Commonwealth Numbered Regulations Commonwealth Numbered RegulationsBy His Excellency's Command
Michael Sukkar
Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing
Contents
Chapter 1--Introduction and core provisions 1
1............................ Name............................................................................................................. 1
2............................ Commencement............................................................................................. 1
3............................ Authority....................................................................................................... 1
Chapter 2--Liability rules of general application 2
Part 2-5--Rules about deductibility of particular kinds of amounts 2
Division 26--Some amounts you cannot deduct, or cannot deduct in full 2
26-85.01................ Borrowing costs on loans to pay life insurance premiums--term insurance policy etc. 2
Division 30--Gifts or contributions 3
30-212.01.............. Valuation of gifts.......................................................................................... 3
30-212.02.............. Application for valuation............................................................................... 3
30-212.03.............. Charge for making valuation......................................................................... 3
30-212.04.............. Advance payment of charge.......................................................................... 3
30-212.05.............. Commissioner not required to consider application until advance payment is paid 4
30-212.06.............. Applications treated as having no effect........................................................ 4
30-212.07.............. Crediting and repaying valuation charges...................................................... 4
30-212.08.............. Valuation certificates..................................................................................... 4
Division 31--Conservation covenants 6
31-15.01................ Valuation of land........................................................................................... 6
31-15.02................ Application for valuation............................................................................... 6
31-15.03................ Charge for making valuation......................................................................... 6
31-15.04................ Advance payment of charge.......................................................................... 6
31-15.05................ Commissioner not required to consider application until advance payment is paid 7
31-15.06................ Applications treated as having no effect........................................................ 7
31-15.07................ Crediting and repaying valuation charges...................................................... 7
31-15.08................ Valuation certificates..................................................................................... 7
Part 2-15--Non-assessable income 9
Division 50--Exempt entities 9
Subdivision 50-A--Various exempt entities 9
50-50.01................ Prescribed institutions located outside Australia........................................... 9
50-50.02................ Prescribed institutions pursuing objectives principally outside Australia...... 9
50-55.01................ Prescribed institutions for items 1.3, 1.4, 6.1 and 6.2 in Division 50 of the Act 10
Division 51--Exempt amounts 11
51-5.01.................. Defence allowances..................................................................................... 11
Part 2-20--Tax offsets 12
Division 61--Generally applicable tax offsets 12
Subdivision 61-G--Private health insurance offset complementary to Part 2-2 of the Private Health Insurance Act 2007 12
61-220.01.............. Private health insurer to provide annual statement to PHIIB if requested.... 12
Part 2-25--Trading stock 13
Division 70--Trading stock 13
Subdivision 70-C--Accounting for trading stock you hold at the start or end of the income year 13
70-55.01................ Cost of natural increase of live stock........................................................... 13
Part 2-40--Rules affecting employees and other taxpayers receiving PAYG withholding payments 14
Division 83A--Employee share schemes 14
Subdivision 83A-A--Objects of Division and key concepts 14
83A-5.01............... Object of Division 83A............................................................................... 14
Subdivision 83A-E--Miscellaneous 14
83A-315.01........... Value of certain ESS interests..................................................................... 14
83A-315.02........... Valuing unlisted rights................................................................................ 14
83A-315.03........... Exercise price of right nil or cannot be determined...................................... 15
83A-315.04........... Value of beneficial interests........................................................................ 15
83A-315.05........... Working out the value of a right to acquire the beneficial interest in a share 15
83A-315.08........... Calculation percentages of 50% or more, and less than 110%.................... 15
83A-315.09........... Base percentages for calculation percentages of 110% or more.................. 17
Chapter 3--Specialist liability rules 19
Part 3-30--Superannuation 19
Division 290--Contributions to superannuation funds 19
Subdivision 290-C--Deducting personal contributions 19
290-155.01............ Complying superannuation fund condition--prescribed superannuation funds 19
290-155.05............ Complying superannuation fund condition--prescribed contributions and superannuation funds 19
290-170.01............ Notice of intent to deduct contributions--contributions-splitting applications 19
Division 291--Excess concessional contributions 21
Subdivision 291-B--Excess concessional contributions 21
291-25.01.............. Concessional contributions for a financial year........................................... 21
Subdivision 291-C--Modifications for defined benefit interests 22
291-170.01............ Treatment of superannuation sub-funds...................................................... 22
291-170.02............ Notional taxed contributions--contributions for funds with 5 or more defined benefit members 22
291-170.03............ Notional taxed contributions--contributions for funds to which section 291-170.02 does not apply 23
291-170.04............ Notional taxed contributions--nil amount................................................... 24
291-170.05............ Notional taxed contributions--conditions for paragraph 291-170(2)(d) and subparagraph 291-170(3)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997................................... 25
291-170.07............ Notional taxed contributions--conditions for paragraph 291-170(4)(d) and subparagraph 291-170(5)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997................................... 27
Division 292--Excess non-concessional contributions 29
Subdivision 292-C--Excess non-concessional contributions tax 29
292-90.01.............. Non-concessional contributions for a financial year.................................... 29
Division 293--Sustaining the superannuation contribution concession 30
Subdivision 293-D--Modifications for defined benefit interests 30
293-115.05............ Preliminary.................................................................................................. 30
293-115.10............ Defined benefit contributions--non-accruing members.............................. 30
293-115.15............ Defined benefit contributions--accruing members with funded benefit interests 30
293-115.20............ Defined benefit contributions--accruing members with other interests...... 31
Subdivision 293-E--Modifications for constitutionally protected State higher level office holders 31
293-145.01............ Constitutionally protected State higher level office holders......................... 31
Division 294--Transfer balance cap 32
Subdivision 294-B--Transfer balance account 32
294-25.01.............. Credit in transfer balance account--payment of consideration for interest supporting deferred superannuation income stream............................................................................................. 32
Subdivision 294-C--Transfer balance debits 32
294-80.01.............. Debit in transfer balance account--reduction in amount of superannuation income stream benefit 32
294-80.02.............. Debit in transfer balance account--reduction in amount of superannuation income stream benefit 33
294-80.03.............. Debit in transfer balance account--certain items of table in subsection 294-80(1) of the Act do not apply to certain superannuation income streams....................................................... 33
Subdivision 294-D--Modifications for certain defined benefit income streams 33
294-130.01............ Meaning of capped defined benefit income stream...................................... 33
294-135.01............ Transfer balance credit--determining special value of a superannuation interest 35
294-145.01............ Transfer balance debits--determining debit value of a superannuation interest 35
Division 295--Taxation of superannuation entities 37
Subdivision 295-D--Contributions excluded 37
295-265.01............ Application of pre-1 July 88 funding credits--limit on choice.................... 37
295-265.02............ Method 1--Funding credit valuation process............................................. 38
295-265.03............ How to calculate the discounted present value of liabilities for step 1 of method 1 39
295-265.04............ How to calculate the assets available to fund pre-1 July 88 liabilities for step 2 of method 1 40
295-265.05............ Method 2--Notionally updated funding credit valuation process............... 40
Subdivision 295-F--Exempt income 42
295-385.01............ Segregated current pension assets--prescribed superannuation income stream benefits 42
Subdivision 295-G--Deductions 42
295-465.01............ Complying funds--deductions for insurance premiums............................ 42
Division 301--Superannuation member benefits paid from complying plans etc. 46
Subdivision 301-D--Departing Australia superannuation payments 46
301-170.01............ Departing Australia superannuation payments............................................ 46
Subdivision 301-E--Superannuation lump sum member benefits less than $200 46
301-225.01............ Superannuation lump sum member benefits less than $200 are tax free...... 46
Division 302--Superannuation death benefits paid from complying plans etc. 47
Subdivision 302-D--Definitions relating to dependants 47
302-195.01............ Circumstances in which a person died in the line of duty............................ 47
302-195.02............ Circumstances in which a person has not died in the line of duty............... 49
302-200.01............ What is an interdependency relationship--matters to be taken into account 50
302-200.02............ What is an interdependency relationship--existence of relationship........... 50
Division 306--Roll-overs etc. 52
306-10.01.............. Roll-over superannuation benefit................................................................ 52
Division 307--Key concepts relating to superannuation benefits 53
Subdivision 307-A--Superannuation benefits generally 53
307-5.01................ What is a superannuation benefit?............................................................... 53
Subdivision 307-B--Superannuation lump sums and superannuation income stream benefits 53
307-70.01.............. Superannuation income stream benefits...................................................... 53
307-70.02.............. Meaning of superannuation income stream............................................... 53
Subdivision 307-C--Components of a superannuation benefit 55
307-125.01............ Components of member benefits accruing before 1 July 1999 paid from the Military Superannuation and Benefits Scheme.......................................................................................... 55
307-125.02............ Components of superannuation benefits after death of recipient of superannuation income stream 55
Subdivision 307-D--Superannuation interests 56
307-200.01............ Application of sections 307-200.02 to 307-200.05 to Subdivisions 291-C and 293-D of the Act 56
307-200.02............ Meaning of superannuation interests--treating superannuation interests as 1 superannuation interest (self-managed superannuation funds)......................................................... 57
307-200.03............ Meaning of superannuation interests--treating a superannuation interest as 2 or more superannuation interests (public sector schemes)............................................................................... 57
307-200.05............ Meaning of superannuation interests--treating a superannuation interest as 2 or more superannuation interests (superannuation income streams)................................................................ 58
307-205.01............ Value of superannuation interest for calculating pre-July 83 amount for members in the contributions and investment phase......................................................................................... 58
307-205.01A......... How to calculate the value of a retirement benefit for step 1 of the method in subsection 307-205.01(2).................................................................................................................... 59
307-205.02............ Value of superannuation interest................................................................. 60
307-205.02A......... Value of superannuation interest--superannuation income streams or superannuation annuities based on identifiable amounts.................................................................................... 61
307-205.02B......... Value of superannuation interest--public sector superannuation schemes.. 61
307-205.02C......... Value of superannuation interest--deferred superannuation income streams 61
307-205.02D......... Value of superannuation interest--pooled investment pensions................. 62
307-205.02E.......... Value of superannuation interest--pooled investment annuities................. 63
Part 3-45--Rules for particular industries and occupations 64
Division 393--Farm management deposits 64
Subdivision 393-B--Meaning of farm management deposit and owner 64
393-20.01.............. Application form for a farm management deposit--information given by depositor 64
393-20.02.............. Application form for a farm management deposit--information given to depositor 64
393-40.01.............. Repayment of farm management deposit in the event of a natural disaster.. 64
Chapter 4--International aspects of income tax 66
Part 4-5--General 66
Division 775--Foreign currency gains and losses 66
Subdivision 775-B--Realisation of forex gains or losses 66
775-145.01............ Application of forex events to currency and fungible rights and obligations 66
Division 830--Foreign hybrids 68
Subdivision 830-A--Meaning of "foreign hybrid" 68
830-15.01.............. Foreign hybrid company............................................................................. 68
Chapter 6--The Dictionary 69
Part 6-1--Concepts and topics 69
Division 960--General 69
Subdivision 960-C--Foreign currency 69
960-50.01.............. Translation of foreign currency amounts into Australian currency--modification of special translation rules.................................................................................................................... 69
Subdivision 960-D--Functional currency 70
960-80.01.............. Translation rules--translation into applicable functional currency.............. 70
960-80.02.............. Translation rules for an attributable taxpayer of a CFC--translation into applicable functional currency 71
960-80.03.............. Translation rules--translation from applicable functional currency into Australian currency 71
Division 974--Debt and equity interests 72
Subdivision 974-F--Related concepts 72
974-135.01............ Non-cumulative redeemable preference shares issued by credit union or mutual building society 72
974-135.02............ Redeemable preference shares..................................................................... 72
974-135.03............ Term cumulative subordinated note with insolvency or capital adequacy conditions 73
974-135.04............ Perpetual cumulative subordinated note with profitability, insolvency or negative earnings conditions 74
974-135.05............ Term cumulative subordinated note with non-viability condition................ 75
Part 6-5--Dictionary definitions 77
Division 995--Definitions 77
995-1.01................ Definitions.................................................................................................. 77
995-1.02................ Approved stock exchanges......................................................................... 80
995-1.03................ Constitutionally protected funds.................................................................. 80
995-1.04................ Definition of contributions-splitting superannuation benefit...................... 81
995-1.05................ Meaning of superannuation annuity........................................................... 81
995-1.06................ Meaning of terminal medical condition...................................................... 81
Chapter 7--Transitional matters 82
Part 1000-1--Transitional matters relating to the repeal of the Income Tax Assessment Regulations 1997 82
1000-1.01.............. Definitions.................................................................................................. 82
1000-1.02.............. This instrument generally applies to income years and financial years starting at or after the commencement time............................................................................................................. 82
1000-1.03.............. Valuations under Division 30 or 31............................................................ 82
1000-1.04.............. Complying superannuation fund condition--elections................................ 82
1000-1.05.............. Notional taxed contributions--allocation of contributions.......................... 83
1000-1.06.............. Transfer balance debits and transfer balance credits.................................... 83
1000-1.07.............. Application of pre-1 July 88 funding credits............................................... 83
1000-1.08.............. Departing Australia superannuation payments............................................ 84
1000-1.09.............. Components of member benefits accruing before 1 July 1999 paid from the Military Superannuation and Benefits Scheme--choice of alternative method.......................................... 84
1000-1.10.............. Farm management deposit........................................................................... 84
1000-1.11.............. Application of forex events to currency and fungible rights and obligations--elections 85
1000-1.12.............. Translating currency--choices and elections............................................... 85
1000-1.13.............. Certificates in relation to terminal medical conditions.................................. 85
Schedule 1A--Method of working out amount of notional taxed contributions 86
Part 1--Preliminary 86
Division 1--Definitions 86
1.1......................... Meaning of accruing member..................................................................... 86
1.2......................... Meaning of benefit category........................................................................ 86
1.3......................... Meaning of defined benefit fund.................................................................. 86
1.4......................... Accruing member must not belong to more than one benefit category at the same time unless certified by an actuary......................................................................................................... 86
1.5......................... Meaning of fund benefit.............................................................................. 87
Division 2--Method 88
1.6......................... Method of working out amount of notional taxed contributions if the fund benefit is wholly sourced from an accumulation of contributions made in respect of the member.................... 88
1.7......................... Method of working out amount of notional taxed contributions in respect of a benefit category if the fund benefit is not wholly sourced from an accumulation of contributions made in respect of the member 88
1.8......................... Method of working out amount of notional taxed contributions................. 88
Part 2--New entrant rate 90
2.1......................... Method of working out new entrant rate for a benefit category................... 90
2.2......................... New entrant rate to be based on period of membership needed to reach maximum benefit accrual 90
2.3......................... New entrant rate to be rounded down......................................................... 90
2.4......................... No allowance for administration expenses or income tax on assessable contributions 91
2.5......................... Certain discretions to be allowed for........................................................... 91
2.6......................... Method of working out new entrant rate for a member............................... 91
Part 3--Valuation parameters 92
3.1......................... Application of economic, decrement and other parameters.......................... 92
3.2......................... Discount rate............................................................................................... 92
3.3......................... Fund earning rate and crediting rate............................................................ 92
3.4......................... Rate of future salary or wages growth........................................................ 92
3.5......................... Rate of increase in price indices.................................................................. 92
3.6......................... New entrant age.......................................................................................... 92
3.7......................... Exit rates..................................................................................................... 93
3.8......................... Pensions...................................................................................................... 94
3.9......................... Mortality of pensioners............................................................................... 94
3.10....................... Taxed and untaxed benefits......................................................................... 95
3.11....................... Other assumptions to be set by the actuary................................................. 95
Part 4--Exercise of discretion to pay a benefit greater than the benefit assumed in calculating the new entrant rate 96
4.1......................... Method of working out the increased exit benefit adjustment amount in the formula in clause 1.8 96
Part 5--Member has changed benefit category 97
5.1......................... Method of working out the category change or discretion adjustment amount in the formula in clause 1.8.................................................................................................................... 97
Part 6--Governing rules have changed 98
6.1......................... Method of working out governing rules change adjustment amount in the formula in clause 1.8 98
Part 7--Non-arm's length increase in superannuation salary 99
7.1......................... Method of working out the increased superannuation salary adjustment amount in the formula in clause 1.8.................................................................................................................... 99
Schedule 1AA--Working out defined benefit contributions 100
Part 1--Preliminary 100
Division 1--Definitions 100
1............................ Meaning of accruing member................................................................... 100
2............................ Meaning of benefit category...................................................................... 100
2A......................... Meaning of defined benefit fund................................................................ 100
2B.......................... Treatment of superannuation sub-funds.................................................... 100
3............................ Accruing member must not belong to more than one benefit category at the same time unless certified by an actuary....................................................................................................... 100
Division 2--Method 102
4............................ Method of determining amount of defined benefit contributions............... 102
Part 2--New entrant rate 104
5............................ Method of working out new entrant rate for a benefit category................. 104
6............................ New entrant rate to be based on period of membership needed to reach maximum benefit accrual 104
7............................ New entrant rate to be rounded down....................................................... 104
8............................ No allowance for administration expenses or income tax on assessable contributions 105
9............................ Certain discretions to be allowed for......................................................... 105
Part 3--Valuation parameters 106
10.......................... Application of economic, decrement and other parameters........................ 106
11.......................... Discount rate............................................................................................. 106
12.......................... Fund earning rate and crediting rate.......................................................... 106
13.......................... Rate of future salary or wages growth...................................................... 106
14.......................... Rate of increase in price indices................................................................ 106
15.......................... New entrant age........................................................................................ 106
16.......................... Exit rates................................................................................................... 107
17.......................... Pensions.................................................................................................... 108
18.......................... Mortality of pensioners............................................................................. 108
19.......................... Other assumptions to be set by the actuary............................................... 110
Part 4--Exercise of discretion to pay a benefit greater than the benefit assumed in calculating the new entrant rate 111
20.......................... Method of working out the increased exit benefit adjustment amount in the formula in subclause 4(2) 111
Part 5--Member has changed benefit category 112
21.......................... Method of working out the category change or discretion adjustment amount in the formula in subclause 4(2).................................................................................................................. 112
Part 6--Governing rules have changed 113
22.......................... Method of working out governing rules change adjustment amount in the formula in subclause 4(2) 113
Part 7--Non-arm's length increase in superannuation salary 114
23.......................... Method of working out the increased superannuation salary adjustment amount in the formula in subclause 4(2)........................................................................................................... 114
Schedule 1B--Valuation factors 115
1............................ Income stream valuation factors................................................................ 115
2............................ Lump sum valuation factors...................................................................... 118
Schedule 1C--Farm management deposits--statements to be read by depositors 120
Part 1--Statements 120
1............................ Statements for the purposes of paragraph 393-20.02(a)............................ 120
Part 2--Required statements 121
2............................ Statements for the purposes of paragraph 393-20.02(b)........................... 121
Part 3--Additional information 123
3............................ Additional information for the purposes of paragraph 393-20.02(c)......... 123
Schedule 2--Translation of currency amounts--rules and other requirements 124
Part 1--Rules and requirements for item 12 of the table in subsection 960-50(6) of the Act 124
1............................ Exchange rate--consistency with accounting standards used by entity..... 124
2............................ Choice of daily exchange rate.................................................................... 124
3............................ Choice of average exchange rate............................................................... 125
Part 2--Translation of foreign currency amounts into Australian currency--rules and requirements for item 11A of the table in subsection 960-50(6) of the Act 126
4............................ Exchange rate--consistency with an entity's financial records................. 126
Schedule 3--Approved stock exchanges 127
1............................ Approved stock exchanges....................................................................... 127