Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Amends the Income Tax Rates Act 1986, in relation to family tax assistance, to:
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- ensure that family tax assistance is properly allowed to taxpayers with a special income component (such as a capital gain) and a liability to pay complementary tax;
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- prevent entitlement to family tax assistance from causing an increase in the rate of penal tax on uncontrolled partnership income; and
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- adjust the complementary tax provisions in relation to family tax assistance to take account of taxpayers with reduced tax-free thresholds.
Date of effect: 1 January 1997.
Proposal announced: Not previously announced.
Financial impact: Negligible cost to the revenue.
Compliance cost impact: No additional compliance costs, over and above those already associated with family tax assistance.
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