Taxation Laws Amendment (Superannuation) Act 1992 (208 of 1992)

Part 2   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 8   Amendments abolishing a taxpayer's ability to choose which parts of an ETP (other than undeducted contributions and concessional components) are rolled-over

45   Roll-over of ETPs

Section 27D of the Principal Act is amended:

(a) by omitting from subparagraphs (1)(b)(i) and (ii) "this paragraph" and substituting "this section";

(b) by omitting from subparagraph (1)(b)(iii) "this subparagraph" and substituting "this section";

(c) by adding at the end the following subsections:

"(4) A taxpayer's election under subsection (1) is taken to have specified the amount worked out using the steps set out in the following provisions of this section as the extent to which the taxpayer wishes a particular applied amount to be regarded as consisting of an eligible component covered by sub-subparagraph (1)(b)(iii)(A), (B) or (BA).

"(5) Step 1: the applied amount consists of the following notional components:

(a) the notional concessional component, which is the amount (including a nil amount) specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(D);

(b) the notional undeducted contributions, which is the amount (including a nil amount) specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(C);

(c) the notional pre-July 83 component, which is the lesser of the following amounts:

(i) the amount worked out using the formula:

(Applied amount – Notional concessional component) * (Pre-July 83 / Total period)

where:

'Pre-July 83' is the number of whole days (if any) in the eligible service period that occurred before 1 July 1983;

'Total period' is the number of whole days in the eligible service period;

(ii) the amount represented by the component (Applied amount-Notional concessional component) in subparagraph (i), reduced by the notional undeducted contributions;

(d) the notional post-June 83 component, which is the applied amount reduced by the other notional components.

"(6) Step 2: if the applied amount includes a notional pre-July 83 component, the taxpayer's election under subsection (1) is taken to have specified that notional component as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(BA).

"(7) Step 3: if the applied amount includes a notional post-June 83 component, the taxpayer's election under subsection (1) has no effect unless the following rules are complied with:

(a) the sum of:

(i) the amount specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(A); and

(ii) the amount specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(B);

must equal the notional post-June 83 component of the applied amount;

(b) the amount specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(B) must not exceed the untaxed element of the post-June 83 component of the qualifying eligible termination payment, reduced by the sum of:

(i) if there are one or more other applied amounts which relate to one or more earlier qualifying roll-over payments (which other applied amounts are called 'previous applied amounts')-the amount specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the previous applied amounts to be regarded as consisting of that eligible component; and

(ii) the untaxed element of the retained amount of the post-June 83 component of the qualifying eligible termination payment;

(c) the amount specified in the taxpayer's election as the extent to which the taxpayer wishes the applied amount to be regarded as consisting of the eligible component covered by sub-subparagraph (1)(b)(iii)(A) must not exceed the sum of:

(i) the taxed element of the post-June 83 component of the qualifying eligible termination payment, reduced, in a case where there are one or more other applied amounts which relate to one or more earlier qualifying roll-over payments (which other applied amounts are called 'previous applied amounts'), by the sum of the amounts specified in the taxpayer's election under subsection (1) as the extent to which the taxpayer wishes the previous applied amounts to be regarded as consisting of that eligible component; and

(ii) if the sum of:

(A) the notional post-June 83 component of the applied amount; and

(B) if there are one or more other applied amounts-the notional post-June 83 components of those other applied amounts; and

(C) the retained amount of the post-June 83 component of the qualifying eligible termination payment;

exceeds the post-June 83 component of the qualifying eligible termination payment-the amount calculated using the formula:

Notional post-June 83 component of applied amount – Limit calculated under paragraph (b) + Amount calculated under subparagraph (i).".