Taxation Laws Amendment Act (No. 3) 1997 (147 of 1997)

Schedule 3   Family tax initiative

Income Tax Assessment Act 1936

2   After subsection 23AF(17C)

Insert:

Family tax initiative adjustment

(17D) If:

(a) the income of a taxpayer of a year of income consists of an amount that is exempt from tax under this section; and

(b) apart from this subsection, section 20C, 20D or 20E of theIncome Tax Rates Act 1986 would apply in relation to the taxpayer;

then:

(c) those sections of theIncome Tax Rates 1986 do not apply to the taxpayer in relation to the year; and

(d) the amount of tax payable by the person is reduced by the amount worked out using the formula:

Tax free threshold increase x Lowest marginal rate

(17E) In subsection (17D):

lowest marginal rate means the lowest rate set out in column 2 of the table in clause 1 of Part I of Schedule 7 to theIncome Tax Rates Act 1986.

tax free threshold increase means the sum of the amounts by which, subject to Division 5 of Part II of theIncome Tax Rates Act 1986, the amount of $5,400 set out in column 1 of the table in clause 1 of Part I of Schedule 7 to that Act would be taken to be increased in relation to the taxpayer in respect of the year of income under sections 20C and 20D of that Act if those sections applied to the taxpayer.