Document ID: chunk:federal_register_of_legislation:C2004A00662:clause:1_3:p9
Version: federal_register_of_legislation:C2004A00662
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 9/20)
Character Range: 23142–25940

money already included in Ron's assessable income under section 86‑15.

 The amount is neither assessable income nor exempt income of Jill, and NewIT cannot deduct the amount.

 (2) To the extent that you are entitled, or any of your *associates are entitled, to a share of the net income of the *personal services entity, or of any of your associates, and that income is:
 (a) *personal services income included in your assessable income under section 86‑15; or
 (b) any other amount that is attributable to that income;
that share is neither assessable income nor *exempt income of the entity receiving it.

86‑40  Salary payments shortly after an income year

 (1) If:
 (a) before the end of 14 July in a particular income year, you receive, as salary or wages, *personal services income of yours from the *personal services entity; and
 (b) failure to make the payment before the end of 14 July would have resulted in an amount of income being included in your assessable income under section 86‑15 for the preceding income year;
you are taken to have received the payment on 30 June of that preceding income year.

Example: Continuing example 2 in section 86‑20: Assume that NewIT is a small withholder for PAYG withholding purposes, and its PAYG payment period covering April 2001 to June 2001 is the quarter ending on 30 June 2001. NewIT's income for that period (after taking into account any reductions under sections 86‑20 and 86‑25) includes $20,000 that is Ron's personal services income, and NewIT pays this to Ron on 12 July 2001.

 The $20,000 that Ron receives is assessable income for the income year ended on 30 June 2001.

 (2) However, this section does not affect the time at which the *personal services entity is treated as having paid the salary or wages.

Note 1: Therefore neither the timing of the entity's deduction for the payment, nor the timing of the obligation to withhold amounts under section 12‑35 in Schedule 1 to the Taxation Administration Act 1953, is affected.

Note 2: However, these payments are treated as relating to the preceding income year for the purposes of the rules relating to payment summaries and PAYG credits (see Subdivisions 16‑C and 18‑A in Schedule 1 to the Taxation Administration Act 1953).

Subdivision 86‑B—Entitlement to deductions

Table of sections

86‑60 General rule for deduction entitlements of personal services entities
86‑65 Entity maintenance deductions
86‑70 Car expenses
86‑75 Superannuation
86‑80 Salary or wages promptly paid
86‑85 Deduction entitlements of personal services entities for amounts included in an individual's assessable income
86‑90 Application of Divisions 28 and 900 to personal services entities

86‑60  General rule for deduction entitlements of personal services entities

  A *personal services