Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 15/18)
Character Range: 5463346–5466214

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 section 82‑65, 82‑70 or 302‑145 (certain employment termination payments and superannuation benefits); and
 (b) any *net capital gain included in your assessable income under Division 102.

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 which you must pay extra income tax).

Table of sections
392‑65 What your averaging adjustment reflects

Your gross averaging amount
392‑70 Working out your gross averaging amount

Your averaging adjustment
392‑75 Working out your averaging adjustment

How to work out your averaging component
392‑80 Work out your taxable primary production income
392‑85 Work out your taxable non‑primary production income
392‑90 Work out your averaging component

392‑65  What your averaging adjustment reflects
 (1) Your averaging adjustment is a proportion of your gross averaging amount, taking account of:
 (a) your taxable primary production income (the part of your basic taxable income from your primary production business); and
 (b) your taxable non‑primary production income (the part of your basic taxable income from other sources).
Your averaging component is the means of taking into account the different parts of your basic taxable income in working out your averaging adjustment.
 (2) If your taxable non‑primary production income is less than or equal to $5,000, your averaging component equals the whole of your basic taxable income. (In other words, your averaging component includes all of your taxable primary production income and all of your taxable non‑primary production income.)
 (3) If your taxable non‑primary production income is between $5,000 and $10,000, a shading‑out system applies so that your averaging component includes some of your taxable non‑primary production income as well as all