INCOME TAX REGULATIONS (AMENDMENT) 1993 NO. 46

INCOME TAX REGULATIONS (AMENDMENT) 1993 NO. 46

STATUTORY RULES 1993 No. 46

ISSUED BY THE AUTHORITY OF THE TREASURER

Income Tax Assessment Act 1936

Income Tax Regulations (Amendment)

These Regulations are made under the Income Tax Assessment Act 1936 (the Act) and are necessary following the publication by the Australian Government Actuary of the Australian Life Tables 1985-1987.

Regulation 9 specifies which Australian Life Tables apply for the purpose of ascertaining life expectation factors used in calculating the annual exclusion from assessable income of the capital cost component of an annuity. The Australian Life Tables 1975-1977 apply to annuities that first commenced to be payable before 1 September 1988. The Australian Life Tables 1980-1982 apply to annuities that first commenced to be payable on or after 1 September 1988. The amendments will make the recently published Australian Life Tables 1985-1987 the prescribed Life Tables for annuities that first commenced to be payable on or after 1 May 1993.

An explanation of the Regulations appears below.

Regulation 1 provides that the Income Tax Regulations will be amended as set out in the amending Regulations.

Regulation 2 amends Regulation 9 of the Income Tax Regulations. Regulation 9 prescribes Australian Life Tables for the purpose of the definition of "life expectation factor" in subsection 27H(4) of the Act.

Regulation 2.1 amends paragraph (b) of Regulation 9 to insert a limit on the operation of the paragraph. The paragraph, which currently provides that the 1980-1982 Australian Life Tables apply to an annuity which first commenced to be payable on or after 1 September 1988, is being amended to make the paragraph apply only where the annuity also first commenced to be payable before 1 May 1993.

Regulation 2.2 inserts a new paragraph (c) into Regulation 9. The new paragraph provides that, for annuities which first commenced to be payable on or after 1 May 1993, the prescribed Life Tables will be the Australian Life Tables 1985-1987 prepared by the Australian Government Actuary.