Private ruling: Income Tax – Income – Excepted Person
Date of advice: 23 June 2017
Published: October 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you an excepted person for the purposes of Division 6AA of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes

Relevant facts and circumstances: You were born with a form of disability. Subsequent testing has demonstrated a progression of your disability thus you are now classified under the definition of permanent disability and therefore qualify for a Carer allowance. A family member started receiving a Carer allowance in respect to your disability. You have provided documentation to support the above facts.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 102AC(1) | Income Tax Assessment Act 1936 Paragraph 102AC(2)(c)

Reasons for decision: Summary: Division 6AA of the ITAA 1936 ensures that special rates of tax and a lower tax free threshold apply in working out the basic income tax liability on taxable income, other than excepted income, derived by a prescribed person. A 'prescribed person' is defined in subsection 102AC(1) of the ITAA 1936 to include any person, other than an excepted person (as defined in subsection 102AC(2) of the ITAA 1936), under 18 years of age at the end of the income year. An 'excepted person' for a year of income is defined in subsection 102AC(2) of the ITAA 1936 and includes a person in respect of whom a Carer allowance under the Social Security Act 1991 was payable in respect of a period that included the last day of the year of income (subparagraph 102AC(2)(c)(i) of the ITAA 1936). You are an excepted person under subsection 102AC(2) of the ITAA 1936 as your family member receives a Carer allowance for you. Accordingly the special rates of tax under Division 6AA of the ITAA 1936 will not apply to income derived by you.