This instrument is the Income Tax Assessment (1997 Act) Regulations 2021.
3 Authority
(1) Subject to subsection (2), this instrument is made under the Income Tax Assessment Act 1997.
(2) Sections 291‑170.05 and 291‑170.07 are made under the Income Tax (Transitional Provisions) Act 1997.
Chapter 2—Liability rules of general application
Part 2‑5—Rules about deductibility of particular kinds of amounts
Division 26—Some amounts you cannot deduct, or cannot deduct in full
26‑85.01 Borrowing costs on loans to pay life insurance premiums—term insurance policy etc.
For the purposes of subsection 26‑85(2) of the Act, the risk component of a premium received in respect of a life insurance policy that is:
(a) a term insurance policy; or
(b) a rider or supplementary benefit attached to another policy where the sum insured is payable on death within a specified term;
is an amount that is equal to the whole of the amount of the premium.
Division 30—Gifts or contributions
30‑212.01 Valuation of gifts
For the purposes of section 30‑212 of the Act, this Division sets out:
(a) the procedure for seeking a valuation from the Commissioner of a gift mentioned in that section; and
(b) the amounts that the Commissioner may charge for making the valuation; and
(c) arrangements for payment of those amounts.
Note: Subsection 30‑212(1) of the Act applies to a person who makes a gift that is covered by a provision of Division 30 of the Act that refers to the value of property as determined by the Commissioner.
30‑212.02 Application for valuation
An application for a valuation must:
(a) be in the approved form; and
(b) be lodged with the Commissioner; and
(c) include the deposit towards the charge for making the valuation required by the approved form, which must not be more than $1,000.
Note: For approved form, see subsection 995‑1(1) of the Act.
30‑212.03 Charge for making valuation
(1) The amount of the charge for making the valuation is an amount equal to the sum of the actual cost of the valuation and all other costs to the Commissioner in obtaining the valuation.
(2) However, if the Commissioner starts the valuation but the application for the valuation is withdrawn or treated as having no effect under subsection 30‑212.06(2), the amount of the charge for making the valuation is an amount equal to the costs to the Commissioner in obtaining the incomplete valuation.
30‑212.04 Advance payment of charge
(1) The Commissioner may give the applicant a written statement:
(a) requiring the applicant to give the Commissioner an advance payment of the charge that may be payable for making the valuation; and
(b) stating the amount of the payment; and
(c) explaining how the amount was worked out.
(2) The Commissioner may ask for more than one advance payment from the applicant under subsection (1).
(3) The applicant must give the Commissioner the advance payment within 14 days after receiving the statement asking for the payment or within such longer period as the Commissioner allows.
Subdivision Subdivision 290 - Income Tax Assessment (1997 Act) Regulations 2021 - ‑C—Deducting personal contributions | Zoe
30‑212.05 Commissioner not required to consider application until advance payment is paid
If the Commissioner has required an advance payment of the charge under section 30‑212.04, the Commissioner is not required to consider the application until the payment is paid.
30‑212.06 Applications treated as having no effect
(1) If the application does not comply with section 30‑212.02, the Commissioner must:
(a) treat the application as having no effect; and
(b) give the applicant a written statement that the application is being treated that way.
(2) If the Commissioner has required an advance payment of the charge under section 30‑212.04, and the payment is not paid within the time mentioned in subsection 30‑212.04(3):
(a) the Commissioner must treat the application as having no effect after that time; and
(b) the Commissioner must give the applicant a written statement that the application is being treated that way.
Note: For an application that is treated as having no effect under subsection (2), see subsection 30‑212.03(2).
30‑212.07 Crediting and repaying valuation charges
(1) The deposit paid under section 30‑212.02 is to be credited against the charge for making the valuation.
(2) An advance payment of the charge paid under section 30‑212.04 is to be credited against the charge for making the valuation.
(3) The charge payable for making the valuation is a debt due to the Commonwealth and recoverable in a court of competent jurisdiction.
(4) However, if the total of the amounts paid under subsections (1) and (2) is more than the charge payable for making the valuation, the Commissioner must pay the difference to the applicant as soon as practicable.
30‑212.08 Valuation certificates
(1) If the Commissioner completes the valuation, the Commissioner must give a valuation certificate to the applicant for the valuation.
(2) The Commissioner must approve, in writing, one or more forms of a valuation certificate for the purposes of subsection (1).
(3) The certificate must include the following information:
(a) the date on which the valuation was completed;
(b) a description of any real property (including a lot and plan number, title reference and the location of the property);
(c) a full description of property other than real property;
(d) the period for which the valuation is in force;
(e) a statement of the valuation.
(4) The certificate may include other information.
(5) The Commissioner must not give a valuation certificate to the applicant until:
(a) the valuation has been completed; and
(b) the Commissioner has received the full amount of the charge payable for making the valuation.
Division 31—Conservation covenants
31‑15.01 Valuation of land
For the purposes of section 31‑15 of the Act, this Division sets out:
(a) the procedure for seeking a valuation from the Commissioner of the change in the market value of the land mentioned in that section; and
(b) the amounts that the Commissioner may charge for making the valuation; and
(c) arrangements for payment of those amounts.
Note: Section 31‑15 of the Act applies to a person who enters into a conservation covenant over land owned by the person, if the conditions mentioned in subsection 31‑5(2) of the Act are met.
31‑15.02 Application for valuation
An application for a valuation must:
(a) be in the approved form; and
(b) be lodged with the Commissioner; and
(c) include a copy of the conservation covenant; and
(d) include the deposit towards the charge for making the valuation required by the approved form, which must not be more than $1,000.
Note: For approved form, see subsection 995‑1(1) of the Act.
31‑15.03 Charge for making valuation
(1) The amount of the charge for making the valuation is an amount equal to the sum of the actual cost of the valuation and all other costs to the Commissioner in obtaining the valuation.
(2) However, if the Commissioner starts the valuation but the application for the valuation is withdrawn or treated as having no effect under subsection 31‑15.06(2), the amount of the charge for making the valuation is an amount equal to the costs to the Commissioner in obtaining the incomplete valuation.
31‑15.04 Advance payment of charge
(1) The Commissioner may give the applicant a written statement:
(a) requiring the applicant to give the Commissioner an advance payment of the charge that may be payable for making the valuation; and
(b) stating the amount of the payment; and
(c) explaining how the amount was worked out.
(2) The Commissioner may ask for more than one advance payment from the applicant under subsection (1).
(3) The applicant must give the Commissioner the advance payment within 14 days after receiving the statement asking for the payment or within such longer period as the Commissioner allows.
31‑15.05 Commissioner not required to consider application until advance payment is paid
If the Commissioner has required an advance payment of the charge under section 31‑15.04, the Commissioner is not required to consider the application until the payment is paid.
31‑15.06 Applications treated as having no effect
(1) If the application for the valuation does not comply with section 31‑15.02, the Commissioner must:
(a) treat the application as having no effect; and
(b) give the applicant a written statement that the application is being treated that way.
(2) If the Commissioner has required an advance payment of the charge under section 31‑15.04, and the payment is not paid within the time mentioned in subsection 31‑15.04(3), the Commissioner must:
(a) treat the application as having no effect after that time; and
(b) give the applicant a written statement that the application is being treated that way.
Note: For an application that is treated as having no effect under subsection (2), see subsection 31‑15.03(2).
31‑15.07 Crediting and repaying valuation charges
(1) The deposit paid under section 31‑15.02 is to be credited against the charge for making the valuation.
(2) An advance payment of the charge paid under section 31‑15.04 is to be credited against the charge for making the valuation.
(3) The charge payable for making the valuation is a debt due to the Commonwealth and recoverable in a court of competent jurisdiction.
(4) However, if the total of the amounts paid under subsections (1) and (2) is more than the charge payable for making the valuation, the Commissioner must pay the difference to the applicant as soon as practicable.
31‑15.08 Valuation certificates
(1) If the Commissioner completes the valuation, the Commissioner must give a valuation certificate to the applicant for the valuation.
(2) The Commissioner must approve, in writing, one or more forms of a valuation certificate for the purposes of subsection (1).
(3) The certificate must include the following information:
(a) the date on which the valuation was completed;
(b) a description of the land (including a lot and plan number, title reference and the location of the land);
(c) a statement of the market value of the land immediately before the conservation covenant was entered into;
(d) a statement of the market value of the land immediately after the conservation covenant was entered into;
(e) a statement of the difference between the market values mentioned in paragraphs (c) and (d);
(f) a statement of the extent to which the difference mentioned in paragraph (e) is attributable to the conservation covenant being entered into.
(4) The certificate may include other information.
(5) The Commissioner must not give a valuation certificate to the applicant until:
(a) the valuation has been completed; and
(b) the Commissioner has received the full amount of the charge payable for making the valuation.
Part 2‑15—Non‑assessable income
Division 50—Exempt entities
Subdivision 50‑A—Various exempt entities
50‑50.01 Prescribed institutions located outside Australia
For the purposes of paragraph 50‑50(1)(c) of the Act, each institution specified in an item in the following table is a prescribed institution.
50‑50.02 Prescribed institutions pursuing objectives principally outside Australia
For the purposes of paragraph 50‑50(1)(d) of the Act, each institution specified in column 1 of an item in the following table, and each institution that is a member of that institution, is a prescribed institution until the date specified (if any) in column 2 of the item.
50‑55.01 Prescribed institutions for items 1.3, 1.4, 6.1 and 6.2 in Division 50 of the Act
For the purposes of paragraph 50‑55(1)(c) of the Act, each institution mentioned in an item in the following table is a prescribed institution until the date specified (if any) in column 2 for the item.
(1) For the purposes of items 1.1 and 1.2 of section 51‑5 of the Act, an allowance specified in an item of the following table is prescribed if the allowance is either:
(a) paid under the specified provision of the 2013 allowances determination; or
(b) paid under the specified provision of the conditions determination.
<table cellspacing="0" cellpadding="0" style="width:100%; border-collapse:collapse"><thead><tr><td colspan="3" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed allowances</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Column 1</span></p><p class="TableHeading"><span>Allowance</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Column 2</span></p><p class="TableHeading"><span>Provision</span></p></td></tr></thead><tbody><tr><td style="width:8.58%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:56.16%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Separation allowance</span></p></td><td style="width:35.26%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division B.3 of the 2013 allowances determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Disturbance allowance</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division</span><span> </span><span>1 of Part</span><span> </span><span>1 of Chapter</span><span> </span><span>6 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Rent allowance paid to a member without dependants or to a member with dependants (unaccompanied)</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division</span><span> </span><span>1 of Part</span><span> </span><span>8 of Chapter</span><span> </span><span>7 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Education assistance</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>4 of Chapter</span><span> </span><span>8 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Transfer allowance</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division</span><span> </span><span>3 of Part</span><span> </span><span>3 of Chapter</span><span> </span><span>14 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Reimbursement of education costs for a child educated at the location of a member’s long</span><span>‑</span><span>term posting overseas</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>6 of Chapter</span><span> </span><span>15 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>7</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Reimbursement of education costs for a child educated in Australia while the member is on a long</span><span>‑</span><span>term posting overseas</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division</span><span> </span><span>5 of Part</span><span> </span><span>6 of Chapter</span><span> </span><span>15 of the conditions determination</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>8</span></p></td><td style="width:56.16%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Deployment allowance</span></p></td><td style="width:35.26%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Division</span><span> </span><span>1 of Part</span><span> </span><span>7 of Chapter</span><span> </span><span>17 of the conditions determination</span></p></td></tr></tbody></table>
(2) For the purposes of item 1.7 of the table in section 51‑5 of the Act, sections 14 and 14B of the Ombudsman Regulations 2017 are prescribed.
(3) In this instrument:
2013 allowances determination means DFRT Determination No. 11 of 2013, ADF Allowances, made under section 58H of the Defence Act 1903.
Note: The 2013 allowances determination could in 2021 be viewed on the Defence Force Remuneration Tribunal’s website (http://dfrt.gov.au).
conditions determination means Defence Determination 2016/19, Conditions of service, made under section 58B of the Defence Act 1903.
Part 2‑20—Tax offsets
Division 61—Generally applicable tax offsets
Subdivision 61‑G—Private health insurance offset complementary to Part 2‑2 of the Private Health Insurance Act 2007
61‑220.01 Private health insurer to provide annual statement to PHIIB if requested
(1) If, during a financial year, a PHIIB insured during an earlier financial year under a complying health insurance policy by a private health insurer (within the meaning of the Private Health Insurance Act 2007) requests a statement about that policy for that earlier year, the private health insurer must provide a statement in accordance with this section.
Note: For complying health insurance policy and PHIIB, see subsection 995‑1(1) of the Act.
(2) The statement must be in the approved form, and provided to the PHIIB within 14 days after the day the request is received.
Note: For approved form, see subsection 995‑1(1) of the Act.
(3) The statement may include information in relation to the following:
(a) the complying health insurance policy held by the PHIIB and payments made under the policy;
(b) the premium, or amounts in respect of the premium, paid during the earlier financial year in relation to the policy;
(c) any reductions of the premium payable, or an amount payable, during the earlier financial year.
Part 2‑25—Trading stock
Division 70—Trading stock
Subdivision 70‑C—Accounting for trading stock you hold at the start or end of the income year
70‑55.01 Cost of natural increase of live stock
For the purposes of paragraph 70‑55(1)(b) of the Act, the cost prescribed for each animal in a class of live stock specified in column 1 of an item in the following table is the amount specified in column 2 of that item.
Part 2‑40—Rules affecting employees and other taxpayers receiving PAYG withholding payments
Division 83A—Employee share schemes
Subdivision 83A‑A—Objects of Division and key concepts
83A‑5.01 Object of Division 83A
For the purposes of Division 83A of the Act, this Division preserves rules under the former Division 13A of Part III of the Income Tax Assessment Act 1936 about valuing unlisted rights to acquire shares under an employee share scheme.
Subdivision 83A‑E—Miscellaneous
83A‑315.01 Value of certain ESS interests
(1) For the purposes of subsection 83A‑315(1) of the Act, the amount specified, in relation to an ESS interest that is an unlisted right that must be exercised within 15 years after the day when the beneficial interest in the right was acquired is, at the choice of the individual:
(a) the market value of the right; or
(b) the value worked out in accordance with sections 83A‑315.02 to 83A‑315.09.
Note: The meaning of market value is affected by Subdivision 960‑S of the Act. For example, section 960‑410 affects how the market value of a non‑cash benefit is worked out.
(2) However, if the deferred taxing point for the ESS interest is:
(a) the day when the individual disposes of the interest (other than by exercising the right); or
(b) if the individual exercises the right—the day when the individual disposes of the beneficial interest in the share acquired by exercising the right;
the amount specified in relation to the right is the market value of the right or share acquired by exercising the right.
83A‑315.02 Valuing unlisted rights
(1) The value of the unlisted right on a particular day is the greater of:
(a) the market value, on the particular day, of the share that may be acquired by exercising the right, less the lowest amount that must be paid to exercise the right to acquire the beneficial interest in the share; and
(b) subject to sections 83A‑315.03 and 83A‑315.04, the value, on the particular day, of the right to acquire the beneficial interest in the share worked out in accordance with sections 83A‑315.05 to 83A‑315.09.
(2) In working out the value of a right for the purposes of this Division, anything that would prevent or restrict conversion of the right to money is to be disregarded.
83A‑315.03 Exercise price of right nil or cannot be determined
If the lowest amount that must be paid to exercise the right to acquire the beneficial interest in a share is nil or cannot be determined, the value of the right on a particular day is the same as the market value of the share on that day.
83A‑315.04 Value of beneficial interests
To avoid doubt, if an individual acquires the beneficial interest in a share or right, the value that is applicable for the purposes of this Division is the value of the share or right, not the value of the interest in the share or right.
83A‑315.05 Working out the value of a right to acquire the beneficial interest in a share
For the purposes of paragraph 83A‑315.02(1)(b), work out the value, on the particular day, of the right to acquire the beneficial interest in the share, using the following method statement.
Method statement
Step 1: Apply the following formula. The result is the calculation percentage.
Start formula start fraction market value on the particular day of the share that is the subject of the right over amount or lowest amount that must be paid to exercise the right end fraction times 100 percent end formula
Step 2: If the calculation percentage is less than 50%, the value of the right is nil.
If the calculation percentage is equal to, or greater than, 50% but less than 110%, the value of the right is the value worked out under section 83A‑315.08.
If the calculation percentage is equal to, or greater than, 110%, the value of the right is the value worked out under section 83A‑315.09.
83A‑315.08 Calculation percentages of 50% or more, and less than 110%
(1) To work out the value of the right under this section, select the percentage (the calculation percentage) from an item in the following tables that corresponds to:
(a) the period, in months, from the particular day (referred to in section 83A‑315.02) until the last day on which the right may be exercised (the exercise period); and
(b) the calculation percentage;
and then multiply the amount, or lowest amount, that must be paid to exercise the right by the calculation percentage. The result is the value of the right.
Note: The following assumptions were used to work out the calculation percentages:
(a) a risk‑free interest rate of 4%;
(b) a dividend yield of 4%;
(c) volatility of 12%.
(2) If, in relation to a particular right:
(a) the exercise period; or
(b) the calculation percentage;
is the top of one range in the table in subsection (1) and is also the bottom of another range in the table, it is taken to be in the lower range and not in the higher range.
83A‑315.09 Base percentages for calculation percentages of 110% or more
(1) The value of the right worked out under this section, is the amount worked out using the following formula:
Start formula amount or lowest amount that must be paid to exercise the right times open square bracket base percentage plus open round bracket excess times additional percentage close round bracket close square bracket end formula
where:
additional percentage, for a right with an exercise period specified in an item in column 1 of the table in subsection (2), is the percentage specified in column 3 of the item.
base percentage, for a right with an exercise period specified in an item in column 1 of the table in subsection (2), is the percentage specified in column 2 of the item.
excess is the amount worked out using the following formula, disregarding any fraction:
Start formula 100 times open bracket calculation percentage minus 110 percent close bracket end formula
exercise period for a right is the period, in months, from the particular day (referred to in section 83A‑315.02) until the last day on which the right may be exercised.
(2) The following table sets out base percentages and additional percentages for the purposes of subsection (1).
Note: The following assumptions were used to work out the base percentages:
(a) a risk‑free interest rate of 4%;
(b) a dividend yield of 4%;
(c) volatility of 12%.
(3) If the exercise period is the top of one range in the table in subsection (2) and is also the bottom of another range in the table, it is taken to be in the lower range and not in the higher range.
Chapter 3—Specialist liability rules
Part 3‑30—Superannuation
Division 290—Contributions to superannuation funds
Subdivision 290‑C—Deducting personal contributions
290‑155.01 Complying superannuation fund condition—prescribed superannuation funds
A superannuation fund is of a kind prescribed for the purposes of subparagraph 290‑155(1)(a)(iii) of the Act if:
(a) the fund has one or more members that have a superannuation interest in the fund that is a defined benefit interest; and
(b) the trustee of the fund elects to have this section apply to the fund; and
(c) the election:
(i) is made before the start of the income year of the fund in which the contribution is made; and
(ii) is not revoked before the start of that year; and
(iii) is made by notifying the Commissioner in the approved form.
Note: For approved form, see subsection 995‑1(1) of the Act.
290‑155.05 Complying superannuation fund condition—prescribed contributions and superannuation funds
For the purposes of paragraph 290‑155(1)(b) of the Act, a contribution to a superannuation fund is a prescribed kind of contribution to a prescribed kind of superannuation fund if:
(a) the contribution is a contribution made to a defined benefit interest; and
(b) the superannuation fund is a fund in relation to which the trustee of the fund has elected that this section apply and the election:
(i) is made before the start of the income year of the fund in which the contribution is made; and
(ii) is not revoked before the start of that year; and
(iii) is made by notifying the Commissioner in the approved form.
Note: For approved form, see subsection 995‑1(1) of the Act.
290‑165.01 Age‑related conditions—prescribed provisions relating to previous work test exemptions
For the purposes of subparagraph 290‑165(1A)(b)(iv) of the Act, the following provisions as in force immediately before the commencement of the Treasury Laws Amendment (Enhancing Superannuation Outcomes) Regulations 2022 are prescribed:
(a) paragraph (d) of items 2 and 3 of the table in subregulation 7.04(1) of the SIS Regulations;
(b) paragraph (d) of items 2 and 3 of the table in subregulation 5.03(1) of the RSA Regulations.
290‑170.01 Notice of intent to deduct contributions—contributions‑splitting applications
For the purposes of subparagraph 290‑170(2)(d)(i) of the Act, each of the following is a contributions‑splitting application:
(a) an application under regulation 6.44 (application to roll over, transfer or allot an amount of contributions) of the SIS Regulations;
(b) an application under regulation 4.41 (application to roll over, transfer or allot an amount of contributions) of the RSA Regulations;
(c) an application to deal with an amount in a way that would result in the amount becoming a contributions‑splitting superannuation benefit in accordance with the SIS Regulations or the RSA Regulations.
291‑25.01 Concessional contributions for a financial year
(1) For the purposes of subsection 291‑25(3) of the Act, this section specifies conditions for the allocation of an amount in a complying superannuation plan.
Note: If the amount meets the conditions of this section it will be an amount covered under subsection 291‑25(3) of the Act. Such amounts are counted in determining an individual’s concessional contributions for a financial year.
(2) The conditions are that the amount is:
(a) allocated under Division 7.2 of the SIS Regulations; and
(b) an assessable contribution; and
(c) not an amount mentioned in item 2 of the table in subsection 295‑190(1) of the Act; and
(d) not an amount mentioned in subsection 295‑200(2) of the Act; and
(e) not an amount mentioned in subsection 99G(6) of the Superannuation Industry (Supervision) Act 1993 that is refunded in accordance with that subsection.
(6) If the amount is allocated from a reserve in lieu of a contribution to the complying superannuation plan (less any allowance for tax) which would have been assessable income of the complying superannuation plan, the amount that is allocated is to be multiplied by 1.176.
Subdivision 291‑C—Modifications for defined benefit interests
291‑170.01 Treatment of superannuation sub‑funds
If there are 2 or more superannuation sub‑funds in relation to defined benefit members of a superannuation fund, apply this Subdivision and Schedule 1A to the superannuation fund separately in respect of each superannuation sub‑fund.
291‑170.02 Notional taxed contributions—contributions for funds with 5 or more defined benefit members
(1) For the purposes of subsection 291‑170(1) of the Act, this section gives the meaning of notional taxed contributions for a financial year in respect of the defined benefit interest of a member of:
(a) a superannuation fund that has 5 or more defined benefit members (other than a fund to which paragraph (6)(a) of this section applies); or
(b) a superannuation fund to which subsection (3), (4), (5) or (6) of this section applies.
Note: Section 291‑170.04 specifies circumstances in which, despite this section, the amount of notional taxed contributions is nil.
(2) The notional taxed contributions are the contributions that are determined by the trustee of the superannuation fund to be notional taxed contributions, using the method set out in Schedule 1A.
(3) If a superannuation fund has 5 or more defined benefit members on 1 July 2007, this subsection applies to the fund even if the number of defined benefit members of the fund becomes less than 5 at any time on or after 1 July 2007.
(4) This subsection applies to a superannuation fund if:
(a) the fund had 5 or more defined benefit members at any time before 1 July 2007; and
(b) the fund had fewer than 5 defined benefit members on 1 July 2007; and
(c) the fund had been in existence for 5 or more years at 1 July 2007; and
(d) the trustee of the fund is an RSE licensee; and
(e) the employer‑sponsor of the fund deals with each of the defined benefit members at arm’s length.
(5) If:
(a) subsection (3) or (4) applies to a superannuation fund (fund 1); and
(b) the defined benefit members of fund 1 are transferred to another superannuation fund (fund 2) on or after 1 July 2007 (whether directly or through a series of transfers between superannuation funds); and
(c) the trustee of fund 2 is an RSE licensee; and
(d) the employer‑sponsor of fund 2 deals with each of the defined benefit members of fund 2 at arm’s length;
this subsection applies to fund 2.
(6) This subsection applies to a superannuation fund if:
(a) the fund had no defined benefit members on 30 June 2007; and
(b) a person became a defined benefit member of the fund after that date; and
(c) the number of defined benefit members of the fund (including the person) is at least 50; and
(d) the employer‑sponsor of the fund deals with each of the defined benefit members at arm’s length.
291‑170.03 Notional taxed contributions—contributions for funds to which section 291‑170.02 does not apply
(1) For the purposes of subsection 291‑170(1) of the Act, this section gives the meaning of notional taxed contributions for a financial year in respect of the defined benefit interest of a member of a superannuation fund (other than a superannuation fund to which section 291‑170.02 of this instrument applies).
Note: Section 291‑170.04 specifies circumstances in which, despite this section, the amount of notional taxed contributions is nil.
(2) The member’s notional taxed contributions for the financial year are:
(a) the amounts of assessable contributions which have been allocated to the member in the financial year in accordance with regulation 7.11 of the SIS Regulations; and
(b) if an amount is allocated to the member from a reserve, other than in the circumstances mentioned in subsection (3):
(i) the amount, unless subparagraph (ii) applies; or
(ii) if the amount is allocated in lieu of a contribution to the fund (less any allowance for tax) which would have been assessable income of the fund—the amount multiplied by 1.176.
Note: Example: An employer has an obligation to make a $1,000 contribution. Instead of the employer making a contribution to the fund, the trustee allocates $850 to the member’s account (which is an amount equivalent to the amount that would be credited to the account after tax was paid). For the purposes of subparagraph (b)(ii), the amount of $850 is to be multiplied by 1.176.
(3) For the purposes of paragraph (2)(b), the circumstances are that:
(a) the amount is allocated from a reserve used solely for the purpose of enabling the fund to discharge all or part of its liabilities (contingent or not), as soon as they become due, in respect of superannuation income stream benefits that are payable by the fund at that time; and
(b) any of the circumstances in subsection (4) apply.
(4) For the purposes of paragraph (3)(b), the circumstances are the following:
(a) the amount has been allocated to satisfy a pension liability of the fund paid during the financial year;
(b) on the commutation of a superannuation income stream, except as a result of the death of the primary beneficiary, the amount is allocated to the recipient of the superannuation income stream, to commence another superannuation income stream, as soon as practicable;
(c) on the commutation of a superannuation income stream as a result of the death of the primary beneficiary, the amount:
(i) is allocated to a death benefits dependant to discharge liabilities in respect of a superannuation income stream benefit that is payable by the fund as a result of the death; or
(ii) if subparagraph (i) does not apply—is paid as a superannuation lump sum and as a superannuation death benefit;
as soon as practicable.
(1) For the purposes of subsection 291‑170(1) of the Act, this section specifies circumstances in which the amount of notional taxed contributions for a financial year in respect of the defined benefit interest of a member of a superannuation fund is nil.
(2) This section applies despite sections 291‑170.02 and 291‑170.03.
(3) A circumstance is that:
(a) the defined benefit interest is held in a public sector superannuation scheme; and
(b) none of the interest is sourced to any extent from:
(i) contributions made into a superannuation fund; or
(ii) earnings on such contributions;
unless the interest is an element taxed in the fund that is attributable to one or more roll‑over superannuation benefits.
(4) A circumstance is that, for the whole of the financial year:
(a) section 291‑170.02 applied in relation to the superannuation fund; and
(b) the member was a non‑accruing member of the fund for the financial year (see subsections (5) to (8) of this section).
(5) The member was a non‑accruing member of the fund for the financial year if the member had no membership of the fund during the financial year other than membership as:
(a) an on‑hold member; or
(b) a pensioned member.
Note: A member could be an on‑hold member of a fund for part of a financial year, and a pensioned member of the fund for another part of the financial year.
(6) The member was an on‑hold member of the fund if:
(a) the member had a benefit entitlement in the fund, but no employer‑provided benefits accrued to the member; and
(b) the rules of the fund provided that the benefit:
(i) was not to increase in nominal terms; or
(ii) was to increase at a rate reflecting general price increases (for example, in accordance with the Consumer Price Index); or
(iii) was to increase at a rate reflecting the general level of salary growth or salary growth for relevant fund membership (for example, in accordance with average weekly earnings, or average weekly ordinary time earnings, published by the Australian Statistician); or
(iv) was to increase at the rate (if any) at which the salary on which the member’s benefit was based increased; or
(v) was to increase at a rate reflecting the earning rate of the assets of the fund or the part of the fund to which the member belonged; or
(vi) in the case of a deferred benefit—was to increase at a rate reflecting any reduction in the expected period in which pension payments were to be made and any deferral of the date when payments would start; or
(vii) was to increase at a regular rate, or a rate worked out using a formula, that an actuary considered would not result in an increase that was more than the greatest of the increases mentioned in subparagraphs (i) to (vi).
(7) The member was a pensioned member of the fund if:
(a) the member’s membership of the fund consisted only of the member receiving pension payments from the superannuation fund; and
(b) any of the following applied:
(i) the pension payments were always the same amount;
(ii) the pension payments were paid from an account that related only to the member, and no employer contributions were paid to the account for the benefit of the member;
(iii) the pension payments increased at rates that were consistent with the rates prescribed under the rules of the fund that applied when the pension commenced to be paid.
(8) For the purposes of determining whether a defined benefit member is a non‑accruing member of the fund for a period, any employer contributions paid to the fund for the period to meet partially, or wholly, unfunded benefit liabilities of the fund are not to be treated as employer contributions for the benefit of the member for the period.
291‑170.05 Notional taxed contributions—conditions for paragraph 291‑170(2)(d) and subparagraph 291‑170(3)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997
(1) For the purposes of paragraph 291‑170(2)(d) and subparagraph 291‑170(3)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997, this section:
(a) applies in relation to a superannuation fund to which section 291‑170.02 of this instrument applies; and
(b) specifies the conditions that are to be satisfied in relation to establishing whether a defined benefit member of the fund’s notional taxed contributions for a financial year in respect of a defined benefit interest in the fund are equal to the member’s basic concessional contributions cap for the financial year.
(2) A condition is that between 5 September 2006 and the time at which the new entrant rate for the defined benefit member is worked out using Schedule 1A:
(a) the rules of any superannuation fund in which a relevant 2006 interest was held during that period have not changed to improve the member’s benefit; and
(b) any of the following apply:
(i) the member has not moved to a new benefit category;
(ii) the member has moved to a new benefit category but the new benefit category does not provide the member with an improved level of benefit;
(iii) the member has moved to a new benefit category but the move was only as a result of the necessary application of the rules of a superannuation fund referred to in paragraph (a) that were, or of legislation that was, in force on 5 September 2006 and the member had no control over the application of the rules or legislation.
(3) A condition is that the new entrant rate for the defined benefit member, as worked out:
(a) before 1 July 2021—using Schedule 1A to the Income Tax Assessment Regulations 1997; and
(b) on or after 1 July 2021—using Schedule 1A to this instrument;
either:
(c) has not increased since it was first worked out; or
(d) has increased since it was first worked out only as a result of the following:
(i) a change to the rules of a superannuation fund in which a relevant 2006 interest is or was held that increases a benefit as a result of a change that is made to satisfy the requirements of the Superannuation Guarantee (Administration) Act 1992;
(ii) the member moving to a new benefit category because of the necessary application of the rules of a superannuation fund referred to in subparagraph (i) that were, or of legislation that was, in force on 5 September 2006, if the member had no control over the application of the rules or legislation.
(4) A condition is that the method of calculating the defined benefit member’s superannuation salary:
(a) has not been changed, in a way that would increase the salary, since 5 September 2006; or
(b) has changed since 5 September 2006 only as a result of a change to the rules of a superannuation fund in which a relevant 2006 interest is or was held that increases a benefit as a result of a change that is made to satisfy the requirements of the Superannuation Guarantee (Administration) Act 1992.
(5) A condition is that either:
(a) the rate of the defined benefit member’s superannuation salary has not increased, since 5 September 2006, by more than:
(i) 50% in 1 year; or
(ii) 75% over 3 years; or
(b) the rate of superannuation salary has increased by more than the rate in subparagraph (a)(i) or (ii) and:
(i) the employer‑sponsor of the superannuation fund in which, immediately after the rate increase, a relevant 2006 interest was held has advised the trustee of that fund that the increase in the rate is on an arm’s length basis; and
(ii) the trustee of a superannuation fund in which a relevant 2006 interest was held after the rate increase notified the Commissioner, in writing, of the increase in the rate as soon as practicable after the increase occurred.
(6) A condition is that no trustee or employer‑sponsor of any superannuation fund in which a relevant 2006 interest is or was held has exercised a discretion to pay a benefit that is greater than the benefit that was assumed for the purpose of calculating the new entrant rate since 5 September 2006.
291‑170.07 Notional taxed contributions—conditions for paragraph 291‑170(4)(d) and subparagraph 291‑170(5)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997
(1) For the purposes of paragraph 291‑170(4)(d) and subparagraph 291‑170(5)(e)(ii) of the Income Tax (Transitional Provisions) Act 1997, this section:
(a) applies in relation to a superannuation fund to which section 291‑170.02 of this instrument applies; and
(b) specifies the conditions that are to be satisfied in relation to establishing whether a defined benefit member of the fund’s notional taxed contributions for a financial year in respect of a defined benefit interest in the fund are equal to the member’s basic concessional contributions cap for the financial year.
(2) A condition is that the new entrant rate for the defined benefit member, as worked out:
(a) before 1 July 2021—using Schedule 1A to the Income Tax Assessment Regulations 1997; and
(b) on or after 1 July 2021—using Schedule 1A to this instrument;
either:
(c) has not increased since 12 May 2009; or
(d) has increased since 12 May 2009 only as a result of the following:
(i) a change to the rules of a superannuation fund in which a relevant 2009 interest is or was held that increases a benefit as a result of a change made to satisfy the requirements of the Superannuation Guarantee (Administration) Act 1992;
(ii) the member moving to a new benefit category because of the necessary application of the rules of a superannuation fund referred to in subparagraph (i) that were, or of legislation that was, in force on 5 September 2006, if the member had no control over the application of the rules or legislation.
(3) A condition is that the method of calculating the defined benefit member’s superannuation salary:
(a) has not been changed, in a way that would increase the salary, since 12 May 2009; or
(b) has changed since 12 May 2009 only as a result of a change to the rules of a superannuation fund in which a relevant 2009 interest is or was held that increases a benefit as a result of a change made to satisfy the requirements of the Superannuation Guarantee (Administration) Act 1992.
(4) A condition is that either:
(a) the rate of the defined benefit member’s superannuation salary has not increased, since 12 May 2009, by more than:
(i) 50% in 1 year; or
(ii) 75% over 3 years; or
(b) the rate of superannuation salary has increased by more than the rate in subparagraph (a)(i) or (ii) and:
(i) the employer‑sponsor of the superannuation fund in which, immediately after the rate increase, a relevant 2009 interest was held has advised the trustee of that fund that the increase in the rate is on an arm’s length basis; and
(ii) the trustee of a superannuation fund in which a relevant 2009 interest was held after the rate increase notified the Commissioner, in writing, of the increase in the rate as soon as practicable after the increase occurred.
(5) A condition is that no trustee or employer‑sponsor of any superannuation fund in which a relevant 2009 interest is or was held has exercised a discretion to pay a benefit that is greater than the benefit that was assumed for the purpose of calculating the new entrant rate since 12 May 2009.
292‑90.01 Non‑concessional contributions for a financial year
(1) For the purposes of paragraph 292‑90(4)(a) of the Act, this section specifies conditions for the allocation of an amount in a complying superannuation plan for you for a financial year.
Note: If the amount meets the conditions of this section it will be an amount covered by subsection 292‑90(4) of the Act. Such amounts are counted in determining your non‑concessional contributions for a financial year.
Conditions—general
(2) Subject to subsection (2A), the conditions are that the amount is:
(a) allocated under Division 7.2 of the SIS Regulations; and
(b) not an assessable contribution; and
(c) not covered by subsection (3).
Conditions for allocations from reserves
(2A) If:
(a) the amount is allocated from a reserve; and
(b) the amount is not allocated in accordance with the conditions specified in subsection (2);
the conditions are that:
(c) section 292‑90.02 does not apply in relation to the allocation; and
(d) the amount is not covered by subsection (3) of this section; and
(e) the amount is not allocated in accordance with the conditions specified in subsection 291‑25.01(2); and
(f) the amount is not an amount mentioned in subsection 99G(6) of the Superannuation Industry (Supervision) Act 1993 that is refunded in accordance with that subsection.
Excluded contributions and payments
(3) Each of the following amounts is covered by this subsection:
(a) a Government co‑contribution made under the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003;
(b) a contribution covered under section 292‑95 of the Act;
(c) a contribution covered under section 292‑100 of the Act, to the extent that it does not exceed the CGT cap amount when it is made;
(d) a contribution made to a constitutionally protected fund (other than a contribution included in the contributions segment of the member’s superannuation interest in the fund);
(e) contributions not included in the assessable income of the superannuation provider in relation to the superannuation plan because of a choice made under section 295‑180 of the Act;
(f) a contribution that is a roll‑over superannuation benefit;
(g) the tax free component of a directed termination payment (within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997) made in the financial year on behalf of you.
292‑90.02 Allocations from reserves—allocations that aren’t included in your non‑concessional contributions
(1) For the purposes of paragraph 292‑90.01(2A)(c), this section applies in relation to the allocation of an amount in a complying superannuation plan for you for a financial year from a reserve if any of subsections (2) to (6) of this section applies.
Note: The result of this section applying in relation to an allocation is that the allocation does not satisfy the condition in subsection 292‑90.01(2A) for inclusion in your non‑concessional contributions for a financial year.
(2) This subsection applies if:
(a) the allocation of the amount for you is part of the allocation, in a fair and reasonable manner, of amounts to accounts for:
(i) every member of the complying superannuation plan; or
(ii) if you are member of a class of members of the complying superannuation plan, and the reserve relates only to that class of members—every member of the class; and
(b) the total amount that is allocated for you for the financial year as part of allocations to which paragraph (a) applies is less than 5% of the value of your interest in the complying superannuation plan at the time of allocation; and
(c) the amount would not be assessable income of the complying superannuation plan if it were made as a contribution.
(3) This subsection applies if:
(a) the reserve is a pension reserve of the complying superannuation plan; and
(b) the amount is allocated from the reserve for you to satisfy a pension liability; and
(c) that liability is paid during the financial year.
(4) This subsection applies if:
(a) the reserve is a pension reserve of the complying superannuation plan; and
(b) the reserve is used to discharge all or part of a liability of the plan to pay a superannuation income stream benefit from a superannuation income stream of which you are the recipient; and
(c) the superannuation income stream is commuted or ceases; and
(d) the commutation or cessation is not a result of the death of the primary beneficiary; and
(e) the amount is allocated from the reserve for you as a result of you having been (before the commutation or cessation) the recipient of the superannuation income stream; and
(f) if the reserve relates to more than one superannuation income stream—the allocation is fair and reasonable having regard to:
(i) for each superannuation income stream that has not been commuted or ceased—the value of the interest that supports the superannuation income stream; and
(ii) for each superannuation income stream that has been commuted or ceased—the value of the interest, that supported the superannuation income stream, immediately before the superannuation income stream was commuted or ceased.
(5) This subsection applies if:
(a) the reserve is a pension reserve of the complying superannuation plan; and
(b) the amount is allocated from the reserve for you as a result of the commutation of a superannuation income stream; and
(c) the commutation is a result of the death of the primary beneficiary; and
(d) you are a death benefits dependant of the primary beneficiary; and
(e) the amount is allocated from the reserve for you:
(i) to discharge liabilities of the plan in respect of a superannuation income stream benefit that is payable by the plan as a result of the death of the primary beneficiary; and
(ii) as soon as practicable on or after the commutation.
(6) This subsection applies if:
(a) the reserve is a pension reserve of the complying superannuation plan; and
(b) the amount is allocated from the reserve for you as a result of the commutation of a superannuation income stream; and
(c) the commutation is a result of the death of the primary beneficiary; and
(d) as soon as practicable on or after the commutation, the amount is:
(i) allocated for you; and
(ii) paid as a superannuation lump sum and a superannuation death benefit.
Meaning of pension reserve
(7) A reserve is a pension reserve of a complying superannuation plan at a particular time if the reserve is used at that time solely for the purpose (the pension liability purpose) of enabling the plan to discharge all or part its pension liabilities (contingent or not) as soon as they become due.
(8) To avoid doubt, for the purposes of subsection (7), if:
(a) a reserve of a complying superannuation plan is used for the purpose of enabling the plan to discharge all or part of a liability of the plan to pay a superannuation income stream benefit from a superannuation income stream; and
(b) the superannuation income stream is commuted or otherwise ceases; and
(c) an amount is allocated from the reserve for a person as a result of the person having been (before the commutation or cessation) the recipient of the superannuation income stream; and
(d) immediately before the commutation or cessation, the reserve was a pension reserve;
the allocation is taken to be a use of the reserve for the pension liability purpose.
Division 293—Sustaining the superannuation contribution concession
Subdivision 293‑D—Modifications for defined benefit interests
293‑115.05 Preliminary
(1) This Subdivision is made for the purposes of subsection 293‑115(1) of the Act.
(2) In this Subdivision:
accruing member, of a superannuation fund for a financial year, means a defined benefit member of the fund who is not a non‑accruing member of the fund for the financial year.
non‑accruing member, of a superannuation fund for a financial year, means:
(a) a defined benefit member who is a non‑accruing member of the fund for the financial year within the meaning of subsections 291‑170.04(5) to (8); or
(b) a member of the Governor‑General Pension Scheme for the financial year, unless (for a member who is the Governor‑General) the member commenced office in the financial year.
293‑115.10 Defined benefit contributions—non‑accruing members
(1) This section applies if you are a non‑accruing member of a superannuation fund for a financial year.
(2) Your defined benefit contributions for the financial year in respect of your defined benefit interest in the fund is nil.
293‑115.15 Defined benefit contributions—accruing members with funded benefit interests
(1) This section applies if:
(a) you are an accruing member of a superannuation fund for the financial year; and
(b) your defined benefit interest in the fund for the financial year is a funded benefit interest.
(2) The interest is a funded benefit interest if:
(a) the interest is in a complying superannuation fund that is not a constitutionally protected fund; and
(b) if the interest is in a public sector superannuation scheme:
(i) the fund trustee has certified, for the financial year, that the fund trustee considers that the scheme will only ever pay superannuation benefits from contributions made to the scheme or earnings from the contributions; and
(ii) the fund trustee has not chosen, under section 295‑180 of the Act, to have contributions made by you, or on your behalf, excluded from the assessable income of the scheme for the financial year.
(3) Your defined benefit contributions for the financial year in respect of the interest is your notional taxed contributions for the year in respect of the interest.
Note: For notional taxed contributions, see section 291‑170 of the Act and Subdivision 291‑C of this instrument.
(4) In working out your notional taxed contributions for the purposes of subsection (3), disregard Subdivision 291‑C of the Income Tax (Transitional Provisions) Act 1997.
293‑115.20 Defined benefit contributions—accruing members with other interests
(1) This section applies if:
(a) you are an accruing member of a superannuation fund for the financial year; and
(b) your defined benefit interest in the fund for the financial year is an interest other than a funded benefit interest.
(2) Your defined benefit contributions for the financial year in respect of the interest is the amount worked out using the method in Schedule 1AA.
Subdivision 293‑E—Modifications for constitutionally protected State higher level office holders
293‑145.01 Constitutionally protected State higher level office holders
For the purposes of paragraph 293‑145(1)(b) of the Act, the following individuals are declared:
(a) a Minister of the government of a State;
(b) a member of the staff of a Minister of the government of a State;
(c) the Governor of a State;
(d) a member of staff of the Governor of a State;
(e) a member of the Parliament of a State;
(f) the Clerk of a house of the Parliament of a State;
(g) the head of a Department of the Public Service of a State or a statutory office holder of equivalent seniority, including a statutory office holder who is the head of an instrumentality or agency of a State;
(h) a judge, justice or magistrate of the court of a State.
Division 294—Transfer balance cap
Subdivision 294‑B—Transfer balance account
294‑25.01 Credit in transfer balance account—payment of consideration for interest supporting deferred superannuation income stream
(1) For the purposes of item 5 of the table in subsection 294‑25(1) of the Act, a transfer balance credit arises under this section in your transfer balance account if:
(a) you are the retirement phase recipient of a superannuation income stream; and
(b) the superannuation income stream is a deferred superannuation income stream; and
(c) after you start to be the retirement phase recipient of the superannuation income stream, you pay an amount of consideration for the superannuation interest that supports the superannuation income stream.
(2) The amount of the credit is the amount of the consideration.
(3) The credit arises at the time you pay the consideration.
294‑25.02 Credit in transfer balance account—commutation of certain capped defined benefit income streams
(1) For the purposes of item 5 of the table in subsection 294‑25(1) of the Act, a transfer balance credit arises under this section in your transfer balance account if:
(a) you receive a superannuation lump sum because a capped defined benefit income stream (the commuted stream) covered by any of items 1 to 7 of the table in subsection 294‑130(1) of the Act is commuted, in full or in part, on or after 1 July 2017; and
(b) the superannuation lump sum is transferred directly to the purchase of a superannuation income stream (the commenced stream) that is covered by an item of the following table and is in the retirement phase.
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:404.8pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Covered superannuation income stream</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:66.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Topic</span></p></td><td style="width:291.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>A superannuation income stream is covered if:</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:66.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Life expectancy pension</span></p></td><td style="width:291.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation</span><span> </span><span>1.06(7) of the SIS Regulations</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:66.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Life expectancy annuity</span></p></td><td style="width:291.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation</span><span> </span><span>1.05(9) of the SIS Regulations</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:66.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Market linked pension</span></p></td><td style="width:291.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation</span><span> </span><span>1.06(8) of the SIS Regulations</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:66.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Market linked annuity</span></p></td><td style="width:291.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation</span><span> </span><span>1.05(10) of the SIS Regulations</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:66.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Market linked pension (RSA)</span></p></td><td style="width:291.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>it is a pension for the purposes of the RSA Act that is provided under terms and conditions that meet the standards of subregulation</span><span> </span><span>1.07(3A) of the RSA Regulations</span></p></td></tr></tbody></table>
(2) The amount of the credit is the value worked out under item 2 of the table in subsection 294‑25(1) of the Act for the commenced stream as if that item applied to the commenced stream.
(3) The credit arises immediately after the transfer balance debit arises in relation to the commutation under subsection 294‑80.02A(3) of this instrument.
(4) For the purposes of subsection 294‑25(3) of the Act, item 2 of the table in subsection 294‑25(1) of the Act does not apply to superannuation income streams that are purchased in circumstances resulting in transfer balance credits arising under this section.
294‑25.03 Credit in transfer balance account—capped defined benefit income streams: transfers to successor funds
(1) For the purposes of item 5 of the table in subsection 294‑25(1) of the Act, a transfer balance credit arises under this section in your transfer balance account if you start to be the retirement phase recipient of a capped defined benefit income stream (the new stream) in the following circumstances:
(a) the new stream arises as a direct result of the payment of an involuntary roll‑over superannuation benefit to a successor fund by a fund that provided a capped defined benefit income stream (the old stream);
(b) you were a retirement phase recipient of the old stream immediately before the transfer;
(c) as part of the transfer, all superannuation income stream benefits cease to be payable from the old stream;
(d) because all superannuation income stream benefits cease to be payable from the old stream, the old stream stops being a superannuation income stream that is in the retirement phase;
(e) because the old stream stops being a superannuation income stream that is in the retirement phase, a transfer balance debit arises in your transfer balance account under item 6 of the table in subsection 294‑80(1) of the Act in respect of the old stream.
(2) The amount of the credit is the amount of the transfer balance debit mentioned in paragraph (1)(e).
(3) The credit arises on the day you start to be the retirement phase recipient of the new stream.
(4) For the purposes of subsection 294‑25(3) of the Act, item 2 of the table in subsection 294‑25(1) of the Act does not apply to a superannuation income stream if a transfer balance credit arises under this section in respect of the superannuation income stream.
Subdivision 294‑C—Transfer balance debits
294‑80.01 Debit in transfer balance account—reduction in amount of superannuation income stream benefit
(1) For the purposes of item 8 of the table in subsection 294‑80(1) of the Act, a transfer balance debit arises under this section in your transfer balance account if:
(a) you are the retirement phase recipient of a superannuation income stream; and
(b) the superannuation income stream is a capped defined benefit income stream that:
(i) is covered by item 1 or 2 of the table in subsection 294‑130(1) of the Act; or
(ii) is prescribed by section 294‑130.01 of this instrument (but is not a superannuation income stream to which subsection 294‑130.01(5) of this instrument applies); and
(c) you are entitled to receive a superannuation income stream benefit (the earlier benefit) from the superannuation income stream at a time (the earlier time); and
(d) the amount of the next superannuation income stream benefit (the later benefit) that you are entitled to receive from the superannuation income stream falls short of the amount of the earlier benefit; and
(e) that shortfall is not attributable to any of the following:
(i) circumstances that cause a transfer balance debit to arise in your transfer balance account (other than because of this section);
(ii) a CPI adjustment in the amount of superannuation income stream benefits that you are entitled to receive from the superannuation income stream.
(2) The amount of the debit is:
(a) the special value, just before the earlier time, of the superannuation interest that supports the superannuation income stream; less
(b) the special value, just before the time (the later time) at which you are entitled to receive the later benefit, of that superannuation interest.
(3) The debit arises at the later time.
294‑80.02 Debit in transfer balance account—reduction in amount of superannuation income stream benefit
(1) For the purposes of item 8 of the table in subsection 294‑80(1) of the Act, a transfer balance debit arises under this section in your transfer balance account if:
(a) you are or were a retirement phase recipient of a deferred superannuation income stream mentioned in subsection 307‑205.02C(1) of this instrument supported by a superannuation interest; and
(b) but for section 294‑80.03 of this instrument, a transfer balance debit would arise at a time under item 5 or 6 of the table in subsection 294‑80(1) of the Act in your transfer balance account because of the superannuation income stream.
(2) The amount of the debit is the total amount of the superannuation benefits that would be payable if you voluntarily caused the superannuation interest to cease at that time.
(3) The debit arises at that time.
294‑80.02A Debit in transfer balance account—commutation of certain capped defined benefit income streams
(1) For the purposes of item 8 of the table in subsection 294‑80(1) of the Act, a transfer balance debit arises under this section in your transfer balance account if:
(a) you receive a superannuation lump sum because a capped defined benefit income stream (the commuted stream) covered by any of items 1 to 7 of the table in subsection 294‑130(1) of the Act is commuted, in full or in part, on or after 1 July 2017; and
(b) the superannuation lump sum is transferred directly to the purchase of a superannuation income stream (the commenced stream) that is covered by an item of the table in subsection 294‑25.02(1) of this instrument and is in the retirement phase.
(2) The amount of the debit is the amount worked out under item 1 of the table in subsection 294‑80(1) of the Act (as it applies in relation to a capped defined benefit income stream under section 294‑145 of the Act) for the commuted stream as if that item applied to the commuted stream.
(3) The debit arises at the later of:
(a) immediately after the commencement of the Treasury Laws Amendment (Allowing Commutation of Certain Income Streams) Regulations 2022; and
(b) immediately after the commutation occurs.
(4) For the purposes of subsection 294‑80(3) of the Act, item 1 of the table in subsection 294‑80(1) of the Act does not apply to capped defined benefit income streams that are commuted in circumstances resulting in transfer balance debits arising under this section.
294‑80.02B Debit in transfer balance account—certain permanent incapacity pensions
(1) For the purposes of item 8 of the table in subsection 294‑80(1) of the Act, a transfer balance debit arises under this section in your transfer balance account if:
(a) a credit arose in your transfer balance account under item 1 or 2 of the table in subsection 294‑25(1) of the Act in respect of a superannuation income stream; and
(b) the superannuation income stream was supported by a superannuation interest covered by subsection 294‑135.01(6) of this instrument; and
(c) the superannuation income stream ceases; and
(d) the cessation does not give rise to a transfer balance debit in your transfer balance account (disregarding this subsection).
(2) The amount of the debit is:
(a) the amount of the credit mentioned in paragraph (1)(a) of this section; less
(b) the amount of any transfer balance debits (apart from debits arising under item 4 of the table in subsection 294‑80(1) of the Act) that have arisen in your transfer balance account in respect of the income stream before the time the debit arises.
(3) The debit arises when the superannuation income stream ceases, as mentioned in paragraph (1)(c).
294‑80.03 Debit in transfer balance account—certain items of table in subsection 294‑80(1) of the Act do not apply to certain superannuation income streams
For the purposes of subsection 294‑80(3) of the Act, items 5 and 6 of the table in subsection 294‑80(1) of the Act do not apply to deferred superannuation income streams mentioned in subsection 307‑205.02C(1) of this instrument.
Subdivision 294‑D—Modifications for certain defined benefit income streams
294‑130.01 Meaning of capped defined benefit income stream
(1) For the purposes of subsection 294‑130(2) of the Act, a superannuation income stream is prescribed if subsection (2), (3), (4), (5), (6) or (7) of this section applies to the superannuation income stream.
Note: A superannuation income stream prescribed under this section is a capped defined benefit income stream (see subsection 294‑130(2) of the Act).
(2) This subsection applies to a superannuation income stream if it is a pension for the purposes of the SIS Act that is provided under rules:
(a) that are in existence on 29 June 2007; and
(b) that would meet the standards of subregulation 1.06(2) of the SIS Regulations except for the circumstances in which those rules allow for either or both of the following:
(i) the pension to be commuted;
(ii) the variation or cessation of pension payments in respect of a child of the deceased primary or reversionary beneficiary.
(3) This subsection applies to a superannuation income stream if:
(a) it arises as a direct result of the payment of an involuntary roll‑over superannuation benefit to a successor fund; and
(b) it is a pension for the purposes of the SIS Act that is paid from the successor fund; and
(c) the rules under which a pension was provided by the fund that made the payment of the involuntary roll‑over superannuation benefit satisfied subsection (2) at the time of transfer; and
(d) the rules of the successor fund under which the superannuation income stream is provided satisfy paragraph (2)(b).
(4) This subsection applies to a superannuation income stream if:
(a) it is covered by item 2 of the table in subsection 294‑130(1) of the Act; and
(b) it starts to be in the retirement phase on or after 1 July 2017; and
(c) it arises as a direct result of the payment of an involuntary roll‑over superannuation benefit to a successor fund.
(5) This subsection applies to a superannuation income stream if:
(a) it is covered by any of items 3 to 7 of the table in subsection 294‑130(1) of the Act; and
(b) it starts to be in the retirement phase on or after 1 July 2017; and
(c) it arises as a direct result of the payment of an involuntary roll‑over superannuation benefit to a successor fund.
(6) This subsection applies to a superannuation income stream if it is a pension for the purposes of the SIS Act that is provided:
(a) on the grounds of invalidity under a public sector superannuation scheme; and
(b) under rules that would meet the standards of subregulation 1.06(2) of the SIS Regulations except to the extent that those rules allow for the variation, suspension or cessation of pension payments due to any of the following:
(i) the primary beneficiary’s level of incapacity being reclassified;
(ii) the primary beneficiary’s personal earnings changing;
(iii) the primary beneficiary being employed by a participating employer of the relevant superannuation scheme;
(iv) the primary beneficiary failing to provide information as required by the rules;
(v) the primary beneficiary reaching a particular age.
(7) This subsection applies to a superannuation income stream if it is a superannuation income stream because of paragraph 307‑70.02(1)(ba).
294‑135.01 Transfer balance credit—determining special value of a superannuation interest
(1) For the purposes of subsection 294‑135(4) of the Act, the special value, at a particular time, of a superannuation interest that supports an income stream that is, or was at any time, a superannuation income stream prescribed by section 294‑130.01 of this instrument, is the amount worked out using the formula:
Start formula annual entitlement times 16 end formula
where:
annual entitlement means the amount worked out by:
(a) dividing the amount of the first superannuation income stream benefit you are entitled to receive from the income stream just after that time by the number of whole days to which that benefit relates; and
(b) multiplying the result by 365.
(2) Subsection (1) does not apply to a superannuation interest covered by subsection (3) or (6).
(3) This subsection covers a superannuation interest that supports an income stream that is, or was at any time, a superannuation income stream prescribed by section 294‑130.01 to which subsection 294‑130.01(5) applies.
(4) For the purposes of subsection 294‑135(4) of the Act, the special value, at a particular time, of a superannuation interest covered by subsection (3) of this section is the amount worked out in respect of that time under subsection 294‑135(3) of the Act.
(5) For the purposes of subsection (4) of this section, treat the reference in subsection 294‑135(3) of the Act to a capped defined benefit income stream covered by any of items 3 to 7 of the table in subsection 294‑130(1) as instead being a reference to the income stream mentioned in subsection (3) of this section.
(6) This subsection covers a superannuation interest in a superannuation plan if:
(a) the superannuation interest supports an income stream that is, or was at any time, a superannuation income stream prescribed by section 294‑130.01 to which subsection 294‑130.01(7) applies; and
(b) a superannuation benefit was paid from the superannuation income stream to a person, whether before, at or after the time the Income Tax Assessment Amendment (Transfer Balance Account Value for Certain Superannuation Income Streams) Regulations 2024 commenced (the commencement time); and
Note: The Income Tax Assessment Amendment (Transfer Balance Account Value for Certain Superannuation Income Streams) Regulations 2024 inserted this subsection.
(c) the superannuation benefit was paid to the person because the person satisfied a condition of release specified in item 103 (permanent incapacity) of the table in Schedule 1 to the Superannuation Industry (Supervision) Regulations 1994; and
(d) the superannuation provider in relation to the superannuation plan had not given the Commissioner, before the commencement time, a statement under subsection 390‑5(1) in Schedule 1 to the Taxation Administration Act 1953 in relation to the superannuation interest indicating that a transfer balance credit arose in the person’s transfer balance account because of the superannuation income stream.
(7) For the purposes of subsection 294‑135(4) of the Act, the special value, at a particular time, of a superannuation interest covered by subsection (6) of this section is the lesser of the following amounts:
(a) the amount worked out in respect of that time under subsection 294‑135(2) of the Act;
(b) if there is a particular period throughout which superannuation income stream benefits are payable under the income stream mentioned in paragraph (6)(a) of this section—the amount worked out in respect of that time under subsection 294‑135(3) of the Act.
(8) For the purposes of paragraphs (7)(a) and (b) of this section, treat:
(a) the reference in subsection 294‑135(2) of the Act to a capped defined benefit income stream covered by item 1 or 2 of the table in subsection 294‑130(1) of the Act; and
(b) the reference in subsection 294‑135(3) of the Act to a capped defined benefit income stream covered by any of items 3 to 7 of the table in subsection 294‑130(1) of the Act;
as instead being references to the income stream mentioned in paragraph (6)(a) of this section.
(9) For the purposes of paragraph (7)(b) of this section, if:
(a) superannuation income stream benefits are payable under the income stream mentioned in paragraph (6)(a) for a fixed term; but
(b) despite that fixed term, the superannuation income stream benefits may cease to be payable before the end of the fixed term in certain circumstances;
treat the superannuation income stream benefits as being payable under the income stream throughout the fixed term.
294‑145.01 Transfer balance debits—determining debit value of a superannuation interest
(1) For the purposes of subsection 294‑145(7) of the Act, the debit value, at a particular time, of a superannuation interest that supports an income stream that is, or was at any time, a superannuation income stream prescribed by section 294‑130.01 of this instrument, is:
(a) the amount of the transfer balance credit that arose in your transfer balance account in respect of the income stream; less
(b) the amount of any transfer balance debits (apart from debits arising under item 4 of the table in subsection 294‑80(1) of the Act) that have arisen in your transfer balance account in respect of the income stream before that time.
(2) Subsection (1) does not apply to a superannuation interest covered by subsection (3).
(3) This subsection covers a superannuation interest that supports an income stream that is, or was at any time, a superannuation income stream prescribed by section 294‑130.01 to which subsection 294‑130.01(5) applies.
(4) For the purposes of subsection 294‑145(7) of the Act, the debit value, at a particular time, of a superannuation interest covered by subsection (3) of this section is the amount worked out in respect of that time under subsection 294‑145(6) of the Act.
(5) For the purposes of subsection (4) of this section, treat the reference in subsection 294‑145(6) of the Act to a capped defined benefit income stream covered by any of items 3 to 7 of the table in subsection 294‑130(1) as instead being a reference to the income stream mentioned in subsection (3) of this section.
Division 295—Taxation of superannuation entities
Subdivision 295‑D—Contributions excluded
295‑265.01 Application of pre‑1 July 88 funding credits—limit on choice
(1) For the purposes of paragraph 295‑265(7)(a) of the Act, this section prescribes the manner in which a superannuation provider in relation to a superannuation fund is to work out the amount applicable to the fund, under subsection 295‑265(6) of the Act, for an income year.
(2) The superannuation provider must use an actuary to work out the amount applicable to the fund for an income year.
Method 1—Funding credit valuation process
(3) The method in section 295‑265.02 (method 1) must be used for an income year, unless:
(a) the conditions mentioned in subsection (8) of this section for using the method in section 295‑265.05 (method 2) are met; and
(b) the superannuation provider’s actuary decides that using method 2 is appropriate.
Amount applicable to the fund
(4) Subject to subsection (5), the amount applicable to the fund for an income year is the least of the following amounts:
(a) the amount of pre‑1 July 88 funding credits unused at the end of the previous income year;
(b) the value of unfunded pre‑1 July 88 liabilities for the income year, determined by the superannuation provider’s actuary in accordance with step 3 of method 1 or method 2;
(c) the pre‑1 July 88 taxable contributions for the income year, worked out in accordance with step 4 of method 1 or method 2.
(5) The amount identified in accordance with subsection (4) must then be adjusted for all transfers of funding credits and relevant liabilities into or out of the fund.
(6) The amounts mentioned in paragraphs (4)(a), (b) and (c), and the amount as adjusted under subsection (5), must be certified by the superannuation provider’s actuary.
(7) The superannuation provider must ensure that, on request, the actuary that certifies an amount under subsection (6) provides the superannuation provider with sufficient information to enable another actuary to check the certification.
Method 2—Notionally updated funding credit valuation process
(8) The superannuation provider may use method 2 for an income year if:
(a) the superannuation provider’s actuary can identify, at the start of the income year, that the value of unfunded pre‑1 July 88 liabilities for the income year exceeds the amount that the superannuation provider wishes to specify for the purposes of subsection 295‑265(1) of the Act; and
(b) the income year is the first or second year after an income year for which method 1 was used to calculate the amount applicable to the fund.
Professional standards must be followed etc.
(9) The superannuation provider must ensure that, in making a calculation under or applying method 1 or 2, the superannuation provider’s actuary:
(a) follows any professional standards prepared by the Institute of Actuaries of Australia; and
(b) has regard to any professional guidance notes prepared by the Institute of Actuaries of Australia;
that relate to the determination of accrued benefits mentioned in method 1 or 2.
Superannuation provider must provide information to support working out, if requested
(10) The superannuation provider must, if requested to do so by the Commissioner, provide the Commissioner with sufficient information to support the provider’s working out of the amount applicable to the fund under subsection 295‑265(6) of the Act for an income year.
295‑265.02 Method 1—Funding credit valuation process
(1) The following is method 1 for the purposes of section 295‑265.01.
Method statement
Step 1: For an income year for which a superannuation provider chooses to reduce the amount of contributions that would otherwise be included in a superannuation fund’s assessable income, calculate, in accordance with section 295‑265.03, the discounted present value of liabilities as at the start of that income year that relates to membership completed.
The discounted present value of liabilities for all members apportioned to pre‑1 July 88 membership is the value of pre‑1 July 88 liabilities for the income year.
Step 2: Calculate, in accordance with section 295‑265.04, the total amount of superannuation fund assets at their market value at the start of the income year, on the basis on which the superannuation provider’s actuary would consider appropriate for a valuation under Part 9 of the SIS Regulations.
The result is the assets available to fund pre‑1 July 88 liabilities for the income year.
Step 3: Deduct the assets available to fund pre‑1 July 88 liabilities for the income year from the value of pre‑1 July 88 liabilities for the income year.
The result is the value of unfunded pre‑1 July 88 liabilities for the income year.
Step 4: The amount of taxable contributions that are allocated to fund that value of unfunded pre‑1 July 88 liabilities, as notified by the superannuation provider to the actuary, are the pre‑1 July 88 taxable contributions for the income year.
(2) The superannuation provider’s actuary must retain the following documentation for the income year for not less than 5 years:
(a) documentation of the liability and valuation apportionment calculations for step 1 of method 1;
(b) documentation to support calculations made for the asset apportionment for step 2 of method 1.
(3) The superannuation provider must retain documentation to support calculations of pre‑1 July 88 taxable contributions for the income year for not less than 5 years.
295‑265.03 How to calculate the discounted present value of liabilities for step 1 of method 1
(1) This section sets out how to calculate the discounted present value of liabilities for step 1 of method 1 in section 295‑265.02.
(2) The basis for the calculation in step 1 of method 1 must be the actuarial valuation basis relevant to the income year in question which the superannuation provider’s actuary would consider appropriate for a valuation under Part 9 of the SIS Regulations.
(3) In making the calculation, exclude the following liabilities that are not provided from taxable contributions:
(a) liabilities representing benefits financed by undeducted contributions (within the meaning of subsection 27A(1) of the Income Tax Assessment Act 1936 as in force just before 15 March 2007);
(b) liabilities representing benefits or components that are expected to be treated as paid from an untaxed source;
Example: Pensions provided on an emerging cost or pay as you go basis, with corresponding elections being made under subsection 295‑180(1) of the Act.
(c) liabilities for entitlements relating to membership and for which corresponding assets can be identified;
(d) liabilities representing death and disability benefits for which costs are claimed as deductible under section 295‑465 or 295‑470 of the Act.
(4) Apportion the discounted present value of the liabilities, between:
(a) the period of superannuation fund membership completed before 1 July 1988; and
(b) the period of superannuation fund membership completed on and after 1 July 1988;
for each superannuation fund member or former member for whom a liability is being valued.
(5) The apportionment must be made having regard to the following requirements and principles:
(a) superannuation fund membership must be consistent with the definition used by the fund to determine the benefit being valued;
(b) an alternative method for apportioning the discounted present value of liabilities may be used only if the superannuation provider’s actuary certifies that the method will provide a reasonable approximation of the apportionment;
(c) a linear apportionment method will generally be used, but an apportionment method that reflects non‑linear accrual of entitlements may be used if the superannuation provider’s actuary considers that such a method achieves an outcome that is consistent with the principle that funding credits can only be used against contributions intended to provide for entitlements relating to membership completed before 1 July 1988.
295‑265.04 How to calculate the assets available to fund pre‑1 July 88 liabilities for step 2 of method 1
(1) This section sets out how to calculate the assets available to fund pre‑1 July 88 liabilities for step 2 of method 1 in section 295‑265.02.
(2) In making the calculation in step 2 of method 1, allow deductions for realisation costs and charges incurred in the normal course of operation of the superannuation fund.
(3) Deduct the amount of assets that relate to excluded liabilities mentioned in subsection 295‑265.03(3).
(4) All remaining assets should be treated as available to fund pre‑1 July 88 liabilities unless the superannuation provider can provide the superannuation provider’s actuary with written evidence to support exclusion of both an amount of assets and a corresponding value of liabilities.
295‑265.05 Method 2—Notionally updated funding credit valuation process
(1) The following is method 2 for the purposes of section 295‑265.01.
Method statement
Step 1: For an income year (the current income year), the superannuation provider’s actuary must notionally adjust the value of pre‑1 July 88 liabilities of the superannuation fund for the previous income year from the start of the previous income year to the start of the current income year, taking into account any factors likely to affect that value.
In making a calculation the actuary must have regard to the valuation basis that would be used by the fund if method 1 were being used for the current income year.
In making a calculation the actuary must have regard to actual experience gained from the operation of the fund if the experience is materially different from valuation assumptions used in the calculation of the value of pre‑1 July 88 liabilities for the previous income year.
The result is the value of pre‑1 July 88 liabilities for the current income year.
Step 2: The actuary must notionally adjust the assets available to fund pre‑1 July 88 liabilities of the superannuation fund for the previous income year from the start of the previous income year to the start of the current income year, taking into account any factors likely to affect those assets, including by:
(a) adding taxable contributions allocated to fund pre‑1 July 88 taxed liabilities in the previous income year; and
(b) deducting the employer‑financed component of pre‑1 July 88 taxed benefits paid out during the previous income year; and
(c) adding actual investment earnings net of the tax and expenses relating to investment income for the previous income year using a basis that is consistent with the underlying investment earnings achieved and normal practices of the superannuation fund.
The result is the assets available to fund pre‑1 July 88 liabilities for the current income year.
Step 3: Deduct the assets available to fund pre‑1 July 88 liabilities for the current income year from the value of pre‑1 July 88 liabilities for the current income year.
The result is the value of unfunded pre‑1 July 88 liabilities for the current income year.
Step 4: The amount of taxable contributions that are allocated to fund that value of unfunded pre‑1 July 88 liabilities, as notified by the superannuation provider to the actuary, are the pre‑1 July 88 taxable contributions for the current income year.
(2) The superannuation provider’s actuary must retain the following documentation for the income year for not less than 5 years:
(a) documentation to support the notional updating of the value of pre‑1 July 88 liabilities for step 1 of method 2;
(b) documentation to support the notional updating of the assets available to fund pre‑1 July 88 liabilities for step 2 of method 2.
(3) The superannuation provider must retain documentation to support calculations of pre‑1 July 88 taxable contributions for the income year for not less than 5 years.
Subdivision 295‑F—Exempt income
295‑385.01 Segregated current pension assets—prescribed superannuation income stream benefits
For the purposes of section 295‑385 of the Act, the following superannuation income stream benefits are prescribed:
(a) an RP superannuation income stream benefit of a superannuation fund payable from:
(i) an allocated pension within the meaning of the SIS Regulations; or
(ii) a market linked pension within the meaning of the SIS Regulations; or
(iii) an account‑based pension within the meaning of the SIS Regulations;
(b) a superannuation benefit payable, from a superannuation interest, in respect of a right mentioned in subsection 307‑70.02(2) that is covered by subsection 307‑70.02(3), if, immediately before the death mentioned in paragraph 307‑70.02(2)(a), the superannuation interest supported a pension mentioned in subparagraph (a)(i), (ii) or (iii) of this section payable to the deceased mentioned in paragraph 307‑70.02(2)(a);
(c) a superannuation benefit payable from a superannuation interest that supports a new superannuation income stream in relation to which subsection 307‑70.02(4) applies (as affected by subsection 307‑70.02(5)), if the superannuation income stream payable to the deceased mentioned in paragraph 307‑70.02(4)(a) was a pension mentioned in subparagraph (a)(i), (ii) or (iii) of this section.
Note 1: Certain assets that enable a superannuation fund to discharge liabilities in respect of superannuation income stream benefits that are RP superannuation income stream benefits and are prescribed under this section are segregated current pension assets of the fund (see subsection 295‑385(4) of the Act).
Note 2: Section 307‑205.02 does not apply to a superannuation income stream mentioned in paragraph (a) of this section (see paragraph 307‑205.02(2)(a)).
Subdivision 295‑G—Deductions
295‑465.01 Complying funds—deductions for insurance premiums
(1) For the purposes of subsections 295‑465(1B) and (2A) of the Act, the proportion specified in an item in the following table in relation to an insurance policy specified in the item may be treated:
(a) as being attributable to the liability of the complying superannuation fund which pays for the policy to provide benefits referred to in section 295‑460 of the Act; and
(b) as being the amount a complying superannuation fund could reasonably be expected to pay in an arm’s length transaction to obtain an insurance policy to cover it for its current or contingent liabilities to provide benefits referred to in section 295‑460 of the Act.
<table cellspacing="0" cellpadding="0" style="width:100%; border-collapse:collapse"><thead><tr><td colspan="3" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Deductible portion of premiums</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Insurance policy</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Specified proportion %</span></p></td></tr></thead><tbody><tr><td style="width:8.58%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:65.82%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD any occupation</span></p></td><td style="width:25.6%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>100</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD any occupation with one or more of the following inclusions:</span></p><p class="Tablea"><span>(a) activities of daily living;</span></p><p class="Tablea"><span>(b) cognitive loss;</span></p><p class="Tablea"><span>(c) loss of limb;</span></p><p class="Tablea"><span>(d) domestic (home) duties</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>100</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD own occupation</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>67</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD own occupation with one or more of the following inclusions:</span></p><p class="Tablea"><span>(a) activities of daily living;</span></p><p class="Tablea"><span>(b) cognitive loss;</span></p><p class="Tablea"><span>(c) loss of limb;</span></p><p class="Tablea"><span>(d) domestic (home) duties</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>67</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD own occupation bundled with death (life) cover</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>80</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:65.82%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>TPD own occupation bundled with death (life) cover with one or more of the following inclusions:</span></p><p class="Tablea"><span>(a) activities of daily living;</span></p><p class="Tablea"><span>(b) cognitive loss;</span></p><p class="Tablea"><span>(c) loss of limb;</span></p><p class="Tablea"><span>(d) domestic (home) duties</span></p></td><td style="width:25.6%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>80</span></p></td></tr></tbody></table>
(2) A proportion specified in the table in subsection (1) may be treated as referred to in subsection (1) only if the conditions to which the insurance policy that relates to the proportion is subject are either more restrictive than or have substantially the same meaning as the conditions described in the definition of the policy in subsection (5).
(3) However, if a member is required to meet a criterion to be eligible for a benefit under an insurance policy in addition to the criteria that are essential to the matters identified in the definition of the policy in subsection (5), the additional criterion may be disregarded.
(4) The use of a specified proportion in the table in subsection (1) in respect of a particular insurance policy is not affected by the inclusion in the insurance policy of a benefit payable to a member because a terminal medical condition exists in relation to the member.
Note: For terminal medical condition, see section 995‑1 of the Act and section 995‑1.06 of this instrument.
(5) In this instrument:
activities of daily living means a component of a disability insurance policy that insures against a disability that results in a member’s total and permanent inability to perform at least 2 of the following activities without the assistance of another person:
(a) bathing and showering;
(b) dressing and undressing;
(c) eating and drinking;
(d) mobility, to the extent of being able to get in and out of bed or a chair, and move from place to place without using a wheelchair;
(e) the ability to use a toilet.
bundled means a situation in which:
(a) the TPD and death (life) components of the combined insurance premium are not separately identified; and
(b) the amount payable to the insured person in relation to the TPD component does not exceed the amount payable in relation to the insured person in relation to the death (life) component.
cognitive loss means a component of a disability insurance policy that insures against a member suffering a permanent deterioration or loss of cognitive functioning or intellectual capacity that requires the person to be under the continuous care and supervision of another person.
death (life) cover means insurance against the liability to provide a superannuation death benefit.
Note: For superannuation death benefit, see subsection 995‑1(1) of the Act.
domestic (home) duties means a component of a disability insurance policy that insures against a disability that results in a member being:
(a) unable to perform the member’s normal domestic duties; and
(b) unable to leave the member’s home unaided; and
(c) incapacitated to such an extent that the member is unlikely to ever engage in normal domestic duties or any gainful employment.
loss of limb means a component of a disability insurance policy that insures against the permanent loss of:
(a) the sight in both the member’s eyes resulting in blindness; or
(b) the use of 2 or more of the member’s limbs, feet or hands; or
(c) the sight in one of the member’s eyes resulting in blindness in that eye and the use of one of the member’s limbs, feet or hands.
normal domestic duties means the tasks performed by an individual whose sole occupation is to maintain the individual’s family home, including:
(a) unassisted cleaning of the individual’s home; and
(b) cooking of meals for the individual’s family; and
(c) doing the laundry for the individual’s family; and
(d) shopping for food for the individual’s family; and
(e) taking care of any dependent children.
TPD any occupation means insurance against the member suffering an illness or injury that is likely to result in the member’s permanent inability to engage in gainful employment for which the member is reasonably qualified by education, training or experience.
TPD own occupation means insurance against the member suffering an illness or injury that is likely to result in the member’s permanent inability to engage in gainful employment in the member’s own occupation, where inability to engage in gainful employment includes the inability to work otherwise than in a substantially reduced capacity to that in which the member worked before suffering the illness or injury.
Division 301—Superannuation member benefits paid from complying plans etc.
Subdivision 301‑D—Departing Australia superannuation payments
301‑170.01 Departing Australia superannuation payments
(1) For the purposes of subparagraph 301‑170(1)(b)(i) of the Act, the following regulations are specified:
(a) regulations 6.20A, 6.20B and 6.24A of the SIS Regulations;
(b) regulation 4.23A of the RSA Regulations.
Note: A superannuation lump sum paid to a person in accordance with the regulations specified in this section is a departing Australia superannuation payment (see subsection 301‑170(1) of the Act).
(2) For the purposes of subsection 301‑170(4) of the Act, a superannuation lump sum that is paid to a KiwiSaver scheme provider under subsection 20H(2) or (2AA) of the Superannuation (Unclaimed Money and Lost Members) Act 1999 is prescribed.
Note: A superannuation lump sum prescribed by this subsection is not a departing Australia superannuation payment (see subsection 301‑170(4) of the Act).
Subdivision 301‑E—Superannuation lump sum member benefits less than $200
301‑225.01 Superannuation lump sum member benefits less than $200 are tax free
(1) For the purposes of paragraph 301‑225(1)(d) of the Act, this section specifies requirements in relation to a superannuation member benefit.
Note: The effect of section 301‑225 of the Act is that a superannuation member benefit is not assessable income and is not exempt income in certain circumstances (which include satisfying the requirements in subsection (2) of this section).
(2) A requirement is that the member’s benefit must be released under:
(a) item 104 or 111 of Part 1 of Schedule 1 to the SIS Regulations; or
(b) item 211 of Part 2 of Schedule 1 to the SIS Regulations; or
(c) item 111 of Schedule 2 to the RSA Regulations.
Division 302—Superannuation death benefits paid from complying plans etc.
Subdivision 302‑D—Definitions relating to dependants
302‑195.01 Circumstances in which a person died in the line of duty
(1) For the purposes of subsection 302‑195(3) of the Act, this section specifies the different circumstances in which a military or police person (the deceased person) died in the line of duty.
Note 1: For military or police person, see section 995‑1.01.
Note 2: However, if the deceased person died in a circumstance set out in section 302‑195.02, the person has not died in the line of duty for the purposes of subsection 302‑195(3) of the Act.
Note 3: This section is relevant for working out whether an individual is a death benefits dependant of a person under section 302‑195 of the Act.
Performance of duties
(2) A circumstance is that the deceased person died while performing the duties of a military or police person.
(3) A circumstance is that:
(a) the deceased person was off duty at the time of the deceased person’s death; and
(b) the deceased person’s death occurred:
(i) in the course of an attempt to arrest a suspected offender; or
(ii) in the course of an attempt to prevent an offence; or
(iii) in the course of an attempt to rescue a person; or
(iv) while the deceased person was travelling to a place of work as a result of being recalled to duty.
Injury
(4) A circumstance is that the deceased person:
(a) died within 12 months after sustaining an injury; and
(b) died as a result of sustaining the injury; and
(c) sustained the injury while performing the duties of a military or police person.
(5) A circumstance is that the deceased person:
(a) was off duty at the time of sustaining an injury; and
(b) sustained the injury:
(i) in the course of an attempt to arrest a suspected offender; or
(ii) in the course of an attempt to prevent an offence; or
(iii) in the course of an attempt to rescue a person; or
(iv) while the deceased person was travelling to a place of work as a result of being recalled to duty; and
(c) died within 12 months after sustaining the injury; and
(d) died as a result of sustaining the injury.
Overseas service
(6) A circumstance is that the deceased person:
(a) was a member of the Defence Force; and
(b) died while serving overseas, if the service was:
(i) warlike service mentioned in paragraph 6(1)(a) of the Military Rehabilitation and Compensation Act 2004; or
(ii) non‑warlike service mentioned in paragraph 6(1)(b) of the Military Rehabilitation and Compensation Act 2004.
(7) A circumstance is that the deceased person:
(a) was a member of the Australian Federal Police or a protective service officer within the meaning of the Australian Federal Police Act 1979; and
(b) died while serving overseas, if the service was:
(i) at a place specified in a determination under subsection 40H(1) of the Australian Federal Police Act 1979; and
(ii) on a peace‑keeping or capacity‑building mission.
(8) A circumstance is that the deceased person:
(a) was a member of a State or Territory police force; and
(b) died while serving overseas, if the service was:
(i) undertaken as a special member of the Australian Federal Police under section 40E of the Australian Federal Police Act 1979; and
(ii) on a peace‑keeping or capacity‑building mission.
Consequences of duties
(9) A circumstance is that, as a result of action taken because the deceased person was a military or police person, the deceased person sustained an injury from which the deceased person died:
(a) immediately; or
(b) within 12 months after sustaining the injury.
Note: Example: The deceased person was killed in retaliation for an action taken in the deceased person’s capacity as a member of a State or Territory police force.
Uncertainty about circumstances of death
(10) A circumstance is that:
(a) the deceased person has died in a circumstance in any of subsections (2) to (9); and
(b) it is not certain, after reasonable inquiry, whether the deceased person has died in a circumstance specified in section 302‑195.02.
Interpretation
(11) For the purposes of this section and section 302‑195.02, the time when a person is off duty includes a time when the person is:
(a) travelling to or from the person’s place of work; or
(b) on a rostered day off work; or
(c) on leave from work.
302‑195.02 Circumstances in which a person has not died in the line of duty
(1) For the purposes of subsection 302‑195(3) of the Act, this section specifies different circumstances in which, despite section 302‑195.01, a military or police person (the deceased person) has not died in the line of duty.
Off duty
(2) A circumstance is that:
(a) the deceased person was off duty at the time of death; and
(b) none of subsections 302‑195.01(3), (6), (7), (8) and (9) apply.
(3) A circumstance is that:
(a) the deceased person died as a result of sustaining an injury; and
(b) the deceased person was off duty at the time of sustaining the injury; and
(c) none of subsections 302‑195.01(5), (6), (7), (8) and (9) apply.
Incidental activity
(4) A circumstance is that:
(a) the deceased person’s death related to an activity that was not directly related to the performance of the deceased person’s duties; and
(b) none of subsections 302‑195.01(6), (7) and (8) apply.
Note: Example: The person’s death related to undertaking a sporting activity.
Death after retirement
(5) A circumstance is that:
(a) the deceased person died after retiring from being a military or police person; and
(b) none of subsections 302‑195.01(4), (5) and (9) apply.
Suicide
(6) A circumstance is that the deceased person died as a result of committing suicide.
Natural causes or disease
(7) A circumstance is that:
(a) the deceased person died as a result of:
(i) natural causes; or
(ii) an illness or disease; and
(b) none of subsections 302‑195.01(6), (7) and (8) apply.
302‑200.01 What is an interdependency relationship—matters to be taken into account
(1) For the purposes of paragraph 302‑200(3)(a) of the Act, this section specifies matters that are to be taken into account in determining whether 2 persons have an interdependency relationship under section 302‑200 of the Act.
(2) The matters are:
(a) all of the circumstances of the relationship between the persons, including (where relevant):
(i) the duration of the relationship; and
(ii) whether or not a sexual relationship exists; and
(iii) the ownership, use and acquisition of property; and
(iv) the degree of mutual commitment to a shared life; and
(v) the care and support of children; and
(vi) the reputation and public aspects of the relationship; and
(vii) the degree of emotional support; and
(viii) the extent to which the relationship is one of mere convenience; and
(ix) any evidence suggesting that the parties intend the relationship to be permanent; and
(b) the existence of a statutory declaration signed by one of the persons to the effect that the person is, or (in the case of a statutory declaration made after the end of the relationship) was, in an interdependency relationship with the other person.
302‑200.02 What is an interdependency relationship—existence of relationship
(1) For the purposes of paragraph 302‑200(3)(b) of the Act, this section specifies circumstances in which 2 persons have, or do not have, an interdependency relationship under section 302‑200 of the Act.
Interdependency relationship
(2) Two persons have an interdependency relationship if:
(a) they satisfy the requirements of paragraphs 302‑200(1)(a) to (c) of the Act; and
(b) one or both of them provides the other with support and care of a type and quality normally provided in a close personal relationship, rather than by a mere friend or flatmate.
Note: For example, care normally provided in a close personal relationship rather than by a friend or flatmate includes the following:
(a) significant care provided for the other person when the other person is unwell;
(b) significant care provided for the other person when the other person is suffering emotionally.
(3) Two persons have an interdependency relationship if:
(a) they have a close personal relationship; and
(b) they do not satisfy one or more of the other requirements set out in subsection 302‑200(1) of the Act; and
(c) the reason they do not satisfy those requirements is that they are temporarily living apart.
Note: For example, 2 persons may satisfy paragraph (c) if one of the persons is temporarily working overseas or is in gaol.
(4) Two persons have an interdependency relationship if:
(a) they have a close personal relationship; and
(b) they do not satisfy one or more of the other requirements set out in subsection 302‑200(1) of the Act; and
(c) the reason they do not satisfy those requirements is that either or both of them suffer from a disability.
No interdependency relationship
(5) Two persons do not have an interdependency relationship if one of them provides domestic support and personal care to the other:
(a) under an employment contract or a contract for services; or
(b) on behalf of another person or organisation such as a government agency, a body corporate or a benevolent or charitable organisation.
Division 306—Roll‑overs etc.
306‑10.01 Roll‑over superannuation benefit
For the purposes of paragraph 306‑10(b) of the Act, each of the following kinds of superannuation benefit is specified:
(a) a superannuation death benefit, unless it is paid to an entitled recipient covered by subregulation 6.21(2A) of the SIS Regulations or subregulation 4.24(3A) of the RSA Regulations;
(b) a benefit to which section 303‑10 of the Act, or section 303‑10 of the Income Tax (Transitional Provisions) Act 1997, applies.
Note: These kinds of superannuation benefits are not roll‑over superannuation benefits (see section 306‑10 of the Act).
Division 307—Key concepts relating to superannuation benefits
Subdivision 307‑A—Superannuation benefits generally
307‑5.01 What is a superannuation benefit?
For the purposes of subparagraph 307‑5(7)(a)(ii) of the Act, the Family Law (Superannuation) Regulations 2025 are prescribed.
Subdivision 307‑B—Superannuation lump sums and superannuation income stream benefits
307‑70.01 Superannuation income stream benefits
For the purposes of subsection 307‑70(1) of the Act (definition of superannuation income stream benefit), all superannuation benefits are specified.
307‑70.02 Meaning of superannuation income stream
(1) For the purposes of subsection 307‑70(2) of the Act, a superannuation income stream is:
(a) an income stream that is taken to be:
(i) an annuity for the purposes of the SIS Act in accordance with subregulation 1.05(1) of the SIS Regulations; or
(ii) a pension for the purposes of the SIS Act in accordance with subregulation 1.06(1) of the SIS Regulations; or
(iii) a pension for the purposes of the RSA Act in accordance with regulation 1.07 of the RSA Regulations; or
(b) an income stream that:
(i) is an annuity or pension within the meaning of the SIS Act; and
(ii) commenced before 20 September 2007; or
(ba) an income stream in respect of which these conditions are satisfied:
(i) the income stream is a defined benefit pension within the meaning of regulation 1.03 of the SIS Regulations; and
(ii) the income stream commenced on or after 20 September 2007; and
(iii) the income stream is provided by a defined benefit fund (within the meaning of regulation 1.03 of the SIS Regulations), or an exempt public sector superannuation scheme (within the meaning of the SIS Act); and
(iv) if the income stream is provided by a defined benefit fund (within the meaning of regulation 1.03 of the SIS Regulations) that is not a public sector superannuation scheme—the fund or scheme has more than 6 members, or had more than 6 members at any time on or before the day the income stream commenced; and
(v) the income stream is not invalidity pay within the meaning of the Defence Force Retirement and Death Benefits Act 1973; and
(vi) the income stream is not an invalidity pension under the superannuation scheme established under the Military Superannuation and Benefits Act 1991; or
(c) a deferred superannuation income stream that is taken to be:
(i) an annuity for the purposes of the SIS Act in accordance with subregulation 1.05(1) of the SIS Regulations because the contract for the provision of the income stream meets the standards of subregulation 1.06A(2) of the SIS Regulations; or
(ii) a pension for the purposes of the SIS Act in accordance with subregulation 1.06(1) of the SIS Regulations because the rules for the provision of the income stream meet the standards of subregulation 1.06A(2) of the SIS Regulations; or
(d) for the purposes of sections 295‑385, 295‑390, 295‑395, 320‑246 and 320‑247 of the Act—one or more rights (whether contingent or not), to the extent that they are covered by subsection (3).
(1A) Paragraphs (1)(a) and (ba) do not apply to any of the following:
(a) a pension payable under subsection 39(1) of the Defence Force Retirement and Death Benefits Act 1973 if:
(i) that pension is payable because invalidity pay (within the meaning of that Act) was payable to the deceased member mentioned in that subsection; and
(ii) that invalidity pay commenced on or after 20 September 2007;
(b) a pension payable under subsection 42(1) of the Defence Force Retirement and Death Benefits Act 1973 if:
(i) that pension is payable because invalidity pay (within the meaning of that Act) was payable to a member (as mentioned in subsection 42(3)); and
(ii) that invalidity pay commenced on or after 20 September 2007;
(c) a pension payable under subsection 43(1) of that Act if:
(i) that pension is payable because invalidity pay (within the meaning of that Act) was payable to a member (as mentioned in subsection 43(3)); and
(ii) that invalidity pay commenced on or after 20 September 2007;
(d) a pension payable under subrule 42(1) or (3) of the Rules (within the meaning of the Military Superannuation and Benefits Act 1991) if:
(i) the deceased retirement pensioner’s pension mentioned in that subrule was an invalidity pension (within the meaning of those Rules); and
(ii) that invalidity pension commenced on or after 20 September 2007;
(e) a pension payable under subrule 46(1) of those Rules if the deceased person’s notional pension mentioned in that subrule was a pension covered by paragraph (d).
(2) Subsection (3) applies if:
(a) immediately before the death of a person (the deceased), a superannuation interest was supporting a superannuation income stream payable to the deceased; and
(b) the superannuation income stream did not automatically revert to another person on the death of the deceased; and
(c) one or more other persons each have a right (whether contingent or not) to be paid an amount that will be a superannuation benefit from the superannuation interest; and
(d) each such right arises on the death of the deceased, and ceases to exist immediately after the payment of the amount mentioned in paragraph (c).
(3) For the purposes of paragraph (1)(d), this subsection covers each such right, to the extent that the value of the superannuation interest has not increased (other than through investment earnings) on or after the deceased’s death.
(4) Subsections (5) and (6) apply if:
(a) immediately before the death of a person (the deceased), a superannuation interest was supporting a superannuation income stream payable to the deceased; and
(b) the superannuation income stream did not automatically revert to another person on the death of the deceased; and
(c) one or more persons each have a right (whether contingent or not) to commence a new superannuation income stream using an amount applied from the superannuation interest; and
(d) each such right arises on the death of the deceased, and ceases to exist at the time the relevant new superannuation income stream commences (disregarding paragraph (5)(a)); and
(e) each of the new income streams is of a kind mentioned in paragraph (1)(a).
(5) For the purposes of sections 295‑385, 295‑390, 295‑395, 320‑246 and 320‑247 of the Act, in applying paragraph (1)(a):
(a) treat each new superannuation income stream mentioned in paragraph (4)(c) as commencing on the death of the deceased; and
(b) during the period:
(i) starting on the death of the deceased; and
(ii) ending at the time the new superannuation income stream commences (disregarding paragraph (a));
take account of the value of the superannuation interest only to the extent that the value has not increased (other than through investment earnings) on or after the deceased’s death.
(6) For the purposes of subsections (2) and (3), disregard a right mentioned in paragraph (4)(c).
Subdivision 307‑C—Components of a superannuation benefit
307‑125.01 Components of member benefits accruing before 1 July 1999 paid from the Military Superannuation and Benefits Scheme
(1) For the purposes of paragraph 307‑125(4)(a) of the Act, subsection (2) specifies an alternative method for determining components of a superannuation benefit:
(a) accruing before 1 July 1999; and
(b) paid from the Military Superannuation and Benefits Scheme on or after 1 July 2007 in respect of a member who is below preservation age;
where the member chooses to use the alternative method.
(2) The alternative method is a method chosen by the member which complies with subsection (3).
(3) For the purposes of subsection (2), the maximum amount that the member may determine as a component of the person’s member benefits accruing before 1 July 1999, whether by a single choice or cumulatively, may not exceed:
(a) for the tax free component of the person’s member benefits accruing before 1 July 1999—the amount worked out under section 307‑210 of the Act for the superannuation interest; and
(b) for the taxable component of the person’s member benefits accruing before 1 July 1999—the amount worked out under section 307‑215 of the Act for the superannuation interest.
Note: Example: A member of the Military Superannuation and Benefits Scheme has an amount of member benefits accruing before 1 July 1999 of $1,000. Just before the benefit is paid, the value of the tax free component is $800 and the taxable component is $200. Before reaching preservation age, the member takes a lump sum benefit of $900.
Note: Under subsection (2), the member is able to determine the amount of the benefit that will be the tax free component and the amount that will be the taxable component of the benefit. However, subsection (3) prevents the member from treating more than $800 of the superannuation benefit as tax free.
Note: A preserved superannuation benefit paid in respect of a member of the Military Superannuation and Benefits Scheme is paid in accordance with subsection 307‑125(2) of the Act.
(4) In this instrument:
Military Superannuation and Benefits Scheme means the scheme that is established by clause 2 of the Military Superannuation and Benefits Trust Deed.
Note: The Trust Deed is made under the Military Superannuation and Benefits Act 1991.
307‑125.02 Components of superannuation benefits after death of recipient of superannuation income stream
(1) For the purposes of paragraph 307‑125(4)(a) of the Act, subsection (3) specifies an alternative method for determining the components of a superannuation benefit referred to in paragraph (3)(a) or (b) if:
(a) immediately before the death of a person (the deceased), a superannuation interest (the relevant superannuation interest) was supporting a superannuation income stream (the original superannuation income stream) payable to the deceased; and
(b) the original superannuation income stream did not automatically revert to another person on the deceased’s death; and
(c) no amounts, other than investment earnings, have been added to the relevant superannuation interest on or after the deceased’s death; and
(d) one or both of the following occurs after the deceased’s death:
(i) a superannuation death benefit that is a superannuation lump sum is paid using only an amount from the relevant superannuation interest;
(ii) a superannuation income stream (the new superannuation income stream) is commenced using only an amount applied from the relevant superannuation interest.
(2) For the purposes of paragraph (1)(c), investment earnings includes:
(a) an amount paid under a policy of insurance on the life of the deceased; and
(b) an amount arising from self‑insurance.
(3) The following method sets out how to work out the tax free component and taxable component of:
(a) a superannuation death benefit mentioned in subparagraph (1)(d)(i); or
(b) a superannuation benefit paid from a superannuation interest that supports the new superannuation income stream mentioned in subparagraph (1)(d)(ii).
Method statement
Step 1. Reduce the amount of the benefit by the extent, if any, to which the benefit is attributable to any of the following:
(a) an amount paid on or after the death of the deceased under a policy of insurance on the life of the deceased;
(b) an amount arising on or after the death of the deceased from self‑insurance.
Step 2. The tax free component of the benefit is the amount that represents the same proportion of the amount resulting from step 1 as the tax free component of the relevant superannuation interest bore to the value of the relevant superannuation interest when the original superannuation income stream commenced.
Step 3. The taxable component of the benefit is the amount of the benefit less the tax free component of the benefit worked out under step 2.
307‑125.03 Components of certain military superannuation benefits
(1) For the purposes of paragraph 307‑125(4)(a) of the Act, subsection (3) specifies an alternative method for determining the components of a superannuation benefit covered by subsection (2).
(2) For the purposes of subsection (1), this subsection covers a superannuation benefit if:
(a) the superannuation benefit is a superannuation lump sum that is a payment of invalidity pay, an invalidity pension or a pension mentioned in subparagraph 301‑275(1)(b)(i), (ii) or (iii) of the Act; and
(b) the invalidity pay, invalidity pension or pension commenced at a time (the commencement time) that is on or after 20 September 2007.
(3) Determine the components, according to the following method:
(a) first, assume that:
(i) the superannuation benefit is a superannuation income stream benefit; and
(ii) the relevant superannuation income stream commenced at the commencement time;
(b) next, determine the components, making the assumptions mentioned in paragraph (a), in accordance with subsections 307‑125(1), (2) and (3) of the Act.
Note: The components may be modified under sections 307‑145 and 307‑150 of the Act (see subsection 307‑120(3) of the Act).
Subdivision 307‑D—Superannuation interests
307‑200.01 Application of sections 307‑200.02 to 307‑200.05 to Subdivisions 291‑C and 293‑D of the Act
For the purposes of section 307‑200 of the Act, sections 307‑200.02 to 307‑200.05 specify ways of treating superannuation interests other than for the purposes of:
(a) calculating an amount of contributions under Subdivision 291‑C of the Act; or
(b) calculating low tax contributions under Subdivision 293‑D of the Act.
307‑200.02 Meaning of superannuation interests—treating superannuation interests as 1 superannuation interest (self‑managed superannuation funds)
For the purposes of subsection 307‑200(2) of the Act, 2 or more superannuation interests that a member holds in a self‑managed superannuation fund are to be treated as one superannuation interest by:
(a) treating every amount, benefit or entitlement that the member holds in the fund as one superannuation interest; but
(b) excluding from that treatment any amount, benefit or entitlement that is to be treated as 2 or more superannuation interests in accordance with section 307‑200.05.
307‑200.03 Meaning of superannuation interests—treating a superannuation interest as 2 or more superannuation interests (public sector schemes)
(1) For the purposes of subsection 307‑200(1) of the Act, a superannuation interest in a public sector superannuation scheme is to be treated as the 2 superannuation interests referred to in subsection (3) in the circumstances specified in subsection (2).
(2) The interest is to be treated as 2 interests if:
(a) the superannuation benefit that is to be paid from the scheme is sourced:
(i) partly from contributions made into the scheme or earnings on those contributions; and
(ii) partly from one or more other sources; or
(b) the superannuation benefits that are to be paid from the scheme are sourced:
(i) partly from contributions made into the scheme or earnings on those contributions; and
(ii) partly from one or more other sources.
(3) The 2 interests are:
(a) an interest that consists of the contributions made into the scheme and the earnings on those contributions; and
(b) an interest that consists of the remainder of the amount sourced from the other source or sources.
(4) For the purposes of this section, an amount specified in a notice given under subsection 307‑285(1) of the Act by the trustee of a scheme is not treated as contributions made into the scheme or earnings on those contributions.
307‑200.05 Meaning of superannuation interests—treating a superannuation interest as 2 or more superannuation interests (superannuation income streams)
For the purposes of subsection 307‑200(1) of the Act, if a superannuation income stream:
(a) is payable; or
(b) will be payable, and it is a deferred superannuation income stream covered by paragraph 307‑70.02(1)(c);
an amount that supports the superannuation income stream is always to be treated as a separate superannuation interest.
307‑205.01 Value of superannuation interest for calculating pre‑July 83 amount for members in the contributions and investment phase
(1) For the purposes of paragraph 307‑205(1)(a) of the Act, this section specifies methods for determining the value of a superannuation interest of a member of a superannuation fund at a particular time for the purposes of calculating the pre‑July 83 amount of the crystallised segment of a tax free component under section 307‑225 of the Act.
Note: Calculating the pre‑July 83 amount of the crystallised segment of the tax free component will require the superannuation interest to be valued before 1 July 2007. This calculation will only be performed for a superannuation interest in the accumulation phase, and only for a superannuation interest in which part of the taxable component is comprised of an element taxed in the fund.
Defined benefit interest
(2) For a superannuation interest that is a defined benefit interest, the method is as follows.
Method statement
Step 1. Calculate, in accordance with section 307‑205.01A, the value of the retirement benefit that would have been payable if the member:
(a) had been eligible to retire immediately before 1 July 2007; and
(b) had elected to do so.
Note: If the member is no longer in the employment which gave rise to the interest, but the interest is preserved in the scheme, retirement is taken to be the point at which the benefit is payable without penalty to the member.
Step 2. If a superannuation lump sum benefit, including a roll‑over superannuation benefit, would have been payable had the member resigned, or withdrawn the benefit, immediately before 1 July 2007, calculate the value of that benefit.
Step 3. The value of the superannuation interest is the greater of the values worked out using steps 1 and 2.
If no value can be determined under step 2, the value of the superannuation interest is the value determined under step 1.
Interest other than defined benefit interest
(3) For a superannuation interest that is not a defined benefit interest, the method is as follows.
Method statement
Step 1. Assume that the member was eligible to retire immediately before 1 July 2007, and work out the total amount of all the superannuation lump sums that could be payable from the interest at that time. The value of the superannuation interest is the total amount, unless step 2 applies.
Step 2. If the total amount worked out under step 1 is less than the total amount actually or notionally allocated to the member (other than because of superannuation contributions surcharge liabilities, insurance costs or other fees, taxes and charges), the value of the superannuation interest is the amount actually or notionally allocated to the member.
307‑205.01A How to calculate the value of a retirement benefit for step 1 of the method in subsection 307‑205.01(2)
(1) This section sets out how to calculate the value of a retirement benefit for the purposes of step 1 of the method in subsection 307‑205.01(2).
(2) If the retirement benefit depends upon the member’s age, service or salary, or upon the employer’s consent, the value is to be calculated on the assumption that:
(a) the member’s service was the member’s actual service immediately before 1 July 2007; and
(b) the member’s age was the greater of:
(i) the minimum age at which a retirement benefit could be taken without requiring the employer’s consent; and
(ii) the member’s actual age immediately before 1 July 2007; and
(c) the member’s salary was the member’s salary for superannuation purposes immediately before 1 July 2007; and
(d) the employer consents to the retirement.
(3) If part or all of the retirement benefit can be paid as a superannuation income stream, then the value of that income stream is determined as the product of:
(a) the annual rate of the superannuation income stream that would have been paid had the maximum proportion of the benefit possible been taken as an income stream; and
(b) the applicable factor for the superannuation income stream that would have been paid set out in clause 1 of Schedule 1B.
(4) The total value of the retirement benefit is the sum of:
(a) the value of the superannuation income stream so determined; and
(b) any lump sum that would have been payable under the assumptions described above had the member taken the maximum possible proportion of the member’s benefit as an income stream.
(5) If the superannuation benefit can only be paid as a lump sum, then the value of the retirement benefit is the amount of that lump sum.
307‑205.02 Value of superannuation interest
(1) For the purposes of paragraph 307‑205(1)(a) of the Act, this section specifies a method for determining the value of a superannuation interest at a particular time if the interest supports a superannuation income stream to which subsection (2) applies.
Note: The proportioning rule in section 307‑125 of the Act requires the tax free component and taxable component of a superannuation benefit to be paid out in the same proportion as they make up of the underlying interest. A value of the superannuation interest is required to ensure that the proportioning rule operates appropriately.
(2) This subsection applies to a superannuation income stream or a superannuation annuity, other than:
(a) a superannuation income stream that is a pension mentioned in subparagraph 295‑385.01(a)(i), (ii) or (iii); or
(b) a superannuation income stream or a superannuation annuity for which the rules providing for the income stream or annuity are based on:
(i) an identifiable lump sum amount; or
(ii) the amount available in the member’s account; or
(c) a superannuation income stream that is supported by a superannuation interest that can be valued under paragraph 307‑205.02B(a); or
(d) a superannuation income stream that is supported by a superannuation interest that can be valued under section 307‑205.02C, 307‑205.02D or 307‑205.02E.
(3) The value of the interest at a particular time is the sum of:
(a) the product of:
(i) the annual amount of the superannuation income stream payable in respect of the superannuation interest at that time; and
(ii) the applicable factor for the superannuation income stream set out in clause 1 of Schedule 1B; and
(b) the product of:
(i) the nominal value of the superannuation lump sum, if any, which is payable in respect of the interest at a time in the future, other than a future lump sum which is a commutation of the income stream included in subparagraph (a)(i); and
(ii) the applicable factor for the superannuation lump sum set out in clause 2 of Schedule 1B.
307‑205.02A Value of superannuation interest—superannuation income streams or superannuation annuities based on identifiable amounts
For the purposes of paragraph 307‑205(1)(a) of the Act, the value of an individual’s superannuation interest that supports a superannuation income stream or a superannuation annuity mentioned in paragraph 307‑205.02(2)(b) but not in paragraph 307‑205.02(2)(d) is:
(a) the identifiable lump sum amount; or
(b) the amount available in the individual’s account.
307‑205.02B Value of superannuation interest—public sector superannuation schemes
For the purposes of paragraph 307‑205(1)(a) of the Act, a superannuation interest in a public sector superannuation scheme is to be valued:
(a) by using the practice for valuing a superannuation interest (other than an interest that supports a superannuation income stream mentioned in paragraph 307‑205.02(2)(a)) that was used by the scheme immediately before 28 June 2007; or
(b) if there was not a practice for valuing an interest at that time—by using the method in subsection 307‑205.02(3).
307‑205.02C Value of superannuation interest—deferred superannuation income streams
(1) For the purposes of paragraph 307‑205(1)(a) of the Act, this section specifies a method for determining the value at a particular time of an individual’s superannuation interest that supports a deferred superannuation income stream that:
(a) is covered by paragraph 307‑70.02(1)(c); and
(b) is neither a pooled investment pension nor a pooled investment annuity.
(2) The value of the interest at a particular time is the greater of:
(a) the sum of each amount of consideration paid for the interest for the income stream, and that amount’s associated notional earnings, as worked out under subsection (3) for the day that includes that time; and
(b) the total amount of the superannuation benefits that would become payable if the individual voluntarily caused the interest to cease at that time.
Note: Subsection (3) works out a total amount made up of the amount of consideration and its associated notional earnings.
(3) An amount of consideration paid for the interest for the income stream, and that amount’s associated notional earnings, for a particular day (the valuing day) is worked out by applying the following formula for each adjustment day (from the earliest to the latest):
Start formula compounded amount of consideration just before the adjustment day times open bracket 1 plus applicable above threshold rate for the adjustment day close bracket end formula
where:
above threshold rate, for a particular day, is the above threshold rate determined for that day under subsection 1082(2) of the Social Security Act 1991.
adjustment day is each of the following:
(a) each 12‑month anniversary of the consideration payment day that happens before the valuing day;
(b) the valuing day.
applicable above threshold rate, for a particular day, is:
(a) if that day is a 12‑month anniversary of the consideration payment day—the above threshold rate for that day; or
(b) if that day is the valuing day—the proportion of the above threshold rate for that day equal to the number of days that the valuing day is in the 12 months starting on the day after:
(i) if the valuing day is at least 12 months after the consideration payment day—the most recent 12‑month anniversary of the consideration payment day; or
(ii) otherwise—the consideration payment day.
compounded amount of consideration just before the adjustment day is:
(a) for the earliest adjustment day—the amount of consideration; or
(b) for each later adjustment day—the result of applying the formula for the most recent earlier adjustment day.
consideration payment day is the day the amount of consideration was paid.
307‑205.02D Value of superannuation interest—pooled investment pensions
(1) For the purposes of paragraph 307‑205(1)(a) of the Act, the value at a particular time of an individual’s superannuation interest that supports a pooled investment pension is the value of so much of the collective pool of assets in the fund at that time as is:
(a) attributed to the individual under the rules of the fund; and
(b) specified in an actuary’s certificate.
(2) A pooled investment pension is a superannuation income stream supported by an individual’s superannuation interest if:
(a) the interest is in a superannuation fund; and
(b) the rules for the provision of the income stream ensure that, once payments of the income stream start, the income stream is to continue for the remainder of the individual’s life; and
(c) the rules for the provision of the income stream ensure that the amounts of those payments are determined by having regard to:
(i) the age, life expectancy or other factors relevant to the mortality of each individual who has that kind of superannuation interest in the fund; and
(ii) the pool of assets in the fund held for the collective benefit of those individuals.
307‑205.02E Value of superannuation interest—pooled investment annuities
(1) For the purposes of paragraph 307‑205(1)(a) of the Act, the value at a particular time of an individual’s superannuation interest that supports a pooled investment annuity is the value of so much of the collective pool of assets held by the life insurance company at that time as is:
(a) attributed to the individual under the contract for the provision of the pooled investment annuity; and
(b) specified in an actuary’s certificate.
(2) A pooled investment annuity is a superannuation income stream supported by an individual’s superannuation interest if:
(a) the superannuation income stream is a superannuation annuity provided by a life insurance company; and
(b) the contract for the provision of the income stream ensures that, once payments of the income stream start, the income stream is to continue for the remainder of the individual’s life; and
(c) the contract for the provision of the income stream ensures that the amounts of those payments are determined by having regard to:
(i) the age, life expectancy or other factors relevant to the mortality of each individual who has that kind of superannuation interest with the life insurance company; and
(ii) the pool of assets held by the life insurance company for the collective benefit of those individuals; and
(d) at least 50 entities have superannuation interests (of any kind) with the life insurance company.
Part 3‑45—Rules for particular industries and occupations
Division 393—Farm management deposits
Subdivision 393‑B—Meaning of farm management deposit and owner
393‑20.01 Application form for a farm management deposit—information given by depositor
For the purposes of paragraph 393‑20(2)(b) of the Act, a form used to apply to an FMD provider to make a farm management deposit must require the depositor to provide the following information:
(a) the depositor’s name, address, date of birth and telephone number;
(b) the amount of the deposit;
(c) a description of the major commodity or commodities produced in the year of the deposit;
(d) if the depositor is not the owner of the deposit—the owner’s name, address and date of birth.
Note 1: Subsection 393‑20(2) of the Act requires a depositor to apply to an FMD provider to make a farm management deposit with the FMD provider.
Note 2: Under paragraph 393‑20(2)(a) of the Act, the application form must also permit the depositor to state the owner’s tax file number in the form.
393‑20.02 Application form for a farm management deposit—information given to depositor
For the purposes of paragraph 393‑20(2)(c) of the Act, a form used to apply to an FMD provider to make a farm management deposit must contain:
(a) one of the statements set out in Part 1 of Schedule 1C; and
(b) statements to the effect of the statements set out in Part 2 of Schedule 1C; and
(c) statements setting out the additional information required by Part 3 of Schedule 1C.
Note 1: Subsection 393‑20(2) of the Act requires a depositor to apply to an FMD provider to make a farm management deposit with the FMD provider.
Note 2: Under paragraph 393‑20(2)(c) of the Act, the statements required by this section to be included in an application form are to be read by the depositor when completing the form.
393‑40.01 Repayment of farm management deposit in the event of a natural disaster
For the purposes of paragraphs 393‑40(3A)(a) and (b) of the Act, the circumstances that are to be satisfied in relation to a repayment of the whole or a part of a farm management deposit are:
(a) recovery assistance has been provided as a Category C measure, in the form of a recovery grant for a primary producer, in accordance with the Disaster Recovery Funding Arrangements 2018, determined by the Minister for Law Enforcement and Cyber Security on 5 June 2018; and
(b) the recovery assistance was first provided during the 12 month period mentioned in subsection 393‑40(1) of the Act; and
(c) the farm management deposit was repaid after the recovery assistance was first provided.
Note 1: A repayment that satisfies the circumstances in this section is not precluded from being a farm management deposit under subsections 393‑40(1) or (2) of the Act.
Note 2: The Disaster Recovery Funding Arrangements 2018 could in 2021 be viewed on the DisasterAssist website (https://www.disasterassist.gov.au).
Division 418—Exploration for minerals
Subdivision 418‑DA—Exploration credits allocation
418‑103.01 Meaning of annual exploration cap—2023‑24 income year
For the purposes of paragraph 418‑103(1)(g) of the Act, the amount of $2.15 million is prescribed.
418‑103.02 Meaning of annual exploration cap—2024‑25 income year
For the purposes of paragraph 418‑103(1)(h) of the Act, the amount of $4.77 million is prescribed.
Division 419—Critical minerals
Subdivision 419‑A—Tax offset for expenditure for producing critical minerals in Australia
Kind of processing activity
(1) For the purposes of subparagraph 419‑20(1)(b)(ii) of the Act, a processing activity is prescribed if it is of a kind that:
(a) substantially transforms a feedstock containing aluminium through extractive metallurgical processing; or
(b) is not beneficiation (including grinding, crushing, floating and other mechanical processing); and
(c) is not manufacturing.
Outcome of processing activity
(2) For the purposes of subparagraph 419‑20(1)(b)(iii) of the Act, a kind of outcome for this kind of processing activity is where high purity alumina with a purity of at least 99.99% is produced.
Note: For the processing activity to be a CMPTI processing activity, a substantial purpose for carrying on the processing activity must be to achieve the outcome mentioned in this subsection (see paragraph 419‑20(1)(b) of the Act).
419‑20.02 CMPTI processing activity—graphite
Kind of processing activity
(1) For the purposes of subparagraph 419‑20(1)(b)(ii) of the Act, a processing activity is prescribed if it is of a kind that:
(a) substantially transforms a feedstock containing graphite by using chemical or thermal purification; or
(b) involves:
(i) the high-velocity collision of particles that are agitated using compressed air or gas; and
(ii) a feedstock containing particles of graphite; or
(c) shapes the particles of graphite in a feedstock;
and it is neither beneficiation (including grinding, crushing, floating and other mechanical processing) nor manufacturing.
Outcome of processing activity
(2) For the purposes of subparagraph 419‑20(1)(b)(iii) of the Act, the following kinds of outcome are prescribed:
(a) for the kind of processing activity mentioned in paragraph (1)(a) of this section—the total graphitic carbon content of the feedstock is increased;
(b) for the kind of processing activity mentioned in paragraph (1)(b) of this section—the particles of graphite have a substantially reduced size;
(c) for the kind of processing activity mentioned in paragraph (1)(c) of this section—the particles of graphite have a substantially more spherical shape.
Note: For the processing activity to be a CMPTI processing activity, a substantial purpose for carrying on the processing activity must be to achieve the relevant outcome mentioned in this subsection (see paragraph 419‑20(1)(b) of the Act).
419‑20.03 CMPTI processing activity—precursor cathode active material
Kind of processing activity
(1) For the purposes of subparagraph 419‑20(1)(b)(ii) of the Act, a processing activity is prescribed if it is of a kind that:
(a) substantially transforms a feedstock containing one or more critical minerals into an output that is chemically distinct from the feedstock; and
(b) is not beneficiation (including grinding, crushing, floating and other mechanical processing); and
(c) is not manufacturing.
Outcome of processing activity
(2) For the purposes of subparagraph 419‑20(1)(b)(iii) of the Act, a kind of outcome for this kind of processing activity is where:
(a) precursor cathode active material is produced; and
(b) the material contains one or more critical minerals; and
(c) the material is suitable for use in the manufacturing of cathode active material for lithium‑ion batteries.
Note: For the processing activity to be a CMPTI processing activity, a substantial purpose for carrying on the processing activity must be to achieve the outcome mentioned in this subsection (see paragraph 419‑20(1)(b) of the Act).
Chapter 4—International aspects of income tax
Part 4‑5—General
Division 775—Foreign currency gains and losses
Subdivision 775‑B—Realisation of forex gains or losses
775‑145.01 Application of forex events to currency and fungible rights and obligations
(1) For the purposes of subsection 775‑145(2) of the Act:
(a) forex realisation event 1 applies to foreign currency, on a weighted average basis, in the circumstances in subsection (2) of this section; and
(b) both of forex realisation events 1 and 2 apply to a fungible right, or a part of a fungible right, to receive foreign currency, on a weighted average basis, in the circumstances in subsection (2) of this section; and
(c) forex realisation event 4 applies to a fungible obligation, or a part of a fungible obligation, to pay foreign currency, on a weighted average basis, in the circumstances in subsection (2) of this section.
(2) For the purposes of paragraphs (1)(a), (b) and (c), the circumstances are that an election to use a weighted average basis:
(a) has been made in writing; and
(b) complies with subsection (3); and
(c) has not been withdrawn in accordance with subsection (5).
Requirements for election
(3) An election complies with this subsection if it includes:
(a) a commencement date of:
(i) the date on which it is made; or
(ii) if the election is made not later than 90 days after 27 April 2005—the applicable commencement date mentioned in section 775‑155 of the Act; or
(iii) 1 July 2004; and
(b) a statement that the election is for all of the forex realisation events that are applicable to the fungible thing to which the election relates to apply, on a weighted average basis, to:
(i) all fungible things (other than a fungible thing in relation to which a choice under Subdivision 775‑E of the Act is in effect); or
(ii) one or more specified classes of fungible things, other than a fungible thing in relation to which a choice under Subdivision 775‑E of the Act is in effect, in circumstances (explained in the statement) in which the effect of the election would reasonably be expected to be the reduction of the costs of compliance with the income tax law; or
(iii) one or more specified fungible things in circumstances (explained in the statement) in which the effect of the election would be consistent with the treatment of those fungible things in the accounting records of the entity making the election, if those records were prepared in accordance with generally accepted accounting principles.
(4) An election that complies with subsection (3) takes effect in accordance with subsection (3).
When an election may be withdrawn
(5) An entity may withdraw an election only if it does not appear, on reasonable grounds, that the election is being withdrawn for a principal purpose of obtaining a tax benefit and either:
(a) if accounting records in relation to the treatment of fungible things to which the election applies are being kept by the entity and prepared in accordance with generally accepted accounting principles—the election is being withdrawn because there has been a change to the entity’s accounting practices; or
(b) if:
(i) accounting records in relation to the treatment of fungible things to which the election applies by the entity are not being kept by the entity and prepared in accordance with generally accepted accounting principles; and
(ii) the election includes the statement mentioned in subparagraph (3)(b)(ii);
there has been a change in the entity’s circumstances that makes the statement mentioned in subparagraph (3)(b)(ii) incorrect.
Note 1: A tax benefit may be an incidental consequence of the withdrawal of an election.
Note 2: A weighted average basis (see section 775‑145 of the Act) is used to allow:
(a) the cost of a fungible amount or part of a fungible amount; or
(b) in the case of a fungible obligation, or a part of a fungible obligation—the proceeds of assuming the obligation or the part of the fungible obligation;
Note: at a particular time to be determined by the weighted average cost of the amounts that were previously added to the fungible amount.
Division 830—Foreign hybrids
Subdivision 830‑A—Meaning of “foreign hybrid”
830‑15.01 Foreign hybrid company
For the purposes of paragraph 830‑15(3)(c) of the Act, it is a requirement for a company in relation to an income year, that the company be a limited liability partnership for the purposes of the Limited Liability Partnerships Act 2000 (UK).
Note: This requirement must be satisfied at all times during the income year when the company is in existence (see paragraph 830‑15(1)(a) of the Act).
Chapter 6—The Dictionary
Part 6‑1—Concepts and topics
Division 960—General
Subdivision 960‑C—Foreign currency
960‑50.01 Translation of foreign currency amounts into Australian currency—modification of special translation rules
(1) For the purposes of subsection 960‑50(7) of the Act, the table in subsection 960‑50(6) of the Act is modified by omitting item 8 and substituting the following items:
8
an amount that you deduct (other than under section 25‑35 or Division 40)
(a) if the amount is paid at or before the time when it became deductible—the amount is to be translated into Australian currency at the exchange rate applicable at the time of payment; or(b) in any other case—the amount is to be translated into Australian currency at the exchange rate applicable at the time when it became deductible.
8A
an amount of a debt that you deduct under section 25‑35
(a) if the debt was included in your assessable income—the amount is to be translated into Australian currency at the exchange rate applicable at the time of translating the income; or(b) if the debt was in respect of money that you lent—the amount is to be translated into Australian currency at the exchange rate applicable at the time of translating the money that was lent; or(c) if you bought the debt—the amount is to be translated into Australian currency at the exchange rate applicable at the time of translating the debt that you bought.
8B
the value of an amount to which a contract (a spot foreign exchange contract) for the exchange of amounts in different currencies relates if:(a) the spot foreign exchange contract includes a requirement that consideration be provided within 2 business days after the contract is entered into; and(b) that requirement is satisfied
the value of the amount to which the contract relates is to be translated into Australian currency at the exchange rate applicable at the tax recognition time (within the meaning of Division 775) referred to in the forex realisation event that happens on payment or receipt of that amount, unless the entity’s usual business practice is not to translate the amount at the exchange rate applicable at the tax recognition time for the purpose of recording the transaction in the entity’s accounting records.Note: An entity’s usual business practice may be to translate amounts into Australian currency at a different exchange rate because the entity recognises gains and losses under spot foreign exchange contracts in the entity’s accounting records.
8C
the value of an amount to which a contract (a spot contract) for the exchange of an amount in a foreign currency and a security relates if:(a) the spot contract includes a requirement that consideration be provided within 2 business days after the contract is entered into; and(b) that requirement is satisfied
the value of the amount to which the contract relates is to be translated into Australian currency at the exchange rate applicable at the tax recognition time (within the meaning of Division 775) referred to in the forex realisation event that happens on payment or receipt of that amount, unless the entity’s usual business practice is not to translate the amount at the exchange rate applicable at the tax recognition time for the purpose of recording the transaction in the entity’s accounting records.Note: An entity’s usual business practice may be to translate amounts into Australian currency at a different exchange rate because the entity recognises gains and losses under spot contracts in the entity’s accounting records.
(2) For the purposes of subsection 960‑50(7) of the Act, the table in subsection 960‑50(6) of the Act is modified by adding after item 11 the following items:
11A
an amount (other than an amount of a receipt or a payment) to which none of the above items applies
the amount is to be translated into Australian currency at an exchange rate that is reasonable having regard to the circumstances.
12
an amount to which any of items 1 to 11A (inclusive) applies
as an alternative to the result mentioned in the item, the amount may be translated into Australian currency using any of the rules set out in Schedule 2 to the Income Tax Assessment (1997 Act) Regulations 2021.
(3) For the purposes of subsection 960‑50(8) of the Act, Schedule 2 to this instrument sets out requirements in relation to the translation of amounts into Australian currency.
Subdivision 960‑D—Functional currency
960‑80.01 Translation rules—translation into applicable functional currency
For the purposes of subsection 960‑80(7) of the Act, the requirements set out in Schedule 2 to this instrument in relation to the translation of amounts into Australian currency have effect in relation to the translation of amounts into the applicable functional currency as if:
(a) each reference in that Schedule to Australian currency were a reference to the applicable functional currency; and
(b) the modifications set out in the following table were made:
<table cellspacing="0" cellpadding="0" style="width:100%; border-collapse:collapse"><thead><tr><td colspan="4" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Modifications to Schedule</span><span> </span><span>2</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:23.76%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Provision</span></p></td><td style="width:22.16%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>After</span></p></td><td style="width:45.5%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Insert</span></p></td></tr></thead><tbody><tr><td style="width:8.58%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:23.76%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Subclause</span><span> </span><span>2(2)</span></p></td><td style="width:22.16%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>year</span></p></td><td style="width:45.5%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>(or, if the entity is an attributable taxpayer in relation to a CFC, each subsequent day in the CFC’s statutory accounting period)</span></p></td></tr><tr><td style="width:8.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:23.76%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Paragraph</span><span> </span><span>2(3)(a)</span></p></td><td style="width:22.16%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>activities</span></p></td><td style="width:45.5%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>(or, if the entity is an attributable taxpayer in relation to a CFC, the use of the rate would not be appropriate having regard to the CFC’s business or activities)</span></p></td></tr></tbody></table>
960‑80.02 Translation rules for an attributable taxpayer of a CFC—translation into applicable functional currency
For the purposes of subsection 960‑80(7) of the Act, if:
(a) an entity is an attributable taxpayer in relation to a CFC; and
(b) the CFC has prepared financial accounts in accordance with standards to which subsection 820‑960(1C) or (1D) of the Act relates; and
(c) those financial accounts translate amounts into the applicable functional currency using particular exchange rates; and
(d) the entity wishes to translate an amount into the applicable functional currency, using the exchange rate used to translate a corresponding amount in the financial accounts;
the entity must translate all amounts into the applicable functional currency using the exchange rates that were used in the financial accounts to translate corresponding amounts.
960‑80.03 Translation rules—translation from applicable functional currency into Australian currency
(1) For the purposes of subsection 960‑80(7) of the Act, this section provides requirements that an entity must comply with in translating an amount from the applicable functional currency into Australian currency.
Amount that is not the attributable income of a CFC
(2) If, on or after 27 April 2005, an entity translates an amount that is not the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960‑80(1) of the Act, the entity must translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the entity carries on the relevant business or other activity; or
(b) if the entity makes an election in writing to use the exchange rate applicable on the last day of the entity’s income year—that exchange rate.
Amount that is the attributable income of a CFC
(3) If, on or after 27 April 2005, an entity that is an attributable taxpayer in relation to a CFC translates an amount that is the attributable income of a CFC from the applicable functional currency into Australian currency on a day in accordance with an item of the table in subsection 960‑80(1) of the Act, the entity must translate the amount using:
(a) an exchange rate that is an average of all of the exchange rates during the period, not exceeding 12 months, in which the CFC carries on the relevant business or other activity; or
(b) if the entity makes an election in writing to use the exchange rate applicable on the last day of the CFC’s statutory accounting period—that exchange rate.
(4) An election under paragraph (2)(b) or (3)(b) is irrevocable.
Division 974—Debt and equity interests
Subdivision 974‑F—Related concepts
974‑135.01 Non‑cumulative redeemable preference shares issued by credit union or mutual building society
(1) For the purposes of paragraph 974‑135(8)(d) of the Act, the obligation in respect of the return of investment on the redemption of a non‑cumulative redeemable preference share issued by an entity that is:
(a) a credit union; or
(b) a mutual building society that is an ADI;
is not an effectively non‑contingent obligation if it meets the criteria in subsection (2) of this section.
(2) The criteria in this subsection are:
(a) the share is issued on or after 4 March 2003; and
(b) the share satisfies, at the time it is issued, the criteria set out in paragraph 1 of Attachment H to the Banking (prudential standard) determination No. 4 of 2017; and
(c) the share is issued subject to the following terms and conditions:
(i) the share has a minimum term of 5 years;
(ii) dividend payments for the share are to be paid only out of operating profits from the current year or the immediately previous year, and only to the extent that payment is permitted by law and by relevant regulatory authorities;
(iii) dividend payments for the share are not cumulative;
(iv) any payments made in relation to the share out of net profits or net assets have preferential rights over payments made in relation to ordinary shares (if any) from the same sources;
(v) if the share is to be redeemed—the redemption cannot be carried out without the approval of the entity’s board;
(vi) if the share is to be redeemed, but the redemption of the share would place the entity in breach of a prudential standard made under the Banking Act 1959—the redemption cannot be carried out without the approval of APRA; and
(d) the redemption is carried out on or after 4 March 2003; and
(e) the share is issued only to a member of the entity; and
(f) a member of the entity and its connected entities can together hold not more than 10% by value of the shares of that kind issued by the entity.
Note: For connected entity, see subsection 995‑1(1) of the Act.
974‑135.02 Redeemable preference shares
For the purposes of paragraph 974‑135(8)(a) of the Act, an obligation to redeem or buy back a preference share in relation to a company is not a contingent obligation merely because a requirement exists, under a law, to the effect that:
(a) the redemption or buy back must not prejudice the company’s ability to pay its creditors; or
(b) the redemption or buy back must not cause the company’s remaining assets to become insufficient to pay any of the company’s debts for which provision for payment has not otherwise been made.
974‑135.03 Term cumulative subordinated note with insolvency or capital adequacy conditions
(1) This section applies to an obligation to pay the principal or interest on a relevant term subordinated note at a particular time on or after 1 July 2001.
(2) For the purposes of paragraphs 974‑135(8)(a) and (b) of the Act, the fact that the obligation is subject to insolvency or capital adequacy conditions does not in itself prevent the obligation from being a non‑contingent obligation.
Meaning of relevant
(3) A term subordinated note is relevant if:
(a) at the time of the note’s issue:
(i) the note does not constitute or meet the requirements of a Tier 1 capital instrument; and
(ii) the note does not form part of the Tier 1 capital of the issuer of the note, or a connected entity, and the reason for the note not doing so is not that the instrument is in excess of the Tier 1 capital required for the purposes of prudential standards that deal with capital adequacy; and
(b) the note has a term of not more than 30 years; and
(c) the note does not include an unconditional right to extend the term of the note beyond a total term of 30 years; and
(d) the note is subject to a condition that any payment of the principal or interest beyond the date on which it would otherwise be payable must accumulate (with or without compounding); and
(e) the note does not give the issuer of the note an unconditional right to decline to provide a financial benefit that is equal in nominal value to the issue price of the note to settle the obligations under the note.
Meaning of insolvency or capital adequacy conditions
(4) Conditions applying to the obligation are insolvency or capital adequacy conditions if they have the effect that the issuer of the note is obliged or able to defer the payment of the principal or interest beyond the date on which it would otherwise be payable if, on that date:
(a) the issuer of the note is insolvent, or would become insolvent if the payment were made; or
(b) if the issuer of the note is an entity that is regulated by APRA or a comparable foreign regulator—the issuer is in breach of its capital adequacy ratio or would be in breach if the payment were made.
Obligations to pay before 15 April 2010
(5) If the obligation is an obligation to pay at a time before 15 April 2010, this section applies only to the extent that applying it would not have the result that:
(a) the rights of a person (other than the Commonwealth or an authority of the Commonwealth) immediately before 15 April 2010 would be affected so as to disadvantage the person; or
(b) liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth), for anything done or omitted to be done before 15 April 2010.
974‑135.04 Perpetual cumulative subordinated note with profitability, insolvency or negative earnings conditions
(1) This section applies to an obligation to pay interest on a relevant perpetual subordinated note at a particular time on or after 1 July 2001.
(2) For the purposes of paragraphs 974‑135(8)(a) and (b) of the Act, the fact that the obligation is subject to profitability, insolvency or negative earnings conditions does not in itself prevent the obligation from being a non‑contingent obligation.
Meaning of relevant perpetual subordinated note
(3) A relevant perpetual subordinated note is a perpetual subordinated note that:
(a) at the time of the note’s issue:
(i) does not constitute or meet the requirements of a Tier 1 capital instrument; and
(ii) does not form part of the Tier 1 capital of the issuer of the note, or a connected entity, and the reason for the note not doing so is not that the instrument is in excess of the Tier 1 capital required for the purposes of prudential standards that deal with capital adequacy; and
(b) would be a debt interest but for the obligation being subject to one or more profitability, insolvency or negative earnings conditions; and
(c) is subject to the condition that any deferred interest must accumulate (with or without compounding); and
(d) was issued by:
(i) an ADI that is a bank or non‑mutual building society and that is regulated for prudential purposes by APRA; or
(ii) a subsidiary of an ADI mentioned in subparagraph (i), being a subsidiary that is regulated with the ADI for prudential purposes by APRA; or
(iii) an entity that has undertaken to comply with prudential standards, issued by APRA, that deal with capital adequacy and is regulated for prudential purposes by APRA; or
(iv) a subsidiary of an entity mentioned in subparagraph (iii) that is covered by the undertaking mentioned in that subparagraph; or
(v) an entity that is regulated for prudential purposes by a foreign prudential regulator that has a prudential regulatory role comparable to that of APRA and under ADI capital adequacy requirements comparable to those of APRA; and
(e) does not give the issuer of the note an unconditional right to decline to provide a financial benefit that is equal in nominal value to the issue price of the note to settle the obligations under the note.
Meaning of profitability, insolvency or negative earnings conditions
(4) Conditions applying to the obligation are profitability, insolvency or negative earnings conditions if they have the effect that the issuer of the note is able, or obliged, to defer the payment of the interest (with or without compounding) beyond the date on which it would otherwise be payable if, on that date:
(a) profitability does not justify the payment; or
(b) the issuer of the note is insolvent, or would become insolvent if the payment were made; or
(c) a dividend has not been declared or paid on a class or classes of share capital of the issuer during a specified period that:
(i) immediately precedes that date; and
(ii) is no more than 24 months; or
(d) the issuer’s retained earnings are negative, or would be negative if the payment were made.
Obligations to pay before 16 March 2011
(5) If the obligation is an obligation to pay at a time before 16 March 2011 this section applies only to the extent that applying it would not have the result that:
(a) the rights of a person (other than the Commonwealth or an authority of the Commonwealth) immediately before that day would be affected so as to disadvantage that person; or
(b) liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth) for anything done or omitted to be done before that day.
Note: The application of this section to a perpetual subordinated note does not mean that the note, together with one or more related schemes, cannot give rise to an equity interest.
974‑135.05 Term cumulative subordinated note with non‑viability condition
(1) This section applies to an obligation to pay the principal or interest on a relevant term subordinated note at a particular time on or after 12 December 2012.
(2) For the purposes of paragraphs 974‑135(8)(a) and (b) of the Act, the fact that the obligation is subject to a non‑viability condition does not in itself prevent the obligation from being a non‑contingent obligation.
Meaning of relevant
(3) A term subordinated note is relevant if:
(a) the note is issued by:
(i) an entity regulated for prudential purposes by APRA or a comparable foreign regulator; or
(ii) a subsidiary of an entity that is regulated for prudential purposes by APRA or a comparable foreign regulator; and
(b) when the note is issued:
(i) the note does not constitute or meet the requirements of a Tier 1 capital instrument; and
(ii) the note does not form part of the Tier 1 capital of the issuer of the note, and the reason for the note not doing so is not that the instrument is in excess of the Tier 1 capital required for the purposes of prudential standards that deal with capital adequacy; and
(c) the note has a term of no more than 30 years, and the note does not include an unconditional right to extend the term of the note beyond a total term of 30 years; and
(d) the note is subject to a condition that, unless a non‑viability trigger event occurs, any payment of the principal or interest beyond the date on which it would otherwise be payable must accumulate (with or without compounding); and
(e) the note does not give the issuer of the note an unconditional right to decline to provide a financial benefit that is equal in nominal value to the issue price of the note to settle the obligations under the note.
Note: Whether the note constitutes or meets the requirements of a Tier 1 capital instrument, or forms part of the Tier 1 capital of the issuer, is determined under the prudential standards that apply to the issuer.
Meaning of non‑viability condition
(4) A condition applying to the obligation is a non‑viability condition if the condition has the effect that, if a non‑viability trigger event occurs, the note must be:
(a) written off; or
(b) converted into ordinary shares of the issuer of the note or of a parent entity of the issuer; or
(c) converted into mutual equity interests of the issuer of the note or of a parent entity of the issuer.
Meaning of non‑viability trigger event
(5) A non‑viability trigger event, in relation to a note, is any of the following:
(a) APRA or a comparable foreign regulator issues a notice, in writing, to the issuer of the note stating that conversion or write‑off of capital instruments issued by the issuer is necessary because, without it, APRA or the foreign regulator considers that the issuer will become non‑viable;
(b) APRA or a comparable foreign regulator determines, in writing given to the issuer of the note, that without an injection of capital, or equivalent support, from the public sector the issuer will become non‑viable;
(c) APRA or a comparable foreign regulator issues a notice, in writing, to a parent entity of the issuer of the note stating that conversion or write‑off of capital instruments is necessary because, without it, APRA or the foreign regulator considers that the parent entity or the issuer will become non‑viable;
(d) APRA or a comparable foreign regulator determines, in writing given to a parent entity of the issuer of the note, that without an injection of capital, or equivalent support, from the public sector the parent entity or the issuer will become non‑viable.
(6) For the purposes of this section, mutual equity interests has the same meaning as in section 11CAA of the Banking Act 1959.
Part 6‑5—Dictionary definitions
Division 995—Definitions
995‑1.01 Definitions
Note: A number of expressions used in this instrument are defined in the Act, including the following:
(a) superannuation benefit;
(b) superannuation income stream benefit.
In this instrument:
2013 allowances determination has the meaning given by subsection 51‑5.01(3).
accruing member:
(a) for the purposes of Schedule 1A—has the meaning given by clause 1.1 of that Schedule; and
(b) for the purposes of Subdivision 293‑D and Schedule 1AA—has the meaning given by subsection 293‑115.05(2).
Act means the Income Tax Assessment Act 1997.
activities of daily living has the meaning given by subsection 295‑465.01(5).
approved stock exchange: see section 995‑1.02.
assessable contribution means an amount included in the assessable income of an entity by Subdivision 295‑C of the Act, disregarding item 5.3 of the table in section 50‑25 of the Act (income tax exemption for constitutionally protected funds) and Subdivision 295‑D of the Act (about excluded contributions).
benefit category:
(a) for the purposes of Subdivision 291‑C and Schedule 1A—has the meaning given by clause 1.2 of that Schedule; and
(b) for the purposes of Schedule 1AA—has the meaning given by clause 2 of that Schedule.
bundled has the meaning given by subsection 295‑465.01(5).
cognitive loss has the meaning given by subsection 295‑465.01(5).
conditions determination has the meaning given by subsection 51‑5.01(3).
constitutionally protected fund: see section 995‑1.03.
death (life) cover has the meaning given by subsection 295‑465.01(5).
defined benefit fund:
(a) for the purposes of Schedule 1A—has the meaning given by clause 1.3 of that Schedule; and
(b) for the purposes of Schedule 1AA—has the meaning given by clause 2A of that Schedule.
defined benefit member:
(a) means a member of a superannuation fund whose entitlements to superannuation benefits (other than benefits payable on death or disability) are defined by reference to one or more of the following matters:
(i) the member’s salary, or allowance in the nature of salary, at a particular date or averaged over a period;
(ii) another individual’s salary, or allowance in the nature of salary, at a particular date or averaged over a period;
(iii) a specified amount;
(iv) specified conversion factors;
other than a member of a superannuation fund whose entitlements to superannuation are defined solely by reference to one or more of the following matters:
(v) the member’s disability superannuation benefits;
(vi) the member’s superannuation death benefits;
(vii) payments of amounts mentioned in paragraph 307‑10(a) of the Act (which relates to temporary disability payments); and
(b) in clause 3.6 of Schedule 1A—has a meaning affected by subclause (4) of that clause; and
(c) in clause 15 of Schedule 1AA—has a meaning affected by subclause (4) of that clause.
domestic (home) duties has the meaning given by subsection 295‑465.01(5).
employer‑sponsor has the meaning given by subsection 16(1) of the SIS Act.
funded benefit interest has the meaning given by subsection 293‑115.15(2).
Governor‑General Pension Scheme means the Governor‑General Pension Scheme constituted by allowances payable under section 4 of the Governor‑General Act 1974.
insolvent, for an issuer, means:
(a) the issuer cannot pay its debts as they fall due; or
(b) the issuer’s liabilities exceed its assets.
loss of limb has the meaning given by subsection 295‑465.01(5).
member contributions has the meaning given by subregulation 5.01(1) of the SIS Regulations.
military or police person means a person mentioned in paragraph 302‑195(2)(a), (b) or (c) of the Act.
Military Superannuation and Benefits Scheme has the meaning given by section 307‑125.01.
non‑accruing member:
(a) for the purposes of section 291‑170.04 and Schedule 1A—has the meaning given by subsection 291‑170.04(5); and
(b) for the purposes of Subdivision 293‑D—has the meaning given by subsection 293‑115.05(2).
normal domestic duties has the meaning given by subsection 295‑465.01(5).
on‑hold member has the meaning given by subsection 291‑170.04(6).
pensioned member has the meaning given by subsection 291‑170.04(7).
pension liability of a complying superannuation plan means a liability of the plan to pay a superannuation income stream benefit.
pension reserve has the meaning given by subsection 292‑90.02(7).
pooled investment annuity has the meaning given by subsection 307‑205.02E(2).
pooled investment pension has the meaning given by subsection 307‑205.02D(2).
registered organisation has the meaning given by subsection 10(1) of the SIS Act.
relevant 2006 interest, in relation to a member, means:
(a) a defined benefit interest held by the member on 5 September 2006; or
(b) any superannuation interest to which the entire value of the interest mentioned in paragraph (a) was transferred (whether directly or through a series of transfers between superannuation interests).
relevant 2009 interest, in relation to a member, means:
(a) a defined benefit interest held by the member on 12 May 2009; or
(b) any superannuation interest to which the entire value of the interest mentioned in paragraph (a) was transferred (whether directly or through a series of transfers between superannuation interests).
RSA Act means the Retirement Savings Accounts Act 1997.
RSA Regulations means the Retirement Savings Accounts Regulations 1997.
RSE licensee has the same meaning as in the SIS Act.
SIS Act means the Superannuation Industry (Supervision) Act 1993.
SIS Regulations means the Superannuation Industry (Supervision) Regulations 1994.
superannuation annuity: see section 995‑1.05.
superannuation income stream: see section 307‑70.02.
superannuation salary means the salary used to determine a person’s entitlement to superannuation benefits.
superannuation sub‑fund, in relation to defined benefit members of a superannuation fund, means an arrangement in the fund which satisfies the following conditions:
(a) there are separately identifiable assets and separately identifiable beneficiaries;
(b) the interest of each beneficiary is determined by reference only to the conditions governing that arrangement;
(c) the defined benefit members have the same employer‑sponsor;
(d) the employer‑sponsor deals with each of the defined benefit members at arm’s length.
terminal medical condition: see section 995‑1.06.
TPD any occupation has the meaning given by subsection 295‑465.01(5).
TPD own occupation has the meaning given by subsection 295‑465.01(5).
995‑1.02 Approved stock exchanges
The stock exchanges specified in Schedule 3 are named for the purposes of the definition of approved stock exchange in subsection 995‑1(1) of the Act.
995‑1.03 Constitutionally protected funds
For the purposes of the definition of constitutionally protected fund in subsection 995‑1(1) of the Act, a fund:
(a) of the kind to which, in the absence of item 5.3 of section 50‑25 of the Act, Division 295 of the Act would apply; and
(b) established by a State Act, or a provision of a State Act, mentioned in an item of the following table, as in force at the time this section commences;
is declared to be a constitutionally protected fund.
995‑1.04 Definition of contributions‑splitting superannuation benefit
For the purposes of the definition of contributions‑splitting superannuation benefit in subsection 995‑1(1) of the Act, contributions‑splitting superannuation benefit means:
(a) a payment made in accordance with subregulation 4.42(2) of the RSA Regulations; or
(b) a payment made in accordance with subregulation 6.45(2) of the SIS Regulations.
995‑1.05 Meaning of superannuation annuity
For the purposes of the definition of superannuation annuity in subsection 995‑1(1) of the Act, superannuation annuity means:
(a) an income stream that:
(i) is issued by a life insurance company or registered organisation; and
(ii) commenced before 20 September 2007; and
(iii) is an annuity within the meaning of subsection 10(1) of the SIS Act or is a benefit mentioned in subregulation 1.07(1A) of the RSA Regulations; or
(b) an income stream that:
(i) is issued by a life insurance company or registered organisation; and
(ii) is taken to be an annuity for the purposes of the SIS Act in accordance with subregulation 1.05(1) of the SIS Regulations; or
(c) a deferred superannuation income stream that is taken to be an annuity for the purposes of the SIS Act in accordance with subregulation 1.05(1) of the SIS Regulations because the contract for the provision of the income stream meets the standards of subregulation 1.06A(2) of the SIS Regulations.
995‑1.06 Meaning of terminal medical condition
For the purposes of the definition of terminal medical condition in subsection 995‑1(1) of the Act, a terminal medical condition exists in relation to a person at a particular time if the following circumstances exist:
(a) 2 registered medical practitioners have certified, jointly or separately, that the person suffers from an illness, or has incurred an injury, that is likely to result in the death of the person within a period (the certification period) that ends not more than 24 months after the date of the certification;
(b) at least one of the registered medical practitioners is a specialist practising in an area related to the illness or injury suffered by the person;
(c) either:
(i) if there is one certification period—the certification period has not ended; or
(ii) otherwise—neither of the certification periods has ended.
Chapter 7—Transitional matters
Part 1000‑1—Transitional matters relating to the repeal of the Income Tax Assessment Regulations 1997
1000‑1.01 Definitions
In this Part:
commencement time means the time this section commences.
old regulations means the Income Tax Assessment Regulations 1997.
repealing regulations means the Treasury Laws Amendment (Income Tax Assessment Repeal and Consequential Amendments) Regulations 2021.
1000‑1.02 This instrument generally applies to income years and financial years starting at or after the commencement time
(1) Subject to this Part, this instrument applies in relation to income years and financial years starting at or after the commencement time.
(2) Subject to this Part, despite the repeal of the old regulations by the repealing regulations, the old regulations continue to apply in relation to income years and financial years starting before the commencement time as if the repeal had not happened.
1000‑1.03 Valuations under Division 30 or 31
(1) Division 30 applies in relation to a valuation sought from the Commissioner under section 30‑212 of the Act at or after the commencement time.
(2) Division 31 applies in relation to a valuation sought from the Commissioner under section 31‑15 of the Act at or after the commencement time.
(3) Despite the repeal of Divisions 30 and 31 of the old regulations by the repealing regulations, those Divisions continue to apply in relation to a valuation sought from the Commissioner under section 30‑212 or 31‑15 of the Act before the commencement time as if the repeal had not happened.
1000‑1.04 Complying superannuation fund condition—elections
(1) An election made for the purposes of regulation 290‑155.01 of the old regulations that is not revoked before the commencement time has effect after the commencement time as if it had been made for the purposes of section 290‑155.01 of this instrument.
(2) An election made for the purposes of regulation 290‑155.05 of the old regulations that is not revoked before the commencement time has effect after the commencement time as if it had been made for the purposes of section 290‑155.05 of this instrument.
1000‑1.05 Notional taxed contributions—allocation of contributions
For the purposes of subsection 291‑170.03(2), an amount of assessable contributions received by a trustee before 1 July 2021 and allocated by the trustee to a member on or after 1 July 2021 in accordance with:
(a) subregulations 292‑170.03(2) and (3) of the old regulations (as they continue to apply under subsection 1000‑1.02(2) of this instrument); and
(b) regulation 7.11 of the SIS Regulations (as in force immediately before the commencement time);
is taken to have been allocated to the member in accordance with regulation 7.11 of the SIS Regulations.
1000‑1.06 Transfer balance debits and transfer balance credits
(1) Section 1000‑1.02 does not apply in relation to Division 294 of the old regulations or Division 294 of this instrument.
(2) The repeal of Division 294 of the old regulations by the repealing regulations does not affect a transfer balance credit or transfer balance debit that arises before the commencement time.
(3) Section 294‑25.01 applies in relation to any amount of consideration paid at or after the commencement time.
(4) Section 294‑80.01 applies in relation to any later benefit that a person is entitled to receive at or after the commencement time, whether the earlier benefit occurs before, at or after the commencement time.
(5) Section 294‑80.03 applies in relation to any superannuation income stream that, at or after the commencement time, stops being a superannuation income stream that is in the retirement phase.
(6) Sections 294‑135.01 and 294‑145.01 apply in relation to any transfer balance credit or transfer balance debit that arises at or after the commencement time.
1000‑1.07 Application of pre‑1 July 88 funding credits
(1) Paragraph 295‑265.01(8)(b) has effect as if the reference to method 1 included a reference to method 1 within the meaning of subregulation 295‑265.01(12) of the old regulations.
(2) Step 1 of the method statement in subsection 295‑265.05(1) has effect as if the value of pre‑1 July 88 liabilities of a superannuation fund for an income year starting before the commencement time were:
(a) if method 2 (within the meaning of subregulation 295‑265.01(12) of the old regulations) was used in relation to the superannuation fund for the income year—the notionally updated value of pre‑1 July 1988 liabilities worked out under regulation 295‑265.01 of the old regulations for the income year in relation to the superannuation fund; or
(b) in any other case—the value of pre‑1 July 1988 liabilities worked out under regulation 295‑265.01 of the old regulations for the income year in relation to the superannuation fund.
(3) Step 2 of the method statement in subsection 295‑265.05(1) has effect as if the assets available to fund pre‑1 July 88 liabilities of a superannuation fund for an income year starting before the commencement time were:
(a) if method 2 (within the meaning of subregulation 295‑265.01(12) of the old regulations) was used in relation to the superannuation fund for the income year—the notionally updated amount of assets available to fund pre‑1 July 1988 liabilities worked out under regulation 295‑265.01 of the old regulations for the income year in relation to the superannuation fund; or
(b) in any other case—the assets available to fund pre‑1 July 1988 liabilities worked out under regulation 295‑265.01 of the old regulations for the income year in relation to the superannuation fund.
1000‑1.08 Departing Australia superannuation payments
(1) Subsection 301‑170.01(1) applies in relation to a superannuation lump sum paid at or after the commencement time.
(2) Despite the repeal of regulation 301‑170.01 of the old regulations by the repealing regulations, that regulation continues to apply in relation to a superannuation lump sum paid before the commencement time as if that repeal had not happened.
1000‑1.09 Components of member benefits accruing before 1 July 1999 paid from the Military Superannuation and Benefits Scheme—choice of alternative method
A choice made for the purposes of regulation 307‑125.01 of the old regulations has effect for income years and financial years starting at or after the commencement time as if it had been made for the purposes of section 307‑125.01 of this instrument.
1000‑1.10 Farm management deposit
(1) Sections 393‑20.01 and 393‑20.02 and Schedule 1C apply in relation to an application for a farm management deposit where the application is made at or after the commencement time.
(2) Despite the repeal of regulations 393‑5 and 393‑10 of the old regulations and Schedule 1C to the old regulations by the repealing regulations, those provisions continue to apply in relation to an application for a farm management deposit where the application was made before the commencement time as if that repeal had not happened.
(3) Section 393‑40.01 applies in relation to a repayment of the whole or a part of a farm management deposit where the repayment is made at or after the commencement time (regardless of when the application for the farm management deposit was made).
(4) Despite the repeal of regulation 393‑15 of the old regulations by the repealing regulations, that regulation continues to apply in relation to a repayment of the whole or a part of a farm management deposit where the repayment was made before the commencement time as if that repeal had not happened.
1000‑1.11 Application of forex events to currency and fungible rights and obligations—elections
An election made in compliance with regulation 775‑145.01 of the old regulations that is not withdrawn before the commencement time has effect after the commencement time as if it had been made in compliance with section 775‑145.01 of this instrument.
1000‑1.12 Translating currency—choices and elections
(1) For the purposes of sections 960‑50.01 and 960‑80.01, a choice made under clause 1.3 of Schedule 2 to the old regulations before the commencement time has effect as if it had been made under clause 3 of Schedule 2 to this instrument.
(2) An election made for the purposes of regulation 960‑80.03 of the old regulations has effect after the commencement time as if it had been made for the purposes of section 960‑80.03 of this instrument.
1000‑1.13 Certificates in relation to terminal medical conditions
(1) Section 995‑1.06 applies in relation to any certification, whether given before or after the commencement time.
(2) A reference to regulation 303‑10.01 of the old regulations in a certificate given for the purposes of that regulation is taken to include a reference to section 995‑1.06 of this instrument.
Part 1000‑2—Transitional matters relating to the Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2021
1000‑2.01 Application of amendments
The amendments of section 291‑25.01 made by Division 3 of Part 2 of Schedule 1 to the Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2021 apply in relation to the 2021‑22 financial year and later financial years.
Part 1000‑3—Transitional matters relating to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023
1000‑3.01 Definitions
In this Part:
2021 commencement time means the commencement time (within the meaning of Part 1000‑1).
old regulations has the same meaning as in Part 1000‑1.
1000‑3.02 Application of amendments
The amendments of section 307‑70.02 made by Schedule 9 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 apply in relation to income years starting on or after the 2021 commencement time.
1000‑3.03 Modified continuing application of old regulations
(1) This section applies for the purposes of the continuing application of the old regulations, as mentioned in subsection 1000‑1.02(2), in relation to an income year starting on or after 1 July 2007.
(2) For those purposes, in determining whether an income stream is a superannuation income stream:
(a) if the income stream would be (apart from this subsection) a superannuation income stream under that continuing application, but would not be a superannuation income stream under section 307‑70.02 because of the amendments made by Schedule 9 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023—treat the income stream as not being a superannuation income stream; and
(b) if the income stream would not be a superannuation income stream under that continuing application (apart from this subsection), but would be a superannuation income stream under section 307‑70.02 because of those amendments—treat the income stream as being a superannuation income stream.
Part 1000‑4—Transitional matters relating to the Treasury Laws Amendment (Military Superannuation Benefits) Regulations 2023
1000‑4.01 Definitions
In this Part:
2021 commencement time means the commencement time (within the meaning of Part 1000‑1).
amending instrument means the Treasury Laws Amendment (Military Superannuation Benefits) Regulations 2023.
old regulations has the same meaning as in Part 1000‑1.
1000‑4.02 Application of amendments
(1) The amendments made by Part 1 of Schedule 1 to the amending instrument apply in relation to income years starting on or after 1 July 2023.
(2) The amendments made by Part 2 of Schedule 1 to the amending instrument apply in relation to superannuation income streams that commenced on or after the 2021 commencement time.
1000‑4.03 Modified continuing application of old regulations
(1) This section applies for the purposes of the continuing application of the old regulations, in relation to superannuation income streams that commenced before the 2021 commencement time.
(2) This section applies despite subsection 1000‑1.06(1).
(3) For the purposes mentioned in subsection (1), treat a superannuation income stream as being prescribed by the old regulations for the purposes of subsection 294‑130(2) of the Act (as a capped defined benefit income stream) if the superannuation income stream:
(a) would not be so prescribed under that continuing application (apart from this subsection); but
(b) would be so prescribed under subsection 294‑130.01(7) (as inserted by Part 2 of Schedule 1 to the amending instrument), on the assumption that the superannuation income stream commenced on or after the 2021 commencement time.
Part 1000‑5—Transitional matters relating to the Income Tax Assessment Amendment (Superannuation) Regulations 2024
1000‑5.01 Application of amendments
Section 294‑25.03 applies if:
(a) you start to be the retirement phase recipient of the new stream on or after the commencement of this section; or
(b) both:
(i) you started to be the retirement phase recipient of the new stream on or after 1 July 2017 and before the commencement of this section; and
(ii) the amount of the transfer balance debit referred to in paragraph 294‑25.03(1)(e) is less than the special value, on the day you start to be the retirement phase recipient of the new stream, of the new stream.
Part 1000‑6—Transitional matters relating to the Income Tax Assessment Amendment (Transfer Balance Account Value for Certain Superannuation Income Streams) Regulations 2024
1000‑6.01 Definitions
In this Part:
2021 commencement time means the commencement time (within the meaning of Part 1000‑1).
amending instrument means the Income Tax Assessment Amendment (Transfer Balance Account Value for Certain Superannuation Income Streams) Regulations 2024.
old regulations has the same meaning as in Part 1000‑1.
1000‑6.02 Application of amendments
(1) Section 294‑80.02B, as inserted by the amending instrument, applies in relation to a superannuation income stream that ceases, as mentioned in paragraph (1)(c) of that section, on or after the 2021 commencement time.
(2) The amendments made by the amending instrument to section 294‑135.01 of this instrument apply in relation to working out the special value, at a particular time, of a superannuation interest if the particular time is on or after the 2021 commencement time.
1000‑6.03 Modified continuing application of old regulations
(1) This section applies for the purposes of the continuing application of the old regulations in relation to a superannuation income stream that:
(a) commenced before the 2021 commencement time; and
(b) is supported by a superannuation interest covered by subsection 294‑135.01(6) of this instrument.
(2) This section applies despite subsection 1000‑1.06(1).
(3) For the purposes mentioned in subsection (1), treat the special value of the superannuation interest at a time (the relevant time) that is before the 2021 commencement time as being the special value of the superannuation interest at the relevant time worked out under section 294‑135.01, as amended by the amending instrument.
(4) To avoid doubt, for the purposes of subsection (3), assume that section 294‑135.01, as amended by the amending instrument:
(a) applies in relation to a transfer balance credit that arises before the 2021 commencement time (despite subsection 1000‑1.06(6)); and
(b) applies in relation to working out the special value, at a particular time, of a superannuation interest even if the particular time is before the 2021 commencement time (despite section 1000‑6.02).
(5) For the purposes mentioned in subsection (1), if the superannuation income stream mentioned in that subsection ceased before the 2021 commencement time, treat section 294‑80.02B of this instrument as applying in relation to that cessation.
Part 1000‑7—Transitional matters relating to the Treasury Laws Amendment (Legacy Retirement Product Commutations and Reserves) Regulations 2024
1000‑7.01 Transitional provision—pension reserves
(1) This section applies to working out, for the purposes of subsection 292‑90.02(4), whether a reserve of a complying superannuation plan is a pension reserve at a time occurring on or after the commencement of this section.
(2) If, before that commencement:
(a) the reserve was used for the purpose of enabling the plan to discharge all or part of a liability of the plan to pay a superannuation income stream benefit from a superannuation income stream; and
(b) the superannuation income stream was commuted or otherwise ceased; and
(c) after the commutation or cessation, an amount was allocated from the reserve for a person; and
(d) immediately before the commutation or cessation, the reserve was a pension reserve;
disregard the allocation.
Part 1000‑9—Transitional matters relating to the Income Tax Assessment (1997 Act) Amendment (Term Subordinated Note) Regulations 2025
1000‑9.01 Application of amendments
The amendment made by Schedule 1 to the Income Tax Assessment (1997 Act) Amendment (Term Subordinated Note) Regulations 2025 applies to an obligation to pay the principal or interest on a relevant term subordinated note at a particular time on or after 12 December 2012.