Commonwealth Numbered Acts

INCOME TAX (RATES) AMENDMENT (CAPITAL GAINS) ACT 1986 No. 53 of 1986 - SECT 7

7. Schedule 24 to the Principal Act is amended-

   (a)  by inserting in clauses 1 and 2 of Part I "and that share does not
consist of or include a capital gains component" before ", the rates of tax";

   (b)  by adding at the end of Part I the following clause:

"3. In the case of a trustee of a trust estate who is liable to be assessed
and to pay tax in pursuance of section 98 of the Assessment Act in respect of
a share of a resident beneficiary of the net income of the trust estate where-

   (a)  Division 6AA of Part III of that Act applies to a part of that share;
        and

   (b)  that share consists of or includes a capital gains component,
the rate of tax for every $1 of that share is the amount ascertained
in accordance with the formula A+B+C, where-
-----
D
A is the amount of tax that would be payable by the trustee under clauses 1
and 2 on the reduced share;
B is 5 times the difference between-

   (c)  the amount of tax that would be payable under clause 1 of Part I of
        Schedule 19 on a taxable income equal to the sum of-

        (i)    whichever of the following amounts is applicable:

                (A)  where Division 16 of Part III of the Assessment Act
                     applies-the average income;

                (B)  where any part of the amount represented by component A
                     was calculated by reference to Schedule 21-the reduced
                     notional income;

                (C)  where neither sub-sub-paragraph (a) nor sub-sub-paragraph
                     (b) applies-the reduced share; and

        (ii)   20% of the part of the capital gains component other than the
               eligible part of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income;
and

   (d)  the amount of tax that would be payable under clause 1 of Part I of
        Schedule 19 on a taxable income equal to the average income, reduced
        notional income or reduced share, as the case may be, if one
        individual were liable to be assessed and to pay tax on that income;
C is-

   (e)  5 times the difference between-

        (i)    the amount of tax that would be payable under clause 1 of Part
               I of Schedule 19 on a taxable income equal to the sum of-

                (A)  the reduced share; and

                (B)  20% of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income;
and

        (ii)   the amount of tax that would be payable under clause 1 of Part
               I of Schedule 19 on a taxable income equal to the sum of-

                (A)  the reduced share; and

                (B)  20% of the part of the capital gains component other than
                     the eligible part of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income; or

   (f)  46% of the eligible part of the capital gains component,
whichever is the greater; and
D is the number of whole dollars in the share.";

   (c)  by inserting in clauses 1 and 2 of Part II "and that share does not
consist of or include a capital gains component" before ", the rates of tax";
and

   (d)  by adding at the end of Part II the following clause:

"3. In the case of a trustee of a trust estate who is liable to be assessed
and to pay tax in pursuance of section 98 of the Assessment Act in respect of
a share of a non-resident beneficiary of the net income of the trust estate
where-

   (a)  Division 6AA of Part III of that Act applies to a part of that share;
        and

   (b)  that share consists of or includes a capital gains component,
the rate of tax for every $1 of that share is the amount ascertained
in accordance with the formula A+B+C, where-
-----
D
A is the amount of tax that would be payable by the trustee under clauses 1
and 2 on the reduced share;
B is 5 times the difference between-

   (c)  the amount of tax that would be payable under clause 1 of Part II of
        Schedule 19 on a taxable income equal to the sum of-

        (i)    whichever of the following amounts is applicable:

                (A)  where Division 16 of Part III of the Assessment Act
                     applies-the average income;

                (B)  where any part of the amount represented by component A
                     was calculated by reference to Schedule 21-the reduced
                     notional income;

                (C)  where neither sub-sub-paragraph (a) nor sub-sub-paragraph
                     (b) applies-the reduced share; and

        (ii)   20% of the part of the capital gains component other than the
               eligible part of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income;
and

   (d)  the amount of tax that would be payable under clause 1 of Part II of
        Schedule 19 on a taxable income equal to the average income, reduced
        notional income or reduced share, as the case may be, if one
        individual were liable to be assessed and to pay tax on that income;
C is-

   (e)  5 times the difference between-

        (i)    the amount of tax that would be payable under clause 1 of Part
               II of Schedule 19 on a taxable income equal to the sum of-

                (A)  the reduced share; and

                (B)  20% of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income;
and

        (ii)   the amount of tax that would be payable under clause 1 of Part
               II of Schedule 19 on a taxable income equal to the sum of-

                (A)  the reduced share; and

                (B)  20% of the part of the capital gains component other than
                     the eligible part of the capital gains component,
if one individual were liable to be assessed and to pay tax on that income; or

   (f)  46% of the eligible part of the capital gains component,
whichever is the greater; and
D is the number of whole dollars in the share.".