Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 65.35

  (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.