Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-30 - SUPERANNUATION

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Division 295 - Taxation of superannuation entities

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Subdivision 295-H - Components of taxable income

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SECTION 295-545 Components of taxable income - complying superannuation funds, complying ADFs and PSTs

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295-545(1)
The taxable income of a *complying superannuation entity is split into a *non-arm ' s length component and a *low tax component.

Note:

A concessional rate applies to the low tax component, while the non-arm ' s length component is taxed at the highest marginal rate. The rates are set out in the Income Tax Rates Act 1986 .

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295-545(2)

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If an entity is not of a kind referred to in paragraph 295-550(8)(a) (about certain small entities), the non-arm ' s length component for an income year is the entity ' s *non-arm ' s length income for that year less any deductions to the extent that they are attributable to that income.

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History

S 295-545(2) substituted by No 52 of 2024, s 3 and Sch 7 item 1, effective 1 July 2024. No 52 of 2024, s 3 and Sch 7 item 5 contains the following application of provisions:

5 Application of amendments
(1)
The amendments of the Income Tax Assessment Act 1997 made by this Schedule apply in relation to income derived in the 2018-19 income year or a later income year.

(2)
Despite subitem (1), the amendments do not apply in relation to:
(a) a loss, outgoing or expenditure that is incurred before the 2018-19 income year; and
(b) a loss, outgoing or expenditure that was not incurred before the 2018-19 income year, but might have been expected to be incurred before the 2018-19 income year.

(3)
To avoid doubt, the amendments of the Income Tax Assessment Act 1997 made by Schedule 2 to the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019 do not apply, and are taken never to have applied, in relation to:
(a) a loss, outgoing or expenditure that is incurred before the 2018-19 income year; and
(b) a loss, outgoing or expenditure that was not incurred before the 2018-19 income year, but might have been expected to be incurred before the 2018-19 income year.

S 295-545(2) formerly read:

295-545(2)
The non-arm's length component for an income year is the entity's *non-arm's length income for that year less any deductions to the extent that they are attributable to that income.

295-545(2A)

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If the entity is of a kind referred to in paragraph 295-550(8)(a) (about certain small entities), the non-arm ' s length component for an income year is the lesser of:

(a) the sum of:

(i) each amount of the entity ' s *non-arm ' s length income under subsection 295-550(1) , (2) , (4) or (5) for that year less any deductions to the extent that they are attributable to that income; and

(ii) each amount of the entity ' s non-arm ' s length income under subsection 295-550(8) or (9) for that year; and

(b) the entity ' s taxable income for the income year:

(i) less the contributions that are included in the entity ' s assessable income under Subdivision 295-C for the income year; and

(ii) plus any deductions to the extent that they are attributable to those contributions.

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295-545(3)
The low tax component is any remaining part of the entity's taxable income for the income year.

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