Private ruling: Excepted person
Published: June 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you an excepted person and therefore are not assessed under the special rules for minors under Division 6AA of the Income Tax Assessment Act 1936 ? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are under the age of 18. You left secondary school. You commenced work for an Apprenticeships Australia approved apprenticeship. You work for four days per week and attend TAFE on one day a week. You are paid a five day working week. You intend to work in your apprenticeship under these conditions for the xxxx and xxxx income years. You do not intend to undertake fulltime study in the xxxx or xxxx income tax years.

Relevant legislative provisions: Division 6AA of the Income Tax Assessment Act 1936

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. There are special rules that apply to the taxation of income received by minors. These rules were introduced to discourage income splitting by diverting income to children. Under these rules 'unearned income' of minors over a certain level is taxed at the highest marginal rate. These rules apply to all persons under the age of 18 unless they fall within a few categories of 'excepted persons'. To be considered an 'excepted person' you must fall within one of the following categories: · A person who is in 'full time occupation' · An incapacitated child in respect of whom a carer allowance or a disability support pension was paid or would, but for eligibility tests be payable. · A double orphan, or permanently disabled person, provided they are not dependant on a relative for support. | Detailed Reasoning - Full time occupation: A minor will be treated to be engaged in full time occupation if they are either (a) actually engaged in full time occupation on the last day of the income year, or (b) engaged in a full time occupation during the income year for at least three months (not necessarily continuously). If the minor engages in a course of full time education after a period of full time occupation, the period of full time occupation is disregarded in calculating the three months. The Commissioner must be satisfied that one the last day of the income year the minor intends to engage in a full time occupation during the whole or substantial part of the next year and does not intend to undertake full time study during that time. Sub section 102AA (1) of the Income Tax Assessment Act 1936 defines occupation as being any office, employment, trade, business, profession, vocation or calling. It does not include a course of education. | Detailed Reasoning - Application to you: You are employed in a full time apprenticeship and are paid a full weekly wage. You are required to work four days and attend one day of training at a TAFE each week. It is considered that the undertaking of such an apprenticeship is equal to full time employment. You are employed by the apprentice provider, and the one day a week study at TAFE is simply a requirement of your employment. You have stated that you will be working under these conditions through until the end of the xxxx year and do not intend to undertake any full time study during this time. Therefore, you are an excepted person under section 102AC of the Income Tax Assessment Act 1936 and as such any 'unearned income' you receive will not be taxed at the highest marginal rate.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.