Private ruling: Flood levy exemption
Published: June 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you required to pay the Temporary Flood and Cyclone Reconstruction Levy (the flood levy) if your taxable income for the year ended 30 June 2012 exceeds $50,000? | A1: Yes.

Relevant facts and circumstances: You were overseas for work purposes during the 2010-11 financial year. Your spouse remained in Australia during this time. During the 2010-11 financial year your home town was affected by a declared natural disaster under the National Disaster Relief and Recovery Arrangements (NDRRA). Your spouse received an Australian Government Disaster Relief Payment (AGDRP) as your home was without electricity for at least 48 hours. You did not receive an AGDRP as a result of the natural disaster. You will earn taxable income in excess of $50,000 in the year ended 30 June 2012.

Relevant legislative provisions: Income Tax (Transitional Provisions) Act 1997 Section 4-10 Income Tax - Temporary Flood and Cyclone Reconstruction Levy Exemptions 2011 Schedule 1

Reasons for decision: Summary: As you do not meet the criteria for an exemption you are required to pay the flood levy if your taxable income for the 2011-12 financial year exceeds $50,000. | Detailed Reasoning - Detailed reasoning: The Australian Government has introduced the flood levy for the financial year ended 30 June 2012. The flood levy is designed to assist affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure, such as, roads, bridges and schools. Section 4-10 of the Income Tax (Transitional Provisions) Act 1997 states you must pay the flood levy where your taxable income for the 2011-12 financial year exceeds $50,000 unless you are covered by the exemption provision. The flood levy is an additional amount to the normal income tax calculated on your taxable income. The exemption provision requires the Minister to specify the classes of individuals in a legislative instrument who are not required to pay the levy. As stated in the legislative instrument Income Tax - Temporary Flood and Cyclone Reconstruction Levy Exemption 2011 , you are not required to pay the levy if you are a member of one of the three exemption classes described below: Class 1 - you were eligible for an AGDRP for a natural disaster that occurred during the 2010-11 or 2011-12 financial year and you received the payment by 30 June 2012 Class 2 - you were affected by: · an event that occurred during the 2010-11 or 2011-12 financial year which was declared as a natural disaster under the NDRRA, and · you were at least 16 years old at the time of the disaster, and · you were an Australian resident for social security reasons at the time of the disaster, and · at least one of the following conditions applies: · as a direct result of the natural disaster: · you were seriously injured, or · an Australian was killed and that Australian was an immediate member of your family, or · your principal place of residence was destroyed or sustained major damage, or · you were unable to gain access to your principal place of residence for at least 24 hours, or · you were stranded in your principal place of residence for at least 24 hours, or · as a result of the natural disaster, your principal place of residence was without electricity, water, gas, sewerage service or another essential service for at least 48 hours, or · you were the principal carer of a child (within the meaning of the Social Security Act 1991 ) to whom sub-paragraph (i) or (ii) applies. Class 3 - you are a New Zealand citizen who received an ex-gratia payment from Centrelink by 30 June 2012 for a natural disaster that occurred in the 2010-11 or 2011-12 financial year. | Detailed Reasoning - Application to your circumstances: Your home town was affected by a NDRRA declared natural disaster. A person is exempt from paying the flood levy where their principal place of residence was without electricity for at least 48 hours as a result of a NDRA declared natural disaster. A place is a person's principal place of residence if: · it is a place in which a person normally resides, and · the person has a right or licence entitling the person to lawfully reside in that place. You are not exempt from paying the flood levy as you do not meet the conditions of any of the classes for exemption: Class 1 does not apply the natural disaster that affected your home town was a natural disaster for which the AGDRP assistance was activated and you did not receive an AGDRP Class 2 does not apply as it is considered that whilst you were in overseas your principal place of residence was in overseas as this was where you resided for employment purposes As your principal place of residence was overseas at the time of the natural disaster, you are not considered to have been affected by a NDRAA declared natural disaster. Class 3 does not apply as you were not a New Zealand citizen which is a criteria for this exemption. Whilst it is acknowledged that you may have been eligible for an AGDRP had you been in your home town at the time of TC there is no discretion contained within the relevant legislation to exempt you from the flood levy on this basis. Accordingly, you will be liabile to pay the flood levy on that portion of your taxable income which exceeds $50,000 for the 2011-12 financial year.

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.