Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A * tax offset that you have carried forward decreases the amount of income tax that you would otherwise have to pay under section 4 - 10 in a later income year.
(2) You apply a * tax offset that is carried forward to a later year in accordance with the priorities set out in Division 63 as if it were a tax offset for that later year.
(3) Before you apply a * tax offset to reduce the amount of income tax that you pay in a later income year in which you have a taxable income, you must apply it to reduce to nil any * net exempt income for:
(a) that later income year; or
(b) any income year after the year in which the tax offset arose and before the later income year in which you had a taxable income but did not apply the tax offset to reduce the amount of income tax you had to pay.
Note: Paragraph (b) would apply to cases such as where your taxable income was below your tax - free threshold or where you had other tax offsets that reduced your income tax to nil.
(3A) In reducing * net exempt income for an income year under subsection (3):
(a) if you were a base rate entity (within the meaning of the Income Tax Rates Act 1986 ) for the year--each 25 cents of * tax offset reduces the net exempt income by $1; or
(b) otherwise--each 30 cents of tax offset reduces the net exempt income by $1.
(4) You can only apply a * tax offset that you have carried forward to the extent that it has not already been applied.
Note: Section 65 - 40 contains special restrictions on applying carried forward tax offsets.