Tax Laws Amendment (2011 Measures No. 5) Act 2011 (62 of 2011)

Schedule 3   National Rental Affordability Scheme

Part 1   National Rental Affordability Scheme Tax Offset

Division 1   NRAS consortiums

Income Tax Assessment Act 1997

1   Sections 380-5 to 380-20

Repeal the sections, substitute:

NRAS certificates issued to individuals, corporate tax entities and superannuation funds

380-5 Claims by individuals, corporate tax entities and superannuation funds

Entitlement

(1) An entity is entitled to a *tax offset for an income year if:

(a) the *Housing Secretary issues an *NRAS certificate in relation to an *NRAS year to the entity (other than in the entity’s capacity (if any) as the *NRAS approved participant of an *NRAS consortium); and

(b) the income year begins in the NRAS year; and

(c) the entity is an individual, a *corporate tax entity or a *superannuation fund.

Amount

(2) The amount of the entity’s *tax offset is the amount stated in the *NRAS certificate.

NRAS certificates issued to NRAS approved participants

380-10 Members of NRAS consortiums - individuals, corporate tax entities and superannuation funds

Entitlement

(1) A *member of an *NRAS consortium is entitled to a *tax offset for an income year if:

(a) the *Housing Secretary issues an *NRAS certificate in relation to an *NRAS year to the *NRAS approved participant of the NRAS consortium; and

(b) the income year commences in the NRAS year; and

(c) the member is an individual, a *corporate tax entity or a *superannuation fund.

Amount

(2) The amount of the *tax offset is the total of the amounts worked out using the following formula for each *NRAS dwelling:

(a) covered by the *NRAS certificate; and

(b) from which the *member *derives *NRAS rent during the *NRAS year:

(3) Treat the references in subsection (2) to the *NRAS year as being references to a period that occurs during the NRAS year, if the *NRAS certificate is apportioned for the period.

380-14 Members of NRAS consortiums - partnerships and trustees

(1) This section applies if:

(a) the *Housing Secretary issues an *NRAS certificate in relation to an *NRAS year to the *NRAS approved participant of an *NRAS consortium; and

(b) the NRAS certificate covers one or more *NRAS dwellings; and

(c) a *member of the NRAS consortium, other than the NRAS approved participant, *derives *NRAS rent during the NRAS year from any of those NRAS dwellings; and

(d) the member is a partnership or a trustee of a trust.

(2) For the purposes of sections 380-15 and 380-20, assume that:

(a) the *member has been issued with an *NRAS certificate in relation to the *NRAS year; and

(b) the NRAS certificate covers each *NRAS dwelling:

(i) covered by the NRAS certificate mentioned in paragraph (1)(b) of this section; and

(ii) from which the member *derives *NRAS rent during the NRAS year; and

(c) the amount stated in the NRAS certificate for each of those NRAS dwellings is the amount worked out using the formula in subsection 380-10(2) in relation to the NRAS dwelling for the NRAS year for the member.

NRAS certificates issued to partnerships and trustees

380-15 Entities to whom NRAS rent flows indirectly

(1) An entity is entitled to a *tax offset for an income year (the offset year ) if:

(a) the *Housing Secretary issues an *NRAS certificate in relation to an *NRAS year to a partnership or a trustee of a trust; and

(b) *NRAS rent *derived:

(i) from any of the *NRAS dwellings covered by the NRAS certificate; and

(ii) during the NRAS year;

*flows indirectly to the entity in any income year; and

(c) the offset year of the partnership or trustee begins in the NRAS year; and

(d) the entity is:

(i) an individual; or

(ii) a *corporate tax entity when the NRAS rent flows indirectly to it; or

(iii) the trustee of a trust that is liable to be assessed on a share of, or all or a part of, the trust’s *net income under section 98, 99 or 99A of the Income Tax Assessment Act 1936 for the offset year; or

(iv) the trustee of an *FHSA; or

(v) a *superannuation fund, an *approved deposit fund or a *pooled superannuation trust.

Note: The entities covered by this section are the ultimate recipients of the NRAS rent because the NRAS rent does not flow indirectly through them to other entities.

(2) The amount of the *tax offset is the sum of the amounts worked out using the following formula for each *NRAS dwelling from which there is *NRAS rent covered by paragraph (1)(b):

(3) Treat the references in subsection (2) to the *NRAS year as being references to a period that occurs during the NRAS year, if the *NRAS certificate is apportioned for the period.

380-20 Trustee of a trust that does not have net income for an income year

(1) An entity is entitled to a *tax offset for an income year (the offset year ) if:

(a) the *Housing Secretary issues an *NRAS certificate in relation to an *NRAS year to a partnership or a trustee of a trust; and

(b) the entity is a trustee of a trust; and

(c) the trust mentioned in paragraph (b) does not have a *net income for an income year; and

(d) *NRAS rent *derived during the NRAS year from an *NRAS dwelling covered by the NRAS certificate would otherwise *flow indirectly to the entity in the income year mentioned in paragraph (c) as if:

(i) the trust did have a net income for the income year; and

(ii) for the purposes of paragraph 380-25(4)(b), the entity has a share amount, being the net income referred to in subparagraph (i) of this paragraph; and

(iii) the entity’s *share of the NRAS rent under section 380-30 was a positive amount; and

(e) the offset year of the partnership or trustee begins in the NRAS year.

(2) The amount of the *tax offset is the amount worked out in accordance with subsection 380-15(2), as if the reference in the formula to the *NRAS certificate were a reference to the NRAS certificate mentioned in paragraph (1)(a) of this section.

(3) For the purposes of working out the entity’s *share of *NRAS rent for an *NRAS dwelling, assume subparagraphs (1)(d)(i), (ii) and (iii) of this section apply.

(4) If the trustee of a trust is entitled to a *tax offset under this section:

(a) a beneficiary of the trust; or

(b) a subsequent entity to whom *NRAS rent for an *NRAS dwelling mentioned in paragraph (1)(d) *flows indirectly;

is not entitled to a tax offset under this Subdivision in relation to the NRAS rent *derived during the *NRAS year from for the NRAS dwelling.