Show at B the total of the amounts at T1 and J.
Use examples 4 and 5 to help you calculate the gross tax amount.
Example 4: Income tax calculation: Superannuation fund showing income at R3 No-TFN-quoted contributions item 10
Example 4a: Complying superannuation fund
The Natalie Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.
The fund received $10,000 in assessable contributions (shown at R item 10) all of which are employer contributions. Of that amount, $8,000 is shown at R1 item 10 for members who quoted their TFN, but $2,000 is shown at R3 item 10 for members who have not quoted their TFN and who opened their account either:
- on or after 1 July 2007, or
- before 1 July 2007 but the assessable contributions made for the member in the income year exceeded $1,000.
The fund has also incurred $1,000 in deductible administration expenses (shown at Q item 11). The superannuation fund’s taxable income is $9,000 (shown at O item 11).
For the purposes of calculating the amount to be shown at J Tax on no-TFN-quoted contributions, T1 Tax on taxable income and B Gross tax, work out the amount of tax as follows:
|
Amount |
Rate |
Tax |
|---|---|---|---|
Assessable income |
|||
No-TFN-quoted contributions |
2,000 |
34 |
680 |
Assessable employer contributions |
8,000 |
|
|
Assessable contributions |
10,000 |
|
|
Total assessable income |
10,000 |
|
|
less |
|||
Deductions |
|||
Administration expenses |
1,000 |
|
|
Taxable income |
9,000 |
15 |
1,350 |
Gross tax |
|
|
2030# |
# The amount of gross tax (shown at B item 12) is the sum of the no-TFN-quoted contributions tax (shown at J item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.
For more information on the applicable tax rates, see Appendix 3.
Example 4b: Non-complying superannuation fund
If the Natalie Superannuation Fund is a non-complying fund, most of its income is taxed at the rate of 47%, but a tax rate of 49% applies to any no-TFN-quoted contributions.
You would calculate J Tax on no-TFN-quoted contributions, T1 Tax on taxable income, and B Gross tax as follows:
|
Amount |
Rate |
Tax |
|---|---|---|---|
Assessable income |
|||
No-TFN-quoted contributions |
2,000 |
2 |
40 |
Assessable employer contributions |
8,000 |
|
|
Assessable contributions |
10,000 |
|
|
Total assessable income |
10,000 |
|
|
less |
|||
Deductions |
|||
Administration expenses |
1,000 |
|
|
Taxable income |
9,000 |
47 |
4,230 |
Gross tax |
|
|
4270# |
# The amount of gross tax (shown at B item 12) is the sum of the no-TFN-quoted contributions tax (shown at J item 12) and the tax (shown at T1 item 12) worked out on the taxable income shown at A item 12.
For more information on the applicable tax rates, see Appendix 3.
Example 4c: Nil taxable income or loss
The Natalie Superannuation Fund is a complying fund. However, it has income which must be taxed at more than 15%.
The fund received $2,000 in assessable contributions, all of which are employer contributions for members who have not quoted their TFN and whose account was opened either:
- on or after 1 July 2007, or
- before 1 July 2007 but the assessable contributions made for the member in the income year exceeded $1,000.
Show the $2,000 at R3 item 10 and also at R item 10.
The fund has also incurred $3,000 in deductible administration expenses (shown at Q item 11). The fund's taxable income is $1,000 loss (shown at O item 11). The taxable income shown at A item 12 is $0.
|
Amount |
Rate |
Tax |
|---|---|---|---|
Assessable income |
|||
No-TFN-quoted contributions |
2,000 |
34 |
680 |
Assessable contributions |
2,000 |
|
|
Total assessable income |
2,000 |
|
|
less |
|||
Deductions |
|||
Administration expenses |
3,000 |
|
|
Taxable income |
0 |
15 |
0 |
Gross tax |
|
|
680# |
# Gross tax of $680 is payable even though the fund made a loss for the income year.
For more information on the applicable tax rates, see Appendix 3.
Example 5: Superannuation fund showing income at U Net non-arm’s length income item 10
Example 5a: Complying superannuation fund
The Elizabeth Superannuation Fund is a complying fund. However, it has income that must be taxed at more than 15%.
The fund received $10,000 of assessable contributions (shown at R item 10) and $4,000 of unfranked dividends from two different private companies. All private company dividends are generally treated as non-arm’s length income unless that income is consistent with an arm’s length dealing. See U Net non-arm’s length income. Of the $4,000 private company dividends, the $2,000 received from one company is treated as non-arm’s length income. The net non-arm’s length income is taxed at 47%.
Deductible expenses attributable to non-arm’s length income are $100. These expenses can be deducted from the non-arm’s length income. All non-arm’s length income is shown on the tax return as a net amount of income. Accordingly an amount of $1,900 is shown at U item 10.
The amount of taxable income remaining after taking into account the non-arm’s length income is referred to as the low tax component.
The fund has also incurred $2,500 in deductible administration expenses (shown at Q item 11) that are not considered to be attributable to the earning of the non-arm’s length income.
The fund’s taxable income is $11,400 (shown at A item 12).
|
Amount |
Rate |
Tax |
|---|---|---|---|
Assessable income |
|||
Assessable contributions |
10,000 |
|
|
Private company dividends (arm’s length income) |
2,000 |
|
|
Net private company dividends (non-arm’s length income) |
1,900 |
|
|
Total assessable income |
13,900 |
|
|
less |
|||
Deductions |
|||
Administration expenses |
2,500 |
|
|
Taxable income (from A item 12) |
11,400 |
|
|
Components of taxable income |
|||
Non-arm’s length component |
1,900 |
47 |
893 |
Low tax component (that is other taxable income) |
9,500 |
15 |
1,425 |
Tax on taxable income (shown at T1 item 12) |
|
|
2,318# |
#The amount of $2,318 is shown at T1 item 12 and also at B Gross Tax as in this example there are not any no-TFN-quoted contributions.
Priority of use of the tax offsets
Funds have access to two types of tax offsets:
- non-refundable non-carry forward tax offsets
- refundable tax offsets.
The first category of tax offsets to be applied against gross tax is C Non-refundable non-carry forward tax offsets. As the name of this category suggests, if the tax offsets are greater than the gross tax, the excess of offsets is lost. If B Gross tax is greater than the offsets at C the remaining tax is shown at T2 Subtotal.
The second category of offsets is E Refundable tax offsets. If the fund is entitled to any refundable tax offsets, the offsets reduce any remaining tax at T2. If the remaining tax is reduced to zero and not all refundable tax offsets have been used up (that is, the E Refundable tax offsets amount exceeds the remaining tax at T2), show the excess of refundable tax offsets at I Tax offset refunds (Remainder of refundable tax offsets). If refundable tax offsets are less than the remaining tax at T2 the shortfall becomes your tax payable amount at T5 Tax payable.
Labels I and T5 are mandatory. You must include an amount at I and T5 even if the amount is zero (if zero write 0).
Any amount at G Section 102AAM interest charge is payable and will increase the T5 amount.
K PAYG instalments raised, rather than just paid, on activity statements and other credits included under H Eligible credits along with any amount at I Tax offset refunds (Remainder of refundable tax offsets) will be applied against the tax payable amount to determine the amount due by the fund or refundable to the fund.