Tax Laws Amendment (Small Business) Act 2007 (80 of 2007)

Schedule 3 STS taxpayers

Part 2 Consequential amendments

Income Tax Assessment Act 1997

137 Subsection 61-510(2) (method statement, steps 3, 4 and 5)

Repeal the steps, substitute:

Step 3. Work out the percentage (the small business percentage ) using the formula:

(((Your net small business income share) / (Your taxable income for the year)) / 100)

If that percentage is more than 100%, the small business percentage is 100%.

Step 4. If the partnership’s *aggregated turnover for the year is $50,000 or less, multiply the amount at step 2 by the small business percentage: the result is the amount of your *tax offset.

Step 5. If the partnership’s *aggregated turnover for the year is more than $50,000, work out the fraction (the small business phase-out fraction ) using the formula:

(($75,000 - The partnership's *aggregated turnover for the year) / $25,000)

The amount of your *tax offset is worked out using the formula:

$((Step 2 amount) X (Small business percentage) X (Small phase-out fraction))$

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