Subdivision F—Special rules relating to AFI subsidiaries carrying on financial intermediary business
449 AFI subsidiaries—interest income
450 AFI subsidiaries—asset disposals and currency transactions
Subdivision G—Substantiation requirements
451 Active income test—substantiation requirements for company
452 Active income test—substantiation requirements for partnership
453 Active income test—substantiation requirements for attributable taxpayer
454 Assessment on assumption—retention of accounts etc. and compliance with information notices
455 Amendment of assessments
Division 9—Attribution of attributable income and other amounts
456 Assessability in respect of CFC’s attributable income
456A Reduction of section 456 assessability where item subject to foreign accruals tax
457 Assessability where CFC changes residence from unlisted country to listed country or to Australia
459A Assessability where CFC or CFT has interest in certain attributable taxpayers
460 Only resident partners, beneficiaries etc. liable to be assessed as a result of attribution
460A Effect of reducing section CGT event J1 amount
Division 10—Post‑attribution asset disposals
461 Reduction of disposal consideration or capital proceeds if attributed income not distributed
Division 11—Keeping of records
462 Keeping of records—section 456
462A Keeping of records—section 457
464A Keeping of records—section 459A
465 Offence of failing to keep records
466 Manner in which records required to be kept
467 Circumstances where records not required to be kept—reasonable excuse etc.
468 Treatment of partnerships
Part VIIB—Medicare levy and Medicare levy surcharge
251R Interpretation
(2) If, during any period, 2 persons (whether of the same sex or different sexes):
(a) had a relationship that was registered under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or
(b) lived together in a relationship as a couple on a genuine domestic basis, although not legally married to each other;
this Part and any Act imposing Medicare levy has effect in relation to the period as if the persons were married to each other.
(2A) If, during the period, either or both of the persons was legally married to another person, or in a relationship mentioned in paragraph (2)(a) with another person, this Part and any Act imposing Medicare levy has effect as if the person or persons were not legally married to, or in a relationship mentioned in paragraph (2)(a) with, the other person or persons.
(3) Subject to subsections (4), (5), (6), (6B), (6C) and (6D), a person shall be taken to have been a dependant of another person for the purposes of this Part during any part of the year of income in which:
(a) the first‑mentioned person was a resident of Australia;
(b) the first‑mentioned person was:
(i) the spouse of the other person;
(ii) a child of the other person less than 21 years of age; or
(iii) a child of the other person not less than 21 years of age but less than 25 years of age and receiving full‑time education at a school, college or university; and
(c) the other person contributed to the maintenance of the first‑mentioned person.
(4) A child referred to in subparagraph (3)(b)(iii) shall not be taken to have been a dependant of a person for the purposes of this Part during a period being the whole or a part of a year of income unless the person is entitled to a notional tax offset in respect of that child under Subdivision 961‑A of the Income Tax Assessment Act 1997.
(5) If, in relation to a period, being the whole or a part of a year of income:
(a) the parents of a child referred to in paragraph (3)(b) lived separately and apart from each other; and
(b) the child would, but for this subsection, be taken, for the purposes of this Part, to be a dependant of each of his or her parents in respect of that period; and
(c) both of the parents or their spouses, being partners as defined in the A New Tax System (Family Assistance) Act 1999, are eligible for family tax benefit at the Part A rate under that Act in respect of that child (whether the child is an FTB child or a regular care child within the meaning of that Act) in respect of the period; and
(d) the Families Secretary has determined, under Subdivision D of Division 1 of Part 3 of that Act, each parent’s or spouse’s percentage of care for the child during a care period (within the meaning of that Act);
the child is to be taken to be a dependant of each parent for the purposes of Part VIIB of this Act, for so much only of that period as corresponds with that percentage of care.
(6) For the purposes of paragraph (3)(c), a person shall be taken to have contributed to the maintenance of another person during any period during which the person and that other person resided together, unless the contrary is established to the satisfaction of the Commissioner.
(6A) A reference in subsections (6B), (6C) and (6D) to an eligible prescribed person in relation to a period is a reference to a person who would, apart from subsections 251U(2) and (3), be taken to have been a prescribed person, for the purposes of this Part and of any Act imposing Medicare levy, during that period by virtue of paragraph 251U(1)(a), (b), (ca), (caa) or (cb).
(6B) For the purposes of this Part, where:
(a) a person (in this subsection called the first person) was an eligible prescribed person in relation to a period in a year of income; and
(b) apart from this subsection, another person (in this subsection called the leviable person) would be a dependant of the first person during that period; and
(c) Medicare levy is payable by the leviable person upon the taxable income of the year of income;
the leviable person is not to be taken to have been a dependant of the first person during that period.
(6C) For the purposes of this Part, where:
(a) a person (in this subsection called the first person) was an eligible prescribed person in relation to a period in a year of income; and
(b) another person (in this subsection called the spouse) was the spouse of the first person during the whole of that period; and
(c) the spouse was not an eligible prescribed person in relation to that period; and
(d) Medicare levy is payable by the spouse upon the taxable income of the year of income; and
(e) apart from this subsection, a child of both the first person and the spouse would be a dependant of both the first person and the spouse during that period;
that child is not to be taken to have been a dependant of the first person during that period.
(6D) Subject to subsection (6F), for the purposes of this Part, where:
(a) a person (in this subsection and subsections (6E) to (6H) (inclusive) called the first person) was an eligible prescribed person in relation to a period in a year of income; and
(b) another person (in this subsection called the spouse) was the spouse of the first person during the whole of that period; and
(c) the spouse was an eligible prescribed person in relation to that period; and
(d) apart from this subsection, Medicare levy would be payable by both the first person and the spouse upon their respective taxable incomes of the year of income; and
(e) apart from this subsection, a child of both the first person and the spouse would be a dependant of both the first person and the spouse during that period; and
(f) the first person and the spouse have entered into an agreement (in subsections (6E) to (6H) (inclusive) called the family agreement) stating that, for Medicare levy purposes, that child:
(i) is not to be treated as a dependant of the first person during that period; and
(ii) is to be treated as a dependant of the spouse during that period;
that child is not to be taken to be a dependant of the first person during that period.
(6E) The family agreement must be entered into on or before the date of lodgment of the return of income of the first person for the year of income concerned or within such further time as the Commissioner allows.
(6F) Subsection (6D) does not apply, and is taken never to have applied, if the first person fails to retain the family agreement until the end of:
(a) 5 years beginning on the date of lodgment of the first person’s return of income for the year of income concerned; or
(b) a shorter period determined by the Commissioner in writing for the first person; or
(c) a shorter period determined by the Commissioner by legislative instrument for a class of persons that includes the first person.
(6FA) A determination under paragraph (6F)(c) may specify different periods for different classes of taxpayers.
(6G) Where the family agreement is lost or destroyed and the Commissioner is satisfied that the first person has a document (in this subsection called the substitute family agreement) that:
(a) is a copy of the family agreement; or
(b) properly records all the matters set out in the family agreement and was in existence when the family agreement was lost or destroyed;
the substitute family agreement is to be taken, for the purposes of this section, to be, and to have been at all times after the family agreement was lost or destroyed, the family agreement.
(6H) Where the family agreement is lost or destroyed and the Commissioner is satisfied that:
(a) the family agreement was lost or destroyed because of circumstances beyond the control of the first person; and
(b) subsection (6G) does not apply;
subsection (6F) does not apply and is to be taken never to have applied.
(6J) Section 170 does not prevent the amendment of an assessment at any time for the purposes of giving effect to subsection (6F), (6G) or (6H).
(7) In this Act (other than this Part, the definition of year of tax in subsection 6(1) and Division 17 of Part III), unless the contrary intention appears, income tax or tax includes Medicare levy payable in accordance with this Part and Medicare levy (fringe benefits) surcharge.
(8) In determining for the purposes of this Part and of any Act imposing levy whether a person was, or but for subsection 251U(2) would have been, or was not, a prescribed person during the whole or a part of the year of income that commenced on 1 July 1983, that year of income shall be deemed to be constituted by the period commencing on 1 February 1984 and ending on 30 June 1984.
251S Medicare levy
(1) Subject to this Part, a levy by the name of Medicare levy is levied, and shall be paid, at the rate applicable under the relevant Act imposing the levy for a financial year upon:
(a) the taxable income of the year of income of a person, not being a company or a person in the capacity of a trustee, who, at any time during the year of income, was a resident of Australia;
(b) if the trustee of a trust estate is required to be assessed in pursuance of section 98 in respect of a share of the net income of the trust estate of the year of income, being a share to which a beneficiary who, at any time during the year of income, was a resident of Australia is presently entitled—that share of that net income; and
(c) if the trustee of a trust estate (other than a trust estate of a deceased person) is required to be assessed, and is liable to pay tax, in pursuance of section 99 or 99A in respect of the whole or a part of the net income of the trust estate of the year of income—that net income or that part of that net income, as the case may be; and
(d) if the trustee of an AMIT is required to be assessed in pursuance of subsection 276‑405(2) of the Income Tax Assessment Act 1997 in respect of an amount mentioned in that subsection—that amount; and
(e) if the trustee of an AMIT is required to be assessed in pursuance of subsection 276‑415(2) of the Income Tax Assessment Act 1997 in respect of an amount mentioned in that subsection—that amount; and
(f) if the trustee of an AMIT is required to be assessed in pursuance of subsection 276‑420(2) of the Income Tax Assessment Act 1997 in respect of an amount mentioned in that subsection—that amount.
Note 1: Subdivision 61‑L (tax offset for Medicare levy surcharge (lump sum payments in arrears)) of the Income Tax Assessment Act 1997 might provide a tax offset for a person if Medicare levy surcharge (within the meaning of that Act) is payable by the person.
Note 2: The tax offset for foreign income tax under Division 770 of the Income Tax Assessment Act 1997 can be applied against your liability to pay Medicare levy or Medicare levy (fringe benefits) surcharge: see item 22 of the table in subsection 63‑10(1) of that Act.
(1A) If the taxpayer is entitled to a tax offset under subsection 301‑20(2) of the Income Tax Assessment Act 1997 for a year of income, paragraph (1)(a) of this section applies as if the taxable income of the taxpayer of the year of income were reduced by the amount mentioned in subsection 301‑20(3) of that Act for the person for the year.
(2) Levy payable by a person in accordance with this Part is payable in addition to any tax payable by the person in accordance with any other provision of this Act.
251T Medicare levy (other than Medicare levy surcharge) not payable by prescribed persons or by certain trustees
Notwithstanding anything contained in section 251S, Medicare levy (other than an increase in the levy payable under section 8B, 8C, 8D, 8E, 8F or 8G of the Medicare Levy Act 1986) is not payable by:
(a) a person (not being a person in the capacity of a trustee) who was a prescribed person during the whole of the year of income; or
(c) a person in the capacity of a trustee of a trust, in respect of a share of the net income of the trust estate of the year of income (being a share to which a beneficiary who was a prescribed person during the whole of the year of income is presently entitled) in respect of which the trustee is required to be assessed in pursuance of section 98.
251U Prescribed persons
(1) Subject to this section, a person shall be taken to have been a prescribed person, for the purposes of this Part and of any Act imposing Medicare levy, during a particular period if:
(a) the person was entitled to free medical treatment during the whole of that period in respect of every incapacity, disease or disabling condition because the person was a member of the Defence Force or was a relative of, or was otherwise associated with, a member of the Defence Force; or
(b) the person was entitled under the Veterans’ Entitlements Act 1986, the Military Rehabilitation and Compensation Act 2004, the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019 to free medical treatment during the whole of that period in respect of every incapacity, disease or disabling condition; or
(ca) the person was, during the whole of that period, a recipient of:
(i) an age pension under Part 2.2 of the Social Security Act 1991; or
(ii) a disability support pension under Part 2.3 of the Social Security Act 1991;
where the rate of the pension was calculated under section 1065 of the Social Security Act 1991; or
(caa) the person was, during the whole of that period, a recipient of a disability support pension under Part 2.3 of the Social Security Act 1991 where the rate of the pension was calculated under section 1066B of the Social Security Act 1991; or
(cb) the person was, during the whole of that period, a recipient of:
(i) an age service pension under Division 3 of Part III of the Veterans’ Entitlements Act 1986; or
(ii) an invalidity service pension under Division 4 of Part III of the Veterans’ Entitlements Act 1986; or
(iii) a partner service pension under Division 5 of Part III of the Veterans’ Entitlements Act 1986;
where the rate of the pension was calculated under Method statement 2 in subpoint SCH6‑A1(3), or Method statement 4 in subpoint SCH6‑A1(5), in Schedule 6 to the Veterans’ Entitlements Act 1986; or
(cc) during the whole of that period:
(i) the person was receiving income support supplement under Part IIIA of the Veterans’ Entitlements Act 1986; and
(ii) the rate of the person’s income support supplement was worked out under Method statement 6 in subpoint SCH6‑A1(7) in Schedule 6 to the Veterans’ Entitlements Act 1986; or
(d) during the whole of that period the person was a non‑resident; or
(e) during the whole of that period the person was:
(i) the head of a diplomatic mission, or the head of a consular post, established in Australia; or
(ii) a member of the staff of a diplomatic mission, or a member of the consular staff of a consular post, established in Australia; or
(iii) a member of the family of a person referred to in subparagraph (i) or (ii), being a member who forms part of the household of that person;
and was not an Australian citizen and was not ordinarily resident in Australia; or
(f) the Health Minister has certified that, had any service, treatment or care to which Medicare benefits under the Health Insurance Act 1973 relate been rendered to the person or to another person during that period, the first‑mentioned person would not have been entitled to Medicare benefits in respect of that service, treatment or care.
Note: Section 960‑255 of the Income Tax Assessment Act 1997 may be relevant to determining family relationships for the purposes of subparagraph (1)(e)(iii).
(2) A person shall not be taken to have been a prescribed person, for the purposes of this Part and of any Act imposing Medicare levy, during a particular period unless every person who was a dependant of the first‑mentioned person during that period is to be taken, or but for this subsection would be taken, to have been a prescribed person, for the purposes of this Part and of any Act imposing Medicare levy, during that period.