Document ID: chunk:federal_register_of_legislation:C2004A00846:clause:1_1:p2
Version: federal_register_of_legislation:C2004A00846
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 2/21)
Character Range: 4166–6899

6‑5 when *derived were derived only when you received it; and

Note: You are taken to have received an amount when it is applied or dealt with on your behalf or as you direct: see subsection 6‑5(4).
 (b) an amount you could deduct under section 8‑1 (about general deductions), 25‑5 (about tax‑related expenses) or 25‑10 (about repairs) when incurred were incurred only when you paid it or it was paid for you.

Example: Reena operates a document handling business. She chooses to become an STS taxpayer for the 2002‑03 income year.

 For that income year:
                  *   Reena receives payments from her clients of $240,000; and
                  *   she is owed $5,000 by her clients; and
                  *   she pays business expenses of $65,000 during the income year; and
                  *   she owes $4,000 to various suppliers.

 Under the STS accounting method:
                  *   Reena includes the $240,000 ordinary income in her assessable income (the amounts she received), but not the $5,000 because she did not receive it in the 2002‑03 income year; and
                  *   she claims deductions of $65,000 (the amounts she paid), but not the $4,000 because she did not pay it in the 2002‑03 income year.

Exceptions

 (2) However:
 (a) subsection (1) does not apply if another provision of this Act (except section 6‑5, 8‑1, 25‑5 or 25‑10) would include the amount, or allow the deduction, at a different time; and
 (b) paragraph (1)(a) does not apply to an amount to the extent that it has not been, and will not be, received by you; and
 (c) paragraph (1)(b) does not apply to an amount to the extent that it has not been, and will not be, paid by you or for you.

Example: Subdivision 385‑G allows you to defer including profit from second wool clips in your assessable income to the next income year. This Subdivision does not override that deferral.

328‑110  When you start being an STS taxpayer

 (1) This section sets out what happens to your *ordinary income and *general deductions, and deductions under section 25‑5 or 25‑10, when you become an *STS taxpayer.

Ordinary income

 (2) Any *ordinary income that you *derived but did not receive, and was assessable, before you became an *STS taxpayer is not again included in your assessable income when you receive it.

Example: Sylvia chooses to become an STS taxpayer for the 2005‑06 income year. In the previous income year, she derived $27,000 of ordinary income that she did not receive in that previous year. It was included in her assessable income for that previous year because she was using an accruals basis of accounting.

 That amount is not again included when Sylvia receives it in the 2005‑06 income year.

 (3) Any *ordinary