Explanatory Memorandum
Circulated by the authority of the Treasurer, the Hon Wayne Swan MPChapter 2 - Income tax treatment of the Prime Minister's Literary Award
Outline of chapter
2.1 Schedule 2 to this Bill amends the Income Tax Assessment Act 1997 to exempt from income tax the Prime Minister's Literary Award, to the extent that the award would otherwise be assessable income.
Context of amendments
2.2 On 22 February 2008 the Minister for Environment, Heritage and the Arts called for entries for the inaugural Prime Minister's Literary Awards and announced that these awards would be tax exempt.
2.3 This amendment ensures that no income tax is payable on the Prime Minister's Literary Award.
Summary of new law
2.4 From 1 July 2007, the Prime Minister's Literary Award will be exempt from income tax to the extent that the award would otherwise be assessable income.
Detailed explanation of new law
2.5 Whether an award is assessable income depends on consideration of the circumstances and the nature of the award and the recipient's assessable income. Given this, this amendment ensures that the Prime Minister's Literary Award is exempt only where the amounts would otherwise be assessable income. [Schedule 2, item 2, section 51-60]
Application and transitional provisions
2.6 This amendment applies to assessments for the 2007-08 income year and later income years. [ Schedule 2, item 3 ]
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