Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_5:p4
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 5 (pt 4/11)
Character Range: 697876–700863

impact assessment of your project); or

 (b) *environmental protection activities.

Note: This may let you get a deduction relating to the property under a provision of this Act outside this Division (such as Division 42, which allows deductions for depreciation of plant used for the purpose of producing assessable income).

 (2) However, subsection (1) is subject to a provision of this Act that expressly provides that a particular use of property is taken not to be for the *purpose of producing assessable income.

Note: There is a list of some provisions of that kind in Note 2 to the definition of purpose of producing assessable income in subsection 995‑1(1).

[The next Division is Division 405.]

Division 405—Above‑average special professional income of authors, inventors, performing artists, production associates and sportspersons

Table of Subdivisions

 Guide to Division 405

405‑A Above‑average special professional income

405‑B Assessable professional income

405‑C Taxable professional income and average taxable professional income

Guide to Division 405

405‑1  What this Division is about

      Significant fluctuations can occur in the professional incomes of authors, inventors, performing artists, production associates and sportspersons.

      To lessen the impact of these fluctuations on your marginal tax rates, special tax rates apply if your professional income is above your average.

      This Division explains how the scheme works and sets out the rules for working out your above‑average special professional income.

Table of sections

405‑5 Special rate of income tax on your above‑average special professional income
405‑10 Overview of the Division

405‑5  Special rate of income tax on your above‑average special professional income

 (1) If you have *above‑average special professional income, the Income Tax Rates Act 1986 generally sets a special rate so that the amount of income tax you pay on the top 4/5 of your above‑average special professional income is effectively 4 times what you would pay on the bottom 1/5 of that income at *basic rates.

Note 1: Your overall income tax will be less only if 2 marginal rates of income tax would apply to your above‑average special professional income if it were treated as the top slice of your taxable income.

Note 2: Section 20F of the Income Tax Rates Act 1986 sets a different special rate if:

                  * family tax assistance (under Division 5 of Part II of that Act) would increase your tax‑free threshold (apart from that section); and

                  * any of your above‑average special professional income would be below the adjusted tax‑free threshold if that income were treated as the top slice of your taxable income.

 (2) The following diagram illustrates how the special rate works.

405‑10  Overview of the Division

For which income years do you have above‑average special professional income?

 (1) The first income year for