Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_9:p7
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 7/11)
Character Range: 675688–678669

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 of your *taxable primary production income.

 (4) If your *taxable non‑primary production income is $10,000 or more, your *averaging component equals your *taxable primary production income. Your averaging component does not include any of your taxable non‑primary production income.

 (5) The following diagram shows examples of these relationships.

The second and third columns show that as taxable non‑primary production income increases above $5,000 (up to a maximum of $10,000), less of it is counted in the averaging component.

Your gross averaging amount

392‑70  Working out your gross averaging amount

  Your gross averaging amount is the amount of the difference between the following amounts worked out under section 392‑35:

 (a) the income tax you would pay at the comparison rate;

 (b) the amount of income tax that you would pay on your *basic taxable income for the *current year at *basic rates.

Your averaging adjustment

392‑75  Working out your averaging adjustment

  Work out your averaging adjustment for the *current year using the formula:

How to work out your averaging component

392‑80  Work out your taxable primary production income

 (1) Work out your taxable primary production income