Document ID: chunk:federal_register_of_legislation:C2025C00029:section:45:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 45 (pt 1/4)
Character Range: 1490072–1492793

45                             *Tax offset arising from payment of *franking deficit tax (see section 205‑70)                                                                                      You may carry it forward to a later income year (under section 205‑70)

Note 1: Section 13‑1 lists tax offsets.
Note 2: Former Division 388 was repealed by the New Business Tax System (Capital Allowances—Transitional and Consequential) Act 2001.
Note 4: The remaining amount of a carry forward tax offset may be reduced by section 65‑30 or 65‑35 to take account of net exempt income.
Note 5: Tax offsets mentioned in items 5 and 10 are more commonly referred to as the Senior Australians Tax Offset.
 (2) Within each item, apply the tax offsets in the order in which they arose.
Note: This would be relevant if you have carry forward tax offsets of the same category for different income years.

Division 65—Tax offset carry forward rules

Guide to Division 65

65‑10  What this Division is about

      This Division sets out the rules about carrying forward excess tax offsets to later income years.
      You can only carry forward certain tax offsets.
      Before you can apply a tax offset to reduce the amount of income tax that you will pay in a later year, you must apply it to reduce certain amounts of net exempt income.
      The same rules that prevent companies from utilising certain losses of earlier income years prevent companies from applying tax offsets that they have carried forward.

Table of sections

Operative provisions
65‑30 Amount carried forward
65‑35 How to apply carried forward tax offsets
65‑40 When a company cannot apply a tax offset
65‑50 Effect of bankruptcy
65‑55 Deduction for amounts paid for debts incurred before bankruptcy

Operative provisions

65‑30  Amount carried forward
 (1) The amount of the *tax offset that is carried forward is the amount of the excess worked out under Division 63.
 (2) However, reduce the *tax offset by the amount worked out by multiplying your *net exempt income by:
 (a) if you are a base rate entity (within the meaning of the Income Tax Rates Act 1986) for the income year—0.25; or
 (b) otherwise—0.3;
if you have a taxable income for the income year.

65‑35  How to apply carried forward tax offsets
 (1) A *tax offset that you have carried forward decreases the amount of income tax that you would otherwise have to pay under section 4‑10 in a later income year.
 (2) You apply a *tax offset that is carried forward to a later year in accordance with the priorities set out in Division 63 as if it were a tax offset for that later year.
 (3) Before you apply a *tax offset to reduce the amount of income tax that you pay in a later income year in