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 2   Elections by NRAS approved participants

Income Tax Assessment Act 1997

6   After section 380-15

Insert:

380-16 Elections by NRAS approved participants that are partnerships or trustees

Scope

(1) This section and sections 380-17 and 380-18 apply if:

(a) an entity (the indirect entity ) is entitled to a *tax offset under section 380-15 or 380-20 for an income year because *NRAS rent *derived:

(i) from any of the *NRAS dwellings covered by an *NRAS certificate issued by the *Housing Secretary in relation to an *NRAS year to a *member (the electing member ) of an *NRAS consortium; and

(ii) during the NRAS year;

*flows indirectly to the indirect entity in any income year (or would otherwise flow indirectly to the indirect entity, as mentioned in paragraph 380-20(1)(d)); and

(b) the electing member was the *NRAS approved participant of the NRAS consortium at any time during the NRAS year; and

(c) the electing member elects to have this section apply to the NRAS certificate and NRAS dwelling for the income year.

Requirements for an election

(2) The election must be made:

(a) in the *approved form; and

(b) within 30 days after the day the *Housing Secretary issues the *NRAS certificate.

(3) The Commissioner may require a copy or copies of the election to be given, within the 30 day period mentioned in paragraph (2)(b):

(a) to the Commissioner; or

(b) to each *member of the *NRAS consortium who may be entitled to a *tax offset under section 380-17 as a result of the election; or

(c) both to the Commissioner and to each such member.

(4) The election may not be revoked.

380-17 Elections by NRAS approved participants that are partnerships or trustees - tax offsets

Entitlement to tax offset

(1) A *member of the *NRAS consortium (other than the electing member) is entitled to a *tax offset for the income year if the member is an individual, a *corporate tax entity or a *superannuation fund.

Amount of tax offset

(2) The amount of the *tax offset is the amount worked out using the following formula:

where:

member’s rent means:

(a) if *NRAS rent was payable for the *NRAS dwelling in relation to the whole of the *NRAS year - the rent *derived by the *member from the NRAS dwelling during the NRAS year; or

(b) if NRAS rent was payable for the NRAS dwelling in relation to only part of the NRAS year - the rent derived by the member from the NRAS dwelling during that part of the NRAS year.

total rent means:

(a) if *NRAS rent was payable for the *NRAS dwelling in relation to the whole of the *NRAS year - the rent *derived from the NRAS dwelling during the NRAS year; or

(b) if NRAS rent was payable for the NRAS dwelling in relation to only part of the NRAS year - the rent derived from the NRAS dwelling during that part of the NRAS year.

total tax offsets means the total of the *tax offsets to which entities would be entitled under section 380-15 or 380-20 because of *NRAS rent *derived:

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

(b) during the *NRAS year;

that *flows indirectly to them from the electing member (or would otherwise flow indirectly to them from the electing member, as mentioned in paragraph 380-20(1)(d)).

(3) The *tax offset to which the indirect entity would otherwise be entitled under section 380-15 for the income year because of the *NRAS certificate and the *NRAS dwelling is reduced by the amount worked out using the following formula:

where:

total tax offsets has the same meaning as in subsection (2).

(4) 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.

Amount of tax offset - rent that passes through NRAS approved participant

(5) For the purposes of the references in the definitions in subsection (2) to rent *derived from the *NRAS dwelling during the *NRAS year, disregard *NRAS rent derived by a *member of the *NRAS consortium from the NRAS dwelling during a period in the NRAS year, to the extent that another member derives rent from the NRAS dwelling during the period because:

(a) the first member is the *NRAS approved participant of the NRAS consortium throughout the period; and

(b) the first member, in accordance with the contractual *arrangements that established the NRAS consortium, passes the NRAS rent on to the other member.

Note: There may be more than one NRAS approved participant during an NRAS year. The electing member may be the NRAS approved participant for only part of the NRAS year.

(6) For the purposes of paragraph (5)(b), treat any *NRAS rent retained by the first *member under the *arrangements as management fees or commission as having been passed on to the other member.

380-18 Elections by NRAS approved participants that are partnerships or trustees - special rule for partnerships and trustees

For the purposes of sections 380-15 and 380-20 to 380-30 (which apply if a partnership or the trustee of a trust derives NRAS rent), for each *NRAS dwelling:

(a) from which the electing member *derived *NRAS rent during the *NRAS year; and

(b) that is covered by the *NRAS certificate; and

(c) from which a partnership or trust that is a *member of the *NRAS consortium derived rent during the NRAS year;

treat the following proportion of the NRAS rent as being NRAS rent derived during the NRAS year by the member mentioned in paragraph (c):

where:

member’s rent has the same meaning as in subsection 380-14B(2).

total rent has the same meaning as in subsection 380-14B(2).