Commonwealth Consolidated Acts

TREASURY LAWS AMENDMENT (PERSONAL INCOME TAX PLAN) ACT 2018 - SCHEDULE 1

Part   1 -- Main amendments

Income Tax Assessment Act 1997

1   After Subdivision   61 - A

Insert:

Subdivision   61 - D -- Low and Middle Income tax offset and Low Income tax offset

Guide to Subdivision   61 - D

61 - 100   What this Subdivision is about

Table of sections

Operative provisions

61 - 105   Entitlement to the Low and Middle Income tax offset

61 - 107   Amount of the Low and Middle Income tax offset

61 - 110   Entitlement to the Low Income tax offset

61 - 115   Amount of the Low Income tax offset

Operative provisions

61 - 105   Entitlement to the Low and Middle Income tax offset

  (1)   You are entitled to a * tax offset for the 2018 - 19, 2019 - 20, 2020 - 21 or 2021 - 22 income year if:

  (a)   you are an individual who is an Australian resident at any time during the income year; and

  (b)   your taxable income for the income year does not exceed $125,333.

  (2)   You are entitled to a * tax offset for the 2018 - 19, 2019 - 20, 2020 - 21 or 2021 - 22 income year if:

  (a)   for the income year, you are a trustee who is liable to be assessed under section   98 of the Income Tax Assessment Act 1936 in respect of a share of the * net income of a trust; and

  (b)   the beneficiary who is presently entitled to that share is an individual who is an Australian resident at any time during the income year; and

  (c)   that share does not exceed $125,333.

  (3)   If you are entitled to a * tax offset under subsection   ( 2), you are entitled to a separate tax offset for each beneficiary who is presently entitled to a share for which subsection   ( 2) is satisfied.

Note:   This section will be repealed on 1   July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

61 - 107   Amount of the Low and Middle Income tax offset

General rule

  (1)   The amount of your * tax offset is set out in the following table in respect of the following income (your relevant income ):

  (a)   if you are an individual--your taxable income for the income year;

  (b)   if you are a trustee--the amount of the share of * net income referred to in subsection   61 - 105(2).

Note:   This section will be repealed on 1   July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

If you are less than 18 years of age

  (2)   Despite subsection   ( 1), the amount of your * tax offset for the income year cannot exceed a cap if:

  (a)   you are an individual who is a prescribed person in relation to the income year for the purposes of Division   6AA of Part   III of the Income Tax Assessment Act 1936 ; and

  (b)   part (the excluded part ) of your basic income tax liability for the income year is attributable to your eligible taxable income (within the meaning of section   102AD of that Act).

The cap is an amount equal to the remaining part of your basic income tax liability for the income year.

Note:   Division   6AA (including section   102AD) is about income that particular kinds of children derive from particular sources.

  (3)   When working out the remaining part of your basic income tax liability, if you are also entitled to a * tax offset under section   160AAA of the Income Tax Assessment Act 1936 , treat that tax offset as having been applied, to the extent possible, against the excluded part of your basic income tax liability.

Note:   That tax offset is for individuals eligible for certain benefits.

If you are a trustee and the beneficiary is less than 18 years of age

  (4)   Despite subsection   ( 1), the amount of your * tax offset for the income year cannot exceed a cap if:

  (a)   you are a trustee; and

  (b)   the beneficiary who is presently entitled to the share of * net income to which the tax offset relates is a prescribed person in relation to the income year for the purposes of Division   6AA of Part   III of the Income Tax Assessment Act 1936 ; and

  (c)   part of your basic income tax liability for the income year is attributable to the portion of that share to which that Division applies.

The cap is an amount equal to the part of your basic income tax liability attributable to the remaining portion of that share.

Note 1:   Division   6AA is about income that particular kinds of children derive from particular sources.

Note 2:   To work out the portion of that share to which Division   6AA applies, see section   102AG of the Income Tax Assessment Act 1936 .

61 - 110   Entitlement to the Low Income tax offset

  (1)   You are entitled to a * tax offset for the 2022 - 23 income year or a later income year if:

  (a)   you are an individual who is an Australian resident at any time during the income year; and

  (b)   your taxable income for the income year does not exceed $66,667.

  (2)   You are entitled to a * tax offset for the 2022 - 23 income year or a later income year if:

  (a)   for the income year, you are a trustee who is liable to be assessed under section   98 of the Income Tax Assessment Act 1936 in respect of a share of the * net income of a trust; and

  (b)   the beneficiary who is presently entitled to that share is an individual who is an Australian resident at any time during the income year; and

  (c)   that share does not exceed $66,667.

  (3)   If you are entitled to a * tax offset under subsection   ( 2), you are entitled to a separate tax offset for each beneficiary who is presently entitled to a share for which subsection   ( 2) is satisfied.

61 - 115   Amount of the Low Income tax offset

General rule

  (1)   The amount of your * tax offset is set out in the following table in respect of the following income (your relevant income ):

  (a)   if you are an individual--your taxable income for the income year;

  (b)   if you are a trustee--the amount of the share of * net income referred to in subsection   61 - 110(2).

If you are less than 18 years of age

  (2)   Despite subsection   ( 1), the amount of your * tax offset for the income year cannot exceed a cap if:

  (a)   you are an individual who is a prescribed person in relation to the income year for the purposes of Division   6AA of Part   III of the Income Tax Assessment Act 1936 ; and

  (b)   part (the excluded part ) of your basic income tax liability for the income year is attributable to your eligible taxable income (within the meaning of section   102AD of that Act).

The cap is an amount equal to the remaining part of your basic income tax liability for the income year.

Note:   Division   6AA (including section   102AD) is about income that particular kinds of children derive from particular sources.

  (3)   When working out the remaining part of your basic income tax liability, if you are also entitled to a * tax offset under section   160AAA of the Income Tax Assessment Act 1936 , treat that tax offset as having been applied, to the extent possible, against the excluded part of your basic income tax liability.

Note:   That tax offset is for individuals eligible for certain benefits.

If you are a trustee and the beneficiary is less than 18 years of age

  (4)   Despite subsection   ( 1), the amount of your * tax offset for the income year cannot exceed a cap if:

  (a)   you are a trustee; and

  (b)   the beneficiary who is presently entitled to the share of * net income to which the tax offset relates is a prescribed person in relation to the income year for the purposes of Division   6AA of Part   III of the Income Tax Assessment Act 1936 ; and

  (c)   part of your basic income tax liability for the income year is attributable to the portion of that share to which that Division applies.

The cap is an amount equal to the part of your basic income tax liability attributable to the remaining portion of that share.

Note 1:   Division   6AA is about income that particular kinds of children derive from particular sources.

Note 2:   To work out the portion of that share to which Division   6AA applies, see section   102AG of the Income Tax Assessment Act 1936 .

Part   2 -- Related amendments

Income Tax Assessment (1936 Act) Regulation   2015

2   Section   4 (definition of 159N rebate maximum amount )

Repeal the definition, substitute:

"159N rebate maximum amount" means $445.

3   Section   4 (definition of 159N rebate reduction rate )

Repeal the definition, substitute:

"159N rebate reduction rate" means 0.015.

4   Section   4 (definition of 159N rebate reduction threshold )

Repeal the definition, substitute:

"159N rebate reduction threshold" means $37,000.

Income Tax Assessment Act 1936

5   After subsection   159N(2)

Insert:

  (2A)   Subsection   ( 1) does not apply for the 2022 - 23 year of income or a later year of income.

Note:   This section will be repealed on 1   July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

Income Tax Assessment Act 1997

6   Section   13 - 1 (table item headed "low income earner")

Omit:

substitute:

7   At the end of subsection   63 - 10(1)

Add:

Note 7:   Item   17 of the table will be repealed on 1   July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 .

Taxation Administration Act 1953

8   Section   45 - 340 in Schedule   1 (method statement, step 1, before paragraph   ( a))

Insert:

9   Section   45 - 375 in Schedule   1 (method statement, step 1, before paragraph   ( a))

Insert: