Document ID: chunk:federal_register_of_legislation:C2024C00866:section:46d:p1
Version: federal_register_of_legislation:C2024C00866
Segment Type: section
Provision Reference: s 46D (pt 1/2)
Character Range: 673047–675971

46D  Deemed income from financial assets—persons other than members of couples
 (1) This section applies to a person who is not a member of a couple.
 (2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.
 (3) This is how to work out the ordinary income that the person is taken to receive:

      Method statement
           Step 1. Calculate the total value of the person's financial assets and compare it with the person's deeming threshold.
                  Note 1: For financial assets see subsection 5J(1).
                  Note 2: For deeming threshold see subsection 46H(1).
           Step 2. This step applies only if the total value of the person's financial assets is equal to or less than the person's deeming threshold. Multiply the total value of the financial assets by the below threshold rate. The result represents the ordinary income that the person is taken to receive per year on his or her financial assets.
                  Note: For below threshold rate see subsection 46J(1).
           Step 3. This step applies only if the total value of the person's financial assets is higher than the person's deeming threshold. Work out the person's deemed income as follows:

                (a) multiply the deeming threshold by the below threshold rate;
                (b) subtract the deeming threshold from the total value of the person's financial assets;
                (c) multiply the remainder by the above threshold rate;

                  Note: For above threshold rate see subsection 46J(2).

                (d) add up the amounts worked out at paragraph (a) and (c): the result represents the ordinary income that the person is taken to receive per year on his or her financial assets.
Example: How deemed income of a person who is not a member of a couple is worked out per year for the person's financial assets other than financial assets described in subsection (3A) (using rates and deeming thresholds in force on 1 July 2022).
 Elaine, a single pensioner, has $164,000 worth of financial assets, made up of $150,000 in proceeds from the sale of Elaine's principal home and $14,000 of other financial assets. Elaine intends to apply $100,000 of the proceeds of sale to purchase another residence that is to be Elaine's principal home. The below threshold rate is 0.25%. The above threshold rate is 2.25%.
 The total value of Elaine's financial assets ($64,000), disregarding part of the proceeds of sale ($100,000—see subsection (3A)), is higher than Elaine's deeming threshold ($56,400—see subsection 46H(1)). So, the deeming threshold is multiplied by the below threshold rate (0.25%):

 Elaine's deeming threshold of $56,400 is subtracted from the total value of Elaine's financial assets ($64,000), disregarding part of the proceeds of sale ($100,000—see subsection (3A)). The