This Act has been repealed and is no longer in force. It is retained for historical reference.
Jurisdiction
Commonwealth
Act Number
105 of 1982
Collection
act
Plain English Summary
8/10 complexity
What this Act does (plain English)
Mechanically, the Income Tax (Rates) Act 1982 declares the income‑tax rates that apply to individuals, trustees and most trust beneficiaries for the financial year beginning 1 July 1982 and then for 1 July 1983 and later years. It does not set the rules for how taxable income is calculated (that is done in the Income Tax Assessment Act 1936), it only declares the rates and related rate‑calculation mechanisms (see s 4 and s 5).
Who it affects: "tax" under this Act excludes companies, corporate unit trusts and superannuation funds (s 3, definition of "tax"). The Act therefore applies to resident and non‑resident individuals, to trustees who are assessed on trust income, and to resident and non‑resident trust estates and beneficiaries (see s 3 and the various Parts and Schedules).
How it works mechanically:
The Act lists general marginal rates and brackets for the 1982–83 year in Schedule 1 and for 1983–84 and later years in Schedule 7 (s 7(1), s 13(1)). Those schedules set the percentage tax applied to specified parts of taxable income.
It also declares "notional rates" for particular calculation purposes (Schedules 2 and 8) and sets out how to calculate tax where a notional income applies (Schedules 3 and 9; s 7(2)–(4), s 13(2)–(4)).
Separate schedules and rules set trustee liabilities (Schedules 4 and 10), and special rates for "eligible taxable income" under Division 6aa of the Assessment Act (Schedules 5 and 11 and related provisions in ss 8, 10, 14, 16). In several cases trustees are assessed at specified rates or calculated as if one individual were liable (Schedules 4, 6, 10, 12).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
The Act provides specific percentage caps and piecewise rules (for example up to 60% in certain cases, s 7(7) and s 13(7)), and contains numerical thresholds used throughout (for example $1,040, $136, $4,462, $17,894, $35,788) which determine which table or part of a table applies (see Schedules 1, 5, 6 and corresponding schedules for later years).
The Act also prescribes per‑dollar formulas for certain further taxes connected to sub‑sections of s 94 of the Assessment Act (s 7(5)–(6); s 13(5)–(6)). These are technical per‑dollar calculations referenced in the Act.
Official rationale (as stated): to "declare the rates of income tax payable upon incomes other than incomes of companies, corporate unit trusts and superannuation funds" (preamble). The Act therefore implements the statutory step that fixes the percentage rates that the Assessment Act then applies.
Practical implications, costs and incentives (mechanisms in the text):
Who pays: taxpayers defined as non‑prescribed residents and prescribed non‑residents pay according to the declared rates (s 3 definitions; Schedules 1 and 7). Trustees assessed under sections 98 or 99 of the Assessment Act pay under trustee provisions (Schedules 4, 10). Section references: s 3; s 7(4); Schedules 1, 4, 7, 10.
Rate‑structure incentives: the Act creates multiple marginal rates and bracket thresholds (Schedules 1 and 7). Those marginal rates determine the tax on each additional dollar earned because the schedules assign percentage rates to parts of taxable income (Schedule 1 Part I & II; Schedule 7 Part I & II). This is a mechanical effect of the rate tables.
Trust and distribution effects: trustees and beneficiaries have separate rate rules (Schedules 4, 6, 10, 12) and the Act explicitly sets rates or calculation methods for trustee liabilities (s 7(4), s 13(4)). Those rules change the tax consequence of income retained by or distributed through trusts because trustee assessments are calculated under those schedules.
Complexity and compliance cost: the Act relies on many cross‑references to the Assessment Act (s 4) and contains multiple schedules, thresholds, notional rate calculations and special per‑dollar formulae (see s 7(2)–(6); Schedules 2, 3, 5, 6). Taxpayers and trustees must compute notional rates, apply different schedules depending on residency, trust status and Division 6aa eligibility, and sometimes use per‑dollar formulae — each of these is a concrete compliance task.
Administrative discretion: the Commissioner has express discretion to reduce tax amounts where certain aggregation rules apply, by giving reductions that in his opinion "is fair and reasonable" (see s 8(5) and s 8(8) and parallel provisions in ss 10(5), 10(8), 14(5), 14(8), 16(6)). That discretion introduces a subjective administrative step in particular aggregation cases.
Small‑amount relief for some trustees: the Act relieves or limits tax for trustees of certain estates where net income is small and the deceased died not less than 3 years before year end (see s 9(1)–(2), s 11(1)–(2), s 15(1)–(2)). Those clauses set fixed dollar thresholds under which tax is nil or capped.
Trade‑offs and implementation risks highlighted by the text:
The Act centralises rate setting in numerous numeric tables and cross‑references rather than a single formula; that increases the potential for calculation errors and requires careful alignment with the Assessment Act (s 4, s 5).
The Commissioner’s discretionary power to reduce tax in certain trustee aggregation scenarios (s 8(5)/(8)/(9) and equivalents) reduces mechanical certainty in those cases and requires administrative decision‑making.
Notional‑rate calculations and further‑tax per‑dollar formulas (s 7(5)–(6), s 13(5)–(6); Schedules 2, 3, 8, 9) introduce additional technical steps to compute a taxpayer’s liability.
What the Act does not do (by its text): it does not alter the Assessment Act’s rules for income, deductions or taxable income computation (those remain in the Assessment Act). It also expressly excludes companies, corporate unit trusts and superannuation funds from the rates declared here (s 3).
Key sections to consult in the text: s 3 (definitions and exclusions), s 4 (incorporation of the Assessment Act), s 5 (deemed to declare rates), Part II (s 6–11) for 1982–83 rules, Part III (s 12–16) for 1983–84 and later rules, and the Schedules (1–12) where the numerical rates and notional‑rate rules are set out.