contributions of its members as consideration to acquire rights to benefits produced by the entity; and

(ii) that has at least 50 members; and

(iii) the contributing members of which do not have day‑to‑day control over the entity’s operation;

(g) an entity, the principal purpose of which is to fund pensions (including disability and similar benefits) for the citizens or other contributors of a foreign country, if:

(i) the entity is a fund established by an *exempt foreign government agency; or

(ii) the entity is established under a foreign law for an exempt foreign government agency; or

(iii) the entity is a *wholly‑owned subsidiary of an entity mentioned in subparagraph (i) or (ii);

(h) an investment entity that satisfies all of these requirements:

(i) the entity is wholly‑owned by one or more *foreign government agencies, or is a wholly‑owned subsidiary of one or more foreign government agencies;

(ii) the entity is established using only the public money or public property of the foreign government concerned;

(iii) all economic benefits obtained by the entity have passed, or are expected to pass, to the foreign government concerned;

(i) an entity established and wholly‑owned by an *Australian government agency, if the capital of the entity, and returns from the investment of that capital, are used for the primary purpose of meeting statutory government liabilities or obligations (such as superannuation liabilities and liabilities arising from compensation or workcover claims);

(ia) the *Future Fund Board;

(j) a *limited partnership, if, throughout the income year:

(i) at least 95% of the *membership interests in the limited partnership are owned by entities mentioned in the preceding paragraphs of this subsection, or by entities that are wholly‑owned by entities so mentioned; and

(ii) the remaining membership interests (if any) in the limited partnership are owned by a *general partner of the limited partnership that habitually exercises the management power of the limited partnership;

(k) an entity, all the membership interests in which are owned by any of the following:

(i) entities mentioned in the preceding paragraphs of this subsection;

(ii) entities that are wholly‑owned by entities mentioned in the preceding paragraphs of this subsection;

(iii) entities that are covered under this subsection because of a previous operation of this paragraph;

(l) an entity of a kind similar to an entity mentioned in the preceding paragraphs of this subsection as specified in the regulations.

(4A) Any financial assets (within the meaning of the Future Fund Act 2006) held by the *Future Fund Board are taken, for the purposes of subparagraph (4)(k)(ii), to be held by the Future Fund Board in its own right.

(5) The rules are as follows:

(a) if an entity that is not a trust holds interests in the trust indirectly, through a *chain of trusts:

(i) treat the entity as a member of the trust; and

(ii) do not treat a trust in the chain of trusts as a member of the trust;

(b) do not treat an object of the trust as a member of the trust;

(c) if the trust is mentioned in subparagraph 275‑10(3)(d)(i) (trusts with wholesale membership)—do not treat an individual as a member of the trust (other than an individual who became a member of the trust because a financial product or a financial service was provided to, or acquired by, the individual as a wholesale client (within the meaning of section 761G of the Corporations Act 2001));

(d) the rules in subsection (7).

(6) For the purposes of paragraph (5)(a), treat an entity covered by subsection (4) as an entity that is not a trust.

(7) The rules are as follows:

(a) treat the following entities as together being one entity:

(i) an individual;

(ii) each of his or her *relatives;

(iii) each entity acting in the capacity of nominee of an individual mentioned in subparagraph (i) or (ii);

(b) treat the following entities as together being one entity (the notional entity):

(i) an entity that is not an individual;

(ii) each entity acting in the capacity of nominee of the entity mentioned in subparagraph (i).

(8) For the purposes of subsection (5), if the entity mentioned in subparagraph (7)(b)(i) is an entity covered by subsection (4), treat the notional entity as an entity covered by subsection (4).

275‑25 Widely‑held requirements for registered MIT—special case for entities covered by subsection 275‑20(4)

(1) The trust satisfies the requirements in this subsection in relation to the income year if:

(a) one or more entities covered by subsection 275‑20(4) have a total *MIT participation interest in the trust of more than 25% at the time the payment mentioned in paragraph 275‑10(3)(a) is made; and

(b) at no time in the income year does an entity (other than an entity covered by subsection 275‑20(4)) have a MIT participation interest in the trust of more than 60%.

(2) For the purposes of paragraphs (1)(a) and (b):

(a) if:

(i) an entity covered by subsection 275‑20(4) has a *MIT participation interest (the first interest) in the trust; and

(ii) another entity covered by subsection 275‑20(4) also has a MIT participation interest (the second interest) in the trust;

disregard the second interest to the extent that it arises through the existence of the first interest; and

(b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts—do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.

(3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 275‑20(4) as an entity that is not a trust.

(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 275‑20(7).

275‑30 Closely‑held restrictions

(1) The trust satisfies the requirements in this subsection in relation to the income year unless, at any time in the income year, any of the following situations exist:

(a) for a trust mentioned in subparagraph 275‑10(3)(d)(i) (trusts with wholesale membership)—10 or fewer persons have a total *MIT participation interest in the trust of 75% or more;

(b) if paragraph (a) does not apply—20 or fewer persons have a total MIT participation interest in the trust of 75% or more;

(2) For the purposes of paragraphs (1)(a) and (b):

(a) if an entity covered by subsection 275‑20(4) has a *MIT participation interest in the trust—treat that entity as not having a MIT participation interest in the trust; and

(b) if an entity that is not a trust has a MIT participation interest in the trust because it holds interests in the trust indirectly, through a *chain of trusts:

(i) if the entity is covered by subsection 275‑20(4)—do not treat it as having a MIT participation interest in the trust; and

(ii) do not treat a trust in the chain of trusts as having a MIT participation interest in the trust.

(3) For the purposes of paragraph (2)(b), treat an entity covered by subsection 275‑20(4) as an entity that is not a trust.

(4) For the purposes of paragraphs (1)(a) and (b), apply the rules in subsection 275‑20(7).

275‑35 Licensing requirements for unregistered MIS

(1) The trust satisfies the requirements in this section in relation to the income year if, at the time the payment mentioned in paragraph 275‑10(3)(a) is made (the time of the first fund payment for the income year):

(a) the trust is operated or managed by:

(i) a financial services licensee (within the meaning of section 761A of the Corporations Act 2001) holding an Australian financial services licence whose licence covers it providing financial services (within the meaning of section 766A of that Act) to wholesale clients (within the meaning of section 761G of that Act); or

(ii) an authorised representative (within the meaning of section 761A of that Act) of such a financial services licensee; or

(b) the trust is operated or managed by an entity covered by subsection (2); or

(i) is a *wholly‑owned subsidiary of an entity covered by subsection (2); and

(ii) is an entity covered by subsection (3).

(2) An entity is covered by this subsection if it would, but for subsection 5A(4) of the Corporations Act 2001 (about the Crown not being bound by Chapter 6CA or 7 of that Act), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act).

(3) An entity is covered by this subsection if it would, but for any instrument issued by ASIC under the Corporations Act 2001 that has effect in relation to the entity and the operation of the scheme mentioned in paragraph 275‑10(3)(c), be required under that Act to be a financial services licensee (within the meaning of section 761A of that Act).

275‑40 MIT participation interest

(1) An entity has a MIT participation interest in a trust if the entity, directly or indirectly:

(a) holds, or has the right to *acquire, interests representing a percentage of the value of the interests in the trust; or

(b) has the control of, or the ability to control, a percentage of the rights attaching to *membership interests in the trust; or

(2) The MIT participation interest of the entity in the trust is the greatest of the percentages mentioned in paragraphs (1)(a), (b) and (c).

275‑45 Meaning of managed investment trust—every member of trust is a managed investment trust etc.

(1) A trust is covered under this section in relation to an income year if:

(a) the condition in paragraph 275‑10(3)(a) is satisfied; and

(b) the condition in paragraph 275‑10(3)(b) is satisfied; and

(i) the only *members of the trust are entities that are covered by subsection 275‑20(4) (other than entities mentioned in paragraph 275‑20(4)(f)); or

(ii) the only members of the trust are entities that are *managed investment trusts in relation to the income year because of subsection 275‑10(2); and

(d) the trust satisfies the licensing requirements in section 275‑35 in relation to the income year.

(2) A requirement in paragraph (1)(a) is satisfied if, and only if, it is satisfied:

(a) at the time the trustee of the trust makes the first *fund payment in relation to the income year; or

(b) if the trustee does not make such a payment in relation to the income year—at both the start and the end of the income year.

275‑50 Extended definition of managed investment trust—no fund payment made in relation to the income year

A trust is covered under this section in relation to an income year if:

(a) the trustee of the trust does not make a *fund payment in relation to the income year; and

(b) the trust would be a *managed investment trust in relation to the income year if the trustee of the trust had made the first fund payment in relation to the income year on the first day of the income year when it was in existence; and

(c) the trust would be a managed investment trust in relation to the income year if the trustee of the trust had made the first fund payment in relation to the income year on the last day of the income year on which it was in existence.

275‑55 Extended definition of managed investment trust—temporary circumstances outside the control of the trustee

A trust is covered under this section in relation to an income year if:

(a) apart from a particular circumstance, the trust would be a *managed investment trust in relation to the income year; and

(b) the circumstance is temporary; and

(d) it is fair and reasonable to treat the trust as a managed investment trust in relation to the income year, having regard to the following matters:

(i) the matters in paragraphs (a) and (b);

(ii) the nature of the circumstance;

(iii) the actions (if any) taken by the trustee of the trust to address or remove the circumstance, and the speed with which such actions are taken;

(iv) the extent to which treating the trust as a managed investment trust in relation to the income year would increase or reduce the amount of tax otherwise payable by the trustee, the *members of the trust or any other entity;

(v) any other relevant matter.

Subdivision 275‑B—Choice for capital treatment of managed investment trust gains and losses

Table of sections

275‑100 Consequences of making choice—CGT to be primary code for calculating MIT gains or losses

275‑105 Covered assets

275‑110 MIT not to be trading trust

275‑115 MIT CGT choices

275‑120 Consequences of not making choice—revenue account treatment

275‑100 Consequences of making choice—CGT to be primary code for calculating MIT gains or losses

(1) The modifications in subsection (2) apply if:

(a) a *CGT event happens at a time involving a *CGT asset; and

(b) the CGT asset is owned at that time by an entity that is a *managed investment trust in relation to the income year in which the time occurs; and

(c) the CGT event happens because the managed investment trust *disposes of, ceases to own or otherwise realises the asset; and

(d) the asset is covered by section 275‑105; and

(e) the entity meets the requirement in section 275‑110 at the time; and

(f) a choice under section 275‑115 covering the entity is in force for the income year in which the time occurs.

(1A) Without limiting paragraph (1)(b), if:

(a) a *VCLP or an *ESVCLP owns a *CGT asset at the time referred to in that paragraph; and

(b) at that time, the *managed investment trust has an interest in the asset as a *limited partner of the VCLP or ESVCLP;

for the purposes of that paragraph, the managed investment trust is taken to own the asset to the extent of that interest.

(2) These provisions do not apply to the *CGT event:

(a) sections 6‑5 (about *ordinary income), 8‑1 (about amounts you can deduct), and 15‑15 and 25‑40 (about profit‑making undertakings or plans);

(b) sections 25A and 52 of the Income Tax Assessment Act 1936 (about profit‑making undertakings or schemes);

(d) Division 70 and section 118‑25 (about trading stock).

General exceptions

(3) The provisions referred to in subsection (2) can apply to the *CGT event if a *capital gain or *capital loss from the event is disregarded because of one of the provisions in this table:

Where gain or loss disregarded because of CGT provision
Item	Provision	Brief description
1	Paragraph 104‑15(4)(a)	Title in a CGT asset does not pass when a hire purchase or similar agreement ends
2	Section 118‑13	Shares in a PDF
3	Section 118‑60	Certain gifts

Trading stock and profit‑making undertakings or plans involving land etc.

(4) The provisions referred to in subsection (2) can also apply to the *CGT event if:

(a) where the *CGT asset is land (including an interest in land), or a right or option to *acquire or *dispose of land (including an interest in land):

(i) the CGT asset is *trading stock; or

(ii) the circumstances existing at the time of the event would, disregarding this Subdivision, give rise to an amount being included in the assessable income of the entity under section 15‑15 or to a deduction for the entity under section 25‑40 (about profit‑making undertakings or plans); or

(b) where paragraph (a) does not apply:

(i) the *managed investment trust acquired the CGT asset in an income year for which the choice mentioned in paragraph (1)(f) was not in force; and

(ii) the CGT asset was treated as trading stock in the managed investment trust’s financial report for the most recent income year ending before the start of the income year in which that choice first came into force; and

(iii) the CGT asset was treated as trading stock in the *income tax return for the managed investment trust for the most recent income year ending before the start of the income year in which that choice first came into force; and

(iv) the CGT asset was treated as trading stock in the managed investment trust’s financial report for the most recent income year ending before the time of the event; and

(v) the CGT asset was treated as trading stock in the income tax return for the managed investment trust for the most recent income year ending before the time of the event.

Treatment of outgoings to acquire trading stock

(5) The modifications in subsection (6) apply if:

(a) an entity that is a *managed investment trust in relation to the income year *acquires a *CGT asset at a time in that income year; and

(b) the CGT asset is an item of *trading stock; and

(c) the CGT asset is not land (including an interest in land), or a right or option to acquire or *dispose of land (including an interest in land); and

(d) the entity incurs an outgoing in connection with acquiring the asset; and

(e) the asset is covered by section 275‑105; and

(f) the entity meets the requirement in section 275‑110 at the time; and

(g) a choice under section 275‑115 covering the entity is in force for the income year in which the time occurs.

(6) The modifications are as follows:

(a) section 8‑1 (about amounts you can deduct) does not apply to the *acquisition;

(b) Division 70 (about trading stock) does not apply in relation to the asset in respect of:

(i) the income year in which the time occurs; and

(ii) any later income year in relation to which the entity is a *managed investment trust and throughout which the entity meets the requirement in section 275‑110.

275‑105 Covered assets

(1) An asset is covered by this section if it is any of the following:

(a) a *share in a company (including a share in a *foreign hybrid company);

(b) a *non‑share equity interest in a company;

(d) land (including an interest in land);

(e) a right or option to *acquire or *dispose of an asset of a kind mentioned in paragraph (a), (b), (c) or (d).

(2) However, the asset is not covered by this section if it is any of the following:

(a) a *Division 230 financial arrangement;

(b) a *debt interest.

275‑110 MIT not to be trading trust

(1) An entity that is a trust meets the requirement in this section at a time if the entity is not, at that time, a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to that income year.

(2) If, apart from a particular circumstance, a trust would meet the requirement in subsection (1) at a time, the trust also meets the requirement in this section at a time if:

(a) the circumstance is temporary; and

(b) the circumstance arose outside the control of the trustee of the trust; and

(c) the trustee of the trust is not liable to pay income tax on the net income of the trust under section 102S of the Income Tax Assessment Act 1936 for the income year in which the time occurs; and

(d) it is fair and reasonable to treat the trust as meeting the requirement in this section at that time, having regard to the following matters:

(i) the matters in paragraphs (a), (b) and (c);

(ii) the nature of the circumstance;

(iii) the actions (if any) taken by the trustee of the trust to address or remove the circumstance, and the speed with which such actions are taken;

(iv) the extent to which treating the trust as meeting the requirement in this section at that time would increase or reduce the amount of tax otherwise payable by the trustee, the beneficiaries of the trust or any other entity;

(v) any other relevant matter.

275‑115 MIT CGT choices

(1) The trustee of an entity that is a *managed investment trust may make a choice under this section that covers the managed investment trust.

(2) The choice must be made in the *approved form.

(3) The choice can be made only:

(a) if the entity became a *managed investment trust in the 2009‑10 income year or a later income year (whether or not the entity existed before it became a managed investment trust)—on or before the latest of the following days:

(i) the day it is required to lodge its *income tax return for the income year in which it became a managed investment trust;

(ii) if the Commissioner allows a later day for the managed investment trust—that later day; or

(b) otherwise—on or before the latest of the following days:

(i) the last day in the 3 month period starting on the day on which this section commences;

(ii) the last day of the 2009‑10 income year;

(iii) if the Commissioner allows a later day for the managed investment trust—that later day.

(4) The choice, once made, cannot be revoked.

(5) The choice is in force:

(a) in the circumstances mentioned in paragraph (3)(a)—for the income year in which the entity became a *managed investment trust (whether or not the entity existed before it became a managed investment trust) and later income years; or

(b) in the circumstances mentioned in paragraph (3)(b)—for the 2008‑09 income year and later income years.

275‑120 Consequences of not making choice—revenue account treatment

(1) This section applies if:

(a) the requirements in subsection 275‑100(1) are met in relation to a *CGT asset held by a *managed investment trust, apart from the requirement in paragraph 275‑100(1)(f); and

(b) the CGT asset is not:

(i) land (including an interest in land); or

(ii) a right or option to *acquire or *dispose of land (including an interest in land); and

(d) disregarding this section:

(i) the net proceeds (if any) from the disposal, cessation or realisation would not be reflected in an amount being included in the assessable income of the managed investment trust (other than under Part 3‑1 or 3‑3); and

(ii) the gain or profit (if any) on the disposal, cessation or realisation would not be reflected in an amount being included in the assessable income of the managed investment trust (other than under Part 3‑1 or 3‑3); and

(iii) the loss (if any) on the disposal, cessation or realisation would not be reflected in an amount being deductible by the managed investment trust.

(2) For the purposes of this Act, treat the disposal, cessation of ownership of or realisation of the asset in the same way as the disposal, cessation of ownership of or realisation of a *revenue asset.

Subdivision 275‑C—Carried interests in managed investment trusts

Table of sections

275‑200 Gains and losses etc. from carried interests in managed investment trusts reflected in assessable income or deduction

(1) This section applies if:

(a) you hold a *CGT asset in an income year that carries an entitlement to a distribution from an entity; and

(b) the entitlement to such a distribution is contingent upon the attainment of profits by the entity; and

(i) it is a *managed investment trust in relation to the income year;

(ii) it was a managed investment trust in relation to a previous income year; and

(d) you acquired the asset because of services you or your *associate provided, or will provide, to the entity; and

(e) you or your associate provided, or will provide, those services:

(i) as a manager of the entity; or

(ii) as an associate of a manager of the entity; or

(iii) as an employee of a manager of the entity; or

(iv) as an associate of an employee of a manager of the entity; and

(f) any of the following apply:

(i) you become entitled in the income year to such a distribution (regardless of whether the distribution is made immediately, or is to be made in the future);

(ii) a *CGT event happens in relation to the asset in the income year.

(1A) For the purposes of paragraph (1)(c), in determining whether the entity satisfies any of the requirements mentioned in that paragraph:

(a) disregard paragraph 275‑10(3)(b) (requirement of not being a trading trust etc.); and

(b) disregard subsection 102T(16) of the Income Tax Assessment Act 1936 (exclusion of public trading trust etc.).

(2) Include in your assessable income for the income year:

(a) the amount of the distribution (except to the extent that it represents a return of capital that you or your associate contributed in order for you to *acquire the asset); or

(b) the amount of your gain or profit (if any) on the *CGT event.

(3) Subsection (2) does not apply to the extent that the amount is included in your assessable income as:

(a) *ordinary income under section 6‑5; or

(b) *statutory income under a section of this Act, other than a provision in Part 3‑1 or 3‑3.

(4) An amount to which subsection (2) applies is taken, for the purposes of the *income tax laws, to have a source in Australia. For the purposes of this subsection, disregard subsection (3).

(5) You are entitled to a deduction for the income year for the amount of your loss (if any) on the *CGT event.

(6) Subsection (5) does not apply to the extent that you can deduct the amount under another provision of this Act.

(7) Subdivision 115‑C does not apply to the amount of a distribution mentioned in subparagraph (1)(f)(i) if:

(a) that amount is included in your assessable income under subsection (2); or

(b) an amount referable to that amount is included in your assessable income under Division 6 of Part III of the Income Tax Assessment Act 1936.

Subdivision 275‑L—Modification for non‑arm’s length income

Guide to Subdivision 275‑L

275‑600 What this Subdivision is about

The trustee of a managed investment trust in relation to an income year is taxed on amounts related to the managed investment trust’s non‑arm’s length income for the income year.

Table of sections

Operative provisions

275‑605 Trustee taxed on amount of non‑arm’s length income of managed investment trust

275‑610 Non‑arm’s length income

275‑615 Commissioner’s determination in relation to amount of non‑arm’s length income

Operative provisions

275‑605 Trustee taxed on amount of non‑arm’s length income of managed investment trust

(1) Subsections (2), (3) and (4) apply if the Commissioner has made a determination under section 275‑615 that specifies an amount of *non‑arm’s length income for a specified *managed investment trust in relation to a specified income year.

Excess amount to be taxed

(2) The trustee of the *managed investment trust is liable to pay income tax at the rate declared by the Parliament on the amount mentioned in subsection (5).

Note: The rate is set out in subsection 12(10) of the Income Tax Rates Act 1986.

Excess amount to be adjusted

(3) If the trust is an *AMIT for the income year:

(a) if paragraph (b) does not apply—treat the trust as having an *over in the income year in which the determination is made, for the specified income year, of a character relating to *ordinary income, or *statutory income, from an *Australian source, equal to the amount mentioned in subsection (5); or

(b) if the trust already has such an over in the income year in which the determination is made, for the specified income year—increase the amount of that over by the amount mentioned in subsection (5).

(4) If the trust is not an *AMIT for the income year, reduce the trust’s *net income for the income year in which the determination is made by the amount mentioned in subsection (5), to the extent that the net income is attributable to that amount.

Excess amount

(5) The amount is the excess mentioned in paragraph 275‑610(1)(b) in respect of the *non‑arm’s length income, reduced by deductions (if any) that:

(a) are reflected in:

(i) if the trust is an *AMIT for the income year—the amounts of its *trust components for the income year (disregarding subsection (3)); or

(ii) otherwise—its *net income for the income year (disregarding subsection (4)); and

(b) are attributable only to the amount of non‑arm’s length income.

275‑610 Non‑arm’s length income

(1) An amount of *ordinary income or *statutory income is non‑arm’s length income of a *managed investment trust if:

(a) it is derived from a *scheme the parties to which were not dealing with each other at *arm’s length in relation to the scheme; and

(b) that amount exceeds the amount that the entity might have been expected to derive if those parties had been dealing with each other at arm’s length in relation to the scheme; and

(i) a distribution from a *corporate tax entity;

(ii) a distribution from a trust that is not a party to the scheme mentioned in paragraph (a);

(iii) a *return covered by subsection (2).

(1A) Disregard subparagraph (1)(c)(ii) if the amount of *ordinary income or *statutory income is *excepted MIT CSA income.

(2) This subsection covers a *return that an entity pays or provides on a *debt interest, if the rate (expressed on an annual basis) of the return does not exceed the greater of:

(a) the *benchmark rate of return for the interest; and

(b) the *base interest rate for the day on which the return is paid or provided, plus 3 percentage points.

(3) Subsection (4) applies if:

(a) an amount would be *non‑arm’s length income of the *managed investment trust (disregarding that subsection); and

(b) the amount is a distribution from a trust, or a share of the *net income of a trust, if the trust is a party to the scheme mentioned in paragraph (1)(a).

(4) The amount is *non‑arm’s length income of the *managed investment trust only to the extent that the distribution or share of *net income is attributable to non‑arm’s length income of the trust mentioned in paragraph (3)(b) (on that assumption that the trust were a managed investment trust) because of another operation of this section.

(5) Subsection (6) applies if:

(a) an amount (the first amount) of *ordinary income or *statutory income of the *managed investment trust that would be *non‑arm’s length income of the managed investment trust (disregarding that subsection) is:

(i) a distribution from a trust that is a party to the scheme mentioned in paragraph (1)(a); or

(ii) a share of the *net income of a trust that is a party to that scheme; and

(b) another amount (the second amount) of ordinary income or statutory income of the managed investment trust is:

(i) a distribution from another trust (whether or not the other trust is a party to that scheme); or

(ii) a share of the net income of another trust (whether or not the other trust is a party to that scheme); and

(6) The first amount is not *non‑arm’s length income of the *managed investment trust to the extent that the second amount would have been higher as mentioned in paragraph (5)(c).

275‑615 Commissioner’s determination in relation to amount of non‑arm’s length income

(1) The Commissioner may make a determination in writing that specifies an amount of *non‑arm’s length income for a specified *managed investment trust in relation to a specified income year if the Commissioner is satisfied that:

(a) the amount of non‑arm’s length income for the managed investment trust in relation to the income year is reflected in:

(i) if the trust is an *AMIT for the income year—one or more of its *trust components for the income year; or

(ii) otherwise—its *net income for the income year; and

(b) the managed investment trust is a party to the *scheme mentioned in paragraph 275‑610(1)(a) at a time in the income year in which the amount is derived; and

(1A) Disregard paragraphs (1)(b) and (c) if the amount of *non‑arm’s length income is *excepted MIT CSA income.

Determination does not form part of assessment

(2) A determination under subsection (1) does not form part of an assessment.

Notice by Commissioner of determination

(3) If the Commissioner makes a determination under subsection (1), the Commissioner must give a copy of the determination to the *managed investment trust concerned.

Evidence of determination

(4) The production of:

(a) a notice of a determination; or

(b) a document signed by the Commissioner, a Second Commissioner or a Deputy Commissioner purporting to be a copy of a determination;

is:

(d) conclusive evidence that the determination is correct (except in proceedings under Part IVC of the Taxation Administration Act 1953 on an appeal or review relating to the determination).

Objections

(5) If an entity to whom a determination relates is dissatisfied with the determination, the entity may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953.

Division 276—Australian managed investment trusts: attribution managed investment trusts

Table of Subdivisions

Guide to Division 276

276‑A What is an attribution managed investment trust?

276‑B Member’s vested and indefeasible interest in share of income and capital of AMIT

276‑C Taxation etc. of member components

276‑D Member components

276‑E Trust components

276‑F Unders and overs

276‑G Shortfall and excess taxation

276‑H AMMA statements

276‑J Debt‑like trust instruments

276‑K Ceasing to be an AMIT

Guide to Division 276

276‑1 What this Division is about

A managed investment trust in relation to an income year is an attribution managed investment trust (or AMIT) for the income year if certain criteria are satisfied. In particular, for the trust to be an AMIT, the interests of the members of the trust need to be clearly defined at all times during which the trust is in existence in the income year (see Subdivision 276‑A).

An AMIT for an income year is treated as a fixed trust. A member of the AMIT in respect of the income year is treated as having a vested and indefeasible interest in a share of the income and capital of the AMIT throughout the income year (see Subdivision 276‑B).

Amounts related to income and tax offsets of an AMIT, determined by the trustee to be of a particular tax character, are attributed to members, generally retaining that tax character (see Subdivision 276‑C).

Underestimates and overestimates of amounts at the trust level are carried forward and dealt with in later years. This is done on a character‑by‑character basis. An underestimate in an income year of a particular character results in an under of that character. An overestimate results in an over of that character. Unders and overs arise, and are dealt with, in the income year in which they are discovered (see Subdivision 276‑F).

The trustee of an AMIT is liable to pay income tax on certain amounts reflecting under‑attribution of income or over‑attribution of tax offsets (see Subdivision 276‑G).

Special rules apply to a trust that ceases to be an AMIT (see Subdivision 276‑K).

Subdivision 276‑A—What is an attribution managed investment trust?

Guide to Subdivision 276‑A

276‑5 What this Subdivision is about

A managed investment trust in relation to an income year is an attribution managed investment trust (or AMIT) for the income year if certain criteria are satisfied. In particular:

(a) the interests of the members of the trust need to be clearly defined at all times when the trust is in existence in the income year; and

(b) the trustee of the trust needs to have made a choice for the trust to be an AMIT in respect of that income year or an earlier income year.

Table of sections

Operative provisions

276‑10 Meaning of attribution managed investment trust (or AMIT)

276‑15 Clearly defined interests

276‑20 Trust with classes of membership interests—each class treated as separate AMIT

Operative provisions

276‑10 Meaning of attribution managed investment trust (or AMIT)

(1) A trust is an attribution managed investment trust (or AMIT) for an income year if:

(a) the trust is a *managed investment trust in relation to the income year; and

(b) the rights to income and capital arising from each of the *membership interests in the trust are clearly defined (see section 276‑15) at all times when the trust is in existence in the income year; and

(d) if the regulations specify criteria for the purposes of this paragraph—those criteria are satisfied in relation to the trust; and

(e) either:

(i) the trustee of the trust has made a choice for the purposes of this subparagraph in respect of that income year; or

(ii) the trust was an AMIT for an earlier income year.

(2) A choice for the purposes of subparagraph (1)(e)(i) cannot be revoked.

276‑15 Clearly defined interests

(1) Without limiting the circumstances in which the rights to income and capital arising from the *membership interests in a trust are clearly defined for the purposes of paragraph 276‑10(1)(b), treat such rights as being clearly defined at a particular time for those purposes if any of the following conditions are satisfied at that time:

(a) the trust is registered under section 601EB of the Corporations Act 2001;

(b) the rights to income and capital arising from each of the membership interests in the trust are the same.

(2) For the purposes of working out whether the condition in paragraph (1)(b) is satisfied, disregard the following:

(a) fees or charges imposed by the trustee on the *members of the trust;

(b) issue and redemption prices of *membership interests in the trust;

276‑20 Trust with classes of membership interests—each class treated as separate AMIT

(1) Subsections (2) and (3) apply if:

(a) the *membership interests in an *AMIT for an income year are divided into classes; and

(b) the rights arising from each of those membership interests in a particular class are the same as the rights arising from every other of those membership interests in that class; and

(c) each of those membership interests in a particular class is distinct from each of those membership interests in another class; and

(d) the trustee of the AMIT has made a choice for the purposes of this paragraph that applies to the income year.

(2) For the purposes of this Division (other than this Subdivision), treat each class of those *membership interests in the *AMIT as being a separate AMIT for that income year.

(3) For the purposes of this Division, allocate assessable income, *exempt income, *non‑assessable non‑exempt income, *tax losses, *net capital losses and other similar amounts in respect of the *AMIT between each of the separate classes mentioned in subsection (1) on a fair and reasonable basis.

Making of choice by trustee

(4) A choice for the purposes of paragraph (1)(d) applies to the income year for which it is made and every subsequent income year.

(5) A choice for the purposes of paragraph (1)(d) cannot be revoked.

Subdivision 276‑B—Member’s vested and indefeasible interest in share of income and capital of AMIT

Guide to Subdivision 276‑B

276‑50 What this Subdivision is about

Table of sections

Operative provisions

276‑55 AMIT taken to be fixed trust and member taken to have vested and indefeasible interest in income and capital

Operative provisions

276‑55 AMIT taken to be fixed trust and member taken to have vested and indefeasible interest in income and capital

For the purposes of this Act:

(a) treat an *AMIT for an income year as a *fixed trust; and

(b) treat an entity that is a *member of the AMIT in respect of the income year as having a vested and indefeasible interest in a share of the income and capital of the AMIT throughout the income year.

Subdivision 276‑C—Taxation etc. of member components

Guide to Subdivision 276‑C

276‑75 What this Subdivision is about

Amounts related to income and tax offsets of an AMIT, of a particular tax character, are attributed to members of the AMIT on the basis of their determined member components of that tax character.

This attribution does not apply to the extent that amounts have been withheld etc. in relation to those components under Subdivision 12‑F, 12‑H or 12A‑C in Schedule 1 to the Taxation Administration Act 1953.

The trustee of an AMIT that is not a withholding MIT may be liable to pay income tax in respect of a determined member component of a foreign resident member (including where that member is acting in the capacity of a trustee). As a result, the member may be entitled to a tax offset.

Table of sections

Taxation etc. of member on determined member components

276‑80 Member’s assessable income or tax offsets for determined member components—general rules

276‑85 Member’s assessable income or tax offsets for determined member components—specific rules

276‑90 Commissioner’s determination as to status of member as qualified person

276‑95 Relationship between section 276‑80 and withholding rules

276‑100 Relationship between section 276‑80 and other charging provisions in this Act

Foreign resident members—taxation of trustee and corresponding tax offset for members

276‑105 Trustee taxed on foreign resident’s determined member components

276‑110 Refundable tax offset for foreign resident member—member that is not a trustee

Special rule for interposed custodian

276‑115 Custodian interposed between AMIT and member

Taxation etc. of member on determined member components

276‑80 Member’s assessable income or tax offsets for determined member components—general rules

Components of income character

(1) Subsection (2) applies if a *member of an *AMIT in respect of an income year has, for the income year, a *determined member component of:

(a) a character relating to assessable income; or

(b) a character relating to *exempt income; or

(2) For the purpose of working out the effects mentioned in subsection (3) for the *member, treat the member as having derived, received or made the amount reflected in the *determined member component:

(a) in the member’s own right (rather than as a member of a trust); and

(b) in the same circumstances as the *AMIT derived, received or made that amount, to the extent that those circumstances gave rise to the particular character of that component.

(3) The effects are as follows:

(a) including an amount in the assessable income of the *member;

(b) including an amount in the *exempt income of the member;

(d) determining whether the member has made a *capital gain from a *CGT event;

(e) determining the extent to which the member’s *net capital loss has been *utilised.

Components of tax offset character

(4) Subsection (5) applies if a *member of an *AMIT in respect of an income year has, for the income year, a *determined member component of a character relating to a *tax offset.

(5) For the purpose of working out the effects mentioned in subsection (6) for the *member, treat the member as having paid or received the amount reflected in the *determined member component:

(a) in the member’s own right (rather than as a member of a trust); and

(b) in the same circumstances as the *AMIT paid or received that amount.

(6) The effects are as follows:

(a) entitling the member to a *tax offset;

(b) entitling the member to a credit under Division 18 in Schedule 1 to the Taxation Administration Act 1953.

276‑85 Member’s assessable income or tax offsets for determined member components—specific rules

(1) This section makes clarifications and modifications of the operation of section 276‑80 in respect of a *member of an *AMIT in respect of an income year.

(2) For the purposes of this Act, if an amount is included in the *member’s assessable income because of the operation of this section, treat that amount as being so included because of the operation of subsection 276‑80(2).

Discount capital gains

(3) Subsection (4) applies if the *member has, for the income year, a *determined member component of the character of:

(a) a *discount capital gain from a *CGT asset that is *taxable Australian property; or

(b) a discount capital gain from a CGT asset that is not taxable Australian property.

(4) For the purposes of section 276‑80 and this section, treat the amount of the component as being double what it would be apart from this subsection.

Franking credit gross‑up

(5) Subsection (6) applies if the *member has, for the income year, a *determined member component (the franking credit gross‑up component) of the character of assessable income under subsection 207‑20(1) (franking credit gross‑up).

(6) For the purposes of subsection 207‑20(1) (franking credit gross‑up), treat the reference in that subsection to the amount of the *franking credit on the distribution as instead being a reference to the amount of the franking credit gross‑up component.

Limitation on circumstances in paragraph 276‑80(2)(b)

(7) The circumstances mentioned in paragraph 276‑80(2)(b) or (5)(b) do not include the following:

(a) the residence of the trustee of the *AMIT;

(b) the place of the central management and control of the AMIT.

276‑90 Commissioner’s determination as to status of member as qualified person

(1) Subsection (2) applies to a *member of an *AMIT in respect of an income year if:

(a) the AMIT is specified in a determination under subsection (3); and

(b) the income year is specified in the determination; and

(i) is specified in the determination; or

(ii) is included in a class of members specified in the determination.

(2) Treat the *member as not being a qualified person in relation to a distribution in relation to the *AMIT for the income year, for the purposes of Division 1A of former Part IIIAA of the Income Tax Assessment Act 1936.

(3) For the purposes of this section, the Commissioner may make a determination in writing that identifies any of the following:

(a) a specified *member of a specified *AMIT;

(b) a specified class of members of a specified AMIT.

(4) The determination may specify one or more income years.

(5) In deciding whether to make a determination under subsection (3), the Commissioner may have regard to any of the following:

(a) arrangements (if any) entered into by the *member that directly or indirectly reduce the economic exposure of the member to changes in the value of the *membership interests held by the member in the *AMIT;

(b) the lack of such arrangements;

(d) any other matter that the Commissioner considers relevant.

(6) A determination under subsection (3) is not a legislative instrument.

(7) If an entity to whom a determination relates is dissatisfied with the determination, the entity may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953.

276‑95 Relationship between section 276‑80 and withholding rules

(1) Subsection 276‑80(2) does not apply to the extent that the *determined member component is reflected in an *AMIT DIR payment or a *fund payment, if an amount in respect of the payment:

(a) has been withheld from the payment under Subdivision 12‑F or 12‑H in Schedule 1 to the Taxation Administration Act 1953; or

(b) would be so withheld apart from an exemption from a requirement to withhold under Subdivision 12‑F in that Schedule; or

(d) would be so paid apart from an exemption from a requirement to withhold under Subdivision 12‑F in that Schedule.

(2) However, if the *determined member component is reflected in a *fund payment, subsection (1) applies only to the extent to which an amount attributable to the fund payment is treated under section 840‑815 as not assessable income and not *exempt income.

(3) Subsection 276‑80(2) does not affect the operation of the following:

(a) Division 11A of Part III of the Income Tax Assessment Act 1936;

(b) Subdivision 840‑M of this Act;

Note: See Division 12A in Schedule 1 to the Taxation Administration Act 1953 for provisions about withholding tax that apply specifically to AMITs.

276‑100 Relationship between section 276‑80 and other charging provisions in this Act

(1) This section applies if:

(a) an amount is included in the assessable income of a *member of an *AMIT in respect of an income year in respect of the member’s interest in the AMIT; and

(b) that amount is so included otherwise than because of the operation of subsection 276‑80(2).

(2) Reduce the amount included in the assessable income of the *member as mentioned in subsection (1) to the extent (if any) that a corresponding amount is included in the assessable income of the member in respect of the member’s interest in the *AMIT because of the operation of subsection 276‑80(2).

(3) To avoid doubt, this section is subject to section 230‑20 (financial arrangements).

Foreign resident members—taxation of trustee and corresponding tax offset for members

276‑105 Trustee taxed on foreign resident’s determined member components

(1) This section applies if:

(a) a *member of an *AMIT in respect of an income year has, for the income year, a *determined member component of a character relating to assessable income in respect of the AMIT; and

(b) either:

(i) unless subparagraph (ii) applies—the member is a foreign resident at the end of the income year; or

(ii) if the member is, in respect of that determined member component, a beneficiary in the capacity of a trustee of another trust—a trustee of the other trust is a foreign resident at the end of the income year; and

(2) The trustee of the *AMIT is to be assessed and is liable to pay income tax:

(a) if subparagraph (1)(b)(i) applies and the *member is not a company—in respect of the amount mentioned in subsection (3) as if it were the income of an individual and were not subject to any deduction; or

(b) if subparagraph (1)(b)(i) applies and the member is a company—in respect of the amount mentioned in subsection (3) at the rate declared by the Parliament for the purposes of this paragraph; or

(c) if subparagraph (1)(b)(ii) applies—in respect of the amount mentioned in subsection (4) or (5) at the rate declared by the Parliament for the purposes of this paragraph.

Note: The rates are set out in the following provisions:

(a) for paragraph (a)—subsection 12(6A) of the Income Tax Rates Act 1986 and Schedule 10A to that Act;

(b) for paragraph (b)—paragraph 28A(a) of that Act;

(3) The amount is the *determined member component, to the extent that the component:

(a) is attributable to a period when the *member was an Australian resident; or

(b) is attributable to a period when the member was not an Australian resident and is attributable to sources in Australia.

(4) The amount is the *determined member component, to the extent that the component is attributable to sources in Australia.

(5) For the purposes of subsection (4), treat the entire amount of the *determined member component as not being attributable to sources in Australia if it is of the character of:

(a) a *discount capital gain from a *CGT asset that is not *taxable Australian property; or

(b) a *capital gain (other than a discount capital gain) from a CGT asset that is not taxable Australian property.

Exception for component reflected in AMIT DIR payment or fund payment

(6) Subsection (2) does not apply to the extent that the *determined member component is reflected in an *AMIT DIR payment or a *fund payment, if an amount in respect of the payment:

(a) has been withheld from the payment under Subdivision 12‑F or 12‑H in Schedule 1 to the Taxation Administration Act 1953; or

(b) would be so withheld apart from an exemption from a requirement to withhold under Subdivision 12‑F in that Schedule; or

(d) would be so paid apart from an exemption from a requirement to withhold under Subdivision 12‑F in that Schedule.

Gross‑up for discount capital gain

(7) Subsection (8) applies if a *determined member component is of the character of:

(a) a *discount capital gain from a *CGT asset that is *taxable Australian property; or

(b) a discount capital gain from a CGT asset that is not taxable Australian property.

(8) For the purposes of this section, treat the amount of the component as being double what it would be apart from this subsection.

276‑110 Refundable tax offset for foreign resident member—member that is not a trustee

(1) This section applies if a trustee is assessed and liable to pay income tax under section 276‑105 in respect of a *member because of paragraph 276‑105(2)(a) or (b).

(2) The *member is entitled to a *tax offset for the income year equal to the tax paid by the trustee in accordance with subsection 276‑105(2).

Note: The tax offset is subject to the refundable tax offset rules: see section 67‑23.

Special rule for interposed custodian

276‑115 Custodian interposed between AMIT and member

(1) This section applies if:

(a) a trust that is a *custodian is a *member of an *AMIT in respect of an income year; and

(b) the custodian has, for the income year, a *determined member component of a particular character for the AMIT; and

(d) the subsequent recipient:

(i) starts to have, at a time in the income year, an entitlement to an amount that is reasonably attributable to all or part of the determined member component; or

(ii) would start to have, at a time in the income year, such an entitlement if the determined member component were an actual payment of an amount.

(2) For the purposes of this Subdivision, reduce the *custodian’s *determined member component by the amount of the entitlement mentioned in subparagraph (1)(d)(i) or (ii).

Note: This subsection may operate to reduce the amount of the determined member component multiple times if there is more than one subsequent recipient in respect of which the requirements in paragraphs (1)(c) and (d) are satisfied.

(3) For the purposes of this Subdivision:

(a) treat the subsequent recipient as being a *member of the *AMIT in respect of the income year; and

(b) treat the subsequent recipient as having, for the income year, a *determined member component for the AMIT that:

(i) is of the character mentioned in paragraph (1)(b); and

(ii) is equal to the amount of the entitlement mentioned in subparagraph (1)(d)(i) or (ii).

Subdivision 276‑D—Member components

Guide to Subdivision 276‑D

276‑200 What this Subdivision is about

A member’s member component of a particular character is so much of an AMIT’s determined trust component of that character (see Subdivision 276‑E) as is attributable to membership interests held by the member, worked out in accordance with certain requirements.

A member’s determined member component of a particular character is the amount stated to be the member’s member component of that character in an AMMA statement (see Subdivision 276‑H).

Table of sections

Member‑level concepts

276‑205 Meaning of determined member component

276‑210 Meaning of member component

Member‑level concepts

276‑205 Meaning of determined member component

(1) The determined member component of a particular character for an income year of a *member of an *AMIT in respect of the income year is the amount of the member’s *member component of that character as reflected in the AMIT’s latest *AMMA statement for the member for the income year.

(2) Subsection (3) applies if:

(a) the *member makes a choice for the purposes of this paragraph that complies with subsection (5); and

(b) the member gives a copy of the choice to the Commissioner within 4 months after:

(i) unless subparagraph (ii) applies—the end of the member’s income year; or

(ii) if the *AMIT gives the member a revised *AMMA statement for the income year at a time after the end of that income year—that time; and

(c) the member gives a notice of the choice, in accordance with subsection (7), to the trustee of the AMIT within those 4 months.

(3) Despite subsection (1), if the *determined member component of that character for the income year (disregarding this subsection) does not accord with subsections 276‑210(2), (3) and (4), that determined member component is instead the member’s *member component of that character for the income year.

(4) For the purposes of subsection (3), in working out the member’s *member component of that character for the income year, if the *trust component of that character differs from the *determined trust component of that character, treat the references in section 276‑210 to determined trust component as instead being references to trust component.

Example: The determined trust component exceeds the trust component because of an unintentional mistake by the trustee of the AMIT. As a result, a member’s corresponding determined member component under subsection (1) exceeds what it would have been if the trustee had not made the mistake.

If the member makes a choice under subsection (2), the amount of the determined member component will be determined according to the amount of the trust component.

(5) The choice must:

(a) be in writing; and

(b) state the following matters:

(i) the income year to which the choice relates;

(ii) what the *member considers to be the member’s *member component of that character for the income year;

(iii) the reason why the member considers that the *determined member component of that character for the income year does not accord with subsections 276‑210(2), (3) and (4).

(6) The way the *member’s *income tax return is prepared is sufficient evidence of the making of the choice.

(7) The notice must:

(a) be in writing; and

(b) state the matters mentioned in paragraph (5)(b).

276‑210 Meaning of member component

(1) This section applies to a *member of an *AMIT in respect of an income year and sets out how to work out the member’s *member components for the year.

Meaning of member component

(2) The *member’s member component of a character is so much of the *AMIT’s *determined trust component of that character as is attributable to the *membership interests in the AMIT held by the member, worked out in accordance with the requirements in subsections (3) and (4).

Attribution must be fair and reasonable and accord with constituent documents

(3) The attribution must be worked out on a fair and reasonable basis, in accordance with the constituent documents of the *AMIT. This requirement is subject to the requirement in subsection (4).

Attribution must not involve streaming of character amounts

(4) The attribution must not attribute any part of a *determined trust component of a particular character to a *member’s *membership interests because of the tax characteristics of the member.

Safe harbour rules

(5) Without limiting the scope of the requirements in subsection (3) and (4), an amount does not fail to be worked out in accordance with those requirements as mentioned in subsection (2) merely because the amount reflects the fact that:

(a) the constituent documents of the *AMIT give the trustee of the AMIT the power to direct an amount arising from the sale of an asset to a particular *member, if:

(i) the member redeems one or more *membership interests in the AMIT; and

(ii) the direction of the amount is made to fund the redemption; and

(b) the trustee exercises that power.

(6) Without limiting the scope of the requirements in subsection (3) and (4), an amount does not fail to be worked out in accordance with those requirements as mentioned in subsection (2) merely because the amount reflects the fact that:

(a) either:

(i) an amount of an *under, relating to a base year (as mentioned in subsection 276‑345(1)) increases a *trust component of the *AMIT for a later income year under section 276‑305; or

(ii) an amount of an *over, relating to a base year (as mentioned in subsection 276‑345(1)) decreases a trust component of the AMIT for a later income year under section 276‑305; and

(b) an entity is a *member of the AMIT at a time in the later income year, but was not a member of the AMIT in respect of the base year.

(7) Without limiting the scope of the requirements in subsection (3) and (4), an amount does not fail to be worked out in accordance with those requirements as mentioned in subsection (2) merely because the amount reflects the fact that:

(a) the trustee made a *capital gain or *capital loss in an income year (for the purposes of working out the amount of a *trust component of the *AMIT for an income year in accordance with the rules in section 276‑265); and

(b) an entity was a *member of the AMIT in respect of the income year, but was not a member of the AMIT at the time the capital gain or capital loss was made.

Subdivision 276‑E—Trust components

Guide to Subdivision 276‑E

276‑250 What this Subdivision is about

An AMIT’s trust component of a particular character is worked out on the basis of the AMIT’s assessable income, exempt income, non‑assessable non‑exempt income and tax offsets (on the assumption that the AMIT were an Australian resident liable to pay tax).

An AMIT’s determined trust component of a particular character is the amount stated to be its trust component of that character in a document that meets certain requirements.

Table of sections

Trust‑level concepts

276‑255 Meaning of determined trust component

276‑260 Meaning of trust component

276‑265 Rules for working out trust components—general rules

276‑270 Rules for working out trust components—allocation of deductions

Trust‑level concepts

276‑255 Meaning of determined trust component

(1) An *AMIT’s determined trust component of a particular character for an income year is the amount stated to be its *trust component of that character in a document that meets the requirements in subsection (2).

(2) The requirements are as follows:

(a) the document was created by the *AMIT;

(b) the document states expressly the amount of the *trust component;

(c) at a time after the document was created, the AMIT sent *AMMA statements for the income year to entities that were *members of the AMIT in respect of the income year;

(d) the amount of the trust component stated in the document reflects the amount of the *determined member components reflected in those AMMA statements.

(3) If, apart from this subsection, there are 2 or more documents that meet the requirements in subsection (2), treat the most recently created of those documents as being the only document that meets those requirements.

Example: The income year for the AMIT ends on 30 June. The trustee creates a document stating the amount for the income year on 1 July. It sends all AMMA statements on 10 July. The trustee creates another document stating a different amount for the income year on 1 September. It sends revised AMMA statements reflecting that amount on 10 September. The document created on 1 September is the only document that meets the requirements in this section in respect of the amount for the income year.

276‑260 Meaning of trust component

(1) The object of this section is to ensure that an *AMIT’s amounts of assessable income, *exempt income, *non‑assessable non‑exempt income and *tax offsets for an income year are allocated, according to their character, into separate components for the purposes of this Act.

(2) An *AMIT’s trust component for an income year:

(a) of a character relating to assessable income; or

(b) of a character relating to *exempt income; or

(d) of a character relating to a *tax offset;

is the amount of that character for the income year worked out for the AMIT in accordance with the rules in sections 276‑265 and 276‑270.

(3) This section is subject to Subdivision 276‑F (which deals with the effect of *unders and *overs).

(4) The rules in sections 276‑265 and 276‑270 apply only for the purposes of determining the amounts of *trust components.

276‑265 Rules for working out trust components—general rules

General taxability and residence assumptions to be made

(1) Work out the amount of the *trust component of each character in relation to the *AMIT assuming that the AMIT’s trustee:

(a) was liable to pay *tax; and

(b) was an Australian resident.

Trust components of assessable income character are net of deductions

(2) The sum of all of the *trust components of a character relating to assessable income of the *AMIT for the income year equals the total assessable income of the AMIT for the income year, reduced by all deductions of the AMIT for the year. To avoid doubt, for the purposes of this subsection, apply subsection (1).

(3) However, if that total assessable income does not exceed those deductions, the amount of each *trust component of a character relating to assessable income of the *AMIT for the income year is nil.

276‑270 Rules for working out trust components—allocation of deductions

(1) An amount of a deduction that relates directly only to one or more amounts of assessable income can be deducted only against that amount or those amounts of assessable income. If there are 2 or more such amounts of assessable income, the amount of the deduction is allocated against those amounts on a reasonable basis.

(2) If an amount of a deduction remains after applying the rules in subsection (1), the remainder can be deducted against other amounts of assessable income. The amount of the remainder is allocated against those amounts on a reasonable basis.

(3) For the purposes of this section, determine whether a deduction relates directly to an amount of assessable income on a reasonable basis.

Subdivision 276‑F—Unders and overs

Guide to Subdivision 276‑F

276‑300 What this Subdivision is about

This Subdivision sets out how underestimates and overestimates of amounts at the trust level are carried forward and dealt with in later years. This is generally done on a character‑by‑character basis.

An underestimate in an income year of a particular character results in an under of that character. An overestimate results in an over of that character.

Unders and overs arise, and are dealt with, in the income year in which they are discovered.

Table of sections

Adjustment of trust component for unders and overs etc.

276‑305 Adjustment of trust component for unders and overs

276‑310 Rounding adjustment deficit increases trust component

276‑315 Rounding adjustment surplus decreases trust component

276‑320 Meaning of trust component deficit

276‑325 Trust component of character relating to assessable income—adjustment for cross‑character allocation amount, carry‑forward trust component deficit and FITO allocation amount

276‑330 Meaning of cross‑character allocation amount and carry‑forward trust component deficit

276‑335 Meaning of FITO allocation amount

276‑340 Trust component character relating to tax offset—taxation of trust component deficit

Unders and overs

276‑345 Meaning of under and over of a character

276‑350 Limited discovery period for unders and overs

Adjustment of trust component for unders and overs etc.

276‑305 Adjustment of trust component for unders and overs

Object

(1) The object of this section is to adjust an *AMIT’s *trust component of a particular character for an income year to take account of any *unders or *overs of that character that the AMIT has in the income year.

Unders increase trust component

(2) If the *AMIT has an *under of that character in the income year (relating to any earlier income year), increase the amount of the *trust component by that under.

Note: Those earlier income years are referred to in section 276‑345 as base years.

Overs decrease trust component

(3) If the *AMIT has an *over of that character in the income year (relating to any earlier income year), decrease the amount of the *trust component by that over.

Note: Those earlier income years are referred to in section 276‑345 as base years.

276‑310 Rounding adjustment deficit increases trust component

(1) If the *AMIT has a *rounding adjustment deficit of that character for the income year, increase the amount of the *trust component by the amount of that rounding adjustment deficit.

(2) The *AMIT has a rounding adjustment deficit of a particular character for an income year if:

(a) the AMIT has a shortfall for the previous income year under subsection 276‑415(1); and

(b) the shortfall results wholly or partly from the trustee of the AMIT rounding down amounts in working out *determined member components for the previous income year.

The amount of the rounding adjustment deficit is the amount of the shortfall, to the extent that it results from that rounding down.

276‑315 Rounding adjustment surplus decreases trust component

(1) If the *AMIT has a *rounding adjustment surplus of that character for the income year, decrease the amount of the *trust component by the amount of that rounding adjustment surplus.

(2) The *AMIT has a rounding adjustment surplus of a particular character for an income year if:

(a) the AMIT has an excess for the previous income year under subsection (3); and

(b) the excess results wholly or partly from the trustee of the AMIT rounding up amounts in working out *determined member components for the previous income year.

The amount of the rounding adjustment surplus is the amount of the excess, to the extent that it results from that rounding up.

(3) The *AMIT has an excess under this subsection for an income year equal to the amount (if any) by which:

(a) the sum of all the *determined member components of all the *members of the AMIT of a particular character relating to assessable income, *exempt income or *non‑assessable non‑exempt income for the income year;

exceeds:

(b) the *determined trust component of that character of the AMIT for the income year.

276‑320 Meaning of trust component deficit

If the amount of the *trust component, worked out after applying sections 276‑305, 276‑310 and 276‑315 (and, if applicable, section 276‑325), falls short of nil:

(a) despite those provisions, the *trust component of that character is nil; and

(b) the shortfall is the *AMIT’s trust component deficit of that character for the income year.

276‑325 Trust component of character relating to assessable income—adjustment for cross‑character allocation amount, carry‑forward trust component deficit and FITO allocation amount

Section applies to trust component of assessable income character

(1) This section applies if the *trust component is of a character relating to assessable income.

Cross‑character allocation amount decreases trust component

(2) If the *AMIT has a *cross‑character allocation amount of that character for the income year, decrease the amount of the *trust component by that amount.

Note: A cross‑character allocation amount of a character for the income year is allocated from a trust component deficit of another character for the income year in accordance with subsections 276‑330(2), (3) and (4).

Carry‑forward trust component deficit decreases trust component

(3) If the *AMIT has a *carry‑forward trust component deficit of that character for the income year, decrease the amount of the *trust component by the amount of that deficit.

Note: A carry‑forward trust component deficit for the income year is worked out in respect of the previous income year under subsection 276‑330(5).

FITO allocation amount increases trust component with the character of foreign source income

(4) If:

(a) the character of the *trust component is a character relating to *ordinary income, or *statutory income, from a source other than an *Australian source; and

(b) the *AMIT has a *FITO allocation amount for the income year;

increase the amount of the trust component by that FITO allocation amount.

Note: A FITO allocation amount for the income year is worked out in accordance with section 276‑335.

276‑330 Meaning of cross‑character allocation amount and carry‑forward trust component deficit

Section applies to trust component of assessable income character

(1) This section applies if the *trust component is of a character relating to assessable income.

Cross‑character allocation amount

(2) The trustee may, in accordance with subsection (3), allocate a *trust component deficit (if any) of that character for the income year against the *AMIT’s other trust components for that income year that are also of a character relating to assessable income.

(3) For the trustee to make an allocation under subsection (2) the trustee:

(a) must allocate that *trust component deficit between those other *trust components on a reasonable basis; and

(b) cannot allocate more to a trust component than the amount of that trust component.

(4) If the trustee allocates an amount under subsection (2) to a *trust component of a character for that income year, the amount allocated is a cross‑character allocation amount of that character for that income year.

Carry‑forward trust component deficit

(5) If there is an amount of that *trust component deficit remaining after allocating it in accordance with subsection (2), the remaining amount is the *AMIT’s carry‑forward trust component deficit of the character mentioned in subsection (1) for the next income year.

276‑335 Meaning of FITO allocation amount

(1) This section applies if:

(a) the *AMIT has a *trust component of the character of *foreign income tax paid that counts towards a *tax offset under Division 770; and

(b) the AMIT has a *trust component deficit for the income year of that character.

(2) The *AMIT has a FITO allocation amount for the income year equal to the sum of:

(a) that *trust component deficit; and

(b) the product of:

(i) that trust component deficit; and

(ii) the *corporate tax gross‑up rate.

276‑340 Trust component character relating to tax offset—taxation of trust component deficit

(1) This section applies if:

(a) the *AMIT has a *trust component of a character relating to a *tax offset; and

(b) the character of the trust component is not the character of *foreign income tax paid that counts towards a tax offset under Division 770; and

Offset trust component deficit (other than FITO character) taxed

(2) The trustee of the *AMIT is liable to pay tax at the rate declared by the Parliament on the amount of the *trust component deficit.

Note: The tax is imposed by the Income Tax (Attribution Managed Investment Trusts—Offsets) Act 2016 and the rate of the tax is set out in that Act.

Unders and overs

276‑345 Meaning of under and over of a character

(1) This section sets out how to work out the amount (if any) of an *AMIT’s *under or *over of a particular character for an income year (the base year) in a later income year (the discovery year).

(2) The time (the discovery time) at which this is worked out for the discovery year is just before the trustee works out the *determined trust component of that character for the discovery year.

Note: This allows unders and overs to be included in the determined trust component for the discovery year: see section 276‑305.

(3) Compare the following amounts:

(a) the *AMIT’s *trust component of that character for the base year, worked out on the basis of the trustee’s knowledge at the discovery time (the discovery year amount);

(b) this amount (the base year running balance):

(i) if the discovery year is the first income year after the base year—the AMIT’s *determined trust component of that character for the base year; or

(ii) otherwise—the discovery year amount worked out under a previous operation of this section for the most recent income year before the discovery year.

A shortfall is an under

(4) If the base year running balance falls short of the discovery year amount, the amount of the shortfall is an under of that character, for the base year, that the *AMIT has in the discovery year.

An excess is an over

(5) If the base year running balance exceeds the discovery year amount, the amount of the excess is an over of that character, for the base year, that the *AMIT has in the discovery year.

276‑350 Limited discovery period for unders and overs

Despite section 276‑345, an *AMIT does not have an *under or an *over of a particular character for an income year (the base year) if:

(a) assuming the Commissioner made an assessment of the *trust component of that character on the day on which the document stating the AMIT’s *determined trust component of that character for the base year was created; and

(b) assuming the assessment had not been amended at the discovery time mentioned in subsection 276‑345(2) for the under or over;

section 170 of the Income Tax Assessment Act 1936 would prevent the assessment from being amended to take account of the under or over.

Note: Section 170 of the Income Tax Assessment Act 1936 specifies the usual period within which assessments may be amended.

Subdivision 276‑G—Shortfall and excess taxation

Guide to Subdivision 276‑G

276‑400 What this Subdivision is about

The trustee of an AMIT is liable to pay income tax on certain amounts reflecting under‑attribution of income or over‑attribution of tax offsets.

Table of sections

Ensuring determined trust components are properly taxed

276‑405 Trustee taxed on shortfall in determined member component (character relating to assessable income)

276‑410 Trustee taxed on excess in determined member component (character relating to tax offset)

276‑415 Trustee taxed on amounts of determined trust component that are not reflected in determined member components

Ensuring unders and overs are properly taxed

276‑420 Trustee taxed on amounts of under of character relating to assessable income not properly carried forward

276‑425 Trustee taxed on amounts of over of character relating to tax offset not properly carried forward

Commissioner may remit tax under this Subdivision

276‑430 Commissioner may remit tax under this Subdivision

Ensuring determined trust components are properly taxed

276‑405 Trustee taxed on shortfall in determined member component (character relating to assessable income)

Income character shortfall

(1) An *AMIT has a shortfall under this subsection for an income year equal to the amount (if any) by which:

(a) the *determined member component of a *member of the AMIT of a character relating to assessable income for the income year;

falls short of:

(b) the *member component of the member of that character for the income year.

Liability to tax

(2) The trustee is liable to pay income tax at the rate declared by the Parliament on the amount that is the sum of each shortfall of the *AMIT under subsection (1) for the income year.

Note: The rate is set out in subsection 12(11) of the Income Tax Rates Act 1986.

276‑410 Trustee taxed on excess in determined member component (character relating to tax offset)

(1) An *AMIT has an excess under this subsection for an income year equal to the amount (if any) by which:

(a) the *determined member component of a *member of the AMIT of a character relating to a *tax offset for the income year;

exceeds:

(b) the *member component of the member of that character for the income year.

Liability to tax

(2) The trustee is liable to pay tax at the rate declared by the Parliament on the amount that is the sum of each excess of the *AMIT under subsection (1) for the income year.

Note: The tax is imposed by the Income Tax (Attribution Managed Investment Trusts—Offsets) Act 2016 and the rate of the tax is set out in that Act.

276‑415 Trustee taxed on amounts of determined trust component that are not reflected in determined member components

(1) An *AMIT has a shortfall under this subsection for an income year equal to the amount (if any) by which:

falls short of:

(b) the *determined trust component of that character of the AMIT for the income year.

Liability to tax

(2) The trustee is liable to pay income tax at the rate declared by the Parliament on the amount worked out as follows:

(a) first, work out the sum of each shortfall of the *AMIT under subsection (1) for the income year;

(b) next, work out the extent (if any) to which each of those shortfalls gives rise to a *rounding adjustment deficit (see subsection 276‑310(2));

(d) next, work out the extent (if any) to which the result of paragraph (c) is referable to one or more shortfalls under subsection 276‑405(1);

(e) next, subtract the result of paragraph (d) from the result of paragraph (c).

Note: The rate is set out in subsection 12(12) of the Income Tax Rates Act 1986.

Gross‑up for discount capital gain

(3) Subsection (4) applies if a *determined member component is of the character of:

(a) a *discount capital gain from a *CGT asset that is *taxable Australian property; or

(b) a discount capital gain from a CGT asset that is not taxable Australian property.

(4) For the purposes of subsection (2), treat the amount of the shortfall under subsection (1) relating to the component as being double what it would be apart from this subsection.

Ensuring unders and overs are properly taxed

276‑420 Trustee taxed on amounts of under of character relating to assessable income not properly carried forward

(1) An *AMIT for an income year has a shortfall under this subsection for the income year equal to the amount (if any) by which:

(a) an *under of the AMIT of a character relating to assessable income in the income year for an earlier income year (the base year) (as worked out by the trustee on the basis of the trustee’s knowledge at the discovery time mentioned in subsection 276‑345(2));

falls short of:

(b) what the under would have been if it had been worked out on the basis of what the trustee should have known at that time.

Liability to tax

(2) The trustee is liable to pay income tax at the rate declared by the Parliament on the amount that is the sum of each shortfall of the *AMIT under subsection (1) for the income year.

Note: The rate is set out in subsection 12(13) of the Income Tax Rates Act 1986.

Adjustment for later unders relating to the same base year

(3) If there is a shortfall under subsection (1) for a particular character for an income year, for the purposes of applying paragraph 276‑345(3)(b) (base year running balance) to a later income year, increase the amount mentioned in subparagraph 276‑345(3)(b)(ii) (previous discovery year amount) for that character by the amount of the shortfall.

(4) Subsection (5) applies if:

(a) there is a shortfall under subsection (1) for a particular character for an income year; and

(b) the *AMIT has an *under of that character in a later income year for the base year mentioned in subsection (1); and

(5) Reduce the shortfall by the extent to which the *under in the later income year reflects the amount mentioned in paragraph (1)(b).

276‑425 Trustee taxed on amounts of over of character relating to tax offset not properly carried forward

(1) An *AMIT for an income year has a shortfall under this subsection for the income year equal to the amount (if any) by which:

(a) an *over of the AMIT of a character relating to a *tax offset in the income year relating to an earlier income year (the base year) (as worked out by the trustee on the basis of the trustee’s knowledge at the discovery time mentioned in subsection 276‑345(2));

falls short of:

(b) what the over would have been if it had been worked out on the basis of what the trustee should have known at that time.

Liability to tax

(2) The trustee is liable to pay tax at the rate declared by the Parliament on the amount that is the sum of each shortfall of the *AMIT under subsection (1) for the income year.

Note: The tax is imposed by the Income Tax (Attribution Managed Investment Trusts—Offsets) Act 2016 and the rate of the tax is set out in that Act.

Adjustment for later overs relating to the same base year

(3) If there is a shortfall under subsection (1) for a particular character for an income year, for the purposes of applying paragraph 276‑345(3)(b) (base year running balance) to a later income year, decrease the amount mentioned in subparagraph 276‑345(3)(b)(ii) (previous discovery year amount) for that character by the amount of the shortfall.

(4) Subsection (5) applies if:

(a) there is a shortfall under subsection (1) of a particular character relating to a *tax offset for an income year; and

(b) the *AMIT has an *over of that character in a later income year relating to the base year mentioned in subsection (1); and

(5) Reduce the shortfall by the extent to which the *over in the later income year reflects the amount mentioned in paragraph (1)(b).

Commissioner may remit tax under this Subdivision

276‑430 Commissioner may remit tax under this Subdivision

The Commissioner may remit the whole or any part of income tax for which a liability arises under this Subdivision if the Commissioner is satisfied that doing so does not result in a detriment to the revenue.

Subdivision 276‑H—AMMA statements

Guide to Subdivision 276‑H

276‑450 What this Subdivision is about

An AMIT for an income year must give each member of the AMIT in respect of the income year an AMIT member annual statement (or AMMA statement) for the income year.

Table of sections

Operative provisions

276‑455 Obligation to give an AMMA statement

276‑460 AMIT member annual statement (or AMMA statement)

Operative provisions

276‑455 Obligation to give an AMMA statement

(1) An *AMIT for an income year must give each *member of the AMIT in respect of the income year an *AMMA statement for the income year.

Note: Section 286‑75 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for breach of this subsection.

(2) The statement must be given no later than 3 months after the end of the income year.

(3) However, the *AMIT need not give an *AMMA statement under subsection (1) to a *member if:

(a) all of the member’s *determined member components for the AMIT for the income year are nil; and

(b) all of the member’s *membership interests in the AMIT have an *AMIT cost base net amount for the income year of nil.

(4) To avoid doubt, the *AMIT does not fail to comply with subsection (1) merely because:

(a) the AMIT gives *AMMA statements for the income year to *members in accordance with subsection (1) by the time required under subsection (2); and

(b) after that time, the AMIT gives those members further AMMA statements for the income year that replace the AMMA statements mentioned in paragraph (a).

276‑460 AMIT member annual statement (or AMMA statement)

(1) An AMIT member annual statement (or AMMA statement) is a statement made by an *AMIT for an income year in accordance with this section.

(2) The statement must:

(a) include information that reflects the amount and character of each *member component of the *member for the income year; and

(b) state what the trustee reasonably estimates to be the amount of the excess or shortfall mentioned in section 104‑107C (AMIT cost base net amount) for the income year in respect of the *CGT asset that is the member’s unit or interest in the *AMIT.

(3) The statement is not an AMMA statement if the *AMIT fails to give it to the *member to whom it is addressed within 4 years after the end of the income year.

Note: The AMIT must give each member an AMMA statement for the income year no later than 3 months after the end of the income year (see section 276‑455).

Subdivision 276‑J—Debt‑like trust instruments

Guide to Subdivision 276‑J

276‑500 What this Subdivision is about

A debt‑like trust instrument in an AMIT is treated as a debt interest in the AMIT. A distribution in relation to the instrument is treated as interest for the purposes of provisions relating to interest withholding tax, and may be treated as a deduction in working out the trust components of the AMIT.

Table of sections

Operative provisions

276‑505 Meaning of debt‑like trust instrument

276‑510 Debt‑like trust instruments treated as debt interests etc.

276‑515 Distribution on debt‑like trust instrument could be deductible in working out trust components

Operative provisions

276‑505 Meaning of debt‑like trust instrument

(1) An instrument that gives rise to an interest in a trust is a debt‑like trust instrument in relation to the trust if:

(a) the amount of any distribution relating to the interest is fixed, at the time the interest is created, by reference to the amount subscribed for the interest; and

(b) any distribution relating to the interest is made solely at the discretion of the trustee of the trust; and

(c) rights to distributions of capital or profits arising from all interests in the trust that are in the same *class as the interest, rank above all such rights arising from other interests in the trust (other than those covered under subsection (2)) if:

(i) the trust ceases to exist; or

(ii) where the trust is a *managed investment scheme—the scheme is under administration or is being wound up; and

(d) in a case where, in relation to a particular period, the trustee of the trust does not make a distribution relating to the interest—making a distribution of any of the following kinds, in relation to that period, is prohibited by the constituent documents of the trust:

(i) a distribution relating to any membership interest in the trust;

(ii) a distribution relating to a membership interest in another entity, if that interest is stapled together with a membership interest in the trust.

(2) This subsection covers an interest in the trust that:

(a) is not a *membership interest in the trust; or

(b) satisfies the requirements in paragraphs (1)(a) and (b).

276‑510 Debt‑like trust instruments treated as debt interests etc.

(1) For the purposes of this Act:

(a) treat a *debt‑like trust instrument in relation to an *AMIT as a *debt interest in the AMIT; and

(b) treat a distribution on a debt‑like trust instrument in relation to an AMIT as a cost incurred by the AMIT in relation to a debt interest issued by the AMIT.

(2) If a trust is an *AMIT for an income year (disregarding this subsection), paragraph (1)(a) applies for the purposes of:

(a) determining whether the trust is a *managed investment trust in relation to the income year; and

(b) determining whether the trust is an AMIT for the income year.

(3) For the purposes of Division 11A of Part III of the Income Tax Assessment Act 1936, if an entity is the holder of a *debt‑like trust instrument in an *AMIT, treat a distribution to the entity in accordance with the instrument as interest.

276‑515 Distribution on debt‑like trust instrument could be deductible in working out trust components

(1) If an entity is the holder of a *debt‑like trust instrument in relation to an *AMIT, for the purposes of sections 276‑265 and 276‑270, treat a distribution to the entity in accordance with the instrument as a *return that the AMIT pays or provides on a *debt interest.

(2) For the purposes of subsection (1), disregard the distribution to the extent (if any) that it is referable to any of the following:

(a) *exempt income of the *AMIT;

(b) *non‑assessable non‑exempt income of the AMIT.

Subdivision 276‑K—Ceasing to be an AMIT

Guide to Subdivision 276‑K

276‑800 What this Subdivision is about

If a trust ceases to be an AMIT, and discovers an under or over from an income year when it was an AMIT, the under or over will have taxation consequences for the trust in the discovery year.

Table of sections

Operative provisions

276‑805 Application of Subdivision to former AMIT

276‑810 Continue to work out trust components, unders, overs etc.

276‑815 Effect of increase

276‑820 Effect of decrease

Operative provisions

276‑805 Application of Subdivision to former AMIT

This Subdivision applies if:

(a) a trust was an *AMIT for an income year; and

(b) the trust is not an AMIT for a later income year (the discovery year).

276‑810 Continue to work out trust components, unders, overs etc.

(1) For the purposes of this section, assume that the trust is an *AMIT for the discovery year.

(2) If the trust has an *under or *over of a character in the discovery year for an earlier income year when the trust was an *AMIT, work out the extent to which the under or over:

(a) increases the amount of the AMIT’s *trust component of that character for the discovery year; or

(b) decreases the amount of the AMIT’s trust component of that character for the discovery year.

276‑815 Effect of increase

(1) This section applies if there is an increase as mentioned in paragraph 276‑810(2)(a).

(2) If the character mentioned in subsection 276‑810(2) relates to assessable income, treat the amount of the increase as assessable income of the trust for the discovery year.

(3) Subsection (4) applies if the character mentioned in subsection 276‑810(2) is the character of:

(a) a *discount capital gain from a *CGT asset that is *taxable Australian property; or

(b) a discount capital gain from a CGT asset that is not taxable Australian property.

(4) For the purposes of subsection (2), treat the amount of the increase as being double what it would be apart from this subsection.

(5) If that character relates to *exempt income, treat the amount of the increase as exempt income of the trust for the discovery year.

(6) If that character relates to *non‑assessable non‑exempt income, treat the amount of the increase as non‑assessable non‑exempt income of the trust for the discovery year.

(7) If that character relates to a *tax offset, treat the amount of the increase as a tax offset of the trust for the discovery year of a kind corresponding to that character (in addition to any other tax offsets of that kind that the trust may have for the discovery year).

276‑820 Effect of decrease

(1) This section applies if there is a decrease as mentioned in paragraph 276‑810(2)(b).

(2) If the character mentioned in subsection 276‑810(2) relates to assessable income:

(a) in the case of a character of:

(i) a *discount capital gain from a *CGT asset that is *taxable Australian property; or

(ii) a discount capital gain from a CGT asset that is not taxable Australian property;

treat half the amount of the decrease as a *capital loss of the trust for the discovery year; or

(b) in the case of a character of:

(i) a *capital gain (other than a discount capital gain) from a CGT asset that is taxable Australian property; or

(ii) a capital gain (other than a discount capital gain) from a CGT asset that is not taxable Australian property;

treat the amount of the decrease as a capital loss of the trust for the discovery year; or

(3) If that character relates to *exempt income, treat the amount of the decrease as reducing the exempt income of the trust for the discovery year.

(4) If that character relates to *non‑assessable non‑exempt income, treat the amount of the decrease as reducing the non‑assessable non‑exempt income of the trust for the discovery year.

(5) If that character relates to a *tax offset, treat the amount of the decrease as reducing the tax offset or offsets (the existing offset or offsets) of the trust for the discovery year of a kind corresponding to that character.

(6) If that character relates to a *tax offset and exceeds the total of the existing offset or offsets (before the reduction under subsection (5)):

(a) unless paragraph (b) applies—the trustee is liable to pay tax at the rate declared by the Parliament on the excess; or

Note: The tax is imposed by the Income Tax (Attribution Managed Investment Trusts—Offsets) Act 2016 and the rate of the tax is set out in that Act.

(b) if that character is the character of *foreign income tax paid that counts towards a tax offset under Division 770—subsection (7) applies.

(7) Increase the trust’s assessable income for the discovery year by the sum of:

(a) the excess mentioned in subsection (6); and

(b) the product of:

(i) that excess; and

(ii) the *corporate tax gross‑up rate.

Treat the amount of that increase as assessable income from a source other than an *Australian source.

Part 3‑30—Superannuation

Division 280—Guide to the superannuation provisions

Table of sections

280‑1 Effect of this Division

280‑5 Overview

Contributions phase

280‑10 Contributions phase—deductibility

280‑15 Contributions phase—limits on superannuation tax concessions

Investment phase

280‑20 Investment phase

Benefits phase

280‑25 Benefits phase—different types of superannuation benefit

280‑30 Benefits phase—taxation varies with age of recipient and type of benefit

280‑35 Benefits phase—roll‑overs

The regulatory scheme outside this Act

280‑40 Other relevant legislative schemes

280‑1 Effect of this Division

(1) This Division is a *Guide.

(2) Tax concessions in this Part are intended to encourage Australians to save in order to make provision for their retirement, recognising that superannuation investments, and the income from them, are quarantined for retirement.

280‑5 Overview

(1) There are 3 phases in the tax treatment of superannuation, as follows:

(a) the contributions phase;

(b) the investment phase;

(2) In the contributions phase, contributions are made to a superannuation plan in respect of a member of the plan.

(3) In the investment phase, these contributions are invested by the superannuation provider.

(4) In the benefits phase, these contributions, plus earnings from investing them, are usually paid as benefits to the member when he or she retires after reaching preservation age. In the event of death, the benefits are usually paid to the member’s dependants.

(5) There is also a regulatory scheme outside this Act that is relevant to the taxation treatment of superannuation. For example, other Acts set out prudential and operating standards for superannuation providers.

Contributions phase

280‑10 Contributions phase—deductibility

Contributions that can be deducted

(1) Employers can usually deduct contributions they make in respect of their employees. Individuals can usually deduct contributions they make in respect of themselves to most complying superannuation funds.

Other contributions cannot be deducted

(2) Other contributions cannot be deducted. These include contributions made by others in respect of individuals (such as contributions by a spouse or family member, or Government co‑contributions).

280‑15 Contributions phase—limits on superannuation tax concessions

(1) There is a limit to contributions that can be made in respect of an individual in a year that receive favourable tax treatment.

(2) If concessional contributions exceed an indexed cap, the excess is included in the individual’s assessable income and gives rise to a tax offset. The individual can release the excess concessional contributions from his or her superannuation interests. Unused cap can be carried forward for 5 years.

(3) If non‑concessional contributions exceed an indexed cap, the individual can request the release of either:

(a) nothing; or

(b) an amount equal to the sum of that excess and 85% of the associated earnings on that excess;

from the individual’s superannuation interests. Whether or not such a request is made, an amount relating to those associated earnings may be included in the individual’s assessable income and may give rise to a tax offset.

(4) In the absence of such a request, the Commissioner may require the relevant superannuation fund to release the amount described in paragraph (3)(b).

Note: This can be done under subsection 131‑15(2) in Schedule 1 to the Taxation Administration Act 1953.

(5) The individual is taxed:

(a) on any shortfall between the amount released as described in subsection (3) or (4) and the excess referred to in subsection (3); or

(b) on that excess, if the individual requested that nothing be released from the individual’s superannuation interests.

(6) The Commissioner may require the release of an amount equal to this tax liability from the individual’s superannuation interests.

Note: This can be done under subsection 131‑15(3) in Schedule 1 to the Taxation Administration Act 1953.

Investment phase

280‑20 Investment phase

(1) Contributions that can be deducted are assessable income of the superannuation provider. Contributions that cannot be deducted are not assessable income of the superannuation provider. (There are some exceptions.)

(2) Earnings on the investment of amounts in a superannuation plan are assessable income of the superannuation provider.

(3) The superannuation provider’s taxable income is generally taxed at the concessional rate of 15%.

(4) However, superannuation providers pay no tax on earnings from the assets that support the payment of benefits in the form of income streams, once the income streams have commenced.

Benefits phase

280‑25 Benefits phase—different types of superannuation benefit

Superannuation benefits can be drawn down as lump sums, income streams (such as pensions or annuities), or combinations of both. Different tax treatment may apply depending on whether a lump sum or income stream is paid.

280‑30 Benefits phase—taxation varies with age of recipient and type of benefit

(1) The taxation of superannuation benefits depends primarily on the age of the member.

(2) If the member is aged 60 or over, superannuation benefits (both lump sums and income streams) are tax free if the benefits have already been subject to tax in the fund (that is, where the benefits comprise a taxed element). This covers the great majority of superannuation members.

(3) Where a superannuation benefit contains an amount that has not been subject to tax in the fund (an untaxed element), this element is subject to tax for those aged 60 or over, though at concessional rates. This is relevant generally to those people (for example, public servants), who are members of a superannuation fund established by the Australian Government or a state government.

(4) If the member is less than 60, superannuation benefits may receive concessional taxation treatment, though the treatment is less concessional than for those aged 60 and over.

(5) Superannuation benefits may also include a “tax free component”; this component of the benefit is always paid tax free.

(6) Additional tax concessions may apply when superannuation benefits are paid after a member’s death.

280‑35 Benefits phase—roll‑overs

A member can “roll over” their superannuation benefits from one complying superannuation plan to another, or between different interests in the same plan. This is usually done to keep the benefits invested in the superannuation system, or to convert a lump sum to a superannuation income stream. No tax is generally payable until the benefits are finally drawn down.

The regulatory scheme outside this Act

280‑40 Other relevant legislative schemes

(1) The Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 regulate the prudential and operating standards for superannuation providers. Concessional tax treatment is generally available only if providers comply with these standards.

(2) Other legislative schemes relevant to superannuation include the following:

(a) the Superannuation Guarantee (Administration) Act 1992, which requires that employers provide a minimum level of superannuation contributions for each of their eligible employees;

(b) the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003, which provides for Government co‑contributions to low income earners’ superannuation;

(c) the Small Superannuation Accounts Act 1995, which provides a facility to accept payments of superannuation guarantee shortfalls;

(d) the Superannuation (Unclaimed Money and Lost Members) Act 1999, which provides for the payment of unclaimed superannuation money, and the maintenance of a register of lost members.

Division 285—General concepts relating to superannuation

285‑5 Transfers of property

(1) Any of the following payments covered by this Part can be or include a transfer of property:

(a) a contribution;

(b) a *superannuation lump sum.

(2) The amount of the payment is or includes the *market value of the property.

(3) The *market value is reduced by the value of any consideration given for the transfer of the property.

Division 290—Contributions to superannuation funds

Table of Subdivisions

Guide to Division 290

290‑A General rules

290‑B Deduction of employer contributions and other employment‑connected contributions

290‑C Deducting personal contributions

290‑D Tax offsets for spouse contributions

Guide to Division 290

290‑1 What this Division is about

This Division sets out the rules for deductions and tax offsets for superannuation contributions.

Subdivision 290‑A—General rules

Table of sections

290‑5 Non‑application to roll‑over superannuation benefits etc.

290‑10 No deductions other than under this Division

290‑5 Non‑application to roll‑over superannuation benefits etc.

This Division does not apply to a contribution that is any of the following:

(a) a *roll‑over superannuation benefit;

(b) a *superannuation lump sum that is paid from a *foreign superannuation fund;

(c) an amount transferred to a *complying superannuation fund or an *RSA from a scheme for the payment of benefits in the nature of superannuation upon retirement or death that:

(i) is not, and never has been, an *Australian superannuation fund or a *foreign superannuation fund; and

(ii) was not established in Australia; and

(iii) is not centrally managed or controlled in Australia.

290‑10 No deductions other than under this Division

(1) You cannot deduct under this Act an amount you pay as a contribution to a *complying superannuation fund or *RSA, except as provided by this Division.

(2) You cannot deduct under this Act an amount you pay as a contribution to a *non‑complying superannuation fund, except as provided by this Division.

Note: Under Subdivision 290‑B (Deduction of employer contributions and other employment‑connected contributions), you may be able to deduct contributions you make to a non‑complying fund that you believe to be a complying fund.

Subdivision 290‑B—Deduction of employer contributions and other employment‑connected contributions

Table of sections

Deducting employer contributions

290‑60 Employer contributions deductible

290‑65 Application to employees etc.

Conditions for deducting an employer contribution

290‑70 Employment activity conditions

290‑75 Complying fund conditions

290‑80 Age related conditions

Other employment‑connected deductions

290‑85 Contributions for former employees etc.

290‑90 Controlling interest deductions

290‑95 Amounts offset against superannuation guarantee charge

Returned contributions

290‑100 Returned contributions assessable

Deducting employer contributions

290‑60 Employer contributions deductible

(1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for another person who is your employee when the contribution is made (regardless whether the benefits are payable to a *SIS dependant of the employee if the employee dies before or after becoming entitled to receive the benefits).

Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see sections 85‑25 and 86‑75 of this Act.

(2) However, the conditions in sections 290‑70, 290‑75 and 290‑80 must also be satisfied for you to deduct the contribution.

(3) You can deduct the contribution only for the income year in which you made the contribution.

(4) You cannot deduct the contribution if it is an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a *regulated superannuation fund, or to an *RSA, to be held for the benefit of your *non‑member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned.

290‑65 Application to employees etc.

(1) At a time when an individual is an employee of an entity within the expanded meaning of employee given by section 12 of the Superannuation Guarantee (Administration) Act 1992, this Subdivision applies as if the individual were an employee of the entity.

(2) For the purposes of this Subdivision:

(a) in relation to a contribution by a partnership in respect of an employee of the partnership—treat the employee as an employee of the partnership; and

(b) in relation to a contribution by a partner in a partnership in respect of an employee of the partnership—treat the employee as an employee of the partner.

Conditions for deducting an employer contribution

290‑70 Employment activity conditions

To deduct the contribution, the employee must be:

(aa) your employee (within the expanded meaning of employee given by section 12 of the Superannuation Guarantee (Administration) Act 1992); or

(a) engaged in producing your assessable income; or

(b) an Australian resident who is engaged in your business.

290‑75 Complying fund conditions

(1) If the contribution was made to a *superannuation fund, at least one of these conditions must be satisfied:

(a) the fund was a *complying superannuation fund for the income year of the fund in which you made the contribution;

(b) at the time you made the contribution, you had reasonable grounds to believe that the fund was a complying superannuation fund for that income year;

(c) at or before the time you made the contribution, you obtained a written statement (given by or on behalf of the trustee of the fund) that the fund:

(i) was a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); and

(ii) was not subject to a direction under section 63 of that Act (which prevents a fund from accepting employer contributions).

(2) However, the condition in paragraph (1)(b) or (c) cannot be satisfied if, when the contribution was made:

(a) you were:

(i) the trustee or the manager of the fund; or

(ii) an *associate of the trustee or the manager of the fund; and

(b) you had reasonable grounds to believe that:

(i) the fund was not a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or

(ii) the fund was operating in contravention of a regulatory provision (within the meaning of section 38A of that Act).

(3) For the purposes of subparagraph (2)(b)(ii), a contravention of the Superannuation Industry (Supervision) Act 1993 or regulations made under it is to be ignored unless the contravention is:

(a) an offence; or

(b) a contravention of a civil penalty provision of that Act or those regulations.

(4) For the purposes of subparagraph (2)(b)(ii), it is sufficient if a contravention is established on the balance of probabilities.

290‑80 Age related conditions

(1) To deduct the contribution:

(a) you must have made the contribution on or before the day that is 28 days after the end of the month in which the employee turns 75; or

(b) you must have been required to make the contribution by an industrial award, determination or notional agreement preserving State awards (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009) that is in force under an *Australian law; or

(c) the contribution must reduce your charge percentage under section 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the employee.

(2) If only paragraph (1)(b) applies, you can deduct only the amount of the contribution that is required by the industrial award, determination or notional agreement preserving State awards.

Note: An industrial agreement, such as an enterprise agreement within the meaning of the Fair Work Act 2009, or a similar agreement made under a State law, is not an award or determination.

(2A) If only paragraph (1)(c) applies, you can deduct only the amount of the contribution that reduces your charge percentage under section 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the employee.

(2B) If both paragraphs (1)(b) and (c) apply and paragraph (1)(a) does not apply, you can deduct only the greater of the following amounts (or only one of them if they are equal):

(a) the amount of the contribution that is required by the industrial award, determination or notional agreement preserving State awards;

(b) the amount of the contribution that reduces your charge percentage under section 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the employee.

Note: If paragraph (1)(a) applies, you can deduct the whole of the contribution (whether or not paragraph (1)(b) or (1)(c) also applies).

(3) For the purposes of this section, a reference to a determination does not include a reference to a workplace determination made under the Fair Work Act 2009 or the Workplace Relations Act 1996.

Other employment‑connected deductions

290‑85 Contributions for former employees etc.

(1) Section 290‑60 applies as modified by this section if a contribution you make in respect of another person:

(a) reduces your charge percentage under sections 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the other person because of section 15B of that Act; or

(b) is a one‑off payment in lieu of salary or wages that relate to a period of service during which the other person was your employee.

(1AA) Section 290‑60 also applies as modified by this section if:

(a) a contribution you make in respect of another person relates to a period of service during which the other person was your employee; and

(b) you make the contribution within 4 months after the person stops being your employee; and

(i) you had made it at a time when the other person was your employee; and

(ii) the law that applied to your entitlement to the deduction at that time had been the same as it was at the time you actually made the contribution.

(1AB) Section 290‑60 also applies as modified by this section if:

(a) a contribution you make in respect of another person relates to a period of service during which the other person was your employee; and

(b) the contribution relates to a *defined benefit interest of the other person; and

(d) you obtain an *actuary’s certificate that:

(i) complies with the requirements (if any) specified by the regulations for the purposes of this paragraph; and

(ii) is to the effect that the contribution does not exceed the amount required by the relevant *superannuation fund to meet the fund’s liabilities in connection with defined benefit interests; and

(e) you would have been entitled to a deduction in relation to the contribution if:

(i) you had made it at a time when the other person was your employee; and

(ii) the law that applied to your entitlement to the deduction at that time had been the same as it was at the time you actually made the contribution.

(1A) Section 290‑60 also applies as modified by this section if:

(a) you make a contribution in respect of another person at a time; and

(b) the other person had been employed by a company or other entity before that time; and

(c) section 290‑90 would apply in relation to the contribution if the other person were employed by the company or entity at that time; and

(d) the contribution:

(i) reduces the company’s or entity’s charge percentage under section 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the other person because of section 15B of that Act; or

(ii) is a one‑off payment in lieu of salary or wages that relate to a period of service during which the other person was the company’s or entity’s employee; or

(iii) if subsection (1B) or (1C) applies—relates to a period of service during which the other person was the company’s or entity’s employee.

(1B) This subsection applies if:

(a) you make the contribution within 4 months after the person stops being the company’s or entity’s employee; and

(b) you would have been entitled to a deduction in relation to the contribution if you had made it while the other person was the company’s or entity’s employee.

(1C) This subsection applies if:

(a) the contribution relates to a *defined benefit interest of the other person; and

(b) you and the company are at *arm’s length with the other person in relation to the contribution; and

(i) complies with the requirements (if any) specified by the regulations for the purposes of this paragraph; and

(ii) is to the effect that the contribution does not exceed the amount required by the relevant *superannuation fund or *RSA to meet the fund’s or RSA’s liabilities in connection with defined benefit interests; and

(d) you would have been entitled to a deduction in respect of the contribution if you had made it while the other person was the company’s or entity’s employee.

(2) Treat the other person as your employee for the purposes of subsection 290‑60(1).

(3) Despite subsection 290‑60(2):

(a) if subsection (1) or (1AA) applies—the condition in section 290‑70 must be satisfied at the most recent time when the other person was your employee (apart from subsection (2) of this section); or

(b) if subsection (1A) applies:

(i) the condition in section 290‑70 need not be satisfied; and

(ii) instead, the condition in subsection 290‑90(4) must be satisfied at the most recent time when the other person was the company’s or entity’s employee.

290‑90 Controlling interest deductions

(1) Section 290‑60 applies as modified by this section if you make a contribution in respect of another person at a time, and at that time:

(a) the other person is an employee of a company in which you have a controlling interest; or

(b) you are connected to the other person in the circumstances set out in subsection (5); or

(2) Treat the other person as your employee at that time for the purposes of subsection 290‑60(1).

Note 1: A deduction may be denied by section 85‑25 if the employee is your associate.

Note 2: Section 86‑60 (read together with section 86‑75) limits the extent to which superannuation contributions by personal service entities are deductions.

(3) Despite subsection 290‑60(2), for you to deduct the contribution the condition in subsection (4) needs to be satisfied instead of the condition in section 290‑70.

(4) The other person must be:

(aa) an employee (within the expanded meaning of employee given by section 12 of the Superannuation Guarantee (Administration) Act 1992) of the other person’s employer; or

(a) engaged in producing the assessable income of the other person’s employer; or

(b) an Australian resident engaged in the business of the other person’s employer.

(5) For the purposes of paragraph (1)(b), the circumstances are:

(a) you are the beneficial owner of shares in a company of which the other person is an employee, but you do not have a controlling interest in the company; and

(b) you are at *arm’s length with the other person in relation to the contribution; and

(i) has set apart an amount as a fund, or has made a contribution to a fund, for the purpose of providing *superannuation benefits for you or a relative of yours; or

(ii) has made an *arrangement under which the other person or relative will or may do so.

Company controlling interest deductions

(6) For the purposes of paragraph (1)(c), the circumstances are:

(a) the other person is an employee of an entity that has a controlling interest in the company; or

(b) an entity that has a controlling interest in the company also has a controlling interest in a company of which the other person is an employee.

290‑95 Amounts offset against superannuation guarantee charge

(1) You cannot deduct a contribution under this Act if you elect under subsection 23A(1) of the Superannuation Guarantee (Administration) Act 1992 that the contribution be offset against your liability to pay superannuation guarantee charge.

Note: Section 26‑95 restricts deductions for charges imposed by the Superannuation Guarantee Charge Act 1992.

(2) However, this section does not apply to such a contribution that is made during the amnesty period (within the meaning of subsection 74(3) of the Superannuation Guarantee (Administration) Act 1992), to the extent that the charge relates to a *superannuation guarantee shortfall for which you qualify for an amnesty under section 74 of that Act.

Returned contributions

290‑100 Returned contributions assessable

(1) Your assessable income includes a payment, or the value of a benefit, you receive in the income year so far as it reasonably represents the direct or indirect return of:

(a) a contribution for which you or another entity have deducted or can deduct an amount for any income year; or

(b) earnings on a contribution of that kind.

Note: An example of an indirect return of a contribution is if the fund to which it was made transfers to another fund assets that include the contribution, and the other fund returns the contribution to the person who made it.

(2) Subsection (1) does not apply if you receive the payment, or the value of the benefit, as a *superannuation benefit.

Subdivision 290‑C—Deducting personal contributions

Table of sections

290‑150 Personal contributions deductible

Conditions for deducting a personal contribution

290‑155 Complying superannuation fund condition

290‑165 Age‑related conditions

290‑167 Contribution must not be a downsizer contribution

290‑168 Contribution must not be a re‑contribution under the first home super saver scheme

290‑170 Notice of intent to deduct conditions

290‑175 Deduction limited by amount specified in notice

290‑180 Notice may be varied but not revoked or withdrawn

290‑150 Personal contributions deductible

(1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for yourself (regardless whether the benefits are payable to your *SIS dependants if you die before or after becoming entitled to receive the benefits).

Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see section 26‑55 of this Act.

(2) However, the conditions in sections 290‑155, 290‑165, 290‑167, 290‑168 and 290‑170 must also be satisfied for you to deduct the contribution.

(3) You can deduct the contribution only for the income year in which you made the contribution.

(4) If the contribution is attributable in whole or part to a *capital gain from a *CGT event:

(a) if you disregarded all or part of the capital gain from the CGT event under subsection 152‑305(1) and you were under 55 just before you made the choice mentioned in that subsection—you cannot deduct the contribution to the extent that it is attributable to the capital gain; or

(b) if a company or trust disregarded all or part of the capital gain from the CGT event under subsection 152‑305(2) and you were under 55 just before the contribution was made—you cannot deduct the contribution to the extent that it is attributable to the capital gain.

Conditions for deducting a personal contribution

290‑155 Complying superannuation fund condition

(1) If the contribution is made to a *superannuation fund:

(a) the fund must be a *complying superannuation fund, for the income year of the fund in which you made the contribution, that is not:

(i) a *Commonwealth public sector superannuation scheme in which you have a *defined benefit interest; or

(ii) a superannuation fund that would not include the contribution in its assessable income under section 295‑190; or

(iii) a superannuation fund of a kind prescribed by the regulations for the purposes of this subparagraph; and

(b) the contribution must not be a contribution of a kind prescribed by the regulations that is made to a superannuation fund of a kind prescribed by the regulations for the purposes of this paragraph.

(2) In determining for the purposes of subparagraph (1)(a)(ii) whether section 295‑190 would apply in relation to a contribution, disregard Subdivision 295‑D.

(3) The Commissioner may publish, in such manner as the Commissioner thinks fit, lists of:

(a) the *superannuation funds to which subparagraph (1)(a)(i), (ii) or (iii) applies for an income year; and

(b) the kinds of contributions to which paragraph (1)(b) applies for an income year, and the superannuation funds to which those contributions have been or would be made.

290‑165 Age‑related conditions

(1) If you were under the age of 18 at the end of the income year in which you made the contribution, you must have *derived income in the income year:

(a) from the carrying on of a *business; or

(b) attributable to activities, or circumstances, that result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).

(2) In any other case, you must have made the contribution on or before the day that is 28 days after the end of the month in which you turn 75.

290‑167 Contribution must not be a downsizer contribution

You cannot deduct the contribution if it is a contribution that is covered under section 292‑102 (about downsizer contributions).

290‑168 Contribution must not be a re‑contribution under the first home super saver scheme

You cannot deduct the contribution if you notified the Commissioner about the contribution under section 313‑50 (about contributing amounts to superannuation that were previously released under the *first home super saver scheme).

290‑170 Notice of intent to deduct conditions

Deductibility of contributions

(1) To deduct the contribution, or a part of the contribution:

(a) you must give to the trustee of the fund or the *RSA provider a valid notice, in the *approved form, of your intention to claim the deduction; and

(b) the notice must be given before:

(i) if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year—the end of that day; or

(ii) otherwise—the end of the next income year; and

Validity of notices

(2) The notice is not valid if at least one of these conditions is satisfied:

(a) the notice is not in respect of the contribution;

(b) the notice includes all or a part of an amount covered by a previous notice;

(i) you were not a member of the fund or the holder of the *RSA; or

(ii) the trustee or *RSA provider no longer holds the contribution; or

(iii) the trustee or RSA provider has begun to pay a *superannuation income stream based in whole or part on the contribution;

(d) before you gave the notice:

(i) you had made a contributions‑splitting application (within the meaning given by the regulations) in relation to the contribution; and

(ii) the trustee or RSA provider to which you made the application had not rejected the application;

(e) if the contribution is made to a *superannuation fund—the condition in section 290‑155 is not satisfied in relation to the fund and the contribution.

Acknowledgment of notice

(3) The trustee or provider must, without delay, give you an acknowledgment of a valid notice, subject to subsection (4).

(4) The trustee or provider may refuse to give you an acknowledgment of receipt of a valid notice if the *value of the *superannuation interest to which the notice relates, at the end of the day on which the trustee or *RSA provider received the notice, is less than the tax that would be payable in respect of your contribution (or part of the contribution) if the trustee or provider were to acknowledge receipt of the notice.

Application to successor funds

(5) Subsections (1) to (4) and section 290‑180 apply as if:

(a) references in those provisions to the fund or *RSA were references to a *successor fund; and

(b) references in those provisions to the trustee or *RSA provider were references to the trustee or RSA provider of the successor fund;

if:

(c) after making your contribution, all of the *superannuation interest to which the notice relates is transferred to the successor fund; and

(d) you have not previously given a valid notice under this section to any *superannuation provider in relation to the contribution.

290‑175 Deduction limited by amount specified in notice

You cannot deduct more for the contribution (or a part of the contribution) than the amount stated in the notice.

290‑180 Notice may be varied but not revoked or withdrawn

(1) You cannot revoke or withdraw a valid notice in relation to the contribution (or a part of the contribution).

(2) You can vary a valid notice, but only so as to reduce the amount stated in relation to the contribution (including to nil). You do so by giving notice to the trustee or the *RSA provider in the *approved form.

(3) However, you cannot vary a valid notice after:

(a) if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year—the end of that day; or

(b) otherwise—the end of the next income year.

(3A) The variation is not effective if, when you make it:

(a) you were not a member of the fund or the holder of the *RSA; or

(b) the trustee or *RSA provider no longer holds the contribution; or

(c) the trustee or RSA provider has begun to pay a *superannuation income stream based in whole or part on the contribution.

(4) Subsection (3) does not apply to a variation if:

(a) you claimed a deduction for the contribution (or a part of the contribution); and

(b) the deduction is not allowable (in whole or in part); and

Application to successor funds

(5) Subsections (2) and (3A) apply as if:

(a) the reference in subsection (3A) to the fund or *RSA were a reference to a *successor fund; and

(b) references in those subsections to the trustee or *RSA provider were references to the trustee or RSA provider of the successor fund;

if, after a valid notice is given under section 290‑170 in relation to the contribution, all of the *superannuation interest to which the notice relates is transferred to the successor fund.

Subdivision 290‑D—Tax offsets for spouse contributions

Table of sections

290‑230 Offset for spouse contribution

290‑235 Limit on amount of tax offsets

290‑240 Tax file number

290‑230 Offset for spouse contribution

(1) You are entitled to a *tax offset for an income year for a contribution you make in the income year to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for your *spouse (regardless whether the benefits are payable to your spouse’s *SIS dependants if your spouse dies before or after becoming entitled to receive the benefits).

(2) You are entitled to the *tax offset only if:

(a) he or she was your *spouse when you made the contribution; and

(b) both you and your spouse were Australian residents when you made the contribution; and

(i) assessable income, disregarding your spouse’s *assessable FHSS released amount for the income year; and

(ii) *reportable fringe benefits total; and

(iii) *reportable employer superannuation contributions;

for the income year is less than $40,000; and

(d) you have not deducted and cannot deduct an amount for the contribution under section 290‑60 (employer contributions); and

(e) if the contribution is made to a *superannuation fund—it is a *complying superannuation fund for the income year of the fund in which you make the contribution.

(3) You are not entitled to the *tax offset if, when you make the contribution, you are living separately and apart from your *spouse on a permanent basis.

(4) You are not entitled to the *tax offset for an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a *regulated superannuation fund, or to an *RSA, to be held for the benefit of your *non‑member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned.

(4A) You are not entitled to the *tax offset for an income year if:

(a) your *spouse’s *non‑concessional contributions for the *financial year corresponding to the income year exceed your spouse’s *non‑concessional contributions cap for the financial year; or

(b) immediately before the start of the financial year, your spouse’s *total superannuation balance equals or exceeds the *general transfer balance cap for the financial year.

(5) For the purposes of subparagraph (2)(c)(iii), reduce (but not below zero) the *reportable employer superannuation contributions by the amount of any *excess concessional contributions your *spouse has for the *financial year corresponding to the income year.

290‑235 Limit on amount of tax offsets

(1) The total of the amounts of *tax offset to which you are entitled for contributions you make for an income year cannot exceed 18% of the lesser of the following:

(a) $3,000 reduced by the amount (if any) by which the total mentioned in paragraph 290‑230(2)(c) for the income year exceeds $37,000;

(b) the sum of the *spouse contributions you make in the income year.

(2) The maximum *tax offset to which you are entitled for an income year is $540, even if you are entitled to a tax offset for more than 1 *spouse.

290‑240 Tax file number

If you are entitled to the *tax offset for the contribution, you may, with your *spouse’s consent, quote your spouse’s *tax file number to the trustee (or *RSA provider) of the *superannuation fund (or *RSA) to which the contribution is made.

Division 291—Excess concessional contributions

Table of Subdivisions

Guide to Division 291

291‑A Object of this Division

291‑B Excess concessional contributions

291‑C Modifications for defined benefit interests

291‑CA Contributions that do not result in excess contributions

291‑D Other provisions

Guide to Division 291

291‑1 What this Division is about

There is a cap on the amount of superannuation contributions that may receive concessional tax treatment for an individual in a financial year.

You can carry forward unused concessional contributions cap from the previous 5 financial years and use it to increase your cap in a later financial year (unless your total superannuation balance equals or exceeds $500,000).

Superannuation contributions that exceed your concessional contributions cap are included in your assessable income for the corresponding income year.

A tax offset compensates for the tax that generally applies to the contributions in the superannuation fund.

Note: Part 2‑35 in Schedule 1 to the Taxation Administration Act 1953 contains rules about a charge you may be liable to pay, and about releasing the excess concessional contributions from superannuation.

Subdivision 291‑A—Object of this Division

Table of sections

291‑5 Object of this Division

The object of this Division is to ensure, in relation to concessional contributions to superannuation, that the amount of concessionally taxed *superannuation benefits that an individual receives results from contributions that have been made gradually over the course of the individual’s life.

Note: Division 292 has the same object, in relation to non‑concessional contributions.

Subdivision 291‑B—Excess concessional contributions

Guide to Subdivision 291‑B

291‑10 What this Subdivision is about

This Subdivision includes excess concessional contributions in your assessable income and provides a tax offset.

Table of sections

Operative provisions

291‑15 Excess concessional contributions—assessable income, 15% tax offset

291‑20 Your excess concessional contributions for a financial year

291‑25 Your concessional contributions for a financial year

Operative provisions

291‑15 Excess concessional contributions—assessable income, 15% tax offset

If you have *excess concessional contributions for a *financial year:

(a) an amount equal to the excess concessional contributions is included in your assessable income for your corresponding income year; and

(b) you are entitled to a *tax offset for that income year equal to 15% of the excess concessional contributions.

Note 1: This offset cannot be refunded, transferred or carried forward: see item 20 of the table in subsection 63‑10(1).

Note 2: You may be liable to pay excess concessional contributions charge: see Division 95 in Schedule 1 to the Taxation Administration Act 1953.

Note 3: You can request the release of excess concessional contributions from superannuation: see Division 131 in that Schedule.

291‑20 Your excess concessional contributions for a financial year

(1) You have excess concessional contributions for a *financial year if the amount of your *concessional contributions for the year exceeds your *concessional contributions cap for the year. The amount of the excess concessional contributions is the amount of the excess.

(2) Your concessional contributions cap is:

(a) for the 2017‑2018 financial year—$25,000; or

(b) for the 2018‑2019 financial year or a later financial year—the amount worked out by indexing annually the amount mentioned in paragraph (a).

Note: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the amount of the cap: see section 960‑285.

Five year carry forward of unused concessional contributions cap

(3) However, your concessional contributions cap for the *financial year is increased in accordance with subsection (4) if:

(a) your *concessional contributions for the year would otherwise exceed your concessional contributions cap for the year; and

(b) your *total superannuation balance just before the start of the financial year is less than $500,000; and

(c) you have previously unapplied *unused concessional contributions cap for one or more of the previous 5 financial years.

(4) Apply your unapplied *unused concessional contributions cap for each of the previous 5 *financial years to increase your *concessional contributions cap (but not by more than the excess from paragraph (3)(a)).

(5) For the purposes of increasing your *concessional contributions cap under subsection (4), apply amounts of *unused concessional contributions cap for previous *financial years in order from the earliest year to the most recent year.

Your unused concessional contributions cap

(6) You have unused concessional contributions cap for a *financial year if the amount of your *concessional contributions for the year falls short of your *concessional contributions cap for the year. The amount of the unused concessional contributions cap is the amount of the shortfall.

(7) However, you do not have unused concessional contributions cap for a *financial year earlier than the 2018‑2019 financial year.

291‑25 Your concessional contributions for a financial year

(1) The amount of your concessional contributions for a *financial year is the sum of:

(a) each contribution covered under subsection (2); and

(b) each amount covered under subsection (3).

Note: For rules about defined benefit interests, see Subdivision 291‑C.

(2) A contribution is covered under this subsection if:

(a) it is made in the *financial year to a *complying superannuation plan in respect of you; and

(b) it is included in the assessable income of the *superannuation provider in relation to the plan, or, by way of a *roll‑over superannuation benefit, in the assessable income of a *complying superannuation fund or *RSA provider in the circumstances mentioned in subsection 290‑170(5) (about successor funds); and

(d) it is not an amount mentioned in item 2 of the table in subsection 295‑190(1).

(3) An amount in a *complying superannuation plan is covered under this subsection if it is allocated by the *superannuation provider in relation to the plan for you for the year in accordance with conditions specified in the regulations.

(4) For the purposes of paragraph (2)(b), disregard:

(a) table item 5.3 in section 50‑25 (about income tax exemption for constitutionally protected funds); and

(b) Subdivision 295‑D (about excluded contributions).

Subdivision 291‑C—Modifications for defined benefit interests

Guide to Subdivision 291‑C

291‑155 What this Subdivision is about

This Subdivision modifies the meaning of concessional contributions relating to defined benefits interests.

Table of sections

Operative provisions

291‑160 Application

291‑165 Concessional contributions—special rules for defined benefit interests

291‑170 Notional taxed contributions

291‑175 Defined benefit interest

Operative provisions

291‑160 Application

This Subdivision applies if, in a *financial year, you have:

(a) a *superannuation interest that is or includes a *defined benefit interest; or

(b) more than one superannuation interest that is or includes a defined benefit interest.

291‑165 Concessional contributions—special rules for defined benefit interests

(1) Despite section 291‑25, the amount of your concessional contributions for the *financial year is the sum of:

(a) the contributions covered by subsection 291‑25(2), and the amounts covered by subsection 291‑25(3), to the extent to which they do not relate to the *defined benefit interest or interests; and

(b) your *notional taxed contributions for the financial year in respect of the defined benefit interest or interests; and

(c) the amount (if any) by which your *defined benefit contributions for the financial year in respect of the defined benefit interest or interests exceed those notional taxed contributions.

Note: Section 291‑370 prevents some contributions from causing your concessional contributions for a financial year to exceed the concessional contributions cap.

(2) In working out your *defined benefit contributions for the *financial year for the purposes of paragraph (1)(c):

(a) if Subdivision 293‑E applies to you for the income year corresponding to the financial year—disregard subsection 293‑150(3); and

(b) if Subdivision 293‑F applies to you—disregard subsection 293‑195(2).

Note: Section 291‑370 prevents some contributions from causing your concessional contributions for a financial year to exceed the concessional contributions cap.

291‑170 Notional taxed contributions

(1) Your notional taxed contributions for a *financial year in respect of a *defined benefit interest has the meaning given by the regulations.

Note: For transitional provisions about notional taxed contributions that were previously in former subsections 292‑170(6) to (9), see Subdivision 291‑C of the Income Tax (Transitional Provisions) Act 1997.

(2) Regulations made for the purposes of subsection (1) may provide for a method of determining the amount of the notional taxed contributions.

(3) Regulations made for the purposes of subsection (1) may define the *notional taxed contributions, and the amount of notional taxed contributions, in different ways depending on any of the following matters:

(a) the individual who has the *superannuation interest that is or includes the *defined benefit interest;

(b) the *superannuation plan in which the superannuation interest exists;

(d) any other matter.

(4) Regulations made for the purposes of subsection (1) may specify circumstances in which the amount of *notional taxed contributions for a *financial year is nil.

(5) Subsections (2), (3) and (4) do not limit the regulations that may be made for the purposes of this section.

291‑175 Defined benefit interest

(1) An individual’s *superannuation interest is a defined benefit interest to the extent that it defines the individual’s entitlement to *superannuation benefits payable from the interest by reference to one or more of the following matters:

(a) the individual’s salary, or allowance in the nature of salary, at a particular date or averaged over a period;

(b) another individual’s salary, or allowance in the nature of salary, at a particular date or averaged over a period;

(d) specified conversion factors.

(2) However, an individual’s *superannuation interest is not a defined benefit interest if it defines that entitlement solely by reference to one or more of the following:

(a) *disability superannuation benefits;

(b) *superannuation death benefits;

Subdivision 291‑CA—Contributions that do not result in excess contributions

Guide to Subdivision 291‑CA

291‑365 What this Subdivision is about

Some contributions and other amounts are treated as always being within your concessional contributions cap, and therefore cannot be excess concessional contributions.

Table of sections

Operative provisions

291‑370 Contributions that do not result in excess contributions

Operative provisions

291‑370 Contributions that do not result in excess contributions

(1) In working out your *concessional contributions for a *financial year, treat the sum of the following as an amount equal to your *concessional contributions cap under subsection 291‑20(2) for the financial year:

(a) contributions made in respect of you for the financial year to a *constitutionally protected fund that would (disregarding this section) be concessional contributions;

(b) if any of your *notional taxed contributions for the financial year:

(i) are worked out under section 291‑170 of the Income Tax (Transitional Provisions) Act 1997; or

(ii) are not worked out under that section, but only because those notional taxed contributions did not meet the requirements of paragraph 291‑170(2)(b) or (4)(b) of that Act;

the amount of those notional taxed contributions;

(c) if your *defined benefit contributions for the financial year (worked out excluding contributions and amounts covered by paragraph (a)) exceed your notional taxed contributions for the financial year (also worked out excluding contributions and amounts covered by paragraph (a))—the amount of that excess;

if that sum would otherwise exceed your concessional contributions cap under subsection 291‑20(2) for the financial year.

Note: This subsection does not take into account any increase in your concessional contributions cap under subsection 291‑20(4).

(2) For the purposes of paragraph (1)(a), treat any amounts covered by subsection 291‑25(3) or paragraph 291‑165(1)(b) or (c) for the *financial year that relate to a *superannuation interest of yours in the fund as if they were contributions made in respect of you for the financial year to the fund.

(3) This section has effect despite sections 291‑25 and 291‑165 of this Act and section 291‑170 of the Income Tax (Transitional Provisions) Act 1997.

Subdivision 291‑D—Other provisions

Guide to Subdivision 291‑D

291‑460 What this Subdivision is about

The Commissioner has a discretion to disregard concessional contributions or allocate them to a different financial year.

Table of sections

Operative provisions

291‑465 Commissioner’s discretion to disregard contributions etc. in relation to a financial year

Operative provisions

291‑465 Commissioner’s discretion to disregard contributions etc. in relation to a financial year

(1) The Commissioner may make a written determination that, for the purposes of working out the amount of your *excess concessional contributions for a *financial year, all or part of your *concessional contributions for a financial year is to be:

(a) disregarded; or

(b) allocated instead for the purposes of another financial year specified in the determination.

Conditions for making of determination

(2) The Commissioner may make the determination only if:

(a) you apply for the determination in accordance with this section; and

(b) the Commissioner considers that:

(i) there are special circumstances; and

(ii) making the determination is consistent with the object of this Division and Division 292.

(2A) Paragraph (2)(a) does not apply if:

(a) the determination relates to a contribution that is an amount the Commissioner pays for your benefit under Part 8 of the Superannuation Guarantee (Administration) Act 1992; and

(b) the amount represents an amount of a charge payment (within the meaning of section 63A of that Act) paid as a result of a disclosure to which paragraph 74(1)(a) of that Act applies; and

(c) the entity making the disclosure qualified, under section 74 of that Act, for an amnesty in relation to the *superannuation guarantee shortfall to which the charge payment relates.

Matters to which regard may be had

(3) In making the determination the Commissioner may have regard to the following:

(a) whether a contribution made in the relevant *financial year would more appropriately be allocated towards another financial year instead;

(b) whether it was reasonably foreseeable, when a relevant contribution was made, that you would have *excess concessional contributions or *excess non‑concessional contributions for the relevant financial year, and in particular:

(i) if the relevant contribution is made in respect of you by another individual—the terms of any agreement or arrangement between you and that individual as to the amount and timing of the contribution; and

(ii) the extent to which you had control over the making of the contribution;

Requirements for application

(4) The application:

(a) must be in the *approved form; and

(b) can only be made after all of the contributions sought to be disregarded or reallocated have been made; and

(c) if you receive an *excess concessional contributions determination for the *financial year—must be given to the Commissioner within:

(i) 60 days after receiving the determination; or

(ii) a further period allowed by the Commissioner.

Notification

(5) The Commissioner must give you:

(a) a copy of the determination; or

(b) if the Commissioner decides not to make a determination—notice of that decision.

Review

(7) If you are dissatisfied with:

(a) a determination made under this section in relation to you; or

(b) a decision the Commissioner makes not to make such a determination;

you may object against the determination, or the decision, as the case requires, in the manner set out in Part IVC of the Taxation Administration Act 1953.

(8) To avoid doubt:

(a) subject to subsection 14ZVB(3) of the Taxation Administration Act 1953, you may also object, on the ground that you are dissatisfied with such a determination or decision, relating to all or part of your *concessional contributions for a *financial year:

(i) under section 175A of the Income Tax Assessment Act 1936 against an assessment made in relation to you for the corresponding income year; or

(ii) under section 97‑10 in Schedule 1 to the Taxation Administration Act 1953 against an *excess concessional contributions determination made in relation to you for the financial year; and

(b) for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, the making of a determination under this section is a decision forming part of the process of making an assessment of tax, and making a calculation of charge, under this Act.

Division 292—Excess non‑concessional contributions

Table of Subdivisions

Guide to Division 292

292‑A Object of this Division

292‑B Assessable income and tax offset

292‑C Excess non‑concessional contributions tax

292‑E Excess non‑concessional contributions tax assessments

292‑F Amending excess non‑concessional contributions tax assessments

292‑G Collection and recovery

292‑H Other provisions

Guide to Division 292

292‑1 What this Division is about

This Division limits the superannuation contributions made in a financial year that receive concessional tax treatment.

You become liable for tax if:

(a) your non‑concessional contributions exceed an indexed cap; and

(b) a corresponding amount is not released from your superannuation interests.

An amount may be included in your assessable income, and you may become entitled to a tax offset, if your non‑concessional contributions exceed that indexed cap.

Subdivision 292‑A—Object of this Division

Table of sections

292‑5 Object of this Division

The object of this Division is to ensure, in relation to non‑concessional contributions to superannuation, that the amount of concessionally taxed *superannuation benefits that an individual receives results from contributions that have been made gradually over the course of the individual’s life.

Note: Division 291 has the same object, in relation to concessional contributions.

Subdivision 292‑B—Assessable income and tax offset

292‑15 What this Subdivision is about

An amount is included in your assessable income, and you are entitled to a tax offset, if:

(a) your non‑concessional contributions exceed an indexed cap; and

(b) you are not liable to pay excess non‑concessional contributions tax for the financial year on the full amount of the excess.

This amount included in your assessable income relates to:

(a) your associated earnings on those excess contributions; and

(b) any amounts that have been released from your superannuation interests.

Table of sections

292‑20 Amount in assessable income, and tax offset, relating to your non‑concessional contributions

292‑25 Amount included in assessable income

292‑30 Amount of the tax offset

292‑20 Amount in assessable income, and tax offset, relating to your non‑concessional contributions

Your assessable income for an income year includes an amount, and you are entitled to a *tax offset for the income year, if:

(a) you receive one or more *excess non‑concessional contributions determinations for a *financial year that corresponds to the income year; and

(b) you are not liable to pay *excess non‑concessional contributions tax for the financial year on the full amount of the excess stated in the most recent of those determinations.

292‑25 Amount included in assessable income

(1) The amount included in your assessable income for the income year is equal to the amount of associated earnings stated in the most recent of those determinations.

(2) However, if:

(a) the sum of any amounts paid in response to release authorities issued in relation to those determinations (the total amount) is less than the amount of the excess stated in the most recent of those determinations; and

(b) section 292‑467 does not apply to you for the *financial year;

the amount included in your assessable income for the income year is equal to the amount of associated earnings that would have been stated in that most recent determination if the total amount had been the amount of the excess stated in that determination.

Note 1: The release authorities are issued under Division 131, or former Division 96, in Schedule 1 to the Taxation Administration Act 1953.

Note 2: Any amounts paid in response to the release authorities are non‑assessable non‑exempt income (see section 303‑15 or former sections 303‑15 and 303‑17).

292‑30 Amount of the tax offset

The *tax offset is equal to 15% of the amount included in your assessable income for the income year under section 292‑25.

Note 1: This tax offset compensates for any tax liability of the superannuation provider on earnings from investments made with the contributions making up the excess amount stated in the most recent determination.

Note 2: This offset cannot be refunded, transferred or carried forward (see item 20 of the table in subsection 63‑10(1)).

Subdivision 292‑C—Excess non‑concessional contributions tax

292‑75 What this Subdivision is about

This Subdivision defines non‑concessional contributions and excess non‑concessional contributions, and sets liability to pay excess non‑concessional contributions tax.

Table of sections

Operative provisions

292‑80 Liability for excess non‑concessional contributions tax

292‑85 Your excess non‑concessional contributions for a financial year

292‑90 Your non‑concessional contributions for a financial year

292‑95 Contributions arising from structured settlements or orders for personal injuries

292‑100 Contribution relating to some CGT small business concessions

292‑102 Downsizer contributions

292‑105 CGT cap amount

Operative provisions

292‑80 Liability for excess non‑concessional contributions tax

You are liable to pay *excess non‑concessional contributions tax imposed by the Superannuation (Excess Non‑concessional Contributions Tax) Act 2007 if you have *excess non‑concessional contributions for a *financial year.

Note: The amount of the tax is set out in that Act.

292‑85 Your excess non‑concessional contributions for a financial year

Your excess non‑concessional contributions

(1) You have excess non‑concessional contributions for a *financial year if:

(a) you receive one or more *excess non‑concessional contributions determinations for the financial year; and

(b) the excess amount stated in the most recent of those determinations exceeds the sum of any amounts paid in response to release authorities issued in relation to those determinations; and

Note: The release authorities are issued under Division 131, or former Division 96, in Schedule 1 to the Taxation Administration Act 1953.

(1A) The amount of your excess non‑concessional contributions is:

(a) if no amounts were paid as described in paragraph (1)(b)—the excess amount stated in that most recent determination; or

(b) otherwise—the amount of the excess worked out under paragraph (1)(b).

Note: Any excess non‑concessional contributions determination you receive after the first one for a financial year is an amended determination.

Your non‑concessional contributions cap—general rule

(2) Your non‑concessional contributions cap for a *financial year is:

(a) unless paragraph (b) applies—the amount (the general non‑concessional contributions cap for the year) that is 4 times your *concessional contributions cap under subsection 291‑20(2) for the year; or

(b) if, immediately before the start of the year, your *total superannuation balance equals or exceeds the *general transfer balance cap for the year—nil.

Note: This subsection does not take into account any increase in your concessional contributions cap under subsection 291‑20(4).

When you can bring forward your non‑concessional contributions cap

(3) Despite subsection (2), work out your non‑concessional contributions cap for a *financial year (the first year) under subsection (5), and your non‑concessional contributions caps for the following 2 financial years (the second year and third year) under subsections (6) and (7), if:

(a) your *non‑concessional contributions for the first year exceed the general non‑concessional contributions cap for that year; and

(b) paragraph (2)(b) does not apply to you in relation to the first year; and

(d) a previous operation of subsection (6) or (7) does not determine your non‑concessional contributions cap for the first year; and

(e) the difference (the first year cap space) between the *general transfer balance cap for the first year and your *total superannuation balance immediately before the start of the first year exceeds the general non‑concessional contributions cap for the first year.

(4) However, do not work out your *non‑concessional contributions cap for the third year under subsection (7) if the first year cap space does not exceed an amount equal to twice the general non‑concessional contributions cap for the first year.

Note: If this subsection applies, your non‑concessional contributions cap for the third year will be worked out under subsection (2) (unless the third year becomes a new first year under a further application of subsection (3)).

First year of bring forward

(5) Your non‑concessional contributions cap for the first year is an amount equal to:

(a) if the first year cap space does not exceed an amount equal to twice the general non‑concessional contributions cap for the first year—twice the general non‑concessional contributions cap for the first year; or

(b) otherwise—3 times the general non‑concessional contributions cap for the first year.

Second year of bring forward

(6) Your non‑concessional contributions cap for the second year is:

(a) if:

(i) your *total superannuation balance immediately before the start of the second year is less than the *general transfer balance cap for the second year; and

(ii) your *non‑concessional contributions for the first year fall short of your cap for the first year (worked out under subsection (5));

that shortfall; or

(b) otherwise—nil.

Third year of bring forward

(7) Your non‑concessional contributions cap for the third year is:

(a) if:

(i) your *total superannuation balance immediately before the start of the third year is less than the *general transfer balance cap for the third year; and

(ii) your *non‑concessional contributions for the second year fall short of your cap for the second year (worked out under subsection (6));

that shortfall; or

(b) if:

(i) your total superannuation balance immediately before the start of the third year is less than the general transfer balance cap for the third year; and

(ii) your cap for the second year is nil; and

(iii) your non‑concessional contributions for the first year fall short of your cap for the first year (worked out under subsection (5));

that shortfall; or

292‑90 Your non‑concessional contributions for a financial year

(1) The amount of your non‑concessional contributions for a *financial year is the sum of:

(a) each contribution covered under subsection (2); and

(aa) each amount covered under subsection (4); and

(b) the amount of your *excess concessional contributions (if any) for the financial year.

Modification for released excess concessional contributions

(1A) However, if:

(a) you make a valid request under section 131‑5 in Schedule 1 to the Taxation Administration Act 1953 in relation to *excess concessional contributions you have for the *financial year; and

(b) a *superannuation provider pays an amount in relation to the release authority issued under section 131‑15 in that Schedule in relation to that request;

the amount paid is first increased, by dividing it by 85%, and the increased amount is applied to reduce the amount of excess concessional contributions mentioned in paragraph (1)(b) of this section.

Non‑concessional contributions and amounts

(2) A contribution is covered under this subsection if:

(a) it is made in the *financial year to a *complying superannuation plan in respect of you; and

(b) it is not included in the assessable income of the *superannuation provider in relation to the *superannuation plan, or, by way of a *roll‑over superannuation benefit, in the assessable income of any *complying superannuation fund or *RSA provider in the circumstances mentioned in subsection 290‑170(5) (about successor funds); and

(i) a Government co‑contribution made under the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003;

(ii) a contribution covered under section 292‑95 (payments that relate to structured settlements or orders for personal injuries);

(iii) a contribution covered under section 292‑100 (certain CGT‑related payments), to the extent that it does not exceed your *CGT cap amount when it is made;

(iiia) a contribution covered under section 292‑102 (downsizer contributions);

(iv) a contribution made to a *constitutionally protected fund (other than a contribution included in the *contributions segment of your *superannuation interest in the fund);

(v) contributions not included in the assessable income of the superannuation provider in relation to the superannuation plan because of a choice made under section 295‑180;

(vi) a contribution that is a *roll‑over superannuation benefit.

(3) Disregard Subdivision 295‑D for the purposes of paragraph (2)(b).

(4) An amount is covered under this subsection if it is any of the following:

(a) an amount in a *complying superannuation plan that is allocated by the *superannuation provider in relation to that plan for you for the year in accordance with conditions specified in the regulations;

(b) the amount of any contribution made to that plan in respect of you in the year that is covered by a valid and acknowledged notice under section 290‑170, to the extent that it is not allowable as a deduction for the person making the contribution;

(c) the sum of each contribution made to that plan in respect of you at a time on or after 10 May 2006 when that plan was not a complying superannuation plan (other than a contribution covered under this paragraph in relation to a previous financial year).

292‑95 Contributions arising from structured settlements or orders for personal injuries

(1) A contribution is covered under this section if:

(a) the contribution arises from:

(i) the settlement of a claim that satisfies the conditions in subsection (3); or

(ii) the settlement of a claim in relation to a personal injury suffered by you under a law of the Commonwealth or of a State or Territory relating to workers compensation; or

(iii) the order of a court that satisfies the conditions in subsection (4); and

(b) the contribution is made within 90 days, or such longer period as the Commissioner allows, after the later of the following:

(i) the day of receipt of the payment from which the contribution is made; or

(ii) in relation to subparagraph (a)(i) or (iii)—the day mentioned in subsection (2); and

(c) 2 legally qualified medical practitioners have certified that, because of the personal injury, it is unlikely that you can ever be *gainfully employed in a capacity for which you are reasonably qualified because of education, experience or training; and

(d) no later than the time the contribution is made to a *superannuation plan, you or your *legal personal representative notify the *superannuation provider in relation to the plan, in the *approved form, that this section is to apply to the contribution.

(2) For the purposes of subparagraph (1)(b)(ii), the day is:

(a) for a settlement mentioned in subparagraph (a)(i):

(i) the day on which the agreement mentioned in paragraph (3)(c) was entered into; or

(ii) if that agreement depends, for its effectiveness, on being approved (however described) by an order of a court, or on being embodied in a consent order made by a court—the day on which that order was made; or

(b) for an order mentioned in subparagraph (1)(a)(iii)—the day on which the order was made.

(3) For the purposes of subparagraph (1)(a)(i), the conditions are as follows:

(a) the claim:

(i) is for compensation or damages for, or in respect of, personal injury suffered by you; and

(ii) is made by you or your *legal personal representative;

(b) the claim is based on the commission of a wrong, or on a right created by statute;

(c) the settlement takes the form of a written agreement between the parties to the claim (whether or not that agreement is approved by an order of a court, or is embodied in a consent order made by a court).

(4) For the purposes of subparagraph (1)(a)(iii), the conditions are as follows:

(a) the order is made in respect of a claim that:

(i) is for compensation or damages for, or in respect of, personal injury suffered by you; and

(ii) is made by you or your *legal personal representative;

(b) the claim is based on the commission of a wrong, or on a right created by statute;

(5) If a claim is both:

(a) for compensation or damages for personal injury suffered by you; and

(b) for some other remedy (for example, compensation or damages for loss of, or damage to, property);

subsections (3) and (4) apply to the claim, but only to the extent that it relates to the compensation or damages referred to in paragraph (a), and only to amounts that, in the settlement agreement, or in the order, are identified as being solely in payment of that compensation or those damages.

(6) If:

(a) you requested the Commissioner to allow a longer period under paragraph (1)(b); and

(b) you are dissatisfied with:

(i) a decision under that paragraph allowing a longer period; or

(ii) a decision the Commissioner makes not to allow a longer period;

you may object against the decision in the manner set out in Part IVC of the Taxation Administration Act 1953.

(7) To avoid doubt:

(a) subject to subsection 14ZVC(3) of the Taxation Administration Act 1953, you may also object, on the ground that you are dissatisfied with such a decision, relating to all or part of your contributions for a *financial year:

(i) under section 175A of the Income Tax Assessment Act 1936 against an assessment made in relation to you for the corresponding income year; or

(ii) under section 97‑35 in Schedule 1 to the Taxation Administration Act 1953 against an *excess non‑concessional contributions determination made in relation to you for the financial year; and

(b) for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, the making of a decision under paragraph (1)(b) of this section is a decision forming part of the process of making an assessment of tax, and making a calculation of charge, under this Act.

292‑100 Contribution relating to some CGT small business concessions

(1) A contribution is covered under this section if:

(a) the contribution is made by you to a *complying superannuation plan in respect of you in a *financial year; and

(b) the requirement in subsection (2), (4), (7) or (8) is met; and

(c) you choose, in accordance with subsection (9), to apply this section to an amount that is all or part of the contribution.

(2) The requirement in this subsection is met if:

(a) the contribution is equal to all or part of the *capital proceeds from a *CGT event for which you can disregard any *capital gain under section 152‑105 (or would be able to do so, assuming that a capital gain arose from the event); and

(b) the contribution is made on or before the later of the following days:

(i) the day you are required to lodge your *income tax return for the income year in which the CGT event happened;

(ii) 30 days after the day you receive the capital proceeds.

(3) For the purposes of paragraph (2)(a), ignore the requirement in paragraph 152‑105(b) if you are permanently incapacitated at the time of the *CGT event but were not permanently incapacitated at the time the relevant *CGT asset was acquired.

(4) The requirement in this subsection is met if:

(a) just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under section 152‑110, disregard any *capital gain arising from the CGT event (or would be able to do so, assuming that a capital gain arose from the event); and

(b) the entity makes a payment to you before the later of:

(i) 2 years after the CGT event; and

(ii) if the CGT event happened because the entity *disposed of the relevant *CGT asset—6 months after the latest time a possible *financial benefit becomes or could become due under a *look‑through earnout right relating to that CGT asset and the disposal; and

(c) the contribution is equal to all or part of your stakeholder’s participation percentage (within the meaning of subsection 152‑125(2)) of the *capital proceeds from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and

(d) the contribution is made within 30 days after the payment mentioned in paragraph (b).

(5) In determining whether the conditions in subsection (2) or (4) are satisfied for a *CGT event in relation to a *pre‑CGT asset, treat the asset as a *post‑CGT asset.

(6) For the purposes of paragraph (4)(a), ignore the requirement in paragraph 152‑110(1)(b) if a *significant individual was permanently incapacitated at the time of the *CGT event but was not permanently incapacitated when the relevant *CGT asset was acquired.

(7) The requirement in this subsection is met if:

(a) the contribution is equal to all or part of the *capital gain from a *CGT event that you disregarded under subsection 152‑305(1); and

(b) the contribution is made on or before the later of the following days:

(i) the day you are required to lodge your *income tax return for the income year in which the CGT event happened;

(ii) 30 days after the day you receive the *capital proceeds from the CGT event.

(8) The requirement in this subsection is met if:

(a) just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under subsection 152‑305(2), disregard all or part of a *capital gain arising from the CGT event; and

(b) the entity makes a payment to you that satisfies the conditions in section 152‑325; and

(c) the contribution is equal to all or part of the capital gain arising from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and

(d) the contribution is made within 30 days after the payment mentioned in paragraph (b).

(9) To make a choice for the purposes of paragraph (1)(c), you must:

(a) make the choice in the *approved form; and

(b) give it to the *superannuation provider in relation to the *complying superannuation plan on or before the time when the contribution is made.

292‑102 Downsizer contributions

Criteria for a downsizer contribution

(1) A contribution is covered under this section if:

(a) the contribution is made to a *complying superannuation plan in respect of you when you are aged 65 years or over; and

(b) the contribution is an amount equal to all or part of the *capital proceeds received from the *disposal of an *ownership interest (the old interest) in a *dwelling; and

(d) any *capital gain or *capital loss from the disposal of the old interest:

(i) for the case where you held it just before the disposal—is wholly or partially disregarded under Subdivision 118‑B (or would have been if you had *acquired it on or after 20 September 1985); or

(ii) otherwise—would have been wholly or partially disregarded under Subdivision 118‑B had you *acquired the old interest on or after 20 September 1985 and held it for a period before the disposal; and

(e) the condition in subsection (2) is met for the disposal; and

(f) the dwelling is located in *Australia, and is not a caravan, houseboat or other mobile home; and

(g) the contribution is made within 90 days, or such longer period as the Commissioner allows, after the time the change of ownership occurs as a result of the disposal; and

(h) you choose, in accordance with subsection (8), to apply this section to the contribution; and

(i) there is not already a contribution covered under this section, and made to a complying superannuation plan in respect of you, from an earlier choice you made in relation to the disposal of:

(i) another ownership interest in the dwelling that was not a related spousal interest to the old interest; or

(ii) an ownership interest in another dwelling.

Note 1: Subparagraph (i)(i) does not prevent another contribution, made for you from the capital proceeds from the disposal of the same interest, from also being a contribution covered under this section.

Note 2: That subparagraph also does not prevent another contribution, made for you from the capital proceeds from the disposal of a related spousal interest, from being a contribution covered under this section.

10‑year ownership condition

(2) The condition in this subsection is met for the *disposal of the old interest if either or both of the following paragraphs applies:

(a) at all times during the 10 years ending just before the disposal:

(i) the old interest was held by you, your *spouse or your former spouse; or

(ii) an *ownership interest in the land on which the *dwelling is situated was held by you, your spouse or your former spouse;

(b) if subsection 118‑147(1):

(i) applies because the old interest was a substitute property interest (within the meaning of that subsection) for an old dwelling referred to in paragraph 118‑147(1)(a); or

(ii) would have applied as described in subparagraph (i) if paragraph 118‑147(1)(a) were modified to refer to a dwelling (the old dwelling) that was your main residence;

you, your spouse or your former spouse *acquired an ownership interest in that old dwelling at least 10 years before the disposal.

Note: Section 118‑147 deals with a dwelling replacing an earlier dwelling that was compulsorily acquired or destroyed etc.

Cap on the amount of a downsizer contribution

(3) Despite subsection (1), the contribution is covered under this section only to the extent that it does not exceed the lesser of:

(a) $300,000, less any other contribution that is already covered under this section and made to a *complying superannuation plan in respect of you; and

(b) the sum of the *capital proceeds from the disposals of:

(i) the old interest; and

(ii) any *related spousal interest to the old interest;

less the sum of all other contributions that are already covered under this section, in relation to the disposal of the old interest or any related spousal interest to the old interest, and made to complying superannuation plans in respect of you or your *spouse.

Market value substitution rule

(3A) In working out *capital proceeds for the purposes of paragraph (1)(b) or (3)(b), disregard section 116‑30 to the extent that it has the effect of increasing those capital proceeds.

Meaning of related spousal interest

(4) A related spousal interest, to an *ownership interest in a *dwelling, is another ownership interest in the dwelling if:

(a) both ownership interests are *disposed of under the same contract; and

(b) just before the disposal, you *held one of the ownership interests and your *spouse held the other.

When interest held by trustee of deceased estate

(5) For the purposes of determining whether an individual held an interest at a particular time, if the interest was held at the particular time by the trustee of the deceased estate of an individual who was your *spouse when the individual died, the interest is taken to be held at the particular time by that individual.

Review of the period for making the contribution

(6) If:

(a) you requested the Commissioner to allow a longer period under paragraph (1)(g); and

(b) you are dissatisfied with:

(i) a decision under that paragraph allowing a longer period; or

(ii) a decision the Commissioner makes not to allow a longer period;

you may object against the decision in the manner set out in Part IVC of the Taxation Administration Act 1953.

(7) To avoid doubt:

(i) under section 175A of the Income Tax Assessment Act 1936 against an assessment made in relation to you for the corresponding income year; or

(ii) under section 97‑35 in Schedule 1 to the Taxation Administration Act 1953 against an *excess non‑concessional contributions determination made in relation to you for the financial year; and

(b) for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, the making of a decision under paragraph (1)(g) of this section is a decision forming part of the process of making an assessment of tax, and making a calculation of charge, under this Act.

Requirements for choices

(8) To make a choice for the purposes of paragraph (1)(h), you must:

(a) make the choice in the *approved form; and

(b) give it to the *superannuation provider in relation to the *complying superannuation plan at or before the time when the contribution is made.

Commissioner to notify providers if contributions are not downsizer contributions

(9) The Commissioner must, in writing, notify a *superannuation provider that all, or a specified part, of a contribution is not covered under this section if:

(a) the Commissioner is aware that a choice referred to in subsection (8) has been given to the superannuation provider for the contribution; and

(b) the Commissioner is satisfied that the contribution, or that part of the contribution, (as applicable) is not covered under this section.

The Commissioner may give a copy of the notification to *APRA.

292‑105 CGT cap amount

(1) Your CGT cap amount at the start of the 2007‑2008 *financial year is $1,000,000.

Note: For transitional rules about contributions made in the period from 10 May 2006 to 30 June 2007, see section 292‑80 of the Income Tax (Transitional Provisions) Act 1997.

Reductions and increases

(2) If a contribution covered by section 292‑100 is made in respect of you at a time, reduce your CGT cap amount just after that time:

(a) if the contribution falls short of your *CGT cap amount at that time—by the amount of the contribution; or

(b) otherwise—to nil.

(3) At the start of each *financial year after the 2007‑2008 financial year, increase your CGT cap amount by the amount (if any) by which the index amount for that financial year exceeds the index amount for the previous financial year.

(4) For the purposes of subsection (3), the index amount for the 2007‑2008 *financial year is $1,000,000. The index amount is then indexed annually.

Note: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the index amount: see section 960‑285.

Subdivision 292‑E—Excess non‑concessional contributions tax assessments

Guide to Subdivision 292‑E

292‑225 What this Subdivision is about

The Commissioner may make an assessment of a person’s liability to pay excess non‑concessional contributions tax, and the excess non‑concessional contributions on which that liability is based.

Table of sections

Operative provisions

292‑230 Commissioner must make an excess non‑concessional contributions tax assessment

292‑240 Validity of assessment

292‑245 Objections

Operative provisions

292‑230 Commissioner must make an excess non‑concessional contributions tax assessment

(1) The Commissioner must make an assessment (an excess non‑concessional contributions tax assessment) of:

(a) if a person has *excess non‑concessional contributions for a *financial year—the amount of the excess non‑concessional contributions; and

(b) the amount (if any) of *excess non‑concessional contributions tax which the person is liable to pay in relation to the financial year.

(2) The Commissioner must give the person notice in writing of an *excess non‑concessional contributions tax assessment as soon as practicable after making the assessment.

292‑240 Validity of assessment

The validity of an *excess non‑concessional contributions tax assessment is not affected because any of the provisions of this Act have not been complied with.

292‑245 Objections

If a person is dissatisfied with an *excess non‑concessional contributions tax assessment made in relation to the person, the person may object against the assessment in the manner set out in Part IVC of the Taxation Administration Act 1953.

Subdivision 292‑F—Amending excess non‑concessional contributions tax assessments

Guide to Subdivision 292‑F

292‑300 What this Subdivision is about

The Commissioner may amend excess non‑concessional contributions tax assessments within certain time limits.

Table of sections

Operative provisions

292‑305 Amendments within 4 years of the original assessment

292‑310 Amended assessments are treated as excess non‑concessional contributions tax assessments

292‑315 Later amendments—on request

292‑320 Later amendments—fraud or evasion

292‑325 Further amendment of an amended particular

292‑330 Amendment on review etc.

Operative provisions

292‑305 Amendments within 4 years of the original assessment

(1) The Commissioner may amend an *excess non‑concessional contributions tax assessment for a person for a *financial year at any time during the period of 4 years after the *original excess non‑concessional contributions tax assessment day for the person for that year.

(2) The original excess non‑concessional contributions tax assessment day for a person for a *financial year is the day on which the Commissioner gives the first *excess non‑concessional contributions tax assessment to the person for the financial year.

292‑310 Amended assessments are treated as excess non‑concessional contributions tax assessments

(1) Once an amended *excess non‑concessional contributions tax assessment for a person for a *financial year is made, it is taken to be an excess non‑concessional contributions tax assessment for the person for the year.

(2) If the Commissioner amends a person’s *excess non‑concessional contributions tax assessment, the Commissioner must give the person notice in writing of the amendment as soon as practicable after making the amendment.

292‑315 Later amendments—on request

The Commissioner may amend an *excess non‑concessional contributions tax assessment for a person for a *financial year after the end of the period of 4 years after the *original excess non‑concessional contributions tax assessment day for the person for the year if, within that 4 year period:

(a) the person applies for the amendment in the *approved form; and

(b) the person gives the Commissioner all the information necessary for making the amendment.

292‑320 Later amendments—fraud or evasion

(1) If:

(a) a person (or a *superannuation provider covered under subsection (2)) does not make a full and true disclosure to the Commissioner of the information necessary for an *excess non‑concessional contributions tax assessment for the person for a *financial year; and

(b) in making the assessment, the Commissioner makes an under‑assessment; and

the Commissioner may amend the assessment at any time.

(2) A *superannuation provider is covered under this subsection if any of the following conditions are satisfied:

(a) contributions have been made to a *superannuation plan of the provider on behalf of the person in the *financial year;

(b) an amount is included in the person’s *concessional contributions for the financial year under subsection 291‑25(3) because the superannuation provider allocated it to the person;

(c) *notional taxed contributions are included in the person’s concessional contributions for the financial year under section 291‑165 because of the person’s *defined benefit interest in a superannuation plan of the provider.

292‑325 Further amendment of an amended particular

If:

(a) an *excess non‑concessional contributions tax assessment has been amended (the earlier amendment) in any particular; and

(b) the Commissioner is of the opinion that it would be just to further amend the assessment in that particular;

the Commissioner may do so within a period of 4 years after the earlier amendment.

292‑330 Amendment on review etc.

Nothing in this Subdivision prevents the amendment of an *excess non‑concessional contributions tax assessment:

(a) to give effect to a decision on a review or appeal; or

(b) as a result of an objection or pending an appeal or review.

Note: If a person is dissatisfied with a statement given to the Commissioner by a superannuation provider under section 390‑5 in Schedule 1 to the Taxation Administration Act 1953, the person may make a complaint under the AFCA scheme (within the meaning of Chapter 7 of the Corporations Act 2001).

Subdivision 292‑G—Collection and recovery

Guide to Subdivision 292‑G

292‑380 What this Subdivision is about

Excess non‑concessional contributions tax is due and payable at the end of 21 days after notice of assessment and the general interest charge applies to unpaid amounts. Money may be released from a superannuation plan to pay the tax.

Table of sections

Operative provisions

292‑385 Due date for payment of excess non‑concessional contributions tax

292‑390 General interest charge

292‑395 Refunds of amounts overpaid

Operative provisions

292‑385 Due date for payment of excess non‑concessional contributions tax

*Excess non‑concessional contributions tax assessed for a person for a *financial year is due and payable at the end of 21 days after the Commissioner gives the person notice of the *excess non‑concessional contributions tax assessment.

292‑390 General interest charge

If *excess non‑concessional contributions tax or *shortfall interest charge payable by a person remains unpaid after the time by which it is due and payable, the person is liable to pay the *general interest charge on the unpaid amount for each day in the period that:

(a) starts at the beginning of the day on which the excess non‑concessional contributions tax or shortfall interest charge was due to be paid; and

(b) ends at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i) the excess non‑concessional contributions tax or shortfall interest charge;

(ii) general interest charge on any of the excess non‑concessional contributions tax or shortfall interest charge.

Note: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953.

292‑395 Refunds of amounts overpaid

Section 172 of the Income Tax Assessment Act 1936 applies for the purposes of this Part as if references in that section to tax included references to *excess non‑concessional contributions tax.

Subdivision 292‑H—Other provisions

Table of sections

292‑465 Commissioner’s discretion to disregard contributions etc. in relation to a financial year

292‑467 Direction that the value of superannuation interests is nil

292‑465 Commissioner’s discretion to disregard contributions etc. in relation to a financial year

(1) If you make an application in accordance with subsection (2), the Commissioner may make a written determination that, for the purposes of this Division and Subdivision 97‑B in Schedule 1 to the Taxation Administration Act 1953, all or part of your *non‑concessional contributions for a *financial year is to be:

(a) disregarded; or

(b) allocated instead for the purposes of another financial year specified in the determination.

(2) You may apply to the Commissioner in the *approved form for a determination under subsection (1). The application can only be made:

(a) after all of the contributions sought to be disregarded or reallocated have been made; and

(b) if you receive one or more *excess non‑concessional contributions determinations for the *financial year—before the end of:

(i) the period of 60 days starting on the day you receive the most recent of those determinations; or

(ii) a longer period allowed by the Commissioner.

(3) The Commissioner may make a determination under subsection (1) only if he or she considers that:

(a) there are special circumstances; and

(b) making the determination is consistent with the object of this Division.

(4) In making a determination under subsection (1) the Commissioner may have regard to the matters in subsections (5) and (6) and any other relevant matters.

(5) The Commissioner may have regard to whether a contribution made in the relevant *financial year would more appropriately be allocated towards another financial year instead.

(6) The Commissioner may have regard to whether it was reasonably foreseeable, when a relevant contribution was made, that you would have *excess concessional contributions or *excess non‑concessional contributions for the relevant *financial year, and in particular:

(a) if the relevant contribution is made in respect of you by another person—the terms of any agreement or arrangement between you and that person as to the amount and timing of the contribution; and

(b) the extent to which you had control over the making of the contribution.

(7) The Commissioner must give you a copy of a determination made under subsection (1).

Review

(9) If you are dissatisfied with:

(a) a determination made under this section in relation to you; or

(b) a decision the Commissioner makes not to make such a determination;

you may object against the determination, or the decision, as the case requires, in the manner set out in Part IVC of the Taxation Administration Act 1953.

(10) To avoid doubt:

(a) subject to subsection 14ZVC(3) of the Taxation Administration Act 1953, you may also object, on the ground that you are dissatisfied with such a determination or decision, relating to all or part of your *non‑concessional contributions for a *financial year:

(i) under section 175A of the Income Tax Assessment Act 1936 against an assessment made in relation to you for the corresponding income year; or

(ii) under section 97‑35 in Schedule 1 to the Taxation Administration Act 1953 against an *excess non‑concessional contributions determination made in relation to you for the financial year; and

292‑467 Direction that the value of superannuation interests is nil

(1) The Commissioner must, by writing, direct that this section applies to you for a *financial year if:

(a) you receive one or more *excess non‑concessional contributions determinations for the financial year; and

(c) the sum of any amounts paid in response to release authorities issued in relation to those determinations is less than the excess amount stated in the most recent of those determinations; and

(d) the Commissioner is satisfied that the *value of all of your remaining *superannuation interests is nil.

Note 1: The direction means you have no excess non‑concessional contributions for the financial year (see paragraph 292‑85(1)(c)), even though not all of the excess amount has been released in response to release authorities issued under Division 131, or former Division 96, in Schedule 1 to the Taxation Administration Act 1953.

Note 2: The direction does not prevent an amount from being included in your assessable income (see Subdivision 292‑B).

Note 3: Any excess non‑concessional contributions determination you receive after the first one for a financial year is an amended determination.

(2) The Commissioner must give you a copy of the direction.

(4) To avoid doubt:

(a) you may object under section 292‑245 against an *excess non‑concessional contributions tax assessment made in relation to you on the ground that a direction was not made under this section; and

(b) for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, not making a direction under this section is a decision forming part of the process of making an assessment of tax under this Act.

Division 293—Sustaining the superannuation contribution concession

Table of Subdivisions

Guide to Division 293

293‑A Object of this Division

293‑B Sustaining the superannuation contribution concession

293‑C When tax is payable

293‑D Modifications for defined benefit interests

293‑E Modifications for constitutionally protected State higher level office holders

293‑F Modifications for Commonwealth justices

293‑G Modifications for temporary residents who depart Australia

Guide to Division 293

293‑1 What this Division is about

This Division reduces the concessional tax treatment of certain superannuation contributions made for high income individuals.

The high income threshold is $250,000.

There are special rules for defined benefit interests, constitutionally protected State higher level office holders, certain Commonwealth justices and temporary residents who depart Australia.

Note: Part 3‑20 in Schedule 1 to the Taxation Administration Act 1953 contains rules about the administration of the Division 293 tax.

Subdivision 293‑A—Object of this Division

Table of sections

Operative provisions

293‑5 Object of this Division

Operative provisions

293‑5 Object of this Division

The object of this Division is to reduce the concessional tax treatment of superannuation contributions for high income individuals.

Subdivision 293‑B—Sustaining the superannuation contribution concession

Guide to Subdivision 293‑B

293‑10 What this Subdivision is about

This Subdivision reduces the superannuation tax concession for high income earners.

An individual’s income is added to certain superannuation contributions and compared to the high income threshold of $250,000. A tax is payable on the excess, or on the superannuation contributions (whichever is less).

The tax is not payable in respect of excess concessional contributions.

Table of sections

Liability for tax

293‑15 Liability for tax

293‑20 Your taxable contributions

Low tax contributions

293‑25 Your low tax contributions

293‑30 Low tax contributed amounts

Liability for tax

293‑15 Liability for tax

You are liable to pay *Division 293 tax if you have *taxable contributions for an income year.

Note: The amount of the tax is set out in the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013.

293‑20 Your taxable contributions

(1) If the sum of:

(a) your *income for surcharge purposes for an income year (disregarding your *reportable superannuation contributions); and

(b) your *low tax contributions for the corresponding *financial year;

exceeds $250,000, you have taxable contributions for the income year equal to the lesser of the low tax contributions and the amount of the excess.

(2) However, you do not have taxable contributions for an income year if the amount of your *low tax contributions is nil.

Low tax contributions

293‑25 Your low tax contributions

The amount of your low tax contributions for a *financial year is:

(a) the low tax contributed amounts covered by section 293‑30 for the financial year; less

(b) your *excess concessional contributions for the financial year (if any).

Note 1: Low tax contributions are modified for defined benefit interests (see Subdivision 293‑D).

Note 2: Modifications in Subdivision 293‑E (about constitutionally protected State higher level office holders) and Subdivision 293‑F (about Commonwealth justices) affect the amount of low tax contributions.

293‑30 Low tax contributed amounts

(1) The low tax contributed amounts covered by this section for a *financial year are the sum of the contributions covered by subsection (2) and the amounts covered by subsection (5) for the financial year.

Note: Low tax contributed amounts covered by this section are modified for State higher level office holders (see Subdivision 293‑E).

Contributions to complying superannuation plans

(2) A contribution is covered under this section for a *financial year if:

(a) it is made in the financial year to a *complying superannuation plan in respect of you; and

(b) it is included:

(i) in the assessable income of the *superannuation provider in relation to the plan; or

(ii) by way of a *roll‑over superannuation benefit, in the assessable income of a *complying superannuation fund or *RSA provider in the circumstances mentioned in subsection 290‑170(5) (about successor funds).

(3) For the purposes of paragraph (2)(b), disregard:

(a) table item 5.3 in section 50‑25 (about income tax exemption for constitutionally protected funds); and

(b) Subdivision 295‑D (about excluded contributions).

Exceptions

(4) Despite subsection (2), a contribution is not covered under this section if it is any of the following:

(a) an amount mentioned in subsection 295‑200(2) (about amounts transferred from foreign superannuation funds);

(b) an amount mentioned in item 2 of the table in subsection 295‑190(1) (about certain roll‑over superannuation benefits);

(c) an amount that the Commissioner pays for your benefit under Part 8 of the Superannuation Guarantee (Administration) Act 1992, if:

(i) the amount represents an amount of a charge payment (within the meaning of section 63A of that Act) paid as a result of a disclosure to which paragraph 74(1)(a) of that Act applies; and

(ii) the entity making the disclosure qualified, under section 74 of that Act, for an amnesty in relation to the *superannuation guarantee shortfall to which the charge payment relates;

(d) an amount that an entity contributes for your benefit that is offset, under section 23A of that Act, against the entity’s liability to pay superannuation guarantee charge (within the meaning of that Act), if:

(i) the amount represents an amount of a superannuation guarantee charge covered by a disclosure to which paragraph 74(1)(a) of that Act applies; and

(ii) the entity qualified, under section 74 of that Act, for an amnesty in relation to the superannuation guarantee shortfall to which the superannuation guarantee charge relates.

Amounts allocated in relation to a complying superannuation plan

(5) An amount in a *complying superannuation plan is covered under this section if it is allocated by the *superannuation provider in relation to the plan for you for the *financial year in accordance with conditions specified by a regulation made for the purposes of subsection 291‑25(3).

Subdivision 293‑C—When tax is payable

Guide to Subdivision 293‑C

293‑60 What this Subdivision is about

This Subdivision has rules about payment of Division 293 tax.

Table of sections

Operative provisions

293‑65 When tax is payable—original assessments

293‑70 When tax is payable—amended assessments

293‑75 General interest charge

Operative provisions

293‑65 When tax is payable—original assessments

(1) Your *assessed Division 293 tax for an income year is due and payable at the end of 21 days after the Commissioner gives you notice of the assessment of the amount of the *Division 293 tax.

Exception for tax deferred to a debt account

(2) However, subsection (1) does not apply to an amount of *assessed Division 293 tax that is *deferred to a debt account for a *superannuation interest.

Note 1: For assessments of Division 293 tax, see Division 155 in Schedule 1 to the Taxation Administration Act 1953.

Note 2: For deferred to a debt account, see Division 133 in that Schedule.

Note 3: For release of money from a superannuation plan to pay these amounts, see Division 135 in that Schedule.

293‑70 When tax is payable—amended assessments

(1) If the Commissioner amends your assessment, any extra *assessed Division 293 tax resulting from the amendment is due and payable 21 days after the day the Commissioner gives you notice of the amended assessment.

Exception for tax deferred to a debt account

(2) However, subsection (1) does not apply to an amount of extra *assessed Division 293 tax that is *deferred to a debt account for a *superannuation interest.

Note 1: For deferred to a debt account, see Division 133 in Schedule 1 to the Taxation Administration Act 1953.

Note 2: For release of money from a superannuation plan to pay these amounts, see Division 131 in that Schedule.

293‑75 General interest charge

If an amount of *assessed Division 293 tax or *shortfall interest charge on assessed Division 293 tax that you are liable to pay remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

(a) begins on the day on which the amount was due to be paid; and

(b) ends on the last day on which, at the end of the day, any of the following remains unpaid:

(i) the assessed Division 293 tax or the shortfall interest charge;

(ii) general interest charge on any of the assessed Division 293 tax or the shortfall interest charge.

Note 1: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953.

Note 2: Shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act.

Note 3: See section 5‑10 of this Act for when the amount of shortfall interest charge becomes due and payable.

Subdivision 293‑D—Modifications for defined benefit interests

Guide to Subdivision 293‑D

293‑100 What this Subdivision is about

This Subdivision modifies the meaning of low tax contributions for individuals who have a defined benefit interest or interests in a financial year.

Table of sections

Operative provisions

293‑105 Low tax contributions—modification for defined benefit interests

293‑115 Defined benefit contributions

Operative provisions

293‑105 Low tax contributions—modification for defined benefit interests

Despite section 293‑25, if you have a *defined benefit interest or interests in a *financial year, the amount of your low tax contributions for the financial year is worked out as follows:

Method statement

Step 1. Start with the low tax contributed amounts covered by section 293‑30 for the *financial year, to the extent to which they do not relate to the *defined benefit interest or interests.

Step 2. Subtract your *excess concessional contributions for the *financial year (if any).

Note: The result of step 2 could be nil, or a negative amount.

Step 3. Add your *defined benefit contributions for the *financial year in respect of the *defined benefit interest or interests.

The result (but not less than nil) is the amount of your low tax contributions for the financial year.

Note: Modifications in Subdivision 293‑E (about constitutionally protected State higher level office holders) and Subdivision 293‑F (about Commonwealth justices) affect the amount of low tax contributions.

293‑115 Defined benefit contributions

(1) Your defined benefit contributions, for a *financial year in respect of a *defined benefit interest, has the meaning given by regulation.

Note: There are modifications in sections 293‑150 (about constitutionally protected State higher level office holders) and 293‑195 (about Commonwealth justices).

(2) A regulation made for the purposes of subsection (1) may provide for a method of determining the amount of the defined benefit contributions.

(3) A regulation made for the purposes of subsection (1) may define the *defined benefit contributions, and the amount of defined benefit contributions, in different ways depending on any of the following matters:

(a) the person who has the *superannuation interest that is or includes the *defined benefit interest;

(b) the *superannuation plan in which the superannuation interest exists;

(d) any other matter.

(4) A regulation made for the purposes of subsection (1) may specify circumstances in which the amount of *defined benefit contributions for a *financial year is nil.

(5) Subsections (2), (3) and (4) do not limit a regulation that may be made for the purposes of this section.

(6) Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act 2003 does not apply to a regulation made for the purposes of subsection (1).

(7) Despite subsection 12(1A) (retrospective commencement of legislative instruments) of the Legislation Act 2003, a regulation made for the purposes of subsection (1) must not commence before 1 July 2012.

Subdivision 293‑E—Modifications for constitutionally protected State higher level office holders

Guide to Subdivision 293‑E

293‑140 What this Subdivision is about

Constitutionally protected State higher level office holders do not pay Division 293 tax in respect of contributions to constitutionally protected funds, unless the contributions are made as part of a salary package.

Table of sections

Operative provisions

293‑145 Who this Subdivision applies to

293‑150 Low tax contributions—modification for CPFs

293‑155 High income threshold—effect of modification

293‑160 Salary packaged contributions

Operative provisions

293‑145 Who this Subdivision applies to

(1) This Subdivision applies to an individual for an income year if:

(a) the individual has a *superannuation interest in a *constitutionally protected fund in the corresponding *financial year; and

(b) at any time in the income year, the individual is declared by regulation to be an individual to whom this Subdivision applies.

(2) Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act 2003 does not apply to a regulation made for the purposes of paragraph (1)(b).

(2A) Despite subsection 12(1A) (retrospective commencement of legislative instruments) of the Legislation Act 2003, a regulation made for the purposes of paragraph (1)(b) must not commence before 1 July 2012.

(3) Nothing in this Subdivision limits section 6 of the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013.

Note: Section 6 of the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013 provides that Division 293 tax is not imposed in relation to a person if the imposition would exceed the legislative power of the Commonwealth.

293‑150 Low tax contributions—modification for CPFs

(1) This section applies for the purpose of working out under section 293‑25 or 293‑105 the amount of the individual’s *low tax contributions for the *financial year corresponding to the income year.

Modified low tax contributed amounts in CPFs

(2) Despite section 293‑30, the low tax contributed amounts covered by that section for the *financial year do not include any contributions to a *constitutionally protected fund, other than contributions covered by section 293‑160 (about salary packaged contributions).

Modified defined benefit contributions in CPFs

(3) Despite section 293‑115, the individual’s defined benefit contributions for the *financial year in respect of a *defined benefit interest in a *constitutionally protected fund are equal to:

(a) unless paragraph (b) applies—nil; or

(b) if, having regard to subsection (2) of this section, the low tax contributed amounts covered by section 293‑30 for the year include contributions in respect of the defined benefit interest—the amount of those contributions.

293‑155 High income threshold—effect of modification

(1) For the purpose of working out the extent (if any) to which the sum mentioned in subsection 293‑20(1) for the individual exceeds the $250,000 threshold mentioned in that subsection, disregard section 293‑150.

(2) To avoid doubt, the effect of subsection (1) is that the amount of the individual’s *taxable contributions for an income year is the lesser of:

(a) the excess (if any) mentioned in subsection 293‑20(1) (worked out disregarding section 293‑150) for the income year; and

(b) the individual’s *low tax contributions for the corresponding *financial year (worked out having regard to section 293‑150).

293‑160 Salary packaged contributions

(1) A contribution made to a *complying superannuation plan in respect of an individual is covered by this section if it is made because the individual agreed with an entity, or an *associate of an entity:

(a) for the contribution to be made; and

(b) in return, for the *withholding payments covered by subsection (2) that are to be made to the individual by the entity to be reduced (including to nil).

(2) This subsection covers a *withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table.

Withholding payments covered
Item	Provision	Subject matter
1	Section 12‑35	Payment to employee
2	Section 12‑40	Payment to company director
3	Section 12‑45	Payment to office holder
4	Section 12‑55	Voluntary agreement to withhold
5	Section 12‑60	Payment under labour hire arrangement, or specified by regulations

Subdivision 293‑F—Modifications for Commonwealth justices

Guide to Subdivision 293‑F

293‑185 What this Subdivision is about

Division 293 tax is not payable by Commonwealth justices and judges in respect of contributions to a defined benefit interest established under the Judges’ Pensions Act 1968.

Table of sections

Operative provisions

293‑190 Who this Subdivision applies to

293‑195 Defined benefit contributions—modified treatment of contributions under the Judges’ Pensions Act 1968

293‑200 High income threshold—effect of modification

Operative provisions

293‑190 Who this Subdivision applies to

(1) This Subdivision applies to an individual if the individual is a Justice of the High Court, or a justice or judge of a court created by the Parliament, at any time on or after the start of the individual’s 2012‑13 income year.

(2) Nothing in this Subdivision limits section 6 of the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013.

293‑195 Defined benefit contributions—modified treatment of contributions under the Judges’ Pensions Act 1968

(1) This section applies for the purpose of working out under section 293‑105 the amount of the individual’s *low tax contributions for any *financial year.

(2) Despite section 293‑115 and subsection 293‑150(3), the individual’s defined benefit contributions for a *financial year for a *defined benefit interest in a *superannuation fund established under the Judges’ Pensions Act 1968 are nil.

293‑200 High income threshold—effect of modification

(2) To avoid doubt, the effect of subsection (1) is that the amount of the individual’s *taxable contributions for an income year is the lesser of:

(a) the excess (if any) mentioned in subsection 293‑20(1) (worked out disregarding section 293‑195) for the income year; and

(b) the individual’s *low tax contributions for the corresponding *financial year (worked out having regard to section 293‑195).

Subdivision 293‑G—Modifications for temporary residents who depart Australia

Guide to Subdivision 293‑G

293‑225 What this Subdivision is about

If you receive a departing Australia superannuation payment, you are entitled to a refund of any Division 293 tax you have paid.

Table of sections

Operative provisions

293‑230 Who is entitled to a refund

293‑235 Amount of the refund

293‑240 Entitlement to refund stops all Division 293 tax liabilities

Operative provisions

293‑230 Who is entitled to a refund

You are entitled to a refund if:

(a) you have made payments of any of the following:

(i) *assessed Division 293 tax;

(ii) a voluntary payment made under section 133‑70 in Schedule 1 to the Taxation Administration Act 1953 for the purpose of reducing the amount by which a debt account for a *superannuation interest is in debit;

(iii) *debt account discharge liability; and

(b) you receive a *departing Australia superannuation payment; and

Note: How the refund is applied is set out in Part IIB of the Taxation Administration Act 1953.

293‑235 Amount of the refund

(1) The amount of the refund to which you are entitled is the sum of the payments mentioned in paragraph 293‑230(a) that you have made.

(2) However, the amount of the refund is reduced by the amount of any refunds to which you are entitled under a previous application of this Subdivision.

Exception—Division 293 tax attributable to period when you are an Australian resident

(3) Despite subsection (1), if:

(a) at any time in your 2012‑13 income year, or a later income year, you are an Australian resident (but not a *temporary resident); and

(b) a payment mentioned in paragraph 293‑230(a) that you have made relates, or is reasonably attributable, to that income year;

the payment is to be disregarded in working out under subsection (1) of this section the amount of the refund to which you are entitled.

293‑240 Entitlement to refund stops all Division 293 tax liabilities

(1) The Commissioner may decide to release you from any existing or future liability to pay *Division 293 tax or *debt account discharge liability if:

(a) you become entitled to a refund under section 293‑230; or

(b) you would become entitled to such a refund, if you were to pay the liability and paragraph 293‑230(c) were disregarded.

(2) The Commissioner may take such action as is necessary to give effect to a decision under subsection (1).

Division 294—Transfer balance cap

Table of Subdivisions

Guide to Division 294

294‑A Object of this Division

294‑B Transfer balance account

294‑C Transfer balance debits

294‑D Modifications for certain defined benefit income streams

294‑E Modifications for death benefits dependants who are children

294‑F Excess transfer balance tax

Guide to Division 294

294‑1 What this Division is about

There is a cap on the total amount you can transfer into the retirement phase of superannuation (where earnings are exempt from taxation).

Credits are added to a transfer balance account when you transfer amounts.

If the balance in your account exceeds the cap, you will be required to remove the excess from the retirement phase, and you will be liable to pay excess transfer balance tax.

Note: Division 136 in Schedule 1 to the Taxation Administration Act 1953 contains rules about excess transfer balance determinations and commutation authorities.

Subdivision 294‑A—Object of this Division

Table of sections

Operative provisions

294‑5 Object of this Division

Operative provisions

294‑5 Object of this Division

The object of this Division is to limit the total amount of an individual’s *superannuation income streams that receive an earnings tax exemption.

Subdivision 294‑B—Transfer balance account

Guide to Subdivision 294‑B

294‑10 What this Subdivision is about

This Subdivision creates a transfer balance account for you, and credits it, if you have a superannuation income stream in the retirement phase.

It also provides for a transfer balance cap and identifies when you have excess transfer balance.

Table of sections

Operative provisions

294‑15 When you have a transfer balance account

294‑20 Meaning of retirement phase recipient

294‑25 Transfer balance credits

294‑30 Excess transfer balance

294‑35 Your transfer balance cap

294‑40 Proportionally indexed transfer balance cap

294‑45 Transfer balance account ends

294‑50 Assumptions about income streams

294‑55 Repayment of limited recourse borrowing arrangement

Operative provisions

294‑15 When you have a transfer balance account

(1) You have a transfer balance account if you are, or have at any time been, the *retirement phase recipient of a *superannuation income stream.

(2) You start to have the *transfer balance account on the later of:

(a) 1 July 2017; and

(b) the day you first start to be a *retirement phase recipient of a *superannuation income stream.

294‑20 Meaning of retirement phase recipient

(1) You are the retirement phase recipient of a *superannuation income stream at a time if:

(a) the superannuation income stream is in the *retirement phase at that time; and

(b) a *superannuation income stream benefit from the superannuation income stream is payable to you at that time.

(2) You are also the retirement phase recipient of a *superannuation income stream at a time if:

(a) the superannuation income stream is in the *retirement phase at that time; and

(b) the superannuation income stream is a *deferred superannuation income stream; and

(c) a *superannuation income stream benefit from the superannuation income stream will be payable to you after that time.

294‑25 Transfer balance credits

(1) The following table sets out when a credit arises in your *transfer balance account and the amount of the credit. The credit is called a transfer balance credit.

Credits in the transfer balance account
Item	If:	A credit of:	Arises:
1	just before 1 July 2017, you are the retirement phase recipient of a superannuation income stream	the value, just before 1 July 2017, of the superannuation interest that supports the superannuation income stream	on the later of: (a) 1 July 2017; and (b) if you are a reversionary beneficiary—the last day of the period of 12 months beginning on the day a *superannuation income stream benefit first becomes payable from the income stream
2	on a day (the starting day) on or after 1 July 2017, you start to be the retirement phase recipient of a superannuation income stream	the value on the starting day of the superannuation interest that supports the superannuation income stream	(a) on the starting day, unless paragraph (b) applies; or (b) if you are a reversionary beneficiary—at the end of the period of 12 months beginning on the starting day
3	you have *excess transfer balance at the end of a day	your *excess transfer balance earnings for that day	at the start of the next day
4	a *transfer balance credit arises under section 294‑55 because of a repayment of a limited recourse borrowing arrangement	the amount of the credit specified in section 294‑55	at the time provided by section 294‑55
5	a *transfer balance credit arises under regulations made for the purposes of this item	the amount of the credit worked out in accordance with the regulations	at the time specified in the regulations

Note 1: The amount of the transfer balance credit is modified for certain capped defined benefit income streams: see Subdivision 294‑D.

Note 2: For the meaning of excess transfer balance earnings, see section 294‑235.

Note 3: If a payment split applies to payments from the superannuation income stream, a debit arises under section 294‑90.

No crediting of earnings if determination issued

(2) Despite item 3 of the table in subsection (1), no credit arises in your *transfer balance account under that item because of *excess transfer balance at the end of a day if the day is in the period:

(a) starting on the day the Commissioner makes an *excess transfer balance determination in respect of you; and

(b) ending on:

(i) unless subparagraph (ii) applies—the first day on which the sum of all *transfer balance debits arising in your *transfer balance account since the determination was issued equals or exceeds the *crystallised reduction amount; or

(ii) if a *transfer balance credit arises in your transfer balance account before the day mentioned in subparagraph (i)—the day on which that credit arises.

Note: For provisions about excess transfer balance determinations, see Division 136 in Schedule 1 to the Taxation Administration Act 1953.

Regulations may provide for exceptions

(3) The regulations may provide that an item of the table in subsection (1) does not apply to a class of *superannuation income streams specified in the regulations.

294‑30 Excess transfer balance

(1) You have excess transfer balance at a particular time if, at that time, the *transfer balance in your *transfer balance account exceeds your *transfer balance cap at that time. The amount of the excess transfer balance is the amount of the excess.

Note: There is a modification for certain capped defined benefit income streams: see Subdivision 294‑D.

(2) The transfer balance in your *transfer balance account at a time equals:

(a) the sum of the *transfer balance credits in the account at that time; less

(b) the sum of the *transfer balance debits (if any) in the account at that time.

Note 1: For transfer balance debits, see Subdivision 294‑C.

Note 2: There is no consequence for having a negative transfer balance.

294‑35 Your transfer balance cap

(1) Your transfer balance cap for the *financial year in which you first start to have a *transfer balance account is equal to the *general transfer balance cap for that financial year.

Note: The amount of the transfer balance cap is modified for child recipients: see Subdivision 294‑E.

(2) Your transfer balance cap for a later *financial year is equal to your transfer balance cap for the previous year, subject to section 294‑40 (which is about proportional indexation).

(3) The general transfer balance cap is:

(a) for the 2017‑2018 *financial year—$1,600,000; or

(b) for the 2018‑2019 financial year or a later financial year—the amount worked out by indexing annually the amount mentioned in paragraph (a).

Note: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the amount of the cap: see section 960‑285.

294‑40 Proportionally indexed transfer balance cap

(1) This section applies to increase your transfer balance cap for a *financial year (other than the financial year in which you first start to have a *transfer balance account) if:

(a) the *general transfer balance cap is increased as a result of indexation for the financial year; and

(b) at no time before the start of that financial year has the *transfer balance in your transfer balance account at the end of a day exceeded your transfer balance cap.

(2) Your transfer balance cap is increased for the *financial year by the amount worked out using the following formula:

where:

indexation increase means the amount by which the *general transfer balance cap for the *financial year increased as a result of indexation.

unused cap percentage is worked out by:

(a) identifying the highest *transfer balance in your *transfer balance account at the end of any day up to the end of the previous *financial year; and

(b) identifying the day on which the transfer balance account had that transfer balance at the end of the day, or, if your transfer balance account had that transfer balance at the end of more than one day, the earliest of those days; and

(c) expressing the transfer balance identified in paragraph (a) as a percentage (rounded down to the nearest whole number) of your *transfer balance cap on the day identified in paragraph (b); and

(d) subtracting the result of paragraph (c) from 100%.

(3) However, if the highest *transfer balance mentioned in paragraph (a) of the definition of unused cap percentage in subsection (2) is less than nil, that unused cap percentage is taken to be 100%.

294‑45 Transfer balance account ends

The *transfer balance account ceases when the *retirement phase recipient dies.

294‑50 Assumptions about income streams

(1) Subsections (2) and (3) apply for the purposes of working out the following matters at a time:

(a) whether you have a *transfer balance account;

(b) the *transfer balance in your transfer balance account.

(2) In working out whether there is a superannuation income stream at a time:

(a) have regard only to facts and circumstances that exist at that time; and

(b) assume a requirement will be met, to the extent (if any) that:

(i) the requirement arises under a provision of the *taxation law or under any rules or standards under which a benefit is, or is purported to be, provided; and

(ii) meeting the requirement is a condition for there to be a superannuation income stream at that time; and

(iii) it is not possible to determine, having regard only to facts and circumstances that exist at that time, whether or not the requirement has been met.

(3) In working out whether a *superannuation income stream is in the retirement phase at a time, disregard the operation of subsection 307‑80(4), if the time is before the end of the 60‑day period mentioned in paragraph (c) of that subsection.

294‑55 Repayment of limited recourse borrowing arrangement

(1) A *transfer balance credit arises in your *transfer balance account if:

(a) a *superannuation provider makes a payment in respect of a *borrowing under an *arrangement that is covered by the exception in subsection 67A(1) of the Superannuation Industry (Supervision) Act 1993 (which is about limited recourse borrowing arrangements); and

(b) as a result, there is an increase in the *value of a *superannuation interest that supports a *superannuation income stream of which you are the *retirement phase recipient; and

(c) the superannuation interest is in a *superannuation fund that is covered by subsection (4) at the time of the payment.

(2) The amount of the credit is the amount of the increase in *value.

(3) The credit arises at the time of the payment.

(4) A *complying superannuation fund is covered by this subsection at a time if any of the following requirements are satisfied:

(a) the fund is a *self managed superannuation fund at the time;

(b) there are less than 5 *members of the fund at the time.

Subdivision 294‑C—Transfer balance debits

Guide to Subdivision 294‑C

294‑75 What this Subdivision is about

A debit arises in your transfer balance account when superannuation income streams that were previously credited (because they receive the earnings tax exemption) are reduced (other than by draw‑downs or investment losses) or lose the earnings tax exemption.

A debit also arises in your transfer balance account when you make a contribution relating to a structured settlement or personal injury, or where certain events occur that result in you having reduced superannuation.

Table of sections

Operative provisions

294‑80 Transfer balance debits

294‑85 Certain events that result in reduced superannuation

294‑90 Payment splits

294‑95 Payment splits—no double debiting

Operative provisions

294‑80 Transfer balance debits

(1) The following table sets out when a debit arises in your *transfer balance account and the amount of the debit. The debit is called a transfer balance debit.

Debits in the transfer balance account
Item	If:	A debit of:	Arises:
1	you receive a superannuation lump sum because a superannuation income stream of which you are a *retirement phase recipient is commuted, in full or in part	the amount of the superannuation lump sum	at the time you receive the superannuation lump sum
2	a *structured settlement contribution is made in respect of you	the amount of the contribution	at the later of: (a) the time the contribution is made; and (b) the start of the day you first start to have a *transfer balance account
3	a *transfer balance debit arises under section 294‑85 because of an event that results in reduced superannuation	the amount of the debit specified in section 294‑85	at the time provided by section 294‑85
4	a *transfer balance debit arises under section 294‑90 because of a payment split	the amount of the debit specified in section 294‑90	at the time provided by section 294‑90
5	a superannuation income stream of which you are a retirement phase recipient stops being in the *retirement phase under subsection 307‑80(4)	the value of the superannuation interest that supports the superannuation income stream at the end of the period within which the commutation authority mentioned in that subsection was required to be complied with	at the end of the period within which the commutation authority mentioned in that subsection was required to be complied with
6	a superannuation income stream of which you were a retirement phase recipient stops being a superannuation income stream that is in the *retirement phase at a time (the stop time), but items 1 and 5 do not apply	the value of the superannuation interest that supported the superannuation income stream just before the stop time	at the stop time
7	the Commissioner gives you a notice under section 136‑70 in Schedule 1 to the Taxation Administration Act 1953 (about non‑commutable excess transfer balance)	the amount of the *excess transfer balance stated in the notice	at the time the Commissioner issues the notice
8	a *transfer balance debit arises under regulations made for the purposes of this item	the amount of the debit worked out in accordance with the regulations	at the time specified in the regulations

Structured settlement contributions

(2) Each of the following is a structured settlement contribution in respect of you:

(a) a contribution to a *complying superannuation plan in respect of you that is covered under section 292‑95 (about structured settlements or orders for personal injuries);

(b) a contribution to a complying superannuation plan in respect of you that would be covered under section 292‑95 if:

(i) the section applied to contributions made before 10 May 2006; and

(ii) paragraphs 292‑95(1)(b) and (d) were disregarded.

Regulations may provide for exceptions

(3) The regulations may provide that an item of the table in subsection (1) does not apply to a class of *superannuation income streams specified in the regulations.

294‑85 Certain events that result in reduced superannuation

(1) A *transfer balance debit arises in your *transfer balance account if:

(a) subsection (2) or (5) provides that the debit arises; and

(b) you notify the Commissioner in the *approved form that the debit has arisen.

Fraud or dishonesty

(2) A debit arises if:

(a) a loss is suffered by a *superannuation income stream provider; and

(b) as a result, the *value of the *superannuation interest that supports a *superannuation income stream of which you are the *retirement phase recipient is reduced; and

(d) an individual has been convicted of an offence involving that fraud or dishonesty.

(3) The amount of the debit equals the amount by which the *value of the *superannuation interest is reduced as a result of the loss.

(4) The debit arises at the time of the loss.

Payments under section 139ZQ of the Bankruptcy Act 1966

(5) A debit arises if:

(a) an amount is paid in compliance with a notice given under section 139ZQ of the Bankruptcy Act 1966; and

(b) as a result, the *value of a *superannuation interest that supports a *superannuation income stream of which you are the *retirement phase recipient is reduced.

(6) The amount of the debit is the amount paid to the trustee in bankruptcy.

(7) The debit arises at the time of the payment.

294‑90 Payment splits

(1) A *transfer balance debit arises in your *transfer balance account if:

(a) subsection (2) provides that the debit arises; and

(b) the Commissioner is notified in the *approved form that the debit has arisen.

Payment splits

(2) A debit arises if:

(a) a *superannuation interest is subject to a *payment split but remains an interest of the *member spouse; and

(b) the superannuation interest supports a *superannuation income stream that is in the *retirement phase; and

(c) as a result of the payment split, a proportion of all *superannuation income stream benefits from the income stream is to be paid to a *non‑member spouse; and

(d) as a result, the member spouse and the non‑member spouse are both *retirement phase recipients of the superannuation income stream.

(3) The amount of the debit is:

(a) if you are the *member spouse—the proportion mentioned in paragraph (2)(c); and

(b) if you are the *non‑member spouse—the remaining proportion;

of the *value, on the day the debit arises, of the *superannuation interest that supports the *superannuation income stream affected by the *payment split.

(4) The debit arises at the later of:

(a) the operative time (within the meaning of Part VIIIB of the Family Law Act 1975) for the *payment split; and

(b) at the start of the day you first start to have a *transfer balance account.

294‑95 Payment splits—no double debiting

If a *transfer balance debit, worked out by reference to a particular proportion, arises in your *transfer balance account because a *superannuation interest is subject to a *payment split, each of the following debits arising in your account at a later time in respect of the same interest is to be reduced by the same proportion:

(a) a debit that arises under item 1 of the table in subsection 294‑80(1) (about commutations), but only if the commuted income stream is a *capped defined benefit income stream;

(b) a debit that arises under item 3 of that table (about events that result in reduced superannuation);

Subdivision 294‑D—Modifications for certain defined benefit income streams

Guide to Subdivision 294‑D

294‑120 What this Subdivision is about

Certain defined benefit lifetime pensions that are subject to commutation restrictions cannot result in excess transfer balance (instead, Subdivision 303‑A applies to the superannuation income stream benefits).

Certain commutation‑restricted income streams started before 1 July 2017 are covered by the same modification.

Table of sections

Operative provisions

294‑125 When this Subdivision applies

294‑130 Meaning of capped defined benefit income stream

294‑135 Transfer balance credit—special rule for capped defined benefit income streams

294‑140 Excess transfer balance—special rule for capped defined benefit income streams

294‑145 Transfer balance debits—special rules for capped defined benefit income streams

Operative provisions

294‑125 When this Subdivision applies

This Subdivision applies to you if you are the *retirement phase recipient of a *capped defined benefit income stream.

294‑130 Meaning of capped defined benefit income stream

(1) A *superannuation income stream is a capped defined benefit income stream if it is:

(a) covered by an item of the following table; and

(b) if it is covered by any of items 2 to 7 of that table—it is in the *retirement phase just before 1 July 2017.

Capped defined benefit income streams
Item	Topic	A superannuation income stream is covered if:
1	Lifetime pension	it is a pension for the purposes of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) that is provided under rules that meet the standards of subregulation 1.06(2) of the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations)
2	Lifetime annuity	it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(2) of the SIS Regulations
3	Life expectancy pension	it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(7) of the SIS Regulations
4	Life expectancy annuity	it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(9) of the SIS Regulations
5	Market linked pension	it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(8) of the SIS Regulations
6	Market linked annuity	it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(10) of the SIS Regulations
7	Market linked pension (RSA)	it is a pension for the purposes of the Retirement Savings Accounts Act 1997 that is provided under terms and conditions that meet the standards of subregulation 1.07(3A) of the Retirement Savings Accounts Regulations 1997

(2) A *superannuation income stream is also a capped defined benefit income stream if the income stream is prescribed by the regulations for the purposes of this subsection.

294‑135 Transfer balance credit—special rule for capped defined benefit income streams

(1) Section 294‑25 applies in relation to a *capped defined benefit income stream as if a reference in that section to the *value of a *superannuation interest were a reference to the *special value of the superannuation interest.

Meaning of special value—lifetime products

(2) The special value, at a particular time, of a *superannuation interest that supports an income stream that is, or was at any time, a *capped defined benefit income stream covered by item 1 or 2 of the table in subsection 294‑130(1), is the amount worked out using the formula:

where:

annual entitlement is worked out by:

(a) dividing the amount of the first *superannuation income stream benefit you are entitled to receive from the income stream just after that time by the number of whole days to which that benefit relates; and

(b) multiplying the result by 365.

Meaning of special value—life expectancy and market linked products

(3) The special value, at a particular time, of a *superannuation interest that supports an income stream that is, or was at any time, a *capped defined benefit income stream covered by any of items 3 to 7 of the table in subsection 294‑130(1), is the amount worked out using the formula:

where:

annual entitlement has the same meaning as in subsection (2) of this section.

remaining term means the number of years remaining at that time in the period throughout which *superannuation income stream benefits are payable under the income stream, rounded up to the next whole number.

Regulations

(4) The regulations may specify a method for determining the special value of a *superannuation interest that supports a *superannuation income stream prescribed by regulations made for the purposes of subsection 294‑130(2).

294‑140 Excess transfer balance—special rule for capped defined benefit income streams

(1) Despite section 294‑30, you have excess transfer balance at a particular time if, at that time, the *transfer balance in your *transfer balance account:

(a) exceeds your *transfer balance cap at that time; and

(b) exceeds your capped defined benefit balance from subsection (3) of this section at that time.

(2) The amount of the excess transfer balance is the lesser of the 2 excesses.

Note: For modifications of the tax treatment of benefits paid from capped defined benefit income streams, see Subdivision 303‑A.

Your capped defined benefit balance

(3) You have an amount under this subsection (a capped defined benefit balance) at a time equal to:

(a) the sum of the *transfer balance credits in your *transfer balance account at that time in respect of *capped defined benefit income streams; less

(b) the sum of the *transfer balance debits (if any) in your transfer balance account at that time in respect of capped defined benefit income streams.

294‑145 Transfer balance debits—special rules for capped defined benefit income streams

Debit for commutation

(1) Item 1 of the table in subsection 294‑80(1) applies in relation to a *capped defined benefit income stream as if the reference in column 2 of that item to the amount of the *superannuation lump sum were a reference to:

(a) in a case where the commutation mentioned in column 1 of that item is a commutation in full—the *debit value, just before the commutation takes place, of the *superannuation interest that supports the capped defined benefit income stream; or

(b) in a case where that commutation is a commutation in part:

(i) if the capped defined benefit income stream is, or was at any time, covered by item 1 or 2 of the table in subsection 294‑130(1)—the debit value mentioned in paragraph (a), multiplied by the fraction mentioned in subsection (1A); or

(ii) if the capped defined benefit income stream is, or was at any time, covered by any of items 3 to 7 of the table in subsection 294‑130(1)—the amount mentioned in subsection (1B).

(1A) For the purposes of subparagraph (1)(b)(i), the fraction is:

where:

SV just after commutation means the *special value, just after the commutation takes place, of the *superannuation interest that supports the *capped defined benefit income stream.

SV just before commutation means the *special value, just before the commutation takes place, of the *superannuation interest that supports the *capped defined benefit income stream.

(1B) For the purposes of subparagraph (1)(b)(ii), the amount is the lesser of the following:

(a) the *debit value mentioned in paragraph (1)(a);

(b) the amount (disregarding this section) of the *superannuation lump sum you received because of the commutation (as mentioned in item 1 of the table in subsection 294‑80(1)).

Debit for events that result in reduced superannuation

(2) Item 3 of the table in subsection 294‑80(1) (about events that result in reduced superannuation) applies in relation to a *capped defined benefit income stream as if the amount of the debit provided for in section 294‑85 was the *debit value, just before the loss or payment reduces the *value of the *superannuation interest that supports the capped defined benefit income stream, multiplied by the amount worked out using the following formula:

where:

SV just after event means the *special value, worked out just after the loss or payment reduces the *value of the *superannuation interest that supports the *capped defined benefit income stream.

SV just before event means the *special value, worked out just before the loss or payment reduces the *value of the *superannuation interest that supports the *capped defined benefit income stream.

Debit for payment split

(3) Item 4 of the table in subsection 294‑80(1) (about a debit for a payment split) applies in relation to a *capped defined benefit income stream as if the reference in section 294‑90 to the *value of the *superannuation interest were a reference to the *debit value of the superannuation interest.

Debits for loss of earnings exemption

(4) Items 5 and 6 of the table in subsection 294‑80(1) apply in relation to an income stream that is, or was, a *capped defined benefit income stream as if the reference in the item to the *value of a *superannuation interest were a reference to the *debit value of the superannuation interest.

Meaning of debit value

(5) The debit value, at a particular time, of a *superannuation interest that supports an income stream that is, or was at any time, a *capped defined benefit income stream covered by item 1 or 2 of the table in subsection 294‑130(1), is:

(a) the amount of the *transfer balance credit that arose in your *transfer balance account in respect of the income stream; less

(b) the amount of any *transfer balance debits (apart from debits arising under item 4 of the table in subsection 294‑80(1)) that have arisen in your transfer balance account in respect of the income stream before that time.

(6) The debit value, at a particular time, of a *superannuation interest that supports an income stream that is, or was at any time, a *capped defined benefit income stream covered by any of items 3 to 7 of the table in subsection 294‑130(1) is:

(a) the amount of the *transfer balance credit that arose in your *transfer balance account in respect of the income stream; less

(b) the sum of the following:

(i) the amount of any *transfer balance debits (apart from debits arising under item 4 of the table in subsection 294‑80(1)) that have arisen in your transfer balance account in respect of the income stream before that time;

(ii) if item 1 of the table in subsection 294‑80(1) applies in relation to the income stream because the income stream is commuted—the amount worked out under subsection (6A).

(6A) The amount is the sum of the following:

(a) the total amount of *superannuation income stream benefits that you were entitled to receive from the income stream before the start of the financial year in which the commutation takes place;

(b) if regulation 1.07B of the Superannuation Industry (Supervision) Regulations 1994 applies to the income stream—the greater of the following:

(i) the minimum amount under subregulation 1.07B(4) of those regulations for the income stream for that financial year;

(ii) the total amount of superannuation income stream benefits that you received from the income stream in that financial year (other than superannuation income stream benefits that you were entitled to receive from the income stream before the start of that financial year);

(c) if regulation 1.07C of the Superannuation Industry (Supervision) Regulations 1994 applies to the income stream—the greater of the following:

(i) the minimum amount under subregulation 1.07C(3) of those regulations for the income stream for that financial year;

(d) if regulation 1.08 of the