Commonwealth Consolidated Acts

INCOME TAX RATES ACT 1986 - SCHEDULE 8

Subsection 12(2)

Part I -- Resident taxpayers, resident beneficiaries and resident trust estates

Division 1 -- Normal notional rate

              1.  This Division applies to the income of a resident taxpayer, other than income in respect of which a trustee is liable to be assessed and to pay tax under section 98 or 99 of the Assessment Act, if Division 16 of Part III of the Assessment Act applies in relation to that income.

              2.  Subject to clause 3, the notional rate in respect of income to which this Division applies is, for every $1 of the taxable income, the amount ascertained by determining the tax that would be payable if the rates set out in Part I of Schedule 7 were applied to a taxable income equal to the taxpayer's average income and dividing the resultant amount by a number equal to the number of whole dollars in that average income.

              3.  The notional rate in respect of income to which this Division applies is to be calculated under clause 2 as if Division 5 of Part II had not been enacted.

Division 2 -- Notional rates in respect of certain trust income

              1.  This Division applies:

                     (a)  to a share of a resident beneficiary of the net income of a trust estate, if:

                              (i)  the trustee of the trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of that share; and

                             (ii)  Division 16 of Part III of the Assessment Act applies in relation to that share; and

                     (b)  to the net income or a part of the net income of a resident trust estate, if:

                              (i)  the trustee of the trust estate is liable to be assessed and to pay tax under section 99 of the Assessment Act in respect of that net income or that part of that net income of the trust estate; and

                             (ii)  Division 16 of Part III of the Assessment Act applies in relation to that net income or that part of that net income.

              2.  The notional rate in respect of income to which this Division applies is:

                     (a)  in a case where the income is:

                              (i)  a share of the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax under section 98 of the Assessment Act; or

                             (ii)  the net income or a part of the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax under section 99 of the Assessment Act, being the net income or a part of the net income of the estate of a deceased person who died less than 3 years before the end of the year of income;

                            the rate that would be calculated in accordance with Division 1 if that income were the taxable income of one individual and were not income in respect of which a trustee is liable to be assessed and to pay tax under section 98 or 99 of the Assessment Act; and

                     (b)  in any other case--the rate that would be calculated in accordance with Division 1 in respect of a taxable income equal to the income if:

                              (i)  that income were the taxable income of one individual and were not income in respect of which a trustee is liable to be assessed and to pay tax under section 99 of the Assessment Act; and

                             (ii)  the reference in column 1 of the table in Part I of Schedule 7 to the part of the ordinary taxable income that exceeds $6,000 but does not exceed $35,000 were a reference to the part of the ordinary taxable income that does not exceed $35,000.

Part II -- Non‑resident taxpayers, non‑resident beneficiaries and non‑resident trust estates

Division 1 -- Normal notional rate

              1.  This Division applies to the income of a non‑resident taxpayer, other than income in respect of which a trustee is liable to be assessed and to pay tax under section 98 or 99 of the Assessment Act, if Division 16 of Part III of the Assessment Act applies in relation to that income.

              2.  The notional rate in respect of income to which this Division applies is, for every $1 of the taxable income, the amount ascertained by determining the tax that would be payable if the rates set out in Part II of Schedule 7 were applied to a taxable income equal to the taxpayer's average income and dividing the resultant amount by a number equal to the number of whole dollars in that average income.

Division 2 -- Notional rates in respect of certain trust income

              1.  This Division applies:

                     (a)  to a share of a non‑resident beneficiary of the net income of a trust estate if:

                              (i)  the trustee of the trust estate is liable to be assessed and to pay tax under section 98 of the Assessment Act in respect of that share; and

                             (ii)  Division 16 of Part III of the Assessment Act applies in relation to that share; and

                     (b)  to the net income or a part of the net income of a non‑resident trust estate if:

                              (i)  the trustee of the trust estate is liable to be assessed and to pay tax under section 99 of the Assessment Act in respect of that net income or that part of that net income of the trust estate; and

                             (ii)  Division 16 of Part III of the Assessment Act applies in relation to that net income or that part of that net income.

              2.  The notional rate in respect of income to which this Division applies is the rate that would be calculated in accordance with Division 1 in respect of a taxable income equal to the income if that income were the taxable income of one individual and were not income in respect of which a trustee is liable to be assessed and to pay tax under section 98 or 99 of the Assessment Act.