Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_9:p6
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 6/11)
Character Range: 673157–675882

year if the income tax you would pay at the *comparison rate equals the amount of income tax you would pay at *basic rates.

Note: The 2 amounts will be equal if:

                  * your basic taxable income and your average income are both below the tax‑free threshold (disregarding any alteration of the threshold by way of family tax assistance); or

                  * your average income equals your basic taxable income for the current year.

How to work out the comparison rate

392‑40  Identify income years for averaging your basic taxable income

  The income years over which you must average your *basic taxable income are:

 (a) if this Division has applied to your assessment for at least 4 income years in a row (including the *current year)—the current year and the 4 previous income years; or

 (b) if this Division has applied to your assessment for less than 4 income years in a row (including the *current year)—those income years and the last income year before them.

Note: You may need to average your basic taxable income for one or more income years before the 1998‑99 income year. See section 392‑1 of the Income Tax (Transitional Provisions) Act 1997.

392‑45  Work out your average income for those years

 (1) Work out your average income in this way:

      Method statement

           Step 1. Add up your *basic taxable income for each of the income years over which you must average your basic taxable income.

           Step 2. Divide the sum by the number of those income years.

           Step 3. Round the result down to the nearest whole dollar if the result is not already a number of whole dollars.

 (2) Your basic assessable income for an income year is your assessable income for the income year, less:

 (a) any amount included in your assessable income under subsection 27B(1A) or (3) (Assessable income to include certain superannuation and kindred payments) of the Income Tax Assessment Act 1936; and

 (b) any *net capital gain included in your assessable income under Division 102 of the Income Tax Assessment Act 1997.

392‑50  Work out the income tax on your average income at basic rates

  Work out the amount of income tax that you would pay on your *average income for the *current year at *basic rates.

392‑55  Work out the comparison rate

  Work out the comparison rate using the formula:

Subdivision 392‑C—How big is your averaging adjustment?

Guide to Subdivision 392‑C

392‑60  What this Subdivision is about

      This Subdivision explains how to work out the amount of the averaging adjustment of your income tax for the current year (whether it is a tax offset or is used by the Income Tax Rates Act 1986 to set the rate at