Document ID: chunk:federal_register_of_legislation:C2016C00969:section:12:p1
Version: federal_register_of_legislation:C2016C00969
Segment Type: section
Provision Reference: s 12 (pt 1/4)
Character Range: 48839–51439

12  Penalty tax
 (1) Where:
 (a) for the purpose of making an assessment, the Commissioner has calculated the trust recoupment tax that is assessable to a person or persons in relation to a taxable amount, not being a secondary taxable amount arising under subsection 6(3);
 (b) the tax avoidance scheme to which the taxable amount relates was entered into after 28 April 1983 and before the commencement of this Act;
 (c) the assessment is to be made in a quarter (in this subsection referred to as the assessment quarter) commencing after the end of the year of income that immediately succeeded the year of income to which the taxable amount relates; and
 (d) the index number in relation to the quarter immediately preceding the assessment quarter exceeds the index number in relation to the March quarter of the year of income that immediately succeeded the year of income to which the taxable amount relates;
the person is liable or, in the case of persons included in an eligible beneficiaries class, the persons are jointly and severally liable, to pay, by way of penalty, additional tax equal to an amount ascertained in accordance with the formula  where:

A is the amount of the trust recoupment tax referred to in  paragraph (a);
B is the index number in relation to the quarter immediately               preceding the assessment quarter; and
C is the index number in relation to the March quarter referred               to in paragraph (d).
 (2) Where:
 (a) for the purpose of making an assessment, the Commissioner has calculated the income tax that is assessable to a person in relation to a year of income (in this subsection referred to as the relevant year of income);
 (b) in the calculation of that income tax an amount was, or amounts were, included in the assessable income of the person by virtue of the application of section 7 in relation to a tax avoidance scheme or tax avoidance schemes entered into after 28 April 1983 and before the commencement of this Act;
 (c) if the amount or amounts had not been included in the assessable income of the person:
 (i) no income tax would have been assessable to the person in relation to the relevant year of income; or
 (ii) there would have been assessable to the person in relation to the relevant year of income an amount of income tax (in this subsection referred to as the amount of claimed tax) that is less than the amount of the income tax referred to in paragraph (a);
 (d) the assessment is to be made in a quarter (in this subsection referred to as the assessment quarter) commencing after the end of the year of income