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+{"_id":"passage_a0JRF000003eCVO2A2/p00388812","text":"## How tax applies if you're under 18 years old\n\nSpecial rules apply and you pay tax on certain income types at a higher rate on income you receive if you're under 18 years old. This rule was introduced to discourage adults from diverting income to their children.\n\nIf you aren't an [excepted person](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/your-income-if-you-are-under-18-years-old#Workoutifyouareanexceptedperson) or receiving [excepted income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/your-income-if-you-are-under-18-years-old#Exceptedincome), you pay tax on that income as below depending on your residency.\n\nYou pay the same [individual income tax rates](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents) as an adult if you're an excepted person or on excepted income.\n\n## If you are a resident\n\nTable 1: Tax rates for residents who are under 18 for 2024–25\n\nIncome for the year\n\nTax rates\n\n$0 – $416\n\nNil\n\n$417 – $1,307\n\nNil plus 66% of the excess over $416 (see [Note](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-if-you-re-under-18-years-old#Ifyouareanonresident))\n\nOver $1,307\n\n45% of the total amount of the income that is not excepted income\n\nTable 2: Tax rates for residents who are under 18 for 2020–21 to 2023–24\n\nIncome for the year\n\nTax rates\n\n$0 – $416\n\nNil\n\n$417 – $1,307\n\nNil plus 66%of the excess over $416 (see [Note](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-if-you-re-under-18-years-old#Ifyouareanonresident))\n\nOver $1,307\n\n45% of the total amount of the income that is not excepted income\n\n**Note**: This rate, or if it is greater, the rate payable on eligible taxable income if it were the top slice of total taxable income and the general rates applied.\n\n## If you are a non-resident\n\nTable 3: Tax rates for non-residents who are under 18 for 2024–25\n\nIncome for the year\n\nTax rates\n\n$0 – $416\n\n30% of the entire amount\n\n$417 – $713\n\n$124.80 plus 66% of the excess over $416 (see [Note 1](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-if-you-re-under-18-years-old#Howincomeistaxedifyouareunder18))\n\nOver $713\n\n45% of the entire amount\n\nTable 4: Tax rates for non-residents who are under 18 for 2020–21 to 2023–24\n\nIncome for the year\n\nTax rates\n\n$0 – $416\n\n32.5% of the entire amount\n\n$417 – $663\n\n$135.20 plus 66% of the excess over $416(see [Note 1](https://www.ato.gov.au/tax-rates-and-codes/tax-rates-if-you-re-under-18-years-old#Howincomeistaxedifyouareunder18))\n\nOver $663\n\n45% of the entire amount\n\n**Note 1**: This rate, or if it is greater, the rate payable on eligible taxable income if it were the top slice of total taxable income and the general rates applied.\n\n## How income is taxed if you are under 18\n\nTable 5: How income of a person under 18 years old is taxed\n\nIf you...\n\nThen...\n\nAre an excepted person\n\nyour net income is taxed at the same individual income tax rates as an adult\n\nOnly have excepted income, such as part-time employment income\n\nyour excepted net income is taxed at the same individual income tax rates as an adult\n\nHave some excepted income (such as part-time employment income) and some other income (such as a family trust distribution)\n\n- your excepted net income is taxed at the same individual income tax rates as an adult\n- your other income (after taking away deductions claimed for that income) will be taxed at higher rates\n\nOnly have other income (such as a family trust distribution)\n\nyour other income (after taking away deductions claimed for that income) will be taxed at higher rates","title":""}
+{"_id":"passage_a0JRF000003dbdt2AA/p00388226","text":"Income Tax (International Agreements) Amendment Bill (No.2) 1989\nDate Introduced: 2 November 1989\nHouse: House of Representatives\nPortfolio: Treasury\nDigest of Bill\nQ\nPurpose\nTo give legislative backing to agreements for the prevention of double\ntaxation and tax avoidance with Thailand and Papua New Guinea. and to amend the\nagreements with France and Singapore.\nBackground\nAustralia has agreements with a number of countries. including Francel\nWest Germany. New Zealandl the United States and the United Kingdom. Recently,\nsuch an agreement was signed with China. The agreements all have a common aim,\nthe prevention of double taxation and avoidance, and this is reflected in the\ncontent of the agreements which are substantially similar. The agreements work\nbe giVing the country of residence the exclusive right to tax certain catagories\nof income and allowing the remaining income to be taxed by the country where it\nwas sourced. If the income is then taxed by the country of residence, it is to\nallow a credit for tax paid in the country of origin. Examples of catagories\nreserved for tax by the country of residence include:\n\"Industrial or commercial profits where the taxpayer has no permanent\nestablishment in the country where the profits are earned;\n-Most pensions and purchased annuities;\n\"Civil servants renumeration; and\n... Air transport pro'fits.\nA recent feature of many agreements is the inclusion of provisions to\nprotect schemes designed to encourage \"investment in certain countries. These\ncountries offer tax concessions or tax free treatment of profits where the body\nestablishes a permanent operation in the country. As a resultl where the body\nreturns profits to Australia, the full profit will be included in taxable income\nand no credit, or a reduced credit, will be available for the tax paid in the\ncountry of source. This largely cancels out the benefit available and reduces\nany incentive offered by the concessional tax treatment. To remove this effect,\n-1-\ncertain agreements contain a provision that the country of residence is to deem\nthat the tax has actually-been paid at the normal rate.\nThe treatment of foreign sourced income in Australia is further complicated\nby the foreign tax credit rules. In announcing proposed changes to these rules,\nfuture amendments to the agreements were foreshadowed.\nMain Provisions\nClauses 5, 6 and 7 will give the Protocols with France and Singapore,\nwhich amend existing agreements. and the agreements with Papua New Guinea and\nThailand force in Australian law. The text of the Protocols and agreements is\ncontained in the Schedules to the Bill and a brief discription of each follows.\nSingapore\nThe changes to this agreement, entered into in 1969, will bring the tax\ntreatment of dividends received by Australians into line with the foreign tax\ncredits law. As well, the definition of permanent establishment will be expanded\nto reflect current agreements. The right to tax shipping profits will be\nclarified to give the country of residence the exclusive right to tax such\nprofits. A provision designed to help give effect to concessional tax treatment\nin Singapore will also be included.\nFrance\nThe main amendments will update an-d clarify this agreement. The main change will\nprovide that if Australia negotiates a lesser rate of tax on dividends with\nanother member of the OECD. negotiations are to be held to provide the same\ntreatment in respect of France.\nPapua New Guinea and Thailand\nThe agreements with these two countries re'l:lect the current tax agreements\nentered into with other countries. For example, income from land will be taxable\nin the country where the land is situated. and business profits may only be\ntaxed in the source country if the entity has a permanent establishment in the\ncountry. Dividends, interest and royalties may be taxed by either country but\nthere are limits on the tax charged by the source country, while pensions will\ngenerally only be taxable in the country of residence. The measures to avoid\ndouble taxation will be based on each country allowing a credit for tax paid in\nthe other country. The provision designed to assist schemes designed to attract\ninvestment to these countries will be included in both agreements.\nAnti - avoidance measures will be concentrated on the exchange of Infor,mation\nbetween tax officials in Australia and the country concerned. However, no\ncountry will be obliged to provide information that could not be obtained under\nthe laws of the country to which the information is to be supplied or to\ndisclose information that would be contrary to public policy.\nAn agreement may be terminated, five years after it commences to operate, by\ngiving one years notice.\n-2-\n---- --------- ------\nFor further information. if required, contact the Economics and Commerce\nGroup.\n14 November 1989 Bills Digest service\nLegislative Research Service\no\no\nThis Digest does not have any official legal status. Other sources should be\nconsulted to determine the subsequent official status of the Bill.\n© Commonwealth of Australia 1989\nExcept to the extent of the uses permitted under the Copyright Act 1968. no\npart of this publication may be reproduced or transmitted in any form or by any\nmeans, including information storage and retrieval systeml without the prior\nwritten consent of the Department of the Parliamentary Library. Reproduction is\npermitted by Members of the Parliament of the Commonwealth in the course of\ntheir official duties.","title":""}
+{"_id":"passage_a0JRF000003R9IP2A0/p00377596","text":"## Partnership\n\nA partnership is a group or association of people who run a business together and share the income or losses from the business between themselves.\n\nA written partnership agreement is not required for a partnership to exist but can help:\n\n- prevent misunderstandings and disputes about what each partner brings to the partnership\n- set out how business income and losses are to be shared between the partners (equally between partners or not)\n- set out how the business is to be managed.\n\nIf there is no written agreement, income and losses are equally distributed between partners.\n\nThe partners in a partnership are not employees of the partnership, but they are able to employ other workers.\n\nPartners are responsible for their own superannuation. However, the partnership is required to pay super for its employees.\n\n### Key tax obligations\n\nA partnership:\n\n- has its own TFN\n- must lodge an annual partnership return showing all business income and deductions and how its income or losses are distributed to the partners\n- must apply for an [ABNExternal Link](https://abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement) and use it for all business activities\n- must [register for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst) if it\n\n- has annual [GST turnover](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst#WorkingoutyourGSTturnover) of $75,000 ($150,000 for not-for-profit organisations) or more\n- provides taxi, limousine or ride-sourcing services (regardless of GST turnover)\n- wants to claim fuel tax credits\n- may be required to lodge [business activity statements](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/business-activity-statements-bas), for example if it is registered for GST, has employer obligations such as pay as you go withholding, or have pay as you go instalments\n- does not pay tax\n\n- each partner reports their share of the net partnership income or loss in their own tax return and is personally liable for any tax that may be due on that income.\n\nA partnership and its partners cannot claim a deduction for money they withdraw from the business. Amounts you take from a partnership:\n\n- are not wages for tax purposes\n- may affect what your share of the partnership income is that you have to pay tax on.\n\nYou will need to be aware of the steps to take if you change the makeup of your [partnership](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/changing-selling-or-closing-your-business/changing-the-makeup-of-a-partnership).","title":""}
+{"_id":"passage_a0JRF000003iDxV2AU/p00392033","text":"## How to vary your PAYG instalment amount (option 1)\n\nYou vary your PAYG instalment amount on your activity statement or instalment notice.\n\nUse the following steps to calculate your varied instalment amount.\n\n### 1. Check that you use the instalment amount option\n\nCheck that there is an instalment amount at **T7** on your activity statement or instalment notice.\n\nIf there is not, you need to [vary your instalment rate (option 2)](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments#HowtovaryyourPAYGinstalmentrateoption2) instead.\n\nIf you varied your instalment amount in a previous quarter of the income year, the amount shown at **T7** will be your previously varied amount.\n\n### 2. Estimate your instalment income for the year\n\nYour [instalment income](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/calculate-your-payg-instalments/instalment-income) is your gross business and investment income, excluding GST.\n\n### 3. Estimate the tax on your instalment income for the year\n\nYou need to estimate the tax on your instalment income for the full income year. This is the amount you will prepay in your instalments.\n\n[PAYG instalments calculator](https://www.ato.gov.au/calculators-and-tools/payg-instalments-calculator)\nYou can use the calculator to:\n\n- estimate your tax for the year\n- work out your varied instalment amount\n- work out your entitlement to credits for previous PAYG instalments.\n\nIf you prefer, you can [manually estimate the tax on your instalment income](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments/estimating-tax-on-your-instalment-income).\n\nIf your estimated instalment income (step 2) is zero, you can vary your instalment amount to zero. You do not need to calculate your estimated tax.\n\n### 4. Work out how much to pay for each instalment\n\nThe amount you pay depends on how much you have paid in previous instalments this year. After each instalment you should have paid a certain proportion of your total estimated tax.\n\nWork out how much to pay in each instalment for:\n\n- [quarterly instalments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments#Ifyoupayquarterlyinstalments)\n- [2 instalments per year](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments#Ifyoupaytwoinstalmentsperyear).\n\nIf you have already paid more than your total estimated tax for the year, you can claim a credit for the overpayment. You do not have to claim a credit. When you lodge your tax return, your PAYG instalments are credited against your income tax and any excess is refunded.\n\n#### If you pay quarterly instalments\n\nYou can use the [PAYG instalments calculator](https://www.ato.gov.au/calculators-and-tools/payg-instalments-calculator) to work out your quarterly instalment amounts.\n\nOr you can manually work out your quarterly instalment amounts as follows with the:\n\n- first quarter\n\n- 25% of your estimated tax for the income year\n- second quarter\n\n- 50% of your estimated tax for the income year\n- *minus* the amount of your first quarter instalment\n- third quarter\n\n- 75% of your estimated tax for the income year\n- *minus* the amount of your first and second quarter instalments\n- *plus* any PAYG instalment credits you claimed for the second quarter\n- fourth quarter\n\n- 100% of your estimated tax for the income year\n- *minus* the amount of your first, second and third quarter instalments\n- *plus* any PAYG instalment credits you claimed for the second and third quarters.\n\n#### If you start paying instalments in the second, third or fourth quarters\n\nIf you are new to PAYG instalments this year, you calculate your varied instalment amount as though the first quarter for which you pay instalments is the first quarter of the year.\n\nFor example, if you start paying instalments in the second quarter, you would treat this as your first quarter and pay 25% of your estimated tax in that quarter.\n\nAs you will not pay all 4 quarterly instalments in your first year, at the end of the year your total instalments will be less than 100% of your estimated tax.\n\n**Example: varying the instalment amount**\n\nCari receives income from her investments. Her quarterly PAYG instalment amount is $5,000.\n\nCari pays this amount in her first quarter (1 July to 30 September) and second quarter (1 October to 31 December).\n\nIn January, Cari sells a portion of her investments and decides to vary her PAYG instalment amount on her third quarterly activity statement (1 January – 31 March) to take account of her new situation.\n\nCari uses the PAYG instalment calculator and estimates the tax on her instalment income for the financial year will be $14,000. Cari works out her varied PAYG instalment as follows:\n\n- Estimated tax:\n\n$14,000\n- Multiplied by 75% (how much to pay for the third quarter):\n\n$14,000 × 75% = $10,500\n- Minus amounts paid for the first and second quarters:\n\n$10,500 − ($5,000 + $5,000) = $500\n\nThe varied amount Cari needs to pay in the third quarter is $500.\n\nIn the fourth quarter Cari will pay her total estimated tax minus the amounts paid in the first 3 quarters:\n\n- $14,000 − ($5,000 + $5,000 + $500) = $3,500\n\nIn the second half of the year, Cari's investment income increases. After she lodges her tax return at the end of the year, her notice of assessment shows her income tax is $15,500.\n\nAs Cari has paid $14,000 in PAYG instalments, she will pay the income tax shortfall of $1,500 (income tax of $15,500 − $14,000 instalments already paid.)\n\nCari's varied instalments were more than 85% of her actual tax liability, so the ATO does not charge any interest on the shortfall.\n\nEnd of example\n#### If you pay 2 instalments per year\n\nYour instalments are due in April and July. You pay:\n\n- April\n\n- 75% of your estimated tax for the income year\n- July\n\n- 100% of your estimated tax for the income year\n- *minus* the amount of the instalment you paid in April.\n\n### 5. Complete your activity statement or instalment notice\n\nOn your activity statement or instalment notice, enter:\n\n- your estimated tax for the year (from step 3) at **T8** – if this is nil, enter 0\n- your varied instalment amount for the period (from step 4) at **T9**. – if the amount is nil or negative, enter 0\n- the [reason you have varied](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments#Variationreasoncodes) your instalment at **T4**\n- your varied instalment amount at **5A** – if you are filling in a paper form, enter the amount from **T9**.\n\nIf the varied instalment amount that you worked out at step 4 is negative, you can claim a credit for your earlier PAYG instalments made within the same financial year.\n\nTo claim a credit, enter your varied instalment amount at **5B** (credit from PAYG income tax instalment variation). Enter the amount as a positive number (do not show the minus sign).\n\nYou do not have to claim a credit. When you lodge your tax return, your PAYG instalments are credited against your income tax and any excess is refunded.\n\n### 6. Lodge and pay\n\n[Lodge and pay](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/lodging-and-paying-payg-instalments) by the due date on your activity statement or instalment notice.","title":""}
+{"_id":"passage_a0JRF000003eNKL2A2/p00388997","text":"A sleepover is when an employee is required to sleep overnight at their client’s premises. It’s different to a [24 hour care shift](https://library.fairwork.gov.au/viewer/?krn=K600557). The span for a sleepover is a continuous period of 8 hours.\n\nEmployees must be rostered or paid for a minimum of 4 hours’ work before or after the sleepover period.\n\nSee [ Hours of work in the Social, Community, Home Care and Disability Services Industry Award](https://www.fairwork.gov.au/find-help-for/disability-support-and-aged-care-services/understanding-schads/hours-of-work-in-the-schads-award#sleepovers) for more information.\n\n## Is it considered one shift?\n\nYes. The sleepover and the hours worked or paid for before and/or after the sleepover are counted as one continuous shift.\n\n>\n> ### Example: Work before or after a sleepover\n>\n>\n>\n> Andrea works in disability support services.\n>\n>\n>\n> She is rostered to work 4pm-11pm on a Wednesday with a sleepover from 11pm to 7am.\n>\n>\n>\n> As the sleepover and the period of work is considered one shift, Andrea's shift starts at 4pm on Wednesday and finishes at 7am on Thursday.\n>\n>\n>\n> Andrea's shift is a night shift, because it finishes after midnight. She'll be paid the night shift penalty rate for the hours worked on Wednesday.\n>\n>\n>\n\n## Is a sleepover a break?\n\nNo. A sleepover can’t count as a break between rostered work periods, or as a break in a broken shift.\n\nSee [Broken shifts in the Social, Community, Home Care and Disability Services Award](https://library.fairwork.gov.au/viewer/?krn=K600303) for more information.\n\n## Does a sleepover count as ordinary hours of work?\n\nNo. Only work before and/or after the sleepover counts as ordinary hours.\n\n## What is an employee paid during a sleepover?\n\nSee [Pay for sleepovers in the Social, Community Services, Home Care and Disability Services Award](https://library.fairwork.gov.au/viewer/?krn=K600726) for more information.\n\n## Do shift penalty rates apply?\n\nShift penalty rates will apply when a shift meets the definition of an afternoon, night or public holiday shift.\n\nThey’re only paid for the hours the employee works before and/or after a sleepover.\n\n>\n> ### Example: Sleepover and shift allowances not on a weekend\n>\n>\n>\n> Orla works from 5pm until 10pm Monday, does a sleepover from 10pm until 6am then works from 6am to 9am on Tuesday.\n>\n>\n>\n> A night shift is a shift finishing after midnight or starting before 6am Monday to Friday.\n>\n>\n>\n> As Orla’s shift finishes at 9am, she gets paid the 15% night shift penalty rate for the hours worked from 5pm to 10pm on Monday and 6am to 9am on Tuesday.\n>\n>\n>\n\n>\n> ### Example\n>\n>\n>\n> Gerry works at a youth crisis centre.\n>\n>\n>\n> He is rostered to do a sleepover on a Tuesday night from 11pm to 7am and then work from 7am to 12pm on Wednesday.\n>\n>\n>\n> The sleepover period is considered a period of duty but doesn't count as ordinary hours.\n>\n>\n>\n> This means that Gerry's shift starts at 11pm and finishes at 12pm the following day.\n>\n>\n>\n> The shift is a night shift because it finishes after midnight.\n>\n>\n>\n> Gerry is paid the 15% night shift penalty rate for the hours worked from 7am to 12pm on Wednesday.\n>\n>\n>\n\n## Are shift penalty rates paid for hours worked on weekends before or after a sleepover?\n\nNo. Shift penalty rates don’t apply to hours worked on Saturdays or Sundays. Employees working before or after a sleepover on a Saturday or Sunday get paid:\n\n- 150% of their ordinary rate of pay for work performed between midnight Friday and midnight Saturday\n- 200% of their ordinary rate of pay for work performed between midnight Saturday and midnight Sunday.\n\nWhere work is performed on a Monday after a Sunday sleepover, the employee is paid the 15% night shift penalty rate for the morning shift.\n\nCasual employees also get their casual loading.\n\n>\n> ## Example: Sleepover and shift allowances on weekends\n>\n>\n>\n> Bernie has a shift on Sunday afternoon from 3pm to 10pm, does a sleepover from 10pm to 6am, and then works from 6am to 9am on Monday. Bernie has agreed to work 10 ordinary hours per shift.\n>\n>\n>\n> Bernie gets paid:\n>\n>\n>\n> - 200% of his ordinary hourly rate from 3pm to 10pm on Sunday\n> - 4.9% of the standard rate as a sleepover allowance\n> - 15% night shift penalty from 6am to 9am on Monday.\n>\n>","title":""}
+{"_id":"passage_a0JRF000003bUjl2AE/p00386253","text":"## Staking and the role of forgers\n\nStaking involves locking your existing crypto asset tokens to validate transactions on the blockchain and create new blocks. The users who create new blocks in this system are known as forgers.\n\nProof of stake is a consensus mechanism, where forgers hold units of a crypto asset to validate transactions (like a miner on a proof of work blockchain) and create new blocks. When a transaction is verified on the network as valid there is a consensus.\n\n### Example: staking existing crypto assets\n\nAnastasia holds 50,000 Coin A tokens, which she stakes to a Coin A pool as a premium staker.\n\nAnastasia receives additional Coin A tokens when her pool participates in consensus. Anastasia also receives a small payment of Coin A tokens from the node leader for supporting their node.\n\nThe money value of the additional Coin A tokens that Anastasia receives is included in her ordinary assessable income at the time she receives the tokens.\n\nThe cost base of Anastasia’s additional Coin A tokens is their market value at the time she receives them.\n\nEnd of example## Staking rewards and income tax treatment\n\nAs a forger who creates a new block, you'll usually receive a reward in the form of additional tokens from holding the original tokens. The money value of additional tokens is **ordinary income** at the time you receive the tokens. You need to declare the income in your tax return as [other income](https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2025/income/other-income/other-income).\n\nOther consensus mechanisms that reward existing token holders for their role in maintaining the network have the same tax outcome. This includes rewards you receive through:\n\n- proof of authority and proof of credit mechanisms by validators\n- agent nodes and guardian nodes\n- premium stakers and other entities performing comparable roles.\n\nYou also receive **ordinary income** equal to the money value of the tokens if you receive as a reward for either:\n\n- participating in 'proxy staking'\n- voting your tokens in a consensus mechanism.\n\nYou also need to declare this income in your tax return as [other income](https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2025/income/other-income/other-income).\n\nWhen you dispose of crypto assets you earn through staking, you will need to [work out if you make a capital gain or loss](https://www.ato.gov.au/individuals-and-families/investments-and-assets/crypto-asset-investments/how-to-work-out-and-report-cgt-on-crypto).\n\n## Airdrops and income tax treatment\n\nAirdrops are a marketing tool that distribute crypto assets through a group of people to build their use and popularity. Some projects 'airdrop' new tokens to existing token holders as a way of increasing the supply of tokens.\n\nThe money value of an established token you receive by airdrop is **ordinary income** at the time you receive it. You need to declare this in your tax return as [other income](https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2025/income/other-income/other-income).\n\n### Example: airdrop tokens and market value\n\nMerindah has held Coin A tokens since December 2024, entitling her to receive monthly BTT airdrops from February 2025.\n\nThe money value of the Coin B tokens that Merindah receives for holding her Coin A tokens is ordinary assessable income.\n\nThe cost base of Coin B tokens that Merindah receives by airdrop is their market value at the time she receives them.\n\nEnd of example## Initial allocation airdrops\n\nA crypto project may make an initial airdrop of tokens that is the very first distribution of its tokens. These tokens are the initial allocation, if there has been no trading in the project's tokens prior to the airdrop.\n\nIf you receive tokens distributed in an initial airdrop you do not derive ordinary income or make a capital gain at the time you receive them.\n\nWhere the project issues these tokens for free (without any payment made for the tokens), they have a cost base of zero ($0). These tokens don't have a market value at the time of the initial airdrop because they have not previously been traded.\n\nWhere these tokens are not free, that is you have made a payment in return for receiving the token, the cost base of the tokens will be amount that you pay to acquire them.\n\nA [CGT event](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/cgt-events) happens when you dispose of the tokens. If you hold your tokens for 12 months or more, you may be entitled to the CGT discount.\n\n### Example: capital gain and CGT discount on initial airdrop token\n\nCswap launched its own native protocol token, CX, through a community airdrop.\n\nJosh is an eligible account holder of the Cswap protocol and received an initial allocation of 800 CX tokens on 16 September 2023.\n\nJosh does not derive ordinary income or make a capital gain as a result of the receipt of the 800 CX.\n\nOn 25 May 2025, Josh sold the 800 CX for $4,000. Because the cost base of the CX tokens was zero, Josh makes a total capital gain of $4,000 in the 2024–25 income year from the sale of the CX.\n\nJosh is also eligible to reduce his total capital gain using the CGT discount, as he held his CX for more than 12 months.\n\nEnd of example\n\n### Example: capital gain on an initial airdrop token that requires payment\n\nTXP launched its own native protocol token, HXP, through an initial airdrop.\n\nTXP distributed the new HXP to participants who paid an amount for the new token.\n\nCalista pays $1 for each token and receives an initial allocation of 1,000 HXP tokens.\n\nCalista does not derive ordinary income or make a capital gain as a result of receiving the 1,000 HXP.\n\nCalista later sells the 1,000 HXP for $4,000. Because the cost base of the CX was $1,000, Calista makes a capital gain of $3,000 from the sale of the HXP.","title":""}
+{"_id":"passage_a0JRF000003fpT42AI/p00390216","text":"# ABN entitlement\n\nNot everyone is entitled to an ABN.\n\nYou're entitled to an ABN if you're:\n\n- [carrying on](https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement#Whatcarryingonanenterprisemeans) or [starting](https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement#Startupactivities) an enterprise in Australia\n- making supplies connected with Australia's [indirect tax zone](https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement#BusinessslocatedoutsideAustralia)\n- a [Corporations Act company](https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement/companies-and-other-entities).\n\n**You may face prosecution or criminal charges if you apply for an ABN, register for GST and claim GST refunds when you’re not entitled.**\n\nWhen you apply for an ABN, you will be asked questions to help us determine whether you are carrying on an enterprise.\n\nYou may be subject to an [ABN entitlement review](https://www.abr.gov.au/who-we-are/our-work/abr-integrity#ABNentitlementreviews) at any time. If we conduct a review, you'll be asked to provide evidence that you commenced, or took steps to commence, your business or enterprise from the start date provided in your ABN application.\n\n[Apply for an ABNExternal link](https://abr.gov.au/ABRWeb/AbnApply.abr?pid=71)\n\n## Carrying on an enterprise\n\nAn enterprise includes activities done in the form of a business, as well as some other activities, including:\n\n- acting as the trustee of a super fund\n- operating a charity\n- renting or leasing property.\n\nThere is no single test to determine if you're carrying on a business. Features of a business include:\n\n- the activity is a significant commercial activity, involving commercial sales of products or services, and is of a reasonable size and scale\n- there is an intention to make a profit from the activity as demonstrated by a business plan – unlike with a hobby\n- the activity is repeated\n- the activity is systematic, organised and carried on in a business-like way and records are kept\n- the activity is carried on in a similar way to that of other businesses in the same or similar industry\n- the entity has relevant knowledge or skill.\n\nFor more information, see** **[Section 9-20External link](https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/antsasta1999402/s9.20.html) *A New Tax System (Goods And Services Tax) Act 1999.*\n\n## Commencement activities\n\nIf your business or other enterprise isn't yet underway, you'll need to have undertaken commencement activities such as:\n\n- advertising, setting up a social media account or a website for the business\n- purchasing business cards or stationery for the business\n- obtaining business licences or insurance to operate (such as public liability and professional indemnity)\n- leasing or purchasing premises, equipment or stock for the business\n- issuing quotes or bidding for work\n- consulting with financial, business or tax advisors\n- applying for finance\n- buying a business.\n\nWhile you don't need to have undertaken all of these commencement activities, you would be expected to have undertaken at least some of them and be able to provide evidence if we request it.\n\n## Employee or contractor\n\nYou're not entitled to an ABN for work that you carry out as an employee – including as an apprentice, trade assistant or labourer – even if you or your employer calls it contracting. An employer shouldn't ask you to get an ABN as a condition of employment.\n\nFor more information, see [Employee or contractorExternal link](https://www.ato.gov.au/business/employee-or-contractor/) on the ATO website.\n\n## Renting out a residential property\n\nWhile renting out an investment property may constitute an enterprise, renting out a **residential** property doesn't generally give rise to GST or pay as you go withholding obligations, so residential property investors may not need an ABN.\n\n## Foreign businesses operating in Australia\n\nIf your business or organisation is located outside Australia, you may be entitled to an ABN if you are carrying on an enterprise:\n\n- in Australia\n- that involves making supplies connected with Australia's indirect tax zone – defined as including Australia but not its external territories or certain offshore areas.\n\n## Registering your superannuation entity\n\nBefore applying for an ABN, a superannuation entity (for example [APRA regulated fundsExternal link](https://www.ato.gov.au/Super/APRA-regulated-funds/Services-and-support/APRA-regulated-fund-support/), ATO regulated self-managed super funds) must be set up correctly. You can apply for an ABN as part of the [registration processExternal link](https://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up/Register-your-fund/).","title":""}
+{"_id":"passage_a0JRF000003i0U12AI/p00391840","text":"## When to provide a tax invoice\n\nIf a customer asks for a tax invoice, you must provide one within 28 days, unless it is for a sale of $82.50 (including GST) or less.\n\nThe information a tax invoice must include depends on:\n\n- the sale amount\n- the sale type (for example, a sale that includes both taxable and non-taxable items)\n- who issues the tax invoice.\n\n## Sales under $1,000\n\nTax invoices for taxable sales of less than $1,000 must include enough information to clearly determine the following 7 details:\n\n1. Document is intended to be a tax invoice.\n2. Seller's identity.\n3. Seller's Australian business number (ABN).\n4. Date the invoice was issued.\n5. Brief description of the items sold, including the quantity (if applicable) and the price.\n6. GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly 1/11 of the total price, as a statement which says, 'Total price includes GST.'\n7. Extent to which each sale on the invoice is a taxable sale.\n\n### Example 1: tax invoice for a sale under $1,000\n\nEnd of example\n## Sales of $1,000 or more\n\nTax invoices for sales of $1,000 or more also need to show the buyer's identity or ABN.\n\nIf your tax invoices meet the requirements for sales of $1,000 or more, you can also use them for sales of lesser amounts.\n\nExample 2 shows:\n\n- GST included in each line item\n- the sale is clearly identified as being fully taxable by the words 'Total price includes GST'\n- the buyer's identity for sales of $1,000 or more.\n\n### Example 2: tax invoice for a sale of $1,000 or more\n\nEnd of example\nIf you supply or receive an invoice that only has a figure at a [wine equalisation tax-goods services tax (WEG) label](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/tax-invoices/invoices-with-a-weg-label), you need further information to claim GST credits and for it to be considered a valid tax invoice.\n\n[GSTR 2013/1](https://www.ato.gov.au/law/view/document?docid=GST/GSTR20131/NAT/ATO/00001) *Goods and services tax: tax invoices* sets out the information requirements for a tax invoice in more detail.\n\n## Taxable and non-taxable sales\n\nA tax invoice that includes taxable and non-taxable items, must clearly show which items are taxable. Items are non-taxable if they are [GST-free](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/when-to-charge-gst-and-when-not-to/gst-free-sales) or [input-taxed](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/when-to-charge-gst-and-when-not-to/input-taxed-sales). The tax invoice must also show:\n\n- each taxable sale\n- the amount of GST to be paid\n- the total amount to be paid.\n\nUse ASIC's MoneySmart [GST calculatorExternal Link](https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/gst-calculator) to calculate the amount of GST you will pay or should charge customers.\n\n[GST 2001/8](https://www.ato.gov.au/law/view/document?docid=GST/GSTR20018/NAT/ATO/00001) *Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts* provides more detail about apportioning.\n\n## Digital invoices\n\nA tax invoice doesn't need to be issued in paper form.\n\nFor example, you can issue a tax invoice to a customer by emailing an invoice in portable document format (PDF) or other digital formats.\n\nAny digital record or document transmitted to the customer needs to contain all the required information to be a valid tax invoice.\n\n## eInvoicing\n\nAustralia has adopted the [Peppol](https://www.ato.gov.au/businesses-and-organisations/einvoicing/peppol) framework as the common standard and network for eInvoicing. eInvoicing (Peppol Invoice) is an automated direct exchange of invoices between a supplier's and buyer's software.\n\nSome eInvoices may not include words such as ‘Tax Invoice’ or’ GST invoice’. However, we consider that an eInvoice satisfies the requirement that the ‘document is intended to be a tax invoice’ if the eInvoice is issued by a supplier in accordance with the A-NZ Invoice Specification under the Peppol framework, and it contains all the mandatory data.\n\nFind out more about [eInvoice data requirements](https://www.ato.gov.au/businesses-and-organisations/einvoicing/einvoicing-for-government/guide-to-receiving-and-processing-einvoices/einvoice-data-requirements).\n\n## Rounding of GST\n\nWhere an amount of GST includes a fraction of a cent, special rounding rules apply.\n\nWhere there is only one taxable sale on a tax invoice, the amount of GST should be rounded to the nearest cent (rounding 0.5 cents upwards).\n\nWhere there is more than one taxable sale on a tax invoice, there are 2 rules known as the total invoice rule and the taxable supply rule.\n\n**Total invoice rule** – total and then round GST for each taxable sale to the nearest cent (rounding 0.5 cents upwards).\n\nOr if all taxable sales on a tax invoice include an amount of GST exactly 1/11 of the price, add up the GST-exclusive value of each taxable sale, calculate GST on that amount and then round to the nearest cent (rounding 0.5 cents upwards).\n\n**Taxable sale rule** – work out the amount of GST for each individual taxable sale. Where the unrounded amount of GST has more decimal places than your accounting system can record, round up or down as appropriate. Then add the individual amounts and round this total to the nearest cent (rounding 0.5 cents upwards).\n\nYou and your customers don't need to use the same rounding rules.\n\n## Agency relationships\n\nSpecial rules apply to tax invoices for transactions carried out through agents. For more information see [GSTR 2000/37](https://www.ato.gov.au/law/view/document?docid=GST/GSTR200037/NAT/ATO/00001) *Goods and services tax: agency relationships and the application of the law*.\n\n## Recipient-created tax invoices\n\nIn most cases, tax invoices are issued by a supplier. However, in special cases, you, as the purchaser or recipient of the goods or services, may issue a tax invoice for your purchases. This is known as a recipient-created tax invoice (RCTI).\n\n### When you can issue an RCTI\n\nYou can issue an RCTI if:\n\n- you and the supplier are both registered for GST at the time the RCTI is issued\n- you and the supplier agree in writing that you may issue an RCTI and they won't issue a tax invoice\n- the agreement is current and effective when you issue the RCTI\n- the Commissioner has determined that the type of goods or services sold under the agreement can be invoiced using an RCTI.\n\nUse the [Recipient Created Tax Invoice Determination 2023](https://www.ato.gov.au/law/view/view.htm?docid=%22ops%2Fli202320%2F00001%22) to find out what goods and services you can issue an RCTI for.\n\nThe determination also outlines requirements that you must include in the written agreement between you and the supplier.\n\nYour written agreement can either be a separate document specifying the sales, or you can embed this information or specific terms in the tax invoice.\n\nUse the [Recipient-created tax invoices](https://www.ato.gov.au/forms-and-instructions/recipient-created-tax-invoices) form as a template for creating RCTIs, or as a reference for information you need to create your own RCTI.\n\nSee [GSTR 2000/10](https://www.ato.gov.au/law/view/document?DocID=GST/GSTR200010/NAT/ATO/00001) *Goods and services tax: recipient created tax invoices* for more information about RCTIs.\n\n### When an RCTI is valid\n\nTo be valid, an RCTI must:\n\n- contain enough information to clearly determine the [requirements of tax invoices](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices#RequirementsOFTIs) and show the document is intended to be a recipient-created tax invoice, not a standard tax invoice\n- show the suppliers and purchaser's ABN and both must be GST registered at the time the RCTI is issued\n- if GST is payable, an RCTI must also show that it's payable by the supplier.\n\nAs the recipient, you must:\n\n- issue the original or a copy of your RCTI to the supplier within 28 days of one of the following dates\n\n- date of the sale\n- date the value of the sale is determined by you\n- retain the original or a copy of the RCTI\n- reasonably comply with your obligations under the tax laws\n- stop issuing RCTIs if any of the requirements for issuing RCTIs are no longer met. For example, the supplier is no longer GST registered.\n\n### RCTI issuer responsibilities\n\nWhen you issue RCTIs, you need to take reasonable care to ensure you meet all the requirements for [when you can issue an RCTI](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices#WhenyoucanissueanRCTI) and your GST credit claims are correct.\n\nIt's expected that you:\n\n- have strong systems and checks in place to ensure you meet the requirements to issue RCTIs\n- check that the supplier is GST-registered before issuing your first RCTI to them\n- undertake periodic checks to ensure your supplier remains GST-registered if you issue RCTIs to them on an ongoing basis.\n\nThe [ABN LookupExternal Link](https://www.abr.business.gov.au) has a variety of tools and resources to help you check whether an entity is registered for GST.\n\nA best practice governance approach is to use automated validation checks at the time of issuing the RCTI. You can integrate ABN Lookup validation data into your own software using [ABN Lookup web servicesExternal Link](https://abr.business.gov.au/Tools/WebServices).\n\nIf a supplier is no longer registered for GST, you cannot issue RCTIs to that supplier. This can lead to you incorrectly claiming GST credits.\n\nIf you've incorrectly claimed GST credits because you've relied on a document that is not a valid RCTI, you should make a [voluntary disclosure](https://www.ato.gov.au/forms-and-instructions/voluntary-disclosures-approved-form). We encourage you to review your governance frameworks to reduce the risk of future errors.\n\n## GST groups\n\nIf a member of a [GST group](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/gst-groups-and-branches/gst-groups) makes a taxable sale, their identity must be clear on the tax invoice.\n\nIf the recipient is a member of a GST group, the buyer's identity must be clearly shown to satisfy the requirement. Include one of the following in the tax invoice:\n\n- the recipient\n- the GST group\n- the representative member\n- another member of the GST group (where there would still be a creditable acquisition if the supply been made to that member).\n\n## Multiple recipients or co-owners\n\nOn a single tax invoice for a taxable sale (for $1,000 or more) to more than one recipient, you must clearly show either:\n\n- the identity of each recipient\n- the ABN of each recipient.\n\nOn a single tax invoice for a taxable sale made by more than one entity (for example, co-owners of property), you must clearly show either:\n\n- the identity and ABN of each co-owner\n- the identity and ABN of one co-owner acting as 'agent co-owner' for the other.\n\nWhen co-owners receive a tax invoice for a sale (for $1,000 or more), the tax invoice must clearly show either:\n\n- the identity of each co-owner\n- the ABN of each co-owner.","title":""}
+{"_id":"passage_a0JRF000003ecCw2AI/p00389200","text":"## Why it's important\n\nTo help avoid an unexpected bill at tax time, tell your employer you have a [study loan](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/types-of-loans). In the same way your employer withholds tax throughout the year to cover your end of year tax liability, they can also withhold extra amounts to cover your study or training support loan [compulsory repayment](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/compulsory-repayments). This amount is calculated when you lodge your tax return.\n\nYour employer will determine how much extra to withhold based on the income you earn with them. If you receive income from other sources, your employer’s withholding may not cover the total compulsory repayment amount. For more information, see [multiple income sources](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/tell-your-employer-about-your-study-or-training-loan#Differentincomesources).\n\n### If you don't tell your employer\n\nIf you don't tell your employer about your study or training support loan, they won't know to withhold extra amounts for your compulsory repayment. This will likely result in you getting a tax bill when you lodge your tax return. You’ll need to pay your tax bill in full and on time to avoid general interest charge being applied.\n\n## Understanding compulsory repayments\n\nYou need to start making compulsory repayments when your repayment income is more than the [minimum repayment threshold](https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds). This applies even if you're still studying or in an apprenticeship.\n\nYour compulsory repayment amount is calculated as a percentage of [your repayment income](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/when-must-you-repay-your-loan#ato-Yourrepaymentincome). This means the more income you earn, the higher your compulsory repayment will be.\n\nYour compulsory repayment amount is calculated when you lodge your tax return. Any [voluntary repayments](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/voluntary-repayments) made towards your loan will not reduce the compulsory repayment amount.\n\n### Work out your compulsory repayment\n\nTo estimate your compulsory repayment, use our [Study and training support loans repayment calculator](https://www.ato.gov.au/single-page-applications/calculatorsandtools#STLoanRepay/questions).\n\nFor current and historical thresholds and rates, see [Study and training loan repayment thresholds and rates](https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds).\n\n### Withholding amounts for your compulsory repayment\n\nWhen you tell your employer you have a study or training support loan, they will start withholding extra amounts from your income if your annual income is expected to be over the minimum repayment threshold.\n\nThe additional amounts withheld are not applied to your loan balance until:\n\n- you lodge your tax return, and\n- a compulsory repayment has been calculated based on your repayment income.\n\nThis means the amount withheld by your employer won't reduce your loan after each pay cycle. The compulsory repayment amount will reduce your loan as a lump sum once your tax return is processed.\n\nThe withholding amount for your loan compulsory repayment may not be listed separately on your payslip. It will be included in the total pay-as-you-go (PAYG) withholding amount.\n\nIf too much is withheld during the year, and you don’t have any outstanding tax or other government debts, you will receive a refund of the overpaid amounts at tax time.\n\n## How to tell your employer\n\nTo tell your employer about your study or training support loan:\n\n- when starting a new job, complete a [Tax file number declaration](https://www.ato.gov.au/forms-and-instructions/tfn-declaration) (NAT 3092) and answer 'Yes' at Question 10, or\n- if you’re already working, and you're not sure if your employer knows you have a loan, complete a [Withholding declaration](https://www.ato.gov.au/forms-and-instructions/withholding-declaration) (NAT 3093) and answer 'Yes' at Question 6.\n\nGive the completed form to your employer so they can work out how much extra to withhold. If you have more than one employer, provide a completed form to each employer.\n\nWhen you pay off your loan in full, complete a new *Withholding Declaration* (NAT 3093) to inform your employer that you no longer need extra amounts withheld.\n\n## Multiple income sources\n\nIf you earn [business or investment income](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/compulsory-repayments#ato-Ifyouearnbusinessorinvestmentincome), you may be registered for [pay as you go (PAYG) instalments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments). This is where you make regular payments throughout the year towards your tax liability. If you are making PAYG instalments, we take your study or training support loan into account when calculating your instalment amount and rate.\n\nIf you earn income from multiple sources, you may need to adjust how much is withheld during the year. This is because your employer doesn't know how much you earn outside of your employment with them. Therefore, the amount they withhold may not be enough to cover your total compulsory repayment amount.\n\nYou can adjust your withholding amounts by:\n\n- asking your employer to increase the amount of tax they withhold from your pay, or\n- voluntarily registering for PAYG instalments and varying the instalment amount to suit your personal circumstances.\n\nStay informed and proactive about your loan repayments to avoid financial surprises and manage your loan effectively. For more information, see [Study and training support loans](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans).\n\n*Authorised by the Australia Government, Canberra.*","title":""}
+{"_id":"passage_a0JRF000003hVBh2AM/p00391520","text":"# Deductions for work expenses\n\nDeductions you can and can't claim for expenses you incur to earn your income.\n\n**Last updated **15 May 2025\n\n.st0{fill:none;}\n.st1{fill:CurrentColor;}\nPrint or Download\n.st0{fill:none;}\n.st1{fill:CurrentColor;}\nFor a summary of common expenses, see [Police officer deductions (PDF, 426KB)This link will download a file](https://www.ato.gov.au/api/public/content/caeed2c9-a664-4f71-a865-7924ac04f9c9_TaxTimeToolkit_Policeofficer_pdf).\n\nTo claim a deduction for a work-related expense you must meet the 3 golden rules:\n\n1. You must have spent the money and you weren't reimbursed.\n2. The expense must directly relate to earning your income.\n3. You must have a [record](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/records-you-need-to-keep) to prove it (usually a receipt).\n\nIf the expense was incurred for both work and private purposes, you only claim a deduction for the work-related portion of the expense.\n\nYou can’t claim a deduction if:\n\n- you don't keep records of your work-related expenses\n- someone else (such as an employer) pays for the expense or reimburses you for it.\n\nFind out which expenses you can and can't claim as a police officer:\n\n- [Police officer expenses A–F](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/guides-for-occupations-and-industries/l-q/police-income-and-work-related-deductions/deductions-for-work-expenses/police-officer-expenses-af)\n- [Police officer expenses G–O](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/guides-for-occupations-and-industries/l-q/police-income-and-work-related-deductions/deductions-for-work-expenses/police-officer-expenses-go)\n- [Police officer expenses P–S](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/guides-for-occupations-and-industries/l-q/police-income-and-work-related-deductions/deductions-for-work-expenses/police-officer-expenses-ps)\n- [Police officer expenses T–W](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/guides-for-occupations-and-industries/l-q/police-income-and-work-related-deductions/deductions-for-work-expenses/police-officer-expenses-tw)\n\nTo help you work out if you can or can't claim a deduction for other expenses, and the records you need, see [Employees guide for work expenses](https://www.ato.gov.au/law/view/document?DocID=SAV/EGWE/00004&PiT=99991231235958).\n\nYou can use the [myDeductions](https://www.ato.gov.au/online-services/online-services-for-individuals-and-sole-traders/ato-app/mydeductions) tool in the ATO app to store records and help keep track of your:\n\n- work-related expenses (such as vehicle trips)\n- general expenses (such as gifts and donations).\n\nYou can upload these records or share them with a tax agent at tax time to make lodging your tax return easier.\n\nWe have information in languages other than English. A summary of common work-related expenses may be available in your language:\n\n1. Select your language from the [other languages' homepage](https://www.ato.gov.au/other-languages).\n2. Select the heading **Individuals**.\n3. Check the list to see if a summary is available.","title":""}
+{"_id":"passage_a0JRF000003f07B2AQ/p00389559","text":"## How it works\n\nYour main residence (your home) is generally exempt from capital gains tax (CGT).\n\nUsually, a property stops being your main residence when you stop living in it. However, for CGT purposes you can continue treating a property as your main residence:\n\n- for up to 6 years if you used it to produce income, such as rent (sometimes called the '6-year rule')\n- indefinitely if you didn't use it to produce income.\n\nDuring the time that you treat the property as your main residence after you stop living in it:\n\n- It continues to be exempt from CGT (the same as if you were still living in it, even if you start renting it out after you leave).\n- You can't treat any other property as your main residence (except for up to 6 months if you are [moving house](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/moving-to-a-new-main-residence)).\n\n##\n[\n]()Eligibility\n\nIf the property was continuously your [main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/eligibility-for-main-residence-exemption), the usual rules for the main residence exemption apply. The property must have:\n\n- been your main residence first – you can't apply the main residence exemption to a period before a property first becomes your main residence (for example, if you rented out your home before you lived in it)\n-\n[stopped being your actual main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence/when-does-a-property-stop-being-your-main-residence) and not used for income – that is, you stopped living in it.\n\n### Partial main residence exemption\n\nIf you use the property to produce income, you may be entitled to a partial main residence exemption from CGT. Examples include when you:\n\n- run a business\n- rent the property out (and the main residence exemption doesn't apply to the period you rent out your home)\n-\n['flip' the property](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/property-development-building-and-renovating/renovating-properties) (buy it to renovate and sell at a profit).\n\nFor more detail, see [Using your home for rental or business](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business).\n\n##\n[\n]()Former home not used for income\n\nIf you don't use your former home to produce income (for example, you leave it vacant or use it as your holiday house) you can treat it as your main residence for an unlimited period after you stop living in it. This only applies if you aren't treating another property at the same time as your main residence.\n\n### Example: former home not used to produce income\n\nBill bought a unit and lived in it for 3 years. He then moved out to live with a friend while his son occupied the unit rent free.\n\nBill didn't treat any other property as his main residence.\n\nHe sold the unit 12 years later and claimed the main residence exemption from CGT.\n\nEnd of example\n\n##\n[\n]()Former home used for income\n\nIf you use your former home to produce income (for example, you rent it out or make it available for rent), you can choose to treat it as your main residence for up to 6 years after you stop living in it. This is sometimes called the '6-year rule'.\n\nYou can choose when to stop the period covered by your choice. For example, if you rented it out for 5 years, you can choose to treat the property as your main residence for 3 years.\n\nIf you're absent more than once when owning the property, the 6-year period applies to each period of absence. A period of absence stops when you either stop renting your home and:\n\n- move back in\n- leave it vacant.\n\n**Watch:** Selling a rental property that was your home\n\n**Media:** Selling a rental property that was your home\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgqExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgq) (**Duration:** 03:17)\n\n### Example: ending the period before the 6-year limit\n\nJames:\n\n- signed a contract to buy a house in Brisbane on 15 September 2013 and moved in as soon as the contract settled.\n- moved to Perth on 10 October 2015 and rented out his Brisbane house\n- signed a contract to buy a new house in Perth on 3 October 2020 and moved in as soon as the contract settled\n- signed a contract to sell the house in Brisbane on 1 March 2025.\n\nWhen he completed his 2024–25 tax return, James decided to treat the Brisbane house as his main residence for the period after he moved out in October 2015 until he purchased his new main residence in Perth in October 2020. This is a period of less than 6 years. This means James is entitled to claim a partial main residence exemption under the '6-year rule'.\n\nAs James decided not to treat the Brisbane house as his main residence after he bought the Perth house, he is subject to CGT for that period. This means James must include a capital gain or loss in the period not covered by the main residence exemption in his 2025 tax return (from October 2020 until March 2025).\n\nEnd of example\n\n### Example: dwelling used to produce income for up to 6 years\n\nLisa:\n\n- signed a contract to buy a house in 2003 and moved in as soon as the contract settled\n- stopped living in the house in 2014\n- signed a contract to sell the house in 2024.\n\nWhile she lived in the house, she didn't use it to produce income.\n\nDuring the 10-year period after she moved out, Lisa:\n\n- rented the house out for 3 years\n- left it vacant for 2 years\n- rented it out again for 3 years\n- left it vacant again for 2 years.\n\nThe total period Lisa used the house to produce income was 6 years, which meets the 6-year limit for treating it as her main residence. It doesn't matter if the 6 years is broken. While the house is vacant, the period is unlimited because the house is not being used to produce income.\n\nLisa can choose to treat the house as her main residence for the entire 10-year period after she stopped living in it and disregard her capital gain or loss on the sale of the house.\n\nLisa must include the CGT event in her tax return in the year of the contract sale date, even if she chooses to treat the house as her main residence for the period she stopped living in it. Lisa can claim the 'Main residence exemption' in her tax return.\n\nEnd of example\n\n### Example: dwelling used to produce income during multiple absences\n\nJez signed a contract to purchase a house in 2005 and moved in as soon as the contract settled. Jez:\n\n- Stopped living in the house in 2014 because he had to move for work, so he rented it out for the next 5 years.\n- Moved back into the house in 2019 and treated it as his main residence for 2 years.\n- Moved out again in 2021 and rented the house out, this time for 3 years.\n- Entered into a contract to sell the house in 2024.\n\nWhile Jez lived in the house, he didn't use it to produce income.\n\nThe 6-year limit applies separately to each period of absence immediately following a period Jez lived in the property. This means Jez can choose to treat the house as his main residence for both rental periods and disregard his capital gain or loss on the sale of the house.\n\nJez must include the CGT event in his tax return in the year of the contract sale date and claim the 'Main residence exemption' in his tax return.\n\nEnd of example\n\n### What happens if the 6-year limit is exceeded\n\nIf you use your former home to produce income for more than 6 years in one absence, it is subject to CGT for the period after the 6-year limit.\n\nTo work out your CGT when you dispose of your home:\n\n- you need to work out your cost base, which is the market value of your home at the time you first used it to produce income, plus any allowable costs since then (this is the [home first used to produce income](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business#ato-Valueofhomewhenfirstusedtoproduceincome) rule)\n- your capital gain or loss is based on the portion of time after first using your home to produce income; that is, over the 6-year limit.\n\n#### Example: former home used to produce income for more than 6 years\n\nRoya bought an apartment for $180,000. She immediately started living in the apartment as her main residence:\n\n- On 29 September 1999, Roya moved interstate and rented out the apartment and at that time the market value of the apartment was $220,000.\n- During her time interstate she didn't acquire another property.\n- In July 2024, she returned to her home state and continued to rent out the apartment.\n- She sold the apartment for $555,000 under a contract that settled on 29 September 2024.\n- She incurred $15,000 in agent’s and solicitor’s fees when she sold.\n- She had no other capital gains or losses.\n\nAs Roya rented out the apartment, she can treat it as her main residence during her absence for a maximum of 6 years. This is the period 29 September 1999 to 29 September 2005.\n\nRoya must treat the apartment as though she acquired it:\n\n- on the date she first used it produce income (29 September 1999)\n- at the market value at that time ($220,000).\n\nRoya works out her CGT as follows:\n\n- Capital proceeds − cost base = capital gain\n\n$555,000 − ($220,000 + $15,000) = $320,000\n- Non-main residence days (days over 6-year limit)\n\n30 September 2005 to 29 September 2024 = 6,940 days\n- Ownership period days (from deemed acquisition date)\n\n29 September 1999 to 29 September 2024 = 9,133 days\n- Assessable capital gain\n\n$320,000 × (6,940 days ÷ 9,133 days) = $243,162\n\nShe is eligible to use the 50% CGT discount to reduce her capital gain:\n\n- $243,162 × 50% = $121,581\n\nRoya is not entitled to a full main residence exemption. She must also report a net capital gain of $121,581 on her 2025 tax return for the period the main residence exemption wasn't applied.\n\nEnd of example\n\n##\n[\n]()Former home used for income before you move out\n\nIf you use any part of your home to produce income before you stop living in it, you can't apply the continuing main residence exemption to that part.\n\nThis means you can't get the main residence exemption for that part of your home either before or after you stop living in it.\n\n### Example: home used for income before ceasing to live in it\n\nHelen signed a contract to buy a house in 2007 and moved in as soon as possible after settlement. Helen:\n\n- used 75% of the house as her main residence and the remaining 25% as a doctor's surgery\n- moved out and rented out the house in 2019\n- signed a contract to sell the house in 2025, making a capital gain of $400,000.\n\nHelen chooses to treat the house as her main residence for the 6 years it was rented out.\n\nAs 25% of the house was used to produce income during the period before Helen stopped living in it, the same proportion of the capital gain is assessable:\n\n$400,000 × 25% = $100,000\n\nEnd of example\n\n##\n[\n]()Foreign residents\n\nIf you are a foreign resident when a CGT event happens to your residential property in Australia (for example, you sell it), you generally aren't entitled to claim the main residence exemption. See [Main residence exemption for foreign residents](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/main-residence-exemption-for-foreign-residents).\n\n## Completing your tax return\n\nIf you signed a sale contract during the income year, you can choose to use the 6-year rule to treat the property as your main residence. When you prepare your tax return, include the main residence exemption if you decide to make this choice.\n\nWhen you sell a property that you rented out, it's important to include:\n\n- if you elect to use the main residence exemption or not\n- your capital gain or loss.\n\nYou must report the capital gain, loss or exemption in the same year as the date you signed the sale contract. Remember, this is based on the **contract date**, not the settlement date.\n\nTo see how to complete myTax when you've sold a rental property, watch our video [How to complete myTax when you've sold a rental propertyExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bi9or7odtggh5r).\n\nFor full instructions on how to complete your tax return, see:\n\n-\n[myTax 2025 CGT events and applying an exemption or rollover](https://www.ato.gov.au/individuals-and-families/your-tax-return/instructions-to-complete-your-tax-return/mytax-instructions/2025/income/australian-income-or-losses-from-investments-or-property/capital-gains#CGTeventsandapplyinganexemptionorrollove)\n\n-\n[18 Capital gains 2025 – Completing your supplementary tax return](https://www.ato.gov.au/forms-and-instructions/individual-supplementary-tax-return-2025-instructions/income-questions-13-24-supplementary-tax-return-2025/18-capital-gains-2025#ato-Completingyoursupplementarytaxreturn) (paper).","title":""}
+{"_id":"passage_a0JRF000003f42j2AA/p00389605","text":"## How GST applies to exports\n\nGST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia (the indirect tax zone) and on most imports of goods.\n\nExports of goods and services from Australia are generally GST-free. If you're registered for GST, this means you:\n\n- don't include GST in the price of your GST-free exports\n- can still claim credits for the GST included in the price of purchases you use to make your exported goods and services.\n\nSee the [definitions for GST terms](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/definitions).\n\n## Export of goods\n\nExported goods are GST-free if they are exported from Australia by the supplier within 60 days of one of the following, whichever occurs first:\n\n- the supplier receives any payment for the goods\n- the supplier issues an invoice for the goods.\n\nIf the goods are paid for by instalments, the payment or invoice referred to is for the final instalment.\n\nSuppliers can contact us via [Online services for business](https://www.ato.gov.au/online-services/businesses-and-organisations-online-services/communication-in-online-services-for-business) to request an extension of the 60-day period.\n\nThe 60-day period does not apply for [new boats sold for private recreational use](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/international-transactions/gst-free-sales-and-purchases-of-new-recreational-boats) if the boat is exported from Australia within 12 months.\n\nAustralia includes all land territory except external territories (such as [Norfolk Island](https://www.ato.gov.au/norfolk-island/tax-for-businesses/gst-transactions-with-mainland-australia), Christmas Island and the Cocos (Keeling) Islands). Under the export rules outlined above, sales of goods to residents of Australia's external territories may also be treated as GST-free export sales by the supplier.\n\nFor more information on the external territories, see Law Companion Ruling [LCR 2016/1](https://www.ato.gov.au/law/view/document?src=dr&pit=99991231235958&arc=false&start=1&pageSize=10&total=1&num=0&docid=COG%2FLCR20161%2FNAT%2FATO%2F00001&dc=false&stype=find&tm=phrase-basic-LCR%202016%2F1) *GST and carrying on an enterprise in the indirect tax zone (Australia)*.\n\n## Exports of services and other exports\n\nOther exports can include the sale of things other than goods or real property for consumption outside Australia, such as:\n\n- services\n- various rights\n- financial supplies\n- other professional services.\n\nA supply of a service is GST-free if the:\n\n- recipient of the service is outside Australia, and\n- use of the service is outside of Australia.\n\nThere are specific rules that determine if the sale of things other than goods or real property for consumption outside Australia, are GST-free or excluded from being treated GST-free.\n\nStart of exampleExample: payments from overseas social media platforms\n\nLiz is located in Australia and registered for GST.\n\nShe posts content to a social media platform. Under Liz’s agreement with the platform, subscribers from around the world can purchase and view her content.\n\nThe platform facilitates transactions between Liz and her subscribers. Through the platform, she receives payments for subscriptions and purchases of her content, messages and tips.\n\nThe platform provides Liz with the location of each subscriber and the value of her sales. She works out her GST-free sales by determining which sales are made to offshore subscribers. She works out which sales are taxable by determining if they are made to subscribers in Australia.\n\nLiz collects GST on her taxable sales and pays it to the ATO. She also [claims GST credits](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/claiming-gst-credits) for the GST included in the price of any goods and services she buys for her business.\n\nIf she can't obtain the location of each subscriber, all her sales will be taxable.\n\nEnd of example\n## When services are used outside Australia\n\nThe supply of service is GST-free if the supply is used or enjoyed outside Australia or the supply is made to a non-resident who is not in Australia when the supply is made.\n\nStart of exampleExample: service used outside Australia\n\nTom, a GST registered Australian freelance writer, is engaged by an English company to write a chapter of a book that will be published in England.\n\nHe writes the chapter in Australia and sends it to the non-resident publisher based in England. His service has been exported to the non-resident publisher who is not in Australia when the supply is made, so he does not include GST in his invoice to the publisher.\n\nEnd of example\n## When services are used in Australia\n\nThe supply of service is not GST-free if the service is provided in Australia even if the recipient is not in Australia.\n\nStart of exampleExample: service used in Australia\n\nA GST registered school in Australia provides tuition to overseas students currently studying in Australia. However, it bills the overseas parents of the students directly.\n\nThe supply may be under an agreement entered into between the Australian school and the overseas parents. However, as it is provided to the students in Australia, the supply is not GST-free.\n\nEnd of example\nFor rulings on GST and the exports of services and other exports, see Goods and Services Tax Ruling [GSTR 2002/6](https://www.ato.gov.au/law/view/document?docid=GST/GSTR20026/NAT/ATO/00001) *Exports of goods, items 1 to 4A of the table in subsection 38-185(1) of the A New Tax System (Goods and Services Tax) Act 1999.*\n\n## Tourist refund scheme\n\nForeign or Australian tourists travelling from Australia are considered to be exporting if they take goods out of Australia as accompanied luggage, which means the goods are:\n\n- carried or worn by the traveller\n- checked into the hold of the aircraft or ship that the traveller is using.\n\nConditions for such supplies are included in either the GST-free [sealed bag method or tourist refund scheme](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/international-transactions/gst-free-sales-to-travellers-departing-australia).\n\nGoods must be declared to Australian Customs and Border Protection Services and the GST refund will have to be repaid if:\n\n- a traveller brings goods back into Australia for which they have made a claim for a GST refund under the tourist refund scheme\n- the value of those goods (combined with any other overseas purchases) exceeds A$900.\n\nGST is payable on the entire value of the items, not just the amount that is over the A$900 limit. Penalties may apply to undeclared taxable goods.\n\nResidents of Australia's external territories can claim refunds of GST and wine equalisation tax where applicable under the tourist refund scheme for unaccompanied goods exported from Australia back to their home territory.\n\n## Registering for GST\n\nYou must [register for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst) in Australia if **both** of the following apply:\n\n- you are carrying on a business or enterprise\n- your GST turnover from sales that are connected with Australia from your enterprise is equal to, or greater than the registration turnover threshold of A$75,000 (or A$150,000 if you are a non-profit organisation).\n\nIf you're a [non-resident business](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/non-resident-businesses-and-gst) you will need to register for GST to ensure you meet your GST obligations.\n\nWhen you [calculate your GST turnover](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst#WorkingoutyourGSTturnover), you need to include export sales connected with Australia, even though they are GST-free.\n\nStart of exampleExample: sales connected with Australia\n\nAlex runs an internet business selling mobile phone parts through his website. About half his sales are to Australian customers and half to overseas customers. He is not registered for GST.\n\nRecently Alex took on a new line of accessories and his sales have increased. His total sales for the past 12 months are now $50,000 for his Australian customers and another $50,000 for his overseas customers.\n\nAlex's sales to Australian customers are included in his GST turnover.\n\nHis sales to overseas customers are also included in his GST turnover because they are 'connected with Australia'. It doesn't matter that these sales, as exports, are GST-free.\n\nAlex's GST turnover is his total sales of $100,000 so he must register for GST.\n\nOnce registered, Alex must include GST in his sales to Australian customers, but his sales to overseas customers are GST-free. He can claim GST credits for any of his business purchases that include GST.","title":""}
+{"_id":"passage_a0JRF000003hiLp2AI/p00391710","text":"### What this Ruling is about\n\n**Class of person/arrangement\n**\n\n1. This Ruling considers the deductibility of interest incurred by borrowers on moneys drawn down under line of credit facilities and moneys redrawn under other loans offering redraw facilities.  It considers the operation of section 8-1 of the *Income Tax Assessment Act 1997* ('ITAA 1997') (formerly subsection 51(1) of the *Income Tax Assessment Act 1936* ('ITAA 1936'))\n**where the borrowed money has been applied for both income producing and non-income producing purposes.\n**\n\n2. The cases cited in this Ruling that consider deductibility under subsection 51(1) of the ITAA 1936 have equal application to section 8-1 of the ITAA 1997.  All references to subsection 51(1) should be taken as including a reference to section 8-1, and vice versa.\n\n3. This Ruling applies only to line of credit facilities as described in paragraphs 4 to 8 below and redraw facilities as described in paragraphs 8 to 11 below.  This Ruling does not deal with facilities that permit the capitalisation of interest or the applicability of the 'refinancing principle' for funds borrowed by business partnerships as discussed in Taxation Ruling TR 95/25.\n\n**\n***Line of credit facilities*\n**\n**\n\n4. A line of credit facility is a credit facility taken out with a financial institution under which a borrower may draw down funds up to an agreed credit limit.  There are a number of different facilities available.  There may be one or more loan contracts and one or more borrowers.  The line of credit may be fully drawn, i.e., the taxpayer borrows up to the credit limit, or partly drawn, i.e., the taxpayer draws only some of the funds leaving credit available to be utilised at a later date.  If the facility is fully drawn the taxpayer can only draw further funds if payments in excess of interest, fees and charges are made into the facility.  Where the facility is partly drawn the taxpayer can draw down further funds up to the credit limit without making repayments of principal.\n\n5. The facility may operate with one account that is used for all draw downs.  Funds may be drawn down from a single line of credit account up to the full amount of the available credit limit and may be used for either income producing or non-income producing purposes or both.\n\n6. Alternatively, the facility may be divided into a number of sub-accounts by agreement between the lender and the borrower.  Some financial institutions allow the sub-accounts to be held by different borrowers.  Some sub-accounts may be used for  income producing purposes ('investment sub-account') and others may be used for non-income producing purposes ('private sub-account').  Some sub-accounts may be used for mixed income producing and non-income producing purposes ('\n**mixed purpose sub-account\n**').  Funds may be drawn down from each sub-account up to an allocated portion of the overall credit limit.\n\n7. While the focus of this ruling is on mixed purpose sub-accounts, the same principles apply to single line of credit accounts used for mixed purposes.\n\n8. In most cases, the lender requires the borrower to make a minimum monthly payment equal to the interest, fees and charges that have accrued on the facility.  A payment into that facility in excess of the interest, fees and charges, is a repayment of principal.  Under these facilities, the borrower is able to make payments to reduce the amount owing under the line of credit account or sub-account at any time.  Any payments over and above the required minimum payments for interest, fees and charges increase the funds available to the borrower to draw down, subject to the agreed credit limit for that account or sub-account.  Where a taxpayer makes a payment over and above the required minimum payment, the taxpayer can direct this payment to be allocated to a particular sub-account.\n\n**\n***Redraw facilities*\n**\n**\n\n9. There are a number of loan arrangements under which a borrower may redraw previous repayments of the loan principal.  There may be one or more loan contracts and one or more borrowers.  The loan may be for income producing purposes, non-income producing purposes or mixed purposes.  The lender prescribes a minimum payment that is due on the loan.  This minimum payment is at least equal to the amount of interest, fees and charges that accrues on the loan, but more commonly is a principal and interest payment.\n\n10. The redraw facility allows the borrower to make payments over and above the minimum payments required under the loan agreement, and then permits the borrower to redraw an amount equivalent to those payments in excess of interest, fees and charges at a later time.  Those payments in excess of interest, fees and charges reduce the borrower's outstanding loan debt and money redrawn increases the outstanding loan debt.\n\n11. A taxpayer may use the money redrawn for income producing purposes, non-income producing purposes or mixed purposes regardless of the use of the original borrowed funds.  In some cases the consent of the lender is required to redraw funds and the redraw may be subject to other conditions affecting the amount and frequency of redraws.  Redraws may also be subject to the consent of the loan guarantors.\n\n### Ruling\n\n**Line of credit facilities\n**\n\n12.  Where a line of credit facility is divided into sub-accounts and each sub-account is used for a specific purpose, interest is fully deductible where funds drawn down on an investment sub-account continue to be used exclusively for an income producing purpose.  Interest is not deductible where funds drawn down on a private sub-account are used for a non-income producing purpose.\n\n13.  Where interest accrues periodically on the outstanding balance of a\n**mixed purpose line of credit sub-account\n**, the deductibility of accrued interest is determined by considering the application of the borrowed funds for income producing and non-income producing purposes.  The original application of the borrowed funds will not determine deductibility where funds borrowed under a line of credit facility have been recouped or withdrawn from the original use and are reapplied to a new use, e.g., upon sale of an asset purchased with borrowed funds.\n\n14.  Where borrowed money applied to a particular use is recouped and redirected to another use, it is necessary to examine that new application of those borrowed funds in considering the deductibility of interest.  Where there are changes in the use of money borrowed under a line of credit facility, or in the amount of borrowed money used for a particular purpose, the deductibility of the interest accrued on that part of the outstanding debt will be determined by considering the advantages sought from that new application of those funds.  Interest will be deductible under section 8-1 to the extent that it is incurred on that part of the outstanding borrowed money used at that time for an income producing purpose.\n\n15.  Where a taxpayer has a mixed purpose sub-account, the interest needs to be apportioned between the income producing and non-income producing purposes.  Apportionment must be made on a fair and reasonable basis.  One approach that we accept as fair and reasonable in relation to the apportionment of interest that has accrued on a daily basis on a mixed purpose account is set out in the following paragraphs.  We accept that this approach to apportionment is not the only approach that is fair and reasonable.\n\n16. Where interest accrues daily under a mixed purpose sub-account, a taxpayer is entitled to a deduction in respect of that part of the interest that has accrued on the portion of the outstanding daily loan balance attributable to an income producing purpose.  In calculating the portion of the outstanding daily loan balance attributable to an income producing purpose, any repayment of principal is applied proportionately against the outstanding balance of amounts applied to income producing and non-income producing purposes respectively, at the time the repayment is made.  However, there are two exceptions.\n\n***First Exception - Borrowed money recouped and repaid*\n**\n\n17.  Where money borrowed and applied to a particular use (the 'relevant use') is recouped in whole or in part, in the sense that the amount or some part of it is recovered ( e.g., on the sale of an asset purchased with borrowed funds) that part of the outstanding balance of the mixed purpose line of credit debt which had been applied to the relevant use can no longer be regarded as continuing to be applied to that use.  Where borrowed funds recouped are repaid to the mixed purpose sub-account in reduction of the outstanding balance, those funds have ceased to be outstanding funds used for any purpose.  The effect of the repayment of the recouped funds to the mixed purpose sub-account is to reduce only that part of the outstanding line of credit debt applied to the previous use of those funds.  The use of the balance of borrowed funds still outstanding is unaffected by the recoupment and repayment in these circumstances unless the amount of the sale proceeds paid into the mixed purpose sub-account exceeds the amount drawn down and applied to the relevant use (the 'relevant debt portion').  This would occur, for example, where the asset is sold at a profit and part or all of the recouped borrowed funds and profit are paid into the mixed purpose sub-account.  To the extent that the payment exceeds the relevant debt portion, such excess amount (i.e., the profit component) will be taken to have reduced prorata the amounts borrowed and applied to uses other than the relevant use.\n\n***Second Exception - Refinancing mixed purpose debt*\n**\n\n18. A taxpayer may choose to refinance a debt outstanding on a mixed purpose sub-account by borrowing an equivalent amount under two separate accounts or sub-accounts.  If the sums borrowed under those two separate accounts are equivalent to the respective income producing and non-income producing parts of the existing outstanding debt, we accept that interest accrued on the debt incurred in refinancing the income producing portion of the mixed purpose debt will be deductible.\n\n***Apportionment calculations*\n**\n\n19.  Where interest on borrowed money accrues daily, we accept that it would be unnecessarily onerous to require a manual daily apportionment calculation.  We accept that the interest accrued in a month is deductible under section 8-1 where it is calculated using an apportionment approach based on the average outstanding principal used that month for income producing purposes.  The deductible portion of interest accruing in each month is calculated as follows:\n\n`total interest accrued for the month  *  deductible interest percentage figure\n`\n\n20.  The deductible interest percentage figure is calculated as follows:\n\n`((A + B) / (C + D))  *  100\n\n`\n\n`\n`\n\n`where`\n\n`\n\nA  =  opening balance (beginning of month) of outstanding principal used for income producing purposes;\n\nB  =  closing balance (end of month) of outstanding principal used for income producing purposes;\n\nC  =  opening balance of total outstanding principal;\n\nD  =  closing balance of total outstanding principal;\n\nNote:  the closing balance for one month is the opening balance for the next month.`\n\n21.  Where a taxpayer makes repayments over and above the required minimum payment and the line of credit facility comprises one mixed purpose sub-account only, the taxpayer cannot choose to notionally allocate the repayments to a particular portion of the total debt, e.g., the non-income producing portion.\n\n**Redraw facilities\n**\n\n22.  The deductibility of interest on a further borrowing of money under a redraw facility depends upon the use to which the redrawn funds are put.\n\n23.  Where the original borrowing is for non-income producing purposes and the taxpayer uses the redrawn funds wholly or partly for income producing purposes, that part of the accrued interest attributable to the redrawn funds used for income producing purposes is deductible.\n\n24.  Similarly, where the original borrowing is for income producing purposes and the taxpayer uses the redrawn funds wholly or partly for non-income producing purposes, that part of the accrued interest attributable to the redrawn funds used for non-income producing purposes is not deductible.\n\n25.  Where a taxpayer uses redrawn funds for a different purpose to the original borrowing in circumstances described in paragraphs 23 or 24, the loan account becomes a mixed purpose account and the same principles discussed above in relation to mixed purpose line of credit sub-accounts will apply to the mixed purpose loan account.  There is an ongoing need to apportion interest on a mixed purpose loan account.  That apportionment needs to be made on a fair and reasonable basis.  Subsequent repayments are apportioned between the outstanding debt used at that time for income producing and non-income producing purposes.  However, the two exceptions for borrowed money recouped and repaid and for the refinancing of a mixed purpose debt, discussed above at paragraphs 17 and 18 in relation to mixed purpose line of credit sub-accounts, are equally applicable to mixed purpose loan accounts.\n\n### Date of effect\n\n26.  This Ruling applies to years commencing both before and after its date of issue.  However, the Ruling does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Ruling (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).\n\n### Explanations\n\n27.  The nature of an interest expense was recently considered by the Full High Court in *Steele v. DC of T*  99 ATC 4242; 41 ATR 139.  The Court said, at 99 ATC 4242 at 4248;  (1999) 41 ATR 139 at 148, that:\n\n>  '... interest is ordinarily a recurrent or periodic payment which secures, not an enduring advantage, but, rather, the use of borrowed money during the term of the loan.  According to the criteria noted by Dixon J in Sun Newspapers Ltd and Associated Newspapers Ltd v FC of T it is therefore ordinarily a revenue item.'\n>\n\n28.  Although interest is ordinarily a revenue expense, it will only be deductible under subsection 8-1 if the expense can be characterised as an outgoing that is incurred in gaining or producing assessable income or is necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income and must not otherwise be excluded from being deductible, e.g. an outgoing of a private or domestic nature.\n\n29.  The character of interest is determined by the purpose of the borrowing.  Generally, the purpose of a borrowing can be determined from the use of borrowed funds and outgoings of interest ordinarily draw their character from that use (see *Fletcher & Ors v. FC of T*  91 ATC 4950; (1991) 22 ATR 613).  It is recognised that it may be appropriate to distinguish between the purpose of the taxpayer in borrowing the money and the use to which the borrowed funds are put in an appropriate case (see *Steele v. DC of T*  99 ATC 4242, at 4251;  (1999) 41 ATR 139, at 150).\n\n30.  The term 'use' in this context does not necessarily require a strict tracing approach to the application of the borrowed money (see *FC of T v. JD Roberts; FC of T v. Smith*  92 ATC 4380; (1992) 23 ATR 494).  Rather, the characterisation of interest on borrowed money (and the purpose of the borrowing) is ascertained by reference to the advantages sought from the use of the borrowed funds.  In *Kidston Goldmines Ltd v. FC of T*  91 ATC 4538 at 4545-6; (1991) 22 ATR 168 at 176-7, Hill J. stated:\n\n> 'In most cases, the purpose of the borrowing will be ascertained from the use to which the borrowed funds were put...\n>\n\n> To be deductible the outgoing, or in a case of apportionment a part of an indivisible outgoing, must be seen to be incidental and relevant to the activity which is directed to the gaining or production of assessable income.  In the normal case, the fact that funds borrowed have been borrowed for the purpose of that activity and can still, in the year of income in which the deduction is claimed, be seen as having that purpose, will lead readily to the conclusion that the interest will be incidental and relevant to the income producing activity.  Again, in the usual case the application of funds for an income producing purpose will demonstrate the relevant connection between the outgoing and the income producing activity.  Indeed there is much to be said for the view that the tests of purpose and application of funds are but two sides of the one matter.'\n>\n\n31.  However, the original purpose of the borrowing and use of the borrowed funds will not always determine the deductibility of interest.  Where borrowed money has been used to purchase an income producing asset and that asset subsequently has been sold, the original use of that money will not necessarily determine the character of the interest expense accruing on those borrowed funds.  In such a case the question of the deductibility of interest '... must be resolved by determining whether the essential character of the interest outgoings after the sale ... was such that it can be said that those outgoings were incurred by the respondent in the course of the gaining or production of assessable income or, having regard to the business then carried on by it, they were necessarily incurred by the respondent in carrying on that business.'  (F.C. of T. v. Riverside Road Pty. Ltd. (in liq.) 90 ATC 4567 at 4576; 21 ATR 499 at 509).\n\n32.  In some circumstances, for example where the loan contract imposes a continuing obligation to pay interest for a specified period, the sale of income producing assets purchased with those borrowed funds may not necessarily result in the immediate cessation of the relevant connection with the income earning activity.  For example, in *Riverside Road* the Full Federal Court held at 90 ATC 4567 at 4576; (1990) 21 ATR 499 at 509 that:\n\n> 'It seems to us that it does not follow from *De Bavay's* case... that the mere fact that the land and buildings were sold necessarily results in the conclusion that as and from the date of sale the whole of the interest incurred was not deductible.  The respondent, pursuant to the contractual arrangements it had entered into, was obliged ... to pay interest until 1 May 1979.  Had it sought to discharge its obligation to the mortgagee, it could have been required to pay interest to this date.'\n>\n\n33.  In the circumstances of that case, the contractual obligation to pay interest for a fixed period meant that the sale of the assets did not alter the essential character of the interest payments incurred until that loan was discharged.\n\n34.  The deductibility of interest under the loan agreement considered by the Court in *Riverside Road* is distinguishable from the deductibility of interest under a line of credit facility.  The observations of the Full Federal Court in *FC of T v. Brown* 99 ATC 4600 at 4608; (1999) 43 ATR 1 at 10 provide support for this view.  The Full Federal Court stated at 99 ATC 4608; 43 ATR 10 that:\n\n> 'Had the loan agreement in question been a \"roll over\" business loan facility which entitled the taxpayer conducting the business, on the date of each monthly payment, to elect to repay the principal and thereby avoid incurring liability for interest or to \"roll over\" the loan and continue to be liable for interest, that may have been a different situation.  In that circumstance there may be considerable force in the contention that the *occasion* of the liability was the election to \"roll over\" the loan on each monthly payment date, rather than any liability arising under the terms of the original loan agreement establishing the terms of the \"roll over\" facility.  In such a case the cessation of business or sale of the income-producing asset acquired with the borrowed funds might properly be regarded as breaking the nexus in much the same way as certain post cessation interest payments were not allowed in *Riverside Road*.'\n>\n\n35.  While the Full Federal Court did not express a concluded view on this issue, their comments suggest that in determining the deductibility of interest under a 'roll over' debt facility, the 'occasion' of the liability to pay interest was to be found in the circumstances concurrent with the accrual of the liability to pay interest which arose on each recurring monthly interest date.\n\n36.  We believe the same principle will apply to a line of credit facility where interest accrues daily and the outstanding debt can be repaid at any time.  The obligation to pay interest under the terms of, and for the period of, the original borrowing can not be regarded as the 'occasion' of the interest liability which accrues in a subsequent period after a taxpayer has made an election not to repay the outstanding principal under a line of credit facility.  A line of credit debt has a continuing opportunity for repayment which distinguishes it from the type of loan debt considered in *Brown*.\n\n37.  Where the funds borrowed under a line of credit remain outstanding, we believe the deductibility of interest is to be determined by considering the ongoing application of those borrowed funds.  Interest is considered to be the cost of retaining the use of the outstanding line of credit funds in the period in which that interest accrues.  Where borrowed funds are recouped from the sale of an income producing asset purchased with that money, the connection between the interest expense and the income producing use of that asset will be broken when the asset is sold.  Interest on those borrowed funds will only be deductible after that time if it can be established that the accrued interest continues to be incurred in the course of deriving assessable income or in carrying on a business.  For this to be the case under a line of credit, there would need to be a sufficient connection between the accrual of interest in a period and any new application for income producing purposes of those recouped borrowed funds.  Deductibility of interest on those borrowed funds will be determined by a consideration of the advantages sought from that new use to which those funds are redirected.\n\n38.  Taxation Ruling TR 95/25 also outlines some general principles governing deductibility of interest.\n\n**Further borrowings\n**\n\n39.  Where a loan facility allows for redraws of extra repayments, we consider those redraws constitute new borrowings of funds that cannot be traced to the extra repayments.  In this regard the term 'redraw' is a misnomer.  It is in effect a new borrowing of funds.  Similarly, a draw down on a line of credit that has not been fully drawn is a new borrowing of funds.\n\n40.  In our view, it is not correct to characterise the reduced loan balance as comprising the previous loan balance with a notional offset credit available in respect of extra repayments as if those extra repayments were standing to the credit of the borrower in a separate account in the books of the lender.  The extra repayments do not create a debt due by the lender to the borrower.  Those funds used to make extra repayments simply cease to exist as an asset of the borrower after being used to discharge part of the loan debt.  In our view, the redraw facility does not involve separate loan and deposit accounts of the type discussed in paragraphs 6 to 8 of TR 93/6.\n\n41.  In the case of a repayment of principal on a line of credit, the borrower acquires a contractual right to borrow a further amount equal to the difference between the reduced drawn-down amount and the available credit limit.  That right to borrow further funds is a contractual right under the loan agreement permitting the borrower to draw down funds up to the agreed credit limit.  The available credit is not an asset of the borrower and the available credit limit can be varied by the lender upon review.\n\n42.  Similarly, under a redraw facility, the loan agreement gives the borrower the right, subject to restrictions in some cases, to borrow a further amount up to the balance of the loan debt that would have been outstanding if the minimum loan repayments required under the loan agreement had been made.  The extra repayments do not create a debt payable by the lender to the borrower and are not an asset of the borrower after they have been used to discharge part of the loan debt.\n\n43.  We consider a draw-down from a line of credit account or sub-account, or a redraw from a loan account, is a separate borrowing.  Therefore, the deductibility of the interest on that separate borrowing depends on whether the interest is incurred in gaining or producing assessable income or is necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.  To the extent borrowings are used for income producing purposes, that part of the accrued interest attributable to those borrowings is deductible.  Conversely, that part of the accrued interest attributable to borrowings used for non-income producing purposes is not deductible.\n\n44. The balance outstanding on a mixed purpose line of credit sub-account or a mixed purpose loan account is an undivided single debt owed by the borrower to the lender.  When repayments of principal are made, it is not considered possible to direct those payments to only that part of the borrowed funds used for a particular purpose as if it were a separate debt.  While it may be possible to trace the uses to which different parts of the borrowed funds are put, it is considered repayments of principal need to be applied proportionately to reduce the balance of the outstanding principal attributable to income producing use and non-income producing use respectively, e.g.,  if 70% of an outstanding line of credit sub-account debt is used for income producing purposes, 70% of any repayment would be in respect of that part of the outstanding debt.  However, there are two exceptions.\n\n***First Exception - Borrowed money recouped and repaid*\n**\n\n45. Where money borrowed and applied to a particular use is recouped, e.g., on the sale of an asset purchased with borrowed funds, that part of the outstanding balance of the mixed purpose debt can no longer be regarded as applied to that use.  Where the borrowed funds recouped are paid into the mixed purpose account or sub-account, those funds have ceased to be outstanding funds used for any purpose.  The effect of the repayment of the recouped funds to the mixed purpose sub-account is to reduce only that part of the outstanding line of credit debt applied to the previous use of those funds.\n**Example four, at paragraph 66 of this ruling, outlines the practical application of these principles.\n**\n\n***Second Exception - Refinancing mixed purpose debt*\n**\n\n46.  A taxpayer may choose to refinance a mixed purpose debt by borrowing an equivalent amount under two separate accounts or sub-accounts.  Where a mixed purpose line of credit sub-account debt is replaced by two new debts and the advantage sought by these borrowings is the refinancing of the respective parts of the previous debt used at that time for income producing and non-income producing purposes, we consider that a strict tracing approach is not appropriate.  It is relevant to bear in mind the comments of Dixon CJ.  in *Hallstroms Pty. Ltd. v. FC of T*  (1946) 72 CLR 634, cited with approval by  Hill J in *FC of T v. JD Roberts; FC of T v. Smith* 92 ATC 4380, at 4391; (1992) 23 ATR 494, at 507, that the question of characterisation depends on:\n\n> '... what the expenditure is calculated to effect from a practical and business point of view, rather than upon the juristic classification of legal rights...'\n>\n\n47. The sole purpose of the borrowing used to refinance money used at that time for income producing purposes is to continue to have the use of those funds for income producing purposes.  Similarly, the sole purpose of the borrowing used to refinance money used at that time for non-income producing purposes is to continue to have the use of those funds for non-income producing purposes.  Therefore, we accept that interest accrued on the debt incurred in refinancing the income related portion of the previous mixed purpose debt will be deductible.\n\n### Alternative views\n\n48.  It has been suggested that if funds were originally borrowed for income producing purposes and there is no requirement to repay those funds, the occasion of the interest liability remains the income producing activities of the taxpayer.  The decision in *FC of T v. Brown* 99 ATC 4600; 43 ATR 1 is cited in support of this proposition.  However, the comments made in that case in relation to 'roll over' loan facilities support our view of the law outlined above.\n\n49.  It has also been suggested that funds withdrawn from a loan account or a line of credit account which can be attributed to the extra repayments made, simply represent a withdrawal of funds temporarily 'parked in the loan'.  This view depends upon a characterisation of the extra repayments as effectively remaining an asset of the borrower, available to the borrower by virtue of the contractual right to redraw them.  As discussed above, we believe this view is not correct.  The extra repayments have been used to discharge part of the loan or line of credit debt and the subsequent redraw or draw down is funded by a subsequent increasing of the loan or line of credit debt.  In our view, the redraw or draw down is a new borrowing of money.  The deductibility of the interest payable on those new borrowings depends upon the advantages sought from the use of those funds.\n\n50.  It has been further suggested that the taxpayer can allocate a repayment to that portion of borrowed moneys used for a particular purpose.  The decision in *FC of T v. Carberry* 88 ATC 5005; (1988) 20 ATR 151, is cited in support of this view.  In *Carberry* a husband and wife borrowed money to acquire undivided real estate comprising a private residence and a kindergarten business and premises.  The taxpayers  applied the proceeds of sale of a previous private residence towards the purchase of the new property.  The proceeds from the sale of the previous residence exceeded the cost attributable to the purchase of the new residence.  In the circumstances, the Administrative Appeals Tribunal held at first instance that the whole of the funds borrowed to finance the acquisition of the property was used by the partnership to purchase the kindergarten.\n\n51.  The decision in *Carberry* is relevant to establishing the original use of the borrowed funds.  On the facts of that case it was open to the tribunal to conclude that the whole of the borrowed funds were applied to an income producing use.  In reaching this conclusion, the Tribunal did not apply a strict tracing approach to the borrowed funds.  However, as recognised by Davies J in that case on appeal to the Federal Court, an apportionment of interest would have been required if the Tribunal had found as a matter of fact that the borrowed funds had been applied to both income producing and private purposes.\n\n52.  The decision in *Carberry* is not inconsistent with the basis of apportionment outlined in this ruling in relation to cases involving borrowed funds applied to both income producing and non-income producing purposes.","title":""}
+{"_id":"passage_a0JRF000003iAl72AE/p00391999","text":"## Value of home when first used to produce income\n\nIf you use your home to produce income you are generally taken to have acquired it at the time you first used it for this purpose.\n\nThis means when you sell your home, you work out the capital gain or loss using its market value at the time you first used it to produce income.\n\nThis is called the 'home first used to produce income rule'.\n\nIf you sell your home within 12 months of when you first use it to produce income, you can’t use the CGT discount.\n\n### Market valuation\n\nYou must get a [market valuation](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/market-valuation-of-assets) of your home when you first start using it for rental or business, if this was after 20 August 1996.\n\nYou need to know this value to calculate your capital gain or loss when you sell it.\n\n### Exclusions\n\nIf you:\n\n- use your home to produce income from the time you acquire it, the rule doesn’t affect you – for an example, see [Rental property becomes your main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business#Rentalproperty)\n-\n[inherit a dwelling](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax/inherited-property-and-cgt) that was a deceased’s main residence – the rule doesn’t apply if you sell the dwelling within 2 years\n- choose to [continue treating a property as your main residence after you move out](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence) – if the property is fully exempt, the rule doesn’t apply.","title":""}
+{"_id":"passage_a0JRF000003hCFV2A2/p00391271","text":"# Who can access their super early\n\nThere are eligibility rules you need to meet to access your super early.\n\n## on this page\n\n- [If you’re in severe financial hardship](https://www.servicesaustralia.gov.au/who-can-access-their-superannuation-early?context=21971#sevfinhardship)\n- [If you’re over preservation age and retired](https://www.servicesaustralia.gov.au/who-can-access-their-superannuation-early?context=21971#a2)\n\nYou normally can’t get your super until you reach your preservation age and retire. Preservation age is usually between 55 and 60, depending on your birth year. You can read about when you can [withdraw and use your super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super) on the Australian Taxation Office (ATO) website.\n\nIn some cases, you may be able to get some of your super early. You’ll need to meet one of the following eligibility requirements:\n\n- be in [severe financial hardship](https://www.servicesaustralia.gov.au/who-can-access-their-superannuation-early?context=21971#sevfinhardship)\n- have a terminal illness\n- be a temporary resident\n- have less than $200 in your super fund\n- meet compassionate grounds.\n\nRead full details about [early access to super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super) on the ATO website.\n\n## If you’re in severe financial hardship\n\nYour super fund will decide if you can access your super early because of severe financial hardship. We don’t decide if you can access your super early or if you’re in severe financial hardship.\n\nYour super fund assesses your application for an early release of super due to financial hardship according to the rules in the *Superannuation Industry (Supervision) Regulations 1994*. Decisions aren’t made under the Social Security Act (SSA) which means we can’t review or change a decision your super fund makes.\n\nAccording to the *Superannuation Industry (Supervision) Regulations 1994* you’re considered to be in severe financial hardship if:\n\n- you’re unable to pay for reasonable and immediate essential family living costs\n- you’ve been getting an eligible income support payment from us for 26 weeks continuously with no gaps\n- you’re getting an eligible income support payment on the day you apply for an early release of super.\n\nRead more about the [*Superannuation Industry (Supervision) Regulations 1994*](https://www.legislation.gov.au/details/f2022c00954) on the Federal Register of Legislation website.\n\nThere are different rules if you’re over preservation age and haven’t retired. You must meet all of the following:\n\n- you’ve reached your preservation age plus 39 weeks\n- you get an income support payment for at least 39 weeks in total since you reached your preservation age.\n- you’ll still be out of retirement, which means you’re looking for work, studying, working full or part time.\n\nYour super fund may also consider other factors when making their decision. You should ask them what their eligibility requirements are.\n\n## If you’re over preservation age and retired\n\nIf you’re over your preservation age and retired, you can access your super under normal conditions. You should contact your super fund.\n\n### Eligible payments\n\nThe Department of Treasury decides which [income support payments](https://www.servicesaustralia.gov.au/income-support-payment) allow you to apply for your super early. Most income support payments are eligible but there are some that aren’t.\n\n### Payments that aren’t eligible\n\nYou can’t access your super early if you get one of these income support payments:\n\n- ABSTUDY\n- Austudy\n- Youth Allowance as a full-time student.\n\n#### Other reasons that can make you ineligible\n\nOther things can make you unable to meet the income support requirements or reset your continuous period to zero. This can include any of these:\n\n- you didn’t get any Centrelink payment in one or more fortnights in the last 26 weeks. This includes when you had a non-payment period because of non-compliance or no payment entitlement due to the earnings you declared being too high to receive any payment.\n- your payment was suspended for 14 days or more\n- you only get an allowance such as Family Tax Benefit or Carer Allowance\n- you were in prison or went overseas and had a gap in your payment of 14 days or more\n- you changed your income support payment type and had a gap of more than one day\n- you weren’t getting an eligible income support payment at the time you submitted your application to your super fund\n- you have a New Zealand non-protected Special Category Visa (SCV).","title":""}
+{"_id":"passage_a0JRF000003dedN2AQ/p00388289","text":"## What is a home-based business?\n\nA home-based business is one where an area of your home is set aside and used exclusively as a place of business.\n\nThe types of expenses you can claim depend on how you operate your business out of your home and the business structure. You can only claim deductions for the business portion of your expenses.\n\nIf you do not have an area set aside and used exclusively as a place of business but you do some work from home, you may still be able to claim a deduction for some of your expenses relating to the area you use.\n\nBe aware that you may have to pay [capital gains tax (CGT)](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/home-based-business-and-cgt-implications) when you sell your home if you used part of your home for business purposes – remember to keep the right records to work out your deductions for CGT. If you are eligible, you may be able to reduce your CGT by applying the small business CGT concessions.\n\nRemember, if your business is entitled to goods and services tax (GST) input tax credits, you must claim the deduction in your income tax return at the GST exclusive amount.\n\n## Home-based business expenses\n\nIf you operate some or all of your business from home, you may be able to claim tax deductions for the business portion of expenses.\n\nThese may include:\n\n- running expenses (such as electricity, phone, decline in value of plant and equipment, furniture and furnishing repairs, cleaning)\n- occupancy expenses (such as mortgage interest or rent, council rates, land taxes, house insurance premiums)\n- the cost of [motor vehicle trips](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicle-expense-calculation-methods) between your home and other locations, if the travel is for business purposes.\n\nFor a summary of this content in poster format, download [Home-based business expenses (PDF, 284KB)](https://www.ato.gov.au/api/public/content/5a8421ea864d4b0fb699f625f4fdefeb?v=5e7436ed).\n\n**Media:** Claiming deductions home-based business expenses\n\n[https://tv.ato.gov.au/ato-tv/media?v=bi9or7od7bgywiExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bi9or7od7bgywi) (**Duration:** 01:09)\n\n## Running expenses\n\nRunning expenses are the increased costs from using your home’s facilities for your business.\n\nYou can claim running expenses if you run your business from home, such as in a separate study or a desk in a lounge room, even if it doesn’t have the character of a ‘place of business’.\n\n### Calculating your claim\n\nThere are several ways to work out your running expenses. You can use any method to calculate your running expenses, provided:\n\n- it is reasonable in your circumstances\n- you exclude your normal (private) living costs\n- you have records to show how you calculated the business expense.\n\n#### Actual cost method:\n\n- where you can only claim based on receipts or other written evidence.\n\n#### Fixed rate method:\n\n- allows you to claim 70 cents for each hour you operate your business at home. This amount covers your deduction for energy expenses (electricity and gas), phone and internet usage, stationery, and computer consumables.\n\nTo use this method, you must keep a record of all the hours worked from home for the entire year, using a diary, spreadsheet, or similar document.\n\nYou can also claim a deduction for any other running expenses not covered by the rate, for example, cleaning your home office.\n\n#### Floor area method:\n\n- you can use the floor area method if you have an area of your home set aside as a 'place of business'. In addition to the floor area method, you can also claim a deduction for decline in value of the business-related portion of depreciating assets and equipment.\n\nFor more information, see [Home-based business expenses – sole trader or partnership](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/home-based-business-expenses-sole-trader-or-partnership#ato-Runningexpenses).\n\n## Depreciation (decline in value) of business assets\n\nIf you use the 70 cents an hour fixed rate method, you can separately claim a deduction for the decline in value of depreciating assets, such as laptops, mobile phones and office furniture.\n\nIf you use assets for both personal and business use, you need to apportion your business deprecation expenses from personal based on your pattern of use.\n\nIf you have an aggregated turnover of less than $10 million, you can choose to use the simplified depreciation rules. You may also be eligible for the $20,000 [instant asset write-off](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off) in the 2023–24 and 2024–25 income year. Find out more at [Simpler depreciation rules for small business](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business).\n\n## Occupancy expenses\n\nOccupancy expenses are expenses that you pay to own or rent your home.\n\nYou can only claim occupancy expenses if the area of your house set aside for your business has the character of a ‘place of business’ (including if most of your business is conducted online). Indicators that the area of your home that you’ve set aside is a place of business include:\n\n- clearly identifiable as a place of business (such as a sign at the front of your house)\n- not easily suitable or adaptable for private or domestic use\n- used exclusively or almost exclusively for your business\n- used regularly for business visits by your clients.\n\nIf you’re eligible to claim occupancy expenses, you can also claim running expenses.\n\nYou usually calculate occupancy expenses based on the proportion of the floor area of your home that is a place of business and the proportion of the year it was used for business.\n\nIf you earn personal services income (PSI), you may not be able to deduct some occupancy expenses. To find out more, see [Personal services income (PSI)](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income).\n\nFor more information, see [Home-based business expenses – sole trader or partnership](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/home-based-business-expenses-sole-trader-or-partnership#ato-Occupancyexpenses).\n\n## Records you need to keep\n\nYou need to keep [complete and accurate records](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business/index-record-keeping-for-business) for at least 5 years to substantiate your claims for all of your home-based business expenses.","title":""}
+{"_id":"passage_a0JRF000003i4EH2AY/p00391926","text":"## How to report back payments\n\nSometimes there may have been an oversight or delay and you need to make a back payment to an employee. As back payments are not a single type of payment, there is no single way to report them through single touch payroll (STP). Instead, you need to consider the circumstances of the back payment.\n\nIn some cases, the back payment you are making may be a [lump sum E](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/reporting-back-payments#LumpsumE) payment. This is a separately reported payment type for STP.\n\nIf you are making a back payment to an employee and it is not lump sum E, then report it in STP as the relevant payment type (such as gross, allowances or overtime).\n\n## Lump sum E\n\nLump sum E is an amount of back payment of remuneration that accrued, or was payable, more than 12 months before the date of payment.\n\nPrior to 1 July 2025, you must report a back payment as **Lump sum E** if the amount was equal to or greater than the lump sum E threshold amount of $1,200.\n\nPost 1 July 2025, the $1,200 threshold no longer applies. Any amount that qualifies as a lump sum E payment must be reported as **Lump sum E**.\n\nYour payroll solution may report lump sum E:\n\n- in each STP report, or\n- only when you finalise your reporting at the end of the financial year.\n\nBoth ways are acceptable.\n\nYou must report lump sum E year-to-date (YTD) amounts by specifying each prior financial year to which the amount relates.\n\nWhen you report lump sum E payments, you no longer need to issue a lump sum E letter to employees at the end of the financial year. This information will now be available on their income statement.\n\n## Lump sum E reporting examples\n\nThe following table outlines some examples of what should and shouldn't be included in **Lump sum** **E**.\n\nLump sum E reporting examples\n\nInclude\n\nDon't include\n\nFor payments made prior to 1 July 2025:\n\n- back payments which accrued, or were payable, more than 12 months before the date of payment and are equal or greater than the lump sum E $1,200 threshold.\n\nFor payments made post 1 July 2025:\n\n- back payments which accrued, or were payable, more than 12 months before the date of payment regardless of the amount.\n\nFor more information, see [Reporting the amounts you have paid](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid).\n\n### Example: lump sum E reporting paid prior to 1 July 2025\n\nRoss' employer identified on 15 February 2022 that Ross has not been paid his higher duties allowance for the past 22 months totalling $3,300, due to an administration error. Using the normal ATO backpay rules, the pay office has split the payment into the following categories:\n\n- The past 12 months of backpay (15 February 2021 to 15 February 2022) totals $1,800. This is taxed and reported in the current financial year. As the backpay is for an allowance, it will be reported in the appropriate allowance field.\n- The amount that is greater than 12 months old (14 February 2021 and earlier) totals $1,500 which means it must be reported as lump sum E because it is greater than the lump sum E threshold of $1,200. The lump sum E component must be allocated to the appropriate financial year. $600 relates to the 2020–21 financial year and $900 relates to the 2019–20 financial year.\n\nThis is reported in STP Phase 2 as follows:\n\n- KN tasks $1,800\n- Lump sum E 2021 $600\n- Lump sum E 2020 $900.\n\nRoss’ employer does not need to provide him with a letter as the lump sum E amounts have been allocated to the appropriate financial years in the STP report.\n\nEnd of example\n\n### Example: lump sum E reporting paid post 1 July 2025\n\nBrett’s employer identifies on 7 October 2025 that Brett has not claimed his cents per kilometre allowance for the first quarter of the prior financial year (1 July 2024 to 30 September 2024) due to a technical issue.\n\n- At that time, the ATO reasonable rate that Brett’s employer used was 0.88c a km.\n- Brett’s timesheet shows that he travelled 583 km.\n- The payment was accrued more than 12 months prior to the date Brett's employer was going to pay him his backpay.\n\nBecause the back payment is being made after 1 July 2025, the lump sum E threshold of $1,200 does not apply and the payment must be reported as Lump sum E. The amount of 0.88 × 583 = $513.04 is reported in STP Phase 2 as follows:\n\n- lump sum E 2024 $513.04.\n\nBrett’s employer does not need to provide him with a letter as the lump sum E amounts as they have included the amount per the relevant financial year in their STP reporting.","title":""}
+{"_id":"passage_a0JRF000003c8MD2AY/p00386773","text":"## When to use market value\n\nIf you sell, transfer or gift property to family or friends for less than it is worth, you’ll be treated as if you received the market value of the property for capital gains tax (CGT) purposes.\n\nYou use the market value of a property to calculate your CGT if both of the following are true:\n\n- what you received was more or less than the market value of the property\n- you and the new owner were not dealing with each other at arm's length.\n\nThis is called the 'market value substitution' rule.\n\nYou are dealing at 'arm’s length' with someone if each party acts independently and neither party exercises influence or control over the other in connection with the transaction.\n\nWe look at the relationship between the parties and the quality of the bargaining between them.\n\nIf the property was your main residence, you can claim the [main residence exemption](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/eligibility-for-main-residence-exemption) from CGT.\n\n### Exceptions\n\nThere are 2 exceptions to the market value substitution rule. If you transfer property to:\n\n- your former spouse on the [breakdown of your marriage or relationship](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/relationship-breakdown-and-capital-gains-tax), the rule may not apply\n- the trustee of a special disability trust for no payment, you can disregard any capital gain or capital loss.\n\n## Valuing your property\n\nYou need to know the [market value of the property](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/market-valuation-of-assets) at the time you disposed of it.\n\n### Example: selling property for less than market value\n\nAntoine owned a rental property. The lease on the property was about to end.\n\nAntoine owed $120,000 on the mortgage. He offered to sell the property to his son for the balance owing on the mortgage. His son accepted the offer and purchased the property for $120,000.\n\nAntoine obtained a market valuation from a professional valuer. The market valuation showed the value of the property at the time of transfer was $450,000.\n\nWhen Antoine calculates his capital gain or loss, his capital proceeds are the market value of $450,000.","title":""}
+{"_id":"passage_a0JRF000003eaFx2AI/p00389170","text":"## How compulsory repayments work\n\nCompulsory repayments of your study and training support loan are made through the income tax system.\n\nYou don't have to provide loan information in your tax return. If you have a loan when you lodge your tax return and your repayment income is above the minimum repayment threshold, we will work out your compulsory repayment and include it on your notice of assessment. This will occur even if your tax return is for an income year before you started studying.\n\nYour compulsory repayment rate increases as your income increases. The more you earn, the higher your repayment. Your compulsory repayment is based on your income alone – not the income of your parents or spouse.\n\nYou won't have to make a compulsory repayment if you have a spouse or dependants and if (due to low family income) you:\n\n- are entitled to a reduction of the Medicare levy\n- don't have to pay the Medicare levy.\n\nIf you don't have to make a compulsory repayment, you may ask your employer not to withhold additional amounts from your pay by completing the *Medicare levy variation declaration* form (NAT 0929).\n\nYou can also make additional [voluntary repayments](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/voluntary-repayments).\n\nAsk a question or read answers to questions at our online community:\n\n[ATO community](https://community.ato.gov.au/s/article/a079s0000009GnGAAU/paying-my-hecs-help-student-loan)\nFor more information see:\n\n-\n[Study and training loan repayment thresholds and rates](https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds)\n\n-\n[Medicare levy variation declaration](https://www.ato.gov.au/forms-and-instructions/medicare-levy-variation-declaration)\n\n-\n[Study and training loan repayment calculator](https://www.ato.gov.au/calculators-and-tools/study-and-training-loan-repayment-calculator)\n\n##\n[\n]()Compulsory repayment changes\n\nChange to compulsory repayments are now law. From the 2025–26 income year, you only need to make a compulsory repayment when your repayment income exceeds $67,000. Your compulsory repayment will only be calculated on the portion of your income that exceeds $67,000.\n\nFor more information, see [Study and training loans – what's new](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new).\n\n##\n[\n]()Advising your employer\n\nYou must advise your employer if you have a study or training support loan. Under the pay as you go (PAYG) withholding system, your employer will withhold an additional amount from your salary and wage income to cover your compulsory repayment.\n\nAdvise your employer by ticking the relevant box on one of the following forms that applies to your situation:\n\n- If you're starting a new job, complete a *Tax file number declaration* (NAT 3092) and include your loan type when asked to do so.\n- If you're already working and being paid, complete a *Withholding declaration* (NAT 3093) and include your loan type when asked to do so.\n- When you pay off your loan in full, complete a new *Withholding declaration* (NAT 3093) to advise you no longer have an outstanding loan. Update your loan type when asked to do so.\n\nThese forms are usually given to you by your employer.\n\n### Employer deductions showing on your account\n\nWhen your employer withholds additional amounts to cover your anticipated compulsory repayment, these amounts are remitted to the ATO as part of the employer's PAYG withholding obligations.\n\nThe additional tax withheld is not applied to your loan account until:\n\n- you have lodged your tax return, and\n- a compulsory repayment has been calculated based on your repayment income.\n\nYour loan balance doesn’t reduce after each pay cycle; it is only applied as a lump sum after your income tax return is lodged.\n\nFor more information see:\n\n-\n[Types of loans](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/types-of-loans)\n\n-\n[Tax file number declaration (NAT 3092)](https://www.ato.gov.au/forms-and-instructions/tfn-declaration)\n\n-\n[Withholding declaration (NAT 3093)](https://www.ato.gov.au/forms-and-instructions/withholding-declaration)\n\n-\n[Tax in Australia: what you need to know](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/tax-in-australia-what-you-need-to-know)\n\n-\n[Tax tables](https://www.ato.gov.au/tax-rates-and-codes/tax-tables-overview)\n\n##\n[\n]()If you earn business or investment income\n\n[Pay as you go (PAYG) instalments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments) is a system where you make regular payments towards your expected tax liability if you earn business or investment income. You pay your tax in instalments throughout the year rather than when you lodge your tax return.\n\nIf you are making PAYG instalments, we take your loan into account when working out your PAYG instalment amount and rate.\n\nYou can vary your instalment amount or rate to allow for your personal circumstances, see [How to vary your PAYG instalments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments).","title":""}
+{"_id":"passage_a0JRF000003cH7l2AE/p00386899","text":"## Taxable payment reporting system services\n\nThe services that come under the Taxable payment reporting system (TPRS) are:\n\n- building and construction\n- cleaning\n- courier and road freight\n- information technology (IT)\n- security, investigation or surveillance.\n\nIf your business provides these services and pays contractors to deliver them, you may need to lodge a TPAR.\n\n## When your business provides TPRS services and other unrelated services\n\nIf your business provides both courier and road freight services, you must combine the payments you receive for both these services. Do this when you work out if you need to lodge a TPAR.\n\nIf TPRS services are only part of the services your business provides, you need to work out what percentage of the payments you receive are for TPRS services each financial year. You do this to determine if you need to lodge a TPAR.\n\nThis doesn't apply to [building and construction services](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/reports-and-returns/taxable-payments-annual-report/work-out-if-you-need-to-lodge-a-tpar/building-and-construction-services) you provide.\n\nIf the total payments you receive for TPRS services are:\n\n- 10% or more of your business income: you must lodge a TPAR\n- less than 10% of your business income: you do **not** need to lodge a TPAR.\n\n### Steps to work out if you need to lodge\n\n**Step 1: calculate your total payments received from contractors for each relevant service.**\n\nAdd up all payments your business received for each relevant TPRS service during the financial year. Include payments received when employees, contractors or sub-contractors performed services on your behalf.\n\n**Step 2: calculate your current or projected business income**\n\nIf you have been operating your business for:\n\n- the full financial year: use your current [business income](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst) for the year\n- less than 12 months of the financial year: use your projected business income. Do this by working out what your business income will be for the next full financial year.\n\n**Step 3: calculate what percent of your business income is from a relevant service**\n\nCalculate this percentage by using the following formula for each financial year:\n\n**Total payments received for a relevant service** ÷ **current or projected business income** x **100** = **%**\n\nYou must lodge a TPAR if:\n\n- 10% or more of your business income for the financial year is from a relevant service\n- you made payments to contractors for a relevant service during the year.\n\nIf you need to lodge a TPAR, report the total contractor payments made to each contractor for the relevant service provided on your behalf.","title":""}
+{"_id":"passage_a0JRF000003Yk3V2AS/p00383659","text":"## When a gift or donation is deductible\n\nYou can only claim a tax deduction for a gift or donation to an organisation that has the status of a [deductible gift recipient](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/gifts-and-donations#Whatisadeductiblegiftrecipient) (DGR).\n\nTo claim a deduction, you must be the person that gives the gift or donation and it must meet the following 4 conditions:\n\n1. It must be made to a DGR.\n2. It must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return. A material benefit is something that has a monetary value.\n3. It must be money or property – this can include financial assets such as shares.\n4. It must comply with any relevant gift conditions – for some DGRs, the income tax law adds conditions affecting the types of deductible gifts they can receive.\n\nDGRs sometimes authorise a business to collect donations on their behalf. For example, a supermarket may be authorised to accept a donation at the register that they then send onto the DGR. You can claim a deduction for a gift or donation you make in this way, if:\n\n- it meets the 4 conditions above\n- you have [a receipt from the third party](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/keeping-a-record-of-your-donation).\n\nIf you receive a material benefit in return for your gift or donation to a DGR – for example, you purchase a ticket to a fundraising dinner – it's considered [a contribution and extra conditions apply](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/is-it-a-gift-or-contribution).\n\nTo claim a deduction, you must have a [record of your donation](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/gifts-and-donations#Keepingrecordsforgiftsanddonations) such as a receipt.\n\n## What is a deductible gift recipient?\n\nA DGR is an organisation or fund that registers to receive tax deductible gifts or donations.\n\nNot all charities are DGRs. For example, crowdfunding campaigns are a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs. Donations to these campaigns and platforms aren't deductible.\n\nYou can check the DGR status of an organisation at [ABN Look-up: Deductible gift recipientsExternal Link](https://abr.business.gov.au/Tools/DgrListing).\n\n## What you can claim\n\nThe amount you can claim as a deduction depends on the type of gift:\n\n- Gifts of money – you can claim the amount of the gift, but it must be $2 or more.\n- Gifts of property or shares – there are different rules depending on the type and value of the property – see [Gift types, requirements and valuation rules](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/gift-types-requirements-and-valuation-rules).\n- Gifts under the Heritage and Cultural programs – there are special circumstances where donations can also be deductible – see:\n- [Donating under the Cultural Gifts Program](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/gift-types-requirements-and-valuation-rules/donating-under-the-cultural-gifts-program)\n- [Heritage gifts](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/gift-types-requirements-and-valuation-rules/heritage-gifts)\n- [Claiming conservation covenant concessions](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/in-detail/fundraising/claiming-conservation-covenant-concessions).\n\nIf you receive a token item for your donation you can still claim a deduction. Token items are things of no material value that are used to promote the DGR, such as lapel pins, wristbands and stickers.\n\nYou claim the deduction for your gift in the income year in which you give the gift. In some circumstances you may elect to [spread the tax deduction over a period of up to 5 income years](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/tax-deductible-donations/when-can-i-claim).\n\n### Bucket donations\n\nIf you made one or more small cash donations, each of $2 or more, to bucket collections – for example, to collections conducted by a DGR for natural disaster victims – you can claim a total tax deduction of up to $10 for those donations for the income year without a receipt.\n\nTo claim donations of more than $10, you need a receipt.\n\n### Political party and independent candidate donations\n\nIn some circumstances, you can claim a deduction for gifts and donations to registered political parties or independent candidates.\n\nThis includes paying a membership subscription to a registered political party.\n\nYou must have made the gift or donation as an individual (not in the course of carrying on a business) and it can't be a testamentary donation.\n\nYour gift or donation must be worth $2 or more. If the gift is property, the property must have been purchased within 12 months of making the donation.\n\nThe most you can claim in an income year is:\n\n- $1,500 for contributions and gifts to political parties\n- $1,500 for contributions and gifts to independent candidates and members.\n\nTo claim a deduction, you must have a written record of your donation.\n\nFor more information see [Claiming political contributions and gifts](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/in-detail/fundraising/claiming-political-contributions-and-gifts).\n\n## What you can't claim\n\nYou can't claim gifts or donations that provide you with a personal benefit, such as:\n\n- raffle or art union tickets – for example, an RSL Art Union prize home\n- items such as chocolates, mugs, keyrings, hats or toys that have an advertised price\n- the cost of attending fundraising dinners (you may be eligible to claim a deduction as a *contribution* if the cost of the event was more than the [minor benefit supplied as part of the event](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/gifts-and-fundraising/fundraising-events/supporting-fundraising-events))\n- club membership fees\n- payments to school building funds made in return for a benefit or advantage – for example, as an alternative to an increase in school fees or placement on a waiting list\n- payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you\n- gifts to family and friends, regardless of the reason\n- donations made under a salary sacrifice arrangement\n- donations made under a will.\n\nYou can't claim a tax deduction for donations made to social media or crowdfunding platforms unless they are a registered DGR.\n\n### Example: material benefits where a deduction can't be claimed\n\nRobbie is an office worker. Each year his workplace gets involved in the Daffodil day appeal to raise money and awareness for the Cancer Council. Robbie buys a teddy bear toy on Daffodil Day at a cost of $30.\n\nRobbie can’t claim a deduction for the cost of the toy as he has received a material benefit in return for his contribution to the Cancer Council.","title":""}
+{"_id":"passage_a0JRF000003eGIr2AM/p00388866","text":"## FBT exemption for eligible vehicles\n\nThere is no fringe benefits tax (FBT) when an employee uses your vehicle if:\n\n- it is an [eligible vehicle](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Vehicleseligiblefortheexemption), and\n- [private use of the vehicle is limited](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Useseligiblefortheexemption).\n\nThere is a separate exemption for [eligible electric cars](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/electric-cars-exemption).\n\n## Vehicles eligible for the exemption\n\nThe following vehicles are eligible for the limited private use exemption:\n\n- a **single cab ute**\n- a **dual cab ute** that is designed to either\n\n- [carry a load of 1 tonne or more](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Calculateloadcarryingcapacityof1tonneorm)\n- carry more than 8 passengers (including the driver)\n- carry a load of less than 1 tonne but is not designed for the principal purpose of carrying passengers. To work out if a dual cab ute meets this condition, see [MT 2024](https://www.ato.gov.au/law/view/document?Docid=MTR/MT2024/NAT/ATO/00001&PiT=99991231235958) *Fringe benefits tax: dual cab vehicles eligibility for exemption where private use is limited to certain work-related travel* on our legal database\n- a **panel van **or **goods van**\n- a **modified vehicle** (such as a hearse) if, for the entire FBT year when the car is used by the employee, the modification permanently affects the inherent design of the vehicle. To find out what constitutes a modified vehicle, see [MT 2033](https://www.ato.gov.au/law/view/document?locid='FOI/1209153P'&PiT=19940127000001) *Fringe benefits tax: application of sub-section 8(2) exemption to modified cars*\n- a **taxi**\n- any **4-wheel drive vehicle** that is designed either\n\n- to [carry a load of 1 tonne or more](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Calculateloadcarryingcapacityof1tonneorm)\n- to carry more than 8 passengers (including the driver)\n- for a principal purpose other than carrying passengers, as indicated by its appearance, marketing specification or carrying capacity – for more information see [TD 94/19](https://www.ato.gov.au/law/view/document?docid=TXD/TD9419/NAT/ATO/00001)\n- any **other road vehicle** that is designed to carry either\n\n- a [load of 1 tonne or more](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Calculateloadcarryingcapacityof1tonneorm)\n- more than 8 passengers (including the driver).\n\nIf the vehicle your employee is using is:\n\n- an eligible vehicle, check that their use is limited to [uses that qualify for the FBT exemption](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles#Useseligiblefortheexemption)\n- a car that is not an eligible vehicle, FBT applies to the employee's private use of it. You calculate the [taxable value of this use as a car fringe benefit](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/cars-and-fbt/taxable-value-of-a-car-fringe-benefit).\n\n### Calculate load carrying capacity of 1 tonne or more\n\nTo determine if a vehicle is eligible, you may need to know if it is designed to carry a load of 1 tonne or more.\n\nYou can use the following formula to calculate the carrying capacity of a vehicle:\n\nMaximum loaded vehicle weight (or gross vehicle weight, which is typically shown on the compliance plate attached to a vehicle's engine bay, door pillar or footwell by the manufacturer or importer).\n\n*Less*:\n\nUnladen vehicle weight (or basic kerb weight, which is the weight of the vehicle with a full capacity of lubricant, coolant and fuel together with spare wheel, tools (including jack) and installed options, but excluding the weight of goods or occupants).\n\n## Uses eligible for the exemption\n\nFBT does not apply if your employee only uses your eligible vehicle for the following:\n\n- travel between home and work\n- travel that is incidental to travel in the course of employment duties\n- non-work-related use that is minor, infrequent and irregular (such as occasional use of the vehicle to remove domestic rubbish).\n\nIf FBT does not apply to your employee's use of your eligible vehicle, then it also does not apply to:\n\n- any road or bridge tolls you incur while your employee is using the vehicle\n- use of the vehicle by your employee's associate (such as their partner), provided their use is also minor, infrequent and irregular.\n\nTo check what we consider minor, infrequent and irregular use, see [PCG 2018/3](https://www.ato.gov.au/law/view/document?DocID=COG/PCG20183/NAT/ATO/00001) *Exempt car benefits and exempt residual benefits: compliance approach to determining private use of vehicles* on our legal database*.*\n\n### Record keeping\n\nYou don't have to keep special records to be eligible for the exemption. However, you must be able to demonstrate that the use of the vehicle at all times meets the limited private use conditions.\n\nFor example, you could regularly compare the opening and closing odometer readings of the vehicle with the total distance you expect the employee to travel between home and work.\n\n## What to do if use of vehicle is subject to FBT\n\nIf an employee's use of your eligible vehicle doesn't meet the conditions for limited private use, it is a car fringe benefit or residual fringe benefit.\n\nYou need to:\n\n1. work out the [taxable value of the private use of the eligible vehicle](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/exempt-use-of-eligible-vehicles/taxable-value-of-private-use-of-eligible-vehicles)\n2. [calculate how much FBT](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/calculating-your-fbt) to pay\n3. [lodge your FBT return](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-registration-lodgment-payment-and-reporting/lodging-your-fbt-return-and-paying)\n4. [pay the FBT amount](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-registration-lodgment-payment-and-reporting/lodging-your-fbt-return-and-paying)\n5. [check if you should report the fringe benefit](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-registration-lodgment-payment-and-reporting/reportable-fringe-benefits) through Single Touch Payroll (or on your employee’s payment summary).\n\n### Claiming tax deductions\n\nYou can claim a [deduction for expenses for motor vehicles](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses) used in running your business. If you pay FBT, the:\n\n- FBT you pay is tax deductible\n- private use expenses of the vehicle that you pay FBT on is tax deductible.","title":""}
+{"_id":"passage_a0JRF000003cEhl2AE/p00386859","text":"### Other allowances (allowance type OD)\n\nThese are other allowances that are not otherwise separately itemised. These can either be deductible or non-deductible expenses. If the allowance belongs in one of the more specific allowance types detailed above, you must report it in the specific allowance type and not as other allowances.\n\nAnything you report as 'other allowances' needs to have a description for the category of expense. These categories will help us assist each of your employees to complete their individual tax returns.\n\nThe following table outlines the description codes descriptions you can use.\n\nOther allowances description codes and examples\n\nAllowance code\n\nDescription\n\nH1 (home office)\n\nUse this code for deductible expense allowances related to the employee maintaining a home office (such as allowances to assist with initial set up or running costs). Do not use this code to report allowances that relate to specific tools and equipment that are reported as tool allowance (allowance type TD).\n\nND (non-deductible)\n\nUse this code for non-deductible expense allowances. Generally, these will be allowances related to an expense which is not work-related, not for business purposes, or is for private purposes.\n\nT1 (transport or fares)\n\nUse this code for deductible expense allowances related to the employee travelling on public transport, or in taxis and rideshare services. Do not use this code to report allowances that relate to transport that was not for business purposes, use ND instead.\n\nU1 (uniform)\n\nUse this code for deductible expense allowances related to uniforms, as long as they are not for non-deductible expenses (use ND instead).\n\nV1 (private vehicle)\n\nUse this code for deductible expense allowances related to the employee travelling in a private vehicle. This includes cents per kilometre allowances for vehicles that are not cars.\n\nDon't use this code to report allowances that relate to transport that was not for business purposes (use ND).\n\nG1 (general)\n\nUse this code for deductible expense allowances that don't belong in one of the other codes above.\n\nSpecific description we tell you to use\n\nSometimes we will tell you to use specific descriptions in relation to certain programs, such as the specific descriptions relating to the JobMaker Hiring Credit scheme (which has now ended). If we tell you to use a specific description, use it instead of the main allowance codes.\n\nDepending on the product you use, these will appear in your STP report as either:\n\n- the code only (for example, G1)\n- the code and name (for example, U1 uniform)\n- the code and the pay code description you have used in your payroll (for example, H1 internet allowance).\n\nThe following table outlines some examples of what should and should not be included in **Other allowances**.\n\nOther allowances reporting examples\n\nInclude\n\nDon't include\n\nG1 (general)\n\n- laundry allowances for the cost of laundering deductible conventional clothing\n\nH1 (home office)\n\n- home office equipment allowances\n- internet allowances\n\nND (non-deductible)\n\n- cents per km payments for private travel such as travel between home and work\n- allowance payments for the cost of transport for private purposes\n- laundry allowance for the cost of laundering uniforms for private purposes\n- allowances paid for travel that is for private purposes\n- part-day travel allowances\n- allowances paid in relation to equipment used for private purposes\n\nT1 (transport or fares)\n\n- Allowance payments for the cost of transport for business related travel not traceable to a historical award in force on 29 October 1986\n\nU1 (uniform)\n\n- allowances paid for the purchase of a uniform\n\nV1 (private vehicle)\n\n- cents per km payments for vehicles other than a car such as a motorbike or van\n- flat rate car allowance that is referable to the kilometres travelled\n\n- direct reimbursement of business expenses – this is not reported\n- living away from home allowance – this falls under the FBT legislation and is not reported here\n- tool allowances – this should be reported as tool allowances ([allowance type TD](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/allowances#ToolallowanceAllowancetypeTD))\n- cents per kilometre – this should be reported as cents per km allowance ([allowance type CD](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/allowances#CentsperkmallowanceAllowancetypeCD))\n- qualification and certificate allowances – this is reported in qualification and certification allowances ([allowance type QN](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/allowances#QualificationandcertificationallowancesA))","title":""}
+{"_id":"passage_a0JRF000003aeV32AI/p00385393","text":"## Types of vehicles\n\n**Cars** (for income tax purposes) are defined as motor vehicles (including 4-wheel drives) designed to carry both:\n\n- a load less than one tonne\n- fewer than 9 passengers.\n\n**Other vehicles** include:\n\n- motorcycles\n- vehicles designed to carry either\n\n- one tonne or more (such as a utility truck or panel van)\n- 9 passengers or more (such as a minivan).\n\nThe motor vehicle must be owned, leased or under a hire-purchase agreement.\n\nIf you operate your business as a company or trust, you can also claim for [motor vehicles provided to an employee](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicles-used-by-your-employees) or their associate as part of their employment.\n\n## Expenses you can claim\n\nYou can claim:\n\n- fuel and oil\n- repairs and servicing\n- interest on a motor vehicle loan\n- lease payments\n- insurance cover premiums\n- registration\n- depreciation (decline in value).\n\nMake sure you use the correct calculation method when claiming motor vehicle expenses. Using the wrong method can lead to incorrect claims. For more information, see [Calculation methods for claiming business motor vehicle expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicle-expense-calculation-methods).\n\n## Separate private from business use\n\nIf you use a motor vehicle for both business and private use, you must be able to correctly identify and justify the percentage that you are claiming as business use. The percentage that is for private use isn't claimable and fringe benefits tax may apply (see [Cars and FBT](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits/fbt-on-cars-other-vehicles-parking-and-tolls/cars-and-fbt)). This is an area where we often see errors made.\n\nIt is important to keep records. You can use a [logbook or diary](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/logbook-method#Whattorecordinyourlogbook) to record private versus business travel. For more information, see [Motor vehicle expense records you need to keep](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicle-expense-records-you-need-to-keep).\n\nTravelling between your home and your place of business is considered private use, **unless** you are a [home-based business](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses) and your trip was for business purposes. For more information, see [Motor vehicle expenses for a home-based business](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/calculating-car-expenses-prior-to-1-july-2015).\n\nYou can also refer to [Motor vehicles used by shareholders of private companies](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicles-used-by-shareholders).\n\n## Car limit\n\nThere is a [limit on the cost](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/assets-and-exclusions) you can use to work out the depreciation of passenger vehicles (except motorcycles or similar vehicles) designed to carry a load of less than one tonne and fewer than 9 passengers.","title":""}
+{"_id":"passage_a0JRF000003gJFp2AM/p00390574","text":"## When services are used outside Australia\n\nThe supply of service is GST-free if the supply is used or enjoyed outside Australia or the supply is made to a non-resident who is not in Australia when the supply is made.\n\nStart of exampleExample: service used outside Australia\n\nTom, a GST registered Australian freelance writer, is engaged by an English company to write a chapter of a book that will be published in England.\n\nHe writes the chapter in Australia and sends it to the non-resident publisher based in England. His service has been exported to the non-resident publisher who is not in Australia when the supply is made, so he does not include GST in his invoice to the publisher.\n\nEnd of example\n## When services are used in Australia\n\nThe supply of service is not GST-free if the service is provided in Australia even if the recipient is not in Australia.\n\nStart of exampleExample: service used in Australia\n\nA GST registered school in Australia provides tuition to overseas students currently studying in Australia. However, it bills the overseas parents of the students directly.\n\nThe supply may be under an agreement entered into between the Australian school and the overseas parents. However, as it is provided to the students in Australia, the supply is not GST-free.","title":""}
+{"_id":"passage_a0JRF000003gWo92AE/p00390731","text":"## GST-free NDIS supplies\n\nA supply to a NDIS participant is GST-free if **all** the following requirements are met:\n\n- the NDIS participant has a [NDIS plan in effect](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#NDISplanineffect)\n- the supply is of [reasonable and necessary supports](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#reasonableandnecessarysupports) that are specified in the statement of supports in the participant's NDIS plan\n- there is [a written agreement](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#madeunderawrittenagreement) between you and the NDIS participant (or another person)\n- it is a supply covered by one of the tables in the [A New Tax System (Goods and Services Tax) (GST free Supply—National Disability Insurance Scheme Supports) Determination 2021External Link](https://www.legislation.gov.au/F2021L00846/latest/text) (NDIS Determination).\n\nThe [explanatory statement to the NDIS DeterminationExternal Link](https://www.legislation.gov.au/F2021L00846/latest/text) provides examples to assist participants with the types of supplies listed in the NDIS Determination.\n\n## NDIS plan is in effect\n\nThe participant's NDIS plan must be in effect under section 37 of the *National Disability Insurance Scheme Act 2013* (NDIS Act), which means it must be approved by the National Disability Insurance Agency (NDIA).\n\nThe plan ceases to be effective when it is replaced by another plan, or when the NDIS participant ceases to be a participant in the NDIS.\n\n## Reasonable and necessary supports\n\nThe supply must be of one or more reasonable and necessary supports, as defined in the participant's NDIS plan.\n\nWhere the participant’s NDIS plan specifies an amount such as time or quantity of reasonable and necessary supports, any supplies of supports in excess of these specifications will not be a GST-free NDIS supply.\n\n## Made under a written agreement\n\nThere must be made a written agreement between you, the supplier, and the NDIS participant (or another person).\n\nThe written agreement must:\n\n- identify the NDIS participant\n- state that the supply is a supply of one or more of the reasonable and necessary supports specified in the statement included, under subsection 33(2) of the NDIS Act, in the participant’s NDIS plan.\n\nThe written agreement can be between you and a person other than the NDIS participant. Other people can include those who manage the plan and funding for the NDIS participant. This would include the NDIA, a plan management provider registered with NDIA, or a guardian or relative of the NDIS participant.\n\nThe written agreement may be a single document or a combination of documents, such as letters between you and the other party and receipts or invoices you issue. It may include documents in electronic form.\n\nAs long as you have written evidence of a legally binding obligation for you to make the supply to the NDIS participant and that it is a reasonable and necessary support as specified in the participant’s NDIS plan, the requirement for a written agreement is satisfied.\n\n### Example: supply made under a written agreement in accordance with a self-managed participant's NDIS plan\n\nJoe, a participant in the NDIS, has an NDIS plan that specifies that he requires 5 hours of support on a weekly basis. He requests XYZ Co to supply him with the support for a period of 3 months based on the NDIS published price. Joe provides XYZ with a letter identifying:\n\n- that he is a NDIS participant\n- the type of support he is to be provided with (as specified in his plan)\n- that the support is one of the reasonable and necessary supports specified in Joe’s NDIS plan.\n\nXYZ writes to Joe to confirm its agreement to provide the support including the start date and signs the letter. For the next 3 months, XYZ supplies Joe with the requested support.\n\nThe written agreement under requirement 3 is satisfied.\n\nEnd of example\nNote that the written agreement does not need to be made under one document.\n\n### Example: supply made under a written agreement in accordance with a participant’s NDIS plan managed by a plan management provider registered with the NDIA\n\nABB Co is registered with the NDIA as a plan management provider. A number of NDIS participants have engaged ABB to manage their plans for them.\n\nThanh, a NDIS participant, would like Elite, a provider of disability supports, to deliver one of the reasonable and necessary supports in her plan. With Thanh's consent, ABB emails Elite with Thanh's relevant requirements, including her name and the number of hours of support needed as specified in her plan. The email also states that the support is one of the reasonable and necessary supports specified in Thanh’s NDIS plan. Elite writes to Thanh and ABB setting out the details of the support to be provided and the price to be paid but makes no reference to Thanh's plan. ABB replies in writing to confirm Thanh's agreement to receive the supports from Elite.\n\nThe written agreement requirement is satisfied by the written evidence provided by the combination of ABB’s email setting out the supports required, Elite’s letter confirming support arrangements and ABB's letter of acceptance.\n\n**Note:** Neither Elite's letter nor ABB's letter of acceptance would be sufficient evidence of the written agreement requirement. This is because these 2 documents do not state that the supply is of a reasonable and necessary support as specified in Thanh's plan. ABB’s initial email on its own is also not sufficient evidence of the written agreement because it does not evidence a binding obligation on Elite to make the supplies to Thanh. It is only the combination of the 3 documents that provide sufficient evidence of the written agreement requirement.\n\nEnd of example\n## A supply covered by the Disability Services Minister’s Determination\n\nFor the supply to be GST-free, as well as meeting the other 3 requirements outlined above, your supply to the NDIS participant must be of a kind covered by the NDIS Determination. The NDIS Determination applies to supplies made on or after 1 July 2021 but before 1 July 2025.\n\nThe NDIS Determination has 2 tables:\n\n- The table in subsection 6(1) – supplies of supports that are GST-free ([Table 1](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#Schedule1)).\n- The table in subsection 6(2) – supplies of supports that are GST-free if they are listed in other determinations ([Table 2](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#Schedule2)).\n\nIf your supply is covered by an item listed in Table 1, the requirement to be covered by the NDIS Determination is satisfied.\n\nIf Table 1 doesn't apply, you can consider Table 2. When an item in Table 2 is relevant to your supply, the requirement to be covered by the NDIS Determination is only satisfied if the item is also covered by one of 3 other determinations.\n\nThis is explained further below.\n\n### Table 1\n\nThe supplies covered by Table 1 of the NDIS Determination are:\n\n- specialist disability accommodation and accommodation or tenancy assistance (the [National Disability Insurance Scheme (Specialist Disability Accommodation) Rules 2020External Link](https://www.legislation.gov.au/F2020L00769/latest/text) sets out the requirements that must be met to supply specialist disability accommodation)\n- assistance in coordinating or managing life stages, transitions and supports, including daily tasks in a group or shared living arrangement\n- household tasks\n- assistance with and training in travel or transport arrangements, excluding taxi fares\n- interpreting and translation\n- assistance to access and maintain education and employment\n- assistive equipment for recreation\n- early intervention supports for early childhood\n- management of funding for supports in a participant’s plan.\n\n### Table 2\n\nIf your supply is not covered by Table 1, the supply is only covered by the NDIS Determination if it is both:\n\n- listed in Table 2\n- listed in any one of 3 other determinations\n\n- [Schedule 1 to the GST-free Supply (Care) Determination 2017External Link](https://www.legislation.gov.au/Details/F2017L00374) (Care Determination)\n- [Section 6 of the A New Tax System (Goods and Services Tax) (GST-free Supply–Residential Care–Government Funded Supplier) Determination 2015External Link](https://www.legislation.gov.au/Details/F2015L00110) (Residential Care Determination), or\n- [Sections 6 or 7 of the GST-free Supply (Health Services) Determination 2017External Link](https://www.legislation.gov.au/Details/F2017L00377) (Health Services Determination).\n\nThe supplies listed in Table 2 are:\n\n- assistance with daily personal activities\n- specialised assessment and development of daily living and life skills, including community participation\n- assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training\n- behavioural support and therapeutic supports\n- home modifications.\n\nThe most common examples of supplies covered by Table 2 and any of the other determinations are set out below in Examples.\n\nExamples: supplies that are both covered by Table 2 and one of the 3 other determinations\n\n*Table 2 item in the NDIS Determination (see [Note](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/national-disability-insurance-scheme#Note))\n\nRelevant other determination\n\nExamples of supplies covered by Table 2 and one of the 3 other determinations\n\n1. Assistance with daily personal activities\n\n[Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2017L00374)\n\nPersonal care\n\nMedication management\n\nContinence management\n\nTraining in use of aids and appliances\n\n2. Specialised assessment and development of daily living and life skills, including community participation\n\n[Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2017L00374)\n\nCounselling\n\nTraining in use of aids and appliances\n\nDay care\n\nAssessment of person’s care needs\n\nIndividual care planning or case management\n\n2. Specialised assessment and development of daily living and life skills, including community participation\n\n[Residential Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2015L00110)\n\nSocial activities in a residential care setting\n\nRecreational therapy in a residential care setting\n\n3. Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training\n\n[Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2017L00374)\n\nBasic equipment for social support (sale or hire)\n\nProvision and monitoring of personal alert systems (sale or hire)\n\nAssessment of person’s care needs\n\nTraining in use of aids and appliances\n\n3. Assistive equipment for general tasks and leisure, including assistive technology specialist assessment, set up and training\n\n[Residential Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2015L00110)\n\nGoods to assist with toileting and incontinence management in a residential care setting (sale or hire)\n\nFurnishings in a residential care setting (sale or hire)\n\n4. Behavioural support and therapeutic supports\n\n[Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2017L00374)\n\nCounselling\n\nPersonal care\n\nCommunity paramedical services\n\nIndividual care planning or case management\n\n4. Behavioural support and therapeutic supports\n\n[Residential Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2015L00110)\n\nTreatment and procedures in a residential care setting\n\nSupport for people with a cognitive impairment in a residential care setting\n\nEmotional support in a residential care setting\n\nRehabilitation support in a residential care setting\n\n5. Home modifications\n\n[Care DeterminationExternal Link](https://www.legislation.gov.au/Details/F2017L00374)\n\nHome modifications which are supplies that assist a person to remain living at home\n\n**Note:** Table 2 items are within the [A New Tax System (Goods and Services Tax) (GST free Supply–National Disability Insurance Scheme Supports) Determination 2021External Link](https://www.legislation.gov.au/F2021L00846/latest/text) and [explanatory statementExternal Link](https://www.legislation.gov.au/C2004A00446/latest/text).\n\n#### Example: supply of when exercise physiology is not GST-free\n\nBernie, a participant in the NDIS, has a NDIS plan that specifies that he requires exercise physiology on a fortnightly basis. Bernie lives at home and attends Health Co, a clinic (not a hospital), to receive the service. No Medicare benefit is payable for the service.\n\nThe supply of exercise physiology services to Bernie satisfies the first 3 elements in that:\n\n- he is a NDIS participant\n- exercise physiology is a reasonable and necessary support specified in his plan\n- there is a written agreement between Bernie and Health Co.\n\nHowever, the fourth requirement is not satisfied because the supply of exercise physiology services is not covered by the NDIS Determination. This is because:\n\n- Table 1 of the NDIS Determination does not cover exercise physiology services.\n- Under Table 2, item 4 lists behavioural and therapeutic supports which includes exercise physiology, but this service is not covered by one of the 3 other determinations unless it is supplied in a residential care facility. The supply to Bernie is provided at Health Co's clinic.\n\nHowever, a supply of exercise physiology services to Bernie can be GST-free, regardless of whether it is made to an NDIS participant, if:\n\n- there is a Medicare benefit payable for the service made to Bernie (see [medical services](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/medical-services))\n- the exercise physiology therapy service is supplied as part of GST-free hospital treatment (see [hospital treatment](https://www.ato.gov.au/law/view/document?DocID=GSD/GSTD20124/NAT/ATO/00001&PiT=99991231235958)).\n\nEnd of example\n## Third party NDIS supplies – plan management\n\nA NDIS participant’s plan may involve other parties. For example, a participant may elect to have their NDIS plan managed by a plan manager. Those services may be GST-free, provided the normal requirements are met.\n\n### Example: plan management services – GST-free\n\nBrian is an NDIS participant with a current NDIS plan. He chooses to engage a plan manager – PQR Pty Ltd (PQR) – to manage his NDIS plan funds and coordinate the provision of his NDIS supports. PQR and Brian enter into a written agreement for this purpose. The plan management services that PQR supplies to Brian are a reasonable and necessary support specified in Brian’s NDIS plan. In addition, the plan management services supplied by PQR to Brian are covered by item 9 in Table 1 in the NDIS Determination.\n\nAs PQR’s supply of plan management services to Brian also meet all the other conditions set out in section 38-38 of the GST Act, they are GST-free.\n\nEnd of example\n## Third party NDIS supplies facilitated by a plan manager\n\nPlan managers can play a vital role for NDIS participants in facilitating the provision of their supports and managing the flow of funds from the NDIA and to providers of supports.\n\nUnder normal circumstances, supplies of NDIS supports are made to the participant, not to the plan manager.\n\n### Example: NDIS supports facilitated by a plan manager\n\nFollowing on from the above example, Brian’s NDIS plan also includes assistance with daily personal activities as a reasonable and necessary support. He asks PQR to locate a suitable qualified therapist near his home. Using its database of support providers, PQR offers 3 potential therapists to Brian.\n\nAfter Brian selects Javier from the 3 therapists, PQR, on behalf of Brian, arranges for Javier to supply the daily personal activities assistance services to Brian.\n\nPQR enters into a written agreement with Javier on behalf of Brian, which identifies Brian as the NDIS participant. The written agreement states that the supply of the daily personal activity's assistance is a supply of one of the reasonable and necessary supports specified in Brian’s NDIS plan.\n\nJavier supplies the agreed daily personal activities assistance to Brian.\n\nThe supply of assisting with daily personal activities is covered by item 1 in Table 1 in the NDIS Determination.\n\nIt is agreed between PQR and Javier that his services will be invoiced monthly, with the invoices being sent directly to PQR. PQR will then use the NDIS *myplace* provider portal to pay Javier on behalf of Brian using Brian’s NDIS funds.\n\nThis arrangement meets all the requirements of section 38-38 of the GST Act and therefore Javier’s supply of daily personal assistance to Brian is GST-free.\n\nEnd of example\n## NDIS supports provided by a third party\n\nWhen third parties are used by NDIS-registered providers of supports, it is important to distinguish between supplies that are GST-free and those which are not.\n\n### Example: supports provided by a third party\n\nCasey is an NDIS participant and self-manages her NDIS plan which includes home and yard maintenance as a reasonable and necessary support since she is not able to undertake these activities herself. LMN Pty Ltd (LMN) specialises in home and yard maintenance for NDIS participants and is a NDIS-registered provider. LMN offers Casey a package deal that will require LMN to maintain her home and yard for a period of 12 months, for a monthly set fee. Casey accepts the offer.\n\nThe written agreement Casey enters into with LMN does not specify who will actually perform the maintenance services. For that purpose, LMN has a stable of contractors it uses, and allocates jobs as and when they are due to be performed according to who is available at the time.\n\nThe written agreement states that that the supply of the home and yard maintenance services is a supply of one or more of the reasonable and necessary supports specified in Casey’s NDIS plan. The essential home and yard maintenance services supplied to Casey are covered by item 3 in Table 1 in the NDIS Determination.\n\nThe supply of the maintenance services from LMN to Casey meets all the requirements of section 38-38 of the GST Act and is therefore GST-free.\n\nThe contractors engaged by LMN to provide Casey’s home and yard maintenance are making a separate supply of services to LMN. Since LMN is not an NDIS participant, the supply of services by the contractors to LMN is not GST-free under section 38-38 of the GST Act and is instead taxable, provided all requirements under section 9-5 of the GST Act are met.","title":""}
+{"_id":"passage_a0JRF000003eoHJ2AY/p00389407","text":"## Operating expenses\n\nOperating expenses are the expenses you have paid for (incurred), or have to pay for (incur), in the everyday running of your business. Examples include office stationery, renting premises and purchase of trading stock. These expenses are sometimes called working or revenue expenses.\n\nYou can generally claim a tax deduction for most operating expenses associated with running your business in the same income year you incur them. Ensure you keep accurate and complete records of these expenses as they occur.\n\nYou can only claim the business portion of these expenses if they relate to both business and private use, for example mobile phone calls.\n\n## General business operating expenses\n\nOperating expenses that are common in business include:\n\n- purchases of trading stock, including delivery charges\n- advertising and sponsorship\n- public relations\n- legal expenses, such as those incurred defending future earnings, borrowing money, discharging a mortgage or obtaining tax advice\n- tender costs, even if the tender is unsuccessful\n- bad debts\n- bank fees and charges\n- annual fees charged by statutory bodies (for example, ASIC)\n- penalties and fines imposed by statutory bodies as a result of breaches of an Australian law are not deductible (for example, late payment fees are usually penalties)\n- insurance premiums, including accident or disability, fire, burglary, professional indemnity, public risk, motor vehicle, loss of profits insurance, or workers compensation\n- interest on money borrowed for\n- producing assessable income or purchasing income-producing assets\n- income tax obligations, employer super contributions, or late payment or lodgment of tax\n- lease expenses\n- stationery\n- small-value mobile phone and tablet accessories\n- for example, protective covers and earphones\n- costs for running a commercial website\n- for example, site maintenance and content updates\n- internet service provider fees\n- subscription fees for off-the-shelf software\n- transport and freight\n- waste removal and recycling\n- parking fees (but not parking fines)\n- small-value items costing $100 or less.\n\n## Other expenses (similar to those claimed by employees)\n\nAs a business owner, you are also able to claim deductions for some business expenses that are the same as those that can be claimed as a deduction by employees, including:\n\n- union dues and subscription fees to trade, business or professional associations\n- clothing expenses (corporate wardrobes or uniforms and occupation-specific and protective clothing)\n- expenses relating to education and technical or professional qualification\n- subscription costs for business or professional journals, information services, newspapers and magazines\n- costs for sunglasses, sunhats and sunscreen when your business activities require outdoor work\n- other items that protect you or your employees from a health or injury risk in your work environment\n- gifts and donations to organisations that have a deductible gift recipient [(DGR)](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/in-detail/types-of-dgrs) status.\n\n## Operating expenses from employing people\n\nExpenses associated with employing people including:\n\n- [salary, wages and super](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-salaries-wages-and-super-contributions)\n- fringe benefits, including the cost of any fringe benefit provided and the associated fringe benefits tax\n- protective clothing required for employees to carry out work activities\n- allowances and reimbursements paid to employees who use their own mobile device for work purposes\n- travel expenses for relocating employees\n- losses due to misappropriation of money by an employee or agent, for example, fraud, theft or embezzlement.\n\n## Business premises operating expenses\n\nBusiness premises operating expenses include:\n\n- electricity\n- landline phone calls and line rental\n- mobile phone calls (prepaid or as part of a plan)\n- internet service fees\n- data plans\n- cloud storage\n- water\n- renting or leasing business premises\n- rates\n- land tax.\n\nIf you incur expenses associated with setting up and using your [Digital ID](https://www.ato.gov.au/online-services/accessing-online-services-with-digital-id-and-ram) to access our online services in the course of running your business, such as phone and internet expenses, you may be able to claim tax deductions for the business portion of those expenses.\n\n## Tax-related operating expenses\n\nTax-related expenses include:\n\n- registered tax agent and accountant fees\n- tax-related expenses, such as\n- having a bookkeeper prepare your business records\n- preparing and lodging tax returns and activity statements\n- objecting to or appealing against your assessment\n- attending an ATO audit\n- obtaining tax advice about your business\n- credit card/charge card payment fee associated with paying a business tax liability, for example, GST liability.\n\nRemember you need to [keep records](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business) to substantiate your claims.","title":""}
+{"_id":"passage_a0JRF000003fGK12AM/p00389783","text":"**What this Guideline is about\n**\n\n1. This Guideline outlines the factors the Commissioner will consider when deciding whether to exercise the discretion[[1]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp1) to treat an interest in the income or capital of a trust as being a fixed entitlement. This can result in a trust being treated as a fixed trust under the trust loss provisions and is also relevant when applying other provisions in the tax legislation which rely on the concept of 'fixed entitlement' (listed in\n**Attachment A\n** of this Guideline).[[2]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp2)\n\n2. In practice, it may be difficult for many trusts to satisfy the definition of 'fixed trust' unless the Commissioner exercises his discretion to treat the beneficiaries' interests as fixed entitlements.\n\n3. This Guideline also outlines (at\n**Attachment B)\n** a safe harbour compliance approach for trustees of certain trusts that allows them to manage the trust's tax affairs as if the Commissioner had exercised the discretion to treat beneficiaries as having fixed entitlements to income and capital of the trust.\n\n4. This Guideline does not apply:\n\n•For the purposes of the 'non-arm's length income' rules in section 295-550 of the *Income Tax Assessment Act 1997* (ITAA 1997) or the 'special income' rules in the former section 273 of the ITAA 1936. The Commissioner's view of the concept of fixed entitlement in those provisions is explained in Taxation Ruling TR 2006/7 *Income tax:  special income derived by a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust in relation to the year of income.*\n•For the purposes of applying former subsection 160APHL(14) of the ITAA 1936 (about the holding period rule for franking credits).\n•To a trust that is an attribution managed investment trust (AMIT) within the meaning of section 276-10 of the ITAA 1997. An AMIT is treated as being a fixed trust, and its members are treated as having fixed entitlements to its income and capital.[[3]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp3)\n\n5. Law Administration Practice Statement PS LA 2002/11 *Issues concerning fixed entitlements to a share of the income or capital of a trust* continues to instruct ATO officers about how to ensure that such issues are decided consistently.\n\n**Structure of this Guideline\n**\n\n6. The structure of this Guideline is represented in the following flowchart which outlines the process for determining if beneficiaries have fixed entitlements to all of the income and capital of a trust.\n\n**Date of effect\n**\n\n7. This Guideline applies both before and after its date of issue.\n\n**Fixed entitlements under subsection 272-5(1)\n**\n\n8. The concept of a 'fixed entitlement' is central to the trust loss provisions.[[4]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp4) It is used to determine whether a trust is a fixed trust, whether a trust's beneficiaries have maintained the requisite proportion of ownership, and for tracing direct and indirect entitlements.\n\n9. A beneficiary will have a fixed entitlement to a share of the income or capital of the trust if, under a trust instrument, their interest in the income or capital is vested and indefeasible.[[5]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp5)\n\n10. A trust is a fixed trust if the beneficiaries have fixed entitlements to all of the income and capital of the trust.[[6]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp6)\n\n***Under a trust instrument*\n**\n\n11. For these purposes, the Commissioner accepts that a 'trust instrument' includes a deed or constitution as supported by documentation such as a Product Disclosure Statement, Investment Memorandum or other document that modifies or supplements the terms of the trust set out in the deed or constitution.\n\n12. The beneficiaries of a trust[[7]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp7) that does not have a 'trust instrument' are not capable of having fixed entitlements in the absence of the exercise of the Commissioner's discretion. Trustees of such trusts cannot rely on the safe harbour compliance approach in managing the trust's tax affairs.\n\n***Vested interests*\n**\n\n13. In terms of the concept of 'fixed entitlement', an interest is 'vested' if it is vested in interest or vested in possession.[[8]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp8) An interest is vested in possession when it gives its holder a right of present enjoyment, whereas an interest is vested in interest if it gives its holder a present right to future enjoyment.\n\n14. The mere object of a discretionary trust does not have a vested interest in, and therefore does not have a fixed entitlement to, either the income or capital of the trust.[[9]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp9)\n\n***Indefeasible interests*\n**\n\n15. An interest is defeasible if it can be defeated by the actions of one or more persons or by the occurrence of one or more subsequent events. An interest of a default beneficiary in the income or capital of the trust is an example of a defeasible interest.\n\n16. Powers in modern trust instruments which cause a beneficiary's interests to be defeasible include:\n\n•Broad powers to amend the trust instrument.[[10]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp10)\n•Powers to issue new units after the trust is settled, or to redeem existing units.[[11]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp11)\n•A power to reclassify existing units so that they do not all have equal rights to receive the income and capital of the trust.\n•A power to classify receipts as being on income or capital account where the units that have been issued do not all have the same rights to receive the income and capital of the trust.\n•A power to appoint a beneficiary's interest in the income or capital of the trust to another beneficiary.\n•A power to settle or appoint any part of the corpus of the trust to a new trust with different beneficiaries.\n•A power to enforce the forfeiture or cancellation of partly paid units due to the non-payment of a call except where such partly paid units would be void *ab initio.*\n\n17. For the purposes of working out whether all beneficial interests have the same rights to receive the income and capital of the trust (sometimes referred to as establishing whether or not there are different classes of interests in the trust), the Commissioner will disregard the following factors which may otherwise result in a different conclusion:[[12]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp12)\n\n•fees or charges imposed by the trustee in relation to the beneficial interests\n•issue price and redemption price of the beneficial interests (provided that the savings rule in subsection 272-5(2) is satisfied as explained below), and\n•exposure of the beneficial interests to foreign exchange gains and losses.\n\n**Satisfaction of the 'savings rule' in subsection 272-5(2)\n**\n\n18. The mere fact that a trustee has power to redeem units in a unit trust, or issue further units, for an appropriate value, being:\n\n•where the units are listed for quotation in the official list of an approved stock exchange - the same price as other units are offered for sale on that exchange at the time of the redemption or issue, or\n•where the units are not so listed - a price determined on the basis of the net asset value of the unit trust at the time of the redemption or issue according to Australian accounting principles\n\ndoes not mean that unit holders' interests in the income or capital of the unit trust are defeasible.[[13]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp13) For the purposes of this Guideline, this is referred to as the 'savings rule'.\n\n19. The Commissioner considers that the savings rule is satisfied where further units may be issued[[14]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp14) or existing units redeemed[[15]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp15) in any of the following situations:\n\n•for a price based on a market value[[16]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp16) of the assets and liabilities of the trust which has been determined by a licensed valuer\n•for a price based on a market value of the assets and liabilities of the trust which has not been determined by a licensed valuer, but which nevertheless is accurate\n•for a price determined by reference to a value of the trust which is sufficiently close to its net asset value (allowing an adjustment for transaction costs)\n•for a price determined by reference to a value of the trust which is sufficiently close to its net asset value (allowing an adjustment for transaction costs), including where accrued distributions are excluded from the net asset value based on a 'unit day's pricing model'\n•for a price based on the volume weighted average price (VWAP) of the units, or\n•in accordance with ASIC Corporations (Managed investment product consideration) Instrument 2015/847, ASIC Class Order [CO 13/655] and ASIC Class Order [CO 13/657] (if relevant), or any other ASIC guidance or relief on the same subject.\n\n***Reference to units includes interests in percentage shares*\n**\n\n20. The Commissioner considers that a reference to 'units' in the savings rule includes a class of vested interest which can be expressed as being a beneficial interest in a percentage share of the total income or capital of the trust. The interest must also be capable of being measured as a percentage of the total beneficial interest in the income or capital of the trust enjoyed by the holders of that same class of interest in the trust.\n\n***Reference to Australian accounting principles*\n**\n\n21. The reference to 'Australian accounting principles'[[17]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp17) means the accounting standards, statements of accounting concepts or authoritative pronouncements of the Australian Accounting Standards Board, as applicable to the trust that seeks to satisfy the requirements of the savings rule.\n\n***Partly paid units*\n**\n\n22. Partly paid units are capable of satisfying the savings rule. In this regard, the relevant price per unit should be adjusted to reflect the proportion of the paid up amount.\n\n**Safe harbour - Compliance approach\n**\n\n23. The trustee of a trust described in\n**Attachment B\n** can manage the trust's tax affairs as if the Commissioner has exercised the discretion to treat the beneficiaries as having fixed entitlements to the income and capital of the trust.\n\n24. The 'safe harbours' in this Guideline can only be satisfied in relation to known facts. A trustee that requires certainty as to whether or not the beneficiaries of the trust have fixed entitlements in relation to a future time must request the exercise of the Commissioner's discretion.\n\n**Discretion to treat an interest as a fixed entitlement in subsection 272-5(3)\n**\n\n25. Where a trust is not a fixed trust, because all of the beneficiaries' interests in the income and capital of the trust are not fixed entitlements, and the trust does not satisfy the requirements for a 'safe harbour' in this Guideline, the trustee may request that the Commissioner exercise the discretion to treat beneficiaries' interests as being vested and indefeasible.\n\n*Note:  the Commissioner is not able to exercise the discretion in relation to:*\n\n•*the mere objects of a discretionary trust - they do not have vested interests in the income or capital of the trust under a trust instrument, or*\n•*an interest of a default beneficiary - although it may be a vested, proprietary interest in a trust, it is defeasible because the trustee may resolve to appoint the income or capital to another beneficiary.*[[18]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp18)\n\n26. A trust can both rely on the savings rule in relation to some trustee powers in a trust instrument (the power to issue or redeem units), and request that the Commissioner exercise the discretion in the context of other powers that may defeat a beneficiary's interest (such as in relation to a power to amend).\n\n27. In deciding whether or not to exercise the discretion, the Commissioner must consider:[[19]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp19)\n\n•the circumstances in which the interest is capable of not vesting or being defeated\n•the likelihood of the interest not vesting or being defeated, and\n•the nature of the trust.\n\n28. The Commissioner will also consider factors relevant in the context of the trust loss rules.\n\n***Circumstances in which the interest is capable of not vesting or being defeated*\n**\n\n29. When examining the *circumstances* in which a beneficiary's interest is capable of not vesting or being defeated, the Commissioner will have regard to any factor that may affect the defeasance of any beneficiary's interest, including:\n\n•the number of circumstances of potential defeasance, and\n•the significance of those circumstances.\n\n30. This includes having regard to:\n\n•any person who is capable of altering the beneficiary's interest\n•the nature of their relationship to the beneficiary, and\n•any limitation on their capability to so alter that interest.\n\n***The likelihood of the interest not vesting or the defeasance happening*\n**\n\n31. When considering the *likelihood* of the interest not vesting or being defeated, the Commissioner must form a view as to the probability that the contingency or defeasance will happen. Where the likelihood of the contingency or event of defeasance occurring is low, this will weigh towards a favourable exercise of the discretion.\n\n32. Where the trustee or manager of the trust has a particular power to defeat a beneficiary's interest, it is relevant to consider how often, if at all, they have exercised that power over a relevant period.\n\n33. Any preconditions or caveats that affect the likelihood of a beneficiary's interest not vesting or being defeated are also relevant.\n\n***The nature of the trust*\n**\n\n34. The *nature of the trust* refers to its basic legal characteristics and its economic function, both actual and intended. The ability of the trustee or manager of the trust to adversely affect the interests of beneficiaries could be limited where:\n\n•additional responsibilities are placed on the trustee by legislation, most commonly as a registered managed investment scheme under Chapter 5C of the *Corporations Act 2001*\n•contractual restrictions limit the trust manager's access to trust assets\n•the trust is subject to industry regulations, licensing or registration requirements, which are legally enforceable, such as the Australian Securities Exchange (ASX) Listing Rules which are enforceable against listed entities and their associates[[20]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp20)\n•commitments are made in a Product Disclosure Statement, Investment Memorandum or other document to exercise powers in a particular (restrictive and/or non-adverse) way\n•the trust deed restricts the ability of the trustee to issue and redeem units at anything other than market value or other values approximating net asset value, or\n•the unanimous (100%) approval of the beneficiaries is required prior to the exercise of a power capable of defeating a beneficiary's interest by the trustee or manager.\n\n***Other contextual factors*\n**\n\n35. Having regard to the subject matter, scope and purpose of the trust loss rules, it is relevant for the Commissioner to consider whether the exercise of the discretion would allow a person to obtain a tax benefit from a trust claiming a deduction for a tax loss, bad debt deduction or debt/equity swap deduction when the person did not bear the economic loss incurred by the trust.\n\n36. The concept of a fixed entitlement is central to the operation of the trust loss rules, the purpose of which is to prevent the transfer of the tax benefit of those losses or deductions. The tax benefit of a loss is transferred when a person who did not bear the economic loss at the time it was incurred by the trust obtains a benefit from the trust being able to deduct the loss.[[21]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp21)\n\n37. Because the discretion to treat beneficiaries' interests as being a fixed entitlement is part of the trust loss rules, and because of the resultant consequences of being treated as a fixed trust, these contextual factors are also relevant even when the reason for requesting that the Commissioner exercise the discretion is related to one of the other legislative provisions listed in\n**Attachment A.\n**\n\n***Factors influencing the exercise of the Commissioner's discretion*\n**\n\n38.\n**Attachment C\n** to this Guideline contains a non-exhaustive list of the factors that the Commissioner will consider when deciding whether or not to exercise the discretion.\n\n39. In each case the Commissioner will weigh up all factors (favourable and unfavourable) in the context of the facts and circumstances of the case. The presence of more favourable factors will increase the likelihood that the Commissioner will exercise the discretion.\n\n40. However, a single power in a trust instrument may pose such a serious threat to beneficiaries' interests that, in the absence of any mitigating factors, the Commissioner will not exercise the discretion.\n\n41. Conversely, the absence of some or all of the favourable factors described in\n**Attachment C\n** does not necessarily preclude the exercise of the discretion.\n\n**Examples\n**\n\n42. The following examples illustrate the application of the savings rule and how the Commissioner would consider the exercise of the discretion in various situations.\n\n***Example 1:  savings rule applies*\n**\n\n43. *The interests in the income and capital of a trust are defeasible only because the trustee may issue or redeem units for a price determined on the basis of the net asset value of the trust. The savings rule will apply in this circumstance to ensure that the beneficiaries' interests are not defeasible, and are fixed entitlements.*\n\n***Example 2:  savings rule applies*\n**\n\n44. *The trustee of a trust issues units for a price that is higher than a price determined on the basis of the net asset value of the trust. The higher price is attributable to transaction costs associated with the issue of the units. The savings rule will apply in this circumstance to ensure that the beneficiaries' interests are not defeasible and are fixed entitlements.*\n\n***Example 3:  savings rule and a safe harbour apply*\n**\n\n45. *If, in relation to the trust in Example 1, the trustee also had an unlimited power to amend the trust deed, the beneficiaries' interests would be defeasible and would not constitute fixed entitlements. However, if the requirements of one of the safe harbours in the compliance approach in*\n***Attachment B*\n** *are satisfied, the trustee can manage the trust's tax affairs as if the Commissioner has exercised the discretion to treat the beneficiaries as having fixed entitlements to the income and capital of the trust.*\n\n***Example 4:  savings rule does not apply but a safe harbour applies*\n**\n\n46. *The beneficiaries' interests in the trust are not fixed entitlements, and the savings rule does not apply, because the trustee may issue or redeem units for a price not determined on the basis of the net asset value of the trust. If the requirements of one of the safe harbours in the compliance approach in*\n***Attachment B*\n** *are satisfied, the trustee can manage the trust's tax affairs as if the Commissioner has exercised the discretion to treat the beneficiaries as having fixed entitlements to the income and capital of the trust.*\n\n***Example 5:  exchange of interests in a trust under Subdivision 124-M of the ITAA 1997*\n**\n\n47. *Two trustees are contemplating a transaction whereby all of the units in one trust (the selling trust) will be acquired by the trustee of the other trust (the acquiring trust) in return for new units in the acquiring trust. The scrip for scrip roll-over provisions require that entities have fixed entitlements to all of the income and capital of each trust immediately before, during and immediately after the exchange of units.*\n\n48. *The beneficiaries' interests in the selling trust are not fixed entitlements, and because of the prospective nature of the proposed transaction, the safe harbours in the compliance approach cannot be relied upon.*\n\n49. *Accordingly, before entering into the transaction, the trustee of the selling trust applies to the Commissioner for a ruling in relation to whether the requirements of scrip for scrip roll-over will be satisfied, including whether fixed entitlements will exist at a future date. The trustee asks the Commissioner to exercise the discretion if the beneficiaries' interests at the future date are not fixed entitlements.*\n\n**Attachment A - Other provisions\n**\n\n50. Other provisions that, directly or indirectly, rely upon the meaning of 'fixed entitlement' in section 272-5\n\n***Income Tax Assessment Act 1936*\n**\n\nSchedule 2F\nTrust loss provisions\n\nsection 102UC\nTrustee beneficiary reporting\n\nsections 160APA; 160APHD\nFranking of dividends\n\n***Income Tax Assessment Act 1997*\n**\n\nsection 104-72\nCGT event E4 and trusts\n\nsection 115-50\nDiscount capital gains\n\nsection 115-110\nForeign or temporary residents - individuals with trust gains\n\nsection 116-35\nCapital proceeds - market value substitution rule\n\nsection 118-510\nCGT and venture capital\n\nsection 124-781\nCapital gains and scrip-for-scrip rollover\n\nSubdivision 165-F\nCompany tax losses - ownership of a company by non-fixed trusts\n\nsection 170-265\nCompany as a member of a linked group\n\nsection 328-440\nSmall business restructure roll-over - ultimate economic ownership of a non-fixed trust\n\nsection 415-20\nDesignated infrastructure entity\n\nsection 703-40\nConsolidation:  treating entities held through non-fixed trusts as wholly-owned subsidiaries\n\nsection 707-325\nConsolidation:  modified market value of an entity becoming a member of a consolidated group\n\nsection 713-50\nConsolidation:  determining destination of distribution by non-fixed trust\n\nsection 719-35\nConsolidation:  treating entities held through non-fixed trusts as wholly owned subsidiaries\n\nsection 725-65\nDirect value shifting:  cause of the value shift\n\nsection 727-110\nIndirect value shifting:  common ownership nexus test\n\nsections 727-360; 727-365; 727-400; 727-410\nIndirect value shifting:  control, common ownership and ultimate stake tests\n\nsection 855-40\nCapital gains or losses of foreign residents\n\n***A New Tax System (Goods and Services Tax) Regulations 1999*\n**\n\nRegulations 48-10.01 and 48-10.03A\nApproval of GST groups\n\n**Schedule 1 to the\n**\n***Taxation Administration Act 1953*\n**\n\nsection 45-287\nTrust income included in instalment income of a beneficiary\n\n**Attachment B - Compliance approach - safe harbours\n**\n\n***Safe harbour - Administration*\n**\n\n51. The trustee of a trust that satisfies the conditions for one of the categories below can manage its tax affairs as if the Commissioner had exercised the discretion to treat the beneficiaries as having a fixed entitlement to the income and capital of the trust for the purposes of section 272-5.\n\n52. Accordingly, other than ensuring that a trust satisfies the relevant conditions of the category relied upon, the Commissioner will not allocate compliance resources to determine whether beneficiaries have fixed entitlements in cases where one of the categories below is met. A safe harbour only has application during the period in which the conditions for the relevant category are satisfied. A trustee that requires certainty as to whether or not the beneficiaries of the trust have fixed entitlements in relation to a future time must request the exercise of the Commissioner's discretion.\n\n53. Taxpayers should maintain relevant records that support their claim that they meet the relevant conditions being relied on.\n\n***Safe harbour - Conditions*\n**\n\n54. To qualify for access to a safe harbour, a trust must, at all relevant times, satisfy the conditions of one of the categories below:\n\n**(1)\n**\n**Listed trusts\n**The trust's units are listed for quotation in the official list of an approved stock exchange (as defined in subsection 995-1(1) of the ITAA 1997 and Regulation 995-1.05 of, and Schedule 5 to, the *Income Tax Assessment Regulations 1997).* This includes depository and nominee arrangements in relation to such units.\n\n**(2)\n**\n**Registered managed investment schemes that are trusts\n**The trust complies with all of the following conditions:\n\n•it is a 'registered scheme' as defined in subsection 995-1(1) of the ITAA 1997 (that is, a managed investment scheme that is registered under section 601EB of the *Corporations Act 2001)*\n•the trustee, Responsible Entity, manager or other controller has complied with all of the requirements of Chapter 5C of the *Corporations Act 2001,* and any applicable ASIC relief (for example, authorising issuing units at a discount), and\n•all beneficial interests have the same rights to receive the income and capital of the trust (see paragraph 17 of this Guideline).\n\n**(3)\n**\n**Certain widely held trusts that satisfy licensing requirements\n**The trust complies with all of the following conditions:\n\n•either:\n\n-the only members of the trust are entities that are covered by subsection 275-20(4) of the ITAA 1997, Investor Directed Portfolio Services ('IDPS' - as defined in ASIC Class Order [CO 13/763]) or 'IDPS-like schemes' (as defined in ASIC Class Order [CO 13/762]); or\n-the only members of the trust are entities that are managed investment trusts in relation to the income year because of subsection 275-10(2), and\n\n•the trust is covered by section 275-15 of the ITAA 1997 (it is not required to be registered in accordance with section 601ED of the *Corporations Act 2001)*\n•the trust satisfies the licensing requirements in section 275-35 of the ITAA 1997, and\n•all beneficial interests have the same rights to receive the income and capital of the trust (see paragraph 17 of this Guideline).\n\n**(4)\n**\n**Unregistered managed investment schemes that satisfy licensing requirements\n**The trust complies with all of the following conditions:\n\n•it is a managed investment scheme (as defined in section 9 of the *Corporations Act 2001)*\n•the trust is covered by section 275-15 of the ITAA 1997 (it is not required to be registered in accordance with section 601ED of the *Corporations Act 2001)*\n•the trust satisfies the licensing requirements in section 275-35 of the ITAA 1997\n•the trust must have a trust instrument\n•all beneficial interests in the income and capital of the trust are vested\n•all beneficial interests have the same rights to receive the income and capital of the trust (see paragraph 17 of this Guideline)\n•all beneficial interests in the income and capital of the trust can be expressed as a percentage of the total income and capital of the trust, and\n•the trust is not a discretionary trust or a trust with default income or capital beneficiaries - that is, no beneficial interest in the income or capital of the trust is capable of being defeated, partly or wholly, by the exercise of a power of appointment of income or capital by the trustee or other donee.\n\n**(5)\n**\n**Specific single interest holder trusts\n**The trust complies with all of the following conditions:\n\n•the trust must have a trust instrument\n•all beneficial interests in the income and capital of the trust are vested\n•all beneficial interests have the same rights to receive the income and capital of the trust (see paragraph 17 of this Guideline)\n•all beneficial interests in the income and capital of the trust can be expressed as a percentage of the total income and capital of the trust\n•the trust is not a discretionary trust or a trust with default income or capital beneficiaries - that is, no beneficial interest in the income or capital of the trust is capable of being defeated, partly or wholly, by the exercise of a power of appointment of income or capital by the trustee or other donee\n•one of the following types of entity holds all of the interests, directly or indirectly, in the trust and has the right to receive all of the income and capital of the trust, directly or indirectly, for their own benefit (that is, excluding a nominee, custodian or agent)\n\n(a)an individual\n(b)a trust that satisfies category 1 above (a listed trust)\n(c)a trust that satisfies category 2 above (a registered managed investment scheme), and\n\n•an arrangement has not been entered into which would result in:\n\n(a)section 272-35 having application\n(b)the trafficking of the tax benefit of a tax loss, bad debt deduction or debt/equity swap deduction, or\n(c)fraud or evasion.\n\n**(6)\n**\n**Other trusts\n**The trust complies with all of the following conditions:\n\n•the trust must have a trust instrument\n•all beneficial interests in the income and capital of the trust are vested\n•all beneficial interests have the same rights to receive the income and capital of the trust (see paragraph 17 of this Guideline)\n•all beneficial interests in the income and capital of the trust can be expressed as a percentage of the total income and capital of the trust\n•the trust is not a discretionary trust or a trust with default income or capital beneficiaries - that is, no beneficial interest in the income or capital of the trust is capable of being defeated, partly or wholly, by the exercise of a power of appointment of income or capital by the trustee or other donee\n•a trustee or manager has never exercised a power capable of defeating a beneficiary's interest to defeat a beneficiary's interest in the income or capital of the trust,[[22]](https://www.ato.gov.au/law/view/document?docid=COG/PCG201616/NAT/ATO/00001#fp22) and\n•an arrangement has not been entered into which would result in:\n\n(a)section 272-35 having application\n(b)the trafficking of the tax benefit of a tax loss, bad debt deduction or debt/equity swap deduction, or\n(c)fraud or evasion.\n\n**Attachment C - Relevant factors in the exercise of the Commissioner's discretion to treat an interest in a trust as being a fixed entitlement\n**\n\n***Factors favourable to the exercise of the Commissioner's discretion*\n**\n\n55. The Commissioner regards the following factors favourably when deciding whether to exercise the discretion:\n\n•a trustee or manager has never exercised a power capable of defeating a beneficiary's interest to defeat a beneficiary's interest in the income or capital of the trust\n•commitments are made in unit holder agreements, Product Disclosure Statements or other documents with legal consequences that the trustee or manager will not exercise a power capable of defeating a beneficiary's interest at all, or in a way that is adverse to the rights of beneficiaries to receive the income and capital of the trust\n•all beneficiaries have the same rights to receive the income and capital of the trust\n•the trust instrument can only be amended with the unanimous (100%) approval of all the beneficiaries\n•although the trust instrument can be amended without the unanimous approval of beneficiaries, the approval percentage calculated on the current interest or unit holdings of beneficiaries effectively means that all beneficiaries must approve any amendment (for example, where the approval of 75% of unit holders is required to make the amendment and the smallest unit holding is more than 25% of the units)\n•the trust instrument has been amended in accordance with section 601GC of the *Corporations Act 2001* (so as to assist with the efficient administration of the trust) but no beneficial interests in the income and capital of the trust are adversely affected\n•the beneficiaries whose rights to receive the income and capital of the trust have been adversely affected by the exercise of a power capable of defeating a beneficiary's interest have explicitly consented to that specific act (such as upon the redemption of the interests of an employee not covered by the savings rule upon the cessation of employment)\n•the trustee or manager deals with the beneficiaries of the trust on an arm's length basis\n•the trust is governed by a foreign law that is similar to Chapter 5C of the *Corporations Act 2001,* and\n•the trust would satisfy the basic and specific conditions (as applicable to the type of trust) for access to a safe harbour.\n\n***Factors adverse to the exercise of the Commissioner's discretion*\n**\n\n56. The Commissioner regards the following factors unfavourably when deciding whether to exercise the discretion:\n\n•a trustee or manager exercises a power to defeat beneficiaries' interests in the income or capital of the trust, however:\n\n-the nature of the power that is exercised will be important, for example, compulsorily redeeming units where a unit holder's stake is less than a minimum specified in the trust instrument, and the unit holder receives the redemption price of those units, is unlikely to preclude the exercise of the discretion\n-where external factors (such as those in the Global Financial Crisis) temporarily affect the ability of the trustee or manager to fund distributions or redemptions, this is unlikely to preclude the exercise of the discretion (for example, a temporary wholesale freezing or deferral of interests)\n\n•there are significantly different beneficiaries of the trust in an income year for which an entity seeks to have a fixed entitlement, than the beneficiaries of the trust in the income year(s) in which the trust made a tax loss, or incurred a bad debt deduction or debt/equity swap deduction\n•an arrangement has been entered into which would result in:\n\n(a)section 272-35 having application\n(b)the trafficking of the tax benefit of a tax loss, bad debt deduction or debt/equity swap deduction, or\n(c)fraud or evasion.\n\n**Commissioner of Taxation**\n\n13 September 2017","title":""}
+{"_id":"passage_a0JRF000003hMzd2AE/p00391435","text":"Do you want to manage your cashflow throughout the year to avoid a large tax bill? If you answered yes and have investment and business income, pay as you go (PAYG) instalments might be for you!\n\nPAYG instalments are prepayments you can make during the year. These will be credited against your expected tax bill, leaving you with little or no tax to pay when you lodge your tax return.\n\n### How will I know if I’ve been automatically entered into PAYG instalments?\n\nYou will enter the PAYG instalments system automatically if you meet the following criteria:\n\nWe’ll send you a letter through our ATO Online service or by post. This will let you know how much you need to pay and when, and the dates you need to lodge by.\n\nDidn’t get a letter? Check your [myGov inbox this opens in a new window ](https://my.gov.au/) or check in with your [registered tax or BAS agent. this opens in a new window ](https://www.ato.gov.au/individuals/Your-tax-return/How-to-lodge-your-tax-return/Lodge-your-tax-return-with-a-registered-tax-agent/)\n\nFind out how to change your communications preferences at [ATO and myGov communications. this opens in a new window ](https://www.ato.gov.au/General/Online-services/Online-services-for-individuals-and-sole-traders/ATO-online-services-and-myGov/ATO-and-myGov-communications/)\n\n### How do I voluntarily enter PAYG instalments?\n\nDo you think you’re going to earn business and investment income over the threshold? Minimise the risk of a large tax bill by voluntarily entering into PAYG instalments.\n\nYou can simply enter by using your myGov account linked to our online services:\n\nYou can also enter through your registered tax agent.\n\n### What does instalment income include?\n\nInstalment income is your gross business and investment activities (excluding GST), this includes:\n\nWhen reporting your instalment income make sure to take your time and be accurate to avoid any penalties.\n\n### How are PAYG instalments worked out?\n\nYour PAYG instalments are calculated using two methods.\n\nThe easiest and most popular option is to pay using the **instalment amount option**. This will be shown on your business activity statement or instalment notice before your PAYG instalments are due.\n\nThe other option is the **instalment rate option**. This works best if your business income fluctuates each period (for example, seasonal business income). This option can help you manage your cash flow, because the amounts you would pay change in line with your income for that period.\n\nNeed more help working out which option is best for you? Have a read of [this information. this opens in a new window ](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/calculate-your-payg-instalments#ato-Chooseyourpaymentoption)\n\nOnce you know which method you’ll use, you can use the [PAYG instalment calculator this opens in a new window ](https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=PAYGI&anchor=PAYGI/questions&anchor=PAYGI/questions#PAYGI/questions) to get an idea of how much you’ll pay.\n\n### How often do I need to pay PAYG instalments?\n\nTypically, most people will pay [quarterly instalments. this opens in a new window ](https://www.ato.gov.au/Business/PAYG-instalments/When-are-PAYG-instalments-due/#Quarterlyinstalments) The letter we send may give you different options, depending on your circumstances – like paying 2 instalments per year or one annual instalment.\n\nIf you pay more in instalments than you owe, you’ll be refunded the excess when you lodge your tax return. If you haven’t paid the required instalments, you will receive a tax bill. By paying it in full and on time you'll avoid any interest charges on it.\n\nIf you’re unsure on how to lodge and pay you can use a registered tax or BAS agent.\n\n### Can I change my PAYG instalment options?\n\nYes, you can! But only before the due date on your first business activity statement or instalment notice of your financial year.\n\nYou can’t change your instalment option mid-financial year. You’ll need to wait for the start of your next financial year to change your instalment option.\n\n### How do I manage and pay my instalments?\n\nThe easiest way to manage your PAYG instalments is by using our ATO online services. You can view, lodge, pay and vary your PAYG instalment obligations in one place. Instalments can be paid electronically by BPAY®, credit card or debit card.\n\nYou’ll find all your payment details, including your payment reference number, in your online services account.\n\n### How does PAYG instalments work with my tax return?\n\nPAYG instalments are designed so you can make regular payments during the financial year, rather than as a lump sum when you lodge your income tax return.\n\nInstalments you have paid are credited when your tax return is processed, and if you’ve paid too much, you’ll receive a refund.\n\nIf your tax bill is larger than you expected, you’ll need to pay the outstanding amount. We encourage you to review your PAYG instalments regularly, so you don’t get caught out.\n\n### How do I exit PAYG instalments?\n\nYou’ll be automatically removed from PAYG instalments when you no longer meet the entry criteria. This is based on your most recent tax return lodged.\n\nIf you’re no longer earning business and investment income, you can choose to exit PAYG instalments.\n\nThe fastest way to exit PAYG instalments is by using our [online services. this opens in a new window ](https://www.ato.gov.au/Business/PAYG-instalments/Stopping-PAYG-instalments/#Exitingyourself:~:text=Individuals%2C%20including%20sole,exit%20PAYG%20instalments.) You can also ask to exit through your registered tax agent.\n\nCancelling your ABN or ceasing business won’t exit you from PAYG instalments. You’re still required to lodge and pay any outstanding instalment notices and business activity statements.","title":""}
+{"_id":"passage_a0JRF000003hoPd2AI/p00391749","text":"## About payment types\n\nAs an employer, you use:\n\n- **ordinary time earnings (OTE)** to work out the [minimum super guarantee contribution](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay) for your employees. OTE is the amount you pay employees for their ordinary hours of work, including things like commissions and shift loadings. OTE is defined in the *Superannuation Guarantee (Administration) Act 1992* (SGAA).\n- **salary and wages** to work out the super guarantee charge. You only need to do this if you missed paying the minimum super guarantee contribution by the due date. Salary and wages are similar to OTE but also include any overtime payments.\n\nThe following tables are a non-exhaustive list of common amounts employers pay. They are aligned to the [Single Touch Payroll Phase 2 reporting guidelines](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross) and indicate which amounts are considered salary and wages and OTE.\n\nYou can use these tables to help you work out the minimum SG contribution for your employees. You may have additional superannuation obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\n### Gross\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 1: Gross\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Ordinary hours of workExternal Link](https://www.fairwork.gov.au/employment-conditions/hours-of-work-breaks-and-rosters/hours-of-work):\n\n- as defined in an award or agreement, or if the ordinary hours of work are not stated in an award or agreement, or not separated from other hours, the total hours\n\nYes\n\nYes\n\nCasual loading\n\nYes\n\nYes\n\n[Shift penaltiesExternal Link](https://www.fairwork.gov.au/pay-and-wages/allowances-penalty-rates-and-other-penalties#penalty-rates) (including public holiday penalties)\n\nYes\n\nYes\n\n[Workers compensationExternal Link](https://www.fairwork.gov.au/employment-conditions/workers-compensation) – payment for hours an employee performs work or is required to attend work\n\nSee [Workers' compensation (paid leave type W)](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#WorkerscompensationpaidleavetypeW)\n\nYes\n\nYes\n\n[Piece ratesExternal Link](https://www.fairwork.gov.au/pay-and-wages/minimum-wages/piece-rates-and-commission-payments#piece-rates) for work done during ordinary hours\n\nYes\n\nYes\n\nDaily rates for employees compensated using a flat daily rate\n\nYes\n\nYes\n\nFlexi time:\n\n- all ordinary hours paid to employees under a flexi time arrangement\n- flexi time arrangements are considered different to rostered days off (RDOs) and time off in lieu (TOIL)\n\nYes\n\nYes\n\n[Breach of break paymentsExternal Link](https://www.fairwork.gov.au/employment-conditions/hours-of-work-breaks-and-rosters/breaks), such as for rest, meal and crib:\n\n- where an employee doesn't get an appropriate break, some awards require employees to be paid at overtime rates until the employee is released from duty\n- even though the employee is being paid at overtime rates, they are working ordinary hours\n\nYes\n\nYes\n\nTime for travel or training paid within the span of ordinary hours\n\nYes\n\nYes\n\nCharge rates for work performed, outcomes achieved, or targets met by [contractors](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/work-out-if-you-have-to-pay-super/super-for-independent-contractors)\n\nYes\n\nYes\n\n[Public holidaysExternal Link](https://www.fairwork.gov.au/employment-conditions/public-holidays#entitlements) – not worked, or worked as ordinary hours. For more information see [overtime](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Overtime11).\n\nYes\n\nYes\n\n#### Example: ordinary hours of work not stated\n\nKim works in a call centre. Under her contract she works a minimum number of hours per week. She also works extra shifts when needed, though there is no clear pattern to this.\n\nThere is no award or agreement that specifies Kim's ordinary hours of work, and she is not paid overtime rates for her extra shifts.\n\nAll of Kim's wages are OTE. As there are no stipulated ordinary hours of work, and no pattern of regular or usual hours, Kim's ordinary hours of work are all the hours she actually works.\n\nAll the payments to Kim are also salary or wages.\n\nEnd of example\n\n#### Example: piece-rates where no ordinary hours stated\n\nEvan works part time as a fruit picker for Golden Fruit Farm Pty Ltd. He is paid 15 cents for every kilogram of apples he picks. There are no ordinary hours specified in any award or agreement.\n\nEvan picks 5,000 kilograms of apples in his 30 working hours in the week and is paid $750 by Golden Fruit Farm Pty Ltd, as the piece rate amount is higher than his minimum wage guarantee under the Horticulture Award.\n\nThe $750 paid to Evan is OTE. As his ordinary hours of work are not specified in any award or agreement, his ordinary hours of work are the hours that he actually works.\n\nThe $750 paid to Evan is also salary or wages.\n\nEnd of example\n## Paid leave and other payments\n\nPaid leave includes the various forms of payment including absences, cashing out in service or upon termination.\n\n### Other paid leave (paid leave type O)\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 2: Other paid leave (paid leave type O)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Annual leaveExternal Link](https://www.fairwork.gov.au/leave/annual-leave)\n\nYes\n\nYes\n\nAnnual leave loading that is clearly linked to a lost opportunity to work overtime\n\nYes\n\nNo\n\n[Annual leave loadingExternal Link](https://library.fairwork.gov.au/viewer/?krn=K600323) – all other\n\nYes\n\nYes\n\n[Long service leaveExternal Link](https://www.fairwork.gov.au/leave/long-service-leave) that is **not paid** under a portable long service leave scheme\n\nYes\n\nYes\n\nLong service leave that is **paid** under a [portable long service leave schemeExternal Link](https://www.fairwork.gov.au/leave/long-service-leave#Portable-long-service-leave)\n\nNo\n\nNo\n\n[Family and domestic violence leaveExternal Link](https://www.fairwork.gov.au/leave/family-and-domestic-violence-leave)\n\nYes\n\nYes\n\n[Rostered days offExternal Link](https://www.fairwork.gov.au/employment-conditions/hours-of-work-breaks-and-rosters/rostered-days-off) – time taken and paid at ordinary rates\n\nYes\n\nYes\n\n[Sick, personal and carers leaveExternal Link](https://www.fairwork.gov.au/leave/sick-and-carers-leave/paid-sick-and-carers-leave)\n\nYes\n\nYes\n\n[Time off in lieu (TOIL) of overtimeExternal Link](https://www.fairwork.gov.au/pay-and-wages/penalty-rates-allowances-and-other-payments/overtime-pay#time-off-instead-of-overtime-pay) – time taken and paid at ordinary rates\n\nYes\n\nYes\n\nStudy leave\n\nYes\n\nYes\n\nSpecial paid leave\n\nYes\n\nYes\n\nGardening leave\n\nYes\n\nYes\n\n### Paid parental leave (paid leave type P)\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\n**Table 3: Paid parental leave (paid leave type P)**\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nEmployer [paid parental leaveExternal Link](https://www.fairwork.gov.au/leave/parental-leave), such as maternity leave, paternity leave or adoption leave\n\nNo\n\nNo\n\nGovernment paid parental leave (GPPL)\n\nNo\n\nNo\n\n### Workers' compensation (paid leave type W)\n\nWhen considering workers’ compensation for OTE purposes, this refers only to amounts you pay in relation to compensation schemes administered by either a:\n\n- federal, state or territory workers’ compensation authority\n- federal, state or territory road and transport accident authority.\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 4: Workers' compensation (paid leave type W)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Workers compensationExternal Link](https://www.fairwork.gov.au/employment-conditions/workers-compensation) – payment for hours an employee performs work or is required to attend work\n\nYes\n\nYes\n\n[Workers compensationExternal Link](https://www.fairwork.gov.au/employment-conditions/workers-compensation) – employee is not required to work, including any top-ups or make-up pay to bring the amount paid on these absences up to their normal rate of pay\n\nNo\n\nNo\n\n### Ancillary and defence leave (paid leave type A)\n\nFair Work defines a range of leave types that are collectively referenced as 'ancillary' leave.\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 5: Ancillary and defence leave (paid leave type A)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Community service leaveExternal Link](https://www.fairwork.gov.au/leave/community-service-leave), including voluntary emergency management activities for bodies such as a State Emergency Service, Country Fire Authority and the RSPCA\n\nNo\n\nNo\n\n[Jury duty leaveExternal Link](https://www.fairwork.gov.au/leave/community-service-leave/jury-duty), including attendance for jury selection and jury duty\n\nNo\n\nNo\n\n[Defence reserve leaveExternal Link](https://www.fairwork.gov.au/tools-and-resources/fact-sheets/rights-and-obligations/defence-reservists-rights-and-responsibilities-at-work), paid to volunteers of the Australian Defence Forces to undertake defence services\n\nNo\n\nNo\n\n### Cash out of leave in service (paid leave type C)\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 6: Cash out of leave in service (paid leave type C)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Cashed out annual leaveExternal Link](https://www.fairwork.gov.au/leave/annual-leave/cashing-out-annual-leave) and leave loading in service\n\nRefer to [Overtime](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Overtime11) for leave loading that is referrable to the lost opportunity to work overtime\n\nYes\n\nYes\n\nCashed out long service leave in service\n\nRefer to [Other paid leave (paid leave type O)](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#OtherpaidleavepaidleavetypeO) for long service leave paid under a portable leave scheme\n\nYes\n\nYes\n\nCashed out [sick, personal and carer’s leave in serviceExternal Link](https://www.fairwork.gov.au/leave/sick-and-carers-leave)\n\nYes\n\nYes\n\nCashed out rostered days off in service\n\nYes\n\nYes\n\nCashout of TOIL of overtime pay in service\n\nYes\n\nNo\n\n### Unused leave on termination (paid leave type U)\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Examples) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nThis section only applies to the specific leave types referenced below. For other types of leave paid upon termination, see [Termination paymentsExternal Link](https://www.fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay)\n\nTable 7: Unused leave on termination (paid leave type U)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Annual leave or leave loadingExternal Link](https://www.fairwork.gov.au/ending-employment/notice-and-final-pay/final-pay#final-pay-payments) accrued after 17 August 1993 paid on a normal termination, such as voluntary resignation, employment terminated due to inefficiency, or retirement\n\nYes\n\nNo\n\n[Long service leaveExternal Link](https://www.fairwork.gov.au/ending-employment/notice-and-final-pay/final-pay#final-pay-payments) accrued after 17 August 1993 paid on a normal termination, such as voluntary resignation, employment terminated due to inefficiency, or retirement\n\nYes\n\nNo\n\n### Allowances\n\n[AllowancesExternal Link](https://www.fairwork.gov.au/pay-and-wages/penalty-rates-allowances-and-other-payments/allowances) may be paid to compensate employees:\n\n- for their work efforts to recognise a higher skill level\n- to compensate for adverse work conditions\n- to compensate for the employee incurring an expense.\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 8: Allowances\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nHourly on-call allowance for ordinary hours of work\n\nYes\n\nYes\n\nTask allowances for:\n\n- work efforts or skills – such as industry allowances, higher duties, leading hand, first aid or supervisor allowances\n- adverse conditions – such as allowances for working at heights, in confined spaces, in the cold, wet or heat, or danger\n- staying employed with the current employer – such as for retention allowances.\n\nThese are reported as allowance type KN in your STP reporting.\n\nYes\n\nYes\n\nExpense allowances that are paid with the reasonable expectation that the money will be fully expended by the employee in the course of providing their services\n\nNo\n\nNo\n\nAllowances that represent partial compensation for expenses likely to be incurred by employees that are paid:\n\n- regardless of whether or not the employee incurred the expense, or\n- where the allowance amount has no relationship to the actual cost incurred by the employee.\n\nYes\n\nYes\n\n#### Example: expense allowance expected to be used in full\n\nMatteo is paid a tool allowance under the [Joinery and Building Trades AwardExternal Link](https://awards.fairwork.gov.au/MA000029.html). It is expected that Matteo will use the whole allowance to supply and maintain his tools.\n\nMatteo’s employer doesn't make SG contributions on the tool allowance as it is not OTE.\n\nEnd of example\n### Overtime\n\n[OvertimeExternal Link](https://www.fairwork.gov.au/employment-conditions/hours-of-work-breaks-and-rosters/hours-of-work/when-overtime-applies) payments are not OTE, provided the employee's ordinary hours of work are clearly identified in the award or agreement.\n\nIf you can't distinctly identify overtime amounts, all the hours actually worked are included in the employee's ordinary hours of work in the award or agreement.\n\nThese rules also apply if the payments are calculated as an annualised or lump sum component of a total salary package. Overtime payments must be clearly identifiable. Otherwise, all hours worked are considered ordinary hours of work.\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 9: Overtime\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[OvertimeExternal Link](https://www.fairwork.gov.au/employment-conditions/hours-of-work-breaks-and-rosters/hours-of-work/when-overtime-applies) payments – provided the employee's ordinary hours of work are clearly identified such as:\n\n- beyond their ordinary hours of work\n- outside the agreed number of hours\n- outside the spread of ordinary hours (the times of the day ordinary hours can be worked)\n\nYes\n\nNo\n\nAnnual leave loading referrable to the lost opportunity to work overtime\n\nYes\n\nNo\n\n[Time off in lieu (TOIL)External Link](https://www.fairwork.gov.au/pay-and-wages/penalty-rates-allowances-and-other-payments/overtime-pay#time-off-instead-of-overtime-pay) – cash out of TOIL in service\n\nFor unused TOIL on termination, see [termination payments](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Terminationpayments10)\n\nYes\n\nNo\n\nOn call allowance for hours outside ordinary hours of work\n\nYes\n\nNo\n\nCall back allowance\n\nYes\n\nNo\n\nBonuses and commissions paid solely for work performed entirely outside ordinary hours\n\nYes\n\nNo\n\n#### Example: overtime identified in an award or agreement\n\nPierre is employed under an award to work 38 ordinary hours per week with additional reasonable overtime. However, Pierre’s roster includes shifts with planned overtime. He works a total of 48 hours per week including 10 hours of overtime paid at overtime rates.\n\nThe payment to Pierre for his 38 ordinary hours of work is OTE.\n\nThe 10 hours of overtime payments are not OTE.\n\nThe payment for all 48 hours is salary or wages.\n\nEnd of example\n### Bonuses and commissions\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 10: Bonuses and commissions\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\n[Commission paymentsExternal Link](https://www.fairwork.gov.au/pay-and-wages/minimum-wages/piece-rates-and-commission-payments#commission-payments)\n\nYes\n\nYes\n\nCommission solely for work performed entirely outside ordinary hours\n\nYes\n\nNo\n\nPerformance bonus\n\nYes\n\nYes\n\nChristmas bonus\n\nYes\n\nYes\n\nBonus labelled as ex gratia but in respect of ordinary hours work\n\nYes\n\nYes\n\nSign-on bonus for new employees\n\nYes\n\nYes\n\nReferral bonus\n\nYes\n\nYes\n\nReturn to work bonus after parental leave\n\nYes\n\nYes\n\nBonus solely for work performed entirely outside ordinary hours\n\nYes\n\nNo\n\n#### Example: bonus paid in respect of overtime\n\nJessie is in IT, on an above award annual salary which includes payment for reasonable additional hours. His ordinary hours are Monday to Friday. As part of a project, Jessie works on Sunday. As a reward for meeting a project milestone which was entirely due to the work they did on Sunday, members of the team are each paid a $1,000 bonus.\n\nAs the bonus is being paid in respect of work that was done entirely outside of ordinary hours, the $1,000 is overtime and not OTE.\n\nEnd of example\n### Directors' fees\n\n**Directors' fees include payments to:**\n\n- the director of a company\n- a person who performs the duties of a director of the company\n- a member of the committee of management of the company, or as a person who performs the duties of such a member if the company is not incorporated.\n\n**Directors’ fees may include payment to cover travelling costs, costs associated with attending meetings and other expenses incurred in the position of a company director.**\n\nTable 11: Directors' fees\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nRemuneration you pay to a working director\n\nYes\n\nYes\n\nRemuneration you pay to a non-working director\n\nYes\n\nYes\n\n## Lump sum payments\n\n### Payments in arrears (lump sum E)\n\nLump sum E refers to [back pay or an arrears paymentExternal Link](https://www.fairwork.gov.au/workplace-problems/common-workplace-problems/i-think-ive-underpaid-my-employee) that was payable more than 12 months before the payment was made. Regardless of the period to which the payment relates, OTE is worked out on the actual component of pay that is being paid.\n\nFor example, if the back pay or arrears payment includes ordinary hours, higher duties allowances, paid annual leave and overtime, then all but the overtime is OTE.\n\n### Return to work payments (lump sum W)\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 12: Return to work payments (lump sum W)\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nBonus paid to an ex-employee to encourage them to return to the employer\n\nYes\n\nYes\n\nBonus payments made to end industrial action and have employees resume work\n\nYes\n\nYes\n\nBonus paid to an employee who has resigned and is encouraged to withdraw their resignation\n\nYes\n\nYes\n\n### Termination payments\n\nPayments made in consequence of the [termination of employmentExternal Link](https://www.fairwork.gov.au/ending-employment/notice-and-final-pay/final-pay#final-pay-payments)** **are generally not OTE.\n\nHow you work out OTE might be impacted if your employee has a [salary sacrifice](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings#Salarysacrifice) arrangement in place.\n\nYou may have additional super obligations under an [industrial instrumentExternal Link](https://www.ato.gov.au/sitecore/service/notfound.aspx?item=web%3a%7b9D5420E8-F93B-424C-B74C-376869619342%7d%40en#extra-terms) (award or agreement) to pay super on amounts that are not OTE.\n\nTable 13: Termination payments\n\nPayment\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nUnused leave on termination, including annual leave, annual leave loading and long service leave.\n\nThis applies regardless of the reason for termination or treatment for tax purposes.\n\nYes\n\nNo\n\n[Payment in lieu of noticeExternal Link](https://www.fairwork.gov.au/ending-employment/notice-and-final-pay#can), for all termination reasons.\n\nThis applies regardless of the reason for termination or treatment for tax purposes.\n\nYes\n\nYes\n\nUnused personal/carers leave on termination, for all termination reasons.\n\nThis applies regardless of the reason for termination or treatment for tax purposes.\n\nYes\n\nNo\n\nUnused rostered days off (RDOs) and time off in lieu (TOIL) of overtime paid on termination\n\nYes\n\nNo\n\nOther payments in consequence of the termination of employment, such as:\n\n- a gratuity or golden handshake\n- [genuine redundancyExternal Link](https://www.fairwork.gov.au/ending-employment/redundancy) or early retirement scheme payments above the tax-free limit\n- severance pay\n- non-genuine redundancy\n- compensation for loss of job\n- compensation for wrongful dismissal\n- invalidity payments other than compensation for personal injury\n- lump sum payments paid due to the death of an employee.\n\nNo\n\nNo\n\n#### Example: termination of employment due to genuine redundancy\n\nUnfortunately, Michael's job is no longer required to be performed by anyone. His job is now redundant, and after consulting with Michael, his employer pays him a genuine redundancy on 14 March 2025. It totals $40,000, and comprises:\n\n- payment of $10,000 in lieu of notice for 4 weeks of wages\n- redundancy payment of $25,000\n- ex-gratia payment of $5,000.\n\nOut of the total payment of $40,000, only the $10,000 payment in lieu of notice is OTE. Michael's employer must pay SG on the payment in lieu of notice, and works out the SG as follows:\n\n$10,000 × 11.5% = $1,150.\n\nEnd of example\n## Salary sacrifice\n\nGenerally, when an employee has a [salary sacrifice arrangement](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/setting-up-super-for-your-business/how-to-set-up-salary-sacrifice-for-super) in place, you need to consider how the salary that is being sacrificed is taken into account when determining the employee's OTE and salary and wages under the SGAA.\n\nTable 14: Salary sacrifice\n\nSacrificed amounts\n\nSalary and wages\n\nOTE (for the purposes of SGAA)\n\nSalary sacrificed to superannuation – where the salary that is sacrificed would otherwise be OTE if it was instead paid to the employee\n\nYes\n\nYes\n\nSalary sacrificed to superannuation – where the salary that is sacrificed would not otherwise be OTE if it was instead paid to the employee, such as paid parental leave or overtime\n\nYes\n\nNo\n\nSalary sacrificed to other employee benefits – including amounts that are fringe benefits and exempt fringe benefits\n\nNo\n\nNo","title":""}
+{"_id":"passage_a0JRF000003eKxZ2AU/p00388960","text":"If you inherit a deceased person’s dwelling, you may be exempt or partially exempt when a CGT event happens to it. The same exemptions apply if a CGT event happens to a deceased’s estate of which you are the trustee. [Flowchart 3.6](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/appendixes/appendix-3-flowcharts?anchor=Flowchart_3p6#Flowchart_3p6) in **appendix 3** sets out the full exemption rules if you inherit a dwelling. Alternatively, the rules are set out below.\n\nIf you are a joint tenant and another joint tenant dies, their interest in the dwelling is taken to pass in equal shares to you and any other surviving joint tenants on that date.\n\nFor the purpose of the main residence exemption, you are treated as if that interest in the dwelling has passed to you as beneficiary of the deceased estate, which means the following rules apply to that interest.\n\nChanges to the law on 12 December 2019 may affect your entitlement to claim the main residence exemption on an Australian residential property that you inherited from a foreign resident. If you are a surviving joint tenant, beneficiary or trustee of a deceased estate and a CGT event happens to your residential property in Australia that you inherited from a foreign resident, you may no longer be entitled to claim the main residence exemption for the deceased’s ownership period.\n\nIf you inherit an Australian residential property from a deceased person who had been a foreign resident for six years or less at the time of their death, the main residence exemption that the deceased accrued for the dwelling is available to you as the beneficiary. The main residence exemption means you may not pay CGT on any capital gain made after you sell or dispose of the inherited property, depending on the use of the property by both you and the deceased.\n\nIf you inherit an Australian residential property from a deceased person who had been a foreign resident for more than six years at the time of their death, any main residence exemption that the deceased person may have accrued for that dwelling is not available to you. This means you may have to pay CGT when you sell or dispose of the property.\n\nIf you inherit an Australian residential property and you have been a foreign resident for more than six years when you sell or dispose of the property, you can't claim the main residence exemption for your ownership period.\n\nThere is a transitional period for properties acquired before 7.30pm AEST on 9 May 2017 which are disposed of on or before 30 June 2020.\n\n**See also:**\n\n- [Joint tenants](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/does-capital-gains-tax-apply-to-you/what-is-a-cgt-asset?anchor=Joint_tenants#Joint_tenants)\n- [Foreign residents and main residence exemption](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/main-residence-exemption-for-foreign-residents)\n\n## Full exemption\n\n## Deceased died before 20 September 1985\n\nAs you acquired the dwelling before 20 September 1985, any capital gain you make is exempt. However, major capital improvements you make to the dwelling on or after 20 September 1985 may be taxable, see [Major capital improvements to a dwelling acquired before 20 September 1985](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/major-capital-improvements-to-a-dwelling-acquired-before-20-september-1985?anchor=Major_capital_improvements_to_a_dwelling#Major_capital_improvements_to_a_dwelling).\n\n## Deceased died on or after 20 September 1985\n\n**A**. The deceased acquired the dwelling **before** 20 September 1985 (it does not matter whether the dwelling was the main residence of the deceased person).\n\nYou may have an ownership interest in a dwelling that passed to you as a beneficiary in a deceased estate or you may have owned it as trustee of a deceased estate. In either case, you disregard any capital gain or capital loss you make from a CGT event that happens to the dwelling if either of the following two conditions applies.\n\n1. You disposed of your ownership interest within two years of the person’s death, that is, if the dwelling was sold under a contract, settlement occurred within two years. This exemption applies whether or not you used the dwelling as your main residence or to produce income during the two year period. The Commissioner has the discretion to extend the two year period for CGT events (such as a sale) happening in the 2008–09 income year and later years, see [Commissioner may extend the two year time period](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/inherited-main-residence#Commissioner_may_extend_time_period).\n2. From the deceased’s death until you disposed of your ownership interest, the dwelling was not used to produce income and was the main residence of one or more of\n\n1. a person who was the spouse of the deceased immediately before the deceased’s death (but not a spouse who was permanently separated from the deceased)\n2. an individual who had a right to occupy the home under the deceased's will (including a right to occupy the home as a result of a court order under the relevant family provision legislation that takes effect as if it had been made as a codicil to the deceased's will)\n3. you, as a beneficiary, if you disposed of the dwelling as a beneficiary.\n\nThe dwelling can be the main residence of one of the above people (even though they may have stopped living in it) if they choose to treat it as their main residence under the [continuing main residence status after dwelling ceases to be your main residence](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/continuing-main-residence-status-after-dwelling-ceases-to-be-your-main-residence?anchor=Continuing_main_residence_status_after_d#Continuing_main_residence_status_after_d) rule.\n\nThe requirement that the dwelling is the main residence of an individual who had a right to occupy it under the deceased’s will is satisfied if the individual moves into the dwelling when it is first practicable to do so. This requirement will be satisfied where the delay in moving is because the dwelling cannot be occupied until probate and administration of the estate is granted.\n\n**B**. The deceased acquired the dwelling **on or after** 20 September 1985.\n\nYou disregard any capital gain or capital loss you make when a CGT event happens to the dwelling or your ownership interest in the dwelling if either of the following two points applies.\n\n1. Condition 2 in **A** above is met and the dwelling passed to you as beneficiary or trustee on or before 20 August 1996. For this to apply, the deceased must have used the dwelling as their main residence from the date they acquired it until their death, and they must not have used it to produce income.\n2. One of the conditions in **A** above is met, and the dwelling passed to you as beneficiary or trustee after 20 August 1996, and just before the date the deceased died it was\n\n1. their main residence\n2. not being used to produce income.\n\nA dwelling can still be regarded as the deceased’s main residence even though they stopped living in it, see [Continuing main residence status after dwelling ceases to be your main residence](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/continuing-main-residence-status-after-dwelling-ceases-to-be-your-main-residence?anchor=Continuing_main_residence_status_after_d#Continuing_main_residence_status_after_d).\n\nStart of exampleExample 86: Full exemption\n\nRodrigo was the sole occupant of a home he bought in April 1990. He did not live in or own another home.\n\nHe died in January 2020 and left the house to his son, Petro. Petro rented out the house and then disposed of it 15 months after his father died.\n\nPetro is entitled to a full exemption from CGT, as he acquired the house after 20 August 1996 and disposed of it within two years of his father’s death.\n\nIf Petro did not sell the house within two years of his father's death due to circumstances beyond his control, he may ask the Commissioner to grant an extension of time, see [Commissioner may extend the two year time period](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/inherited-main-residence#Commissioner_may_extend_time_period).\n\nEnd of example\n## Partial exemption\n\nIf you do not qualify for a full exemption from CGT for the home, you may be entitled to a partial exemption.\n\nYou calculate your capital gain or capital loss as follows:\n\nCapital gain or capital loss amount × (non-main residence days ÷ total days)\n\n## Non-main residence days\n\n‘Non-main residence days’ is the number of days that the dwelling was not the main residence.\n\n1. If the deceased acquired the dwelling before 20 September 1985, non-main residence days is the number of days in the period from their death until settlement of your contract for sale of the dwelling when it was not the main residence of one of the following\n\n1. a person who was the spouse of the deceased (except a spouse who was permanently separated from the deceased)\n2. an individual who had a right to occupy the dwelling under the deceased’s will, or\n3. you, as a beneficiary, if you disposed of the dwelling as a beneficiary.\n2. If the deceased acquired the dwelling on or after 20 September 1985, non-main residence days is the number of days calculated under (a) plus the number of days in the deceased’s period of ownership when the dwelling was not their main residence.\n\n## Total days\n\n1. If the deceased acquired their ownership interest before 20 September 1985, ‘total days’ is the number of days from their death until you disposed of your ownership interest.\n2. If the deceased acquired the ownership interest on or after 20 September 1985, total days is the number of days in the period from when the deceased acquired the dwelling until you disposed of your ownership interest.\n\nA further adjustment may be required if the dwelling was a main residence, but was partly used to produce income, for example, if, for a period, part of it was rented out or used as a place of business.\n\nStart of exampleExample 87: Partial exemption\n\nVicki bought a house under a contract that was settled on 12 February 1995 and she used it solely as a rental property. When she died on 17 November 1998, the house became the main residence of her beneficiary, Lesley. Lesley sold the property under a contract that was settled on 27 November 2020.\n\nAs Vicki had never used the property as her main residence, Lesley cannot claim a full exemption from CGT. However, as Lesley used the house as her main residence, she is entitled to a partial exemption from CGT.\n\nVicki owned the house for 1,375 days and Lesley then lived in the house for 8,047 days, a total of 9,422 days. Assuming Lesley made a capital gain of $100,000, the taxable portion is:\n\n$100,000 × (1,375 ÷ 9,422) = $14,594\n\nIn working out her capital gain, Lesley can use either the discount method or the indexation method. This is because, for the purposes of using those methods, she is taken to have acquired the property on 12 February 1995 (when Vicki acquired it) and this is before 11.45am AEST on 21 September 1999, and more than 12 months before Lesley entered into the contract to sell it.\n\nEnd of example\nIf you dispose of your ownership interest in a dwelling within two years of the person’s death, you can ignore the main residence days and total days in the period from the person’s death until you dispose of the dwelling if this lessens your tax liability. See [Commissioner may extend the two year time period](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/inherited-main-residence#Commissioner_may_extend_time_period).\n\nYou also ignore any non-main residence days before the deceased’s death in calculating the capital gain or capital loss if:\n\n- you acquired the dwelling after 20 August 1996\n- the dwelling was the deceased’s main residence just before their death, and\n- the dwelling was not being used to produce income at the time of their death.\n\n## Using a home you inherited to produce income\n\nIf a person acquired their main residence on or after 20 September 1985, and they died and it passed to you as a beneficiary (or as trustee of their estate) after 20 August 1996, you are taken to have acquired the dwelling at its market value at the time you first used it to produce your income if:\n\n- you first used the dwelling to produce income after 20 August 1996\n- when a CGT event happens to the dwelling, you would get only a partial exemption because you used the dwelling to produce assessable income during the period you owned it\n- you would have been entitled to a full exemption if the CGT event happened to the dwelling immediately before you first used it to produce income\n- the CGT event did not happen to the dwelling within two years of the person’s date of death.\n\nIf all of the above apply, you must work out your capital gain or capital loss using the market value of the dwelling at the time you first used it to produce income. You do not have a choice.\n\n## Cost to you of acquiring the dwelling\n\nIf you acquire a dwelling the deceased had owned, there are special rules for calculating your cost base.\n\nThese rules apply in calculating any capital gain or capital loss when a CGT event happens to the dwelling.\n\nThe first element of the cost base and reduced cost base of a dwelling (its acquisition cost) is its market value at the date of death if either:\n\n- the dwelling was acquired by the deceased before 20 September 1985, or\n- the dwelling passes to you after 20 August 1996 (but not as a joint tenant), and it was the main residence of the deceased immediately before their death and was not being used to produce income at that date.\n\nIn any other case, your acquisition cost is the deceased’s cost base and reduced cost base on the day they died. You may need to contact the trustee or the deceased’s recognised tax adviser to obtain the details. If that cost base includes indexation, you must recalculate it to exclude the indexation component if you prefer to use the discount method to work out your capital gain from the property.\n\nIf you are a beneficiary, the cost base and the reduced cost base also include amounts that the trustee of the deceased’s estate would have been able to include in the cost base and reduced cost base.\n\n## Continuing main residence status\n\nIf the deceased was not living in the home at the date of their death, they or their trustee may have chosen to continue to treat it as their main residence. You may need to contact the trustee or the deceased’s recognised tax adviser to find out whether this choice was made. If it was, the dwelling can still be regarded as the deceased’s main residence:\n\n- for an indefinite period, if the dwelling was not used to produce income after the deceased stopped living in it, or\n- for a maximum of six years after they stopped living in it, if it was used to produce income after they stopped living in it.\n\nStart of exampleExample 88: Continuing main residence status\n\nAldo bought a house in March 1995 and lived in it.\n\nHe moved into a nursing home in December 2016 and left the house vacant. He chose to treat the house as his main residence after he stopped living in it under the [Continuing main residence status after dwelling ceases to be your main residence](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/continuing-main-residence-status-after-dwelling-ceases-to-be-your-main-residence?anchor=Continuing_main_residence_status_after_d#Continuing_main_residence_status_after_d) rule.\n\nAldo died in February 2021 and the house passed to his beneficiary, Con, who uses the house as a rental property.\n\nAs the house was Aldo’s main residence immediately before his death and was not being used to produce income at that time, Con can get a full exemption for the period Aldo owned it.\n\nIf Con rented out the house and sold it more than two years after Aldo’s death, the capital gain for the period from the date of Aldo’s death until Con sold it is taxable, unless the Commissioner grants Con an extension of time, see [Commissioner may extend the two year time period](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/inherited-main-residence#Commissioner_may_extend_time_period).\n\nIf Con had sold the house within two years of Aldo’s death, he could have ignored the main residence days and total days between Aldo’s death and him selling it, which would have given him exemption for this period.\n\nIf Aldo had rented out the house after he stopped living in it, he could also have chosen to continue to treat it as his main residence, see [Continuing main residence status after dwelling ceases to be your main residence](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2021/whats-new/real-estate-and-main-residence/continuing-main-residence-status-after-dwelling-ceases-to-be-your-main-residence?anchor=Continuing_main_residence_status_after_d#Continuing_main_residence_status_after_d). The house would be considered to be his main residence until his death because he rented it out for less than six years.\n\nIf this choice had been made, Con would get an exemption for the period Aldo owned the house.\n\nEnd of example\n## Commissioner may extend the two year time period\n\nA trustee or beneficiary of a deceased estate may apply to the Commissioner for an extension of the two year time period, where the CGT event happened in 2008–09 or later. Generally, the Commissioner would exercise the discretion in situations where the delay is due to circumstances which are outside of the control of the beneficiary or trustee, for example:\n\n- the ownership of a dwelling or a will is challenged\n- the complexity of a deceased estate delays the completion of administration of the estate\n- a trustee or beneficiary is unable to attend to the deceased estate due to unforeseen or serious personal circumstances arising during the two year period (for example, the taxpayer or a family member has a severe illness or injury), or\n- settlement of a contract of sale over the dwelling is unexpectedly delayed or falls through for circumstances outside the beneficiary or trustee’s control.\n\nThese examples are not exhaustive.\n\nIn exercising the discretion, the Commissioner will also take into account whether and to what extent the dwelling is used to produce assessable income and for how long the trustee or beneficiary held the ownership interest in the dwelling.","title":""}
+{"_id":"passage_a0JRF000003hryb2AA/p00391771","text":"## Common conditions of release\n\nThe most common conditions of release for paying benefits are when the member:\n\n- has reached their preservation age and retires\n- has reached their preservation age and begins a transition-to-retirement income stream\n- ceases an employment arrangement on or after the age of 60\n- is 65 years of age (even if they haven't retired)\n- has died (see [Paying superannuation death benefits](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/paying-superannuation-death-benefits)).\n\nThere are some special circumstances where at least part of a member’s super benefits can be released before the member has reached preservation age.\n\n### Preservation age\n\nAccess to super benefits is generally restricted to members who have reached their preservation age.\n\nDate of birth\n\nPreservation age\n\n(years)\n\nBefore 1 July 1960\n\n55\n\n1 July 1960 – 30 June 1961\n\n56\n\n1 July 1961 – 30 June 1962\n\n57\n\n1 July 1962 – 30 June 1963\n\n58\n\n1 July 1963 – 30 June 1964\n\n59\n\nAfter 30 June 1964\n\n60\n\n### Retirement under super laws\n\nFor retirement there are no restrictions on the form in which the benefits can be taken.\n\nIf the member is:\n\n- under 60 years of age – they can access their preserved benefits only when they reach preservation age, cease gainful employment and have no intention to become gainfully employed in the future\n- at least 60 years of age – they can access their preserved benefits when they leave a job.\n\nIf a member who is 60 or over ceases one employment arrangement but continues in another employment arrangement, they may cash all benefits accumulated up to that time. All amounts accrued after that date will be preserved or restricted non-preserved benefits and can't be cashed until a fresh condition of release is met.\n\n### Preservation age – transition to retirement\n\nPreservation age is the minimum retirement age at which a member is normally able to access their preserved benefits. Subject to the governing rules of your fund, members who have not retired may access their super with a transition to retirement income stream once they have reached their preservation age.\n\nA [transition to retirement](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/paying-smsf-benefits/income-stream-pension-rules-and-payments/transition-to-retirement-income-streams) income stream must:\n\n- be account-based\n- not be commuted unless the member has met a condition of release with no cashing restrictions\n- meet the [minimum pension standards](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/paying-smsf-benefits/income-stream-pension-rules-and-payments#ato-Minimumpensionstandards)\n- not exceed a maximum of 10% of the account balance at the start of each financial year.\n\n### Turning 65\n\nA member who has reached age 65 may cash their benefits at any time. There are no cashing restrictions, which means the benefits can be paid as an income stream or a lump sum.\n\nA fund member is not compelled to draw down their super once they reach a particular age. They can keep their benefits in the fund indefinitely. The only time it is compulsory for a fund to pay out a member’s benefit is when a member dies.\n\n## Special conditions of release\n\nIn special circumstances at least part of a member’s super benefits can be released before the member has reached preservation age.\n\nAs trustee, you must ensure that the member has met a condition of release before you release any funds, and check that the governing rules of your fund allow it. It's possible that a benefit may be payable under the super laws but not under the rules of your fund. For more, see [Release authorities](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/release-authorities).\n\nGenerally, rollovers to other super funds don’t require the member to satisfy a condition of release, subject to the governing rules of your fund. For information on the Kiwi Saver scheme, see Trans-Tasman retirement savings portability.\n\nPayments of benefits to members who have not met a condition of release are not treated as super benefits – instead, they will be taxed as ordinary income at the member's marginal tax rate. This is also known as illegal early release of super. Significant penalties may also apply to you as trustee and to your fund. For more, see [TA 2009/1 Superannuation illegal early release arrangements](https://www.ato.gov.au/law/view/document?DocID=TPA/TA20091/NAT/ATO/00001&PiT=99991231235958).\n\nSpecial conditions of release include:\n\n- [Terminating gainful employment](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Terminatinggainfulemployment)\n- [Permanent incapacity](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Permanentincapacity)\n- [Temporary incapacity](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Temporaryincapacity)\n- [Severe financial hardship](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Severefinancialhardship)\n- [Compassionate grounds](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Compassionategrounds)\n- [Terminal medical condition](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#Terminalmedicalcondition)\n- [First home super saver scheme](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/releasing-benefits/conditions-of-release#FHSSscheme).\n\n### Terminating gainful employment\n\nSubject to the governing rules of your fund, where a member (who has not met another condition of release) has ceased employment with an employer who had contributed to the member's fund, on termination:\n\n- all preserved benefits may be paid, but they must be taken as a lifetime pension or annuity, which can't be commuted into a lump sum (unless the preserved benefits are less than $200, in which case the member can cash the benefits without restriction)\n- all unrestricted non-preserved benefits can be cashed out on request from the member (no cashing restrictions).\n\n### Permanent incapacity\n\nA member's benefits may be cashed if you're satisfied that their ill health makes it unlikely that they will engage in gainful employment that they are reasonably qualified for by education, training or experience.\n\nMembers may still be eligible where they meet the above criteria, but are undertaking other work, such as light duties in a different position or casual work in a different field.\n\nThere are no cashing restrictions on payment of benefits.\n\n### Temporary incapacity\n\nA member's benefits may be paid if you're satisfied that the member has temporarily ceased work due to physical or mental ill health that does not constitute permanent incapacity. In general, temporary incapacity benefits may be paid only from the insured benefits or voluntary employer funded benefits.\n\nIt's not necessary for the member's employment to fully cease but, generally, a member would not be eligible for temporary incapacity benefits if they were receiving sick leave benefits. The benefit must be paid as an income stream for the period of the incapacity and can't be commuted to a lump sum.\n\n### Severe financial hardship\n\nTo release benefits under severe financial hardship you need to be satisfied that the member:\n\n- can't meet reasonable and immediate family living expenses\n- has been receiving relevant government income support payments for a continuous period of 26 weeks and was receiving that support at the time they applied to the trustees.\n\nThe payment must be a single gross lump sum of no more than $10,000 and no less than $1,000 (or a lesser amount if the member's benefits are less than $1,000). Only one payment is permitted in any 12-month period.\n\nAlternatively, if the member has reached their preservation age plus 39 weeks, you need to be satisfied that the member:\n\n- has been receiving relevant government income support payments for a cumulative period of 39 weeks since reaching their preservation age\n- was not gainfully employed on a full-time or part-time basis at the time of applying to the trustees.\n\nIf you release benefits under these circumstances, there are no cashing restrictions.\n\nMore information can be found by visiting, [Services Australia – Early release of superannuationExternal Link](https://www.servicesaustralia.gov.au/individuals/services/centrelink/early-release-superannuation).\n\n### Compassionate grounds\n\nBenefits may be released on specified compassionate grounds if all the following conditions are met:\n\n- a member does not have the financial capacity to meet an expense\n- release is allowable under the governing rules of your fund.\n\nThe amount of super that you can pay on compassionate grounds is limited to what is reasonably needed. It is paid as a lump sum, see [Early access to your super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super).\n\n### Terminal medical condition\n\nIf a member has a terminal medical condition and 2 medical professionals certify that the condition is likely to result in the member’s death in the next 24 months, the balance of their super account may be paid as a tax-free lump sum benefit. There are no cashing restrictions. See more about [access to super for members with a terminal medical condition](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/paying-benefits/access-to-super-for-members-with-a-terminal-medical-condition).\n\n### First home super saver scheme\n\nThe [First home super saver](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme) (FHSS) scheme allows your fund members to save for their first home inside their super. Your members can do this by making voluntary concessional and non-concessional contributions to their super. When your members are ready to receive their FHSS amounts, they can request a release from us to withdraw personal contributions they have made into super since 1 July 2017, along with associated earnings.\n\nIf your member's request to release an FHSS amount is successful, we will issue you with a release authority showing the amount you are required to send to us. We will also send you a release authority statement form, which you will need to complete (this must be completed in all cases, including for partial releases or where you are unable to release any amounts).\n\nWe will issue the release authority electronically via SuperStream where you are SuperStream enabled. When you receive an electronic release authority you are required to respond with an electronical release authority statement via the SuperStream Rollover message.\n\nFor both paper and electronic forms, you are required to comply with this release authority within 10 business days of the date of the release authority.\n\nEven if your member has not made voluntary contributions to your fund, the FHSS amount can still be released from their account subject to the applicable cashing order of benefit rules. Once you have sent any FHSS release amounts to us, we will withhold the appropriate amount of tax, and in some cases offset the remaining amount against any outstanding Commonwealth debts. We will then pay the balance of the FHSS release amount to your member.","title":""}
+{"_id":"passage_a0JRF000003cdEj2AI/p00387240","text":"## Non-commercial loss rules\n\nWork through the following non-commercial loss rules to work out if you need to:\n\n- claim and offset the loss against your other income, such as salary and wages\n- defer the loss and claim it in a later year.\n\n## 1. Are you in business?\n\nTo claim a loss or apply for the Commissioner's discretion to allow you to claim a loss, your activity must be '[in business](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business)'.\n\nIn addition, you normally need to have commenced the business activity. Broadly, business is considered 'commenced' if you have:\n\n- decided to commence the business activity\n- acquired the minimum commercial level of business assets to allow that business activity to be carried on, and\n- actually commenced business operations.\n\n### Example: commencing business operations\n\nIn the first year, Bob built a shed, repaired fences and cleared a part of the block. In the second year, he planted pumpkin seeds on a commercial scale.\n\nIn the first year, the venture didn't have the significant purpose or character of a business venture as the activities were done in preparation.\n\nIn the second year, with the planting of the pumpkin seeds, the activities constitute the commencing of business operations.\n\nEnd of example\n## 2. Similar business activities\n\nIf you are carrying on more than one business activity and they are [similar business activities](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses/offset-or-defer-the-loss-individuals-or-sole-traders/similar-business-activities), you may group them together when considering the non-commercial loss rules. For example, you could group activities if you decided to plant and sell corn in addition to pumpkins.\n\nIf you are running multiple business activities that are not similar, you must apply the non-commercial loss rules separately to each activity. For example, if Bob decided to build and sell cubby houses in addition to farming pumpkins. This may mean that you can claim a tax deduction for a loss on one business activity but not for the other.\n\n## 3. Excepted activity\n\nIf your loss-making business is in primary production or in professional arts (we call these '[excepted business activities](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses/offset-or-defer-the-loss-individuals-or-sole-traders/excepted-business-activities)'), and your assessable income from other sources is less than $40,000 (excluding any net capital gain), you can offset your losses from your other income.\n\n## 4. Less than $250,000 income requirement\n\nThe total of your taxable income, reportable fringe benefits, reportable super contributions and total net investment losses must less than $250,000 for you to be eligible to offset your losses in the current year. Find out more about [the income requirement](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses/offset-or-defer-the-loss-individuals-or-sole-traders/the-income-requirement).\n\nIf you do not meet the income requirement or don't pass any of the four tests, you must:\n\n- defer the loss, or\n- you can apply for the Commissioner's discretion in limited circumstances.\n\n## 5. Four tests\n\nIf you meet the income requirement, check if you pass any of the [four tests](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses/offset-or-defer-the-loss-individuals-or-sole-traders/four-tests). If you pass, you can offset the loss in the year in question.\n\n## 6. Commissioner's discretion\n\nIf you do not meet the income requirement or any of the four tests, you can apply for the [Commissioner's discretion](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses/commissioner-s-discretion) to allow the claim. The Commissioner will only exercise the discretion in limited circumstances if:\n\n- there are special circumstances outside your control that have prevented you passing one of the four tests, or\n- because of the nature of the business, there is a lead time before your business can pass one of the four tests or make a profit.\n\nIf there are no grounds for the Commissioner to exercise the discretion, you need to defer the loss for that income year.","title":""}
+{"_id":"passage_a0JRF000003iA1x2AE/p00391988","text":"## What are self-education expenses?\n\nSelf-education expenses are the costs you incur when you:\n\n- undertake courses at an educational institution (whether or not the courses lead to a formal qualification)\n- undertake courses provided by a professional or industry organisation\n- attend work-related conferences or seminars\n- do self-paced learning and study tours (whether within Australia or overseas).\n\n## Eligibility to claim self-education expenses\n\nYou can claim a deduction for a self-education expense if, at the time you incur the expense, it has a sufficient connection to earning income from your employment activities.\n\nSelf-education has a sufficient connection to earning your employment income if it either:\n\n- maintains or improves the specific skills or knowledge you require for your current employment activities\n- results in, or is likely to result in, an increase in your income from your current employment activities.\n\nYour employment activities are the duties and tasks expected of you to perform your job and are usually set out in your duty statement.","title":""}
+{"_id":"passage_a0JRF000003cxRx2AI/p00387605","text":"## Expenses you can claim\n\nIf your self-education expenses meet the [eligibility criteria](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Eligibilitytoclaimselfeducationexpenses), you can claim a deduction for the following expenses:\n\n- [Tuition, course, conference or seminar fees](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Tuitioncourseconferenceorseminarfees)\n- [General course expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Generalcourseexpenses)\n- [Decline in value of depreciating assets](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Declineinvalueofdepreciatingassets)\n- [Car and other transport expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Carandothertransportexpenses)\n- [Accommodation and meal expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Accommodationandmealexpenses) (incurred when the self-education requires you to travel and be away from your home for one or more nights)\n- [Interest on borrowings](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Interestonborrowings).\n\nFor [self-education expenses incurred before 1 July 2022](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses/self-education-reduction-in-expenses), you generally can't claim the first $250 of expenses.\n\n### Tuition, course, conference or seminar fees\n\nYou can claim a deduction for tuition fees, including student and amenities fees you incur if you are enrolled in a full fee-paying place at a university or other higher education institution. If you pay the fees up front, you will incur the amount when you pay it. If you withdraw from the course before the census date and the fees are subsequently refunded to you, you can't claim a deduction for them. In all other circumstances, you incur deductible course or tuition fees when the debt becomes a legal obligation you need to pay back (for example, on the census date). This is not when you make a repayment.\n\nThis includes fees that you pay with the assistance of a:\n\n- FEE-HELP loan\n- VET Student Loan (VSL).\n\nYou can't claim a deduction for voluntary or compulsory [repayments of these loans](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Expensesyoucantclaim) in your tax return.\n\nIf you're unsure whether you are enrolled in a full fee-paying place, you can check with your university or higher education institution.\n\n#### Example: deduction for course fees\n\nTara enrols in 2 subjects for her Master of Business Administration course. The course has a sufficient connection to her current employment duties. Each subject cost $10,000. Tara has deferred payment of the course fees through a FEE-HELP loan.\n\nTara's subjects have a census date of 22 March, meaning she will not need to pay the course fees if she withdraws from the subject before this date.\n\nTara decides to withdraw from one subject on 17 March due to an unexpected increase in workload. On 22 March, Tara incurs the course fees of $10,000 for the remaining subject she enrolled in.\n\nTara can claim a deduction for the course fees of $10,000 she incurs on 22 March in the income year it occurs, even though she has a deferred payment through a FEE-HELP loan.\n\nOn 15 June, Tara gets a bonus of $5,000 from her employer. She decides to use the bonus to make a voluntary repayment of $5,000 to her FEE-HELP loan.\n\nTara can't claim a deduction for the voluntary repayment of $5,000 that she makes to her FEE-HELP loan. She also can't claim a deduction for any compulsory repayments included on her notice of assessments that she is required to make to her FEE-HELP loan.\n\nEnd of exampleThere are certain [tuition fees you can't claim as a deduction](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Expensesyoucantclaim).\n\nFor seminars, conferences and similar courses, you can claim a deduction for the cost you incur to attend the event or enrol in the course.\n\nYou can't claim a deduction for tuition, course, conference or seminar fees if your employer reimburses you or pays the fees on your behalf.\n\n### General course expenses\n\nYou can claim a deduction for the following general course expenses you incur as a result of undertaking your work-related self-education:\n\n- computer consumables – for example, printer cartridges\n- equipment repairs – for example, the cost of repairing a computer\n- internet and data usage (excluding connection fees)\n- phone calls\n- postage\n- stationery\n- student union fees\n- textbooks\n- trade, professional, or academic journals.\n\n### Decline in value of depreciating assets\n\nA depreciating asset is an asset that loses its value over time. You can claim a deduction each year for the decline in value (depreciation) until the value of the asset is nil. This period is called the effective life of the asset.\n\nYou can claim a deduction for the decline in value (depreciation) of assets you use for work-related self-education purposes. For example:\n\n- computers\n- professional libraries\n- desks and chairs\n- filing cabinets and bookshelves\n- calculators\n- technical instruments and tools\n- other equipment (such as desk lamps).\n\n#### $300 or less\n\nYou can claim the cost of a depreciating asset you purchase in the year you buy it if:\n\n- the asset cost $300 or less\n- you mainly use it for work-related self-education (or in the course of earning other non-business assessable income) in the income year you buy it.\n\nYou need to apportion your claim if you also use the asset for private purposes.\n\n#### More than $300\n\nIf the depreciating asset you are using for work-related self-education cost more than $300, you can claim a deduction for its decline in value over its effective life.\n\nYou must reduce your claim if you either:\n\n- bought the asset part-way through the income year\n- use the asset partly for private purposes.\n\nTo work out your claim for the decline in value of a depreciating asset, use our online Depreciation and capital allowances tool.","title":""}
+{"_id":"passage_a0JRF000003dlzp2AA/p00388397","text":"Sometimes taxpayers own shares or units that they may have acquired at different times. This can happen as people decide to increase their investment in a particular company or unit trust. A common question people ask when they dispose of only part of their investment is how to identify the particular shares or units they have disposed of.\n\nThis can be very important because shares or units bought at different times may have different amounts included in their cost base. In calculating the capital gain or capital loss when disposing of only part of an investment, you need to be able to identify which shares or units you have disposed of. Also, when you dispose of any shares or units you acquired before 20 September 1985, any capital gain or capital loss you make is generally disregarded.\n\nIf you have the relevant records (for example, share certificates), you may be able to identify which particular shares or units you have disposed of. In other cases, the Commissioner will accept your selection of the identity of shares disposed of.\n\nAlternatively, you may wish to use a ‘first in, first out’ basis where you treat the first shares or units you bought as being the first you disposed of.\n\nIn limited circumstances, we will also accept an average cost method to determine the cost of the shares disposed of. You can only use this average cost method when:\n\n- the shares are in the same company\n- the shares are acquired on the same day\n- the shares have identical rights and obligations, and\n- you are not required to use market value for cost base purposes.\n\nStart of exampleExample 22: Identifying when shares or units were acquired\n\nBoris bought 1,000 shares in WOA Ltd on 1 July 1997. He bought another 3,000 shares in the company on 1 July 2002.\n\nIn December 2002, WOA Ltd issued Boris with a CHESS statement for his 4,000 shares. When he sold 1,500 of the shares on 1 January 2021, he was not sure whether they were the shares he bought in 2002 or whether they included the shares bought in 1997.\n\nBecause Boris could not identify when he bought the particular shares he sold, he decided to use the ‘first in, first out’ method and nominated the 1,000 shares bought in 1997 plus 500 of the shares bought in 2002.","title":""}
+{"_id":"passage_a0JRF000003i2Ar2AI/p00391881","text":"There is already a process available for a person to seek a remittance of their HELP debt, for units in which they were enrolled, but could not complete, under the ‘special circumstances’ provisions [[Appendix G](https://www.education.gov.au/higher-education-publications/higher-education-administrative-information-providers-october-2021/48-appendices/guide-special-circumstances-decision-making)]. The person’s provider is then responsible for assessing whether their application meets these provisions. If the person wishes to escalate their complaint, they can use the internal and external review mechanisms of the special circumstances provisions. Failing this, the person’s option of last resort is to contact the Department of Finance and request their debt be waived, as a debt to the Commonwealth. The waiver of debt power is discretionary. This means there is no automatic entitlement to a waiver of debt.\n\nA waiver of debt is a special concession granted to a person that extinguishes a debt owed to the Commonwealth. This means that the debt is completely forgiven and can no longer be recovered by the Commonwealth.\n\nThe waiver of debt mechanism is generally an avenue of last resort and is used only where there is no other viable avenue to provide redress. In general, this assistance may be granted where it is considered the Commonwealth has a moral responsibility to provide assistance, rather than a legal responsibility.\n\nThe waiver of debt power is found in section 63 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). It allows the Finance Minister to waive amounts owing to the Commonwealth. The waiver of debt power has been delegated to officials within the Department of Finance.\n\nDebts are usually waived where the decision-maker considers recovery of the debt would be inequitable or cause ongoing financial hardship and that other options are not appropriate. In this context, ongoing financial hardship is likely to be taken to exist when payment of the debt would leave a person unable to provide food, accommodation, clothing, medical treatment, education or other necessities for the person or their family, or other people for whom they are responsible.\n\nHowever, even if the person demonstrates financial hardship, the decision-maker may still consider their debt should not be waived.\n\nAny individual, company or other organisation can apply for waiver of a debt owed to the Commonwealth, either for themselves or for an authorised third party. Claims are made in writing and face-to-face meetings are generally not conducted. All relevant evidence in support of an application, e.g. correspondence between the applicant and the relevant Commonwealth agency, medical certificates etc, must be included. If an application for a waiver of debt is on the grounds of financial hardship, the additional Statement of Financial Details must be included.","title":""}
+{"_id":"passage_a0JRF000003dc6v2AA/p00388239","text":"## Who needs to know?\n\nThis information will help you understand how money taken out of your business, or using business assets for private purposes, must be recorded and reported for tax purposes.\n\nIt applies if you are an individual who is:\n\n- a director, shareholder or employee of a company that operates a small business (your business)\n- a trustee, beneficiary or employee of a trust that operates a small business (your business)\n- a director of a corporate trustee for a trust that operates a small business (your business)\n- or has been an associate of a shareholder (individual or entity) of a private company (an associate can include a relative, partner, spouse, or another entity controlled by a shareholder).\n\n## How do you use money or assets from a company or trust\n\nThe most common ways you may take or use money or assets from a company or trust are as:\n\n- salary and wages – see [employment income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/employment-income)\n- [fringe benefits](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/types-of-fringe-benefits), such as an employee using the business's car\n- directors' fees\n- dividends paid by the company to you as a shareholder (a distribution of the company’s profits) – see [paying dividends and other distributions](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/imputation/paying-dividends-and-other-distributions)\n- trust distributions by the trust to you as a beneficiary – see [trust income](https://www.ato.gov.au/businesses-and-organisations/trusts/trust-income-losses-and-capital-gains/trust-income)\n- loans from the trust or company – see [loans by private companies](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans)\n- [allowances or reimbursements](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/payments-you-need-to-withhold-from/payments-to-employees/allowances-and-reimbursements) of expenses you receive from the trust or company.\n\nThere are reporting and record-keeping requirements for each of these types of transactions.\n\n## How to record and report the use of your business money or assets\n\nYou must maintain appropriate [records](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business) that explain transactions where you have:\n\n- taken money or assets from your business\n- used the business's assets for private purposes.\n\nThe ATO view on minimum record-keeping standards is provided in [Taxation Ruling TR 96/7](https://www.ato.gov.au/law/view/document?docid=TXR/TR967/nat/ato/00001).\n\nThere may also be reporting requirements for these transactions.\n\n### Salary, wages or directors’ fees\n\nYou can be an employee, director and shareholder of the company that operates your business. You can also be an employee, trustee and a beneficiary of the trust that operates your business.\n\nYou must include any salary, wages or directors' fees you receive from your business as assessable income in your individual tax return.\n\nThe company or trust that operates your business can generally claim a deduction for any salaries, wages or directors' fees paid if it complies with the pay as you go (PAYG) withholding and reporting obligations for each payment.\n\nYour business must:\n\n- register for [PAYG withholding](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding) and withhold an amount from salary, wages and directors’ fees\n- report PAYG withholding information in its [business activity statements (BAS)](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/business-activity-statements-bas)\n- report the payment information to the ATO using [Single Touch Payroll (STP)](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll), unless covered by a deferral or exemption\n- pay the amount withheld to the ATO and make compulsory employee [superannuation contributions](https://www.ato.gov.au/businesses-and-organisations/super-for-employers) to a complying super fund by the relevant cut-off dates.\n\n#### Example 1: taking money as salary or wages\n\nDaphne is the sole director of a private company that sells speciality gift hampers to customers. She and her partner Jo are equal shareholders in the company. Before this income year, Daphne ran the business as a sole trader.\n\nAs a sole trader, Daphne paid $1,500 a month out of her business account and into her personal account for personal expenses. Regardless of the amounts that were transferred to her personal account, all the income Daphne earned as a sole trader is included as business income in the business and professional items schedule on her individual tax return.\n\nDaphne decided to change business structures and set up a private company to run her business. Daphne is an employee, shareholder and director of the private company.\n\nDaphne's tax agent explains to her that there are different tax consequences now that the business is run through a company, which is a separate legal entity.\n\nAs an employee of the company, Daphne is paid $1,500 a month as a salary. Daphne now reports the $1,500 a month she receives from her employment as salary in her individual tax return.\n\nThe tax agent helps Daphne set up PAYG withholding and STP reporting, as well as meet her company's superannuation guarantee obligations.\n\nThe company lodges a separate annual tax return. It reports the business income and claims a deduction for the salary paid to Daphne in the company tax return.\n\nEnd of example### Fringe benefits and allowances\n\n[Fringe benefits tax (FBT)](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax) may apply when an employer, (for example a company or trust), provides certain benefits to its employees, directors, employees' families or other associates. These benefits can include a payment or reimbursement of private expenses or being allowed to use the business assets for private purposes, such as the business's car.\n\nYour company or trust:\n\n- may be entitled to claim a deduction for the cost of providing fringe benefits\n- can generally claim GST credits for items provided as fringe benefits\n- must lodge an FBT return and pay any FBT that applies to the fringe benefits provided to the employees or their associates\n- must keep [all records](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-registration-lodgment-payment-and-reporting/record-keeping-for-fbt) relating to the fringe benefits it provides, including how the taxable value of benefits was calculated.\n\nThere are various exemptions from FBT that may apply, for example, the small business car parking exemption.\n\nThere are also rules that address when [FBT and Division 7A](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-fringe-benefits-tax) could both apply to a payment, loan or debt forgiven.\n\nAn FBT liability for your business may be reduced if you (as an employee) make a contribution towards the cost of the fringe benefit.\n\nYou don’t need to report the value of fringe benefits that you (or your associate) receive in your tax return, unless they are included as reportable fringe benefits on your payment summary or income statement.\n\n#### Example 2: FBT on the provision of private company assets to employees who are shareholders\n\nSameera is the sole director and shareholder of a small tourism company that runs tours and owns 3 coastal holiday houses.\n\nSameera is also one of 3 employees of the private company.\n\nEach employee of the company is given the opportunity to stay in one of the holiday houses for up to 4 weeks each year during the off-peak season.\n\nThis year, Sameera and her family take up this offer and stay at their favourite holiday house for 2 weeks at no cost.\n\nThis is an employee’s private use of one the company’s business assets. The company is providing Sameera, in her capacity as an employee, with a fringe benefit.\n\nThe company reports the fringe benefit in its FBT return and pays FBT on the benefit.\n\nEnd of example## Distribution of income and profits\n\n### Dividends\n\nIf your business is run through a company, the company can distribute its profits to its shareholders, which can include you.\n\nThis distribution of profits is known as a [dividend](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/imputation/paying-dividends-and-other-distributions).\n\nIf the company has franking credits, it may be allowed to frank the dividend by allocating a franking credit to the distribution. A franking credit represents income tax paid by the company on its profit and can be used by the shareholder to offset their income tax liability.\n\nA company must issue a distribution statement at the end of each income year to each shareholder who receives a dividend. It must show the amount of the franking credit on the dividends paid and the extent to which they were franked. The company may also need to lodge a franking account tax return in certain circumstances.\n\nAny dividends that you receive and franking credits on them must be reported in your tax return as assessable income.\n\nThe company cannot claim a deduction for dividends paid as these are not a business expense, but rather a distribution of company profit.\n\n### Trust distributions\n\nIf your business is operated through a [trust](https://www.ato.gov.au/businesses-and-organisations/trusts/trusts-trustees-and-beneficiaries), depending on the terms of the trust deed, the beneficiaries of the trust may be presently entitled to a share of the trust income for the income year.\n\nBy the end of an income year, the trustee should advise and document in the trustee resolution:\n\n- details of the beneficiaries\n- their share of the net income of the trust.\n\nIf the trustee resolution is not made according to the terms of the trust deed, it may be ineffective and, instead, other beneficiaries (called default beneficiaries) or the trustee may be assessed on the relevant share of the trust's net (taxable) income. Where a trustee is assessed, it may be at the highest marginal tax rate.\n\nDetails of the trust distribution should be included in the statement of distribution which is part of the trust tax return lodged for each income year.\n\nThe trust can't claim a deduction for distributions paid as it is not a business expense, but rather a distribution of trust income.\n\nIf the beneficiary of a trust is a company, and the trust doesn't pay the amount the company is presently entitled to, [Division 7A](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-and-trusts) of the *Income Tax Assessment Act 1936* may apply.\n\n#### Closely held trusts\n\nIf you have a trust within your family group, in some circumstances you may need to include a [trustee beneficiary statement](https://www.ato.gov.au/businesses-and-organisations/trusts/trusts-registration-and-reporting-obligations/closely-held-trusts/trustee-beneficiary-reporting-rules) as part of the trust return lodged.\n\nFor further guidance, see [closely held trusts](https://www.ato.gov.au/businesses-and-organisations/trusts/trusts-registration-and-reporting-obligations/closely-held-trusts/rules-for-closely-held-trusts).\n\n## Lending money or assets\n\n### Companies lend money or assets to shareholders and their associates\n\nWhen a private company lends money or assets to its shareholders or their associates, the shareholder or associate may be taken to have received a [Division 7A deemed dividend](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends) if certain conditions are not met.\n\nIf this happens, the shareholder or associate will need to report an unfranked dividend in their individual tax return. The company also needs to report the unfranked dividend paid and the loan balance in its company tax return.\n\nTo avoid a Division 7A deemed dividend, before the company tax return is due or lodged (whichever comes first), loans must either:\n\n- be repaid in full, or\n- put on complying terms.\n\nTo put a loan on complying terms, the loan must be made subject to a written agreement that:\n\n- states the names of the parties to the agreement, being the private company and the shareholder or shareholder's associate (the loan recipient)\n- is signed and dated by the private company and loan recipient\n- has an interest rate for each year of the loan that at least equals the benchmark interest rate\n- doesn't exceed the maximum term of 7 years, or 25 years in certain circumstances when the loan is secured by a registered mortgage over real property.\n\nThe company must include any interest earned from the loan in its company tax return and complete the Division 7A company tax return labels.\n\nYou (the shareholder or shareholder's associate):\n\n- must make the minimum yearly repayment for the loan each income year (use the [Division 7A calculator](https://www.ato.gov.au/calculators-and-tools/division-7a-calculator-and-decision-tool) to work this out)\n- can't borrow money from the company to make the minimum yearly repayment\n- can make repayments on the loan by offsetting against your entitlement to a dividend declared by the company - this dividend must be reported in your individual tax return as assessable income.\n\n#### Example 3: loan received from the company and put on complying terms\n\nAmir is the sole director of a private company that provides administration services to other businesses. He and his partner Aiesha are equal shareholders in the company.\n\nAmir's and Aiesha's daughter is about to start high school and they have to pay $2,000 in school fees. Amir decides they should use money from the company to pay the fees.\n\nAmir knows that he can't pay for a private expense using the company’s money without properly accounting for it. As the director, he decides that the company will lend them the $2,000.\n\nHe draws up a written loan agreement for the loan to be repaid over 2 years, with an interest rate equal to the benchmark interest rate. The loan agreement identifies the company, Amir and Aiesha as the parties, and the repayment terms. It is signed by all parties. The loan agreement is made on complying terms under Division 7A.\n\nThe company lends Amir and Aiesha the money, which they pay back to the company with interest each year according to the agreement over the next 2 years. When Amir prepares the company tax return, he declares:\n\n- the interest as income of the company\n- the loan balance, as at the end of the income year.\n\nEnd of example### Trustees lend money or assets to beneficiaries and their associates\n\nIf you borrow money from a trust, you will need to keep a record of it. If the loan is on commercial terms, you will need to repay the principal and interest as per the loan agreement. The trust will need to report the interest as assessable income in its tax return.\n\nThere may be a situation where someone receives an amount of trust income instead of the beneficiary who is presently entitled to that amount in an arrangement to reduce tax. This can happen where the trustee, instead of paying the trust income to the presently entitled beneficiary, lends that money on interest-free terms to another person.\n\nThis is called a [reimbursement agreement](https://www.ato.gov.au/businesses-and-organisations/trusts/trust-income-losses-and-capital-gains/trust-taxation-reimbursement-agreement) and the anti-avoidance rule in section 100A of the *Income Tax Assessment Act 1936* may apply.\n\n## Repayments of loans made to companies and trusts\n\nIf you have lent money to your company or trust, it can't claim a deduction for any repayments of principal it makes to you. However, it may be able to claim a deduction for interest it pays to you on the loan if it incurred the interest expense for an income-producing purpose. The company or trust should keep records of any loan agreements and documents explaining these payments being made to you.\n\nYou don't have to declare the principal repayments, but any interest you receive is assessable income to you and must be included in your individual tax return.\n\n## When you take your business's money or assets in another way\n\nIf you take money out of your company or trust or use its assets for private purposes in a way not described, you or your company or trust may have unintended tax consequences. This may include triggering Division 7A.\n\nTo ensure your business transactions are transparent:\n\n- You should consider setting up a separate bank account for your business to pay business expenses from, and avoid using it to pay for your private expenses.\n- If you take money out of the business or use its assets, make sure you keep proper records that explain all relevant transactions, including all income, payments and loans to you and your associates from the business.\n- If your private company lends money to its shareholders or their associates, make sure the loans comply with Division 7A.\n- Ensure all transactions are correctly reported for tax purposes.\n\nIf you make an honest mistake when trying to comply with these obligations, you should tell us or your registered tax agent as soon as possible.\n\n### Example 4: repaying a loan before the company's lodgment day\n\nJian is the sole director and shareholder of a private company, that he uses to run his plumbing business. Jian decides to have his home repainted, which he pays for using his company’s bank account.\n\nJian meets regularly with his bookkeeper, who notices the unusual transaction.\n\nThe bookkeeper advises Jian that the transaction will be treated as a Division 7A deemed dividend if he doesn’t pay the money back or make it a complying loan before the company tax return is due or lodged for the income year (the company lodgment day). Jian has enough money in his personal bank account, so he decides to repay the company the full amount.\n\nAs he repays the full amount before the company’s lodgment day, there are no Division 7A consequences for Jian.\n\nHe also takes his bookkeeper’s advice and makes sure he stops paying his private expenses from the company bank account.","title":""}
+{"_id":"passage_a0JRF000003cyz72AA/p00387621","text":"## When overpayments happen\n\nOverpayments can happen:\n\n- when an employer mistakenly believes an employee is entitled to the pay, or\n- because of a payroll error.\n\nEmployers can only take money out of an employee’s pay to fix up a mistake or overpayment in limited circumstances. For more information, visit [Deducting pay](https://www.fairwork.gov.au/pay-and-wages/deductions-and-related-issues/deducting-pay).\n\n## Fixing an overpayment\n\nWhen overpayments occur, the employer and employee should discuss and agree on a repayment arrangement.\n\nIf the employee agrees to repay the money, a written agreement should be made which sets out the:\n\n- reason for the overpayment\n- amount of money overpaid\n- way repayments will be made (for example, cash, cheque or electronic transfer) and how often (this has to be reasonable).\n\nIf a repayment arrangement can’t be agreed on, an employer should get legal advice. Find out [where to get legal advice](https://www.fairwork.gov.au/tools-and-resources/other-workplace-relations-help/legal-help).\n\n**Example: How to pay back a mistaken overpayment **\n\nTony was overpaid $2,000 over 3 years because of a payroll error. His award doesn’t allow an employer to make a deduction when an employee is overpaid.\n\nTony and his employer, Alice, meet to discuss the overpayment. Tony agrees to repay the money and they come up with a solution.\n\nTony tells Alice that he’d prefer to pay the money back in $20 instalments each week. This arrangement is put in writing and they both sign the agreement.\n\n**Tip: Have a conversation about the overpayment**\n\nEmployers and employees should talk to each other if an overpayment has been made. Then, come to an agreement about repayment and put this in writing.\n\nIf you need help preparing for a difficult conversation, take free and interactive training from our [Online learning centre](https://www.fairwork.gov.au/tools-and-resources/online-learning-centre).","title":""}
+{"_id":"passage_a0JRF000003dIJW2A2/p00387935","text":"## What you can claim\n\nYou can claim a tax deduction for most expenses you incur in carrying on your business if they are directly related to earning your assessable income.\n\nTypes of business expenses you may be able to claim deductions for include:\n\n- day-to-day operating expenses\n- purchases of products or services for your business\n- certain [capital expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-depreciating-assets-and-capital-expenses), such as the cost of [depreciating assets](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-depreciating-assets-and-capital-expenses#Depreciatingassetexpenses) like machinery and equipment used in your business.\n\nThe amount of your deduction and when you can claim it will depend on the type of expense (for example certain capital expenditures are deductible over time) and whether it has any private or domestic purpose for which you must reduce your deduction. Also, some expenses are not deductible (for example fines).\n\nThere are 3 golden rules for what we accept as a valid business deduction:\n\n1. The expense must have been for your business, available as an allowable deduction and not for private use.\n2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.\n3. You must have [records](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business) to prove it.\n\nYou can't claim the [GST component of your expenses as a deduction](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/claiming-gst-credits/effect-of-gst-credits-on-income-tax-deductions) if you can claim it as a GST credit on your business activity statement.\n\nYou can also claim deductions for expenses related to protecting staff from safety hazards involved in performing their duties. For example, infection from transmissible diseases. This may include hand sanitiser, sneeze or cough guards, face masks, gloves, other personal protective equipment, antibacterial wipes and other cleaning supplies that are used for business purposes.\n\nLearn more by taking our online course [Claiming small business tax deductionsExternal Link](https://smallbusiness.taxsuperandyou.gov.au/claiming-small-business-tax-deductions).\n\nIf you need assistance with understanding some of the tax and super terms, see our [definitions](https://www.ato.gov.au/about-ato/using-our-website/definitions).\n\n## What you can't claim\n\nThere are some expenses that are not deductible, such as:\n\n- entertainment expenses, other than those you provide as a [fringe benefit](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/registration-obligations-for-businesses/work-out-which-registrations-you-need/taxation-registrations/fringe-benefits-tax)\n- traffic fines\n- private or domestic expenses, such as childcare fees or clothes for your family\n- expenses relating to earning [income that is not assessable](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/assessable-income/what-income-to-include#Businessassessableincome)\n- payments for which you have not met your PAYG withholding or reporting obligations – [non-compliant payments](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/in-detail/removing-tax-deductibility-of-non-compliant-payments)\n- the GST component of a purchase if you can [claim it as a GST credit](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/claiming-gst-credits/when-you-can-claim-a-gst-credit) on your business activity statement.\n\nYou generally cannot claim a deduction for the cost of capital assets that are dealt with under the [capital gains tax](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax) rules, such as the land your business premises are on. Some exceptions apply for capital works, plant and certain expenditure of primary producers on improvements to land.\n\nYour deductions may be limited for expenses incurred in relation to [personal services income](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/what-to-do-when-the-psi-rules-apply/claiming-deductions-when-receiving-psi) (PSI) if the [PSI](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/assessable-income/what-income-to-include#ato-Personalservicesincome) rules apply to that income.\n\n### How to apportion for expenses that have both business and private purposes\n\nYou cannot claim a deduction for an expense to the extent it is incurred for a private or domestic purpose.\n\nHow you apportion depends on how much of the expense relates to running your business and the type of expense.\n\n- If you have a home-based business and claim [occupancy expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/home-based-business-expenses-sole-trader-or-partnership#ato-Occupancyexpenses) you will generally apportion these based on floor area and the time your home is [used in your business](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/sole-trader-or-partnership-home-based-business). For [running expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-home-based-business-expenses/home-based-business-expenses-sole-trader-or-partnership#ato-Runningexpenses), there is a variety of methods you may use depending on your circumstances.\n- There are [different methods you can use to calculate deductions for your motor vehicle expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/motor-vehicle-expense-calculation-methods) depending on your business structure and the type of vehicle you are claiming them for.\n- For other expenses, you will generally apportion based on the private and business use of the asset or service acquired. This must be done on a fair and reasonable basis that reflects any private use of the asset or purpose of the expense.\n- You need to [keep records](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business) to show how you have apportioned your expense. For example, if you incur an expense to repair your laptop which you only use for your business, you can claim a deduction for the full cost of the repair. However, if you use the laptop 50% of the time for your business and 50% of the time for private use, you can only claim a deduction for 50% of the cost of the repair.\n\n#### Example: Expenses that have both business and private purposes\n\nJax is a make-up artist who runs a business teaching make-up techniques and promoting make-up and products for profit through multiple online channels.\n\nJax purchases make-up for use in that business, but also uses some of the make-up they purchase for personal use. They estimate this to be about 50% with the remainder used in their teaching business. Jax is only able to claim a deduction for 50% of the cost of the make-up.\n\nEnd of example## When you can claim your deduction\n\nThe type of expense – operating expense or capital expense – determines when you can claim your deduction. Generally, you can claim:\n\n- operating expenses (such as office stationery and wages) in the year you incur them\n- certain capital expenses (such as depreciating assets and capital works assets) [over a longer period](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/general-depreciation-rules-capital-allowances/effective-life-of-an-asset) – however, you may be eligible to claim an immediate deduction for the business use portion of depreciating assets you acquire for your business if you are a small business entity and chose to apply the [simplified depreciation rules](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business).\n- [other capital expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-depreciating-assets-and-capital-expenses#ato-Othercapitalexpenses) (such as start-up expenses) may be immediately deductible or claimed over time.\n\nFor more information see [Deductions for depreciating assets and other capital expenses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-depreciating-assets-and-capital-expenses).\n\nYou generally incur an expense when you have a legal obligation to pay for the goods or services. An invoice is not necessary for an expense to have been incurred, but you do need a record of the expense.\n\nIf you use an item in your business for only part of a year, you generally need to restrict your claim to the period it was used for the business.\n\n### Claiming a deduction for a prepaid expense\n\nThere are different rules for expenses you pay in advance – that is, expenses you incur now for goods or services you will receive (in whole or in part) in a later income year.\n\nWhere the expense is $1,000 or more, you will usually need to apportion (or distribute) the expense across the whole supply or service period if you:\n\n- won't receive the goods or services in full within 12 months\n- are not eligible for an immediate deduction.\n\n## How to claim your tax deduction\n\nHow to claim your business deductions depends on your business type:\n\n- Sole trader – claim the deductions in your individual tax return in the 'Business and professional items' schedule, using myTax or a registered tax agent.\n- Partnership – claim the deductions in your partnership tax return.\n- Trust – claim the deductions in your trust tax return.\n- Company – claim the deductions in your company tax return.","title":""}
+{"_id":"passage_a0JRF000003fb6j2AA/p00390007","text":"## Business\n\nThere is no single factor that determines if you are in business, but some of the factors you need to consider include:\n\n- You intend to make a profit – or genuinely believe you will make a profit from the activity – even if you are unlikely to do so in the short term.\n- You've made a decision to start a business and have done something about it to operate in a businesslike manner, such as:\n\n- registered a business name\n- obtained an ABN.\n- You repeat similar types of activities.\n- The size or scale of your activity is consistent with other businesses in your industry.\n- Your activity is planned, organised and carried out in a businesslike manner. This may include:\n\n- keeping business records and account books\n- having a separate business bank account\n- operating from business premises\n- having licenses or qualifications\n- having a registered business name.\n\n### Benefits of running a business\n\nIf you run a business you can:\n\n- apply for an ABN to use in your business transactions\n- have the flexibility to manage your time and work your own hours\n- register a .com.au website once you have an ABN\n\n- access to government information, services and concessions for business\n\n- establish a business identity when selling to customers and other businesses\n\n- claim tax deductions for business expenses against your taxable income.\n\n## Hobby\n\nA hobby is a pastime or leisure activity conducted in your spare time for recreation or pleasure.\n\n### Benefits of having a hobby\n\nHaving a hobby allows you to:\n\n- gain personal enjoyment and satisfaction from the activity\n\n- gift or sell your work for the cost of materials\n\n- do it in your own time or when people contact you\n\n- have no reporting obligations of a business.\n\n## Key differences between a business and a hobby\n\nActivity\nHobby\nBusiness\n\nDeclaring payments\nYou do not need to declare the amounts you make from your hobby to the Australian Taxation Office (ATO).\nYou will need to [declare your income](https://www.ato.gov.au/Business/Income-and-deductions-for-business/Assessable-income/) to the ATO in your annual return.\n\nClaiming tax deductions\nYou cannot claim a deduction for any losses from your creative work if it is a hobby.\n\nYou can claim for [deductions](https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/) on your expenses and generally need an ABN to do this.\n\nKeeping records\nYou do not need to keep records of your hobby for the ATO, however it’s good practice to keep records in case your circumstances change.\nYou must [keep records](https://business.gov.au/finance/payments-and-invoicing/record-keeping) for your business for tax and other obligations.\n\nLicences and permits\nGenerally, you will not need to hold licences and permits for your hobby.\nYou may need [licences and permits](https://ablis.business.gov.au/) specific to your type of business.\n\nAustralian Business Number (ABN) eligibility\nYou are not eligible for an ABN for a hobby, however if you sell goods or services to businesses, they may ask you for an ABN when they pay you. You can use a [Statement by a supplier form](https://www.ato.gov.au/Forms/Statement-by-a-supplier-not-quoting-an-ABN/) to avoid the business withholding an amount from the payment to you for not having an ABN. The statement lets the business know that you are selling the goods or services as your hobby.\nIt is not compulsory for businesses to [register for an ABN](https://business.gov.au/registrations/register-for-an-australian-business-number-abn), however getting an ABN is free and makes running your business easier, particularly if you have to register for other taxes like GST.\n\nWithout an ABN, other businesses must withhold 47% from payments they make to you for tax purposes.\n\nSelling goods\nIf you’re selling goods, you’ll need to comply with Australian Consumer Law (ACL). Your customers have automatic rights if they buy a product that breaks easily, doesn’t work or doesn’t perform as generally expected.\nRead more about [fair trading](https://business.gov.au/legal/fair-trading).\n\nDeclaring paymentsHobbyYou do not need to declare the amounts you make from your hobby to the Australian Taxation Office (ATO).BusinessYou will need to declare your income to the ATO in your annual return.Claiming tax deductionsHobbyYou cannot claim a deduction for any losses from your creative work if it is a hobby.\nBusinessYou can claim for deductions on your expenses and generally need an ABN to do this.\nKeeping recordsHobbyYou do not need to keep records of your hobby for the ATO, however it’s good practice to keep records in case your circumstances change.BusinessYou must keep records for your business for tax and other obligations. Licences and permitsHobbyGenerally, you will not need to hold licences and permits for your hobby.BusinessYou may need licences and permits specific to your type of business.Australian Business Number (ABN) eligibilityHobbyYou are not eligible for an ABN for a hobby, however if you sell goods or services to businesses, they may ask you for an ABN when they pay you. You can use a Statement by a supplier form to avoid the business withholding an amount from the payment to you for not having an ABN. The statement lets the business know that you are selling the goods or services as your hobby.BusinessIt is not compulsory for businesses to register for an ABN, however getting an ABN is free and makes running your business easier, particularly if you have to register for other taxes like GST.\n\nWithout an ABN, other businesses must withhold 47% from payments they make to you for tax purposes.\nSelling goodsHobby/BusinessIf you’re selling goods, you’ll need to comply with Australian Consumer Law (ACL). Your customers have automatic rights if they buy a product that breaks easily, doesn’t work or doesn’t perform as generally expected.\nRead more about fair trading.\n\n## What to do if you aren't sure\n\nIf you aren't sure whether your activity is a business or hobby, you can:\n\n- learn more on the difference between a [hobby and a business](https://www.ato.gov.au/Business/Starting-your-own-business/Are-you-in-business-/) and whether the income you've earned from your activity is taxable on ATO website\n- seek professional advice from an accountant, legal expert or [business adviser](https://business.gov.au/expertise-and-advice) who can help you decide whether you’re running a business or a hobby\n- get a [private ruling](https://www.ato.gov.au/General/ATO-advice-and-guidance/ATO-advice-products-(rulings)/Private-rulings/) from the ATO. This will provide an answer that protects you from penalties and interest.","title":""}
+{"_id":"passage_a0JRF000003fwaz2AA/p00390289","text":"## What is PSI?\n\nPersonal Services Income (PSI) is income that is received by you, or another entity that is mainly a reward for your personal effort or skill. For example, income you earn as an independent contractor or income received by a company or trust that you provide your personal services through. The PSI rules are integrity rules that improve fairness, by preventing those not carrying on a personal services business, from:\n\n- diverting their PSI that is an entity or person associated with them who will pay less tax on it, and\n- stopping them, or the entity receiving it, from claiming deductions for some expenses they couldn't claim if they had received the PSI as an employee.\n\n## Who can earn PSI?\n\nYou can receive PSI in almost any industry, trade or profession. Common examples include but are not limited to:\n\n- financial professionals\n- information technology consultants\n- engineers\n- construction workers\n- medical practitioners.\n\nAs PSI is mainly a reward for an individual's personal efforts or skills, only individuals can earn PSI. Individuals can earn PSI either directly as a sole trader, or through another entity such as a company, partnership or trust. When an individual earns PSI indirectly through another entity, that entity is referred to as a 'personal services entity' (PSE).\n\n### Example 1: sole trader earning PSI\n\nAndre is a plumber who operates as a sole trader. He receives a contract to fix a blocked toilet and repair 3 leaking taps. He charges $25 for materials and $225 for his labour. The total of the invoice is $250. This income ($250) is PSI as it is mainly a reward for Andre’s personal efforts and skills.\n\nEnd of example\n\n### Example 2: individual earning PSI through another entity\n\nSandy is an information technology consultant who provides systems analysis services through her company, SP Consulting. SP Consulting enters into a contract with Richie's Computer Co to provide Sandy’s consultancy services. The contract and invoice for this work both indicate that more than 50% of the payment for these consultancy services are a reward for Sandy's labour. So the income is mainly a reward for Sandy's personal efforts or skills and is PSI.","title":""}
+{"_id":"passage_a0JRF000003Z7GD2A0/p00383960","text":"## Piece rates\n\nA piece rate is where an employee gets paid by the piece. This means the employee gets a pay rate for the amount picked, packed, pruned or made.\n\nWhen piece rates are paid, they apply instead of the hourly or weekly pay rate. An employee can be hired to work a mix of piece rates and hourly rate shifts.\n\nAn employee can be paid piece rates when:\n\n- an award or registered agreement allows for piece rate payments\n- the employee isn’t covered by an award or registered agreement and they get a pay rate based on how much work they do.\n\nAn award or registered agreement can have additional requirements or specific rules about piecework. Find out more information about piecework arrangements in your award by selecting from the list below.\n\nFind enterprise agreements and other registered agreements on the Fair Work Commission website. Go to [Find an enterprise agreement – Fair Work Commission](https://www.fwc.gov.au/agreements-awards/enterprise-agreements/find-enterprise-agreement).\n\nAward and agreement free employees can be paid piece rates. They must still receive at least the [national minimum wage](https://www.fairwork.gov.au/taxonomy/term/404). Go to [Award and agreement free wages and conditions](https://www.fairwork.gov.au/employment-conditions/awards/award-and-agreement-free-wages-and-conditions) for more information.\n\n## Commission payments\n\nA commission payment is an amount paid to an employee based on how much they sell.\n\nNormally, the commission payment is calculated as a fee or percentage of the employee’s total sales. A commission payment can be called a ‘bonus’ or ‘incentive payment’.\n\nA commission payment can:\n\n- be paid as an extra incentive on top of an employee’s pay or\n- make up an employee’s whole wage (commission only payments).\n\n### When an employee can be paid commission as an incentive\n\nAn employee can be paid commission as an incentive at any time.\n\nAn award or registered agreement can set out rules about how this can be done.\n\n### When a employee can be paid commission only\n\nAn employee can be paid on a commission only basis when an award, enterprise agreement or other [registered agreement](https://www.fairwork.gov.au/taxonomy/term/407) states an employee can be paid this way.\n\nFor rules about paying award and agreement free employees on a commission only basis see [Award and agreement free wages and conditions](https://www.fairwork.gov.au/awards-and-agreements/award-and-agreement-free-wages-and-conditions).\n\nAn award or registered agreement can set out specific rules about how the commission can be paid.","title":""}
+{"_id":"passage_a0JRF000003hB052AE/p00391254","text":"Have a study or training support loan like HECS or HELP? Then you’ve probably heard about the government’s recent changes. The 20% loan debt reduction and compulsory repayment changes are now law.\n\n### So, what does this mean for you?\n\nIf you had a study loan on 1 June 2025, you’re eligible for a 20% reduction. The best part is you don't need to do anything for the reduction to be applied. The 20% reduction will be backdated to your study loan balance as at 1 June 2025. We’ll then adjust the indexation, so it applies to the new lower debt balance.\n\nWe’ll notify you when we’ve applied the reduction to your loan account. You can view it on your ATO Online account through myGov or in the ATO app.\n\n**You don’t need to wait for the 20% reduction to lodge your tax return**, continue to lodge as normal.\n\n### What happens if I’ve paid off my HECS, HELP debt or other study loan debt?\n\nIf you paid off your loan before 1 June 2025, you won’t be eligible for the 20% reduction.\n\nAlready lodged this tax time and paid off some or all of your loan? Don’t worry! You’ll still get the same reduction amount. The 20% reduction applies to what your debt balance was on 1 June 2025.\n\nIf your study loan is in credit after the reduction, you may receive a refund to your nominated bank account. It’s a good idea to double check and [update your bank account details this opens in a new window ](https://www.ato.gov.au/individuals-and-families/tax-file-number/update-your-tfn-registration-details/update-your-financial-institution-details) with us ahead of time. If you have a debt with us or another government agency, your refund may be used to pay those instead.\n\nIf your loan is paid off, remember to tell your employer so they stop withholding additional amounts. Just fill out a [Withholding declaration this opens in a new window ](https://www.ato.gov.au/forms-and-instructions/withholding-declaration) and give it to them.\n\n### What else has changed?\n\n**Compulsory repayments**\n\nFrom the 2025-26 financial year, the compulsory repayment threshold changes. Next tax time, you won’t need to make a compulsory repayment unless your repayment income is more than $67,000.  We’ll also only calculate your repayment on income above the $67,000 threshold, instead of your total income.\n\nThis means most people will either have a smaller compulsory repayment or won’t need to make a repayment at all. You pay your compulsory repayment throughout the year in your pay. Your employer is also likely to withhold less money from your pay after the tax tables are updated, giving you more money in your pocket each payday!\n\n**PAYG instalments**\n\nIf you pay PAYG instalments, you won’t see a change until the 2026-27 income year. You can vary your instalments at any time – but it’s a good idea to get advice from a registered tax agent first as under estimating could land you with a tax bill.\n\n### When will I see the changes?\n\nWe’re updating our systems to deliver these changes, which may take some time. Most people should get their 20% reduction before the end of 2025.","title":""}
+{"_id":"passage_a0JRF000003dp2X2AQ/p00388439","text":"## What is a scholarship?\n\nWhen we say 'scholarship' we mean the following types of payments:\n\n- a scholarship\n- a bursary\n- an educational allowance\n- educational assistance.\n\nA scholarship can be a one-off payment, or a series of payments over one or more years as either:\n\n- an amount of money you receive\n- a payment made on your behalf.\n\nScholarship payments help you with your educational expenses or other requirements. For example, payments may include:\n\n- offsets for tuition fees\n- a regular amount for general living costs – such as travel or boarding\n- allowances to cover particular costs – such as uniforms and textbooks.\n\nScholarship payments may be [exempt income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/scholarships-prizes-and-awards/scholarship-payments#Exemptincomefromascholarship) (not taxable income). You need to work out if your scholarship payment is either wholly or partially assessable or exempt income.\n\nIf your scholarship is **not** exempt, you need to include it as income in your tax return.\n\nScholarship money comes from any number of sources such as a university, government, a business or an individual philanthropist. You might receive your scholarship payment directly from the source or through an administrator which is often your university.\n\nYour scholarship agreement will set out:\n\n- the amounts you receive\n- when you will receive payments\n- any conditions that apply to continue to get the scholarship\n- what you can spend the money on (in some cases).\n\nYou generally apply for a scholarship by submitting an application. It is usually granted on merit or some process involving specific criteria.\n\nA scholarship is not a loan. There are no repayment requirements.\n\n### Example: scholarship arising from charitable bequest\n\nJenny is a full-time student doing an undergraduate degree. She applies for and wins the 'Fearless Journalist' award. This gives her fortnightly payments over the course of her degree which she uses to pay for her HECS-HELP debt and text books.\n\nThe 'Fearless Journalist' award is from investment income that comes from capital donated in the Will of Jack Jones. The payments go to the most meritorious applicant in the journalist course at Williams University, who shows the most potential to succeed in fearless journalism.\n\nThe money Jenny receives for the award is a scholarship.\n\nEnd of example\n## Exempt income from a scholarship\n\nFor a scholarship payment to be exempt from paying tax, you must meet **all** of the following conditions:\n\n- The payment can't be an excluded government payment (for example, Austudy, Youth Allowance or ABSTUDY).\n- There is no [requirement for you to do work](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/scholarships-prizes-and-awards/scholarship-payments#Workrequirement) (either as an employee or contract for labour, now or in the future).\n- You are a [full-time student at a school, college or university](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/scholarships-prizes-and-awards/scholarship-payments#Fulltimestudentataschoolcollegeorunivers).\n- The scholarship is provided to you principally for [educational purposes](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/scholarships-prizes-and-awards/scholarship-payments#Educationalpurposes).\n\nYour scholarship provider may be able to tell you if your scholarship is exempt or assessable income. In some cases, they will already have sought advice from us.\n\nTo help you work out if your scholarship is exempt or assessable income you can use the [Is my scholarship taxable?](https://www.ato.gov.au/calculators-and-tools/is-my-scholarship-taxable) tool.\n\n### Work requirement\n\nYour scholarship payment is not exempt income if, as a condition of the scholarship, you work or will work in the future for the person or organisation funding the scholarship. This includes work:\n\n- as an employee or under a contract for labour\n- that is done without a contract or any other form of legal relationship.\n\n#### Example: requirement to work as employee – not exempt income\n\nHenry receives a Delilah Limited scholarship for university students. The scholarship has certain conditions. The payments are conditional on Henry achieving a minimum grade each semester. Henry must submit a copy of his academic record to Delilah Limited each semester.\n\nThere may also be a requirement for Henry to complete paid vacation employment with Delilah Limited during the scholarship term. The scholarship payment depends on him working under the terms set out by Delilah Limited.\n\nIf Henry completes his studies successfully, Delilah Limited may offer him a position. If Henry does not accept the position, he may need to repay some or all of the scholarship. Delilah Limited also has the right of first refusal should Henry need to do other work experience as part of his course.\n\nThe scholarship payments are not exempt income. Henry may need to become Delilah Limited’s employee, at their discretion, for a period set out in the scholarship agreement.\n\nEnd of example\n### Full-time student at a school, college or university\n\nFor your scholarship payment to be exempt income you must be studying full-time at a school, college or university. You do not need to be physically at the school, college or university but must be studying a full-time load.\n\n#### Example: part time university study – scholarship payment not exempt\n\nKirra receives a scholarship from her local government. The scholarship is available to women in their second or third year of study who are doing a science degree at a local university.\n\nUnder the scholarship agreement, Kirra receives $1,000 to assist her to pay for education expenses.\n\nKirra studies part-time.\n\nEven though Kirra is doing a university degree, her scholarship payments are not exempt income because she is not studying full-time.\n\nEnd of example\n\n### Educational purposes\n\nFor your scholarship payment to be exempt income, it must be provided to you principally for educational purposes. This includes education at a place of learning such as a university campus or a full-time degree provided online, and can also include a component of work experience.\n\nWork experience at the premises of an organisation is for your education as long as your education is the most important factor for the work experience (and not the output you are producing). If you are working alongside employees and producing outputs that a similarly experienced employee or contractor would produce, your scholarship would generally not be considered as being provided principally for educational purposes.\n\nEnd of example\n\n#### Example: work experience requirement as part of the course – exempt income\n\nThe AAA University has a veterinary course that requires all students to complete work experience with a qualified practitioner as part of the course's qualification requirements.\n\nA select number of students in the course receive a scholarship from the university. The scholarship payments go to students throughout the length of the course, including when students do their work experience.\n\nThe students gain work experience from their participation at the practitioner's clinics in a six-month period. Students do not provide normal vet services to the owners of the animals.\n\nThe scholarship payments are exempt because they are provided principally for educational purposes.\n\nEnd of example\n\n#### Example: scholarship requires work experience – exempt income\n\nMegan receives a vacation scholarship from her university funded by WalesCo, an external organisation. A panel consisting of representatives from both the university and WalesCo, select the scholarship recipient.\n\nUnder the scholarship agreement, Megan receives 4 equal payment instalments over 2 years. In return, she must complete 10 weeks of professional vacation work experience with WalesCo each year. Megan can select when she will carry out the work experience and the hours she will attend. She rotates between departments within WalesCo to give her an insight and enable her to observe and learn from the various projects WalesCo undertakes.\n\nThe scholarship agreement states there is no requirement for Megan to become an employee of WalesCo, and nor is Megan an employee. She remains enrolled in full-time study during the time she is doing the work experience.\n\nMegan’s scholarship is exempt income. The benefit of Megan’s work is limited (both by time, and is not concentrated on one project). This demonstrates that WalesCo is not engaging Megan for her work output, but to assist her in her education by providing work experience.\n\nEnd of example\n\n#### Example: company sponsored PhD study – not exempt income\n\nDiego resigns as an employee of Alpha Co to do a full-time study course. He is completing research for a PhD which involves an area in which Alpha Co has a commercial interest. Diego had been part of a team working on this project before resigning.\n\nDiego applies for and wins a research scholarship that Alpha Co funds. The scholarship administration is done by the university. The university pays weekly support for Diego during his study.\n\nDiego works alongside Alpha Co's current employees. Alpha Co's expectation is for him to produce the same output and contribute in the same way as those employees.\n\nDiego's weekly support payments are not exempt income. The scholarship is not provided principally for educational purposes. Instead, Alpha Co benefits from his participation as Diego is producing outputs that an employee or contractor with similar experience would produce while he is completing his PhD.\n\nEnd of example\n## Scholarship payments specifically exempt from tax\n\nThe following education and training payments are specifically exempt from tax. You don't need to include these in your tax return.\n\n- Payments under a Commonwealth scheme for assistance of secondary education or the education of isolated children.\n- Grants from the Australian-American Educational Foundation – the Fulbright Commission.\n- Endeavour research fellowships and Executive Awards.\n\n## Scholarship payments and your tax return\n\nIf your scholarship is **taxable**:\n\n- you need to show your scholarship amount as assessable income in your tax return\n- you should advise your scholarship provider that your scholarship is assessable income for tax purposes.\n\nThe scholarship provider may need to withhold tax from your periodic payments depending on:\n\n- the information you provide on your tax file number (TFN) declaration\n- the amount paid to you.\n\nIf your scholarship is **not taxable** (exempt income):\n\n- you don't include your scholarship amount as assessable income in your tax return\n- you should advise your scholarship provider\n\n- that your scholarship is exempt income\n- they don't need to withhold tax from your periodic payments.","title":""}
+{"_id":"passage_a0JRF000003bfSH2AY/p00386388","text":"Hustlin’ every day?\n\nWith the cost of living going up, more people are finding creative ways to make money on the side. While the added income can be a welcomed boost, it's important to know what you need to do when it comes to tax and what you need to declare.\n\nWe’re here to break down some tax tips so you can stay on top of things while enjoying that extra dough.\n\n### Okay but first - what even is a side hustle?\n\nA side hustle is work you do outside of your primary job for extra income.\n\nSide hustles come in many forms – some of the ones we’ve seen lately are content creators on platforms like Twitch or OnlyFans, the sharing economy, drop shipping, gig economy work, freelancing, or even animal breeders.\n\nTo break it down a bit further, a side hustle could be:\n\n### To declare, or not declare, that is the question\n\n**If your side hustle is a [business this opens in a new window ](https://www.ato.gov.au/Business/Starting-your-own-business/Are-you-in-business-/)**, big or small, then you need to make sure all your tax, super and Australian business register obligations are met – this includes things like keeping good and accurate records and lodging and paying when required.\n\nAs a business you’ll need to declare [income this opens in a new window ](https://www.ato.gov.au/Business/Income-and-deductions-for-business/Assessable-income/What-income-to-include/) you earn from your side hustles. You can claim some [deductions this opens in a new window ](https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/) too.\n\n**If you’re a sole trader** with more than one business, you’ll use the same ABN for each. For example, you run a hair dressing business, and are an influencer on the side, you’d use the same ABN for both.\n\nSole traders declare all income on their individual tax return. If you lodge online with myTax, select ‘[you were a sole trader this opens in a new window ](https://www.ato.gov.au/Individuals/Income-deductions-offsets-and-records/Income-you-must-declare/Business-partnership-and-trust-income/#Incomeasanindividualrunningabusiness)‘.\n\nIf you’re not a sole trader [different rules apply this opens in a new window ](https://www.ato.gov.au/Business/Starting-your-own-business/Business-structures---key-tax-obligations/). And if you’re [not a business this opens in a new window ](https://www.ato.gov.au/Business/Starting-your-own-business/Are-you-in-business-/#Whenyourenotinbusiness)? We have information on that too.\n\n### What about other tax stuff? Do I need to pay GST or apply for an ABN?\n\nLong story short, you don’t need an ABN unless you register for GST. However, getting an ABN is free and can make running your business or enterprise easier, so you may decide to apply for an ABN before it's required. For example:\n\nBefore you apply for an ABN, check if you're [entitled to have one this opens in a new window ](https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement). Once you have your ABN, you must [keep your ABN details up to date this opens in a new window ](https://www.abr.gov.au/business-super-funds-charities/updating-or-cancelling-your-abn/update-your-abn-details), and cancel your ABN if you close your business.\n\nIf you have a [GST turnover this opens in a new window ](https://www.ato.gov.au/Business/GST/Registering-for-GST/#WorkingoutyourGSTturnover) of $75, 000 or more in a 12-month period from a business you carry on, including your side hustle, you’ll need to register for GST. Remember, if you’ve received products and services instead of money for your activities these may count as income. You’ll need to include their value when working out your GST turnover.\n\nIf your side hustle is [ride-sourcing this opens in a new window ](https://www.ato.gov.au/General/Sharing-economy-and-tax/ride-sourcing/) you need to register for GST from the day you start, regardless of how much you earn.\n\n### Will having a side hustle affect my current job?\n\nHaving a side hustle while working another job is totally fine! You’ll just have to remember a couple of things:\n\n### How do I make sure I’m paying enough tax to prevent a debt?\n\nIf you’re earning income outside of employment you’ll need to pay tax yourself. How much tax exactly? Well, that’s worked out by whichever [tax bracket this opens in a new window ](https://www.ato.gov.au/Rates/Tax-rates---Australian-residents/?=Redirected_URL) your total combined income puts you in.\n\nLet’s look at PAYG instalments a little more. PAYG instalments make it easy to plan ahead by prepaying tax throughout the year. It also helps you keep a healthy cash flow. Instalment amounts are based on your business and investment income, not your salary and wages.\n\nCheck out our article for info on how to enter the [PAYG instalment](https://community.ato.gov.au/s/article/a07RF000004SgisYAC/answers-to-your-payg-instalment-questions) system.\n\nWhat if your salary or wages are increasing? We have [tax tables this opens in a new window ](https://www.ato.gov.au/Rates/Tax-tables/) and a [tax withheld calculator this opens in a new window ](https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=TWC&anchor=TWC/questions#TWC/questions) so you can check your employer is withholding enough tax. If you think they should be withholding more, you can submit a [withholding declaration this opens in a new window ](https://www.ato.gov.au/forms/withholding-declaration/).","title":""}
+{"_id":"passage_a0JRF000003g5ft2AA/p00390395","text":"## Conditions of release of super\n\nYou can withdraw your super when you:\n\n- turn 65 (even if you haven’t retired)\n- reach [preservation age](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/super-withdrawal-options#Preservationage) and\n\n- retire or\n- start a [transition to retirement income stream](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/retirement-withdrawal-lump-sum-or-income-stream) while continuing to work\n- satisfy an [early access](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super) requirement.\n\nRetirement means you have ceased gainful employment either:\n\n- when you were 60 years old or over\n- before you turned 60 years old and you have reached your preservation age – the fund trustee must be satisfied you have no intention of becoming employed again in the future.\n\nSee [Retirement withdrawal – lump sum or income stream](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/retirement-withdrawal-lump-sum-or-income-stream).\n\n### Preservation age\n\nYour preservation age is the age at which you can access your super if you're retired (or start a transition to a retirement income stream).\n\n(Your preservation age is not the same as your pension age. Check with [Services AustraliaExternal Link](https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/who-can-get-it) for the age pension eligibility requirements.)\n\nYour preservation age depends on when you were born, as set out in this table.\n\nPreservation age based on date of birth\n\nDate of birth\n\nPreservation age\n\nBefore 1 July 1960\n\n55\n\n1 July 1960 – 30 June 1961\n\n56\n\n1 July 1961 – 30 June 1962\n\n57\n\n1 July 1962 – 30 June 1963\n\n58\n\n1 July 1963 – 30 June 1964\n\n59\n\nFrom 1 July 1964\n\n60\n\n## Accessing your super early\n\nIn very limited circumstances, you can access your super early:\n\n- on [medical, compassionate, hardship and incapacity grounds](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/when-you-can-access-your-super-early)\n- under the [First home super saver scheme](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme) – to withdraw voluntary contributions you've made to your super\n- if you're a [temporary resident](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/how-superannuation-applies-to-temporary-residents) and are leaving Australia\n- if your super account balance is [less than $200](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/when-you-can-access-your-super-early) and your employment is terminated, or you have a 'lost super' account with a balance less than $200.\n\n## Super death benefits\n\nWhen a person dies, in most cases their super fund pays their remaining super interest to their nominated beneficiary.\n\nSuper paid after a person's death is called a [super death benefit](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/superannuation-death-benefits).\n\n## Illegal early access schemes\n\nIt is illegal to withdraw your super for any reason other than when it is allowed by the superannuation law – that is, when you satisfy a condition of release.\n\nBeware of people promoting early-access schemes. Participating in [illegal early-access schemes](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/illegal-early-access-to-super) will cost you a lot more than the super you withdraw.","title":""}
+{"_id":"passage_a0JRF000003f8nt2AA/p00389672","text":"## What to do when you acquire an asset\n\nWhen you acquire a capital gains tax (CGT) asset, you should establish your acquisition date and share of ownership, and start keeping records.\n\nThis will help you work out your capital gain or loss correctly, so you pay the correct amount of CGT when you dispose of the asset.\n\n## Acquisition date\n\nGenerally, the acquisition date is when you become the owner of the asset – for example, when you purchase it.\n\nHowever, there are 2 common situations where your acquisition date might differ from the date you become the owner:\n\n- **When you buy an asset under contract and do not take immediate possession.** This commonly happens with real estate. In this case, your acquisition date is the date on the contract, not when you settle.\n- **When you inherit a CGT asset.** In this case, the acquisition date is the date of death of the former owner.\n\nYou should establish the date of acquisition because you will need it to work out your CGT when you dispose of the asset.\n\nIt is important because:\n\n- CGT does not apply if you owned the asset before CGT started on 20 September 1985 (but major improvements to a property since 20 September 1985 may be subject to CGT)\n- the rules for working out a capital gain or loss have changed over time\n- to qualify for the CGT discount you need to own the asset for at least 12 months.\n\n## Joint ownership\n\nIf you share ownership of an asset with others, each person makes a capital gain or loss.\n\nThere are 2 types of shared ownership:\n\n- tenants in common\n- joint tenants.\n\n### Tenants in common\n\nTenants in common are 2 or more people who co-own an asset in defined shares. The shares may be unequal.\n\nWhen a CGT event occurs (such as selling the asset), the individuals split the capital gain or loss between them according to their share of ownership.\n\n#### Example: tenants in common\n\nLui and Monica own a rental property as tenants in common.\n\nLui has a 20% share and Monica has an 80% share.\n\nLui and Monica decide to sell their rental property. They make a capital gain of $200,000.\n\nLui and Monica split the capital gain according to their share of ownership:\n\n- Lui has a capital gain of $40,000 (20%)\n- Monica has a capital gain of $160,000 (80%).\n\nEnd of example### Joint tenants\n\nJoint tenants have equal shares in the asset. Therefore, each person has an equal share of any capital gain or loss from a CGT event.\n\nWhen one joint tenant dies, their share in the asset is [acquired in equal shares by the surviving joint tenants](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax/inherited-property-and-cgt/co-ownership-and-right-of-survivorship).\n\n#### Example: joint tenants\n\nCarmen and Joe own a rental property as joint tenants.\n\nThey decide to sell their rental property. They make a capital gain of $68,000.\n\nCarmen and Joe each has a capital gain of $34,000 (50%).\n\nEnd of example### Partnerships\n\nFor CGT purposes, a partnership does not own an asset. Instead, each partner owns a proportion of the asset.\n\nWhen a CGT event occurs, the partners use their proportion to work out their capital gain or loss.\n\n## Keeping records\n\nYou must keep records of all transactions or events that are relevant to working out your capital gain or loss.\n\n### What to record\n\nYour records must be in English or be translatable to English.\n\nKeep the following records:\n\n- receipts or contracts of purchase or transfer\n- evidence of any stamp duty on the purchase or transfer\n- details of interest on money you borrowed relating to the asset\n- records of agent, accountant, legal and advertising costs\n- receipts of insurance costs, rates and land taxes\n- market valuations\n- receipts of maintenance, repair and modification costs\n- bank accounts showing brokerage fees on shares\n- receipts or contracts of sale or transfer.\n\nYou should also keep records to establish whether you have claimed an income tax deduction for an item of expenditure. If you have claimed a deduction, you can't include the amount in the cost base of the asset.\n\nFor more information, see [Keeping CGT records](https://www.ato.gov.au/forms-and-instructions/guide-to-capital-gains-tax-2025/about-capital-gains-tax/keeping-cgt-records).\n\n### How long to keep records\n\nKeep records for 5 years after the year that the CGT event occurs.\n\n#### Example: keeping records for 5 years\n\nLiz sold some shares in September 2024 and made a capital gain.\n\nThis means the CGT event happened in the 2024–25 financial year.\n\nLiz needs to keep purchase and sale records of the shares until the end of the 2029–30 financial year (30 June 2030).\n\nEnd of example#### Net capital loss\n\nIf you have a net capital loss for the year, you should keep records of the loss. You can use the loss to offset a capital gain in a later year.\n\nThere is no time limit on how long you can carry forward a net capital loss.\n\nOnce you have offset the loss against a capital gain, you should keep records of the CGT event that resulted in the loss.\n\nKeep records for a further:\n\n- 2 years for individuals and small and medium businesses\n- 4 years for other taxpayers.\n\n### Missing or destroyed records\n\nIf you don't have records for your CGT assets, there are ways you can get the information you need. If you:\n\n- **bought a property**, ask your solicitor or estate agent to give you copies of the records\n- **made improvements to an investment property**, ask the builder for a copy of the receipt for payment\n- **bought shares in a company or units in a managed fund**, ask your stockbroker or investment adviser to give you the relevant information\n- **received an asset as a gift**, ask a professional valuer to tell you what the market value would have been\n- **lost your records in a natural disaster**, we can [help you reconstruct them](https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/support-in-difficult-times/tax-and-super-support-in-difficult-times/reconstructing-your-tax-records).","title":""}
+{"_id":"passage_a0JRF000003dI9p2AE/p00387929","text":"## When to cancel your GST registration\n\nYou or your registered tax or BAS agent **must** cancel your GST registration within 21 days of:\n\n- selling or closing your business\n- changing your business structure – this includes changing from a partnership to a company, unless the old business carries on another business.\n\nYou can choose to cancel your GST registration if your GST turnover is below the threshold for compulsory registration, **unless** you:\n\n- are a taxi driver (including ride-sourcing or chauffeur services)\n- represent an incapacitated entity who is registered or required to be registered for GST – for example, an individual who is bankrupt or a company in liquidation\n- are an Australian resident who acts as an agent for a non-resident that is registered (or required to be registered) for GST.\n\nTo confirm you no longer require your GST registration or for information on thresholds and working out your GST turnover, refer to [Registering for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst).\n\nIf you are a non-resident business, see [Non-resident businesses and GST](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/non-resident-businesses-and-gst).\n\n## Effect on other registrations\n\nIf you are [pausing or permanently closing your business](https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/prepare-and-lodge/tax-time/tax-time-toolkits/tax-time-toolkit-small-business/small-business-guides/pausing-or-permanently-closing-your-business) (you can also refer to the [Pausing or permanently closing your business fact sheetThis link will download a file](https://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52dhttps://www.ato.gov.au/api/public/content/f3e8b5d81b11459b999669fefe820dac?v=1acea52d)), you must still meet your tax and superannuation lodgment, reporting and payment obligations.\n\nCancelling your GST registration may affect some, but not all your other registrations.\n\nWhen you cancel your GST registration, your fuel tax credit, luxury car tax (LCT) and wine equalisation tax (WET) registrations will also be automatically cancelled.\n\nYou must keep lodging activity statements if you:\n\n- are registered for pay as you go (PAYG) withholding\n- have entered into PAYG instalments\n- have fringe benefits tax (FBT) obligations.\n\n## Cancellation date\n\nThe date you choose to cancel your GST registration should be the last day you want to be registered.\n\nWe usually cancel your GST registration from the date you choose.\n\nYou cannot:\n\n- cancel your registration retrospectively if you were still operating on a GST-registered basis after the date you chose\n- continue to operate on a GST-registered basis after your cancellation date\n- cancel if you have already lodged an activity statement for the period containing the date of cancellation.\n\n## How to cancel your GST registration\n\nYou can cancel your GST registration and any other roles or registrations together or separately:\n\n- through [Online services for business](https://www.ato.gov.au/online-services/businesses-and-organisations-online-services/profile-in-online-services-for-business#Addupdateorcancelataxtype)\n- through your registered tax or BAS agent\n- by phone on **13 28 66** – between 8.00am and 6.00pm, Monday to Friday\n- by completing the *Application to cancel registration* (NAT 2955) through [Order publications](https://www.ato.gov.au/about-ato/contact-us/order-publications) and posting it to us.\n\nRegistered tax agents can use Online services for agents [to update or cancel a client's tax registration](https://www.ato.gov.au/tax-and-super-professionals/digital-services/online-services-for-agents/online-services-for-agents-user-guide/profile/tax-registrations).\n\n### Simplified GST registration\n\nIf you are a non-resident business registered under the [simplified GST registration](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/non-resident-businesses-and-gst/simplified-gst-registration) system, your authorised contact can [email](mailto:AustraliaGST@ato.gov.au) us to [cancel your registration](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/non-resident-businesses-and-gst#Cancelyourregistration).\n\n## Cancelling your Australian business number (ABN)\n\nIf you are cancelling your GST registration because you [restructured your business, sold it or closed it down](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/changing-selling-or-closing-your-business), you must also [cancel your ABN registrationExternal Link](https://www.abr.gov.au/business-super-funds-charities/updating-or-cancelling-your-abn/cancel-your-abn) within 28 days.\n\nIf you're a company registered with the [Australian Securities & Investments Commission (ASIC)External Link](https://www.asic.gov.au/), but no longer carry on a business, you can choose to keep your ABN registration, but you must cancel your GST registration.\n\nIf you're cancelling your GST registration, consider your other Australian tax and super obligations before cancelling your ABN.\n\nWhen you cancel your ABN, your GST, LCT, WET and fuel tax credits registrations will also be cancelled. You will not receive any future activity statements unless you have PAYG withholding or PAYG instalments.\n\nYou can cancel your ABN online through the [Australian Business RegisterExternal Link](https://abr.gov.au/mynewkey) (ABR).","title":""}
+{"_id":"passage_a0JRF000003cmec2AA/p00387432","text":"# Work out if the PSI rules apply to you\n\nIf you have received personal services income (PSI), you need to determine if the PSI rules apply to that income.\n\n**Last updated **23 November 2022\n\n.st0{fill:none;}\n.st1{fill:CurrentColor;}\nPrint or Download\n.st0{fill:none;}\n.st1{fill:CurrentColor;}\n\nIf you have worked out that the [income you have received is PSI](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/income-that-is-psi), the next step is to work out whether the PSI rules apply to you.\n\nTo do this, you need to work out if you are a personal services business (PSB) in the year that you received PSI.\n\nYou can [self-assess as a PSB](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/self-assessing-as-a-psb) if you:\n\n- meet the [results test](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/results-test) in relation to at least 75% of your PSI, or\n- meet one of the other PSB tests and less than 80% of your PSI is from the same entity and its associates.\n\nThe other PSB tests are [Unrelated clients test](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/unrelated-clients-test), the [Employment test](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/employment-test), and the [Business premises test](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/business-premises-test).\n\nIf you're a company, partnership or trust and you have more than one individual generating PSI, the self-assessment rules and PSB tests need to be applied to each individual. It is possible for one individual to conduct a PSB but not another.\n\nIf you are unable to self-assess as a PSB for a particular income year, you may be able to [apply for a PSB determination](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/self-assessing-as-a-psb/apply-for-a-psb-determination) (PSBD) in some circumstances.\n\nIf you self-assess as a PSB, or have a PSBD, then the PSI rules will not apply to the PSI you receive in that income year. See [What to do if the PSI rules don't apply](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/what-to-do-if-the-psi-rules-don-t-apply) for more information.\n\nIf you are unable to self-assess as a PSB, and do not have a PSBD for the relevant income year, the PSI rules will apply. See [What to do when the PSI rules apply](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/what-to-do-when-the-psi-rules-apply) for more information.\n\nThe PSI rules will not affect:\n\n- the contractual relationships between you and your clients or customers – for example, you do not become an employee or stop being a contractor\n- your entitlement to an Australian business number (ABN) or registration for goods and services tax (GST)\n- whether you are still considered to be running a business.\n\nYou may find this [flow chart](https://www.ato.gov.au/law/view/document?DocID=DTR/TR2021D2/NAT/ATO/00001&anchor=H252#H252) useful in determining whether the PSI rules apply to you or your business.\n\nIf you are still unsure, you may need to [seek further advice](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/seek-further-advice-about-psi) from us or a registered tax professional.","title":""}
+{"_id":"passage_a0JRF000003i3jd2AA/p00391914","text":"## Eligibility for DASP\n\nIf you've worked in Australia on a temporary visa, you may have accumulated superannuation that has been paid by your employer under the compulsory super guarantee.\n\nYou may be eligible to have this super (and any earnings and other contributions) paid to you (less tax) as a departing Australia superannuation payment (DASP) after you leave.\n\nGenerally, you can claim a DASP if all the following apply:\n\n- you accumulated superannuation while [working](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia) in Australia on a temporary resident visa issued under the *Migration Act 1958* (excluding Subclasses 405 and 410)\n- your visa has ceased to be in effect (expired or cancelled)\n- you have [left Australia](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/returning-to-your-home-country) and you do not hold any other active Australian visa\n- you're not an Australian or New Zealand citizen, or a permanent resident of Australia (if you're a New Zealand citizen leaving Australia permanently, you may be able to [transfer your super to New Zealand](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/trans-tasman-retirement-savings-transfers)).\n\nWhile you can't claim a DASP until after you've left Australia, we strongly recommend you get all the information you need and start your application before you leave. It may be difficult for you to start the process once you have left.\n\n## Locating your super\n\nIf you've worked for multiple employers, you may have more than one super account and these may be with different super funds.\n\nIf you're not sure where your super is, you can search for it by:\n\n- using the [DASP online application systemExternal Link](https://applicant.tr.super.ato.gov.au/applicants/default.aspx?pid=1) once you've met eligibility requirements and provided your TFN\n- using [ATO online services](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/keeping-track-of-your-super/keeping-track-of-your-super-online) or the ATO app (after creating a myGov account and linking to the ATO)\n- [phoning us](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp/help-with-the-dasp-online-application-system).\n\nEmployers are required to make super contributions on a quarterly basis, so you should check with your employer that all contributions have been paid into your fund before submitting your application.\n\nIf you don't apply for your DASP, your super fund will transfer your super money to the ATO as unclaimed super money, if both:\n\n- it has been 6 months or more since you left Australia\n- your visa has ceased to be in effect.\n\nYou may be able to claim [ATO-held super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/keeping-track-of-your-super/ato-held-super) as DASP.\n\n## How to claim your super\n\nYou can apply for a DASP via either:\n\n- the [DASP online application systemExternal Link](https://applicant.tr.super.ato.gov.au/applicants/default.aspx?pid=1) – for both super fund and ATO-held super\n- a paper form\n\n- for super held by a super fund, use [Application for a departing Australia superannuation payment form](https://www.ato.gov.au/forms-and-instructions/departing-australia-super-payment-application) (NAT 7204) – send this form **directly to the super fund**\n- for ATO-held super, use [Application for payment of ATO-held superannuation money](https://www.ato.gov.au/forms-and-instructions/superannuation-application-for-payment-of-ato-held-super) (NAT 74880) – send this form to the address listed on the form\n- by [authorising someone](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp#Authorisingsomeonetoclaimonyourbehalf) to claim on your behalf.\n\nBefore submitting your DASP application, check with your employer to confirm they have paid all the super they are required to.\n\n### Online applications\n\nYou can use the [DASP online application systemExternal Link](https://applicant.tr.super.ato.gov.au/applicants/default.aspx?pid=1) free of charge\n\nThe DASP online system will automatically confirm your immigration status online with the Department of Home Affairs – you don't need to apply for a Certification of Immigration Status from the Department of Home Affairs unless directed by your super fund. You can start and save your online application while you are still in Australia and have all the relevant information handy.\n\nYou can only submit a DASP application when you've left Australia and do not hold an active visa. For further information on visa cessation, including cancellation, once you have departed Australia, see [Cancelling a visa (homeaffairs.gov.au)External Link](https://immi.homeaffairs.gov.au/visas/cancelling-a-visa).\n\nTake note of the information you enter when you start your online application. You'll need the same details to resume your saved application after you leave Australia.\n\nWhere the value of your super money is $5,000 or more, your super fund may require certified copies of your proof of identification documents.\n\nIt's much easier to certify documents while you are in Australia. As there are specific rules on who can certify documents, we recommend you do this before you leave. Check with your super fund to confirm what documents are required.\n\nFor more information on how to use the system, see [Help with the DASP online application system](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp/help-with-the-dasp-online-application-system).\n\n### Paper applications\n\nFor **super held by a super fund**, you need to complete the [Application for departing Australia superannuation payment form](https://www.ato.gov.au/forms-and-instructions/departing-australia-super-payment-application) (NAT 7204) and send one to each of your super funds.\n\nIf you're applying on a paper form, your super fund may charge you a fee depending on the value of your super money. Your super fund will also require certified copies of your proof of identification documents.\n\nIt's much easier to certify documents while you are in Australia. As there are specific rules on who can certify documents, we recommend you do this before you leave. Check with your super fund to confirm what documents are required.\n\nFor **ATO-held super**, use the [Application for payment of ATO-held superannuation money](https://www.ato.gov.au/forms-and-instructions/superannuation-application-for-payment-of-ato-held-super) (NAT 74880) and send it directly to us. There are no costs for paper applications sent to the ATO.\n\n#### Super value of $5,000 or more\n\nFor super accounts with a balance of $5,000 or more, paper applications to super funds may require a *Certification of Immigration Status* from Home Affairs, which charges a fee to issue this certificate. They will email it directly to you and the super funds you nominate.\n\nRequest a *Certificate of Immigration Status* from Home Affairs using [Form 1194 Certification of Immigration Status (PDF 290KB)This link will download a file](https://immi.homeaffairs.gov.au/form-listing/forms/1194.pdf).\n\n#### Super value of less than $5,000\n\nFor super accounts with a balance of less than $5,000, you can provide evidence that you have left Australia and your visa has expired without completing the *Certification of Immigration Status*.\n\nAsk your super fund what evidence you need to provide. If you're not able to provide the evidence yourself, your super fund may ask you for a *Certification of Immigration Status* from Home Affairs before they can process your application.\n\nIf you have held a WHM visa and haven't applied for a *Certification of Immigration Status* from Home Affairs, you'll need to provide your visa information on the paper application. This may be checked against Home Affairs records and your application may take longer to process if it doesn't match.\n\n### Authorising someone to claim on your behalf\n\nYou can authorise someone else to apply for your DASP. They can act on your behalf and update your information, so consider carefully who you allow to represent you.\n\nYour representative will need a written authority from you before they can submit your DASP application.\n\nYou can nominate either:\n\n- a tax agent with full registration or conditional registration for the purpose of claiming DASP with the Tax Practitioners Board\n- another person if you use a DASP paper form.\n\nRegistered tax agents can claim DASP on your behalf through the [DASP online intermediary application system](https://www.ato.gov.au/tax-and-super-professionals/digital-services/departing-australia-superannuation-payments-dasp-online-system).\n\nAnyone applying on your behalf using a paper form will have to satisfy your super fund they have the authority to claim on your behalf. Ask your super fund what documents they require.\n\n### Applying for super of a deceased temporary resident\n\nIf you believe you may be entitled to receive the super benefits of a deceased temporary resident, you can't use the application system to apply.\n\nTo [apply for super held](https://www.ato.gov.au/forms-and-instructions/departing-australia-super-payment-application) by a fund for a deceased temporary resident, contact the fund directly.\n\nIf you believe you're entitled to claim super held by the ATO for a deceased temporary resident, complete the relevant [ATO-held super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/keeping-track-of-your-super/ato-held-super) form. You'll also need to complete the [Application for payment of ATO-held superannuation money for a deceased person cover sheetThis link will download a file](https://www.ato.gov.au/api/public/content/a07fc028-e1dc-42e2-a3d8-a29ca0efbb42_c184812d_4029_43c3_8403_b9243168272a_pdf) (NAT 75530) and send it directly to us.\n\n## Returning to Australia after claiming DASP\n\n### Returning to Australia later on a new visa\n\nClaiming a DASP will not affect any future visa applications.\n\n### Returning to Australia permanently\n\nIf you've returned to Australia as a permanent resident and your super fund has transferred your super to us as 'former temporary resident – unclaimed super', you can either:\n\n- transfer this money back to an Australian super fund\n- apply for it to be paid to you directly, if you've met all the eligibility requirements.\n\nEither way, the payment is still considered a DASP and is subject to the relevant DASP tax rate.\n\nTo transfer your super back to a super fund, phone our superannuation enquiries line on **13 10 20**.\n\nTo apply for a DASP when you have returned to Australia permanently, use the [Application for payment of ATO-held superannuation money](https://www.ato.gov.au/forms-and-instructions/superannuation-application-for-payment-of-ato-held-super) (NAT 74880) and send it directly to us.\n\n## How and when DASP is paid\n\nYour DASP will generally be paid within 28 days of your completed application being received. It may take longer if you submit an incomplete application or are asked to provide additional supporting documents.\n\nThere are 3 payment options:\n\n- electronic funds transfer (EFT) to an Australian bank account\n- Australian dollar cheque\n- international money transfer (IMT) – only for applications to super funds.\n\nNot all super funds offer IMT. Fees and charges (including currency conversion) may apply, so check with your fund to see what payment options are available.\n\nEFT is usually the most effective payment option, and you should consider keeping your Australian bank account open to receive your DASP.\n\nConfirm with your Australian bank that you will be able to arrange the money to be paid to an account in your home country.\n\nFor ATO-held super, you can only choose EFT to an Australian bank account in your name or a cheque.\n\n## How DASP is taxed\n\nA final DASP tax will be withheld from your payment when it is made. The payment may be made up of 2 components, taxable and tax free.\n\nDifferent tax rates apply to [working holiday maker (WHM) visa](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp#Whatareworkingholidaymakervisas) holders.\n\nDASP tax rates\n\nPayment component\n\nDASP ordinary tax rate (for non-WHM)\n\nDASP WHM tax rate\n\nTax-free component\n\nNil\n\nNil\n\nTaxable component – taxed element\n\n35%\n\n65%\n\nTaxable component – untaxed element\n\n45%\n\n65%\n\nThe payer of the DASP must issue you a DASP payment summary within 14 days of making the payment. The DASP payment summary will tell you the amount of DASP tax that was withheld and the amount paid to you.\n\nDASP payment summaries issued by the ATO will have an '**H**' indicator at the DASP type when the DASP WHM tax rate was applied. The indicator will be blank where the DASP ordinary tax rate was applied.\n\n### How tax rates are applied\n\nThe DASP tax rate will be determined by each super fund individually, as each fund is making a separate payment.\n\nEach super fund will assess your application and determine the tax rate to apply based on the information it holds in relation to your contributions.\n\nIf you have held a WHM visa, your super fund will check whether the DASP includes amounts attributable to super contributions made while you held a WHM visa. If it does, the fund will apply the DASP WHM tax rate. If it doesn’t, the fund will apply the DASP ordinary tax rates.\n\nThe different DASP tax rates that may apply are summarised below:\n\n- If you have never held a WHM visa – the DASP ordinary tax rates apply.\n- If you have only ever held a WHM visa and associated bridging visas – the DASP WHM tax rate applies.\n- If you held both a WHM visa and another type of visa – the tax rate that applies will depend on whether the DASP includes amounts attributable to super contributions made while you held a WHM visa. If it does, the DASP WHM tax rate will apply to the entire amount. If it does not, the DASP ordinary tax rates will apply.\n\nIt doesn't matter when you held a WHM visa. The DASP WHM tax rate applies if you have ever held a 417 or 462 and associated bridging visas and the DASP includes amounts attributable to super contributions made while you held the relevant visa.\n\nThe DASP WHM tax rate applies to the entire payment, including any super you may have earned while working under a different visa.","title":""}
+{"_id":"passage_a0JRF000003iDW52AM/p00392025","text":"You must account to your client for money or other property you may receive from your client or on their behalf that you hold on trust for them. This is one of your obligations as a registered tax practitioner under the Code of Professional Conduct (Code item 3).\n\nA trust generally arises when you receive money or other property from a client or on behalf of a client. This could include:\n\n**tax refunds or other payments received from the Australian Taxation Office (ATO) on behalf of your clients**\n\n**money received from clients for specific purposes, such as setting up a company or paying a tax liability.**\n\nA trust relationship can arise from express or implied arrangements between you and your client.\n\n## Ways you can account for money or other property held on trust\n\nSome ways you can account for money or other property held on trust for a client include:\n\n- keeping your personal or business funds separate from any trust money, most preferably through the use of a separate bank account\n- keeping accurate and up-to-date records of any dealings in relation to the money or other property held on trust\n- using a letter of engagement with your clients to expressly set out details about how money or other property held on trust will be dealt with\n- seeking prompt instructions from clients about how and where to pay money or other property received on their behalf, and then paying or providing that money or other property to the client in a timely manner\n- passing tax refunds on to clients within 14 days unless there are exceptional circumstances or some agreement between you and your client to the contrary\n- promptly answering any questions clients raise about money or other property held on trust\n- allowing clients access to any records relating to money or other property held on trust\n- reconciling the trust records and reporting to clients on an appropriate periodic basis, in the circumstances, to ensure that they are correct and up to date\n- maintaining up-to-date policies and procedures of the practice in relation to the handling of client money or other client property\n- applying money or other property lawfully in accordance with the directions of the client, and telling the client what has been done.\n\nThe above list is not exhaustive, and you should consider what steps are appropriate depending on the nature and size of your practice.","title":""}
+{"_id":"passage_a0JRF000003hYhR2AU/p00391555","text":"Remote work is on the rise! So, you’ve got the chance to work from anywhere in the world, but do you know the tax and super rules? If you’re employed remotely, stay one step ahead of tax time and find out what you need to know to get your tax return right.\n\n### I work remotely in Australia for a foreign employer – how am I taxed?\n\nIf you’re working in Australia for an overseas employer the first thing to check is your [tax residency](https://community.ato.gov.au/s/article/a07RF00000GjNz8YAF/working-out-your-tax-residency-and-what-it-means-for-you). This decides how you’re taxed.\n\n**If you’re an Australian resident for tax purposes:**\n\n**If you’re a foreign or temporary resident for tax purposes:**\n\n**If you’re a contractor and not an employee, you’ll need to:**\n\n### I’m moving overseas and continuing to work remotely for an Australian business – what do I need to know?\n\nWhen leaving Australia, what you need to do all comes down to your tax residency. Work out your tax residency by using the relevant [residency decision tool this opens in a new window ](https://www.ato.gov.au/Calculators-and-tools/Work-out-your-tax-residency/). Keep in mind, your residency may change!\n\nIf you **remain an Australian resident for tax purposes**, it’s likely your income will be deemed Australian-sourced. This means your employer will continue to withhold tax and pay super as normal while you’re out of the country.\n\nIf / when you’re **no longer an Australian resident for tax purposes**, your Australian employer won’t have any Australian tax or super requirements. Your income will be considered foreign-sourced. This means you won’t have to file an Australian tax return.\n\nThe easiest way to manage your tax affairs while overseas is with our [online services this opens in a new window ](https://www.ato.gov.au/general/online-services/). To keep using myGov and your linked services, make sure to [change your sign in options this opens in a new window ](https://www.servicesaustralia.gov.au/before-you-go-overseas-and-leave-australia?context=60040#a2:~:text=international%20lines.-,Check%20your%20myGov%20Account%20settings,to%20make%20sure%20you%20can%20access%20myGov%20while%20you%E2%80%99re%20travelling%20overseas.,-You%E2%80%99ll%20either%20need) *before* you leave.\n\nCheck out our info for [Australians living overseas this opens in a new window ](https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/Australians-living-overseas/) for more.\n\n### I’m a foreign resident employee working remotely overseas for an Australian business – do I need to lodge an Australian tax return?\n\nShort answer – no. Employers don’t tax your income if you aren’t an Australian resident for tax purposes. If you’re paid into a bank account with an overseas address, you don’t need to worry about lodging an Australian tax return.","title":""}
+{"_id":"passage_a0JRF000003e6092AA/p00388707","text":"## Inheriting money and assets\n\nThere are no inheritance or estate taxes in Australia.\n\nHowever, you may have tax obligations for the assets you inherit:\n\n- [capital gains tax](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax) may apply if you dispose of an asset inherited from a deceased estate\n- income tax applies as usual to any dividends or rental income from shares or property you inherited.\n\n## Receiving income of a deceased estate\n\nUntil the deceased person's estate is finalised, it may continue to earn income. For example, the estate may have income from a rental property or other investments.\n\nIf you become [presently entitled](https://www.ato.gov.au/individuals-and-families/deceased-estates/doing-trust-tax-returns-for-the-deceased-estate/when-a-beneficiary-is-presently-entitled-to-income) to income of the deceased estate, you need to include it in your tax return.\n\nIf this happens, the legal personal representative (LPR) of the estate should provide you with the necessary information to complete your tax return.\n\n## Receiving a super death benefit\n\nIf the deceased person had super, the super fund's trustee will work out who will receive benefits. Super paid after a person's death is called a 'super death benefit'.\n\nThe tax on a [super death benefit](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/tax-on-super-benefits#ato-Taxonsuperdeathbenefits) depends on:\n\n- whether you were a dependant of the deceased under tax law\n- whether it is paid as a lump sum or income stream\n- whether the super is tax-free or taxable (and whether the super fund has already paid tax on the taxable component)\n- your age and the age of the deceased person when they died (for income streams).\n\nTo find out about your entitlement you will need to contact the super fund trustee directly.","title":""}
+{"_id":"passage_a0JRF000003hvZB2AY/p00391792","text":"## Procedures for disclosing protected information under Schedule 1 to the Taxation Administration Act 1953\n\n### Overview\n\n1. The procedures and instructions set out in this document have been developed to satisfy the Commissioner's obligations under section 355–335 of Schedule 1 to the *Taxation Administration Act 1953* (TAA).\n2. Section 355-335 of Schedule 1 to the TAA requires the Commissioner to issue and publish instructions about the procedures to be followed by taxation officers when disclosing protected information under:\n- section 355-55 (disclosures to Ministers)\n- section 355-65 (disclosures for other government purposes)\n- section 355-70 (disclosures for law enforcement and related purposes).\n3. All references to legislation in this document are to Schedule 1 to the TAA, unless otherwise indicated.\n\n### Background\n\n1. The tax law secrecy provisions in Division 355 of Schedule 1 to the TAA apply to protected information. Protected information is defined to mean information that was disclosed or obtained under or for the purposes of a taxation law (other than the *Tax Agent Services Act 2009*), which relates to the affairs of an entity (including but not limited to the entity's tax affairs), and which identifies, or is reasonably capable of being used to identify, that entity.\n2. To be protected information, the information need not relate to a living individual, but can relate to any entity as defined in section 960-100 of the *Income Tax Assessment Act 1997*, that is:\n- an individual\n- a body corporate\n- a body politic\n- a partnership\n- any other unincorporated association or body of persons\n- a trust\n- a superannuation fund\n- an approved deposit fund.\n3. Protected information may be contained in written documents, conversations, electronic recordings, transcripts or any other form in which information can be recorded. It includes information obtained directly from a taxpayer or information generated by us (for instance, through collating or cross-referencing information from a variety of sources).\n4. It is an offence under section 355–25 for a tax officer to disclose protected information to another entity, other than to the entity who the information is about, or that entity's covered entity (as defined in subsection 355-25(2)), unless the disclosure is permitted under one of the exceptions in Division 355.\n5. A tax officer who proposes to disclose protected information under one of the exceptions in Division 355 must always ensure that their disclosure will fit the requirements stipulated in the exception they propose to apply.\n6. The table items in sections 355–55, 355–65 and 355–70 are exhaustive lists of circumstances in which disclosures of protected information may be made under each section and tax officers must observe the defined terms in each section. Any proposed disclosure under these sections must fit one of the table items in the relevant section for a tax officer to make a proposed disclosure.\n7. For disclosures under the exceptions in sections 355–55, 355–65 or 355–70, a tax officer must follow the instructions in this document.\n\n## Before protected information can be disclosed by us to a Minister\n\n### Introduction\n\n1. Division 355 permits a tax officer to disclose protected information to Ministers in the circumstances and for the purposes set out in the table in subsection 355–55(1). These are:\n- to enable any Minister to exercise a power or perform a function under a taxation law (table item 1)\n- to enable the Minister to respond directly to the entity the information is about in relation to a representation made by that entity to either the Minister or another member of Parliament (table item 2)\n- to the Minister for the purpose of informing decisions made under the Compensation for Detriment Caused by Defective Administration Scheme (table item 3)\n- to the Finance Minister, for the purpose of the making, or possible making, of an act of grace payment connected to the administration of a taxation law, or the waiver or possible waiver of a tax debt (table item 4)\n- to any Minister for the purpose of determining whether to make an ex-gratia payment, or administering such a payment (table item 5)\n- to specified Ministers for the purpose of enabling them to discharge specified responsibilities, but only where the disclosure is of information contained in the Register of Foreign Ownership of Agricultural Land or the Register of Foreign Ownership of Water Entitlements (table item 6).\n\n### Process\n\n1. The following paragraphs in this section list the process that tax officers must follow before disclosing protected information to a Minister under section 355–55.\n2. Ensure that you are authorised to make the disclosure.\n- Section 355–55 permits any tax officer to lawfully disclose protected information under section 355–55.\n- Tax officers must also comply with any policies determined by their business line regarding minimum classification levels for making disclosures to recipients of a kind listed in subsection 355–55(1). The Taxation Authorisation Guidelines are available to tax officers on our intranet.\n3. Consult with Parliamentary Services in Corporate Relations, or a Parliamentary business line coordinator.\n- A tax officer who proposes to disclose protected information to a Minister must consult Parliamentary Services in Corporate Relations, or a Parliamentary business line coordinator. A list of Parliamentary business line coordinators is available to tax officers on our intranet.\n- Further information is available to tax officers on our intranet, in the Providing Services to Treasury Portfolio Ministers and Parliament Chief Executive Instruction.\n4. Determine whether one of the table items in section 355–55 will apply to the proposed disclosure.\n- Ensure that the proposed recipient of the protected information is an entity described in column 2 of the table item that will be relied on.\n- Ensure that the purpose for which the information would be disclosed fits the lawful purpose for disclosure set out in column 3 of the table item that will be relied on.\n- The table items are an exhaustive list of circumstances in which disclosures of protected information may be made under section 355–55. They are not examples. The proposed disclosure must fit one of the table items in order to be permitted under section 355–55.\n- Any defined terms in section 355–55 must be carefully observed in assessing the application of the table items in that section.\n- Note there are some other very limited circumstances in which protected information may be disclosed to a Minister apart from under section 355–55. The processes set out in this CMPI apply only to those disclosures of protected information to Ministers that are made under section 355–55. An example is that protected information about a Minister's own affairs as a taxpayer may be provided to that Minister, consistent with section 355–25.\n- Details of all circumstances in which protected information may be disclosed to a Minister, both under section 355–55 and apart from under section 355–55, are set out in Law Administration Practice Statement PS LA 2004/9 Disclosing information about the affairs of a taxpayer to Ministers.\n5. Obtain senior officer agreement.\n- If a tax officer who proposes to disclose protected information under section 355–55 is not the Commissioner, a Second Commissioner, an SES employee or acting SES employee of the ATO, they must obtain agreement that the disclosure of protected information is covered by the table item in section 355–55 they propose to apply, from\n- the Commissioner\n- a Second Commissioner\n- an SES employee or acting SES employee of the ATO, who is not the disclosing tax officer's direct supervisor.\n- The Parliamentary coordinator who is managing the relevant work item seeks senior officer agreement by submitting to them an approvals and agreement template which specifies the table item in section 355–55 under which protected information will be disclosed.\n- The senior officer from whom agreement is sought checks that the statutory criteria for the particular table item identified on the template has been satisfied.\n- The senior officer indicates on the template that they agree that the proposed disclosure is covered by the nominated table item and notifies the Parliamentary coordinator that agreement has been given.\n6. Record senior officer agreement.\n- The document recording the senior officer agreement should be attached to the relevant work item in the Parliamentary Workflow System, prior to returning the work item to Parliamentary Services for disclosure to the Minister.\n\n## Before protected information can be disclosed by us for other government purposes\n\n### Introduction\n\n1. Division 355 permits a tax officer to disclose protected information for other government purposes set out in tables 1 to 7 in section 355–65. These are:\n- Table 1: Records or disclosures relating to social welfare, health and safety\n- Table 2: Records or disclosures relating to superannuation or finance\n- Table 3: Records or disclosures relating to corporate regulation, business, research or policy\n- Table 4: Records or disclosures relating to other taxation matters\n- Table 5: Records or disclosures relating to rehabilitation or compensation\n- Table 6: Records or disclosures relating to the environment\n- Table 7: Records or disclosures relating to miscellaneous matters.\n\n### Process\n\n1. The following paragraphs in this section list the process that tax officers must follow before disclosing protected information for other government purposes under section 355–65.\n2. Ensure that you are authorised to make the disclosure.\n- Section 355–65 permits any tax officer to lawfully disclose protected information under section 355–65.\n- However, tax officers must comply with any policies determined by their business line regarding minimum classification levels for making disclosures to recipients of a kind listed in section 355–65. The Taxation Authorisation Guidelines are available to tax officers on our intranet.\n3. Determine whether one of the table items in section 355–65 will apply to the proposed disclosure.\n- Ensure that the proposed recipient of the protected information is an entity described in column 2 of the table item that will be relied on.\n- Ensure that the purpose for which the information would be disclosed fits the lawful purpose for disclosure set out in column 3 of the table item that will be relied on.\n- The table items are an exhaustive list of circumstances in which disclosures of protected information may be made under section 355–65. They are not examples. The proposed disclosure must fit one of these table items in order to make a disclosure under section 355–65.\n- Any defined terms in section 355–65 must be carefully observed in assessing the application of the table items in that section.\n4. Comply with any Memorandum of Understanding (MOU) that applies to the proposed disclosure.\n- Identify and comply with any MOU that applies to a proposed disclosure of protected information to a particular recipient. A MOU cannot authorise any disclosure of protected information that is not consistent with the secrecy provisions in taxation law. But it may stipulate agreed conditions for information disclosure, such as timeframes for responding to requests, or agency contacts through which requests and disclosures are to be directed.\n- Refer to the table of MOUs maintained by Corporate Relations, available to tax officers on our intranet.\n- Direct any questions about compliance with a particular MOU to the MOU manager listed in the Corporate Relations MOU table available to tax officers on our intranet or identified in the MOU itself.\n\n## Before protected information can be disclosed by us for law enforcement and related purposes\n\n### Introduction\n\n1. Division 355 permits a tax officer to disclose protected information to the entities and for the purposes set out in the table in section 355–70. These are:\n- to an authorised law enforcement agency officer, or a court or a tribunal, for the purpose of investigating a serious offence, or enforcing a law, the contravention of which is a serious offence, or the making, or proposed or possible making, of a proceeds of crime order, or supporting or enforcing a proceeds of crime order (table item 1)\n- to an authorised ASIO officer, for the purpose of performing ASIO's functions under subsection 17(1) of the *Australian Security Intelligence Organisation Act 1979* (table item 2)\n- to a Project Wickenby officer, or a court or tribunal, for or in connection with a purpose of the Project Wickenby taskforce (made before 1 July 2015, or a later prescribed day) (table item 3)\n- to a taskforce officer of a prescribed taskforce, or a court or tribunal, for or in connection with a purpose of the prescribed taskforce (made within the time limit, if any, prescribed by the regulations) (table item 4)\n- to a Royal Commission in respect of which Letters Patent issued by the Governor-General declare that the Royal Commission is a Royal Commission to which this table item applies, or a member of such a Royal Commission, for the purpose of the Royal Commission conducting its inquiry (table item 5)\n- to a Royal Commission of a State or a Territory prescribed by the regulations for the purposes of this table item, a commission of inquiry of a State or a Territory prescribed by the regulations for the purposes of this table item, or a board of enquiry of a State or a Territory prescribed by the regulations for the purposes of this table item, for the purpose of investigating a serious offence, or enforcing a law the contravention of which is a serious offence, or the making, or proposed or possible making, of a proceeds of crime order, or supporting or enforcing a proceeds of crime order (table item 6).\n\n### Process\n\n1. The following paragraphs in this section list the process that tax officers must follow before disclosing protected information for law enforcement and related purposes under section 355–70.\n2. Consult the Information Disclosure Team in the Integrated Compliance business line.\n- A tax officer who proposes to disclose protected information under section 355–70 must consult with the Information Disclosure Team in Integrated Compliance.\n- Disclosure templates provided by the Information Disclosure Team must be completed.\n- The disclosure must be approved by the Information Disclosure Team.\n- The Information Disclosure Team will arrange all necessary authorisations and agreements without which disclosures under section 355–70 cannot be made. They also ensure that statutory reporting requirements in relation to section 355–70 are met.\n3. Ensure that you are authorised to make the disclosure.\n- A tax officer other than the Commissioner or Second Commissioner can only disclose protected information under section 355-70 if they have been delegated to do so by the Commissioner, or if they have been authorised to do so by the Commissioner or one of the Commissioner's delegates. Only certain SES officers have a delegation from the Commissioner to disclose protected information and to authorise other tax officers to disclose protected information under section 355–70. This is an additional requirement that applies to this exception only. Note this is a separate requirement to the senior officer agreement set out in paragraph 28.\n- A tax officer who has not been authorised to do so by the Commissioner or Commissioner's delegate must not disclose any protected information under section 355–70.\n- All inquiries about authorisations for the purposes of section 355–70 must be directed to the Information Disclosure Team in Integrated Compliance.\n4. Determine whether one of the table items in section 355–70 will apply to the proposed disclosure.\n- Ensure that the proposed recipient of the protected information is an entity described in column 2 of the table item that will be relied on.\n- Ensure that the purpose for which the information would be disclosed fits the lawful purpose for disclosure set out in column 3 of the table item that will be relied on.\n- The table items are an exhaustive list of circumstances in which disclosures of protected information may be made under section 355–70. They are not examples. The proposed disclosure must fit one of the table items to be permitted to make a disclosure under section 355–70.\n- The defined terms in section 355–70 must be carefully observed in assessing the application of the table items in that section.\n5. Comply with any Memorandum of Understanding (MOU) that applies to the proposed disclosure.\n- Identify and comply with any MOU that applies to a proposed disclosure of protected information to a particular recipient. A MOU cannot authorise any disclosure of protected information that is not consistent with the secrecy provisions in taxation law. But it may stipulate agreed conditions for information disclosure, such as timeframes for responding to requests, or agency contacts through which requests and disclosures are to be directed.\n- Refer to the table of MOUs maintained by Corporate Relations, available to tax officers on our intranet.\n- Direct any questions about compliance with a particular MOU to the MOU manager listed in the MOUs Corporate Relations table available to tax officers on our intranet or identified in the MOU itself.\n6. Obtain senior officer agreement.\n- If a tax officer who proposes to disclose protected information under section 355–70 is not the Commissioner, a Second Commissioner, an SES employee or acting SES employee of the ATO, they must obtain agreement that the disclosure of protected information is covered by the table item in section 355-70 they propose to apply, from:\n- the Commissioner\n- a Second Commissioner\n- an SES Employee or acting SES employee of the ATO.\n- Senior officer agreement is sought by the Information Disclosure Team, by submitting a disclosure checklist on which the statutory criteria for the relevant table item are listed and checked off by a member of the Information Disclosure Team.\n- The senior officer from whom agreement is sought checks that the statutory criteria for the particular table item have been satisfied.\n\nThe senior officer electronically signs the checklist to indicate that they agree that the proposed disclosure is covered by the table item indicated in the disclosure checklist and notifies the Information Disclosure Team that agreement has been given.","title":""}
+{"_id":"passage_a0JRF000003hwzt2AA/p00391810","text":"## When pay slips should be given\n\nPay slips have to be given to an employee within 1 working day of pay day, even if an employee is on leave.\n\n## How pay slips should be given\n\nPay slips have to be in either electronic form or hard copy. Electronic pay slips must have the same information as paper pay slips.\n\n## What a pay slip should have on it\n\nPay slips have to cover details of an employee’s pay for each pay period. Below is a list of what to include:\n\n- employer’s and employee’s name\n- employer’s Australian Business Number (if applicable)\n- pay period\n- date of payment\n- gross and net pay\n- if the employee is paid an hourly rate:\n- the ordinary hourly rate\n- the number of hours worked at that rate\n- the total dollar amount of pay at that rate\n- any loadings (including casual loading), allowances, bonuses, incentive-based payments, penalty rates or other paid entitlements that can be separated out from an employee’s ordinary hourly rate. For example, a note could be included on a pay slip that the hourly rate incorporates the relevant casual loading.\n- the pay rate that applied on the last day of employment\n- any deductions from the employee's pay, including:\n- the amount and details of each deduction\n- the name, or name and number of the fund / account the deduction was paid into\n- any superannuation contributions paid for the employee’s benefit, including:\n- the amount of contributions made during the pay period (or the amount of contributions that the employer intends to make)\n- the name, or the name and number, of the superannuation fund the contributions were (or will be) made to.\n\nWhen an employer is required to give a new employee a pay slip within 14 days of their first pay day, they don’t have to include the superannuation fund name or number if:\n\n- the employee hasn’t notified the employer of their choice of superannuation fund\n- the employer hasn’t been able to obtain the employee’s stapled superannuation fund details from the Australian Taxation Office (ATO).\n\nFor more information, visit the ATO’s website [Stapled super funds for employers](https://www.ato.gov.au/Business/Super-for-employers/Setting-up-super-for-your-business/Offer-employees-a-choice-of-super-fund/Request-stapled-super-fund-details-for-employees/).\n\n### Leave balances on pay slips\n\nWhile it's best practice to show an employee's leave balances on their pay slip, it’s not a requirement.\n\nLeave that can be shown on a pay slip includes:\n\n- annual leave\n- sick and carer’s leave\n- long service leave.\n\nEmployers do need to tell employees their leave balances if they ask for it.\n\n## Paid family and domestic violence leave on pay slips\n\nThere are rules about how information about paid family and domestic violence leave must be reported on pay slips and what information must not be included. This is to reduce the risk to an employee’s safety when accessing paid family and domestic violence leave.\n\nEmployers need to keep a record of leave balances and any leave taken by employees. However, pay slips must not mention paid family and domestic violence leave, including any leave taken and leave balances.\n\nAn amount paid to an employee for taking paid family and domestic violence leave has to be recorded on a pay slip as:\n\n- ordinary hours of work, or\n- another kind of payment for performing work, such as an allowance, bonus or overtime payment.\n\nHowever, if an employee requests it, their employer can record time taken as paid family and domestic violence leave as another type of leave on their pay slip (for example, annual leave).\n\nIf an employee has taken a period of paid family and domestic violence leave, it is best practice for their employer to record this on their pay slip in a way that makes the pay slip look as close as possible to how it would have looked if the employee had not taken the leave.\n\n### Example: Recording paid family and domestic violence leave on a pay slip\n\nJamie works in a warehouse for a large supermarket.\n\nJamie requests to take one day of paid family and domestic violence leave. On that day, Jamie would have worked 7 ordinary hours, including 3 hours in a cool room that would attract a cold work allowance.\n\nJamie’s employer issues them a pay slip that includes the 7 ordinary hours and 3 hours of the cold work allowance for that day, instead of recording that period as paid family and domestic violence leave. This means Jamie’s pay slip looks the same as it would have looked if Jamie hadn’t taken the leave at all.\n\n## Request for pay slips\n\nIf as an employee, you don’t receive a pay slip, we encourage you to talk to your employer. Find step-by-step advice on how to start this process at [I'm not getting pay slips](https://www.fairwork.gov.au/workplace-problems/common-workplace-problems/im-not-getting-pay-slips).\n\nYou can also check out our [online learning course on having difficult conversations](https://www.fairwork.gov.au/node/2187) for tips on how to approach your employer.\n\nEmployers who give proper pay slips are able to keep good records that can be easily found if needed.\n\n## What happens if pay slips aren't given or don't have the right information\n\nFair Work Inspectors can give employers a fine, called an [infringement notice](https://www.fairwork.gov.au/about-us/compliance-and-enforcement/infringement-notices), if they:\n\n- don't include the right information on a pay slip\n- don't issue pay slips at all or within 1 working day of paying employees.\n\nIt’s unlawful for employers to give pay slips that they know are false or misleading.\n\nEmployers can also be penalised if we choose to [take a matter to court](https://www.fairwork.gov.au/about-us/compliance-and-enforcement/litigation). In some cases, employers who have not given pay slips may have to prove to a court that they didn't underpay an employee.\n\n### Tips for employers\n\n- Issue pay slips in an easily printable format.\n- Make sure employees can access and print their pay slips in private.\n- Pay slips should be written in plain English and simple to understand.","title":""}
+{"_id":"passage_a0JRF000003hdHJ2AY/p00391638","text":"## Main GST-free products and services\n\nMost basic foods, some education courses and some medical, health and care products and services are GST-free, often referred to as exempt from GST.\n\nThings that are GST-free include:\n\n- most basic food\n- some education courses, course materials and related excursions or field trips\n- some medical, health and care services\n- some menstrual products\n- some medical aids and appliances\n- some medicines\n- some childcare services\n- some religious services and charitable activities\n- supplies of accommodation and meals to residents of retirement villages by certain operators\n- cars for disabled people to use, when certain requirements are met\n- water, sewerage and drainage\n- international transport and related matters\n- precious metals\n- sales through duty-free shops\n- grants of land by government\n- farmland\n- international mail\n- exports\n- sales of businesses as going concerns\n- some telecommunications supplies\n- eligible emissions units.\n\n**See also**\n\n- [GST food list](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-food/detailed-food-list)\n- [GST Rulings and Determinations](https://www.ato.gov.au/single-page-applications/legaldatabase#Law/table-of-contents) and search the topic you are interested in\n\n## Exports of goods\n\nExported goods are GST-free if they are exported from Australia within 60 days of one of the following, whichever occurs first:\n\n- the supplier receives any payment for the goods\n- the supplier issues an invoice for the goods.\n\nIn the case of goods paid for by instalments, the payment or invoice must be for the final instalment.\n\nSuppliers can apply to us to extend the 60-day period.\n\n## Other exports\n\nOther exports generally include supplies of things other than goods for consumption outside Australia, such as:\n\n- services\n- various rights\n- other professional services.\n\nA supply of a service is usually GST-free if the recipient of the service is outside Australia.\n\nThere are specific rules that determine if the supply is GST-free.\n\n**See also**\n\n- [GSTR 2019/1](https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20191/NAT/ATO/00001&PiT=99991231235958) *Goods and services tax: supply of anything other than goods or real property connected with the indirect tax zone (Australia)*\n- [GSTR 2018/2](https://www.ato.gov.au/law/view/document?DocID=GST/GSTR20182/NAT/ATO/00001&PiT=99991231235958) *Goods and services tax: supplies of goods connected with the indirect tax zone (Australia)*\n- [GSTR 2002/6](https://www.ato.gov.au/law/view/document?docid=GST/GSTR20026/NAT/ATO/00001) *Exports of goods*\n- [GST definitions](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/definitions)\n\n## Sale of a business as a going concern\n\nThe sale of a business as a going concern is GST-free if **all** the following apply:\n\n- before the sale, the buyer and seller agree in writing that the sale is of a going concern\n- the buyer is registered or required to be registered for GST\n- everything necessary for the business to continue operation is supplied to the buyer\n- the seller carries on the business until the day it is sold (date of settlement)\n- payment is made for the sale.\n\n**See also**\n\n- [Sale of a business as a going concern – supporting information](https://www.ato.gov.au/individuals-and-families/your-tax-return/if-you-disagree-with-an-ato-decision/object-to-a-decision/what-to-include-in-your-objection/supporting-information-to-provide/gst/sale-of-a-business-as-a-going-concern)\n- [GSTR 2002/5](https://www.ato.gov.au/law/view/document?docid=GST/GSTR20025/NAT/ATO/00001) *When is a 'supply of a going concern' GST-free?*\n- [GST definitions](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/definitions)\n\n## Cars, car parts and leasing\n\nIf you are eligible to purchase a car GST-free, you are also entitled to:\n\n- lease a car GST-free, providing you meet the other conditions relating to intended use\n- purchase car parts (such as batteries, tyres and disc brake pads) GST-free.\n\nPetrol, oil or accessories such as mudflaps are not GST-free.\n\nIf you satisfy the eligibility criteria, complete a *Declaration for an exemption of GST on a car or car parts* and present it to your car or car parts supplier.\n\nAn eligible veteran with a disability can also get an approved form from the Department of Veterans’ Affairs to apply for a rebate on the purchase of a motorcycle and motorcycle parts.\n\nIf you do not have a declaration for exemption before you purchase your car or car parts, the dealer or supplier may charge you GST. You may be able to get a refund of the GST after you have purchased your car or car parts. However, it is simpler for you if you provide the declaration before you make your purchase. Under tax law, we are unable to provide you with a direct refund of the GST you paid on either your car or car parts.\n\n**Find out about**\n\n- [Purchasing a car](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/when-to-charge-gst-and-when-not-to/gst-free-sales#Leasingacar)\n- [Leasing a car](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/when-to-charge-gst-and-when-not-to/gst-free-sales#Leasingacar1)\n- [Car parts](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/when-to-charge-gst-and-when-not-to/gst-free-sales#Carparts)\n\n**See also**\n\n- [Eligibility for tax concessions on cars for people with a disability](https://www.ato.gov.au/people-with-disability/tax-concessions-on-cars-for-people-with-disability)\n- [Medical aids and car appliances](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/gst-and-health/supply-of-services-through-a-third-party?page=7)\n- [Declaration for an exemption of GST on a car or car parts – person with a disability who is gainfully employed](https://www.ato.gov.au/forms-and-instructions/gst-free-car-person-with-a-disability-who-is-gainfully-employed)\n- [Declaration for an exemption of GST on a car or car parts – disabled veterans](https://www.ato.gov.au/forms-and-instructions/gst-free-car-disabled-veterans)\n- [Motorcycle GST rebate schemeExternal Link](https://www.dva.gov.au/health-and-treatment/help-cover-healthcare-costs/help-your-vehicle-costs/motorcycle-gst-rebate) (for disabled veterans)\n\n### Purchasing a car\n\nAn eligible person is exempt from paying GST on a car up to the value of the '[car limit](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/assets-and-exclusions#Carcostlimit)'.\n\nThe 'car limit' figure is set annually. You must pay GST on any amount above that limit.\n\nThe value of the car you purchase does not include the value of any modifications made solely to adapt the car for you to drive or be driven in.\n\nIf the value of a modified car exceeds the car limit, you must pay GST on the value above the car limit. You do not pay GST on the value of the modifications made to the car.\n\n**See also**\n\n- [Car cost limit for depreciation](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/assets-and-exclusions#Carcostlimit) (the car limit is the same as the car cost limit for depreciation)\n- [LCT modifications for people with a disability](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/luxury-car-tax/when-lct-doesn-t-apply/modifications-for-people-with-a-disability)\n\n### Leasing a car\n\nIf you are eligible to purchase a car GST-free, then you can also lease a car GST-free, if **both** of the following apply:\n\n- the lease is for a minimum of two years, or you use the car to travel 40,000 kilometres from the date you lease it\n- you intend to use the car for the prescribed purpose for the whole of that period – for example, an eligible person with a disability must also plan to use the car for their personal transport to or from gainful employment for the whole period.\n\n#### Novation arrangements\n\nUnder a novation arrangement, you may agree with the lessor and the finance company to take over all or part of the lessee's rights and obligations under a lease.\n\nWhether a car is GST-free under a novation arrangement depends on the type of arrangement you entered.\n\nIf you lease it under a **partial** novation arrangement the car is GST-free. Under a partial novation lease your employer does not lease the car, but you lease it directly.\n\nIf it is subject to a **full** novation arrangement the car is not GST-free. Under a full novation arrangement your employer leases the car.\n\n**See also**\n\n- [Vehicles purchased under novated leases](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/motor-vehicle-and-transport/gst-and-vehicles-purchased-under-novated-leases)\n\n### Car parts\n\nIf you are eligible to purchase a car GST-free, you are also entitled to purchase certain car parts GST-free, including items such as:\n\n- batteries\n- disc brake pads\n- tyres\n- oil filters\n- petrol filters\n- liquid petroleum gas (LPG) conversion kits\n- spark plugs\n- water and fuel pumps\n- radiator hoses\n- windscreens\n- head and tail-light globes.\n\nItems that are not car parts are not GST-free, these include:\n\n- oil and grease\n- paint\n- hydraulic fluid\n- radiator or petrol additives\n- refrigerant gas\n- brake fluid\n- petrol.\n\nAccessories are not car parts and are not GST-free, these include:\n\n- spoilers\n- mudflaps\n- pin striping\n- roof racks\n- CD players.\n\nParts that are not specifically for cars are not GST-free. For example, parts specifically for trucks, vans, buses, motorcycles and other machinery.\n\nCar parts purchased by a business for sale to eligible people are not GST-free for the business.\n\nThe business:\n\n- must pay GST when it purchases the car parts and can later claim a GST credit (if registered for GST) on their activity statement\n- can sell the car parts GST-free to eligible people when presented with a completed declaration.\n\nCar parts supplied to you during a repair of your car, and the cost of labour services in fitting those parts to your car, are GST-free. This is because the supply of car parts and labour to an eligible person is treated as a single GST-free ‘sale of car parts’.\n\nIf car parts are supplied to you when you service your car and those parts are integral to the servicing of your car then those parts and the labour services in fitting those parts are not GST-free. A car service, which typically involves mostly labour services with some integral parts, such as spark plugs or filters, is a taxable sale and incurs GST.\n\nStart of exampleExample 1: GST-free sale of car parts\n\nJohn has a current certificate of medical eligibility. He goes to an automotive parts and accessories store where he purchases spark plugs and brake pads for his car. The spark plugs and brake pads are GST-free for John. If John later has the spark plugs and brake pads fitted by a mechanic, the labour will be a taxable sale because it is a separate supply of labour, not a sale of car parts.\n\nEnd of example\n\nStart of exampleExample 2: GST-free sale of car parts including labour for fitting the parts\n\nJustine sells tyres to Madge for a price that includes the cost of the labour associated with fitting and balancing the tyres. Madge also needs the brake pads in her car replaced. Madge has a current certificate of medical eligibility. The sale and fitting of the tyres and the brake pads are GST-free.\n\nEnd of example\n\nStart of exampleExample 3: Taxable car parts sold as part of a service\n\nAnna has a current certificate of medical eligibility. She takes her car to the mechanic for a routine service. In the course of the service, the mechanic changes the spark plugs in Anna’s car. The sale of spark plugs is integral to the car service and, as such, is not a GST-free sale of car parts but a taxable supply of labour services.\n\nEnd of example\n\nStart of exampleExample 4: GST-free sale of car parts including labour in fitting those parts made during a car service\n\nJim has a current certificate of medical eligibility. He takes his car to the mechanic for a routine service, including changing the spark plugs. During the course of the service, the mechanic finds that the exhaust system needs to be replaced. While the service itself, including the fitting of spark plugs, is not a GST-free sale of car parts, the sale and fitting of the exhaust system is GST-free.","title":""}
+{"_id":"passage_a0JRF000003hpOv2AI/p00391754","text":"On 14 May 2024, as part of the 2024–25 Budget, the government announced it will continue to provide support for small businesses by extending the $20,000 instant asset write-off limit for a further 12 months until 30 June 2025.\n\nThis measure is now law.\n\nUnder the measure small businesses with an aggregated turnover of less than $10 million, can deduct:\n\n- the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2024 and 30 June 2025\n- an amount included in the second element (cost addition) of eligible depreciating asset's cost that they have incurred between 1 July 2024 and 30 June 2025, if they claimed an immediate deduction for the asset under the simplified depreciation rules in a prior income year where the amount is:\n\n- the first amount of second element cost incurred after the end of the income year in which the asset was written off; and\n- less than $20,000.\n\nThe $20,000 limit under the measures applies on a per asset basis, so small businesses can instantly write off multiple assets.\n\nAssets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that. In addition, pool balances under $20,000 at the end of 2024-25 income year can be written off.","title":""}
+{"_id":"passage_a0JRF000003eekz2AA/p00389234","text":"## What is foreign and worldwide income?\n\nAs an [Australian resident for tax purposes](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/australian-resident-for-tax-purposes), you must declare income you earn anywhere in the world in your Australian tax return. This is known as your worldwide income. It includes any foreign income you may receive from:\n\n- [superannuation pensions and annuities](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/superannuation-pensions-and-annuities)\n- [business activities](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/australians-doing-business-overseas/foreign-business-income)\n- [employment and personal services](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/australian-resident-foreign-and-worldwide-income#Incomefromemploymentandpersonalservices)\n- [assets and investments](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/australian-resident-foreign-and-worldwide-income#incomefromassetsandinvestments)\n- [capital gains on overseas assets](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/australian-resident-foreign-and-worldwide-income#capitalgainsonoverseasassets).\n\nIf you have interests or involvement in foreign entities or foreign trusts, you may have [attributed foreign income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/australian-resident-foreign-and-worldwide-income/attributed-foreign-income). This is income attributed to you that has not been distributed.\n\n### Income from employment and personal services\n\nIf you have worked overseas or provided services to an organisation located outside Australia, you need to declare relevant income as if it were earned in Australia. This may include:\n\n- salary and wages\n- directors' fees\n- consultancy fees\n- business income\n- any other remuneration.\n\nThis income may also include payments received from platforms hosted overseas – for example, if you are a content creator or influencer, and your payment is from overseas.\n\n### Income from assets and investments\n\nIf you own assets or investments overseas, including offshore bank accounts, you need to declare the relevant returns as if they were in Australia. This may include:\n\n- interest from bank deposits or bonds\n- dividends from shares\n- royalties from intellectual property\n- rental income from real estate\n- pensions, annuities and lump sums from managed funds\n- income streams from super funds\n- attributed income from foreign entities\n- some government pensions.\n\n### Capital gains on overseas assets\n\nIf you own an asset overseas, you may have to pay Australian [capital gains tax](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax) when you sell the asset. You need to keep appropriate records.\n\nIf you acquired an overseas asset before you became an Australian resident, you treat the asset as though you acquired it when you became an Australian resident.\n\nSimilarly, if you stop being an Australian resident while holding an overseas asset, you treat the asset as though you disposed of it when you stopped being an Australian resident.\n\nTo accurately calculate your capital gain or loss, ensure you keep a record of the value of your asset at these times. This is a complex area of tax law and you may be eligible for exemptions.\n\n## Paying Australian tax on your foreign and worldwide income\n\nIf you're an Australian resident for tax purposes and you:\n\n- have a temporary resident visa\n\n- you don’t pay tax on most of your foreign income in Australia\n- we tax your income from some actual work you do overseas while you are a temporary Australian resident\n- receive foreign income\n\n- receive income from a [country that has a tax treaty](https://www.ato.gov.au/about-ato/international-tax-agreements/in-detail/what-are-tax-treaties) with Australia\n\nIf you are an Australian Government agency employee (and not a member of a disciplined force), you now pay tax on income from delivering [Australian Official development assistance (ODA)](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/tax-exempt-income-from-foreign-employment/exempt-income-from-foreign-service). Members of a disciplined force delivering ODA may still be eligible for exemption.\n\n## Tax paid overseas\n\nIf you have already paid tax in the country where you derived the income, you may be able to claim an [Australian foreign income tax offset](https://www.ato.gov.au/forms-and-instructions/foreign-income-tax-offset-rules-guide-2025).\n\nTo be eligible for a foreign income tax offset, you must:\n\nThe foreign country must have taxing rights over the income. If they do not, you can ask them for a refund of the tax paid.\n\nThe offset amount you are entitled to will not always be the same as the tax you paid overseas. If you are claiming more than $1,000, you will first need to work out your foreign income tax offset limit to determine your entitlement.\n\n## Tax exemptions for international employment income\n\nEmployment income from international work may be exempt from Australian tax in limited circumstances, such as:\n\nFor more information about these situations, and the conditions you must meet, see [Tax exempt income from foreign employment](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/tax-exempt-income-from-foreign-employment).\n\n## Converting foreign income to Australian dollars\n\nYou must convert all foreign income, deductions and tax offsets to Australian dollars in your tax return.\n\n[Foreign income conversion calculator](https://www.ato.gov.au/calculators-and-tools/income-foreign-income-conversion-calculator)\nDepending on your circumstances and the type of income, you can use either:\n\n## Apportioning foreign income across multiple years\n\nUnlike Australia, most countries do not have an income year ending on 30 June. You may need to report your foreign income and associated tax offsets in multiple tax returns in Australia.\n\nYou will need to work out which income tax years the income amounts align to and apportion them accordingly.\n\n## Audit and verification checks\n\nWe do audit and verification checks and we [data match](https://www.ato.gov.au/about-ato/commitments-and-reporting/information-and-privacy/data-and-analytics/data-matching) the tax information provided in tax returns with data we collect from other parties, such as:\n\nWe recommend you ensure your bank has correctly recorded all your details, such as your name, address and tax file number. This will avoid any unnecessary follow-up action being taken by Australia or another country if a discrepancy is found.\n\nWe receive and exchange financial account information with participating foreign tax authorities. This ensures Australian residents with financial accounts in other countries are complying with Australian tax law. You could receive penalties and interest charges if you do not declare your foreign income.\n\n- you can provide a [certificate of residency and overseas tax relief form](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/certificate-of-residency-and-overseas-tax-relief-form) to the tax authorities in that country and ask them to either\n\n- reduce their withholding tax\n- exempt you from paying tax in that country if they do not have taxing rights over the income.\n- have paid the tax on the income overseas\n- have records to prove that the tax has been paid.\n- certain types of foreign service\n- working on an approved overseas project\n- working in Australia for certain international organisations\n- overseas deployment with an Australian Defence Force\n- working for an Australia–United States joint space or defence project.\n- the exchange rates prevailing at specific times – there are specific [Translation (conversion) rules](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/foreign-exchange-gains-and-losses/translation-conversion-rules) that tell you the exchange rate to use\n- an [average exchange rate](https://www.ato.gov.au/tax-rates-and-codes/foreign-exchange-rates-overview) – daily and monthly rates published monthly.\n- banks\n- financial institutions\n- investment bodies\n- employers\n- other government agencies.","title":""}
+{"_id":"passage_a0JRF000003gM2P2AU/p00390611","text":"## Your income and the tax-free threshold\n\nYour income may come from one or more payers at the same time. Payers include employers, government agencies, or work you do as a sole trader.\n\nYou can choose to claim or not claim the [tax-free threshold](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/how-to-claim-the-tax-free-threshold) ($18,200) on the income you earn.\n\nIf you claim the tax-free threshold:\n\n- you won't pay tax where your income is $18,200 or less.\n- your payer will withhold tax when you earn above $363 per week, $726 per fortnight or $1,573 per month.\n\n## When to claim the tax-free threshold\n\nIf you have more than one payer at the same time, generally, you only claim the tax-free threshold from one payer. Usually, you claim the tax-free threshold from the payer who pays you the highest salary or wage.\n\nYou may receive your income from 2 or more payers at the same time, if you:\n\n- have a second job or more than 2 jobs\n- have a regular part time job and also receive a taxable pension or government allowance\n- are working under an ABN as a contractor, sole trader or other business structure.\n\n## Second job or payer\n\nWhere you have more than one payer and expect to earn above $18,200 from all sources, you should advise your other payers to withhold tax from your income at a higher rate. This is the 'no tax-free threshold' rate.\n\nYou may need to complete and lodge a [PAYG withholding variation application](https://www.ato.gov.au/forms-and-instructions/payg-withholding-variation-application). Your request should be in writing but you can send it as an email request, a paper or online form.\n\nDoing this reduces the chance of you having a tax debt (tax bill) at the end of the income year. See, [Why you may receive a tax bill](https://www.ato.gov.au/individuals-and-families/your-tax-return/your-notice-of-assessment/why-you-may-receive-a-tax-bill).\n\n## Change of job during the income year\n\nIf you change jobs during the income year your previous employer stops paying you, and this means you will no longer claim the tax-free threshold from them. You can claim the tax-free threshold from your new payer even if you have claimed it from your previous employer.\n\nTo choose whether to claim the tax-free threshold from your new employer complete a tax file number (TFN) declaration. Your payer will work out how much tax to withhold from their payments to you.\n\nWe will work out your total tax payable at the end of the income year when you lodge your tax return.\n\n### Example: changing jobs\n\nHamid has just completed his university degree and has found a job as a graduate in the public service. During December and January Hamid keeps working at his part time job in a café until he starts in a graduate position in February.\n\nHe has claimed the tax-free threshold from his café job from July to January. When he quits his café job and starts his graduate position he claims the tax-free threshold from his new employer from February.\n\nEnd of example## Tax withheld from all income sources\n\nWhen you lodge your tax return, we assess all the income you earn and the tax withheld amount. Sometimes the total tax withheld may be more or less than the amount you need to meet your end-of-year tax liability, if:\n\n- [your income is $18,200 or less](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/multiple-jobs-or-change-of-job#Ifyourincomeis18200orless), you can claim the tax-free threshold\n- [too much tax is withheld](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/multiple-jobs-or-change-of-job#Ifyourincomeisover18200andtoomuchiswithh), it may result in a tax refund\n- [too little tax is withheld](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/tax-free-threshold/multiple-jobs-or-change-of-job#Iftoolittletaxiswithheld), you may receive a tax bill to pay the difference.\n\nDepending on your circumstances, you can request a change to the amounts of tax withheld from your income. This will help you to match your end-of-year tax liability more closely.\n\n### If your income is $18,200 or less\n\nIf you're certain your total income for the income year from all your payers will be $18,200 or less, you can choose to claim the tax-free threshold from each payer.\n\nIf you do this and your total income later increases to above $18,200, you'll need to provide one of your employers with a [withholding declaration](https://www.ato.gov.au/forms-and-instructions/withholding-declaration). The withholding declaration will advise them you want to stop claiming the tax-free threshold from that payer.\n\n#### Example: income of $18,200 or less\n\nDuring the 2024–25 income year Jeff has a:\n\n- taxable pension of $384.61 per fortnight ($10,000 for the income year)\n- part-time job earning $307.69 per fortnight ($8,000 for the year).\n\nJeff claims the tax-free threshold on his pension and no tax is withheld during the year.\n\nIf Jeff doesn't claim the tax-free threshold through his employer for his part-time job, $50 per fortnight would be withheld.\n\nAssuming that Jeff doesn't have other income, his taxable income for the income year will be $18,000. His tax payable at the end of the income year would be nil ($0). He would receive a refund of the total tax withheld when he lodges his 2025 tax return.\n\nIf Jeff expects to receive the same income for the next income year, he could choose to claim the tax-free threshold for his part-time job as well through his employer, so that no tax is withheld from payments made to him. He can do this by completing a withholding declaration and providing it to his employer.\n\nEnd of example### If too much tax is withheld\n\nIf your income is more than $18,200 and too much tax was withheld in the income year, you can apply to reduce the amount of tax withheld from your payments.\n\nYou will need to complete and lodge a [PAYG withholding variation application](https://www.ato.gov.au/forms-and-instructions/payg-withholding-variation-application). Your request should be in writing but you can send it as an email request, a paper or online form.\n\nWhen we receive your application, we'll calculate the variation amount and provide your payers with new instructions for withholding your tax.\n\nYou should only apply for this variation if you're certain of your income amounts and are disadvantaged by the current withholding rates.\n\n#### Example: too much tax withheld during the year\n\nSue has 2 jobs during the 2024–25 income year. As a part-time retail sales assistant, she earns $615.38 per fortnight ($16,000 for the income year). She also works in a restaurant earning on average $384.62 per fortnight ($10,000 for the income year).\n\nSue claims the tax-free threshold from her retail employer and has no tax withheld.\n\nAs Sue doesn't claim the tax-free threshold from her restaurant employer, $66 per fortnight is being withheld. In total $1,716 was withheld for the income year.\n\nSince Sue doesn't have any other income, her tax payable or refundable when she lodges her tax return would be calculated as follows:\n\nTaxable income\n\n$26,000\n\nIncome tax payable on $26,000\n\n$1,248\n\nLess, Low income tax offset\n\n$700\n\nPlus, Medicare levy\n\n$0\n\n**Total tax and Medicare levy**\n\n**$548**\n\nCredit for total tax withheld\n\n$1,716\n\n**Tax refund due to Sue**\n\n**$1,168**\n\nThe tax refund of $1,168 arises because too much tax was withheld from Sue's income from her employers during the income year.\n\nIf this situation is likely to continue, Sue can apply to us for a withholding variation to reduce the amounts of tax withheld. So, Sue will receive extra net pay during the income year, rather than receiving a large tax refund at the end of the income year.\n\nEnd of example### If too little tax is withheld\n\nSometimes the total tax withheld from your payments may be too little to cover your tax liability for the income year.\n\nTo avoid an end-of-year tax debt, you can ask one or more of your payers to [increase the amount they withhold](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/varying-your-payg-withholding) from your payments. You will need to complete and lodge a [PAYG withholding variation application](https://www.ato.gov.au/forms-and-instructions/payg-withholding-variation-application). Your request should be in writing but you can send it as an email request, a paper or online form.\n\n#### Example: too little tax withheld\n\nPierre receives a taxable pension and has a part-time job. Over the course of the 2024–25 income year, he receives:\n\n- $30,000 from the pension – Pierre's payer applies the tax-free threshold to his fortnightly payments\n- $30,000 from the part-time job – Pierre's employer applies no tax-free threshold to his fortnightly payments.\n\nPierre's tax withheld is:Income type\n\nTaxable annual income\n\nFortnightly income\n\nFortnightly tax withheld\n\nPension\n\n$30,000\n\n$1,153.84\n\n$84.00\n\nPart-time job\n\n$30,000\n\n$1,153.84\n\n$236.00\n\nTotal\n\n$60,000\n\n$2,307.68\n\n**$320.00**\n\nAt the end of the income year, the total tax withheld from Pierre's income will be $8,320 ($320 × 26).\n\nWhen Pierre lodges his tax return for the income year, the actual amount of income tax he has to pay, or tax refundable to him, will be calculated as follows:\n\nTaxable income\n\n$60,000\n\nIncome tax payable on $60,000\n\n$8,788\n\nLess, Low income tax offset\n\n$100\n\nPlus, Medicare levy (2% of $60,000)\n\n$1,200\n\n**Total tax and Medicare levy**\n\n**$9,888**\n\nCredit for total tax withheld\n\n$8,320\n\n**Tax payable**\n\n**$1,568**\n\nPierre will have a tax debt of $1,568 as insufficient tax was withheld during the income year.\n\nPierre can ask one or both of his payers to withhold extra tax to cover the shortfall. Alternatively, he can put money aside to ensure that he can pay his tax bill when it falls due.","title":""}
+{"_id":"passage_a0JRF000003hFbZ2AU/p00391314","text":"## When you can access your super\n\nThere are limited circumstances where you can access your super on compassionate grounds to meet expenses for you or your dependant.\n\nUnder the law, we have no discretion to vary the conditions under which you can access your super early.\n\nYou may be able to have super released on compassionate grounds to meet expenses for:\n\n- medical treatment for you or your dependant\n- medical transport for you or your dependant\n- modifying your home or vehicle to accommodate special needs arising from your or your dependant's severe disability\n- palliative care for you or your dependant's terminal illness\n- death, funeral or burial expenses for your dependant\n- preventing foreclosure or forced sale of your home.\n\nFor more information, see [Expenses eligible for release on compassionate grounds](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/expenses-eligible-for-release-on-compassionate-grounds).\n\nApplications for the compassionate release of super generally need to be for an unpaid expense, however, if you have borrowed money to pay for the expense, you may be able to access your super to repay the outstanding balance of the borrowed amount.\n\nThese circumstances **don't include** meeting general day-to-day expenses in hardship situations. In these situations, you may be able to [access your super early](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/when-you-can-access-your-super-early), but there are different rules, and you apply directly to your super fund.\n\nWhen you apply, ensure you attach all the required evidence so your application can be assessed as quickly as possible. Applications that are not accompanied by all the required documentary evidence may be delayed or not approved.\n\nAs your application may not be approved, we recommend you wait for the outcome and receive payment from your fund **before** you book the treatment or services you have applied for.\n\n## Things to consider\n\nAccessing your super early will reduce your super balance. This may affect your:\n\n- future retirement income\n- income protection insurance\n- life and total and permanent disability insurance cover\n- family tax benefit\n- child support payments.\n\nMake sure you understand your options and the financial impacts of accessing your super before applying. Consider getting financial advice.\n\nYou can start with these free services:\n\n- [Centrelink's Financial Information ServiceExternal Link](https://www.servicesaustralia.gov.au/individuals/services/financial-information-service) can inform and educate you about financial matters.\n- [ASIC's MoneysmartExternal Link](https://moneysmart.gov.au/financial-advice/financial-advisers-register) has helpful information about seeking financial advice.\n\n## How tax applies\n\nThe super you withdraw on compassionate grounds is paid and taxed as a normal super lump sum. For more information, see [Tax on super benefits](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/tax-on-super-benefits).\n\nThe tax rate depends on various factors, including your age, your preservation age, and the components of the super lump sum.\n\nSuper that is released early will generally count towards your assessable income for income tax purposes. You need to include any taxable amounts in your tax return.\n\n### Refund of tax withheld\n\nYou may be able to request a refund of any tax withheld from your super lump sum payment if you had a terminal medical condition either:\n\n- at the time of the payment\n- within 90 days of receiving the payment.\n\nFor information about how to request a refund and the documents you need to provide, see [Refund of tax paid on super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-due-to-a-terminal-medical-condition#ato-Refundoftaxpaidonsuper).\n\n## What you need to do before applying for early release\n\nBefore you apply for early release of super on compassionate grounds, work through these steps to check what you need to do if you:\n\n- are seeking to access your super to pay for an expense for yourself, you'll need to [find out if you are eligible for compassionate release of super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Eligibilityforcompassionatereleaseofsupe)\n- are [applying to pay for someone else's expenses](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Accessingsupertopayexpensesforsomeoneels), there are additional eligibility requirements\n- meet the eligibility requirements you'll then need to understand what [evidence you need to provide](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Evidencerequirements).\n\n### Contact your super fund\n\nBefore applying to us for compassionate release of your super, you must contact your super fund to:\n\n- confirm they will release your super early on compassionate grounds\n- confirm there is sufficient money in your account to cover both the expense and the tax withholding amount (which generally is up to 32% of the amount being withdrawn)\n- check if there will be any fees for releasing your super early under compassionate grounds\n- understand the implications on any insurance attached to your accounts.\n\nIf you're a member of an **exempt public sector super scheme**, don't apply to us unless your scheme has directed you to. In most cases, you'll need to apply directly to your scheme for early release of super. These schemes are subject to state and territory laws on early release of super.\n\nIf you have a **self-managed super fund (SMSF)**, you still need our approval to access your super early under compassionate release of super. Be aware that some advisers claim you can get early access to your super by transferring it into a SMSF. These schemes are illegal and there are heavy penalties if you participate. For more information, see [Illegal early access to super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/illegal-early-access-to-super).\n\n## Eligibility for compassionate release of super\n\nWe can only approve a release of your super if you meet all the following conditions:\n\n- Condition 1 – you are or have been a citizen or permanent resident of Australia or New Zealand.\n\n- If you are currently a temporary resident, you can't meet this condition and you're **not** eligible to apply - for more information see [temporary residents and superannuation](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation).\n- If you were a temporary resident and are not a current Australian or New Zealand citizen or permanent resident, you can't meet this condition and you're **not** eligible to apply. You may be eligible to be paid your super in the form of a [Departing Australia superannuation payment](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/temporary-residents-and-superannuation/departing-australia-superannuation-payment-dasp).\n- Condition 2 – you meet the eligibility requirements of the specific compassionate grounds that you’re applying for.\n- Condition 3 – you or your dependants' expense is unpaid or has been paid as a result of you borrowing money that remains outstanding – where you or your dependant have borrowed money to pay the expense\n\n- You can only apply to repay any outstanding amounts from the amount borrowed.\n- Additional documents will need to be provided as part of your application.\n- Condition 4 – you can’t afford to pay part or all the expense without accessing your super. That is, you can't pay the expense by\n\n- using your savings\n- redrawing your mortgage\n- selling shares, investments or assets\n- accessing funding through other means (such as the National Disability Insurance Scheme)\n- borrowing money, obtaining a loan or using credit facilities - noting that if you then are unable to repay the borrowed amount, you may still be eligible to apply.\n- Condition 5 – you provide all required supporting evidence and invoices or quotes, including any documentary evidence required to show you're in a dependant relationship with someone when you're applying to pay an expense for them.\n\n## Accessing super to pay expenses for someone else\n\nIf you're seeking to access your super to pay an expense for another person, you must have a dependent relationship with that person.\n\nIf your relationship meets the requirements of an Interdependent relationship or substantially financially dependent relationship, you need to provide evidence of the relationship.\n\n### Who is a dependant\n\nA person can be considered your dependant if they meet the criteria for one of the following categories:\n\n- your spouse\n- your child\n- any other person you are in an interdependent relationship with\n- a person who is substantially financially dependent on you.\n\nRead the following information to determine if your relationship meets the relevant criteria and to understand the additional evidence you need to provide.\n\nApplications submitted with incomplete evidence will be delayed or not approved.\n\n#### Spouse\n\nWe define a spouse as someone who is either:\n\n- legally married to you\n- a person who is recognised as being in a registered relationship with you under a state or territory law\n- not legally married to you but lives with you on a genuine domestic basis in a relationship as a couple.\n\nIf you're applying to pay for the expense of your spouse, you're not required to provide any additional evidence with your application.\n\n#### Child\n\nA child is someone less than 18 years old.\n\nTo be considered your dependent, the child must be either your:\n\n- biological child\n- adopted child\n- stepchild\n- child of your spouse\n- a child within the meaning of the *Family Law Act 1975*.\n\nIf you're applying to pay for the expense of your child who meets one of these criteria, you're not required to provide any additional evidence with your application.\n\nIf your application is to pay for the expenses of your child who is 18 years or older, you'll need to satisfy that an interdependent relationship or a substantially financial dependent relationship exists between you and your child.\n\n#### Interdependent\n\nAn interdependent relationship is a relationship between 2 people that meets **all** the following conditions:\n\n- they have a close personal relationship\n- they live together\n- one or both provides financial support to the other\n- one or both provides domestic support and personal care to the other.\n\nYou may also be considered to have an interdependent relationship if you have a close personal relationship but live apart temporarily. An example is if one or both of you are:\n\n- temporarily working or studying interstate or overseas\n- detained in prison\n- receiving care for a physical, intellectual, or psychiatric disability.\n\n#### Evidence\n\nOnce you have read the following information, you may wish to use or print our [Interdependent relationship checklist](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know/interdependent-relationship-checklist) to assist you in collecting the required evidence for your application.\n\nTo show that you are in an interdependent relationship with another person, you need to provide:\n\n- documents showing that you both live at the same address or, if you're temporarily living apart, that you normally live together\n\n- this could be a joint bank statement or a phone or utility bill for example\n- if you are temporarily living apart, your application needs to explain why.\n- evidence of the financial support provided, including bank statements from either people that clearly shows payments to the other person or made on their behalf\n- a statutory declaration form detailing all the circumstances of the relationship between the persons, including (where relevant)\n\n- duration of your relationship\n- whether or not a sexual relationship exists\n- degree of mutual commitment to a shared life\n- ownership, use and acquisition of property\n- care and support of children\n- public aspects of your relationship\n- degree of emotional support provided to each other\n- degree to which the relationship is one of mere convenience\n- any information that indicates you intend for the relationship to be permanent.\n\n##### Example: evidence to support interdependency\n\nAlix makes an application for compassionate release of super to modify her home to accommodate her adult son’s special needs arising from a severe disability. To support her application that her son is a dependant both Alix and her son provide:\n\n- statutory declarations that they\n\n- have shared and continue to share a close and personal relationship for over 2 years\n- have lived together for more than 2 years\n- provide domestic support in the form of cleaning and cooking and emotional support to each other given they have no other living relatives, and\n- due to her son's disability, he can't live on his own, so the current situation will be permanent\n- electricity bills confirming they live at the same address\n- copies of bank statements, showing that Alix has provided for the last 8 years, and continues to provide, financial support of $100 a week to her son.\n\nAs they live together Alix is also able to show that she pays for all bills, and everyday expenses for her and her son.\n\nIn this case we are satisfied that an interdependency relationship exists between Alix and her son.\n\nEnd of example\n### Substantially financially dependent\n\nA person is substantially financially dependent on another where one person is unable to meet their normal living expenses without the financial support of the other person. Your application needs to include information and financial documents that show:\n\n- you make regular, continuous, substantial financial payments to, or on behalf of, the other person for a significant period\n- these payments cover all or a substantial portion of the person's normal living expenses\n- the person would be unable to afford their normal living expenses without these payments (such as groceries, mortgage or rent, transportation costs, utility bills and medical expenses).\n\n#### Evidence\n\nOnce you have read the following information, you may wish to use or print our [Financial dependant checklist](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know/financial-dependant-checklist) to help you collect the required evidence for your application.\n\nTo prove you're in a substantially financially dependent relationship with another person, you need to provide:\n\n- a written statement or letter (this can include a statutory declaration from yourself or the dependant that includes the following information about the relationship\n\n- how regularly financial support is provided\n- value of financial support provided\n- duration of the financially dependent relationship\n- whether the other person's normal living expenses are financed by these payments\n- level of reliance the other person has on the financial support provided\n- whether the other person has any other sources of income and, if so, the value\n- any other information that supports the relationship.\n- financial documents that\n\n- support the written statement or letter and clearly demonstrate that you financially support the other person to meet their normal living expenses (such as groceries, mortgage payments or rent, transportation costs, utility bills, medical expenses) on a regular basis for a significant period\n- show the other person couldn't meet their living expenses without your financial support.\n\nFinancial documents that can demonstrate the financial support include:\n\n- your and the other person's bank statements for the same period, showing\n\n- transfer and receipt of money to, or on behalf of, the other person\n- how the money is used to fund the other person's normal living expenses\n- any income the other person is receiving.\n- receipts for expenses you have paid on behalf of the other person\n- documents detailing any employment payments or government help provided to the dependant that show any other income they have.\n\n##### Example: evidence to support substantial financial dependency\n\nDev makes an application for compassionate release of super for medical treatment for his mother. Dev and his mother share a close relationship, and he supports his mother financially. They don't live together. To support a substantially financial relationship, Dev provides us with:\n\n- copies of bank statements from himself and his mother showing fortnightly transfers of money to support his mother that show\n\n- his mother used the money transferred by Dev to buy essential everyday living expenses\n- the arrangement has been occurring for more than 12 months\n- Dev’s mother doesn't receive any other income or financial assistance.\n- copies of receipts for shopping expenses, medical expenses, and rent payments that Dev has been paying for his mother for more than 12 months\n- statutory declarations from both Dev and his mother detailing\n\n- the financial support Dev provides to his mother\n- how his mother wouldn't be able to maintain a basic standard of living without the support Dev provides.\n\nThe supporting bank statements and receipts substantiate the statutory declarations provided by both Dev and his mother.\n\nGiven the breadth of supporting material provided by Dev and his mother, we're satisfied that a substantial financial dependency relationship exists.\n\nEnd of example\n## Accessing super to repay borrowed amounts for eligible expenses\n\nIf you or your dependant paid for an eligible expense by borrowing money and you don't have the financial capacity to repay the amount, you may be able to access some of your super to repay the outstanding balance of the borrowed amount.\n\nBorrowed amount refers to any debt that was incurred to pay for an eligible expense, where a balance remains outstanding and has a requirement to be repaid. Examples of financial arrangements that may be eligible are:\n\n- amounts borrowed from family or friends\n- amounts loaned by a commercial lender (banks or other lenders)\n- credit card debts\n- amounts owed to 'pay later' services.\n\nAs part of your application, you need to provide us with the terms of the arrangement.\n\n### Eligibility criteria\n\nTo access your super on compassionate grounds to repay borrowed amounts, all the following conditions need to be met:\n\n- Condition 1 – You or your dependant meet all the eligibility conditions to access your super on compassionate grounds. That is:\n\n- the expense is an eligible expense\n- you have the necessary documents to support your expense.\n\nFor more information see [expenses eligible for release on compassionate grounds](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/expenses-eligible-for-release-on-compassionate-grounds).\n\n- Condition 2 – You or your dependant borrowed money for the purposes of paying for the expense.\n- Condition 3 – The borrowed amount was used to pay for the expense.\n- Condition 4 – The borrowed amount remains outstanding in part or full.\n- Condition 5 – You don’t have the financial capacity to repay the outstanding balance of the borrowed amount in accordance with the terms you agreed to (you need to consider options to repay some or all the borrowed amount before applying).\n\nWhere these conditions are met and you can provide the required supporting documents, we can consider approving a release to repay the outstanding balance of the borrowed amount that was used to pay for the eligible expense.\n\n#### Amounts that are not eligible\n\nAny interest or administrative fees, including penalties charged on the borrowed amount can't be considered as part of a release on compassionate grounds.\n\n### Evidence\n\nIn addition to the documents required to support your or your dependant's eligibility for the expense, you need to provide additional documents to support the borrowed amount. The documents required will differ depending on whether you or your dependant:\n\n- borrowed money from family or friends\n- got a loan from a commercial lender\n- used other lenders or financial arrangements.\n\n#### Amounts borrowed from family or friends\n\nIf you or your dependant borrowed money from family or a friend, your application must include the following additional documents and information to support the borrowed amounts.\n\nIf you don't provide the right evidence your application will be delayed or not be approved. The following information tells you what these documents must include.\n\nOnce you have read the following information, you may wish to use or print our [Repaying amounts borrowed from family or friends checklist](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know/repaying-amounts-borrowed-from-family-or-friends-checklist) to help you in collecting the required evidence for your application. You must provide:\n\n- A paid invoice, receipt or bank statement that shows the payment of the expense, including the\n\n- date of payment\n- method of payment (electronic payment, credit card, cash)\n- amount paid.\n\nAll documents need to show who they were issued to. Where you are providing bank statements, you need to ensure that the account holder's name and statement period are visible.\n\nYou must provide a [statutory declaration](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Statutorydeclarations) from yourself or your dependant that must include:\n\n- the amount borrowed, lender's name, how it was paid, and the date received\n- intended use of borrowed amount\n- any terms of repayment that were agreed to (this needs to include why the repayment terms can't be met)\n- the outstanding balance of the borrowed amount that you aren't able to repay by other means.\n\nYou must provide a statutory declaration from the lender that must include:\n\n- the amount loaned, who it was for, how it was paid, and the date paid\n- intended use of the loaned amount\n- any terms and conditions for the amount loaned (including any information about repayments requirements and the charging of interest or fees)\n- the outstanding balance of the loaned amount.\n\nIf you entered into any written contracts or agreements that detail the terms of the arrangement, you need to include these documents in your application.\n\n#### Loans from a commercial lender\n\nIf you or your dependant obtained a loan from a commercial lender, your application needs to include these additional documents to support the loan:\n\n- an invoice or quote for the expense\n- proof the expense has been paid\n- financial documents showing the payment of amounts between yourself or your dependant and the lender\n- a loan contract\n- a statutory declaration from yourself or your dependant.\n\nIf you don't provide the right evidence your application will be delayed or not be approved. The following information tells you what these documents need to include.\n\n##### Invoices, receipts and bank statements\n\nYour application must also include:\n\n- a paid invoice, receipt or bank statement that shows the payment of the expense, including the\n\n- date of payment\n- method of payment (electronic payment, credit card or cash)\n- amount paid\n- payer's details\n- the loan statement that shows\n\n- the opening balance of the loan\n- the date on which the loan was provided\n- payment of the amount to you or your dependant's bank account\n- any repayments that have been made\n- any interest or fees that have been charged\n- the account owner's name\n- your or your dependant's bank statement that shows\n\n- the incoming payment from the loan account to your personal account, including payment date\n- payments to the provider, including the payment dates\n- the account owner's name.\n\n**Note:** Where you are providing bank statements, you need to ensure that the account holder's name and statement period are visible.\n\n##### Statutory declaration and loan contract\n\nYour application must also include:\n\n- the loan contract with the terms and conditions of the loan (including any information about repayment requirements and the charging of interest and fees)\n- a statutory declaration from yourself or your dependant that includes\n\n- the amount borrowed, lender's name and the date received\n- the intended use of the borrowed amount\n- the outstanding balance of the borrowed amount that you aren't able to repay by other means\n- details of the changes in your or your dependant's circumstances since obtaining the loan that have resulted in the repayment terms not being met\n- details of other funding options (see [condition 4](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Condition4)) you have considered and why they aren't available.\n\n### Other lenders or financial arrangements\n\nIf you or your dependant has borrowed money or incurred a debt to pay for an eligible expense from any other entity, your application needs to include these documents to support this arrangement:\n\n- an invoice or quote for the expense\n- proof the expense has been paid\n- financial documents showing the payment of amounts between yourself or your dependant and the lender\n- a statutory declaration from yourself or your dependant.\n\nIf you don't provide the right evidence your application will be delayed or not be approved. The following information tells you what these documents need to include.\n\n#### Paid by credit card\n\nWhere you paid for your expense via a credit card, we can only approve the expense amount less any repayments made to the credit card after the payment date of the expense. If your total repayments exceed the cost of the expense, we will be unable to approve any amounts for release.\n\nDue to this your application will need to include statements showing all transactions since the payment of the expense.\n\n#### Invoices, receipts and bank statements\n\nYour application must also include:\n\n- an invoice or quote that includes an itemised list of expenses and their cost\n- a paid invoice, receipt or bank statement that shows the payment of the expense, with the:\n\n- date of payment\n- method of payment (electronic payment, credit card, cash)\n- amount paid\n- payer's details.\n\nWhere you are providing bank statements, you need to ensure that the account holder's name and statement period are visible.\n\n#### Financial documents and statutory declaration\n\nYour application must also include:\n\n- financial documents that include details of the borrowed amount or debt incurred (including bank statements, loan contracts, written agreement, loan statements or repayment schedules), with the following information\n\n- receipt of the borrowed amounts or debt incurred, including the date\n- payments to the provider (or direct payment to the provider from the lender on your or your dependant's behalf), including the date and the amount paid\n- any terms and conditions regarding the amount (including any information about repayments requirements and the charging of interest or fees)\n- intended use of the borrowed amount or debt incurred (including details of any interest or fees that have been charged and repayments that have been made)\n- a statutory declaration from yourself or your dependant with\n\n- the amount borrowed or debt incurred, lender's name and the date received\n- intended use of the borrowed amount or debt incurred\n- the outstanding balance of the borrowed amount that you aren't able to repay by other means\n- details of why you can't make repayments as per the agreed terms\n- details of other funding options (see [condition 4](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/access-on-compassionate-grounds-what-you-need-to-know#Condition4)) you have considered and why they aren't available.\n\n##### Example: repayment of money borrowed from a family to pay for a funeral\n\nJustin makes an application for compassionate release of super to repay money borrowed from his sibling David, that was used to pay for the funeral of his partner Mary.\n\nTo support his eligibility, Justin includes the death certificate for Mary, showing that she passed away 2 years ago. He also provides a quote for $14,200 from a funeral company, showing the itemised costs of their professional fees, the coffin, the death certificate and a celebrant.\n\nTo support the payment of the expense, Justin has provided a receipt from the same funeral company confirming the electronic payment of $14,200. The receipt is dated 2 weeks after the date on the quote.\n\nTo support the borrowed amount, Justin provided the following documents:\n\n- a statutory declaration from Justin advising\n\n- Justin borrowed $15,000 from David 2 years ago to pay for the funeral of Mary, as Justin didn't have the sufficient savings to pay for the expense at the time\n- Justin also advised that he has made 3 repayments over the last 2 years totalling $1,500\n- Justin is unable to make further repayments due to cost-of-living pressures\n- a statutory declaration from David advising\n\n- David lent $15,000 to Justin 2 years ago to pay for the funeral of his wife Mary, via electronic bank transfer\n- David and Justin didn't document any repayment terms, however it was agreed that Justin would repay the full amount to David\n- Justin has made 3 repayments totalling $1,500 since obtaining the loan.\n\nIn this case, we consider Mary a dependant of Justin as they were spouses. The documents provided support that Justin borrowed $15,000 from David to pay for the funeral expenses of Mary. As only $14,200 of the borrowed amount was required for the funeral expense and Justin has repaid $1,500 to David, we can approve a release of up to $12,700 to repay the outstanding balance of the borrowed amount.\n\nEnd of example\n## Evidence requirements\n\nYou must provide [evidence relevant to the specific ground](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/access-on-compassionate-grounds/expenses-eligible-for-release-on-compassionate-grounds) for compassionate release and where relevant to show that someone is your dependant.\n\nIf you don't provide all required evidence your application will be delayed or not be approved.\n\nThe following requirements apply to all the evidence and information that you provide.\n\nIf you submit your application **online**, you need digital copies of the required evidence:\n\n- We accept photos of documents – supported file formats are PDF, gif, jpeg and png.\n- We **don't** accept screen shots of text messages or emails.\n- Our system won't accept more than 20 attachments and 10 MB per attachment.\n\nIf you submit a paper application, you need to ensure you provide copies of your documents. Don't provide original documents as these will not be returned.\n\nWhere your evidence, including quotes and invoices or registered medical practitioner and specialist reports, are written in a language other than English:\n\n- you will need to have it translated\n- the translator must be accredited by the [National Accreditation Authority for Translators and Interpreters (NAATI)External Link](https://www.naati.com.au/).\n\nDon't include images of a disturbing nature to support your application as they're not necessary to assess your application.\n\nWe may carry out checks with your providers to validate evidence provided in your application, including where missing or additional information is required, including contacting service providers to validate invoices, quotes or medical reports.\n\nWhen providing financial statements (for example, from a lender) to support your application, you need to ensure these are on the provider's letterhead and include the account holder’s name and statement period.\n\n### Quotes and invoices\n\nUnder each ground we also need to see evidence of expenses that show the amounts you’re seeking to release from your super account. This can include an itemised quote or an invoice that shows the amount and a description of each component.\n\nInvoices and quotes must:\n\n- include an itemised list of expenses and their respective costs, lump sum quotes or invoices won't be accepted\n- include the provider's name and contact details\n- be on the provider's letterhead\n- be addressed to you, or your dependant if you are applying for them\n- be dated\n\n- no more than 6 months old for unpaid quotes\n- no more than 30 days old for unpaid invoices.\n- be converted to Australian dollars if they're in a foreign currency, at the exchange rate at the time you apply. If we approve your application, we won't recalculate the conversion at the time of approval.\n\nIf the quote or invoice has been paid by a borrowed amount there are no timeframe requirements for the invoice or quote.\n\n## Statutory declarations\n\nSome applications require statutory declarations to be provided as a supporting document. This can be any valid statutory declaration form (Commonwealth, State or Territory), so long as it meets the requirements of the Act it is made under.\n\nYou can make a Commonwealth statutory declaration via the paper form or through your myGov account. To access the Commonwealth statutory declaration form and for guidance on completing this form, see [how to complete a statutory declarationExternal Link](https://www.ag.gov.au/legal-system/statutory-declarations/about-commonwealth-statutory-declarations).","title":""}
+{"_id":"passage_a0JRF000003gMVR2A2/p00390616","text":"## Residential properties a foreign person can buy\n\nFrom 1 April 2025 to 31 March 2027, foreign persons are banned from purchasing established dwellings in Australia (limited exceptions apply). This includes temporary residents purchasing an established dwelling for use as a principal place of residence. Temporary residents can still apply for approval to purchase vacant land or new dwellings.\n\nThe types of residential property that a foreign person can buy in Australia include:\n\n- a [new or near-new dwelling](https://www.ato.gov.au/individuals-and-families/investments-and-assets/foreign-resident-investments/foreign-investment-in-australia/exemption-certificates-for-property-developers#whatisanewdwelling)\n- an established dwelling for redevelopment\n- an off-the-plan property\n- vacant residential land\n- an established dwelling for a foreign company that employs workers from Pacific island countries and Timor-Leste and are required to provide housing for them, including those participating in the [Pacific Australia Labour MobilityExternal Link](https://www.palmscheme.gov.au/) (PALM) scheme.\n\nIf you intend to buy a non-residential asset (including commercial real estate, agricultural land, registrable water interest, business interest or mining production), see [Steps to invest in Australian non-residential assets](https://www.ato.gov.au/individuals-and-families/investments-and-assets/foreign-resident-investments/foreign-investment-in-australia/register-of-foreign-ownership-of-australian-assets/how-a-foreign-investor-registers-non-residential-assets/steps-to-invest-in-australian-non-residential-assets).\n\n## Types of dwellings a foreign person can buy\n\nForeign persons can buy the following types of dwellings.\n\n### New or near new dwelling\n\nA **new or near-new dwelling** is a dwelling that:\n\n- will be, is being, or has been, built on residential land\n- is part of a residential development\n- was previously sold by the developer, but the transaction ultimately failed to settle\n- has not been previously occupied for more than 12 months in total.\n\n### Established dwelling\n\nAn **established dwelling** is an existing dwelling on residential land and is not a new dwelling as described above.\n\n### **Vacant land**\n\n**Vacant land** is land that has no substantive permanent building on it, that:\n\n- can be lawfully occupied by persons, goods, or livestock\n- generally, has not previously had an established dwelling on it.\n\nFor more information, see [Apply to buy residential property as a foreign person](https://www.ato.gov.au/individuals-and-families/investments-and-assets/foreign-resident-investments/foreign-investment-in-australia/residential-property-application-for-foreign-investors).","title":""}
+{"_id":"passage_a0JRF000003emSP2AY/p00389380","text":"If you use information about tax losses in a later tax return – for example, you carry forward a tax loss – you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.\n\nFor more information, see [Taxation Determination TD 2007/2](https://www.ato.gov.au/law/view/document?docid=TXD/TD20072/NAT/ATO/00001) *Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under income tax law?*","title":""}
+{"_id":"passage_a0JRF000003fG3t2AE/p00389778","text":"## Using PAYG instalments to manage your tax\n\nWhether you run your own business or earn investment income, planning ahead for your income tax is important to help you keep a healthy cash flow.\n\nPAYG instalments help you do this, this is how it works.\n\n1. You enter the PAYG instalments system. We may enter you automatically, or you can voluntarily enter.\n2. You make regular payments (instalments) during the year, usually once every 3 months. The amount you pay is based on your business and investment income.\n3. When you lodge your tax return, the PAYG instalments you have paid during the year are offset against your tax, leaving you with little or no tax to pay.\n\nPAYG instalments are different to [PAYG withholding](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding). With PAYG withholding, employers collect tax from the payments they make to their employees, and send it to the ATO, so employees don't have a big tax bill at the end of the year.\n\nThis video explains the difference between PAYG withholding and PAYG instalments. It also explains how PAYG instalments can help you avoid a large tax bill when you lodge your tax return.\n\n**Media:** Pay as you go instalments - Tax basics for small business\n\n[https://tv.ato.gov.au/ato-tv/media?v=bi9or7odswuq4cExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bi9or7odswuq4c) (**Duration:** 02:44)\n\n## Automatic entry to PAYG instalments\n\nIf you lodge a tax return with instalment income above the entry threshold, you may be required to pay PAYG instalments.\n\n### Entry thresholds\n\nWe work out whether you need to pay PAYG instalments based on information you reported in your latest tax return.\n\nOne of the things we look at is your [instalment income](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/calculate-your-payg-instalments/instalment-income). This is your gross business and investment income, excluding GST and any capital gains.\n\nIf you are an **individual (including a sole trader) or trust**, you will automatically enter the PAYG instalments system if you have all of the following:\n\n- instalment income from your latest tax return of $4,000 or more\n- tax payable on your latest notice of assessment of $1,000 or more\n- estimated (notional) tax of $500 or more.\n\nA **company or super fund** will automatically enter the PAYG instalments system if any of the following apply; it:\n\n- has instalment income from its latest tax return of $2 million or more\n- has estimated (notional) tax of $500 or more\n- is the head company of a consolidated group.\n\n### How you start paying instalments\n\nWe will let you know when you have entered the PAYG instalments system.\n\n- If you are registered for myGov with a linked ATO account, you will receive a letter in your myGov Inbox.\n- If you have Online services for business, or Standard Business Reporting software, you will receive your instalment information 21 days before the due date.\n- If none of the above applies, you will receive a paper letter in the mail.\n\nIf we have your mobile phone number we will also remind you via SMS.\n\nWhen we contact you, we will let you know:\n\n- when to pay\n- how often to pay – this depends on your circumstances, but most people pay quarterly\n- how much to pay, including your options for calculating your instalments.\n\nYou will start making payments once we send you an activity statement or instalment notice.\n\n## Voluntary entry to PAYG instalments\n\nIf you are new to business, or you think you will earn business and investment income over the [threshold](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments#Entrythresholds), it's a good idea to voluntarily enter PAYG instalments.\n\nPrepaying your tax through PAYG instalments will help you smooth out your cashflow and avoid a large tax bill when you lodge your tax return.\n\n### How to start voluntary PAYG instalments\n\nTo get started with voluntary PAYG instalments:\n\n1. [Estimate the amount of tax to pay](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments#Step1Estimatetheamountoftaxtopay)\n2. [Make a request to enter the PAYG instalments system](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments#Step2MakearequesttoenterthePAYGinstalmen)\n3. [Pay your instalments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments#Step3Payyourinstalments)","title":""}
+{"_id":"passage_a0JRF000003h6bV2AQ/p00391195","text":"### Ineligible contributions\n\nThe following contributions are **not** eligible:\n\n- contributions made before 1 July 2017\n- super guarantee (SG) contributions made by your employer\n- contributions to defined benefit interests or constitutionally protected funds\n- mandated employer or member contributions made for you under an award or industrial agreement\n- member contributions made for you by your spouse, parent or other friends or family\n- amounts you receive under a contributions-splitting arrangement\n- government co-contributions\n- contributions under a structured settlement or personal injury order\n- amounts contributed to super as part of the small business CGT concessions\n- amounts transferred from a KiwiSaver scheme that are Australian-sourced amounts or returning New Zealand-sourced amounts\n- [applicable fund earnings](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/transfer-from-a-foreign-super-fund-to-an-australian-super-fund) from a foreign fund transfer you elect to include in the receiving fund's assessable income\n- contributions that are mandatory under a state or territory law or the rules of a fund\n- excess concessional or non-concessional contributions, which are not eligible even if they otherwise would have been before they were identified to be in excess of the relevant contribution cap for the applicable income year\n- COVID-19 early release of superannuation re-contributions.\n\nIf there are any of these amounts in your request for a FHSS determination, your request may be delayed or cancelled.","title":""}
+{"_id":"passage_a0JRF000003cc492AA/p00387230","text":"By including your spouse's income in your tax return, we can work out if you’re entitled to specific offsets, rebates or reductions. It also lets us know if you're liable for the Medicare levy surcharge. If you don't include your spouse’s income, we may need to amend your tax return which may leave you with a debt.\n\nA spouse is anyone you've lived with in a genuine domestic relationship at any point during the year.  This includes de facto and same-gender couples.  Even if you're not married, you may have a spouse for tax purposes.\n\n### Do I have to include my spouse's income in my tax return?\n\nYes, even if you keep your tax affairs separate from your spouse, you'll still need to provide us with their income information. We need this information to work out whether:\n\n### What spouse income information do I include?\n\nYou'll need to include your spouse's taxable income. Check through the spouse income labels on your tax return to see if there are other fields that apply to your spouse's income.\n\n### What if my spouse is a foreign resident for tax purposes?\n\nEven if your spouse is a foreign resident for tax purposes, you need to declare that you have a spouse. You also need to include their global income in the spouse income disclosures on your tax return.\n\n### What if I don't know my partner's income details?\n\nIf you can't access your partner’s income details, you can make a reasonable estimate of these amounts.  You can use information like:\n\n### What if I separated from my spouse or started a new relationship?\n\nRelationship breakdowns, while unfortunate, are a reality we’ve accounted for when it comes to lodging your return.\n\nIf you’ve **separated from your spouse** during the financial year and no longer live together, here’s what to do:\n\nIf you had **more than one spouse** during the financial year, complete this section with the details of your latest spouse. For example, the spouse you were in a relationship with on 30 June.","title":""}
+{"_id":"passage_a0JRF000003dVwf2AE/p00388131","text":"## Compulsory repayment thresholds and rates\n\nThe repayment thresholds and marginal rates are updated annually for the compulsory repayment of:\n\n- Higher Education Loan Program (HELP)\n- VET Student Loan (VSL)\n- Student Financial Supplement Scheme (SFSS)\n- Student Start-up Loan (SSL)\n- ABSTUDY Student Start-up Loan (ABSTUDY SSL)\n- Australian Apprenticeship Support Loan (AASL) – previously known as Trade Support Loan (TSL).\n\nFor more information, see:\n\n- [Study and training loan repayment calculator](https://www.ato.gov.au/calculators-and-tools/study-and-training-loan-repayment-calculator)\n- [Study and training support loans](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans)\n\n## Current repayment thresholds and rates\n\nAll study and training loans are covered by one set of thresholds and rates. From the 2025–26 income year, compulsory repayments are calculated using marginal rates. Your compulsory repayment is only calculated on income above the minimum threshold.\n\nIf your repayment income is $179,286 or more, your compulsory repayment will continue to be 10% of your total repayment income. This is to ensure you are not worse off because of the shift to marginal rates.\n\nFor more information on this change, see [Study and training loans – what's new](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/study-and-training-loans-what-s-new).\n\nThe hierarchy in which compulsory repayments are applied to study and training loans is:\n\n- HELP\n- VSL\n- SFSS\n- SSL\n- ABSTUDY SSL\n- AASL.\n\n**Note:** Repayment income (RI) is taxable income plus any:\n\n- total net investment loss (which includes net rental losses)\n- total reportable fringe benefits amounts\n- reportable super contributions\n- exempt foreign employment income.\n\nTable 1: 2025–26 repayment thresholds and rates\n\nRepayment income (RI)\n\nRepayment amount on this income\n\n$0 – $67,000\n\nNil\n\n$67,001 – $125,000\n\n15c for each $1 over $67,000\n\n$125,001 – $179,285\n\n$8,700 plus 17c for each $1 over $125,000\n\n$179,286 and over\n\n10% of your total repayment income\n\n## Previous repayment thresholds and rates\n\nCompulsory repayments for 2024–25 and earlier years were based on total repayment income.\n\nTable 2: 2024–25 repayment income thresholds and rates\n\nRepayment income (RI) thresholds\n\nRepayment rate (% of repayment income)\n\nBelow $54,435\n\nNil\n\n$54,435–$62,850\n\n1.0%\n\n$62,851–$66,620\n\n2.0%\n\n$66,621–$70,618\n\n2.5%\n\n$70,619–$74,855\n\n3.0%\n\n$74,856–$79,346\n\n3.5%\n\n$79,347–$84,107\n\n4.0%\n\n$84,108–$89,154\n\n4.5%\n\n$89,155–$94,503\n\n5.0%\n\n$94,504–$100,174\n\n5.5%\n\n$100,175–$106,185\n\n6.0%\n\n$106,186–$112,556\n\n6.5%\n\n$112,557–$119,309\n\n7.0%\n\n$119,310–$126,467\n\n7.5%\n\n$126,468–$134,056\n\n8.0%\n\n$134,057–$142,100\n\n8.5%\n\n$142,101–$150,626\n\n9.0%\n\n$150,627–$159,663\n\n9.5%\n\n$159,664 and above\n\n10%\n\nTable 3: 2023–24 repayment income thresholds and rates\n\nRepayment income (RI)\n\nRepayment rate\n\nBelow $51,550\n\nNil\n\n$51,550–$59,518\n\n1.0%\n\n$59,519–$63,089\n\n2.0%\n\n$63,090–$66,875\n\n2.5%\n\n$66,876–$70,888\n\n3.0%\n\n$70,889–$75,140\n\n3.5%\n\n$75,141–$79,649\n\n4.0%\n\n$79,650–$84,429\n\n4.5%\n\n$84,430–$89,494\n\n5.0%\n\n$89,495–$94,865\n\n5.5%\n\n$94,866–$100,557\n\n6.0%\n\n$100,558–$106,590\n\n6.5%\n\n$106,591–$112,985\n\n7.0%\n\n$112,986–$119,764\n\n7.5%\n\n$119,765–$126,950\n\n8.0%\n\n$126,951–$134,568\n\n8.5%\n\n$134,569–$142,642\n\n9.0%\n\n$142,643–$151,200\n\n9.5%\n\n$151,201 and above\n\n10%\n\nTable 4: 2022–23 repayment income thresholds and rates\n\nRepayment income (RI)\n\nRepayment rate\n\nBelow $48,361\n\nNil\n\n$48,361–$55,836\n\n1.0%\n\n$55,837–$59,186\n\n2.0%\n\n$59,187–$62,738\n\n2.5%\n\n$62,739–$66,502\n\n3.0%\n\n$66,503–$70,492\n\n3.5%\n\n$70,493–$74,722\n\n4.0%\n\n$74,723–$79,206\n\n4.5%\n\n$79,207–$83,958\n\n5.0%\n\n$83,959–$88,996\n\n5.5%\n\n$88,997–$94,336\n\n6.0%\n\n$94,337–$99,996\n\n6.5%\n\n$99,997–$105,996\n\n7.0%\n\n$105,997–$112,355\n\n7.5%\n\n$112,356–$119,097\n\n8.0%\n\n$119,098–$126,243\n\n8.5%\n\n$126,244–$133,818\n\n9.0%\n\n$133,819–$141,847\n\n9.5%\n\n$141,848 and above\n\n10%\n\nTable 5: 2021–22 repayment income thresholds and rates\n\nRepayment income (RI)\n\nRepayment rate\n\nBelow $47,014\n\nNil\n\n$47,014–$54,282\n\n1.0%\n\n$54,283–$57,538\n\n2.0%\n\n$57,539–$60,991\n\n2.5%\n\n$60,992–$64,651\n\n3.0%\n\n$64,652–$68,529\n\n3.5%\n\n$68,530–$72,641\n\n4.0%\n\n$72,642–$77,001\n\n4.5%\n\n$77,002–$81,620\n\n5.0%\n\n$81,621–$86,518\n\n5.5%\n\n$86,519–$91,709\n\n6.0%\n\n$91,710–$97,212\n\n6.5%\n\n$97,213–$103,045\n\n7.0%\n\n$103,046–$109,227\n\n7.5%\n\n$109,228–$115,781\n\n8.0%\n\n$115,782–$122,728\n\n8.5%\n\n$122,729–$130,092\n\n9.0%\n\n$130,093–$137,897\n\n9.5%\n\n$137,898 and above\n\n10%\n\nTable 6: 2020–21 repayment income thresholds and rates\n\nRepayment income (RI)\n\nRepayment rate\n\nBelow $46,620\n\nNil\n\n$46,620–$53,826\n\n1.0%\n\n$53,827–$57,055\n\n2.0%\n\n$57,056–$60,479\n\n2.5%\n\n$60,480–$64,108\n\n3.0%\n\n$64,109–$67,954\n\n3.5%\n\n$67,955–$72,031\n\n4.0%\n\n$72,032–$76,354\n\n4.5%\n\n$76,355–$80,935\n\n5.0%\n\n$80,936–$85,792\n\n5.5%\n\n$85,793–$90,939\n\n6.0%\n\n$90,940–$96,396\n\n6.5%\n\n$96,397–$102,179\n\n7.0%\n\n$102,180–$108,309\n\n7.5%\n\n$108,310–$114,809\n\n8.0%\n\n$114,810–$121,698\n\n8.5%\n\n$121,699–$128,999\n\n9.0%\n\n$129,000–$136,739\n\n9.5%\n\n$136,740 and above\n\n10%\n\nFrom 1 July 2019, all study and training loans are covered by one set of thresholds and rates.\n\nTable 7: 2019–20 repayment income thresholds and rates\n\nRepayment income (RI)\n\nRepayment rate\n\nBelow $45,881\n\nNil\n\n$45,881–$52,973\n\n1.0%\n\n$52,974–$56,151\n\n2.0%\n\n$56,152–$59,521\n\n2.5%\n\n$59,522–$63,092\n\n3.0%\n\n$63,093–$66,877\n\n3.5%\n\n$66,878–$70,890\n\n4.0%\n\n$70,891–$75,144\n\n4.5%\n\n$75,145–$79,652\n\n5.0%\n\n$79,653–$84,432\n\n5.5%\n\n$84,433–$89,498\n\n6.0%\n\n$89,499–$94,868\n\n6.5%\n\n$94,869–$100,560\n\n7.0%\n\n$100,561–$106,593\n\n7.5%\n\n$106,594–$112,989\n\n8.0%\n\n$112,990–$119,769\n\n8.5%\n\n$119,770–$126,955\n\n9.0%\n\n$126,956–$134,572\n\n9.5%\n\n$134,573 and above\n\n10%","title":""}
+{"_id":"passage_a0JRF000003dXVR2A2/p00388155","text":"## Concessional contributions\n\nConcessional contributions include:\n\n- employer contributions, such as\n\n- employer super guarantee contributions and any superannuation guarantee charge (SGC) shortfall amounts we've collected from your employer where they failed to pay contributions on time for you\n- salary sacrificing contributions\n- additional concessional contributions your employer makes as part of an agreement with you\n- other amounts paid by your employer from your before-tax income to your super fund, such as administration fees and insurance premiums\n- personal contributions you're entitled to claim as an income tax deduction\n- notional taxed contributions to [defined benefit and constitutionally protected funds](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/super-contributions-to-defined-benefit-and-constitutionally-protected-funds))\n- [unfunded defined benefit contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/super-contributions-to-defined-benefit-and-constitutionally-protected-funds#Unfundeddefinedbenefitfunds)\n- some amounts allocated from a fund reserve (amounts that form part of the fund's assessable income)\n- amounts transferred from a [foreign super fund](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/transfer-from-a-foreign-super-fund-to-an-australian-super-fund) where the assessable amount is greater than the vested amount at time of transfer\n- for people over 18, contributions by\n\n- a spouse living separately and apart from you on a permanent basis\n- a parent, child, relative or friend if you are 18 years old or older\n- any other third party other than an employer or your spouse.\n\nConcessional contributions are taxed in your super fund at the rate of 15%, payable by the fund.\n\n## Non-concessional contributions\n\nNon-concessional contributions include:\n\n- contributions you or your employer makes from your after-tax income\n- contributions your spouse makes to your super fund, unless\n\n- your spouse is contributing for you as your employer\n- you're separated or permanently living apart from your spouse, in which case a contribution they make for you is a third-party concessional contribution\n- [personal contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/personal-super-contributions) you have **not** claimed and been allowed as an income tax deduction\n- excess concessional (before-tax) contributions you have **not** [released from your super fund](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/concessional-contributions-cap)\n- contributions exceeding the lifetime CGT cap allowable under the [small business CGT exemptions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/understanding-concessional-and-non-concessional-contributions#SuperCGTcapelectionamountsundersmallbusi)\n- retirement benefits you withdraw from a super fund and 're-contribute' to super and which you have **not** claimed or been allowed as an income tax deduction\n- contributions made for you by someone else if you are under 18 **and** the contributor is not your employer\n- most [transfers from foreign super funds](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/transfer-from-a-foreign-super-fund-to-an-australian-super-fund) (including [New Zealand KiwiSaver contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/foreign-super-funds/trans-tasman-retirement-savings-transfers)), not including amounts in your fund's assessable income\n- life insurance premiums and fund fees (in some cases).\n\n### Exclusions from non-concessional contributions\n\nThe following types of contributions do **not** count towards your non-concessional contributions cap:\n\n- personal injury payments (also known as [structured settlement contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/understanding-concessional-and-non-concessional-contributions#Personalinjuryelectionamounts))\n- contributions you chose to count towards your [capital gains tax (CGT) cap](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/understanding-concessional-and-non-concessional-contributions#SuperCGTcapelectionamountsundersmallbusi) that have **not exceeded** your lifetime limit\n- [downsizer contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/downsizer-super-contributions) from the proceeds of selling your home\n- [re-contribution of COVID-19 early release superannuation amounts](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/re-contributing-covid-19-early-release-super-withdrawals).\n\nThese types of contributions are only excluded if you meet all the relevant conditions. You must specifically ask your fund to exclude them, by providing it with the relevant form before or when you contribute (for details, see the links above).\n\nGovernment co-contributions are also not counted as non-concessional contributions. You don't have to take any action for these to be excluded.\n\n#### Personal injury election amounts\n\nYou may be able to exclude personal contributions arising from a personal injury payment from counting towards your non-concessional contributions cap.\n\nYou can only use the exclusion for the part of the payment that is compensation or damages for your personal injury.\n\nYou must advise your fund that you are choosing (electing) to exclude the amount before or when you make the contribution. Otherwise, your fund must report the amounts as personal contributions.\n\nYour election can be made in the approved [Contributions for personal injury election](https://www.ato.gov.au/forms-and-instructions/superannuation-contributions-for-personal-injury) form, although this is not compulsory. However, you must provide your fund with all the information required by this form.\n\nThere is no limit on the amount you can claim as a personal injury election amount, but there are strict conditions on the contributions you can claim the exclusion for.\n\nIf the exclusion doesn't apply to you, the amount will be treated as a normal personal contribution and count towards your non-concessional contributions cap.\n\n**Example: personal injury compensation**\n\nBruce was injured in a car accident. As a result of his injury, he is not expected to ever work again in a role for which he is suited through education, training or experience. Two qualified medical practitioners have certified this.\n\nThree years after his injury, Bruce receives $2 million from the insurers as a structured settlement of his claim. This amount is comprised of:\n\n- $1.5 million compensation for personal injury\n- $500,000 compensation for medical costs.\n\nBruce contributes $1.75 million to his super within 90 days of receiving the payment. He uses the remaining $250,000 to pay the debts he accrued for hospital stays and physiotherapy as a result of his injury.\n\nBruce can only choose (elect) to exclude $1.5 million of the contribution (the part of the payment which was compensation for the personal injury) from being counted towards his non-concessional cap. The remaining $250,000 will count towards his non-concessional cap.\n\nEnd of example\n#### Super CGT cap election amounts under small business exemptions\n\nYou may be able to choose (elect) to exclude personal contributions of amounts arising from a capital gains tax (CGT) event from counting towards your non-concessional contributions cap.\n\nTo make this election, the amount you contribute must arise from a capital gains event or a 'CGT look-through earnout right' and meet the requirements of either the:\n\n- [small business 15-year exemption](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/incentives-and-concessions/small-business-cgt-concessions/small-business-15-year-exemption)\n- [small business retirement exemption](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/incentives-and-concessions/small-business-cgt-concessions/small-business-retirement-exemption).\n\nIf you contribute an amount arising from a CGT event to your super, it will not count towards your non-concessional contributions cap if you notify your fund using the [Capital gains tax cap election](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-cap-election) form.\n\nThere is a lifetime cap on the amount you can contribute to your super under these exemptions without counting towards for non-concessional contributions cap (see [CGT cap election](https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-cap-election)).\n\nYou must provide this form to your fund before or at the time you make the contribution. Otherwise, your fund must report the amount as a personal contribution.\n\nUse of this approved* election* form is not compulsory. However, you must provide your fund with all the information required by the form.\n\nIf the exclusion criteria for either exemption does not apply to you, the amount will be treated as a normal personal contribution. It will count towards your non-concessional contributions cap.\n\n**Example: super CGT cap election**\n\nBarry owned a small business for 33 years. When he was 72 years old, he started selling his business assets in preparation for retirement. He is eligible to use the small business 15-year exemption.\n\nIn the 2022–23 income year, Barry contributed to his super fund $550,000 of the capital proceeds he received from selling some of his eligible assets. At the same time, he notified his fund that he was electing to use $550,000 of his super CGT cap, under the small business 15-year exemption. This was to exclude the contribution from counting towards his non-concessional contributions for the year.\n\nBarry's super CGT cap for the year is $1,650,000, reduced to $1,100,000 after his election to use $550,000 of his super CGT cap.\n\nEnd of example\n## Compensation arising from financial advice\n\nYour super fund may receive compensation from a financial services provider if you received inappropriate financial advice, or if you paid fees but did not receive advice. The compensation may be a refund or reimbursement of adviser fees, or an amount to compensate for lost earnings. It may also include an interest component.\n\nThe compensation may count towards your contribution caps depending on your circumstances.\n\nIf the finance service provider paid the compensation to your super fund without your direction, the compensation will be a **concessional** contribution in the financial year the fund receives it.\n\nThe compensation will be a **non-concessional** contribution in the financial year it is received by the fund if it has been paid to your super fund and allocated to your account and either of the following applies:\n\n- the compensation was paid to you, and you subsequently contributed it as a personal contribution to your super fund\n- you directed the financial service provider to pay the compensation that was payable to you into your super fund.\n\nHowever, it will be a concessional contribution to the extent that it is covered by a valid and acknowledged notice of intent to claim a deduction and is allowable as a deduction.\n\nFor technical guidance, see [Super contribution caps](https://www.ato.gov.au/law/view/document?DocID=AFS/SuperContributionCaps/00001&PiT=99991231235958) in our Legal Database.\n\n## First home super saver scheme contributions\n\nYou can contribute an amount up to your existing superannuation contribution caps into your super fund to save for your first home under the [first home super saver](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme) (FHSS) scheme.\n\nYour FHSS contributions count towards your contribution caps for the year they were made. If you exceed your caps (even if you made contributions only for the purposes of the FHSS scheme), you could pay more tax. This will be separate to any tax you pay on the FHSS release amount.","title":""}
+{"_id":"passage_a0JRF000003i1pu2AA/p00391884","text":"## How capital gains or losses apply\n\nWhen you sell or dispose of a rental property you may make a capital gain or loss.\n\nA capital gain or loss is the difference between what it cost you to obtain and improve the property (the cost base) and the amount you receive when you dispose of it.\n\nIf you make a:\n\n- net capital gain in an income year, you'll generally be liable for capital gains tax (CGT)\n- net capital loss, you can carry it forward and deduct it from your capital gains in later years.\n\nUse our calculator or steps to [calculate your CGT](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt).\n\nTo see how to enter your capital gains or losses when completing your tax return in myTax, watch our video on [how to complete myTax when you have sold a rental propertyExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bi9or7odtggh5r).\n\nYou may be entitled to a part of full [main residence exemption](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/eligibility-for-main-residence-exemption) if you lived in the property before renting it out, see [Treating your former home as main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence).\n\nYou will be entitled to a part main residence exemption if you [rented out part of your home](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business).\n\nFor a summary fact sheet with common scenarios about CGT and eligibility for the main residence exemption, go to the ATO Publication Ordering Service to download [Capital gains tax and the main residence exemption](https://iorder.com.au/publication/publicationdetails.aspx?pid=75488-04.2025).\n\nIf you are a co-owner of the property, you'll make a capital gain or loss in accordance with your ownership interest in the property.\n\nThe application of CGT depends on when you acquired the property:\n\n- If you acquired the property before 20 September 1985 then it will only apply to certain capital improvements made after that date.\n- If you acquired the property after 20 September 1985, then it will apply to the entire property.\n\n**Watch:** Selling your rental property\n\n**Media:** Selling your rental property\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgxExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgx) (**Duration:** 2:46)\n\n**Watch:** Selling a rental property that was your home\n\n**Media:** Selling a rental property that was your home\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgqExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgq) (**Duration:** 3:17)\n\nFor a summary fact sheet with common scenarios about the CGT on sale of property, go to the ATO Publication Ordering Service to download [Capital gains tax on the sale of property](https://iorder.com.au/publication/publicationdetails.aspx?pid=75443-04.2025).\n\n## Working out your costs\n\nThe [cost base and reduced cost base](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/cost-base-of-asset) of a property include the amount you paid for it together with some incidental costs associated with acquiring, holding and disposing of it (such as legal fees, stamp duty and real estate agent’s commissions).\n\nIt does not include amounts that you have claimed or could claim as a tax deduction.\n\nWhen you sell your rental property, the time of the event (the time at which you make a capital gain or loss) is when you enter into the contract, not when you settle.\n\n### Example: capital gains on the sale of a co-owned rental property\n\nKarl and Louisa bought a residential rental property in November 2016 for a purchase price of $750,000.\n\nThey incur costs of purchase, including stamp duty and legal fees, of $30,000.\n\nAfter purchase they improved the property by constructing a fence for $6,000.\n\nOver the 7 years of ownership of the property, they claimed $5,000 in decline in value deductions and $35,000 in capital works deductions. (If they had purchased the property after 9 May 2017 then there would be no deductions for the decline in value of any second-hand depreciating assets.)\n\nIn June 2025, they entered into a contract to sell the property, and in November 2025 it was sold for $900,000. Their costs of sale, including legal fees, were $10,000.\n\n**A + B + C + D − E - F = Cost base**\n\nWhere:\n\n- A is the purchase price\n- B is the costs of the purchase\n- C is the cost of property improvements\n- D is the costs of sale\n- E is the capital works deductions\n- F is the total amount of decline in value deductions claimed over the period of ownership of the rental property\n\n$750,000 + $30,000 + $6,000 + $10,000 − $35,000 − $5,000 = $756,000\n\nThe capital gains outcomes are:\n\nProceeds = $900,000\n\n**Proceeds − Cost base = Capital gain outcome**\n\n$900,000 − $756,000 = $144,000\n\nAs the property has been owned for more than a year, Karl and Louisa can apply  the 50% discount and reduce the capital gain to $72,000.\n\nKarl and Louisa owned the property jointly. This means that they each have a capital gain of $36,000 which they will need to put in their tax return for the year in which the contract to sell the property was made, being the 2024–25 year.\n\nEnd of example\nFor more information on working out your costs, see [Rental properties guide](https://www.ato.gov.au/forms-and-instructions/rental-properties-2025).\n\n## Capital expenses\n\nExpenses you incur when purchasing, acquiring, selling, or disposing of your rental property are capital expenses. You may be able to include capital expenses when calculating the 'cost base' of your property. This can help you reduce the amount of CGT you pay when you sell your property.\n\nCapital expenses include:\n\n- conveyancing costs paid to a conveyancer or solicitor\n- title search fees\n- valuation fees (when it is a private valuation conducted by your solicitor)\n- stamp duty on the transfer of the property\n- initial repairs.\n\n### Example: capital expenses\n\nStephen recently purchased a rental property that needed repairs before the tenants moved in. He paid tradespeople to:\n\n- repaint dirty walls\n- replace broken hardwired light fittings\n- repair doors on 2 bedrooms.\n\nThe house was also treated for damage by white ants.\n\nBecause Stephen incurred these expenses to make the property suitable for rent (not while he was using the property to generate rental income), these expenses are capital expenses and are added to the cost base of the property.\n\nEnd of example\n## GST on rental properties\n\nGenerally, the sale of existing residential premises is input taxed, that is, the sale price doesn't include GST. This means:\n\n- you can't claim GST credits on any costs associated with buying or selling\n- GST does not apply to the rental payments you receive.\n\nHowever, if you [build new residential premises](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/property-development-building-and-renovating/building-and-construction-residential-premises) for sale, you may:\n\n- be liable for GST on the sale ([at settlement](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-at-settlement))\n- need to [register for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-and-property) depending on your turnover.\n\nIf you do need to register for GST, you may also be entitled to GST credits on construction and sale costs, even if the premises have been rented for a period before being sold.\n\nFor more information, see [GST and residential property](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-and-residential-property).\n\n## Foreign resident capital gains withholding\n\nForeign resident capital gains withholding (FRCGW) may apply when selling your rental property to a foreign resident.\n\nFor more information, see [Foreign resident capital gains withholding](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding).","title":""}
+{"_id":"passage_a0JRF000003iAEr2AM/p00391991","text":"## Things that show your rental property is available\n\nYour property is available for rent where you either have:\n\n- a tenant renting the property\n- made genuine effort to\n- advertise the property in ways that give it broad exposure to possible tenants\n- have conditions that are not so restrictive that tenants are likely to rent the property.\n\nWhere you rent out property or it is genuinely available for rent, you can [claim for expenses](https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses) you incur. There are also some [rental expenses you can't claim](https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/how-to-claim-rental-expenses#ato-Expensesyoucantclaim).\n\n## Things that show your rental property is not available\n\nThings that may show a property isn't genuinely available for rent include:\n\n- it's advertised in ways that limit its exposure to potential tenants – for example, the property is only advertised\n- at your workplace\n- by word of mouth\n- on restricted social media groups\n- outside annual holiday periods when the likelihood of it being rented out is very low\n- the location, condition of the property, or accessibility of the property mean that it's unlikely tenants will seek to rent it\n- you place unreasonable or stringent conditions on renting out the property that restrict the likelihood of the property being rented out, such as\n- setting the rent above the rate of comparable properties in the area\n- placing a combination of restrictions on renting out the property – for example, requiring prospective tenants to provide references for short holiday stays and having conditions like 'no children' and 'no pets'\n- you refuse to rent out the property to interested people without adequate reasons.\n\nThese things generally show you:\n\n- don't have a genuine intention to earn rental income from the property\n- may have other purposes, such as using it or reserving it for personal use.\n\nCheck our examples of factors that generally indicate the [property is not genuinely available to rent](https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses?page=4#Isthepropertygenuinelyavailableforrent).","title":""}
+{"_id":"passage_a0JRF000003iHg92AE/p00392070","text":"## Understanding property sales\n\nProperty sales (including subdivided land) that are part of a property development business will be treated as ordinary income.\n\nIn other instances, when you sell property that is not part of a property development business, even if it includes your family home, you need to understand when:\n\n- the proceeds from the sale of the property are treated as ordinary income or a capital gain\n- an activity is considered to be carrying on an enterprise for **ABN** and **GST** purposes.\n\n### Income or capital\n\nYour purpose when you enter into an arrangement to purchase, develop or sell the property determines if gains or losses are a capital gain or ordinary income.\n\nYour purpose may:\n\n- include holding the property to derive rental income and to sell for a profit (multiple purpose)\n- occur several years after you acquired the property\n- change throughout your ownership period.\n\n#### Example: acquiring property to sell and rent (multiple purpose)\n\n##### Scenario\n\nDean acquires a block of land with the intention to subdivide into smaller lots, develop properties for lease and potentially sell the properties in the future under the right market conditions. Dean is a savvy business person, who has run several businesses previously and is experienced in property development.\n\nThe loan application outlines the different possible uses for the property, including sale and leasing of the properties.\n\nUpon completion, the properties are leased until an opportunity arises to sell at a price that maximises profits.\n\n##### General principles\n\nDean may enter into a property development project with a dominant and secondary purpose.\n\nThe profit-making purpose by sale need not be the dominant purpose.\n\nLand can still be trading stock where the land is held for more than one purpose (section 70-10 ITAA 1997).\n\nFor an asset to be trading stock there must be a 'substantial purpose' of sale at a profit.\n\nThe nature of Dean’s business and history of profit-making activities is taken into account.\n\nEnd of example\nFor a more detailed example on acquiring properties for multiple purposes, see example 7 in our [Legal database](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales&PiT=99991231235958).\n\nThe tax outcome depends on whether the disposal was:\n\n- a simple realisation of the property – the gain or loss is a capital gain or loss\n- a disposal undertaken as either part of a:\n\n- business – the money received is assessable income of the business (see more about issues arising from being in a development [business](https://www.ato.gov.au/businesses-and-organisations/starting-registering-or-closing-a-business/starting-your-own-business/are-you-in-business))\n- profit-making undertaking – the net profit is assessable income.\n\nIt's likely that any gain will be a profit for income tax purposes and not just a capital gain if your activities leading up to a sale look like either:\n\n- a commercial transaction\n- part of an arrangement to make a profit beyond the appreciation in the value of the land only.\n\n#### Example: simple realisation of property\n\n##### Scenario\n\nBlewit purchases a large parcel of land which he uses to conduct a horse training business.\n\nDue to personal health issues and increasing debt, Blewit decides to subdivide the land and sell the lots.\n\nThe subdivision works are minimal to meet council requirements.\n\nA property developer is engaged by Blewit to help with the subdivision process and Blewit has minimal involvement with the subdivision process.\n\nAll lots of vacant land were sold.\n\n##### General principles\n\nProceeds are assessable on capital account, unless it can be determined that Blewit is carrying on a business or undertaking a profit-making scheme.\n\nIndicators that support activities amount to the mere realisation of a capital asset:\n\n- minimal works to meet council requirements\n- landowner’s minimal degree of involvement in the subdivision\n- land wasn't purchased with an intention to resell at profit\n- small scale and low complexity\n- Blewit has no experience or history of property development.\n\nEnd of example\nFor more detailed examples on whether the disposal of subdivided land is the simple realisation of the property, see examples 5 and 6 in our [Legal database](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales&PiT=99991231235958).\n\nIf property is purchased as a capital asset, and there is a change in intention, the ultimate overall gain should be split between a capital gain and ordinary income.\n\nIt is only the net profit you make from your profit-making undertaking that will be assessable as ordinary income. Any capital gains will be assessed under the capital gains tax (CGT) rules.\n\n### GST consequences\n\nYou may have GST obligations and entitlements if you sell property:\n\n- with the intention of making a profit\n- while carrying on a business\n- as part of a business or commercial transaction.\n\nWhere the gain or loss on the sale is considered to be ordinary income for income tax purposes, the sale will be:\n\n- part of an enterprise for GST purposes\n- included in calculating your [turnover for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst) registration purposes\n- subject to GST if you exceed the [GST registration threshold](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst) or are otherwise already registered for GST.\n\nWhere the gain or loss on the sale is considered a capital gain, you may still have GST consequences on the sale if you:\n\n- used the land in an enterprise you were carrying on – the sale of the property will be a sale undertaken as part of that enterprise\n- are registered or required to be registered for GST – your sale may be subject to GST.\n\nIf your gain or loss is capital because you merely realised the property value and didn't use the land in an enterprise, your sale will **generally not be subject to GST**.\n\nIf you are required to pay GST, you can claim a credit for any GST included in the price you pay for things you purchased to make the sale. You must be registered for GST to claim a credit.\n\n## Factors to consider\n\nWhen you acquire the property as a home, farm or other capital asset, your purpose and the steps you take to sell the property determines whether the gain for income tax purposes is either:\n\n- a capital gain\n- ordinary income from a profit-making undertaking.\n\nThe following factors will help you work out the tax treatment:\n\n- [type of entity making the sale ](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Thenatureoftheentityundertakingtheoperat)\n- [types of activities you're involved in](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Thenatureandscaleofotheractivitiesundert)\n- [costs incurred prior to the sale](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Thecostsincurredpriortothesale)\n- [complexity and steps undertaken](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Thecomplexityandstepsundertaken)\n- [parties and phases involved](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Themannerinwhichtheoperationortransactio)\n- [your relationship to other parties involved in the sale ](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Yourrelationshiptootherpartiesinvolvedin)\n- [your purpose in buying the land](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Yourpurposeinbuyingtheland)\n- [timing and steps undertaken for the sale](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/tax-consequences-on-sales-of-property#Thetimingandstepsundertakenforthesale)\n\nThis information is a guide only and provides additional detail in general terms for each of the factors in [Taxation Ruling 92/3](https://www.ato.gov.au/law/view/document?DocID=TXR/TR923/NAT/ATO/00001&PiT=99991231235958) *Income tax: whether profits on isolated transactions are income*.\n\nWhen considering the income tax and GST implications of your property sale, it is important to **weigh all the factors** together and not consider them in isolation.\n\n### The type of entity making the sale\n\nTo help determine if the property sale was commercial in nature and what the tax consequences are, consider the:\n\n- type of entity involved in your property sale\n- reasons for undertaking it.\n\nRegardless of your structure, you are more likely to be carrying on a commercial business deal when you:\n\n- engage a developer to carry out a development activity for a fee\n- share in the profits from the sales with the developer.\n\nA property sale is more likely to be a **capital gain** if you:\n\n- are an individual and the sale was driven by personal reasons - for example, a simple land subdivision and sale of part of land you no longer need\n- don't have a history as a developer\n- own or control a business and it doesn't carry out any land dealing or development activities.\n\nA property sale is more likely to be **ordinary income** if a business entity (such as a partnership, trust, company) is established, acquires property with the intention of making a profit and enters into a property development.\n\n### The types of activities you're involved in\n\nThe types of activities you are involved in (not including the property sale in question) can help to determine if the activity was part of a profit-making undertaking.\n\nThe sale of the property is more likely to be a **capital gain** if you:\n\n- aren't engaged in business, or your business activities aren't related to property development or property transactions\n- haven't previously been involved in commercial property transactions or developments in any capacity\n- originally acquired the land primarily for investment purposes only, such as to earn rental income.\n\nThe sale of the property is more likely to be **ordinary income** if you:\n\n- have had previous commercial property transactions\n- operate a business related to property development, construction, or sale\n- originally acquired the land with an intention to undertake development activities.\n\n#### Example: property renovation (flipping)\n\n##### Scenario\n\nAmanita decides to purchase a property and before doing so, thoroughly researches the real estate market, attends investment seminars and engages a real estate agent to canvass where best to buy and resell property.\n\nThe property purchased by Amanita has good resale potential as it is in an attractive location but requires renovation.\n\nAmanita moves into the property and completes the renovations within 15 months and sells the property at a profit.\n\nUsing the proceeds from the sale, Amanita purchases another property that requires renovation and repeats these activities.\n\n##### General principles\n\nAmanita is carrying on a property renovation business.\n\nProperty renovation business or profit-making activity factors can include (but are not limited to):\n\n- regularity, repetitiveness and continuity\n- size and scale\n- level of planning and organisation are carried on in a business-like manner\n- activities are carried on for the purpose of making a profit.\n\nProperties are regarded as trading stock (even when lived in for a short period).\n\nMain residence exemption won't apply to assets held as trading stock.\n\nEnd of example\nFor more detailed examples on property flipping, see examples 3 and 4 in our [Legal database](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales&PiT=99991231235958). For further information see [Are you in the business of renovating properties? ](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/are-you-in-the-business-of-renovating-properties)\n\n### The costs incurred prior to the sale\n\nThe costs incurred can help to determine if the activity was commercial in nature.\n\nThe sale of the property is more likely to be a **capital gain** if:\n\n- the development cost is low compared to the value of the undeveloped land\n- you were exposed to minimal financial risk in undertaking the activities leading to the sale.\n\nThe sale of the property is more likely to be **ordinary income** if:\n\n- the development cost is significant compared to the value of the undeveloped land for example, attributable to building on the land\n- you were exposed to significant financial risk in undertaking the activities leading to the sale for example, mortgaging the land to finance the activity.\n\n#### Example: one-off profit-making activity\n\n##### Scenario\n\nClaude's home has a big backyard which has been difficult to maintain. He decided to undertake extensive research on subdividing and building (including speaking with multiple local real estate agents).\n\nClaude engaged a project developer to subdivide the land and build a house with the intention of making a profit from the sale of the development.\n\nThe development was funded by a bank loan and Claude expected the sale of the new house to pay the loan out in full.\n\nClaude sold the new house and made a profit from the sale.\n\nClaude held the subdivided block of land for more than 12 months before the sale.\n\n##### General principles\n\nClaude has engaged in a one-off profit-making development activity because the transaction was more complex than a mere realisation through selling the vacant lot and was undertaken in a businesslike manner to make a profit.\n\nOnce the backyard was subdivided and got its own title, it became a separate asset.\n\nClaude will need to include both the net profit and any capital gain from the sale of the development in his assessable income.\n\nTo the extent that Claude makes a capital gain, it will be reduced by amounts from the sale already included (being the net profit) in Claude’s assessable income. The 50% CGT discount will then apply.\n\nGST registration will be required if Claude entered into a profit-making activity and exceeded the GST registration turnover threshold.\n\nEnd of example\nFor more detailed examples on one-off development activities, see example 2 in our [Legal database](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales&PiT=99991231235958).\n\n### The complexity and steps undertaken\n\nThe complexity and steps carried out to prepare the land for sale can help to determine if the activity was commercial in nature.\n\nThe sale of the property is more likely to be a **capital gain** if:\n\n- it is a single transaction\n- it is the sale of an unimproved block\n- the cost of development is low compared to the value of the undeveloped land.\n\nThe sale of the property is more likely to be **ordinary income** if:\n\n- the land was purchased for the purpose of subdivision and sale – an indication of this is if you sought approvals soon after the land was acquired\n- the land sale involved significant improvements – for example, to improve its condition to maximise profit, or the construction of houses, other buildings, roads or other community services\n- the overall project involved the purchase and development of neighbouring blocks\n- the development activity was subject to a decision by a government authority to rezone the land, that you or related parties lobbied for\n- the costs of development are significant compared to the value of the undeveloped land.\n\n### The parties and phases involved\n\nIn determining if the sale of property is commercial in nature, it is necessary to consider whether the sale occurred in phases over a period of time, involved multiple parties or a series of transactions.\n\nThe sale of property is more likely to be a **capital gain** if:\n\n- it is a straightforward one-off transaction between you and a purchaser\n- the only element of the arrangement is an agreement to transact and sell land in its existing state\n- there are no other parties involved in finalising the sale (except for real estate agents and conveyancers)\n- if you were approached by a third party to facilitate a sale, rather than actively marketing the property.\n\nThe sale of property is more likely to be **ordinary income** if:\n\n- you transacted with multiple parties (such as architects, property developers and consultants) through various agreements to prepare the property for eventual sale\n- the sale relied on a number of additional steps and was significantly more complex than a standard residential sale\n- you engage a developer to carry out a development activity for a fee.\n\n### Your relationship to other parties involved in the sale\n\nYour relationship with others involved in the sale can help to determine if the activity is commercial in nature and treated as ordinary income.\n\nThe sale of the property is more likely to be a **capital gain** if the:\n\n- type of parties involved were limited to those such as real estate agents, conveyancers and surveyors\n- arrangement is non-commercial and more in the nature of a family dealing (such as selling a granny flat previously used by a family member).\n\nThe sale of the property is more likely to be **ordinary income** where professional third-party experts (such as architects, developers and consultants) act on your instructions, their business activities are taken to be your activities.\n\n### Your purpose in buying the land\n\nThe purpose for entering an arrangement to develop and sell land may occur several years after the land was acquired. The purpose may change throughout the ownership period.\n\nIf you purchased the land for sale and didn't use it for any other purpose, the transaction was commercial in nature and ordinary income.\n\nThe sale of the property is more likely to be a **capital gain** if the land was purchased:\n\n- exclusively for private purposes, such as your family home or holiday home, and was held for a significant period\n- as a rental investment property that was held for a significant period\n- as a farm for the purposes of carrying out farming activities.\n\nThe sale of the property is more likely to be **ordinary income** if the land was purchased:\n\n- to be developed\n- for land banking (holding for future development).\n\n#### Example: residential suburban block development\n\n##### Scenario\n\nAfter 17 years of living in their home, Mr Block decided to subdivide the land for development which involved demolishing the house and building 3 townhouses:\n\n- one townhouse to live in\n- one townhouse to rent out\n- a third townhouse to be sold at a profit.\n\nMr Block hired professionals to design the townhouses, obtain the permit and subdivide the land.\n\nThe development was funded by a bank loan and the property was used as security.\n\nThe townhouses were completed in 14 months.\n\nHowever, Mr Block fell ill and had to move into a nursing home. To fund this move, Mr Block sold all 3 townhouses and made a substantial profit.\n\n##### General principles\n\nMr Block is not carrying on a business of property development.\n\nThe gain from the sale of the townhouse built with the intention to sell is ordinary income, from a profit-making undertaking or scheme.\n\nThe gain from the 2 townhouses not built with the intention to sell is not part of a profit-making undertaking and is the realisation of the capital value of those assets.\n\nIn relation to GST:\n\n- Mr Block is required to register for GST because he is carrying on an enterprise and meets the turnover test\n- the sale of the townhouses built with the intention to rent and sell will be taxable supplies made as part of Mr Block's enterprise\n- Mr Block is entitled to GST credits for construction costs of the townhouse built to sell but is not entitled to GST credits for construction costs of the other 2 townhouses.\n- Mr Block is entitled to an [adjustment](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/reporting-paying-and-activity-statements/making-adjustments-on-your-activity-statements/types-of-adjustments?page=3#ato-Changesincreditablepurpose) to claim GST credits for the taxable supply of the townhouse intended for rent.\n\nEnd of example\nFor more detailed examples on residential suburban developments, see our [Legal database](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales&PiT=99991231235958).\n\n### The timing and steps undertaken for the sale\n\nThe length of time you own the land can help to determine if the property sale is commercial in nature and treated as ordinary income.\n\nThe sale of the property is more likely a **capital gain** if the land is owned for a significant period and used, for example, as a house or farm. This is evidence you acquired the land for those purposes.\n\nThe sale of the property is more likely to be **ordinary income** if the land was owned for a short period before being sold.\n\n## Evidence to determine intent and purpose\n\nEven when a property sale involves your family home, you need to keep evidence of the sale process.\n\nWritten records are the best evidence of your purpose and intention and are much more valuable than what you can remember in hindsight.\n\n## Further assistance\n\nThis information provides general examples that illustrate principles described in:\n\n- [Taxation Ruling 92/3](https://www.ato.gov.au/law/view/document?DocID=TXR/TR923/NAT/ATO/00001&PiT=99991231235958) *Income tax: whether profits on isolated transactions are income*\n- [Miscellaneous Taxation Ruling 2006/1](https://www.ato.gov.au/law/view/document?src=hs&pit=99991231235958&arc=false&start=1&pageSize=10&total=493&num=0&docid=MXR%2FMT20061%2FNAT%2FATO%2F00001&dc=false&stype=find&tm=phrase-basic-MT%202006%2F1) *The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number*.\n\nSee additional [Examples of tax consequences on sales of land including small-scale land subdivision](https://www.ato.gov.au/law/view/document?DocID=GUI/tax-consequences-land-sales) on our Legal database.\n\nFor more information about property see:\n\n- [Subdividing land ](https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/land-vacant-land-and-subdividing/subdividing-land)\n- [Are you in the business of renovating properties?](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/are-you-in-the-business-of-renovating-properties)\n- [GST and property ](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-and-property)\n\nIf your circumstances are not fully covered here or you are unsure how it applies to you, [contact us](https://www.ato.gov.au/about-ato/contact-us) or seek professional advice. You may also [apply for a private ruling](https://www.ato.gov.au/about-ato/ato-advice-and-guidance/ato-advice-products-rulings/private-rulings/applying-for-a-private-ruling).\n\nQC71028\n\n.st0{fill:none;}\n.st1{fill:CurrentColor;}\nPrint or Download","title":""}
+{"_id":"passage_a0JRF000003glLm2AI/p00390950","text":"## Calculating your car expense deductions and keeping records\n\nYou use either of 2 methods to calculate deductions for car expenses:\n\n- [Cents per kilometre method](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Centsperkilometremethod)\n- [Logbook method](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Logbookmethod)\n\nUse the calculator to work out your deduction for either method.\n\n[Work-related car expenses calculator](https://www.ato.gov.au/calculators-and-tools/work-related-car-expenses)\nIf you are claiming car expenses for more than one car, you can use a different method for each car. You can also change the method you use in different income years for the same car.\n\n### Cents per kilometre method\n\nTo calculate your deduction using this method, multiply the number of work-related kilometres you travel in the car by the rate per kilometre for that income year.\n\n'Work-related kilometres' are the kilometres your car travels in the course of earning your assessable income.\n\nUse the rate for the income year for which you are claiming a deduction:\n\n- 2024–25 and 2025–26: use 88 cents per kilometre\n- 2023–24: use 85 cents per kilometre\n- 2022–23: use 78 cents per kilometre\n- 2020–21 and 2021–22: use 72 cents per kilometre\n- for rates in earlier years, see [Prior year tax return forms and schedules](https://www.ato.gov.au/forms-and-instructions/prior-year-tax-return-forms-and-schedules).\n\nYou can claim a maximum of 5,000 work-related kilometres per car.\n\nYou need to [keep records](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Keepingrecordsforcentsperkilometremetho1) that show how you work out your work-related kilometres.\n\nIf you and another joint owner use the car for separate income-producing purposes, you can each claim up to 5,000 work-related kilometres.\n\nThe cents per kilometre rate covers all car expenses, including:\n\n- decline in value\n- registration\n- insurance\n- maintenance\n- repairs\n- fuel costs.\n\nYou can’t add any of these expenses on top of the rate when you work out your deduction using this method.\n\n#### Example: car deduction using cents per kilometre\n\nOnce per week, Johan makes a 27-kilometre round trip in his own car from his head office in the city to meet with clients. In addition, once per month he makes a 106-kilometre round trip to visit clients at another location.\n\nWhen Johan consults his diary at the end of the 2024–25 income year, he works out he was at work for 47 weeks, but he missed one weekly meeting with clients as he was sick. He also determines that, although he was on leave for 5 weeks during the income year, he still made 12 × 106-kilometre round trips to visit clients.\n\nHe works out his work-related kilometres as:\n\nNumber of weekly trips **multiplied** **by** distance of weekly trip **equals** total weekly trip kilometres\n\n46 × 27 km = 1,242 km\n\nNumber of monthly trips **multiplied** **by** distance of monthly trip **equals** total monthly trip kilometres\n\n12 × 106 km = 1,272 km\n\nTotal weekly trip kilometres **plus** total monthly trip kilometres **equals** total trip kilometres\n\n1,242 km + 1,272 km = 2,514 km\n\nJohan works out his deduction for the 2024–25 income year as:\n\n2,514 km × 0.88 = $2,212\n\nEnd of example\n#### Keeping records for cents per kilometre method\n\nIf you use the cents per kilometre method, you don't need receipts.\n\nYou do need to be able to show that you own the car and how you work out your work-related kilometres. For example, you could record your work-related trips:\n\n- in a diary\n- using the [myDeductions](https://www.ato.gov.au/online-services/online-services-for-individuals-and-sole-traders/ato-app/using-mydeductions/mydeductions) tool in the ATO app.\n\n### Logbook method\n\nTo calculate your deduction using the logbook method, you need to:\n\n- [keep a logbook](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Keepingalogbook) that shows your work-related trips for a continuous period of at least 12 weeks (your logbook is valid for up to 5 income years)\n- [keep receipts or other records of your car expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Keepingrecordsofcarexpensesforlogbookmet)\n- use your logbook to [calculate the deductible portion of your car expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/motor-vehicle-and-car-expenses/expenses-for-a-car-you-own-or-lease#Howtocalculateyourdeductionusingalogbook).\n\n#### Keeping a logbook\n\nYour logbook must:\n\n- cover at least 12 continuous weeks and be broadly representative of your travel\n- include the destination and purpose of every journey, the odometer reading at the start and end of each journey, and the total kilometres travelled during the period\n- include odometer readings for the start and end of the logbook period.\n\nYour logbook is valid for 5 years. However, if your circumstances change (for example, if you change jobs or move to a new house), and the logbook is no longer representative of your work-related use, you will need to complete a new 12-week logbook.\n\nIn each of the 4 years following the first year, you need to keep:\n\n- odometer readings for the start and end of the full period you claim\n- your work-related use percentage based on the logbook.\n\nIf you are using the logbook method for 2 or more cars, keep a logbook for each car and make sure they cover the same period.\n\nYou can keep an electronic logbook using the [myDeductions](https://www.ato.gov.au/online-services/online-services-for-individuals-and-sole-traders/ato-app/using-mydeductions/mydeductions) tool in the ATO app, or keep a paper logbook.\n\nYou must retain your logbook and odometer records for 5 years after the end of the latest income year that you rely on them to support your claim.\n\n#### Keeping records of car expenses for logbook method\n\nYou can claim running costs and decline in value of your car.\n\nYou must keep:\n\n- receipts for your fuel and oil expenses, or a record of your reasonable estimate of these expenses based on the odometer readings for the start and end of the period for which you are claiming\n- receipts for other expenses for your car – for example, registration, insurance, lease payments, services, tyres, repairs, electricity expenses and interest charges\n- a record of the purchase price of the car and how you work out your claim for the decline in value of your car, including the effective life and method you use.\n\n#### Electric cars - records of electricity expenses\n\nIf your car is electric, instead of keeping receipts for fuel and oil, you must keep:\n\n- receipts for electricity from commercial charging stations\n- evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car\n- odometer readings for the start and the end of the period that you are claiming.\n\nAlternatively, you can use the electric vehicle (EV) home charging rate of 4.2c per kilometre to make a reasonable estimate of your home charging expenses based on your odometer readings. If you choose to use this rate but you also used commercial charging stations to charge the car during the income year, you must disregard your commercial charging station costs. They can't be claimed as a separate deduction.\n\nIf your car can accurately report the percentage of its total charge based on the type of charging location (home versus commercial stations), you can use the EV home charging rate to calculate the cost of your home charging. You can also claim your commercial charging station costs. You do this by adjusting the total number of relevant kilometres by the home charging percentage and then multiplying those kilometres by the EV home charging rate and then adding your commercial charging station costs. You must still keep all of the records listed above if you calculate your charging costs in this way.\n\n##### Example: home charging percentage can be accurately determined\n\nBill owns an electric car which he uses for work purposes. Bill charges his electric car at home and at commercial charging stations.\n\nFor the 2024-25 income year, Bill has:\n\n- a valid logbook\n- the odometer reading for his car at the start and the end of the income year\n- an electricity bill for his home showing he incurred electricity expenses\n- receipts for his commercial charging station expenses which total $172.\n\nBill's car generates a report detailing the annual percentage of total charge that relates to home charging. The report shows that Bill charges his electric vehicle 75% at home during the 2024–25 income year.\n\nBill travelled a total of 10,000 km in the 2024–25 income year. His home charging kilometres are determined by applying the home charging percentage to the total kilometres travelled.\n\nBill calculates his home charging kilometres as:\n\nTotal kilometres **multiplied by** home charging percentage **equals** home charging kilometres\n\n10,000km × 75% = 7,500km\n\nTo calculate his total home charging expenses, Bill multiplies the home charging kilometres by the EV home charging rate:\n\n7,500km × 4.2c/km = $315\n\nBill calculates his total charging expenses as:\n\nHome charging expenses **plus** commercial charging expenses **equals** total charging expenses\n\n$315 + $172 = $487\n\nTo calculate his deduction for charging his car during the 2024-25 income year, Bill will multiply his total charging expenses ($487) by his work-related use percentage from his logbook.\n\nEnd of example\n#### Hybrid cars - records of fuel, oil and electricity expenses\n\nIf your car is a hybrid, you must keep all the following:\n\n- receipts for your fuel and oil\n- receipts for commercial charging stations\n- evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car\n- odometer readings for the start and the end of the period that you are claiming.\n\nFrom 1 July 2024, you can use the EV home charging rate if the car you own and use for work is a plug-in hybrid electric vehicle (PHEV). For more information on how to calculate your home charging expenses for your PHEV using the EV home charging rate and the records you need to keep, see [PCG 2024/2DC](https://www.ato.gov.au/law/view/document?DocID=DPA/PCG20242DC1/NAT/ATO/00001) *Electric vehicle home charging rate - calculating electricity costs when a vehicle is charged at an employee's or individual's home*.\n\nYou can't claim capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it, or improvement costs (for example, adding paint protection or tinted windows).\n\n#### How to calculate your deduction using a logbook\n\n1. Work out the total number of kilometres you travelled during the logbook period.\n2. Work out the number of kilometres you travelled for allowable work-related trips during the logbook period.\n3. Divide the work-related kilometres (2) by the total kilometres (1), then multiply by 100. This is your work-related use percentage.\n4. Add up your total expenses for the period that you are claiming.\n5. Multiply your work-related use percentage (3) by your car expenses (4). This is the amount you claim as a deduction.","title":""}
+{"_id":"passage_a0JRF000003fqwz2AA/p00390236","text":"## How capital gains or losses apply\n\nWhen you sell or dispose of a rental property you may make a capital gain or loss.\n\nA capital gain or loss is the difference between what it cost you to obtain and improve the property (the cost base) and the amount you receive when you dispose of it.\n\nIf you make a:\n\n- net capital gain in an income year, you'll generally be liable for capital gains tax (CGT)\n- net capital loss, you can carry it forward and deduct it from your capital gains in later years.\n\nUse our calculator or steps to [calculate your CGT](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt).\n\nTo see how to enter your capital gains or losses when completing your tax return in myTax, watch our video on [how to complete myTax when you have sold a rental propertyExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bi9or7odtggh5r).\n\nYou may be entitled to a part of full [main residence exemption](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/eligibility-for-main-residence-exemption) if you lived in the property before renting it out, see [Treating your former home as main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence).\n\nYou will be entitled to a part main residence exemption if you [rented out part of your home](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business).\n\nFor a summary fact sheet with common scenarios about CGT and eligibility for the main residence exemption, go to the ATO Publication Ordering Service to download [Capital gains tax and the main residence exemption](https://iorder.com.au/publication/publicationdetails.aspx?pid=75488-04.2025).\n\nIf you are a co-owner of the property, you'll make a capital gain or loss in accordance with your ownership interest in the property.\n\nThe application of CGT depends on when you acquired the property:\n\n- If you acquired the property before 20 September 1985 then it will only apply to certain capital improvements made after that date.\n- If you acquired the property after 20 September 1985, then it will apply to the entire property.\n\n**Watch:** Selling your rental property\n\n**Media:** Selling your rental property\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgxExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgx) (**Duration:** 2:46)\n\n**Watch:** Selling a rental property that was your home\n\n**Media:** Selling a rental property that was your home\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgqExternal Link](https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfs6pgq) (**Duration:** 3:17)\n\nFor a summary fact sheet with common scenarios about the CGT on sale of property, go to the ATO Publication Ordering Service to download [Capital gains tax on the sale of property](https://iorder.com.au/publication/publicationdetails.aspx?pid=75443-04.2025).\n\n## Working out your costs\n\nThe [cost base and reduced cost base](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/cost-base-of-asset) of a property include the amount you paid for it together with some incidental costs associated with acquiring, holding and disposing of it (such as legal fees, stamp duty and real estate agent’s commissions).\n\nIt does not include amounts that you have claimed or could claim as a tax deduction.\n\nWhen you sell your rental property, the time of the event (the time at which you make a capital gain or loss) is when you enter into the contract, not when you settle.\n\n### Example: capital gains on the sale of a co-owned rental property\n\nKarl and Louisa bought a residential rental property in November 2016 for a purchase price of $750,000.\n\nThey incur costs of purchase, including stamp duty and legal fees, of $30,000.\n\nAfter purchase they improved the property by constructing a fence for $6,000.\n\nOver the 7 years of ownership of the property, they claimed $5,000 in decline in value deductions and $35,000 in capital works deductions. (If they had purchased the property after 9 May 2017 then there would be no deductions for the decline in value of any second-hand depreciating assets.)\n\nIn June 2025, they entered into a contract to sell the property, and in November 2025 it was sold for $900,000. Their costs of sale, including legal fees, were $10,000.\n\n**A + B + C + D − E - F = Cost base**\n\nWhere:\n\n- A is the purchase price\n- B is the costs of the purchase\n- C is the cost of property improvements\n- D is the costs of sale\n- E is the capital works deductions\n- F is the total amount of decline in value deductions claimed over the period of ownership of the rental property\n\n$750,000 + $30,000 + $6,000 + $10,000 − $35,000 − $5,000 = $756,000\n\nThe capital gains outcomes are:\n\nProceeds = $900,000\n\n**Proceeds − Cost base = Capital gain outcome**\n\n$900,000 − $756,000 = $144,000\n\nAs the property has been owned for more than a year, Karl and Louisa can apply  the 50% discount and reduce the capital gain to $72,000.\n\nKarl and Louisa owned the property jointly. This means that they each have a capital gain of $36,000 which they will need to put in their tax return for the year in which the contract to sell the property was made, being the 2024–25 year.\n\nEnd of example\nFor more information on working out your costs, see [Rental properties guide](https://www.ato.gov.au/forms-and-instructions/rental-properties-2025).\n\n## Capital expenses\n\nExpenses you incur when purchasing, acquiring, selling, or disposing of your rental property are capital expenses. You may be able to include capital expenses when calculating the 'cost base' of your property. This can help you reduce the amount of CGT you pay when you sell your property.\n\nCapital expenses include:\n\n- conveyancing costs paid to a conveyancer or solicitor\n- title search fees\n- valuation fees (when it is a private valuation conducted by your solicitor)\n- stamp duty on the transfer of the property\n- initial repairs.\n\n### Example: capital expenses\n\nStephen recently purchased a rental property that needed repairs before the tenants moved in. He paid tradespeople to:\n\n- repaint dirty walls\n- replace broken hardwired light fittings\n- repair doors on 2 bedrooms.\n\nThe house was also treated for damage by white ants.\n\nBecause Stephen incurred these expenses to make the property suitable for rent (not while he was using the property to generate rental income), these expenses are capital expenses and are added to the cost base of the property.\n\nEnd of example\n## GST on rental properties\n\nGenerally, the sale of existing residential premises is input taxed, that is, the sale price doesn't include GST. This means:\n\n- you can't claim GST credits on any costs associated with buying or selling\n- GST does not apply to the rental payments you receive.\n\nHowever, if you [build new residential premises](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/property/property-development-building-and-renovating/building-and-construction-residential-premises) for sale, you may:\n\n- be liable for GST on the sale ([at settlement](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-at-settlement))\n- need to [register for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-and-property) depending on your turnover.\n\nIf you do need to register for GST, you may also be entitled to GST credits on construction and sale costs, even if the premises have been rented for a period before being sold.\n\nFor more information, see [GST and residential property](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/property/gst-and-residential-property).\n\n## Foreign resident capital gains withholding\n\nForeign resident capital gains withholding (FRCGW) may apply when selling your rental property to a foreign resident.","title":""}
+{"_id":"passage_a0JRF000003dAvR2AU/p00387801","text":"## Automatic exit\n\n### Individuals\n\nWe will automatically remove you from PAYG instalments if you:\n\n- are eligible to claim the senior and pensioners tax offset in your tax return\n- report business and investment income of less than $4,000 (for residents, or $1 for non-residents) in your tax return\n- have a tax debt of less than $1,000 (after adjustments for PAYG instalments and voluntary payments) in your tax assessment\n- have a calculated PAYG instalment rate of 0.0%\n- have an estimated (notional) tax liability of less than $500\n- are under 18 and your tax return shows Division 6AA income less than the lowest marginal threshold, or\n- lodge a final tax return or non-lodgment advice, or your tax agent lodges a 'further return not necessary'.\n\nWe will also remove a taxpayer from PAYG instalments if we are advised they are deceased.\n\n### Trusts\n\nWe will automatically remove a trust from PAYG instalments if it:\n\n- has an estimated (notional) tax liability of less than $500\n- reports instalment income of less than $4,000 in its tax return\n- has a tax debt of less than $1,000 (after adjustments for PAYG instalments and voluntary payments) in its tax assessment, or\n- has a calculated PAYG instalment rate of 0.0%.\n\n### Companies and super funds\n\nWe will automatically remove a company or super fund from PAYG instalments if all of the following apply:\n\n- it has a calculated PAYG instalment rate of zero or an estimated (notional) tax liability of less than $500\n- it has instalment income (excluding capital gains) in its most recent income tax assessment of less than $2 million\n- it is not the head company of a consolidated group.\n\n## Exiting yourself\n\nYou can exit PAYG instalments if you are no longer earning business or investment income.\n\nYou can't exit PAYG instalments if you have:\n\n- become bankrupt and are in a debt agreement (under Part IX of the *Bankruptcy Act 1966*) or personal insolvency agreement (under Part X of the Act)\n- a tax debt of less than $500 that would have been more than $500 after including PAYG instalments for the year\n- received a refund that would have been a debt of more than $500 after including PAYG instalments for the year.\n\n### Individuals, including sole traders\n\nYou can make a request to exit PAYG instalments using your myGov account linked to the ATO's Online services.\n\n[Sign in to myGov (individuals and sole traders)](https://onlineservices.ato.gov.au/default.aspx?PageName=HomePage)\nSelect **Tax** > **Manage** > **Tax registrations > Cancel**. This option will only be available when you become eligible to exit PAYG instalments.\n\nYou can also ask to exit through your registered tax agent or you can phone us on **13 28 61**.\n\n### All businesses\n\nYou can request to exit PAYG instalments using Online services for business.\n\n[Log in to Online services for business](https://onlineservices.ato.gov.au/business/)\nYou can also ask to exit through your registered tax agent, or you can phone us on **13 28 66**.\n\n## Re-entering PAYG instalments\n\nIf you lodge a tax return with income or tax above the [entry thresholds](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments), we will contact you about re-entering PAYG instalments.\n\nYou can [re-enter PAYG instalments voluntarily](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments) if your circumstances change or you want to plan ahead for your income tax.","title":""}
+{"_id":"passage_a0JRF000003gaOj2AI/p00390804","text":"## Body corporate administrative fund fees and charges\n\nYou may be able to claim a deduction for body corporate fees and charges you pay. Not all body corporate fees are deductible in full in the income year you incur them.\n\nBody corporate fees are a cost you pay to the body corporate or strata to manage the property and maintain common areas. Strata title body corporates are constituted under the strata title legislation of the various states and territories.\n\nThese fees and charges may go towards payments to:\n\n- cover the cost of day-to-day expenses to maintain and manage the building – for example, insurance premiums, maintenance of gardens and management of the body corporate itself\n- a special purpose fund, for a specific expense – for example, roof repairs and building insurance.\n\nRegular payments you make to body corporate administration funds or general purpose sinking funds for ongoing administration and general maintenance are considered to be payments for the provision of services by the body corporate. You can claim an immediate deduction for these regular payments at the time you incur them.\n\nYou can’t claim a deduction for a special levy you are required by the body corporate to pay to fund a particular capital improvement. You may be able to claim a [capital works deduction](https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/capital-expenses#ato-Capitalworks) for the cost of capital improvements or repairs of a capital nature once the work is completed. The cost must also be charged to either the special purpose fund or the general purpose sinking fund, if a special contribution has been levied.\n\nFor a summary fact sheet of what you can and can't claim, go to the ATO Publication Ordering Service to download [Rental property body corporate fees and chargesExternal Link](https://iorder.com.au/publication/publicationdetails.aspx?pid=75375-04.2025).","title":""}
+{"_id":"passage_a0JRF000003hHa92AE/p00391358","text":"## Are you an Australian resident for tax purposes?\n\nIf you're an Australian resident for tax purposes, you need to declare all income earned both in Australia and overseas on your Australian tax return (even if you've already paid tax on it overseas).\n\nIf you've paid foreign tax on income in another country, you may be entitled to an Australian foreign income tax offset.\n\nGenerally, you are an Australian resident for tax purposes if you:\n\n- have always lived in Australia or you have come to Australia and live here permanently\n- have been in Australia continuously for 6 months or more, and for most of that time you worked in the one job and lived at the same place\n- have been in Australia for more than 6 months of the year, unless your usual home is overseas and you do not intend to live in Australia\n- go overseas temporarily and you do not set up a permanent home in another country\n- are an overseas student who has come to Australia to study and are enrolled in a course that is more than 6 months long.\n\nThere are 4 statutory tests to determine your residency:\n\n- Resides test\n- Domicile test\n- 183-day test\n- The commonwealth superannuation test.\n\nYou can also use our [Work out your residency status for tax purposes](https://www.ato.gov.au/calculators-and-tools/tax-return-work-out-your-tax-residency) tool to help work out your [residency](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency).\n\nFor information about foreign and temporary residents, see [Foreign and temporary residents](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/foreign-and-temporary-residents).\n\n## Part-year Australian resident\n\nIf you are an Australian resident for part of the year, your [tax-free threshold](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/tax-free-threshold-for-newcomers-to-australia) will be less than the full tax-free threshold of $18,200 that applies to Australian residents.\n\nIf you became or ceased to be an Australian resident for tax purposes during the income year, you will receive the [part-year tax-free threshold](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/living-overseas-and-becoming-a-foreign-tax-resident) and resident tax rates will apply to your income.\n\nPart-year residents have a tax-free threshold of at least $13,464. The remaining $4,736 of the full tax-free threshold is pro-rated according to the number of months during the income year you were a resident for tax purposes.\n\nWhen you complete your individual income tax return, you must include the:\n\n- date that you became or stopped being an Australian resident for tax purposes\n- number of months that you were an Australian resident.\n\nWe will work out your tax-free threshold using the information you provide.\n\nFor more information on lodging your tax return early, see [Lodge your tax return before leaving Australia](https://www.ato.gov.au/individuals-and-families/your-tax-return/how-to-lodge-your-tax-return/lodge-your-tax-return-before-leaving-australia).\n\n## Dual residents\n\nYou're a dual resident if you're a resident of both:\n\n- Australia for domestic income tax law purposes\n- another country for the purpose of that other country’s tax laws.\n\nWhere Australia has a [double tax treaty](https://www.ato.gov.au/about-ato/international-tax-agreements) with a foreign country, a treaty tie breaker test would usually determine which country has the right to tax Australian and foreign sourced income.\n\nFor more information about working out your residency, see [Work out your residency status for tax purposes](https://www.ato.gov.au/calculators-and-tools/tax-return-work-out-your-tax-residency).\n\n## Australian resident for tax purposes and foreign income\n\nIf you're an Australian resident for tax purposes and you:\n\n- are also a [temporary resident](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/foreign-and-temporary-residents#ato-Temporaryresidents)\n\n- most of your [foreign income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income) isn't taxed in Australia\n- we tax some of your income from actual work you do overseas while you are a temporary Australian resident (see [Exempt foreign employment income](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/tax-exempt-income-from-foreign-employment))\n- receive foreign income\n\n- income may be taxed in both Australia and the country from where you received it\n- tax paid in another country on your foreign income may entitle you to an [Australian foreign income tax offset](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/tax-offsets/claiming-a-foreign-income-tax-offset)\n- receive income from a country that Australia has a tax treaty with\n\n- you can ask the tax authorities in that country to reduce their withholding tax or to exempt you from paying tax in that country\n- done by supplying a [tax relief form](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/certificate-of-residency-and-overseas-tax-relief-form) or a [certificate of residency](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/certificate-of-residency-and-overseas-tax-relief-form).","title":""}
+{"_id":"passage_a0JRF000003cTQf2AM/p00387102","text":"## Assets acquired before 20 September 1985\n\nAssets you acquired before 20 September 1985 are exempt from CGT.\n\nYou declare the sale or disposal of pre-CGT assets in your tax return. At the CGT exemptions and rollovers question, select **Capital gains disregarded as a result of the sale of a pre-CGT asset**.\n\n## Real estate\n\nMost [property](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax) is subject to CGT.\n\nThis includes:\n\n- vacant land\n- business premises\n- rental properties\n- holiday houses\n- hobby farms.\n\nIf you acquired property before 20 September 1985, any [property improvements or additions](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/property-improvements-and-additions) you make after that date may be subject to CGT.\n\nYour main residence is generally exempt from CGT.\n\n## Your main residence – home\n\n[Your main residence](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home) (your home) is exempt from CGT.\n\nHowever, CGT may apply if:\n\n- you rent out part of it\n- you use it for business\n- it is on more than 2 hectares of land\n- you are a foreign resident and you don't satisfy the requirements of the [life events test](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/main-residence-exemption-for-foreign-residents#ato-Lifeeventstest) at the time the 'CGT event' happens.\n\nFor a summary fact sheet with common scenarios, go to the ATO Publication Ordering Service to download [Capital gains tax and the main residence exemptionExternal Link](https://iorder.com.au/publication/publicationdetails.aspx?pid=75488-04.2025).\n\n## Granny flat arrangements\n\nCGT does not apply when an eligible [granny flat arrangement](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/granny-flat-arrangements-and-cgt) is created, varied or terminated.\n\n## Cars and motorcycles\n\nYour car or motorcycle is exempt from CGT.\n\nA car is defined as a motor vehicle that carries a load of less than 1 tonne and fewer than 9 passengers.\n\n## Shares and units\n\nCGT applies to [shares, units and similar investments](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/shares-and-similar-investments) when a 'CGT event' happens. This includes when you sell them or receive a distribution (other than a dividend) from a managed fund.\n\n## Exchange traded funds\n\nWhen you sell or dispose of exchange traded funds (ETFs) the units are subject to CGT. This includes any units received from a distribution reinvestment plan (DRP). You need to include them as part of the cost base when you [calculate your capital gain or loss](https://www.ato.gov.au/individuals-and-families/investments-and-assets/shares-funds-and-trusts/exchange-traded-funds#CalculatingCGTonETFunitdisposals).\n\n## Managed investment trusts\n\nDistributions from [managed investment trusts](https://www.ato.gov.au/individuals-and-families/investments-and-assets/shares-funds-and-trusts/managed-investment-trusts) (MIT) can include capital gains and non-assessable payments, which are relevant for CGT purposes. The trustee should advise you if any CGT discounts apply.\n\n## Crypto assets\n\nYou need to [work out and report CGT](https://www.ato.gov.au/individuals-and-families/investments-and-assets/crypto-asset-investments/how-to-work-out-and-report-cgt-on-crypto) when you dispose of crypto asset investments.\n\nIf your crypto is a [personal use asset](https://www.ato.gov.au/individuals-and-families/investments-and-assets/crypto-asset-investments/crypto-asset-as-a-personal-use-asset), capital gains or losses from disposing of it may be exempt from CGT. Crypto is a personal use asset if it is kept or used mainly to purchase items for personal use or consumption.\n\n## Personal use assets\n\nA capital gain on a personal use asset is subject to CGT if it cost you more than $10,000 to acquire the asset.\n\nCapital losses on personal use assets are ignored. This means you can't use a capital loss on a personal use asset to reduce capital gains on other assets (including other personal use assets).\n\nPersonal use assets are CGT assets that you keep for your personal use or enjoyment.\n\nThey include:\n\n- boats\n- furniture\n- electrical goods\n- household items\n- an option or right to acquire a personal use asset\n- a debt resulting from\n- a CGT event involving a CGT asset kept for your personal use\n- making a private loan to a family member or friend.\n\nThe following are not classed as personal use assets:\n\n- collectables – these may be subject to CGT\n- your main residence, which is generally exempt from CGT\n- cars, which are exempt from CGT.\n\nIf you dispose of personal use assets individually that would usually be sold as a set, you get the exemption only if you acquired the set for $10,000 or less.\n\n## Collectables\n\nA collectable is subject to CGT unless:\n\n- you acquired the collectable for $500 or less\n- you acquired a share in the collectable for $500 or less before 16 December 1995\n- you acquired a share in the collectable when the collectable had a market value of $500 or less.\n\nCollectables include:\n\n- artwork\n- jewellery\n- antiques\n- coins or medallions\n- rare folios, manuscripts or books\n- postage stamps or first day covers.\n\nIf you make a capital loss on a collectable you can only deduct it against capital gains from collectables, not from other capital gains.\n\nIf you dispose of collectables individually, that would usually be disposed of as a set, they are exempt only if you acquired the set for $500 or less after 16 December 1995.\n\n## Intangible assets\n\nIntangible assets may be subject to CGT.\n\nThey include:\n\n- leases\n- goodwill\n- licences\n- contractual rights.\n\nA number of [CGT events](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/cgt-events), other than disposal, can happen to these assets. For example, granting a lease is a CGT event.\n\n## Foreign currency\n\nForeign currency is subject to CGT. You make a capital gain or loss on fluctuations in the foreign currency exchange rate.\n\nForeign currency is subject to [foreign exchange gains and losses](https://www.ato.gov.au/forms-and-instructions/guide-to-capital-gains-tax-2025/about-capital-gains-tax/does-capital-gains-tax-apply-to-you#ato-CGTandforeignexchangegainsandlosses). A capital gain or loss arises from the acquisition or disposal of foreign currency when there is a fluctuation in the exchange rate.\n\nThis applies to foreign currency held as cash and CGT assets denominated in a foreign currency (such as an overseas rental property).\n\n## Depreciating assets\n\nCGT does not apply to [depreciating assets](https://www.ato.gov.au/businesses-and-organisations/assets-and-property/capital-gains-tax-for-business-assets/depreciating-assets-and-cgt) used solely for taxable purposes.\n\nThis includes:\n\n- business equipment\n- items in a rental property.\n\nGains or losses ([balancing adjustments](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/general-depreciation-rules-capital-allowances/disposing-or-ceasing-to-use-a-depreciating-asset)) made on these assets are treated as assessable income or claimed as deductions.\n\nHowever, if you have used a depreciating asset for private purposes, CGT may apply.\n\n## Specific exemptions such as awards and payouts\n\nThe following are exempt from CGT:\n\n- a decoration awarded for valour or brave conduct (unless you paid or exchanged property for it)\n- assets used solely to produce exempt income or some types of non-assessable, non-exempt income\n- compensation or damages received for any\n- wrong or injury you suffered at work\n- wrong, injury or illness you or your relatives suffered\n- winnings or losses from gambling, a game or a competition with prizes\n- reimbursement payment of your expenses under the following\n- Unlawful Termination Assistance Scheme\n- Alternative Dispute Resolution Assistance Scheme\n- M4/M5 Cashback Scheme\n- a scheme established under legislation by an Australian Government agency, a local government body or a foreign government agency (except a payment for the loss, destruction or transfer of an asset)\n- the transfer of a super interest in one small super fund (a complying fund that has no more than 6 members) to another because of a relationship breakdown between spouses or former spouses\n- rights created or ended in a superannuation agreement (as defined in the *Family Law Act 1975*)\n- a CGT event happening to the segregated current pension asset of a complying super fund\n- some payouts under a general insurance policy, life insurance policy or annuity instrument, such as payments from the maturity of a life insurance policy\n- a payment for surrender of an insurance policy where you are the original beneficial owner of the policy\n- shares in a pooled development fund\n- shares of certain profits, gains or losses arising from disposal of investments by [certain venture capital and early stage venture capital limited partnership entities](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/incentives-and-concessions/venture-capital-and-early-stage-venture-capital-limited-partnerships)\n- a financial arrangement where gains and losses are calculated under the [taxation of financial arrangements (TOFA) rules](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/taxation-of-financial-arrangements-tofa/tofa-elections/election-for-the-tofa-rules-to-apply)\n- gifts made through a will to a deductible gift recipient beneficiary.","title":""}
+{"_id":"passage_a0JRF000003ZFbx2AG/p00384107","text":"## Employee or independent contractor traits\n\nThe following table outlines each indicium and some features that may point towards or against a finding of employment. No single indicium is determinative and they should not be applied as if they are a checklist. Analysis of the indicia must be done by reference only to the legal rights and obligations that arise from the contract you enter into with your worker. Conduct and work practices are not relevant, unless they are, among other things, sufficient to vary the contractual terms agreed to.\n\nTable: Employee and independent contractor indicium and traits\n\nEmployee\n\nIndependent contractor\n\n[Control](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/control-over-work): your business has the legal right to control how, where and when the worker does their work.\n\n[Control](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/control-over-work): the worker can choose how, where and when their work is done, subject to reasonable direction by you.\n\n[Integration](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/independence): the worker serves in your business. They are contractually required to perform work as a representative of your business.\n\n[Integration](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/independence): the worker provides services to your business. The worker performs work to further their own business.\n\n[Mode of remuneration](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/basis-of-payment): the worker is paid either:\n\n- for the time worked\n- a price per item or activity\n- a commission.\n\n[Mode of remuneration](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/basis-of-payment): the worker is generally contracted to achieve a specific result, and is paid when they have completed that result, often for a fixed fee.\n\n[Ability to subcontract or delegate](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/ability-to-delegate-or-subcontract): there is no clause in the contract allowing the worker to delegate or subcontract their work to others. The worker must perform the work themselves and cannot pay someone else to do the work for them.\n\n[Ability to subcontract or delegate](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/ability-to-delegate-or-subcontract): there is a clause in the contract allowing the worker the right to delegate or subcontract their work to others. The clause must not be a sham and must be legally capable of exercise.\n\n[Provision of tools and equipment](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/equipment-tools-and-other-assets): your business:\n\nprovides all or most of the equipment, tools and other assets required to complete the work; or the worker provides all or most of the tools, but your business provides them with an allowance or reimburses them for expenses incurred.\n\n[Provision of tools and equipment](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/equipment-tools-and-other-assets): the worker provides all or most of the equipment, tools and other assets required to complete the work, and you do not give them an allowance or reimbursement for the expenses incurred.\n\nThe work involves the use of a substantial item that your worker is wholly responsible for.\n\n[Risk](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/commercial-risks): the worker bears little or no risk. Your business bears the commercial risk for any costs arising out of injury or defect in their work.\n\n[Risk](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors/commercial-risks): the worker bears the commercial risk for any costs arising out of injury or defect in their work.\n\nGeneration of goodwill: your business benefits from any goodwill arising from the work of the worker.\n\nGeneration of goodwill: the worker’s business benefits from any goodwill generated from their work, not your business.","title":""}
+{"_id":"passage_a0JRF000003i3gP2AQ/p00391913","text":"## Property\n\nThe following schemes relate to SMSFs and property.\n\n### Residential property purchased through illegal SMSF schemes\n\nThese schemes often target first home buyers wanting to enter the Australian property market to purchase a house and land package.\n\nThese schemes may be structured differently, but typically involve the:\n\n- set up or use of an SMSF\n- rollover of a member's super benefits from an existing fund to the SMSF\n- SMSF investing in a property trust (an unrelated unit trust) for a fixed period and rate of return, being a contributory fund with other investors\n- on-lending of money by the property trust to individuals to help them purchase real property, secured by mortgages over the property.\n\nOnce the investment is in place, the member gains access to money from a third-party entity to help finance the purchase of residential property under an arrangement commonly referred to as a 'loan'. Depending on the scheme, this money is used for:\n\n- all or part of the deposit\n- the balance of the purchase price\n- costs related to the purchase.\n\nIn some cases, the money is also used to help consolidate the member's personal debts to help them secure a home loan.\n\nIn return for a high fee paid by the fund, the scheme promoter commonly helps by:\n\n- establishing the SMSF and the property investment\n- organising the purchase of the property, including the payment of the deposit and home loan.\n\nThese schemes are established and promoted to look like a genuine SMSF investment to help individuals purchase a home.\n\nHowever, they often contravene one or more of the super laws, which may give us reason to view the SMSF as:\n\n- a 'sham' and not a legitimate super fund\n- providing a member with a current day benefit\n- set up and maintained in a way that doesn’t comply with the sole purpose test.\n\nThe arrangement may also involve the:\n\n- [illegal early access of super](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/illegal-early-access-to-super) benefits by members\n- giving of financial assistance to a member using the resources of the fund\n- provision of a 'loan' to a member to help them buy a home (if a genuine 'loan', will be an in-house asset of the fund).\n\nTo determine whether a scheme gives rise to a contravention of the super laws, we will take a 'look-through' approach and consider the arrangement as a whole.\n\nIf SMSF monies are used to help purchase a house for a member or a relative to live in through investments in other entities, this may be treated as illegal early access of super benefits. The amount may be included in the member's assessable income and taxed at their marginal rate, With the potential for tax shortfall penalties to also apply.\n\nThe trustee will have contravened one or more of the super laws and serious penalties may apply. The trustee may be:\n\n- personally liable to pay an administrative penalty\n- disqualified from acting as trustee.\n\nIf trustees are involved in a scheme like this, they should make a voluntary disclosure, see [SMSF early engagement and voluntary disclosure service](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/smsf-regulation-and-compliance/smsf-compliance/smsf-voluntary-disclosure-service). We will take this into account when determining any penalties that may apply.\n\nIf you're approached by promoters or think you're involved in a scheme you can [report it](https://www.ato.gov.au/about-ato/tax-avoidance/understanding-tax-schemes/report-schemes-and-promoters) to us confidentially.\n\n### Related-party property development ventures\n\nProperty development in associated joint venture structures may result in substantial profits for the SMSF, especially if related group entities provide most of the services without adhering to arm's length market values. This results in profits disproportionately attributed to the SMSF compared to the capital contributed.\n\nWhilst an SMSF can invest directly or indirectly in property development ventures, extreme care must be taken.\n\nSome arrangements can result in significant income tax and superannuation regulatory risks, potentially including the application of the NALI provisions and breaches of regulatory rules about related party transactions.\n\nIn May 2023, we published a Taxpayer Alert (TA) on these types of arrangements and how we are actively reviewing them.\n\nFor more information, see:\n\n- [TA 2023/2](https://www.ato.gov.au/law/view/document?DocID=TPA/TA20232/NAT/ATO/00001) *Diverting profits of a property development project to an SMSF, through use of a special purpose vehicle, involving non-arm’s length arrangements*.\n- SMSF Regulator's Bulletin [SMSFRB 2020/1](https://www.ato.gov.au/law/view/document?src=hs&pit=99991231235958&arc=false&start=1&pageSize=10&total=2&num=1&docid=SRB%2FSRB20201%2FNAT%2FATO&dc=false&stype=find&tm=phrase-basic-SMSFRB%202020%2F1) *Self-managed superannuation funds and property development*.\n\n### Residential property purchased in a member's name\n\nThis is where an SMSF is set up to help members buy residential property in their personal name. These schemes often target first home buyers wanting to enter the property market.\n\n### Legal life interest of property\n\nThis happens when an SMSF member or other related entity grants a legal life interest over commercial property to a SMSF. This means the rental income diverted to the SMSF is taxed at a lower rate without full ownership of the property ever transferring to the SMSF.","title":""}
+{"_id":"passage_a0JRF000003e0sP2AQ/p00388638","text":"## Simplified depreciation rules\n\nYou can choose to use the simplified depreciation rules if you have a small business with an aggregated turnover of less than:\n\n- $10 million from 1 July 2016 onwards\n- $2 million for previous income years.\n\nAggregated turnover is based on the [annual turnover](https://www.ato.gov.au/about-ato/using-our-website/definitions) of your business and that of any business entities that are your affiliates or connected with you.\n\nSimplified depreciation rules for small business include:\n\n- an [instant asset write-off](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business#Instantassetwriteoff10) for assets that cost less than the relevant limit\n- a general [small business pool](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business#Smallbusinesspool), which has simplified calculations to work out the depreciation deduction.\n\nThere were 3 temporary tax depreciation incentives available to eligible small businesses using the simplified depreciation between the 2019–20 and 2022–23 income years:\n\n- [temporary full expensing](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/temporary-full-expensing)\n- [increased instant asset write-off](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off)\n- [backing business investment](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/backing-business-investment-accelerated-depreciation)\n\n## Instant asset write-off\n\nUsing [instant asset write-off for eligible businesses](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off), small business owners can immediately write off the business portion of the cost of an asset that costs less than the relevant limit amount for the year the asset is first used or installed ready for use.\n\nFor an asset for which a small business has claimed an immediate deduction under the simplified depreciation rules in a prior income year, it can also immediately deduct an amount included in the [second element](https://www.ato.gov.au/forms-and-instructions/depreciating-assets-guide-2024/depreciating-assets-effective-life-cost-and-decline-in-value/cost-of-a-depreciating-asset) (cost addition) of that asset's cost, where the amount is:\n\n- the first deductible amount of second element cost incurred after the end of the income year in which the asset was written off\n- less than the relevant limit amount for the income year it is being claimed.\n\nFor the 2023–24 and 2024–25 income years the relevant limit amount is $20,000.\n\nIf your businesses uses the simplified depreciation rules, the instant asset write-off limit **does not** apply for assets you started to hold, and first used (or had installed ready for use) for a taxable purpose from 7:30 pm AEDT on **6 October 2020 to 30 June 2023**. These businesses must instead immediately deduct the business portion of the asset's cost under [temporary full expensing](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/temporary-full-expensing).\n\n## Small business pool\n\nFor income years ending on or before October 2020 and after 1 July 2023, you:\n\n- pool the business portion of most higher cost assets (those with a cost equal to or more than the relevant instant asset write-off limit) and claim\n\n- a 15% deduction in the year you start to use them or have them installed ready for use\n- a 30% deduction each year after the first year\n- deduct the balance of the small business pool at the end of the respective income year if the balance at that time (before applying the depreciation deductions) is less than the instant asset write-off limit.\n\nFor income years ended between 6 October 2020 and 30 June 2023, small business owners using simplified depreciation must deduct the balance of the [small business pool](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/small-business-pool-calculations) under [temporary full expensing](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/temporary-full-expensing) at the end of the respective income year.\n\n## Using simplified depreciation\n\nIf you choose to use the simplified depreciation rules, you must:\n\n- use them to work out deductions for all your depreciating assets except those specifically excluded\n- apply the entire set of rules, not just individual elements (such as the instant asset write-off)\n- only claim a deduction for the portion of the asset used for business or other taxable purposes and not for the portion for private use.\n\nA small number of assets are [excluded](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/assets-and-exclusions) from the simplified depreciation rules and a [car limit](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off#Exclusionsandlimits) applies to the cost of passenger vehicles.\n\n## If you stop using simplified depreciation\n\nIf you choose to stop using the simplified depreciation rules or become ineligible to use them, you must work out deductions for your depreciating assets using the [general depreciation rules](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/general-depreciation-rules-capital-allowances). For income years ending between 6 October 2020 to 30 June 2023, you may be eligible to claim deductions under either temporary full expensing or backing business investment incentives.\n\nIf you choose to stop using the simplified depreciation rules or become ineligible to use them for an income year, in that and later income years you can't:\n\n- add more assets to the pool which you started to use, or had installed ready for use, during the income year\n- claim an instant asset write-off for any new assets under these rules.\n\nFor depreciating assets which are allocated to your small business pool you:\n\n- continue to claim a 30% deduction for each year, following the allocation year, until the pool balance falls below the instant asset write-off limit\n- then deduct the remaining pool balance.\n\nFor income years ending between 6 October 2020 and 30 June 2023 you deduct the balance of your small business pool under temporary full expensing.\n\nTo notify the Commissioner of your choice, lodge your tax return and [keep your records](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business#Bookkeepingandrecordkeeping) for the required period of time. You aren't required to lodge any other form to notify of your choice.\n\n### Lock out rule\n\nFrom 7:30 pm AEST 12 May 2015 to 30 June 2025 the ‘lock out’ rule is suspended to allow small businesses that have chosen to stop using the simplified depreciation rules to take advantage of temporary full expensing and the instant asset write-off.\n\nPreviously, the 'lock out' rule prevented small businesses from re-entering the simplified depreciation system for 5 years if they had opted out.\n\n### Using simplified depreciation rules again\n\nIf you have stopped using the simplified depreciation rules, and then start using them again, you must adjust the opening [pool balance](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/small-business-pool-calculations) for any depreciating assets that you have started using or installed ready for use since last using these rules.\n\nYour new opening pool balance will be your previous closing balance plus the business portion of the value of any depreciating assets not previously added to the pool.\n\n## Bookkeeping and record keeping\n\nModern bookkeeping systems generally calculate depreciation, but make sure you have chosen the right settings to apply the simplified depreciation rules.\n\nIn line with the [record-keeping](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business) requirements for taxpayers generally, you must keep records for 5 years of:\n\n- how you worked out your opening pool balance\n- any change in how much you use the asset in your business\n- any assets you dispose of.","title":""}
+{"_id":"passage_a0JRF000003eABp2AM/p00388764","text":"## ETP caps\n\nThere are 2 caps:\n\n- ETP cap – this is\n\n- indexed each year\n- reduced by any earlier ETPs paid in the same income year and by any earlier ETPs for the same termination, regardless of when they are paid.\n- Whole-of-income cap – this is\n\n- $180,000\n- reduced by any other taxable payments (such as salary and the taxable components of any earlier ETPs) received by the employee in the same income year.\n\nThe cap which applies depends on the type of payment. For example, a genuine redundancy payment and a 'golden handshake' may be subject to different caps.\n\nFor more information on the ETP caps, see [ETP cap amount](https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/employment-termination-payments#ato-ETPcapamount).\n\n## Which cap to apply\n\nWhich cap applies depends on the type of payment.\n\nThe ETP cap applies to 'excluded payments'. These include:\n\n- genuine redundancy and early retirement scheme payments that exceed the [tax-free limit](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/redundancy-and-early-retirement). Only the amount in excess of the limit is subject to the cap.\n- non-genuine redundancy payments that would have been for a genuine redundancy had the employee not reached their retirement age or age-pension age\n- invalidity payments. Only the amount not included in the [tax-free component](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/tax-free-component-of-etps) is subject to the cap.\n- [compensation payments](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/applying-the-etp-caps#Compensationpayments) principally for personal injury, unfair dismissal, harassment or discrimination\n- death benefit ETPs.\n\nThe lesser of the ETP cap and the whole-of-income cap should be applied to all other 'non-excluded payments'. These include:\n\n- golden handshakes and gratuities\n- [non-genuine redundancy payments](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/redundancy-and-early-retirement#Redundancy)\n- payments in lieu of notice\n- payments for unused sick leave or unused rostered days off.\n\nIn the majority of cases, the whole-of-income cap will be less, so it will apply to these payments.\n\nThe only exception is if you make [multiple payments](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/working-out-the-whole-of-income-cap-amount#Multiplepayments) to the employee for the same termination. The ETP cap is reduced by the other payments – even if they occur in different income years – and could then be lower than the whole-of-income cap.\n\n### Categorising payments\n\nIn some circumstances, a non-excluded payment, such as unused sick leave, may be classified as excluded and subject only to the ETP cap. You need to categorise each payment as excluded or non-excluded based on the following factors:\n\n- the employment conditions – for example, what you're reasonably required to pay under the industrial agreement or employment contract for that termination type\n- whether the payment is extra, discretionary or separate to what is reasonably required for that particular type of termination.\n\n[This example](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/engaging-a-worker/when-a-worker-leaves-your-business/taxation-of-termination-payments/working-out-the-whole-of-income-cap-amount#ExampleSingleETPwithexcludedandnonexclud) shows how a payment for unused sick leave may be classified as an excluded payment. Other non-excluded payments may be classified as excluded in similar circumstances.\n\n### Compensation payments\n\nPayments that are made mainly to compensate an employee for a genuine dispute from personal injury, unfair dismissal, harassment or discrimination are excluded from the whole-of-income cap.\n\nA payment does not need to be made as a result of proceedings before a court to be deemed as compensation. The employee or employer should keep evidence to show that a genuine dispute existed.\n\n#### Example 1: Compensation for unfair dismissal\n\nJulie’s employment was terminated by her employer. Julie has evidence that she was unfairly dismissed because of her strong union affiliation and disputes her termination by engaging a lawyer to act on her behalf.\n\nThe lawyer negotiates a $20,000 out-of-court settlement with Julie’s employer for unfair dismissal.\n\nAlthough Julie’s complaint did not go to court, there was a genuine dispute between Julie and her employer that resulted in compensation for her unfair dismissal. Her payment of $20,000 is a compensation payment. It will be subject to the ETP cap and excluded from the calculation of the whole-of-income cap.\n\nEnd of example\n\n#### Example 2: Compensation for harassment and discrimination\n\nMonica’s employment was terminated in September 2023 because of alleged poor work performance. Monica feels that she was unfairly dismissed, believing that her dismissal was actually as a result of a harassment claim she lodged against her manager. She takes court action against her employer and receives a payment of $150,000. Monica has other taxable income of $100,000.\n\nAs the payment is a result of the termination of her employment and made to compensate her for harassment and discrimination, it is subject to the ETP cap and excluded from the whole-of-income cap.\n\nThe ETP cap for 2024–25 is $245,000. Therefore, the entire $150,000 of her compensation payment will receive concessional tax treatment, regardless of her other income.","title":""}
+{"_id":"passage_a0JRF000003h9EP2AY/p00391233","text":"## When to use the form\n\n[Foreign resident capital gains withholding](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding/foreign-resident-capital-gains-withholding-overview) (FRCGW) applies to vendors disposing of certain taxable property under contracts entered into from 1 July 2016.\n\nAustralian resident vendors should use the online [Foreign resident capital gains withholding clearance certificate application](https://www.ato.gov.au/frcgw_clearance_certificate.aspx) to notify us that FRCGW doesn't need to be withheld from the sale of taxable Australian real property assets.\n\nIt provides the details of vendors so we can establish their tax residency status.\n\nIf you are a foreign resident, don't lodge an application – if you are entitled to a [variation](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding/foreign-residents-and-variations) to your CGT liability, lodge a variation request.\n\n## Apply now\n\nAustralian resident vendors should use the online [Foreign resident capital gains withholding clearance certificate application](https://www.ato.gov.au/frcgw_clearance_certificate.aspx)\n\nDon't wait to sign a contract, lodge your application as soon as you are thinking of selling. **It can take up to 28 days to process.**\n\nThe certificate is valid for 12 months from the date issued.\n\nVendors must provide the purchaser with an ATO issued clearance certificate on or before the day of settlement of the sale of the asset to ensure no withholding occurs.\n\nEach vendor must lodge their own application. Vendors who are parties to the same property transaction are not able to lodge joint applications.\n\n## Who can complete and lodge\n\nA clearance certificate application form should be completed and lodged by Australian resident vendors who don't wish to have an amount withheld by purchasers.\n\nThe entity that has legal title to the asset, is the entity required to obtain a clearance certificate for foreign resident capital gains withholding purposes. Where a purchaser acquires an asset through a sale or transfer, the vendors are the individuals or companies that have legal title to the asset before the sale or transfer.\n\nWhere the vendor of the asset is the trustee of a trust (for example, an executor of a deceased estate or a trustee of a superannuation fund) it is the trustee that applies for the clearance certificate. The trustee should apply for the clearance certificate using (as the identifier) their:\n\n- own tax file number (TFN)\n- Australian business number (ABN).\n\nTo avoid possible delays in issuing a clearance certificate, ensure:\n\n- the [associates’ detailsExternal Link](https://abr.gov.au/business-super-funds-charities/applying-abn/what-you-need-your-abn-application/associates-details) in the [Australian business registerExternal Link](https://www.abr.gov.au/business-super-funds-charities/updating-or-cancelling-your-abn/update-your-abn-details) are updated with the current corporate trustee details.\n- where a corporate trustee doesn't have a TFN, you must attach the details of the relevant trust and the company's Australian company number (ACN) to the application.\n\nWhere a purchaser acquires an asset that has been granted (such as a lease), the vendors are the grantors of the asset.\n\nVendors may either complete and lodge the form themselves, or have it completed and lodged on their behalf by a third party (for example, a solicitor, an accountant, or a tax agent).\n\nConveyancers, real estate agents and other persons charging a fee for services can't complete the form on behalf of the vendor unless they are a legal practitioner or registered tax agent.\n\nHowever, a vendor may provide a completed paper PDF version of the form to a conveyancer, real estate agent or other person charging a fee for service, who should enter the details in the online form (providing faster processing) as part of the settlement process they provide the vendor.\n\n## How to complete the online form\n\nYou can't save an incomplete clearance certificate application form and return to complete it at a later date – the form must be completed and submitted in one session.\n\nThese instructions explain how to complete each section of the form, lodging your application and what happens next.\n\nThe foreign resident capital gains withholding clearance certificate application will request specific information based on the information you provide. Mandatory fields are marked with an asterisk (*).\n\nHelp is available in the top right-hand side of the form. If you are unsure of how to complete this form after reading these instructions, you can phone us on **13 28 66** (Fast Key Code **4, 2**).\n\n**Form sections:**\n\n- [1. Application type](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_1Applicationtype)\n- [2. Who can the ATO contact about this form](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_2WhocantheATOcontactaboutthisform)\n- [3. Vendor details](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_3Vendordetails)\n- [4. Application details](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_4ApplicationDetails)\n- [5. Attachments](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_5Attachments)\n- [6. Declaration](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_6Declaration)\n- [7. Confirmation screen](https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application#BK_7ConfirmationScreen)\n\n### 1. Application type\n\nThis question determines if you are submitting the application as a vendor of the asset or their representative (for example, lawyer or accountant):\n\n- *Are you submitting this application as a vendor of the asset or their representative? – select vendor or vendor's representative.\n- Conveyancers who are simply keying the form on behalf of a vendor should select 'vendor'.\n- Contract date (or possible contract date) – enter the contract date as shown on the contract of sale. If no contract is yet signed, you can enter an anticipated date.\n- Expected settlement date of the asset – enter the date of settlement for the sale, or when you expect it to settle.\n\nAt the end of the application type section click **Next** to proceed to the:\n\n- vendor details section of the form – if the applicant is the vendor\n- contact details page – if the applicant is the vendor's representative.\n\n### 2. Who can the ATO contact about this form\n\nIf you're submitting the application as the vendor's representative, you must provide your contact details. This allows us to contact you to resolve any issues and process the form in a timely manner.\n\nWe'll provide the contact person with a copy of the Clearance Certificate Application decision at the same time as we provide it to the vendor.\n\nIf you're a conveyancer who is not a legal practitioner or tax agent, you can be the contact for the purposes of the form.\n\nHowever, if questions are asked, we would expect that you relay these to the vendor. The vendor can then provide you with answers which you can communicate to us. Alternatively, you may ask us to contact the vendor directly should further questions be raised.\n\nThe contact detail fields are:\n\n- Title – select the title of the contact person from the list provided\n- First name – the first name of the contact person\n- *Last name – the last name of the contact person\n- Job title – the job title of the applicant, which may also be used to disclose the relationship between the applicant and the vendor\n- Contact email address – the email address for the contact person. By providing an email address, you are authorising us to respond to you by email. If you don't provide us with an email address, it may take longer to receive the clearance certificate as we will mail it to you.\n- If you choose to communicate with us via email, be aware the internet isn't a secure environment. We can't guarantee the privacy and security of personal information.\n- Contact phone number – the contact person's phone number (including area code) and country code (if the country is not Australia). Don't include brackets ( ) or spaces in your entry. Providing a phone number will ensure we can easily contact you if we require additional information to process the clearance certificate.\n- *Address – the contact's address, including the suburb/town/locality, state/territory, postcode and country.\n\n**Note:** Providing a contact email address and phone number will help to avoid unnecessary delays. We will contact you if we need to clarify any details during the application process.\n\nIf you choose to communicate with us via email, be aware the internet isn't a secure environment. We can't guarantee the privacy and security of personal information.\n\nThe following options are presented at the end of the contact details section:\n\n- **Back** – to return to the last screen that had been viewed\n- **Print friendly version** – to print the details that have been entered into the form\n- **Next** – to proceed to the vendor details section of the form.\n\n### 3. Vendor details\n\nThe vendor should be the entity that has legal title to the asset. If there are multiple vendors on the title, each vendor will need to apply for a separate clearance certificate in their name.\n\n**Note:** Where the vendor is the trustee of a trust, that entity should apply for the clearance certificate using their:\n\n- tax file number (TFN)\n- Australian business number (ABN), if they have one\n- Australian company number (ACN), if they have one.\n\nProviding as much detail as possible reduces the likelihood of us having to contact the nominated contact person in section 2 (if completed).\n\nThe vendor details fields are:\n\n- Tax file number (TFN) – enter the vendor's TFN. While you're not required to provide the vendor's TFN, providing the TFN assists us in identifying the vendor in our records which means that we can process the application faster\n- Australian business number (ABN) – enter the vendor's ABN. While you're not required to provide the vendor's ABN, providing your ABN assists us in identifying the vendor in our records which means that we can process the application faster\n- *Entity type – select the entity type of the vendor from the list. The entity that has legal title to the asset, is the entity required to obtain a clearance certificate for foreign resident capital gains withholding purposes.\n\nFor transactions involving assets held on trust (including the assets of deceased estates and superannuation funds), select the entity type that corresponds with the entity that is the trustee (either 'individual' or 'trustee'). Applicants should **not** use the 'other' entity type as this will result in a delay in processing the application.\n\n- Only select **other** if the vendor is not an entity of one of the specified entity types\n- If the entity type of the vendor is a **company**, the company detail fields will appear\n- *Company name – the legal name of the company (that is, the name under which the vendor is incorporated as reflected on the certificate of title)\n- Business name (if applicable) – the business name or trading name of the vendor\n- Ultimate holding company – the name of the ultimate holding company of the vendor. This is the company that has ownership and controlling interest over the whole group of companies of which the vendor is a member\n- If the entity type of the vendor is an **individual,** the individual detail fields will appear\n- Title – select the title of vendor from the list provided\n- First name – the first name of the vendor\n- Other given names – if an individual has another given name reflected on the certificate of title, they should include this. Including only the initial is also acceptable\n- *Last name – the last name of the vendor.\n\nIf the vendor's name has changed, you need to [update your name](https://www.ato.gov.au/individuals-and-families/tax-file-number/update-your-tfn-registration-details/update-your-name) on our systems before you apply for a clearance certificate. The clearance certificate issues in the legal name that we have on our systems.\n\n- *Date of birth – the date of birth of the vendor in dd/mm/yyyy format or select from the calendar icon\n- Contact email address – the vendor's email address. By providing an email address you are authorising us to respond to you by email. If you don't provide an email address, it may take longer to receive the clearance certificate as we will mail it to you.\n- If you choose to communicate with us via email, be aware the internet isn't a secure environment. We can't guarantee the privacy and security of personal information.\n- Contact phone number – the vendor's phone number, including area code and country code (if the country is not Australia). Don't include brackets ( ) or spaces in your entry. Providing a phone number will ensure we can easily contact you if we require additional information to process your clearance certificate.\n\n**Note**: You must provide either a contact phone number or email address. Providing both will help to avoid unnecessary delays. We will contact you if we need to clarify any details during the application process.\n\n- If the entity type of the vendor is **other** entity, the other entity detail fields will appear\n- *Entity name – the legal name of the vendor as reflected on the certificate of title\n- Business name (if applicable) – the business name or trading name of the vendor\n- Vendors contact details – these fields appear when the entity type selected for the vendor is either **company** or **other**\n- Title – select the title of contact person from the list provided\n- First name – the first name of the contact person\n- *Last name – the last name of the contact person\n- Job title – the job title of the contact person\n- Contact email address – the email address of the contact person. By providing an email address, you are authorising us to provide information to the vendor by email. If you don't provide an email address, it may take longer to receive the clearance certificate as we will mail it to the vendor.\n- Contact phone number – the contact person's phone number, including area code and country code (if the country is not Australia). Don't include brackets ( ) or spaces in your entry. Providing a phone number for the vendor will ensure we can easily contact them if we require additional information to process the clearance certificate.\n\n**Note:** You must provide either a contact phone number or email address for the vendor. Providing both will help to avoid unnecessary delays. We will contact the vendor if we need to clarify any details during the application process.\n\nIf you choose to communicate with us via email, be aware the internet isn't a secure environment. We can't guarantee the privacy and security of personal information.\n\n- *Address – enter the vendor's address, including the suburb/town/locality, state/territory, postcode and country\n- *Has your residency status changed since your last tax return or will it change before you sell the property? – select one of the following\n- 'Yes' – if the vendor's residency status has changed since lodging their last tax return or will change before the property is sold\n- 'No' – if the vendor's residency status hasn’t changed since lodging their last tax return or won't change before the property is sold.\n- * Have you lodged a tax return for the last 2 years? – select one of the following\n- 'Yes' – if the vendor has lodged both tax returns for the last 2 years for which the due date has passed\n- 'No' – if the vendor has not lodged both their Australian tax returns for the last 2 years, and the due date for lodging returns for those years of income has passed.\n- * Are you holding the property on behalf of a foreign resident or on behalf of other entities that include a foreign resident? – select one of the following\n- 'Yes' – if the vendor holds the property on behalf of a foreign resident, or on behalf of other entities that include a foreign resident\n- 'No' – if the vendor doesn’t hold the property on behalf of a foreign resident, or on behalf of other entities that include a foreign resident.\n\n**Note:** You must answer 'Yes' to this question if you intend to use the same clearance certificate for multiple properties, any of which you hold on behalf of a foreign resident or on behalf of other entities that include a foreign resident.\n\nThe following options are presented at the end of the vendor details section:\n\n- **Back** – to return to the last screen that had been viewed\n- **Print friendly version** – to print the details that have been entered into the form\n- **Next** – to proceed to the application details section of the form.\n\n### 4. Application details\n\nThe application details provide more information about the vendor's application. This section is reached if the vendor answered:\n\n- 'Yes' to 'Has your residency status changed since your last tax return or will it change before you sell the property?'\n- 'No' to 'Have you lodged a tax return for the last 2 years?'\n\nThe application details fields are:\n\n- If the entity type of the vendor is a **company**, the company detail fields will appear. This section requires a 'Yes' or 'No' answer to establish residency status of the company\n- *Is the company incorporated in Australia? If you answered 'No', the following questions will need to be answered\n- *Does the company carry on business in Australia?\n- *Is the company's central management and control in Australia?\n- *Is the company's voting power controlled by shareholders who are residents in Australia?\n- If the entity type of the vendor is an **individual**, the individual detail fields will appear\n- *Are you migrating and settling in Australia? Select 'Yes' or 'No'.\n\n**Note:** Answer 'Yes' if you have lived in Australia for the past 3 years, but you have not been required to lodge an income tax return in the last 2 years, for example, an aged pensioner.\n\nImmigrants must hold a current permanent residence visa, issued by the Department of Immigration and Border Protection, and intend to reside permanently in Australia. New Zealanders do not need a permanent residency visa, however they must intend to reside permanently in Australia.\n\n- *Are you an Australian returning to live in Australia? – select 'Yes' or 'No'\n- *Have you stayed, or do you intend to stay, in Australia for 6 months or more? – select 'Yes' or 'No'\n- *Do you have social or economic ties to a country other than Australia? – select 'Yes' or 'No'\n- *What is your main purpose for being in Australia? – select your main reasons for being in Australia\n- *Have you stayed or intend to stay in a particular place continuously for 6 months or more? – select 'Yes' or 'No'\n- *Where do you live while in Australia? – select where you live while in Australia\n- *Do you have a spouse and/or dependent children? – select 'Yes' or 'No'\n- *Where are your spouse and/or dependent children? – select where your spouse/dependent is living\n- *Where do you hold the majority of your assets? – select Australia or overseas\n- *Are you a member of any clubs, churches, community groups or organisations in Australia? – select 'Yes' or 'No'\n- *Have you been in Australia, either continuously or intermittently, for 183 days or more in the income year? – select 'Yes' or 'No'\n- *Is your usual place of abode outside of Australia? – select 'Yes' or 'No'\n- *Do you intend to take up residence in Australia? – select 'Yes' or 'No'\n\nThe following options are presented at the end of the application details section:\n\n- **Back** – to return to the last screen that had been viewed\n- **Print friendly version** – to print the details that have been entered into the form\n- **Next** – to proceed to the attachments section of the form.\n\n### 5. Attachments\n\nYou can electronically attach any documents you believe support the application for a clearance certificate.\n\nThis may be relevant where:\n\n- your residency status changed since your last tax return or will change before you sell the property\n- you have not lodged a tax return for the last 2 years.\n\nYou can attach more than one file and each file must be in .doc, .docx, .rtf, .xls, .xlsx, .pdf, .jpg, .tif, .bmp, .png, or .gif format.\n\nThe following options are presented at the end of the attachments section:\n\n- **Back** – to return to the last screen that had been viewed\n- **Print friendly version** – to print the details that have been entered into the form\n- **Next** – to proceed to declaration section of the form.\n\n### 6. Declaration\n\n*Complete the declaration section of the form.\n\nThere are 2 parts of this section to complete:\n\n- *the declaration\n- *declare you are not a robot – this field is required for system operational reasons.\n\nOnce you have completed this section, you should submit the form.\n\nThe following options are presented at the end of the declaration section:\n\n- **Back** – to return to the last screen that had been viewed\n- **Print friendly version** – to print the details that have been entered into the form\n- **Submit** – to submit the form.\n\n### 7. Confirmation screen\n\nThe confirmation screen confirms the clearance certificate application form has been successfully lodged.\n\nYou should retain a copy of the form. Do this by selecting Print friendly version to save or print the application.\n\n## What happens next\n\nWe will process your application and notify you of the outcome. If you don’t provide an email address, we will mail the clearance certificate to your contact postal address. If required, we will contact you to resolve or clarify any information.\n\nIndividual vendors can obtain a copy of their clearance certificate outcome online:\n\n- Login in to **myGov** and go to **ATO online services**\n- **My profile** menu, go to **Communication**\n- then **History**.\n\nIf we approve a clearance certificate, you'll need to provide a copy to the purchaser on or before settlement.","title":""}
+{"_id":"passage_a0JRF000003gu452AA/p00391030","text":"### How do I notify the ATO when someone dies?\n\nWe understand that tax won’t be your priority when someone passes away. But it’s a good idea to let us know that a person has died so we can stop sending correspondence to them.\n\nWhen you’re ready, you’ll need to [officially notify us of their death this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/notifying-us-of-a-death-and-who-will-manage-the-estate#ato-Whocannotifyus) and provide supporting documents like a death certificate, probate or letters of administration. This tells us who is authorised to manage the estate.\n\nYou can notify us by:\n\n### Can I access a deceased person’s tax and super info?\n\nYou can access a person’s full tax and super records if you are authorised to manage their estate. This is called an authorised [legal personal representative this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/who-can-represent-a-deceased-estate#ato-WhocanbealegalpersonalrepresentativeLPR) (LPR).\n\nAn authorised LPR is generally an executor who has obtained [grant of probate this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/who-can-represent-a-deceased-estate#Whatareprobateandlettersofadministration) or another person with [letters of administration this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/who-can-represent-a-deceased-estate#Whatareprobateandlettersofadministration).\n\nIf you’re the authorised LPR, you may decide to appoint a solicitor or tax agent to help you manage the estate. If you do, we can share the deceased person’s info with them too.\n\nIf you are not the authorised LPR, we can still help you but there are some legal restrictions on the info we can share.\n\nFor more info on [accessing a deceased person’s tax and super info this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/accessing-a-deceased-person-s-tax-and-super-information) check out our website.\n\n### Do I need to lodge a final tax return?\n\nIf the deceased person earned income in the year they died, you may need to lodge a final tax return. This is known as a ‘date of death’ tax return, and is different to the [trust tax return for the deceased estate this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/doing-trust-tax-returns-for-the-deceased-estate). The return essentially finalises their personal tax obligations up until their date of death.\n\nGenerally, the authorised LPR should lodge the return. If you aren’t the authorised LPR, you can still lodge – we’ll just review the return to determine what actions we need to take.\n\nYou can lodge a final tax return using the [paper tax return for individuals this opens in a new window ](https://www.ato.gov.au/TaxReturnForIndividuals-redirect). If you’ve appointed a tax agent to help you, they can prepare and lodge the return online.\n\nFor more help [lodging a final tax return this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/doing-a-final-tax-return-for-the-deceased-person) visit our website.\n\n### What if no income was earned in the year of death?\n\nIf a date of death tax return is not required, you can let us know by completing a [non-lodgment advice form this opens in a new window ](https://www.ato.gov.au/Non-LodgmentAdvice-redirect). Where the form asks for a reason, print ‘DECEASED’ followed by the date of death.\n\n### What happens to HECS-HELP loans upon death?\n\nIf a deceased person has a study loan, the amount they owe is worked out up until the day they passed.\n\nWhen their final tax return is processed, we’ll work out if a final [compulsory repayment this opens in a new window ](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/compulsory-repayments) is required.  Any outstanding loan amount that remains after this will be cancelled.\n\nYou can read more about loan repayments on the [Study Assist website this opens in a new window ](https://www.studyassist.gov.au/managing-and-repaying-your-loan/loan-repayments).\n\n### What happens to other government agency debts upon death?\n\nIf there are outstanding debts with us or other government agencies, they’ll need to be handled by the deceased estate.\n\nIf the estate has enough assets to cover the debts, the executor must pay the amounts owing. After that, the remaining assets can be distributed to beneficiaries according to the will.\n\n### Do I need to submit a trust tax return?\n\nFinalising a deceased estate can take anywhere between **6 to 12 months** – sometimes longer. A trust tax return covers the period **after** their death and tells us about any income generated by the estate. For example – interest, dividends or rental income.\n\nIf you’re required to lodge a trust tax return, you’ll need to do so each year until the estate has been fully distributed to the beneficiaries.\n\nWork out if a [trust tax return this opens in a new window ](https://www.ato.gov.au/individuals-and-families/deceased-estates/doing-trust-tax-returns-for-the-deceased-estate/when-and-how-to-lodge-returns-for-a-deceased-estate) is required and how to prepare a deceased estate return.\n\n### Can probate expenses be claimed as a tax deduction?\n\nWhether you can claim probate expenses depends on the type of deceased estate tax return you’re completing.\n\nIf it’s the final tax return for a deceased individual (also known as a date of death tax return), you can include:\n\nYou can include tax agent’s fees and similar expenses you incur as the executor.\n\n### How do I complete my own tax return if my spouse dies?\n\nIf your spouse passes away during the income year, there are some steps you’ll need to follow when completing your own tax return. They include:\n\n### Do I have to pay tax as a beneficiary of a deceased estate?\n\nIf you receive an inheritance as a beneficiary of a deceased estate, you won’t need to pay tax on the inheritance itself. However, you may have tax obligations for the assets you inherit. These can include:\n\nYou don’t need to declare inherited money or assets, like jewellery, on your tax return. Our article has more information on [tax on gifts and inheritances](https://community.ato.gov.au/s/article/a079s0000009GnFAAU/tax-on-gifts-and-inheritances).","title":""}
+{"_id":"passage_a0JRF000003Uk0U2AS/p00380056","text":"## Overview of deregistration\n\nA company may be deregistered:\n\n- voluntarily, for example after it is closed down\n- by the Australian Securities & Investments Commission (ASIC), for example for outstanding annual review fees\n- by court order, for example following amalgamation or because of winding-up.\n\nOnce a company is deregistered, it ceases to exist as a legal entity and can no longer do anything in its own right.\n\nTo prevent administrative deregistration of your company by ASIC, keep your contact details and obligations up to date with ASIC.\n\n## Before voluntary deregistration\n\nBefore you voluntarily deregister your company, you must make sure all the company's tax and superannuation obligations are up to date.\n\nThis includes:\n\n- lodging and confirming we have processed all overdue and final tax forms including\n\n- tax returns\n- activity statements\n- fringe benefits tax returns\n- taxable payments annual reports\n- paying all outstanding debts\n- finalising your company’s super affairs, including paying super guarantee amounts and charges\n- finalising your end of year reporting, for example if you report through Single Touch Payroll (STP)\n- ensuring a replacement trustee is appointed if you are acting as the corporate trustee of a super fund or trust\n- finalising lodgments and other obligations if the company is\n\n- part of a goods and services tax (GST) group\n- an income tax group, or\n- a partner in a partnership.\n\nEarly tax returns can be lodged electronically using Standard Business Reporting (SBR)-enabled software.\n\n## After deregistration\n\nOnce deregistered, a company ceases to exist. This means we will stop:\n\n- paying refunds\n- interacting with the company, including through former directors and other representatives\n- processing forms lodged after deregistration\n- enabling reporting, for example through STP.\n\nWe will also:\n\n- cancel any tax forms received after deregistration\n- cancel the company's Australian business number (ABN) and all registrations, for example pay as you go (PAYG) withholding and GST\n- cancel any links the company has to registered intermediaries\n- refund credits the company was entitled to before deregistration, including to\n\n- the company only, where its registration has been reinstated by ASIC\n- the liquidator, where a GST credit arose after they were appointed\n- ASIC in all other cases.\n\n### Director penalties\n\nCompany directors may still be liable for some debts incurred before deregistration. For example, if a company does not meet its obligations, we may recover the following amounts under the [director penalty](https://www.ato.gov.au/individuals-and-families/paying-the-ato/if-you-don-t-pay/director-penalty-regime) regime:\n\n- PAYG withholding\n- net GST (including luxury car tax and wine equalisation tax)\n- super guarantee charge (SGC).\n\n#### Requesting confidential information to meet your obligations\n\nWe can disclose confidential information to a former director to help them understand or comply with their tax obligations, including where they require further information in relation to a director penalty.\n\nWe won’t disclose confidential information if you request it for purposes other than to support you to meet your tax obligations – for example, to support your position in a private dispute.\n\n##### Example: when disclosure is permitted\n\nTom is a former director of ABC Pty Ltd, that was deregistered in 2023. Tom no longer has access to ABC Pty Ltd’s company records. In 2024, we issue a director penalty notice to Tom in relation to $4,000 in unpaid super guarantee charge (SGC) incurred by ABC Pty Ltd prior to deregistration.\n\nTom contacts us and requests information regarding the calculation of the underlying SGC liability, and the names of the employees to which the shortfalls relate. Tom states he is seeking the information so he can satisfy himself of the amount of the liability, and confirm whether he has already made payments towards the outstanding liability.\n\nThe ATO officer considers Tom’s request and determines the information would enable him to understand or comply with his tax obligations. They disclose the information to Tom.\n\nEnd of example\n## Reinstatement of registration\n\nIf your company has been [deregistered by ASICExternal Link](https://asic.gov.au/for-business/closing-your-company), you can seek advice from them regarding whether:\n\n- your entity's circumstances meet their criteria for administrative reinstatement\n- you have to apply to the court for an order that they reinstate your company.\n\nOnce the company is reinstated by ASIC, we will treat it as if it had never been deregistered. You can make lodgments which we will process.\n\nLodgments made to us during the period of deregistration must be re-lodged by the company after reinstatement, unless there is a court order validating those lodgments.\n\nWe may apply to reinstate a deregistered company for the purpose of pursuing outstanding liabilities owed by the company before deregistration.","title":""}
+{"_id":"passage_a0JRF000003i1pt2AA/p00391871","text":"**Ruling**\n\n**Subject: Rental deductions for tree and asbestos contamination removal**\n\n**Question 1**\n\nAre you entitled to a deduction under section 40-755 of the *Income Tax Assessment Act 1997* (ITAA 1997) for expenditure incurred in the removal of asbestos affected areas, including the removal of a garage and carport, from your rental property?\n\n**Answer**\n\nYes\n\n**Question 2**\n\nAre you entitled to a deduction under section 8-1 of the ITAA 1997 for expenditure incurred on tree removal?\n\n**Answer**\n\nNo\n\n**Question 3**\n\nAre you entitled to a deduction under section 8-1 of the ITAA 1997 for expenditure incurred for landscaping?\n\n**Answer**\n\nNo\n\n**This ruling applies for the following period:**\n\nYear ended 30 June 20xx\n\n**The scheme commences on:**\n\n1 July 201xx\n\n**Relevant facts and circumstances**\n\nThis ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.\n\nYou are the joint owner of a rental property.\n\nSafety concerns arose when the tenant discovered exposed pieces of a material in the garden and requested you have them removed. A contractor was engaged to clean up the garden.\n\nFollowing the contractors work severe rain exposed further pieces in the rear of the yard.\n\nThe tenant was also concerned about a garage constructed from asbestos and requested you undertake an asbestos review.\n\nYou engaged an environmental company to inspect the area and provide recommendations.\n\nThe company reported the exposed pieces were asbestos that appeared to have been buried and had contaminated the soil. The company provided reports which recommended the garage and contaminated soil be removed.\n\nYou engaged a qualified asbestos removal company to remove the contaminated areas. Both the garage and a carport were demolished and have not been replaced. On completion of the asbestos removal works you obtained a clearance certificate.\n\nFurther safety concerns arose regarding two trees on the property and council allowed for their removal.\n\nAn application was submitted to the council requesting to have them removed. A Tree Officer from the council attended the premises and determined:\n\nThe trees were removed a professional tree lopping company.\n\nAs a result of the soil removal, the area was landscaped and re-grassed.\n\n**Relevant legislative provisions**\n\n*Income Tax Assessment Act 1997* section 8-1\n\n*Income Tax Assessment Act 1997* section 25-10\n\n*Income Tax Assessment Act 1997* section 40-775\n\n**Reasons for decision**\n\n**Summary**\n\nYou are entitled to a deduction for your share of the costs to remediate the asbestos affected areas of the property.\n\nYou are not entitled to deduction for your share of the costs for landscaping or removal of the trees, including the stumps and roots. These expenses are capital in nature**.**\n\n**Detailed Reasoning**\n\n**Asbestos Removal**\n\nSection 40-755 of the ITAA 1997 provides a deduction for expenditure you incur for the sole or dominant purpose of carrying on environmental protection activities. Paragraph 40-755(3)(a) of the ITAA 1997 further clarifies an earning activity ‘is an activity you carried on, carry on, or propose to carry on for the purpose of producing assessable income for an income year (except a net capital gain)’.\n\nEnvironmental protection activities are listed in subsection 40-755(2) of the ITAA 1997. One class of environment protection activities is:\n\nThe environmental protection provisions are provisions of last resort. If a deduction is allowable under another provision of the ITAA 1997, the expenditure is not deductible under section 40-755 of the ITAA 1997.\n\nIn your case you have incurred expenses to have the asbestos removed from the property. You also incurred associated expenses to obtain approval for the removal of the asbestos.\n\nThese expenses are considered to be capital in nature as it is a one-off cost that results in a lasting advantage, that is, the removal of the pollution risk to the property. Therefore, a deduction is not allowed under sections 8-1 of the ITAA 1997 or 25-10 of the ITAA 1997.\n\nIt is, however, considered that your sole or dominant purpose in carrying out the work was to rid the affected areas of pollution on the site of your income earning activity by asbestos and prevent further contamination or deterioration.\n\nTherefore, you are entitled to a deduction for the total cost of removing asbestos from your rental property under section 40-755 of the ITAA 1997.\n\n**Tree Removal**\n\nSection 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.\n\nSubsection 25-10(1) of the ITAA 1997 allows a deduction for expenditure incurred for repairs to premises (or part of premises), that you held or used solely for the purpose of producing assessable income. Capital expenditure, however, is not deductible under subsection 25-10(3) of the ITAA 1997.\n\nThe removal of a tree, including its stumps and roots, is not a maintenance or repair expense and is similar to that which normally falls for consideration under section 25-10 of the ITAA 1997. Normally this is a one-off type expense that produces an enduring benefit, and is considered to be an improvement.\n\nIn your case, you incurred expenses to remove two trees that were likely to cause damage to your rental property. The removal of trees is not considered to be a repair as there is no replacement or correction of defects in or damage to the trees. The trees were removed to eliminate any potential risk and are no longer in existence. As the removal of the trees is not actually repairing any damage, a repairs deduction is not allowable under section 25-10 of the ITAA 1997\n\nAdditionally, the expense is considered to be capital in nature as it is a one-off expense that provides an enduring benefit, that being, the removal of a potential hazard. As the expense is capital in nature, a deduction is also not allowable under section 8-1 of the ITAA 1997.\n\nTherefore, you are not entitled to a deduction for the expenses incurred to have the trees removed from your rental property.\n\n**Landscaping**\n\nTypically, deductible expenditure incurred to maintain a rental property will be ongoing and recurrent and is incurred to preserve the property and keep it in a rentable state; whereas non-deductible maintenance expenditure is typically one-off and provides an enduring benefit.\n\nExpenses incurred for repairs to a property used for income producing purposes are deductible providing the expenditure is not of a capital nature.\n\nTaxation Ruling TR 97/23 explains the circumstances in which expenditure incurred for repairs is an allowable deduction. Generally a repair involves a restoration of a thing to a condition and efficiency it formerly had without changing its character.\n\nWorks can be fairly described as repairs if they are done to make good damage or deterioration of property that has occurred by ordinary wear and tear, by accidental or deliberate damage, or by the operation of natural causes during the passage of time. To repair property improves to some extent the condition it was in immediately before repair; however, a minor or incidental degree of improvement may be done to property and still be a repair.\n\nWhere the work amounts to a substantial improvement and results in a greater efficiency of function in the property, the expenditure is not for repairs and is of a capital nature. An improvement involves bringing a thing or structure into a more valuable or desirable form, state or condition than a mere repair would do. Some factors that point to work done to property being an improvement include whether the work will extend the property’s income producing ability, significantly enhance its saleability or market value or extend the property’s expected life.\n\nGeneral garden maintenance is an allowable deduction where, for example, you pay someone to mow lawns, maintain garden beds or prune trees. However, landscaping is considered to be an improvement and therefore not an allowable deduction as a repair or as a deduction under section 8-1 of the ITAA 1997.","title":""}
+{"_id":"passage_a0JRF000003hVrd2AE/p00391528","text":"## Importer for the purpose of claiming GST credits\n\nYou must be the importer of the goods to claim GST credits. You are the importer of the goods if both of the following apply:\n\n- you have caused the goods to be brought to Australia for your own purposes\n- you, or your agent, are named as the 'owner' of the goods on the import declaration.\n\nYou have caused goods to be brought to Australia if the goods were brought to Australia for application to your own purposes after importation.\n\nYou use goods for your own purposes if you sell, lease or hire the goods, use the goods as trading stock or use the goods in the manner consistent with their design or nature.","title":""}
+{"_id":"passage_a0JRF000003fl4T2AQ/p00390123","text":"## Changes in creditable purpose\n\nThe amount of GST credit you can claim on a purchase or importation depends on the extent to which it is used for a creditable purpose. You may have to make an adjustment if there is a change in the extent of the creditable purpose.\n\nYou use goods or services for a 'creditable purpose' if you use them in your business. This does not include their use:\n\n- to make input-taxed sales, or\n- for private or domestic use.\n\nThe 'creditable purpose' of a purchase changes if either:\n\n- there is a difference between how you planned to use it and how you actually use it\n- the way you use it has changed over time.\n\nAdjustments are required for changes in creditable purpose because the GST credit you originally claimed will either have been too much or too little.\n\nYou will generally not have to make an adjustment for a change in creditable purpose:\n\n- if the value of the purchase or importation was $1,000 (GST-exclusive) or less\n- if the value of the purchase or importation related to business finance and was $10,000 (GST-exclusive) or less.\n\n### Adjustment periods\n\n'Adjustment periods' are the reporting periods in which you have to account for any adjustments in your activity statement.\n\nAn adjustment period for a purchase or importation is a reporting period that both:\n\n- starts at least 12 months after the end of the reporting period you claimed your GST credit in (or would have claimed your GST credit in had the purchase or importation been creditable)\n- ends on 30 June (or if none of your reporting periods end on 30 June, your reporting period that ends closest to 30 June).\n\nThe maximum number of adjustment periods in which you make adjustments depends on the value of the purchase or importation.\n\nTable 1: Adjustment periods for most purchases and importations\n\nValue of the purchase or importation (GST-exclusive)\n\nNumber of adjustment periods\n\n$1,001 to $5,000\n\n2\n\n$5,001 to $499,999\n\n5\n\n$500,000 or more\n\n10\n\nTable 2: Adjustment periods for purchases or importations that relate to business finance\n\nValue of the purchase or importation (GST-exclusive)\n\nNumber of adjustment periods\n\n$10,001 to $50,000\n\n1\n\n$50,001 to $499,999\n\n5\n\n$500,000 or more\n\n10\n\nIf you cancel your GST registration, your final reporting period is also an adjustment period for purchases and importations.\n\n**See also**\n\n- [If your business changes or ceases](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/if-your-business-changes-or-ceases)\n\n### Working out adjustments for changes in creditable purpose\n\nTo work out the adjustment amount, follow the steps below.\n\n**Step 1**: Work out the extent to which you have used the purchase or importation for a creditable purpose during the period, starting from when you made your purchase or importation and ending at the end of the adjustment period. Work this out as a percentage.\n\n**Step 2**: Work out one of the following, as applicable, as a percentage.\n\n- If you have **not** previously made an adjustment for a change in creditable purpose, work out the extent to which you had originally planned to use the purchase or importation for a creditable purpose.\n- If you have previously made an adjustment for a creditable purpose, work out the extent to which you used the purchase or importation for a creditable purpose in respect of the last adjustment.\n\n**Step 3**: Compare the percentages worked out at Step 1 and Step 2.\n\nYou have:\n\n- **an increasing adjustment** if the percentage worked out at Step 2 is more than the percentage worked out at Step 1 – this means you pay more GST for the reporting period\n- **a decreasing adjustment** if the percentage worked out at Step 1 is more than the percentage worked out at Step 2 – this means you pay less GST for the reporting period\n- **no adjustment** if there is no difference between the percentages worked out at Step 1 and Step 2 – this means you do not have to make an adjustment in the reporting period.\n\n**Step 4**: Calculate increasing or decreasing adjustments by multiplying the full amount of GST credit by the change in use (the difference between the percentages at Step 1 and Step 2). The 'full amount of GST credit' means the amount of GST credit you would have been entitled to claim if you had used the purchase or importation entirely for a creditable purpose.\n\nTo work out your adjustment:\n\n- If you have an increasing adjustment, the adjustment is worked out as follows\n\n- the full amount of GST credit × [percentage worked out at Step 2 less the percentage worked out at Step 1].\n- If you have a decreasing adjustment, the adjustment is worked out as follows\n\n- the full amount of GST credit × [percentage worked out at Step 1 less the percentage worked out at Step 2].\n\n**Example: Calculating an adjustment for a change in creditable purpose**\n\nHollis is registered for GST and owns a bookshop. On 12 March 2015 he purchases a computer to use in his business for $1,500 (including $136.36 GST). The price of the purchase means it is subject to two adjustment periods (see [Table 1](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/reporting-paying-and-activity-statements/making-adjustments-on-your-activity-statements/types-of-adjustments#Table1A)).\n\nHollis reports and pays GST quarterly and claims a full GST credit for the computer in the reporting period 1 January 2015 to 31 March 2015 because he plans to use it 100% for his business.\n\nHollis's first adjustment period is the reporting period 1 April 2016 to 30 June 2016. To work out if he needs to make an adjustment in that reporting period, Hollis compares his actual use with his planned use. So he compares:\n\n- the extent to which he uses the computer for business from 12 March 2015 to 30 June 2016 (expressed as a percentage), with\n- the extent to which he plans to use the computer for business (expressed as a percentage).\n\nHollis works out that he actually uses the computer 80% for business and 20% for personal use from 12 March 2015 to 30 June 2016.\n\nHollis makes an increasing adjustment on his April to June 2016 quarterly activity statement to repay some of the GST credits he claims because he:\n\n- plans to use the computer 100% for business\n- claims a full GST credit for the GST included in the purchase price of the computer\n- only uses the computer 80% for business.\n\nThe increasing adjustment is calculated as follows:\n\n- $136.36 (the GST included in the purchase price of the computer) × 20% (the difference between 100% and 80%).\n\nHollis' second adjustment period is the 1 April 2017 to 30 June 2017 reporting period. To work out if he needs to make an adjustment in that reporting period, Hollis compares his actual use against his previously stated use. He compares:\n\n- the extent to which he uses the computer for business from 12 March 2015 to 30 June 2017 (expressed as a percentage), with\n- the extent to which he says he uses the computer for business from 12 March 2015 to 30 June 2016 (that is, the percentage worked out in respect of the last adjustment).\n\nHollis works out that he used the computer 50% for business and 50% for personal use from 12 March 2015 to 30 June 2017. This is less than the extent to which he used it for business in respect of the first adjustment (80%).\n\nHollis makes an increasing adjustment on his April to June 2017 quarter activity statement to repay some of the GST credits he claimed. This adjustment is calculated as follows:\n\n- $136.36 (the GST component of the purchase price) × 30% (the difference between 80% and 50%).","title":""}
+{"_id":"passage_a0JRF000003Osjt2AC/p00376174","text":"## Meaning of 'loan' under Division 7A\n\nDivision 7A extends the meaning of 'loan' to include:\n\n- an advance of money\n- a provision of credit, or any other form of financial accommodation\n- a payment for a shareholder or their associate, if they have an obligation to repay the amount whether it's\n\n- on their account\n- on their behalf\n- at their request\n- a transaction (whatever its terms or form) that is the same as a loan of money.\n\nA loan is considered to be made at the time the amount is paid either as an ordinary loan, or if any of the above is done in relation to a shareholder or an associate.\n\n### Example: loan to a shareholder\n\nTerry Pty Ltd loans $20,000 to Ann, a shareholder of Terry Pty Ltd. The money is loaned to Ann on the basis that she pays it back when she can. The $20,000 is a loan from Terry Pty Ltd to Ann because it is an advance of money, and Division 7A may apply.\n\nEnd of example\nIf a private company makes one or more loans to a shareholder or their associate in an income year, it may be taken to make an [amalgamated loan](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Amalgamatedloans).\n\nIf a loan is made by way of a promissory note, it is a provision of credit or a form of financial accommodation, and Division 7A may apply.\n\n### Example: promissory note to a shareholder\n\nLucas Pty Ltd provides $10,000 to Belinda, a shareholder of Lucas Pty Ltd, by way of a promissory note and under an agreement with Lucas Pty Ltd, Belinda is obliged to repay the amount. The $10,000 is a loan from Lucas Pty Ltd to Belinda and Division 7A may apply.\n\nEnd of example\nIf a private company beneficiary, in respect of a [trust entitlement](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-trust-entitlements) which is unpaid (unpaid present entitlement), provides financial accommodation to the trustee of a trust, it will be taken to make a loan to the trustee of the trust for Division 7A purposes.\n\n## Loans by other entities\n\nLoans made by other entities may also have Division 7A apply, such as:\n\n- [Closely-held corporate limited partnerships](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Closelyheldcorporatelimitedpartnerships)\n- [Trusts](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Trusts)\n- [Interposed entities](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Interposedentities).\n\n### Closely-held corporate limited partnerships\n\nGenerally, [closely-held corporate limited partnerships](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-closely-held-corporate-limited-partnerships) are treated as companies for income tax purposes.\n\nFor example, a reference to a:\n\n- share includes a reference to an interest in a corporate limited partnership\n- shareholder includes a reference to a partner in a corporate limited partnership.\n\nDivision 7A applies to a closely-held corporate limited partnership in the same way it applies to a private company.\n\nFor more information, see [Taxpayer Alert TA 2007/5](https://www.ato.gov.au/law/view/document?docid=TPA/TA20075/NAT/ATO/00001) *Arrangements designed to avoid the operation of Division 7A through the use of a Corporate Limited Partnership*.\n\n### Trusts\n\nDivision 7A applies to certain payments, loans and debt forgiveness made by trustees to a shareholder or an associate of a shareholder of a private company, where:\n\n- the company is presently entitled to an amount from the net income of the trust estate\n- the whole of that amount has not been paid by a specified date.\n\nHowever, the rules do not apply in all cases where there is an unpaid present entitlement.\n\n### Interposed entities\n\nDivision 7A applies to certain loans made by private companies to a shareholder or their associate through [interposed entities](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-interposed-entities).\n\n## Loans that are treated as dividends\n\nA private company may be taken to have paid a dividend at the end of the income year, if it lends an amount during the year, and:\n\n- the borrower is a shareholder, or an associate of a shareholder, of the company\n- a reasonable person would conclude that the loan was made because the borrower was a shareholder, or an associate of a shareholder, at some time.\n\nThe total of all dividends a private company is taken to have paid under Division 7A is limited to its [distributable surplus](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-distributable-surplus) for that income year.\n\nA loan will be deemed to be a dividend by Division 7A if it's:\n\n- made to a shareholder or an associate of a shareholder\n- not fully repaid before the private company's lodgment day for the year when the loan is made – a private company's lodgment day is the earlier of the due date for lodgment, or the actual date of lodgment of their income tax return for the income year\n- not excluded specifically by other sections of Division 7A.\n\n### Exclusions\n\nA loan is **not** treated as a dividend if:\n\n- it is made to another company (and that other company is not acting in the capacity of trustee)\n- the payment would be included in the shareholder's or their associate's assessable income under a provision of the tax law (other than Division 7A)\n- the payment would be excluded from the shareholder's or their associate's assessable income under a provision of the tax law\n- it is made in the ordinary course of business and on the usual terms the private company applies to similar loans to entities at arm's length\n- the loan has satisfied the minimum interest charge and maximum term requirement and is made or put under a written agreement before the private company's lodgment day\n- it is a distribution made in the course of a liquidator winding-up a company\n- it is made to purchase shares or rights under an employee share scheme\n- it is an amalgamated loan in the year it is made and provided the required minimum yearly repayments are made in the following years\n- the loans were made before 4 December 1997 and there has been no variation of terms or amounts since they were made.\n\n## Varying the terms of a pre-1997 loan\n\nLoans made before 4 December 1997 are generally not subject to Division 7A.\n\nHowever, where a loan is varied on or after 4 December 1997 – either by extending the term of the loan or increasing the amount of the loan – the loan will be treated as if it were a new loan entered into on the day it is varied. Therefore Division 7A may apply to this new loan.\n\n## Complying loans\n\nA loan is considered to be a 'complying loan' when it meets certain [criteria](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Criteria). Additionally, payments made by a private company can be converted to a complying loan – see [Refinancing loans](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Refinancingloans1).\n\nWhen a loan is on a complying agreement, it will be excluded from being a Division 7A dividend.\n\nWatch the video for more details about complying loans:\n\n**Media:** Division 7A: Complying loans\n\n[https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubxseuzwExternal Link](https://tv.ato.gov.au/#/media/bd1bdiubxseuzw) (**Duration:** 05:49)\n\n### Criteria of a complying loan agreement\n\nThere are 3 criteria a loan needs to meet to be considered to be a 'complying loan':\n\n- [Minimum interest rate](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Minimuminterestrate)\n- [Maximum term](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Maximumterm)\n- [Written agreements](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Writtenagreements).\n\n#### Minimum interest rate\n\nThe interest rate for each year of the loan must at least equal the [Division 7A – benchmark interest rate](https://www.ato.gov.au/tax-rates-and-codes/division-7a-benchmark-interest-rate). The benchmark interest rates are updated annually.\n\n#### Maximum term\n\nThe term of the loan must not exceed the following:\n\n- 25 years for a loan secured by a mortgage over real property, noting\n\n- the whole of the loan must be secured by a registered mortgage over the property\n- when the loan is first made, the market value of the property (less liabilities secured over the property in priority to the loan) must be at least 110% of the amount of the loan\n- 7 years for any other loan.\n\n#### Written agreements\n\nA written agreement must be in place before the private company's lodgment day for the income year in which the loan amount was paid to the shareholder or their associate.\n\nThere is no prescribed form for the written agreement. However, as a minimum, the agreement should:\n\n- identify the parties\n- set out the essential terms of the loan, that is the\n\n- amount and term of the loan\n- the requirement to repay\n- the interest rate payable\n- be signed and dated by the parties.\n\nA written agreement can be drafted to cover loans which will be made to a shareholder or their associate for a number of income years in the future.\n\n##### Example: loan put under written agreement before lodgment day\n\nDuring the 2023 income year, Frame Pty Ltd made an unsecured loan to Penelope, a shareholder of Frame Pty Ltd. The loan won't be treated as a dividend in the 2023 income year if it is:\n\n- put under a written agreement before the private company's lodgment day\n- the term of the loan is no greater than 7 years\n- the rate of interest payable in subsequent income years equals or exceeds the benchmark interest rate for those years.\n\nEnd of example\n### Converting payments to a complying loan\n\nPayments made to a shareholder, or their associate, can be converted to complying loans before the private company's lodgment day to avoid a dividend being deemed.\n\nFor payments converted to loans, the private company is taken to have made a loan at the time the payment was made. For more information about payments, see [Division 7A – payments by private companies](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-payments).\n\n#### Example: payment converted to a loan before lodgment day\n\nIn the 2021 income year, XYZ Pty Ltd pays the petrol expenses of a vehicle owned by Sally, its shareholder. Sally is under no express or implied obligation to repay the amount. Unless Sally and XYZ Pty Ltd convert the payment to a complying loan, the Division 7A provisions in respect of payments will apply.\n\nIf Sally and XYZ Pty Ltd agree to convert the payment into a loan before the private company's lodgment day, the Division 7A provisions relating to loans will apply.\n\nEnd of example\n## Refinancing loans\n\nCertain loans can be refinanced without resulting in a deemed dividend.\n\n### Loan converted to a loan secured by a mortgage\n\nAn unsecured loan that is converted to a loan secured by a registered mortgage over real property can have the loan term extended. The maximum term of the loan becomes 25 years less the period of the term already expired when the loan was unsecured.\n\n### Secured loan converted to an unsecured loan\n\nA secured loan can also be converted to an unsecured loan but there will be a corresponding reduction in the loan term.\n\n#### Loans in place for 18 years or less\n\nThe maximum of the unsecured loan is 7 years if the remaining term on the secured loan at the time of conversion was 18 years or less.\n\n#### Loans in place for more than 18 years\n\nIf the secured loan has already been in place for more than 18 years, the maximum term of the unsecured loan will be reduced so that the total term of the loan (in both its secured and unsecured form) will be no more than 25 years. That is, deduct from 7 years the difference between:\n\n- the length of the period starting when the loan was made and ending when the loan was converted\n- 18 years.\n\n### Loan subordinated to another loan from another entity\n\nA private company loan can also be refinanced when the loan becomes subordinated to another loan from another entity. The subordination must arise as a result of circumstances beyond the control of the entity to which the original loan was made. The private company and the other entity must have dealt with each other at arm's length in relation to the subordination.\n\nIn these circumstances, the repayment of the old loan as part of the refinancing is not disregarded for Division 7A purposes.\n\n#### Example: refinancing a loan\n\nHilda Pty Ltd has made a loan secured by a mortgage over real property to an associate of a shareholder, Sachin. The term of the loan was 25 years. However, after 20 years, the terms of the loan are changed so it is no longer secured by a mortgage over real property. If the expired term of the old secured loan was less than 18 years, the maximum term of the unsecured loan would be 7 years. However, in this instance, the original secured loan had already been in place for more than 18 years. As a result, in the written agreement governing the new loan, the maximum term of the loan will be 5 years (that is, 7 years less the number of years by which the existing loan has exceeded 18).\n\nEnd of example\n## Amalgamated loans\n\nAn amalgamated loan is when a private company makes one or more loans to a particular shareholder or associate during an income year, and each loan:\n\n- isn't repaid before the company's lodgment day\n- would be treated as a dividend, except it's under a complying loan agreement\n- has the same maximum term.\n\nEach of the individual loans are known as 'constituent loans'. The amount of the amalgamated loan is the sum of the constituent loans that have not been repaid before the lodgment day for the year of income in which the amalgamated loan is made.\n\n### Converting to a loan secured by a mortgage\n\nAn unsecured loan can be converted to a loan secured by a mortgage over real property with a longer maximum term. When the term of an existing loan is extended because of a mortgage, a new amalgamated loan is taken to be made in the income year prior to the income year in which the extension is made. The previous amalgamated loan is disregarded if the loan comprised of one constituent loan. If the previous amalgamated loan comprised of more than one constituent loan, the amount of the previous amalgamated loan is reduced by the amount treated as a new amalgamated loan.\n\n### More than one amalgamated loan\n\nA private company may have a number of amalgamated loans to a shareholder or their associate at any one time. This will occur where relevant constituent loans have been made over a number of income years. Private companies with more than one amalgamated loan will need to maintain records for each loan.\n\n### Minimum yearly repayment\n\n[The Division 7A calculator and decision tool](https://www.ato.gov.au/calculators-and-tools/division-7a-calculator-and-decision-tool) can be used to calculate the minimum yearly loan repayment of principal and interest required to repay the amalgamated loan over its maximum term.\n\nHowever, to calculate the repayment manually, the following steps can be used:\n\n- Step 1: multiply the amount of the loan not repaid by the end of the previous income year by the current year's benchmark interest rate.\n- Step 2: divide one by one plus current year's benchmark interest rate.\n- Step 3: index the step 2 amount to the power of the remaining term of the loan in years.\n- Step 4: one minus the step 3 amount.\n- Step 5: divide the step 1 amount by the step 4 amount.\n\nThe amount of the loan referred to in step 1 is the amount of the amalgamated loan.\n\nThese steps can also be expressed as:\n\nWhere:\n\n- MYR = minimum yearly repayment\n- P = amount of loan not repaid by the end of the previous income year\n- I = current year's benchmark interest rate\n- T = remaining loan term (in years).\n\nThe minimum yearly repayment needs to be worked out for each income year after the year in which the loan is made.\n\nIf the private company has more than one amalgamated loan, each amalgamated loan is considered separately. The loans can't be grouped for the purposes of calculating a minimum yearly repayment. There will be a minimum yearly repayment in respect of each amalgamated loan.\n\n### Concepts for the minimum yearly repayment formula\n\nA number of specific concepts apply to the minimum yearly repayment formula. They are the:\n\n- amount of loan not repaid by the end of the previous income year\n- current year's benchmark interest rate\n- remaining term of the loan.\n\n#### Amount of the loan not repaid by the end of the previous income year\n\nGenerally, you calculate the amount of a loan outstanding (or not repaid) at the end of the previous income year using the following formula:\n\n- opening balance of the amalgamated loan, as of the beginning of the previous income year, minus\n- amount of principal repaid during that income year.\n\nHowever, the calculation differs depending on whether the income year after the amalgamated loan is made is the:\n\n- [first income year](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Firstincomeyear)\n- [subsequent income years](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans#Subsequentincomeyears).\n\n##### First income year\n\nFor the first income year after the amalgamated loan is made:\n\n- no interest is payable in respect of the year the loan is made\n- the amount of the loan not repaid by the end of the previous income year is calculated by subtracting\n\n- the total principal repayments made before the private company's lodgment day, from the original amount of the loan.\n\nIf no repayments are made before the lodgment day, the balance of the amalgamated loan that hasn't been repaid before the end of the previous income year is the sum of the constituent loan balances at the end of that year.\n\n###### Example: amount of amalgamated loan not repaid by the end of the income year when the loan is made\n\nDuring the 2014 income year a private company made loans of $50,000 and $25,000 to a shareholder.\n\nThe loans were made under complying written loan agreements. Both loans were unsecured loans with a term of 7 years with interest rates set at the benchmark interest rates.\n\nOn 31 August 2014 the shareholder made a repayment of $20,000 on the $50,000 loan.\n\nThe private company's lodgment day for its 2014 income tax return was 15 May 2015 and the return was lodged on that date.\n\nThe amount of the amalgamated loan not repaid by the end of the 2014 income year is $55,000.\n\nEnd of example\n##### Subsequent income years\n\nThe amount of the amalgamated loan not repaid by the end of the income year is calculated on the basis that interest is payable on the balance of the amalgamated loan, at a rate equal to the benchmark interest rate for the income year.\n\nFor the following income years, to calculate the amount of the loan not repaid by the end of the previous income year, it's important to know how much of the repayment made in the income year is attributable to interest and how much is applied to reduce the principal.\n\nThe [Division 7A calculator and decision tool](https://www.ato.gov.au/calculators-and-tools/division-7a-calculator-and-decision-tool) provides a breakdown of the interest and principal components of the payment. To calculate this manually, apply the relevant benchmark interest rate to the amounts outstanding. If the interest rate in the written agreement is different from the benchmark interest rate, the benchmark interest rate is used to calculate the minimum yearly repayment for Division 7A purposes.\n\nThe amount of the loan repaid during an income year is obtained by deducting the interest from the actual repayments made during the year. The opening balance of the loan for the next year is the opening balance at the beginning of the previous year less the principal repaid during that year.\n\nWhere a repayment is made before the private company's lodgment day for the year in which the amalgamated loan is made, the principal amount at 1 July of the first income year after the loan is made, is not the sum total of the constituent loans at 1 July. Rather, it is the sum of the constituent loans immediately before the lodgment day. For this purpose, payments made before lodgment day are taken to have been made in the year the amalgamated loan is made.\n\n###### Example: amount of amalgamated not repaid by the end of the income year after the loan is made\n\nThis example uses the same facts as the example above, except on 30 May 2015 the shareholder paid the private company a further $8,000, being a $4,000 payment for each loan. No other repayments were made during the 2015 income year.\n\nInterest is calculated annually in arrears by reference to the daily balance throughout the year as follows.\n\nFirstly, work out the daily balance throughout the year:\n\nThe principal as at 1 July 2014 is $75,000, which is the loan balance.\n\nThe repayment of $20,000 on 31 August 2014 reduces the loan balance to $55,000.\n\nThe repayment of $8,000 on 30 May 2015 reduces the loan balance to $47,000.\n\nTo calculate the interest:\n\n= (interest payable on $75,000 from 01/07/2014 to 30/08/2014) + (interest payable on $55,000 from 31/08/2014 to 29/05/2015) + (interest payable on $47,000 from 30/05/2015 to 30/06/2015)\n\n= (5.95% of $75,000 × (61 ÷ 365)) + (5.95% of $55,000 × (272 ÷ 365)) + (5.95% of $47,000 × (32 ÷ 365))\n\n= $745.79 + $2,438.68 + $245.17\n\n= $3,430 (rounded to the nearest dollar).\n\nThe 'amount of the loan not repaid by the end of the previous income year' is $50,430 ($75,000 principal + $3,430 interest − $28,000 repayments = $50,430).\n\nIf the actual interest rate used in the written agreement exceeds the benchmark rate, the 'amount of the loan remaining at the end of the previous income year' will be a notional amount.\n\nEnd of example\n#### Working out the remaining term\n\nThe remaining term is the difference between:\n\n- the number of years in the longest constituent loan\n- the number of years between the end of the private company's income year in which the loan was made, and the end of the private company's income year before the income year for which the minimum yearly repayment is being worked out.\n\nIf the answer is not a whole number, it is rounded up to the next whole number.\n\n##### Example: calculate the first minimum yearly repayment (2015)\n\nThis example uses the same facts as the examples above.\n\nTo work out the first minimum yearly repayment, the amount of the amalgamated loan not repaid by the end of the 2014 income year is $55,000 (loans made less principal repayments made before the lodgment day for the 2014 income year) and the benchmark interest rate for the income year ended 30 June 2015 is 5.95%.\n\nThe remaining term is worked out as the difference between:\n\n- the number of years in the longest constituent loan included in the amalgamated loan (7 years)\n- the number of years between the end of the private company's income year in which the loan was made (2014), and the end of the private company's income year before the 2015 income year for which the minimum yearly repayment is being worked out (that is 2014), that is 0 years.\n\nThe remaining term is 7 years (that is, 7 − 0 = 7).\n\nThe minimum yearly repayment for the income year ended 30 June 2015 is worked out as follows:\n\nStep 1: multiply the amount of the loan not repaid by the end of the previous income year by the current year's benchmark interest rate, which is 55,000 × 0.0595 = 3272.5.\n\nStep 2: divide one by one plus current year's benchmark interest rate, which is 1 ÷ (1+0.0595) = 0. 943841435.\n\nStep 3: index the step 2 amount to the power of the remaining term of the loan in years, which is 0.943841435 to the power of 7 = 0.667257208\n\nStep 4: one minus the step 3 amount, which is 1 - 0.667257208 = 0.332743.\n\nStep 5: divide the step 1 amount by the step 4 amount, which is 3272.5 ÷0.332742732 = 9835 (when rounded to the closest dollar).\n\nIn determining if there is a minimum yearly repayment shortfall, all repayments made during the 2015 income year (including those made prior to the private company's lodgment day for the 2015 income year) are taken into account.\n\nThe total of the repayments made in the 2015 income year is $28,000 (the $20,000 payment made on 31 August 2014 and the $8,000 payment made on 30 May 2015). As $28,000 exceeds $9,835, there is no shortfall and therefore no deemed dividend arises for the 2015 income year.\n\nEnd of example\n\n##### Example: calculate the minimum yearly repayment for the subsequent income year (2016)\n\nThis example uses the same facts as example 7.\n\nThe amount of the loan remaining at the end of the previous income year (that is, the year ended 30 June 2015) is $50,430 (see conclusion to example 7).\n\nThe benchmark interest rate for the 2016 income year is 5.45%.\n\nThe remaining term is worked out as the difference between:\n\n- the number of years in the longest constituent loan included in the amalgamated loan (7 years)\n- the number of years between the end of the private company's income year in which the loan was made (2014) and the end of the private company's income year before the 2016 income year for which the minimum yearly repayment is being worked out (that is 2015), that is one year.\n\nThe remaining term is 6 years (that is, 7 − 1 = 6).\n\nThe minimum yearly repayment for the 2016 income year will be worked out as follows:\n\nStep 1: multiply the amount of the loan not repaid by the end of the previous income year by the current year's benchmark interest rate, which is 50,430 × 0.0545 = 2748.435.\n\nStep 2: divide one by one plus current year's benchmark interest rate, which is 1 ÷ (1+0.0545) = 0. 948316738.\n\nStep 3: index the step 2 amount to the power of the remaining term of the loan in years, which is 948316738 to the power of 6 = 0.72731157\n\nStep 4: one minus the step 3 amount, which is 1 - 0.72731157 = 0.27268843.\n\nStep 5: divide the step 1 amount by the step 4 amount, which is 2748.435 ÷ 0.27268843 = $10,079 (when rounded to the closest dollar).\n\nThe shareholder would need to make repayments on the loan totalling at least $10,079 to not trigger any Division 7A dividend.\n\nEnd of example\n#### Loan repayments not taken into account\n\nSome payments that a shareholder, or their associate, makes to a private company in respect of a loan before the required time will not be taken into account when working out:\n\n- the minimum yearly repayment\n- how much of the loan has been repaid.\n\nExamples of these payments include:\n\n- a journal entry that appears to record a payment being made on a date when no payment was actually made (for example, a back dated journal entry) will not be accepted as having been made at that time\n- payments where a reasonable person would conclude that the shareholder or their associate, either\n\n- when making the payment, intended to obtain a loan (directly or indirectly) from the private company of an amount similar to, or larger than, the payment\n- before making the payment, obtained a loan from the private company (directly or indirectly) of a total amount similar to, or larger than, the repayment in order to make the payment\n- a loan is obtained indirectly when it is received through an [interposed entity](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-interposed-entities) arrangement.\n\nFor more information on the amount of a loan obtained indirectly, see Taxation Determination [TD 2011/16](https://www.ato.gov.au/law/view/document?DocID=TXD/TD201116/NAT/ATO/00001&PiT=99991231235958) *Income tax: Division 7A - payments and loans through interposed entities - factors the Commissioner will take into account in determining the amount of any deemed payment or notional loan arising under section 109T of the Income Tax Assessment Act 1936*.\n\n##### Example: amount not taken to be a repayment\n\nAlicia obtains a loan of $10,000 from Cleary Pty Ltd. Alicia is a shareholder of Cleary Pty Ltd. Alicia has until the lodgment day to repay the loan. Two weeks before the lodgment day Alicia obtains a further $10,000 from Cleary Pty Ltd. She then repays the original $10,000 loan a week before the lodgment day.\n\nThe repayment of the original $10,000 loan won't be taken into account because Alicia has borrowed a similar amount from Cleary Pty Ltd and, in this case, a reasonable person would conclude that the loan was obtained to make the repayment of the original $10,000.\n\nThe original $10,000 loan is treated as a deemed dividend subject to the distributable surplus of the private company.\n\nEnd of example\n\n##### Example: new loan obtained following repayment\n\nAlpha Trust requires a minimum level of working capital to operate its business. Beta Co is a private company that has significant retained earnings. Alpha Trust and Beta Co are controlled by the same individual.\n\nOn 30 March 2020, Beta Co lends $200,000 to Alpha Trust to use as working capital. The parties enter into a complying loan agreement before Beta Co’s lodgment day (being 15 May 2021). On 30 May 2021, Alpha Trust repays $33,965 to Beta Co, the minimum yearly repayment required. On 2 June 2021, Beta Co lends $100,000 to Alpha Trust.\n\nHaving regard to all the circumstances, a reasonable person would conclude that the trustee of Alpha Trust intended to borrow $100,000 (which is a larger amount than the repayment) from Beta Co when the repayment was made. Alpha Trust's repayment of $33,965 may not be taken into account for the purposes of working out how much the $200,000 loan has been repaid.\n\nEnd of example\n\n##### Example: interposed entity arrangement\n\nApple Trust requires a minimum level of working capital to operate its business. Banana Co is a private company that has significant retained earnings. Orange Co is a private company that has no retained earnings. Apple Trust, Banana Co and Orange Co are controlled by the same family group.\n\nOn 30 March 2020, Banana Co lends $200,000 to Apple Trust. The parties enter into a complying loan agreement before Banana Co’s lodgment day (being 15 May 2021). On 30 May 2021, Banana Co lends $100,000 to Orange Co. On 31 May 2021, Orange Co lends $100,000 to Apple Trust. On 2 June 2021, Apple Trust repays $40,000 to Banana Co.\n\nThe loan between Orange Co and Apple Trust is not a Division 7A complying loan and Orange Co has no distributable surplus.\n\nHaving regard to all the circumstances including the timing of payments and the relationship between entities, a reasonable person may conclude that Banana Co lent $100,000 to Orange Co solely or mainly as part of an arrangement involving a loan to Apple Trust. Banana Co is taken to have made a notional loan of $100,000 to Apple Trust.\n\nHaving regard to all the circumstances, a reasonable person may conclude that before the payment of $40,000 was made, the trustee of Apple Trust borrowed $100,000 (which is a larger amount to the payment) from Banana Co in order to make the payment. Apple Trust's repayment of $40,000 may not be taken into account for the purposes of working out how much the $200,000 loan has been repaid.\n\nEnd of example\n## Payments always taken into account\n\nSome payments will **always** be taken into account, even if there's an intention to obtain another loan when the payment is made. These payments are made by offsetting the following amounts against the balance of the loan:\n\n- a dividend payable to the shareholder or their associate by the private company\n- work and income support related withholding payments and benefits payable by the private company to the shareholder or their associate (for example, salary or wages)\n- payments covered by a voluntary agreement to withhold\n- if the shareholder or their associate transferred property to the private company, an amount equal to the difference between the arm's length value of property and the amount that the company has already paid the shareholder or their associate for the transfer.\n\nA payment by legal offset is only effective in making a repayment on the loan if:\n\n- mutual liabilities exist at the time of the offset\n- there is an agreement between the private company and the shareholder or their associate to offset the liabilities (which may be express or implied).\n\nA book entry only records a transaction, it doesn't create one. The offset agreement is the legal basis for discharging the liabilities between the parties.\n\nIn addition, a payment by another entity to the private company on behalf of the shareholder or their associate will be taken into account (regardless of any intention to obtain another loan) if the amount of the payment is:\n\n- payable by the other entity to the shareholder or their associate\n- included in the shareholder's or their associate's assessable income in the income year in which the payment is made, or in an earlier income year.\n\nAn entity can include an individual, company, trust or partnership.\n\n### Example: minimum yearly repayment made by offsetting a dividend\n\nIn the 2022 income year Sandy obtains a complying loan from Sunshine Pty Ltd, which she is a shareholder of. In the 2023 income year Sandy is required to make minimum yearly repayments of $5,500 on the loan.\n\nOn 20 June 2023 Sunshine Pty Ltd declares a dividend of $5,500 payable to Sandy.\n\nOn 28 June 2023 Sandy and Sunshine Pty Ltd enter into an agreement to offset their mutual legal liabilities. - Sunshine Pty Ltd's liability to pay Sandy a $5,500 dividend, against Sandy's obligation to pay Sunshine Pty Ltd $5,500.\n\nSandy has satisfied the minimum yearly repayment for the 2023 income year, because the agreement to offset the dividend liability against the loan was entered into and executed before the end of the income year.\n\nEnd of example\n### Failure to make a minimum yearly repayment\n\nA shortfall in a minimum yearly repayment on an amalgamated loan may be deemed to be a dividend (subject to the private company's distributable surplus) if:\n\n- a private company made an amalgamated loan to a shareholder or their associate in an earlier year of income\n- the amalgamated loan is not repaid at the end of the current year\n- the amount paid to the private company during the current year in respect of the loan is less than the minimum yearly repayment for the current year\n- the Commissioner does not exercise their discretion not to treat the amount as a dividend.\n\nIf a shareholder or their associate makes a repayment for a constituent loan in an income year after the year in which the constituent loan was made, the repayment is taken to be a repayment in respect of the amalgamated loan.\n\n### Commissioner's discretion\n\nIf a repayment is less than the minimum yearly repayment on an amalgamated loan, discretion may apply. The shareholder or associate must satisfy us that the minimum yearly repayment was not met because of circumstances beyond their control (and they would suffer undue hardship if the loan were treated as a dividend). If we are satisfied this is the case, then the private company will not be taken to pay a dividend.\n\nCriteria that are considered:\n\n- the shareholder's or their associate's ability to repay the loan at the end of the income year in which the amalgamated loan was made\n- any circumstances that reduced the shareholder's or their associate's ability to repay the loan\n- whether the shareholder or their associate took all reasonable steps to make the minimum yearly repayment for the current income year\n- whether the shareholder or their associate made payments equal to the amount of the deficiency as soon as possible after the current income year.\n\nWe may also disregard a deemed dividend and extend the period for repayments where the shareholder or their associate was unable to make the minimum yearly repayments because of circumstances beyond their control. We will specify a later date the minimum yearly repayments must be made and, provided the amount of the shortfall is paid within the specified time, the shortfall will not be taken to be a dividend.\n\nIn addition to the above discretion, where a deemed dividend arises under Division 7A because of an honest mistake or inadvertent omission, we have discretion to either:\n\n- disregard the deemed dividend (subject to conditions being complied with)\n- allow the dividend to be franked.\n\nFor more information, see:\n\n- [Division 7A – the Commissioner's discretion under section 109RB](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-exercise-of-commissioner-s-discretion-under-section-109rb)\n- [Request to extend time to make 2019–20 minimum yearly repayments for COVID-19 affected borrowers under section 109RD](https://www.ato.gov.au/forms-and-instructions/covid-19-affected-borrowers-extension-request-for-minimum-yearly-repayments-under-s109rd-2020-21)\n- [Request to extend time to make 2020–21 minimum yearly repayments for COVID-19 affected borrowers under section 109RD](https://www.ato.gov.au/forms-and-instructions/covid-19-affected-borrowers-extension-request-for-minimum-yearly-repayments-under-s109rd-2019-20).\n\n## Amount of the dividend\n\nWhere there is no loan agreement in place, the amount treated as a dividend is the amount of the loan that has not been repaid before the company's lodgment day.\n\nFor loans made under a written complying loan agreement entered into before the private company's lodgment day, a deemed dividend may arise in subsequent years if the required minimum yearly repayment is not made.\n\nThe amount deemed as a dividend is the amount by which the payments made to the company in the current year for the loan falls short of the required minimum yearly repayment for that year.\n\nIf the loan is made in the previous year of income in the course of winding-up a company, the amount treated as a dividend is the amount of the loan that has not been repaid at the end of the current income year.\n\n### Example: non-complying loan to shareholder with repayment\n\nOn 1 January 2021, ABC Pty Ltd made a cash advance of $10,000 to Peter, a shareholder of ABC Pty Ltd. ABC Pty Ltd lodged its income tax return for the 2021 income year on 28 February 2022. By that date, Peter had repaid an amount of $2,000 and the loan had not been put on a qualifying commercial footing.\n\nThe amount treated as a dividend on 30 June 2021 is the amount of the loan not repaid before the lodgment day (for example, $8,000) subject to ABC Pty Ltd's distributable surplus.\n\nEnd of example\n## Franking the dividend\n\nAmounts treated as dividends under Division 7A are generally not frankable, even though they are taken to be paid out of the private company's profits – see [Division 7A – franking implications](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-franking-implications). However, there are exceptions.\n\nWhen an amount is taken to be a dividend under Division 7A because of an honest mistake or inadvertent omission, we have [discretion](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-exercise-of-commissioner-s-discretion-under-section-109rb) to:\n\n- disregard the deemed dividend (subject to conditions being complied with)\n- allow the private company to choose to frank the dividend.\n\n## Shareholder's or beneficiary's loan account\n\nEach entry in a shareholder's or beneficiary's loan account needs to be analysed to determine what type of transaction it represents (that is, whether it is a payment, a loan or a debt forgiveness to which Division 7A applies). Additionally, entries representing loan repayments must be analysed to determine if they can be taken into account when working out the amount of a loan repaid or the minimum yearly repayment.\n\nThe balance of a shareholder's or beneficiary's loan account in the company or trustee accounts respectively may be in debit or credit at the end of the income year. Although a debit balance at the end of a year of income may indicate that there are loans that have not been repaid and a credit balance may indicate that no loans remain unpaid, neither result leads to the automatic conclusion that Division 7A does or doesn't apply.\n\nIf a private company has more than one shareholder's or beneficiary's loan account, the private company in calculating the Division 7A exposure cannot use a credit balance in one account to offset the debit balance in another account. Calculations of Division 7A loans are done in respect of transactions in the loan accounts of each individual shareholder.\n\nThe 'lender' is the private company or trustee who made the loan that is subject to Division 7A.","title":""}
+{"_id":"passage_a0JRF000003hCgv2AE/p00391276","text":"## Moving in\n\nYour main residence is generally exempt from capital gains tax (CGT).\n\nFor CGT purposes, your home qualifies for the main residence exemption from the time you acquire it, provided you move in as soon as practicable.\n\nIf you buy your home, the 'time you acquire it' is the settlement date of the contract.\n\nIf:\n\n-\n**there is a delay moving in because of illness or other unforeseen circumstances** – your home is still exempt, provided you move in as soon as the cause of the delay is removed (for example, when you recover from the illness)\n-\n**you can't move in because the property is being rented to someone** – the property doesn't become your main residence until you move in\n-\n**you have not yet sold your old home** – you can treat both homes as your main residence for up to 6 months.\n\n### Example: moving in as soon as practicable\n\nLi Jing signed a contract to buy a townhouse in March. She took possession when settlement occurred in April.\n\nIn late March, Li Jing's employer sent her overseas on an assignment for 4 months. She moved into the townhouse when she returned in late July.\n\nLi Jing's overseas assignment was unforeseen at the time she bought the townhouse. She moved in as soon as practicable after settlement of the contract. Therefore, she can treat the townhouse as her main residence from the date she acquired it.\n\nIf Li Jing treats the townhouse as her main residence for this period, she can't treat any other property as her main residence (except for a limited time if she is moving house).\n\nEnd of example\n\n##\n[\n]()Moving to another main residence\n\nIf you acquire a new home before you dispose of your old one, you can treat both as your main residence for up to 6 months.\n\nYou can do this if all of the following are true:\n\n- you lived in your old home as your main residence for a continuous period of at least 3 months in the 12 months before you disposed of it\n- you didn't use your old home to produce income (such as rent) in any part of that 12 months when it wasn't your main residence\n- the new property becomes your main residence.\n\n### Example: full exemption for both homes\n\nJill and Norman bought their new home under a contract that settled in January and they moved in immediately.\n\nThey sold their old home under a contract that settled in April.\n\nBoth the old and new homes are treated as their main residence for the period January to April, even though they did not live in the old home during that period.\n\nEnd of example\n\n### Exceeding the 6-month limit\n\nIf it takes longer than 6 months to dispose of your old home, the main residence exemption applies to both homes only for the last 6 months before you dispose of your old home.\n\nFor the period before this, when you owned both homes, you can choose which home to treat as your main residence. The other will be subject to CGT for that period.\n\n#### Example: partial main residence exemption for one home\n\nJeneen and John bought their old home under a contract that settled on 1 January 2001 and moved in immediately. It was their main residence until they bought another home, under a contract that settled on 1 January 2024.\n\nThey kept their old home after moving into the new one. They didn't use the old home to produce income.\n\nThey sold the old home under a contract that settled on 1 October 2024. Jeneen and John owned this home for a total of 8,675 days.\n\nBoth homes are treated as their main residence for the period 1 April 2024 to 1 October 2024, the last 6 months that Jeneen and John owned their old home. One of the homes won't get the main residence exemption for 91 days from 1 January 2024 to 31 March 2024.\n\nJeneen and John have 2 options:\n\n- They can claim the main residence exemption for their new home from the time they first move in. The capital gain on their old home is then partially assessable for CGT. The assessable proportion is multiplied by 91 ÷ 8,675, which is the number of days the old home was not their main residence divided by the total days they owned the old home.\n- They can treat their old home as their main residence for the period 1 January 2024 to 31 March 2024, even though they have moved out. This means it is fully exempt. If they later sell their new home, it will be assessable for CGT for the 91-day period.\n\nEnd of example\n\nYou can choose to continue [treating your former home as your main residence after you move out](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence). If you do this, you can't treat your new home as your main residence (except for up to 6 months while you are moving house).","title":""}
+{"_id":"passage_a0JRF000003eXoL2AU/p00389127","text":"## Expenses you can't claim\n\nYou can't claim the following expenses in relation to your self-education:\n\n- tuition fees paid by someone else or that your employer or a third-party reimburses you for\n- tuition fees paid upfront or with the assistance of a HECS-HELP loan for Commonwealth supported places at a university or higher education provider\n- repayments of study and training support loans such as\n- Higher Education Loan Program (HELP), including FEE-HELP and HECS-HELP\n- Student Financial Supplement Scheme\n- VET Student Loans (VSL)\n- Student Start-up Loans and former ABSTUDY Student Start-up Loans\n- Australian Apprenticeship Support Loans (AASL)\n- accommodation and meals where you are not required to be [temporarily away from home](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/overnight-travel-expenses-and-allowances) for one or more nights.\n\nYou also can’t claim a deduction for self-education expenses you incur if your only income is a qualifying [Australian Government allowance or payment](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/Income%20you%20must%20declare/government-payments-and-allowances). This allowance or payment is a rebatable benefit and is eligible for the beneficiary tax offset.\n\nFor [self-education expenses incurred before 1 July 2022](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses/self-education-reduction-in-expenses), you generally can't claim the first $250 of expenses.\n\n### Example: receiving Austudy payments\n\nAlison starts a full-time Bachelor of Pharmacy. She applies for and receives Austudy payments from Centrelink to support herself while studying.\n\nAustudy is a taxable government assistance payment and is eligible for the beneficiary tax offset.\n\nAlison can't claim a deduction for her self-education expenses because the Austudy payments are her sole income and Austudy is a rebatable benefit.\n\nEnd of exampleFor more information see [TR 2024/3](https://www.ato.gov.au/law/view/document?docid=TXR/TR20243/NAT/ATO/00001) *Income tax: deductibility of self-education expenses incurred by an individual*.","title":""}
+{"_id":"passage_a0JRF000003fIfB2AU/p00389820","text":"### What this Ruling is about\n\n1. This Ruling considers how Subdivision 40-B and Subdivision 40-C of the *A New Tax System (Goods and Services Tax) Act 1999* (GST Act) apply to supplies of residential premises.\n\n2. The Ruling does not consider the issue of when a sale of real property is a sale of new residential premises. This issue is considered in Goods and Services Tax Ruling GSTR 2003/3 *Goods and services tax*: *when is a sale of real property a sale of new residential premises*? The Ruling does not consider when premises are commercial residential premises. This issue is considered in Goods and Services Tax Ruling GSTR 2012/6 *Goods and services tax*: *commercial residential premises*.\n\n3. Unless otherwise stated in the examples in this Ruling, it is assumed that supplies and acquisitions made by entities mentioned satisfy all of the necessary requirements in section 9-5 of the GST Act for taxable supplies and section 11-5 for creditable acquisitions respectively. It is also assumed that a sale of residential premises is not a sale of new residential premises unless otherwise stated. Nor is any reference to a lease of premises a reference to a long-term lease unless otherwise stated.\n\n4. All legislative references in this Ruling are to the GST Act unless otherwise specified.\n\n5. A general introduction to the GST legislation affecting residential premises can be found in the Background in Part A of Appendix 1 (paragraphs 54 to 60 of this Ruling).\n\n### Ruling\n\n**Residential premises to be used predominantly for residential accommodation (regardless of the term of occupation)\n**\n\n***Definition of residential premises*\n**\n\n6. Premises[[1]](https://www.ato.gov.au/law/view/document?LocID=%22GST%2FGSTR20125%2FNAT%2FATO%2Ffp1%22&PiT=99991231235958#fp1), comprising land or a building, are residential premises under paragraph (a) of the definition of residential premises in section 195-1 where the premises are occupied as a residence or for residential accommodation, regardless of the term of occupation. The actual use of the premises as a residence or for residential accommodation is relevant to satisfying this limb of the definition.\n\n7. Premises, comprising land or a building, are also residential premises under paragraph (b) of the definition of residential premises if the premises are intended to be occupied, and are capable of being occupied, as a residence or for residential accommodation, regardless of the term of the intended occupation. This limb of the definition refers to premises that are designed, built or modified so as to be suitable to be occupied, and capable of being occupied, as a residence or for residential accommodation. This is demonstrated through the physical characteristics of the premises.\n\n8. A supply of residential premises may consist of a single room or apartment, or a larger complex consisting of rooms or apartments.\n\n***Residential premises to be used predominantly for residential accommodation (regardless of the term of occupation) - physical characteristics*\n**\n\n9. The requirement in sections 40-35, 40-65 and 40-70 that premises be 'residential premises to be used predominantly for residential accommodation (regardless of the term of occupation)' is to be interpreted as a single test that looks to the physical characteristics of the property to determine the premises' suitability and capability for residential accommodation.[[2]](https://www.ato.gov.au/law/view/document?LocID=%22GST%2FGSTR20125%2FNAT%2FATO%2Ffp2%22&PiT=99991231235958#fp2)\n\n10. The requirement for residential premises to be used predominantly for residential accommodation does not require an examination of the subjective intention of, or use by, any particular person. Premises that display physical characteristics evidencing their suitability and capability to provide residential accommodation are residential premises even if they are used for a purpose other than to provide residential accommodation (for example, where the premises are used as a business office).\n\n11. Premises that do not display physical characteristics demonstrating that they are suitable for, and capable of, being occupied as a residence or for residential accommodation are not residential premises to be used predominantly for residential accommodation, even if the premises are actually occupied as a residence or for residential accommodation. For example, someone might occupy premises that lack the physical characteristics of premises suitable for, or capable of, residential accommodation (such as a squatter residing in a disused factory). Although the premises may satisfy paragraph (a) of the definition of residential premises in section 195-1, the premises are not residential premises to be used predominantly for residential accommodation.\n\n*Example 1 - purchaser's intention not to use premises for residential accommodation*\n\n12. *John carries on an enterprise which involves leasing a house on property which he owns. Based on the physical characteristics of the house it is residential premises to be used predominantly for residential accommodation. The area in which the house is located has recently been rezoned by the local Council to permit higher density residential apartments. Following the rezoning, a developer, Knock Them Down Co, approaches John and offers to purchase his property. Knock Them Down Co intends to demolish the house, redevelop the property into a new apartment building, and sell the apartments*.\n\n13. *The fact that Knock Them Down Co does not intend to use the house to provide residential accommodation does not mean that the house is not residential premises to be used predominantly for residential accommodation. Knock Them Down Co's intention is not a relevant factor in determining the character of the premises. Based on its physical characteristics, the house is residential premises to be used predominantly for residential accommodation. The sale of the house by John to Knock Them Down Co is an input taxed supply under section 40-65*.\n\n***Living accommodation provided by shelter and basic living facilities*\n**\n\n14. 'Residential premises' are not limited to premises suited to extended or permanent occupation. Residential premises provide 'living accommodation', which does not require any degree of permanence. It includes lodging, sleeping or overnight accommodation.\n\n15. To satisfy the definition of residential premises, premises must provide shelter and basic living facilities. Premises that do not have the physical characteristics to provide these are not residential premises to be used predominantly for residential accommodation.\n\n16. A supply of a residential apartment in a building may include a garage, car-parking space, or storage area located within the building complex. The garage, car-parking space, or storage area is ancillary or incidental to the dominant component of the supply being the residential apartment. It can be reasonably concluded that the garage, car-parking space, or storage area are to be used for the better enjoyment of the residential apartment. They do not form a dominant part of the supply. The supply is therefore a composite supply of residential premises to be used predominantly for residential accommodation.[[3]](https://www.ato.gov.au/law/view/document?LocID=%22GST%2FGSTR20125%2FNAT%2FATO%2Ffp3%22&PiT=99991231235958#fp3) This is still the outcome where the garage, car-parking space, or storage space is separately titled from the residential apartment, but is physically located within the same building complex.\n\n17. A supply of a garage, car-parking space, or storage area that is supplied separately from the supply of a residential unit is not a supply of residential premises to be used predominantly for residential accommodation. This may occur, for example, where the garage, car-parking space, or storage area is supplied after the original supply of the residential unit, or where the garage, car-parking space, or storage area is located in a separate building. The supply is a taxable supply where the requirements of section 9-5 are satisfied.\n\n*Example 2 - supply of a car parking space*\n\n18. *Patrick is a plumber who is registered for GST. He purchases a residential unit in a CBD location with a separately titled car parking space in the same building. He resides in the unit for a period and then decides to rent the unit to overseas students who attend a nearby university. He initially leases the residential unit and car parking space together under the one lease. The supply of the residential unit and car parking space is an input taxed supply of residential premises that are to be used predominately for residential accommodation*.\n\n19. *For a subsequent lease, he realises that students are unlikely to need the car parking space and excludes the car parking space from the lease of the residential unit. He leases the car parking space to an accountant who requires the car parking space for business purposes. The supply of the car parking space is a taxable supply. It is not a supply of residential premises to be used predominately for residential accommodation as it is not ancillary or incidental to the supply of the residential premises*.\n\n***Fit for human habitation*\n**\n\n20. Premises must be fit for human habitation in order to be suitable for, and capable of, being occupied as a residence or for residential accommodation. An objective consideration of the relevant facts and circumstances determines whether residential premises are fit for human habitation. Residential premises are not fit for human habitation when they are in a dilapidated condition which prevents them being occupied for residential accommodation.\n\n21. Residential premises that are either:\n\n•in a minor state of disrepair; or\n•subject to a temporary legal prohibition for occupation pending minor repairs;\n\nare still suitable for, and capable of, being occupied as a residence or for residential accommodation.\n\n22. A partially built building is not residential premises until it becomes fit for human habitation. Contractual or legal prohibitions against residential occupation do not prevent premises from being suitable for, and capable of, providing residential accommodation.\n\n*Example 3 - temporary disruption to occupation*\n\n23. *Ashlea is registered as a hairdresser and owns and rents residential premises that she formerly resided in at a costal town in northern Australia. The premises are not new residential premises*.\n\n24. *A tropical cyclone crosses the coast leading to windows being shattered and damage to the roof. The damage is readily repairable but Ashlea fails to make the repairs resulting in the local Council issuing a notice stating that the premises are not fit for habitation. As a result, the tenant's occupation of the premises is temporarily disrupted. Ashlea sells the premises before making the repairs. Despite the damage to the premises and the action taken by the Council, the physical characteristics of the premises show that it is suitable for, and capable of, being occupied as a residence or for residential accommodation. The sale of the premises is therefore an input taxed supply of residential premises to be used predominately for residential accommodation*.\n\n**Other premises\n**\n\n25. Not all premises that possess basic living facilities are residential premises to be used predominantly for residential accommodation. If it is clear from the physical characteristics of the premises that their suitability for living accommodation is ancillary to the premises' prevailing function, the premises are not residential premises to be used predominantly for residential accommodation.\n\n*Example 4 - office building*\n\n26. *Commercial Place is a five storey building. The ground floor has a foyer and reception area. All floors have been constructed with large open spaces for staff cubicles and desks, smaller office spaces, meeting rooms and areas for storage of documents. Each floor also contains a kitchen, amenities area and toilets. The ground floor also has showers provided with the toilet facilities*.\n\n27. *While the office building provides shelter and basic living facilities including kitchens, toilets and shower facilities, the physical characteristics of the premises indicate that they are not residential premises to be used predominantly for residential accommodation. The physical characteristics indicate that the premises are a place for office workers to undertake tasks associated with a business. A supply of the premises would not be input taxed under Division 40*.\n\n*Example 5 - private hospital*\n\n28. *Maxwell Hospital is a privately operated hospital. The hospital contains wards to accommodate 150 patients, an entrance foyer, waiting areas, operating theatres, recovery areas, reception areas, nurses' stations, specialists' suites, storerooms, staff amenities, utility and disposal rooms, and ambulance bays. The design of the premises is based around the needs of patients and medical practitioners in providing medical and surgical treatment*.\n\n29. *While Maxwell Hospital provides shelter and basic living facilities, its physical characteristics indicate that it is not residential premises to be used predominantly for residential accommodation. The physical characteristics indicate that these premises are a place where the sick or injured are given medical or surgical treatment. A supply of the premises would not be input taxed under Division 40*.\n\n*Example 6 - residential care facility*\n\n30. *Care-res is a developer that specialises in constructing and leasing aged care facilities. Care-res designs and builds these facilities to specifications that make these premises suitable for approval for use as a residential care facility under the relevant legislation*.\n\n31. *Care-res constructs a facility designed to provide both personal and nursing care. The physical characteristics of this facility differ from the physical characteristics of premises for independent retirement living. This facility includes what is commonly known as a low care hostel and a nursing home. The facility meets all of the regulatory requirements of the relevant legislation in the State in which it operates, including the applicable provisions of the Building Code of Australia for facilities of this type*.\n\n32. *The facility includes private bedrooms and separate communal meal, living and entertainment areas, administration offices, and commercial kitchen and laundry. All functional areas for occupants, including those areas that provide living accommodation, have been designed for fittings, furniture and equipment used to provide care to persons with a condition of frailty or disability*.\n\n33. *Overall, the physical characteristics that reflect suitability for the provision of care prevail over those which reflect suitability for the provision of residential accommodation. Although accommodation is necessary in the course of providing residential care, the premises' suitability for accommodation is ancillary to their suitability for providing care*.\n\n34. *The facility is not residential premises to be used predominantly for residential accommodation. The physical characteristics evidence that the premises are to be used predominantly to provide care to the frail and disabled. A supply by Care-res by way of the lease of the facility is a taxable supply under section 9-5*.\n\n35. Where it is doubtful, based on an inspection of the physical characteristics of the premises, whether the premises are residential premises to be used predominantly for residential accommodation, design or construction documents, such as architectural plans, may assist in characterising the premises. This documentation may also be relevant in determining the intended character of premises before construction of the premises is completed.\n\n*Example 7 - shop*\n\n36. *Julian leases a building from its owner. It consists of a display area, a storage area, an office, a kitchenette and a toilet. The premises were designed as a shop which is evidenced by the architectural plans held by the lessor. Julian furnishes the premises in order to use it as his residence, but makes no structural changes to it*.\n\n37. *The building provides shelter and basic living facilities. Although the physical characteristics of the building may be considered similar to characteristics found in a house or apartment, the physical characteristics of the building together with the design plans objectively show that the premises are not residential premises to be used predominantly for residential accommodation. Rather, the characteristics and design plans show that the building is a shop designed to facilitate a retail business*.\n\n38. *Although Julian's occupation of the shop as a residence means the shop satisfies paragraph (a) of the definition of residential premises in section 195-1, the shop is not residential premises to be used predominantly for residential accommodation. The supply is not an input taxed supply under Division 40 and is a taxable supply under section 9-5*.\n\n39. *The outcome of this example would differ if Julian had made modifications to the building that changed the physical character of the building from a shop to residential premises to be used predominately for residential accommodation*.\n\n**Supplies requiring apportionment\n**\n\n40. The value of a supply of premises that includes residential premises to be used predominantly for residential accommodation needs to be apportioned to the extent that part of the premises is not residential premises to be used predominantly for residential accommodation.\n\n*Example 8 - residential premises partly converted for business use*\n\n41. *Shannon decides to partly modify her house to use in her profession as a doctor. She modifies an area of the house to provide office and consulting room space, an operating theatre, a waiting room and storage for the business. A sealed car park is also added to the property. Significant physical modifications are made to these areas, including the removal and alteration of walls, and the addition of lighting, hygiene facilities and security to meet industry standards. The existing lounge room is used as the patients' waiting room. An existing bedroom is used for storage. No physical modifications are made to the lounge room or bedroom*.\n\n42. *The modifications result in the part of the premises consisting of the office, consulting room, operating theatre and car park no longer being residential premises to be used predominantly for residential accommodation. Objectively, part of the premises is still designed predominantly for residential accommodation, comprising bedrooms (including the bedroom used for storage*), *bathroom, kitchen, living room, lounge room and gardens*.\n\n43. *If Shannon later sells or leases the premises, she will need to apportion the value of the supply between the taxable and input taxed parts of the supply*.\n\n*Example 9 - the addition of furniture and minor fittings is not sufficient to modify physical characteristics*\n\n44. *Rebecca is a solicitor. She lives in a terrace house that is not new residential premises, and decides to convert a room at the front of the house into an office for her practice. Rebecca arranges the installation of an electricity point and telephone line for the place in the room where she intends to set-up a printer and facsimile machine. She fits the room out with book shelves, filing cabinets, desk, office chairs, a table for the printer and facsimile machine, and suitable floor coverings. She also has an advertising sign placed outside the front door of her house. Rebecca does not modify any of the other rooms in the house*.\n\n45. *These changes are not sufficient to modify the physical characteristics of the terrace house into premises other than residential premises to be used predominantly for residential accommodation. The furniture and fittings that Rebecca has brought into the room do not change the physical characteristics of the house itself. Also, the installation of an electricity point and telephone line, and the placement of a sign outside the house, are not sufficient modifications to alter the physical characteristics of the premises so that they are no longer residential premises to be used predominantly for residential accommodation. If Rebecca sells or leases the premises she will be making a wholly input taxed supply under section 40-65 or section 40-35 respectively*.\n\n***Land supplied with a building*\n**\n\n46. There is no specific restriction, in the definition of residential premises, on the area of land that can be included with a building. The extent to which land forms part of residential premises to be used predominantly for residential accommodation is a question of fact and degree in each case. A relevant factor in determining this is the extent to which the physical characteristics of the land and building as a whole indicate that the land is to be enjoyed in conjunction with the residential building. The use of the land is not a determining factor in deciding if the land forms part of the residential premises.\n\n**Vacant land\n**\n\n47. Vacant land is not capable of being occupied as a residence or for residential accommodation as it does not provide shelter and basic living facilities. Vacant land is not residential premises.\n\n**Applying the tests in additional scenarios\n**\n\n***Display homes*\n**\n\n48. A house that is residential premises to be used predominantly for residential accommodation may be supplied by way of lease as a display home. Regardless of whether the lease contains a prohibition on the house being used as a residence or for residential accommodation, the supply is an input taxed supply under section 40-35.\n\n***Transportable buildings*\n**\n\n49. A transportable building such as a demountable dwelling or moveable home[[4]](https://www.ato.gov.au/law/view/document?LocID=%22GST%2FGSTR20125%2FNAT%2FATO%2Ffp4%22&PiT=99991231235958#fp4) that is designed as a residence, or to provide residential accommodation, is residential premises when placed on land and installed ready for occupation.\n\n50. A supply of a transportable building before it is placed on land and installed ready for occupation is not an input taxed supply under sections 40-35, 40-65 or 40-70.[[5]](https://www.ato.gov.au/law/view/document?LocID=%22GST%2FGSTR20125%2FNAT%2FATO%2Ffp5%22&PiT=99991231235958#fp5) The supply is subject to the basic rules.\n\n51. A transportable building that is not designed as a residence or to provide residential accommodation (for example, a transportable building that lacks basic living facilities) is not residential premises to be used predominantly for residential accommodation.\n\n***Vehicles designed for road use*\n**\n\n52. Road vehicles, including motor homes, caravans and campervans, are not residential premises as they are not land or a building. This is the case regardless of whether they are used as a residence or for residential accommodation.\n\n### Date of effect\n\n53. This Ruling applies both before and after its date of issue. However, this Ruling does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). If, prior to the issue of this Ruling, you relied on Goods and Services Tax Ruling GSTR 2000/20, you are protected in respect of what you have done up to the date of issue of this Ruling and the withdrawal of GSTR 2000/20.\n\n**Commissioner of Taxation**\n\n19 December 2012","title":""}
+{"_id":"passage_a0JRF000003gzOj2AI/p00391127","text":"## If you stop being an Australian resident\n\nIf you [stop being an Australian resident for tax purposes](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency), you are taken to have disposed of CGT assets for their market value at the time you stopped being a resident, except for any taxable Australian property. This is sometimes called 'deemed disposal'.\n\nThe same applies if you stop being a resident trust for CGT purposes.\n\nForeign and temporary residents are subject to CGT only on taxable Australian property. This is the reason you are not taken to have disposed of these particular CGT assets when you stop being an Australian resident for tax purposes.\n\nIf you stop being an Australian resident for tax purposes, the full [CGT discount](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/cgt-discount-for-foreign-residents) will not be available when you dispose of an asset that you acquired after 8 May 2012 and is sold after you became a foreign resident. You may get an apportioned discount for the part of the ownership period of the asset where you were an Australian resident.\n\nIf you have assets that are not taxable Australian property that you are taken to dispose of when you stop being an Australian resident, you can claim the full 50% CGT discount if you have always been an Australian resident while owning the asset.\n\nIf you have any indirect Australian real property interests, or options or rights to acquire such interests, you are taken to have immediately re-acquired these assets for their market value.\n\n### Example: stops being an Australian resident\n\nJemima and Maurice were born in Australia and have always resided in Australia. Maurice gets a job in Italy, so Jemima and Maurice decide to move there permanently.\n\nMaurice and Jemima jointly own an apartment which they decide to keep and rent out. Jemima and Maurice also own some shares in publicly listed companies.\n\nThey leave Australia on 15 January 2025 and cease to be Australian residents at that date.\n\nAs Jemima and Maurice have stopped being Australian residents, they are taken to have disposed of their shares for market value on 15 January 2025. They can claim the full 50% CGT discount on the deemed disposal of their shares.\n\nJemima and Maurice are not taken to have disposed of their apartment because it is taxable Australian property. A CGT event will occur in respect of the apartment when they dispose of it. They can't claim the full 50% CGT discount on the sale of their apartment. However, they may claim an apportioned discount on any capital gains on the sale as they were Australian residents for part of their ownership period. They can use the [capital gains tax record keeping tool](https://www.ato.gov.au/calculators-and-tools/capital-gains-tax-record-keeping-tool) to help them calculate this.","title":""}
+{"_id":"passage_a0JRF000003cLsw2AE/p00386977","text":"## How much super to pay for independent contractors\n\nThe minimum super you must pay is the super guarantee [percentage](https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?page=22#Super_guarantee_percentage) of the worker's [ordinary time earnings](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings). This is the labour component of the contract. Do not include:\n\n- any contract payments that are for material and equipment\n- overtime for which the worker was paid overtime rates\n- GST.\n\nIf the values of the different parts of the contract aren't detailed in the contract, we'll accept their market values. We'll consider normal industry practices. If you cannot work out the labour part of the contract, you can use a reasonable market value of the labour section.\n\nPaying an additional amount equal to the SG rate to the independent contractor on top of their usual pay does not count as a super contribution. To avoid the super guarantee charge, you must make the SG contribution to the independent contractor's super fund each quarter.","title":""}
+{"_id":"passage_a0JRF000003hvkT2AQ/p00391797","text":"## Eligibility for exemption before you move in\n\nIf you build a dwelling on land you already own, the land normally is not exempt from capital gains tax (CGT) until the dwelling becomes your main residence.\n\nHowever, you can treat the land as your main residence for up to 4 years before you move in if you:\n\n- have an ownership interest (other than a life interest) in the land\n- build, repair or renovate a dwelling on the land, or finish a partly constructed dwelling\n- move into the dwelling as soon as practicable after it is finished and continue to use it as your main residence for at least 3 months.\n\nThe same option is available if you build a new dwelling to replace a dwelling that was demolished or destroyed. You can treat the vacant land as your main residence for up to 4 years while building your new home.\n\n## How to apply the exemption\n\nIf you choose to treat land as your main residence until your home is finished:\n\n- the land is exempt from the time you acquire it or for up to 4 years before you move in, whichever is shorter\n- if you or anyone else occupies a dwelling that is already on the land, the exemption period does not start until that dwelling is vacated\n- you can't treat any other dwelling as your main residence for the same period (except for a limited time if you are [moving from one main residence to another](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/moving-to-a-new-main-residence))\n- you can't choose to have a shorter period of exemption for the new dwelling in order to exempt your old home for part of the construction period.\n\n### Example: treating land as main residence\n\nAhmed built a new dwelling on a vacant block of land he bought, and moved from his old home into the new one. His key dates are:\n\n- 3 November 1997 – bought old home\n- 3 September 2010 – bought land for new dwelling\n- 2 September 2024 – finished building new dwelling\n- 1 October 2024 – sold old home\n- 7 October 2024 – moved into new dwelling (this was as soon as practicable after completion).\n\nAhmed can treat the new dwelling as his main residence from 7 October 2020. This is the 4 years immediately before the new dwelling actually becomes his main residence.\n\nIf he chooses to do this, Ahmed's old home is exempt:\n\n- from 3 November 1997 (when he acquired it) until 6 October 2020 (just before he began treating the dwelling under construction as his main residence)\n- for the 6 months before he disposed of it – that is, from 1 April 2024 to 1 October 2024 – because during this period he can treat both dwellings as his main residence under the rules for moving from one main residence to another.\n\nEnd of example\n## If the owner dies during construction\n\nThe exemption can still apply if the owner of the dwelling under construction were to die at any time between:\n\n- entering into contracts for the construction work\n- the end of the first 3 months of residence in the new home.\n\nThe surviving joint owner (or if none, the trustee of the deceased estate) can choose to treat the land and dwelling as the deceased's main residence. The conditions are the same, except that the exemption period ends when the deceased died.","title":""}
+{"_id":"passage_a0JRF000003heQH2AY/p00391670","text":"## Trips while working and between workplaces\n\nYou can claim a tax deduction for the cost of transport on trips to:\n\n- perform your work duties – for example, if you travel from your regular place of work to meet with a client\n- attend work-related conferences or meetings away from your regular place of work\n- deliver items or collect supplies\n- go between 2 or more separate places of employment, such as if you have more than one job (but not if one of the places is your home)\n- go from your\n\n- regular place of work to an alternative place of work that isn't a regular place of work (for example, a client's premises) while still on duty, and back to your regular place of work or directly home\n- home to an alternative place of work that isn't a regular place of work to perform your duties, and then to your regular place of work or directly home (this doesn't apply if the alternative place of work has become a regular workplace).\n\n### Example: travel between 2 separate workplaces\n\nAaron works part time at a supermarket and also works part time as a house cleaner. On Tuesdays Aaron drives his car directly from his job at the supermarket to his regular cleaning clients.\n\nAs the trip is between 2 separate places of work, neither of which is Aaron's home, he can claim a deduction for the transport expenses he incurs for that trip.\n\nEnd of example\n\n### Example: travel to an alternative place of work\n\nBrock works for a large company with 2 offices in Melbourne. He usually works from the city office but occasionally he's required to attend training at the company's office in Box Hill. When Brock travels to the Box Hill office, he catches a tram at his own expense.\n\nBrock can claim a deduction for the cost of the tram between the Melbourne office and Box Hill office as it's an alternative place of work. He can also claim the cost of any trips between the Box Hill office and his home.\n\nHowever, if Brock works from the city office every Monday to Thursday and from the Box Hill office every Friday as a standard arrangement, then the city office is his regular place of work every Monday to Thursday and the Box Hill office is his regular place of work every Friday. Brock can't claim a deduction for trips between his home and either of his regular places of work.\n\nEnd of example\n## Trips between home and work\n\nYou can't claim trips between your home and place of work, except in [limited circumstances](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/trips-you-can-and-can-t-claim#Whenyoucanclaimtripsbetweenhomeandwork).\n\nThese trips put you in a position to start work and earn income but are not part of performing your work duties. The cost of these trips is a private expense.\n\nThis is the case even if you:\n\n- live a long way from your regular place of work\n- work outside normal business hours – for example, shift work or overtime\n- do minor work-related tasks on the way to work or the way home – for example, picking up the mail\n- go between your home and regular place of work more than once a day\n- are on call – for example, you are on standby duty and your employer contacts you at home to come into work\n- have no public transport near where you work\n- do some work at home\n- work from your home running your own business and travel directly to a place of work where you work for somebody else.\n\n### Example: public transport not available\n\nTim works at his local cinema. His shift often finishes late into the night. The only available bus doesn't operate past 7:00 pm so Tim has to drive to and from work.\n\nThe cost Tim incurs to drive to work is not deductible. This is because Tim incurs the cost to put him in the position to earn his employment income, not in the course of performing his work duties.\n\nEnd of example\n\n### Example: working from home and travelling to regular place of work\n\nRavi works in the accounts department of a large retail chain. At the end of each month, Ravi's workload increases. To keep on top of his work, Ravi does some work at home before he goes into the office or when he gets home from the office in the evening.\n\nRavi can't claim a deduction for the expenses he incurs when he travels between his home and the office on these occasions.\n\nRavi works at home for convenience and doesn't incur the cost of travelling from his home to the office in the course of performing his work duties. He incurs the expenses to be in the position to start work. The transport costs are a private expense.\n\nEnd of example\n\n### Example: travelling while on standby duty\n\nNadena is a registered nurse at a hospital. During a typical fortnight, Nadena has 9 shifts and one standby shift. If another nurse calls in sick when Nadena is on standby duty she may be called in to work that shift.\n\nThe standby shift may be at night, early morning or during the day, depending on her roster cycle.\n\nNadena can't claim a deduction for travel between her home and the hospital when she is called into work while she is on standby duty.\n\nShe incurs the expense in travelling from her home to the hospital, not in the course of performing her work duties. The transport costs are a private expense. This is the case even if the shift is outside normal business hours or there is no public transport available.\n\nEnd of example\n\n### Example: travelling to a distant regular work location\n\nAldo lives in North Queensland with his family. He is an employee on a long-term project in Sydney. His employment contract states that his place of work is the office on the project site in Sydney.\n\nAs Aldo lives in North Queensland and only needs to be physically on site during certain stages of the project, he has an informal agreement with his employer to work from home whenever he's not required on site.\n\nWhen it's necessary for Aldo to be on site, he's generally at the project site for no longer than 2 weeks at a time. When Aldo needs to be on site, he flies to Sydney at his own expense.\n\nThe project site in Sydney is Aldo's regular place of work and he can't claim a deduction for the cost of travelling from North Queensland to Sydney.\n\nAldo doesn't incur the transport expenses in the course of performing his work duties. He incurs the expenses to put him in the position to start work.\n\nHis travel costs to stay in Sydney, such as accommodation and meals, are also private because Aldo chooses to live in North Queensland and work in Sydney.\n\nEnd of example\n### When you can claim trips between home and work\n\nThere are some circumstances where you can claim a deduction for the cost of trips between home and work. You must check that you meet the eligibility conditions for at least one of the following:\n\n- [Home is a base of employment](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/trips-you-can-and-can-t-claim#Homeisabaseofemployment)\n- [Transporting bulky tools and equipment](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/trips-you-can-and-can-t-claim#Transportingbulkytoolsandequipment)\n- [Itinerant or shifting places of work](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/trips-you-can-and-can-t-claim#Itinerantorshiftingplacesofwork)\n\nYou may also be able to claim a deduction for a trip that includes an alternative place of work that isn't a regular place of work – see [Trips while working and between workplaces](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/cars-transport-and-travel/trips-you-can-and-can-t-claim#Tripswhileworkingandbetweenworkplaces).\n\n#### Home is a base of employment\n\nYou can claim a deduction for the cost of a trip from home to your place of work if your home was a base of employment. You must meet all 3 of these conditions:\n\n- You're required to start your employment duties at home then travel to your regular place of work to complete those particular duties.\n- Undertaking the work in 2 locations is necessary due to the nature of your employment duties.\n- The trip to your regular place of work isn't part of a normal trip to work that would have occurred anyway.\n\n##### Example: home is base of employment\n\nTom is the IT Security Director of a data storage company. He's on call 24 hours a day to be notified of a security breach. His employer installs a secure terminal at his home so he can work from home if he receives a call out of hours. Normally, Tom would provide advice over the phone to the staff on site, and sometimes he would log into the secure terminal at his home to correct the issue.\n\nAt times, Tom starts working on a security issue from the home terminal but is then required to drive into the office out of hours to resolve the issue. On these occasions the transport expenses he incurs for this journey are deductible, as his home has become a base of employment. However, his regular daily trip into the office is not deductible.\n\nEnd of example\n#### Transporting bulky tools and equipment\n\nYou can claim a deduction for the cost of trips between home and work if you need to carry bulky tools or equipment and all the following conditions are met:\n\n- the tools or equipment are essential to perform your work\n- the tools or equipment are bulky, meaning that\n\n- they are awkward to transport because of their size and weight\n- they can only be transported conveniently using a motor vehicle\n- there is no secure storage for such items at the workplace\n- you don't transport the tools or equipment as a matter of choice (for example, if your employer provides secure storage and you choose to take the tools home instead).\n\nIf you claim a deduction, you will need to keep a record of:\n\n- all work items you carry\n- the size and weight of all work items\n- evidence that the items you carry are essential to your work\n- evidence that your employer did not provide secure storage at the workplace.","title":""}
+{"_id":"passage_a0JRF000003bpg92AA/p00386526","text":"## Assessments\n\nWhen you lodge your tax return for an income year, we issue you with an assessment (original assessment). An assessment shows your tax liability for that income year.\n\nWe will issue you with an amended assessment showing your updated tax liability if either:\n\n- you request an amendment to your assessment, for example to include a deduction you forgot to claim\n- we review your return and amend your assessment, for example, if we disallow a deduction you have claimed because you can't claim it under the law.\n\nThere are time limits for amending an assessment and an amended assessment. The time limit gives you certainty about your tax affairs because it means we can't amend your assessment outside the time limit.\n\n## Individuals\n\nIndividuals generally have **2 years** to amend an assessment. The time limit starts from the day after your notice of assessment is sent to you.\n\nFor example, if you receive an email from myGov on 3 November 2025 to advise you your notice of assessment is available, your amendment period starts on 4 November 2025. That means you have until 4 November 2027 to request an amendment to your assessment.\n\nIf you are out of time to amend your assessment, you may need to lodge an objection instead. While the time limit for lodging amendments and objections is the same, you can request an extension of time to lodge an objection in some circumstances.\n\nYou can submit more than one amendment request within a review period.\n\n## Sole Traders\n\nFor sole traders, the time limit to amend an assessment for the 2023–24 income year and earlier income years is generally **2 years**.\n\nFor the 2024–25 income year and later income years, sole traders will have **4 years** to amend an assessment.\n\nThe period for amending your assessment starts from the day after your assessment is sent to you.\n\nYou should submit an amendment early to ensure that we can process it in time.\n\nYou can submit more than one amendment request within a period of review.\n\nGenerally, we can't amend your assessment more than 2 years after it was issued unless you request it. However, we may amend your tax return outside the time limit in exceptional circumstances, such as when evasion or fraud has occurred.\n\nIf you're a business or super entity, see [Time limits for business and super amendments](https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/fix-a-mistake-or-amend-your-tax-return/request-an-amendment-to-a-business-or-super-tax-return).\n\n## When to lodge an objection\n\nIf you're out of time to amend your assessment, you may need to lodge an objection instead.\n\nYou'll need to [lodge an objection](https://www.ato.gov.au/individuals-and-families/your-tax-return/if-you-disagree-with-an-ato-decision/object-to-a-decision/complete-and-lodge-your-objection) if you want to:\n\n- dispute the law\n- dispute the facts we have used to come to a decision about your tax affairs (including your assessment)\n- lodge an amendment outside of the time limits.\n\nYou may be able to request an extension of time to lodge an objection in some circumstances.\n\nFor more information on objections, see [Eligibility to lodge an objection](https://www.ato.gov.au/individuals-and-families/your-tax-return/if-you-disagree-with-an-ato-decision/object-to-a-decision/eligibility-to-lodge-an-objection).","title":""}
+{"_id":"passage_a0JRF000003hFN32AM/p00391309","text":"#### Workers’ compensation (paid leave type W)\n\nSome employers pay workers' compensation to their employees, and in other circumstances the insurer makes the payment directly to the employee. Where you have made workers’ compensation payments, these must now be reported separately.\n\nWhen reporting workers' compensation (paid leave type W), only include amounts you pay in relation to compensation schemes administered by:\n\n- a federal, state or territory workers' compensation authority\n- a federal, state or territory road and transport accident authority.\n\nDon't include payments you make in relation to a commercially obtained insurance policy, such as private income protection or salary continuance policies – these are reported as [other paid leave (paid leave type O)](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross#OtherpaidleavePaidleavetypeO).\n\nOnly pre-sacrifice amounts that are not classified as [OTE](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-much-super-to-pay/list-of-payments-that-are-ordinary-time-earnings) according to the SGAA should be included as workers’ compensation. Some industrial instruments may require super to be paid on these amounts.\n\nIf you are making a [back payment or arrears payment](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/reporting-back-payments), it may be included in Workers’ compensation.\n\nThe following table outlines some examples of what should and shouldn't be included in **Workers’ compensation**.\n\nWorkers' compensation reporting examplesInclude\n\nDon't include\n\n- payments for any approved (or anticipated approval of) workers’ compensation absence paid by the employer to the employee\n- top-up payments made by the employer\n- workers’ compensation payments made after termination\n- workers’ compensation payments may be required to continue to be paid, even after the employee is terminated, in accordance with insurer requirements\n- although no longer technically an employee absence, these payments should be reported as workers’ compensation (paid leave type W)\n- payments to employees on workers’ compensation who are at work performing duties – this payment must be reported as [gross](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross#Gross)\n- payments to employees under an income protection or salary continuance insurance policy - this is reported as [other paid leave (paid leave type O)](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross#OtherpaidleavePaidleavetypeO)\n\n- payments to employees on workers’ compensation who are at work performing duties – this payment must be reported as [gross](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross#Gross)\n- payments to employees under an income protection or salary continuance insurance policy - this is reported as [other paid leave (paid leave type O)](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll/in-detail/single-touch-payroll-phase-2-employer-reporting-guidelines/reporting-the-amounts-you-have-paid/disaggregation-of-gross#OtherpaidleavePaidleavetypeO)","title":""}
+{"_id":"passage_a0JRF000003ges92AA/p00390882","text":"## What is an Australian, foreign and temporary resident?\n\nYou are an [Australian resident for tax purposes](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency) if you [reside in Australia](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-resides-test) or if you satisfy one of the following statutory tests:\n\n- [domicile test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-domicile-test)\n- [183-day test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-183-day-test)\n- [superannuation test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-superannuation-test)\n\nIf you are not an Australian resident for tax purposes, you are a [foreign resident](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/foreign-and-temporary-residents). A foreign resident is also referred to as a non-resident.\n\nYou are also a [temporary resident](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/foreign-and-temporary-residents) if:\n\n- you have a temporary visa\n- both you and your spouse are not Australian residents within the meaning of the *Social Security Act 1991* (that is, not an Australian citizen or permanent resident or a protected Special Category visa holder from New Zealand).\n\nYou won't be a temporary resident if, at any time after 6 April 2006, you have been an Australian resident and:\n\n- you didn't have a temporary visa\n- either you and your spouse were Australian residents within the meaning of the *Social Security Act 1991* (that is, are an Australian citizen or permanent resident or a protected Special Category visa holder from New Zealand).\n\nA temporary resident may be an Australian resident for tax purposes or a foreign resident. If you satisfy the requirements for being a temporary resident, your capital gains will be taxed in the same way as a foreign resident.\n\n## Becoming an Australian resident\n\nWhen you [become an Australian resident for tax purposes](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency) (except when you are also a temporary resident after this occurs), you are taken to have acquired your [CGT assets](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/list-of-cgt-assets-and-exemptions) at the same time, for their market value at that time. This is sometimes called 'deemed acquisition'.\n\nThis does not apply to assets:\n\n- you acquired before CGT started on 20 September 1985\n- that were [taxable Australian property](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/taxable-australian-property), such as real estate in Australia and assets used to carry on a business in Australia – the general [cost base rules](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/cost-base-of-asset) apply to taxable Australian property.","title":""}
+{"_id":"passage_a0JRF000003QCrp2AG/p00376945","text":"## Quoting an ABN\n\nSuppliers can provide you with invoices. Other electronic or paper documents that quote an ABN and relate to the supply are also acceptable.\n\nYou can also record a supplier's ABN if it is displayed on their website and keep it with your record of the transaction.\n\nYou should [check an ABN](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/payments-you-need-to-withhold-from/withholding-from-suppliers/checking-an-abn) if you suspect that it might not be genuine or that it does not belong to the supplier who quoted it.\n\n## Phone orders\n\nIf you order supplies by credit card over the phone, before placing the order ask the supplier for their ABN. If they don't have an ABN, do not authorise the supplier to charge the whole amount to your credit card as you will need to withhold tax from the payment.\n\n## Internet orders\n\nIf the supplier:\n\n- is based in Australia, you will need their ABN, otherwise you will have to withhold\n- is not carrying on an [enterprise](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/definitions#ato-Enterprise) in Australia, they will not need to quote an ABN and you will not need to withhold from payments you make to them\n- the website URL doesn't identify the supplier as having an Australian connection, the supplier may not have a [permanent establishment](https://www.ato.gov.au/about-ato/international-tax-agreements/in-detail/permanent-establishments/permanent-establishments) in Australia, so you won't need to withhold. You should retain a record of the reason for not withholding.\n\n## Overseas order\n\nForeign resident suppliers generally do not need to provide you with an ABN unless they are carrying on an enterprise in Australia which includes an agent or a branch office in Australia.\n\n### Example: ordering goods from overseas\n\nJohn orders goods for his business from an overseas business. The supplier doesn't need an ABN and John does not need to withhold. John may need to pay GST and customs duty when the goods are imported into Australia.\n\nJohn also orders goods for his business from a different overseas business. The goods are delivered and John is invoiced by their agent in Australia. If the agent doesn't quote their ABN on the invoice or any other document, John will need to withhold.\n\nEnd of example\n## Regular suppliers\n\nRegular suppliers can periodically quote their ABN to you to cover all the supplies they make to your business for a specified period, such as a financial year.\n\nYou must keep records that can verify the supplier, the supplier's ABN and the payments made in relation to the supplies.\n\nAt least once a year, you should check that the ABN quotation is correct and up to date.\n\nIf a regular supplier provides you with an ABN that is different from one previously quoted, check with the supplier – they may have accidentally quoted the wrong ABN. Alternatively, you can [check the ABN's validity](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/payments-you-need-to-withhold-from/withholding-from-suppliers/checking-an-abn).\n\n## Corporate group\n\nIf you are part of a corporate group, you don't have to get or quote an ABN every time you pay or charge another group member for supplies as long as every member of the group:\n\n- keeps a register of the ABN of all the other members that supply it\n- is able to link each transaction to the correct ABN.","title":""}
+{"_id":"passage_a0JRF000003hK092AE/p00391399","text":"## What a branch is\n\nA branch is formed where a business entity separately registers its branch to suit the structural, management and accounting arrangements of the organisation. When an entity registers a branch for GST or PAYG purposes, the entity is called the 'parent entity'.\n\n## Who should use this form\n\nUse this form if you want to:\n\n- create a goods and services tax (GST) branch\n- create a pay as you go (PAYG) withholding branch\n- add a GST role to an existing PAYG withholding branch, or\n- add a PAYG withholding role to an existing GST branch.\n\nFor details about the personal information we collect from you, see [Privacy notice – Application to register a GST or PAYG withholding branch](https://www.ato.gov.au/about-ato/commitments-and-reporting/in-detail/privacy-and-information-gathering/privacy-notices/application-to-register-a-gst-or-payg-withholding-branch).\n\n## Download a form\n\nYou can download the form in portable document format (PDF) – [Application to register a GST or PAYG withholding branch (NAT 14834, PDF, 312KB)This link will download a file](https://www.ato.gov.au/api/public/content/02f3834ce939413292dcd99a7ff321b7).\n\n## Lodge your form\n\nKeep a copy of your completed form for your records. Lodge the original including any attachments using:\n\n- secure mail through[ Online services for business](https://www.ato.gov.au/forms-and-instructions/gst-or-payg-withholding-branch-registration#LodgethroughOnlineservicesforbusiness)\n- practice mail through [Online services for agents](https://www.ato.gov.au/forms-and-instructions/gst-or-payg-withholding-branch-registration#LodgethroughOnlineservicesforagents).\n\n### Lodge through Online services for business\n\nIf you use Online services for business to lodge your form, it is more secure and will be processed faster than if you lodge by mail.\n\nFollow these steps to lodge through secure mail in Online services for business:\n\n1. Complete the form.\n2. Save the completed form as a PDF to your computer.\n3. Log in to [Online services for business](https://www.ato.gov.au/online-services/businesses-and-organisations-online-services/communication-in-online-services-for-business/).\n4. Select **Communication**, then **Secure Mail**.\n5. Create a **New** message.\n6. Go to the **Topic** list and select **Registrations**.\n7. Go to **Subject** list and select **Branching registration enquiry**.\n8. Attach the form and any attachments.\n9. Provide your contact details and complete the declaration.\n10. Select **Send**.\n\nYou will receive a receipt number once you've lodged your form.\n\n#### Tracking your progress\n\nYou can track your form's progress in Online services for business by selecting **Your dealings** from the **Communication** menu.\n\n### Lodge through Online services for agents\n\nFollow these steps to lodge through practice mail in Online services for agents:\n\n1. Select **Communication**, then **Practice mail**.\n2. Create a **New** message.\n3. Go to the **Topic** list and select **Registrations**.\n4. Go to the **Subject** list and select **Branching registration enquiry**.\n5. At **Enquiry** type, select **I am enquiring on behalf of client**.\n6. Search for your client and select them.\n7. Attach the form and any attachments.\n8. Provide your contact details and complete the declaration.\n9. Select **Send**.\n\nYou will receive a receipt number once the message has successfully been sent.","title":""}
+{"_id":"passage_a0JRF000003hiQf2AI/p00391711","text":"## Benefits of salary sacrificing\n\nYou and your employer can agree on a salary sacrifice arrangement (also known as salary packaging or total remuneration packaging) to exchange part of your salary or wages for benefits of a similar value.\n\nYou can use a salary sacrifice arrangement to have some of your salary or wages paid into your super fund instead of to you. This effectively reduces your taxable income, meaning you pay less tax on your income. These concessional contributions are taxed in the super fund at a rate of 15%, which is generally less than your marginal tax rate.\n\n## How salary sacrifice contributions are treated\n\nSalary sacrifice super contributions do not:\n\n- reduce the ordinary time earnings (OTE) that your employer is required to calculate your super entitlement on\n- count towards the amount of super guarantee contributions that your employer is required to make.\n\nSalary sacrifice super contributions are classified as employer super contributions, rather than your personal contributions. They are additional to your super guarantee entitlements. Your employer must still pay your full super guarantee as though there was no salary sacrifice arrangement in place.\n\nThe sacrificed component of your total salary package is not counted as assessable income for tax purposes. This means that it is not subject to pay as you go (PAYG) withholding tax. However, salary sacrifice super contributions are included in your [reportable super contributions](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/options-for-adding-to-your-super#Reportablesupercontributions) and must be included in your tax return.\n\nIf salary sacrifice super contributions are made to a complying super fund, the sacrificed amount is not considered a fringe benefit and is not subject to fringe benefits tax.\n\n## Salary sacrifice limitations\n\nUnless there are limitations specified in the terms of your employment, there is no limit to the amount you can salary sacrifice into super. However there are tax implications.\n\nConsider whether the amount you wish to salary sacrifice will:\n\n- mean you exceed your [concessional (before-tax) contributions cap](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/concessional-contributions-cap), which limits the amount that can be contributed to your super fund that is taxed at the concessional rate of 15%\n- be subject to [Division 293 tax](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/division-293-tax-on-concessional-contributions-by-high-income-earners), which applies in respect of your concessional contributions when your combined income and concessional super contributions for Division 293 purposes is more than $250,000.","title":""}
+{"_id":"passage_a0JRF000003foyP2AQ/p00390210","text":"## About taxable Australian property\n\nForeign and temporary residents are subject to capital gains tax (CGT) only on taxable Australian property.\n\nTaxable Australian property includes:\n\n- Australian real property, such as a house, apartment, commercial building or land\n- an indirect interest in Australian real property\n- a mining, quarrying or prospecting right in Australia\n- a CGT asset that you have used to carry on a business through a permanent establishment in Australia\n- an option or right over one of the above – for example, a contract to purchase property off the plan.\n\nForeign residents are subject to the full rate of [foreign resident capital gains withholding](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding/foreign-residents-and-variations) (FRCGW). FRCGW is applied to the sale price (or [market value](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding/foreign-resident-capital-gains-withholding-overview#Marketvalue) if non-arm's length) when selling Australian real property (property), unless there is a [variation notice](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/foreign-resident-capital-gains-withholding/foreign-residents-and-variations#Applyforavariation) that reduces the rate.\n\nFor CGT events happening on or after 20 May 2009, a leasehold interest in land in Australia is Australian real property.\n\nIf you [stop being an Australian resident](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/how-changing-residency-affects-cgt), you are taken to have disposed of each of your assets that are not taxable Australian property for their market value at the time you stopped being a resident.\n\nYou have the option of disregarding capital gains and losses at that time. If you do this, your assets will be taken to be taxable Australian property. For example, if you disregard the capital gain or loss on Australian shares you own, those shares would become taxable Australian property.\n\n## Indirect interests in Australian real property\n\nIf you are a foreign or temporary resident, any indirect interest you have in Australian real property is subject to CGT.\n\nYou have an indirect interest in Australian real property if both the following are true:\n\n- you and your associates together own 10% or more of another entity, whether Australian or foreign – this is called the 'non-portfolio interest test'\n- the market value of the assets of that entity is mainly attributable to Australian real property – this is called the 'principal asset test'.\n\n### Indirect interests acquired before 11 May 2005\n\nIf you acquired an indirect interest in Australian real property before 11 May 2005, you are taken to have acquired it at its market value on 10 May 2005 if:\n\n- you are a foreign resident or the trustee of a trust that was not a resident trust for CGT purposes\n- the interest did not have the necessary connection with Australia but is taxable Australian property.\n\n### Foreign currency\n\nThe entity through which you have an indirect Australian real property interest may keep its accounts mainly in a foreign currency.\n\nIf so, when you dispose of your interest you must apply [functional currency rules](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/foreign-exchange-gains-and-losses/in-detail/guide-to-functional-currency-rules) to calculate your capital gain or loss.\n\nThis means if the entity uses the foreign currency to account for its transactions, you will convert your capital gain or loss into Australian currency.","title":""}
+{"_id":"passage_a0JRF000003hidZ2AQ/p00391714","text":"## Work out your tax residency\n\nYou can use the [residency tests](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency#Residencytests) to work out if you're:\n\n- an [Australian resident for tax purposes](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/australian-resident-for-tax-purposes)\n- a [foreign or temporary resident](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/foreign-and-temporary-residents) for tax purposes.\n\nYou can also be a temporary resident if you are an Australian resident or a foreign resident for tax purposes.\n\nWe don't use the same rules as the Department of Home Affairs. This means you:\n\n- can be an Australian resident for tax purposes without being an Australian citizen or permanent resident\n- may have a visa to enter Australia but are not an Australian resident for tax purposes.\n\nFor a summary of key information about residency status, download [Residency for tax purposes (PDF, 296KB)This link will download a file](https://www.ato.gov.au/api/public/content/f7fcb4c5-9e3e-40f3-ae29-8cabd6c7fcf7_TaxTimeToolkit_Residencyfortaxpurposes_pdf). This information is also available in Arabic, Chinese, Japanese, Korean and Vietnamese, go to [Information in your language](https://www.ato.gov.au/other-languages).\n\nIf you're a working holiday maker, see [Working holiday makers](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/coming-to-australia/working-holiday-makers).\n\n## Residency tests\n\nThere are statutory tests to determine your residency:\n\n- [Resides test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency#Residestest)\n- [Domicile test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency#Domiciletest)\n- [183-day test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency#BK_183daytest)\n- [The Commonwealth superannuation test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency#TheCommonwealthsuperannuationtest)\n\nYou can also use our [work out your residency status for tax purposes](https://www.ato.gov.au/calculators-and-tools/tax-return-work-out-your-tax-residency) tools to help work out your residency.\n\n### Resides test\n\nThe primary test of tax residency is called the [resides test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-resides-test). If you reside in Australia, you're an Australian resident for tax purposes and you don't need to apply any of the other residency tests.\n\nSome of the factors that can be used to determine residency status include:\n\n- physical presence\n- intention and purpose\n- family\n- business or employment ties\n- maintenance and location of assets\n- social and living arrangements.\n\nIf you don't satisfy the resides test, you'll still be an Australian resident if you satisfy one of 3 statutory tests.\n\n### Domicile test\n\nYou're an Australian resident if your domicile (the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.\n\nA domicile is a place that is your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).\n\nFor more information about this test, see [the domicile test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-domicile-test).\n\n### 183-day test\n\nYou will be a resident under this test if you're actually present in Australia for more than half the income year, whether continuously or with breaks. unless it is established that your ‘usual place of abode’ is outside Australia and you have no intention of taking up residence here.\n\nFor more information about this test, see [the 183-day test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-183-day-test).\n\n### The Commonwealth superannuation test\n\nThis test applies to Australian Government employees working at Australian posts overseas and who are contributing members of the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS). It does not apply to members of the Public Sector Superannuation Accumulation Plan (PSSAP). If this is the case, you (and your spouse and children under 16) are a resident of Australia regardless of any other factors.\n\nFor more information about this test, see [the superannuation test](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/residency-tests/residency-the-superannuation-test).","title":""}
+{"_id":"passage_a0JRF000003fAg12AE/p00389707","text":"## Tax rates for foreign residents\n\nYou should advise your Australian financial institution (your payer) that you are a foreign resident so they can withhold tax in Australia at the time of payment. You won't need to declare this income in an Australian tax return. Your payer will then withhold tax at the rates shown in the table below.\n\nTax rates for foreign residentsTax rate for\n\nTreaty countries\n\nNon-treaty countries\n%\n\nInterest\n\nSome agreements provide an exemption from withholding tax in certain circumstances.\n\n10%\n\nUnfranked dividends\n\nMost agreements reduce the rate to 15%.\n\n30%\n\nRoyalties\n\nMost agreements reduce the rate to 10%.\n\n30%\n\nThe full list of our tax treaties is maintained by Treasury and can be found at [Income tax treatiesExternal Link](https://treasury.gov.au/tax-treaties/income-tax-treaties/).\n\nTell your Australian payer your current overseas address so they can withhold the right rate of tax. If you don't, they may withhold tax at the higher rate of 47% (from 1 July 2017).\n\n## Certificates of payment\n\nIf you need proof of payment of withholding tax to comply with the tax requirements of your own country, you can ask your payer to request a certificate of payment from us.\n\nFor more information on investment income and withholdings paid to foreign residents, see:\n\n- [Investment income and royalties paid to foreign residents](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/payments-you-need-to-withhold-from/withholding-from-investment-income/investment-income-and-royalties-paid-to-foreign-residents)\n- [Withholding from dividends paid to foreign residents](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/income/withholding-from-dividends-paid-to-foreign-residents)\n- [Withholding from royalties paid to foreign residents](https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/australian-income-of-foreign-residents/withholding-from-royalties-paid-to-foreign-residents).","title":""}
+{"_id":"passage_a0JRF000003i2Kc2AI/p00391915","text":"## Eligibility to claim self-education expenses\n\nYou can claim a deduction for a self-education expense if, at the time you incur the expense, it has a sufficient connection to earning income from your employment activities.\n\nSelf-education has a sufficient connection to earning your employment income if it either:\n\n- maintains or improves the specific skills or knowledge you require for your current employment activities\n- results in, or is likely to result in, an increase in your income from your current employment activities.\n\nYour employment activities are the duties and tasks expected of you to perform your job and are usually set out in your duty statement.\n\nYou may also be eligible if you undertake a course to maintain your right to receive a [taxable bonded scholarship](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Taxablebondedscholarshiprecipients).\n\nIn some circumstances, only the expenses incurred for certain subjects or components of your self-education will have a sufficient connection to earning your employment income. For more information on when this will apply and how to apportion your expenses, see [Apportioning expenses](https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/education-training-and-seminars/self-education-expenses#Apportioningexpenses).","title":""}