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Thursday, 8 December 1927


Senator Sir GEORGE PEARCE (Western Australia) (Vice-President of the Executive Council) [9.39]. - I move -

That the bill be now read a second time.

This bill provides for the rates at which income tax shall be levied for the financial year 1927-28. These represent a reduction of 10 per cent. in the rates of tax formerly in force in the case of taxpayers other than companies. No reduction in the rate payable by companies is being proposed. The former minimum amount of tax of £1 is also being reduced to 10s. The main difference between the proposals for the present year and those of former years is the specification of the rates of tax to be paid by a trustee in respect of income assessable to the trustee in his representative capacity. The necessity to specify the rates of tax payable by a trustee has arisen through a decision of the High Court in the case of Kuhnel v. Deputy Commissioner of Taxation, in relation to the war-time profits tax. In that case a trustee company was trustee for the estate of a shareholder in a company, and the court was asked tostate the amount of income tax payable by the company in respect of the value of the interest of the estate in the profits of the company which were subject to war-time profits tax. The court decided that the tax payable should be calculated by reference to the ratepayable by the company on the assumption that the interest in the profit belonged to it. . This meant that, when income tax was payable in respect of any income of a trust estate, the rate of tax would vary according as the trustee happened to be a company or an individual. If the trustee were a company the rate of tax would be1s. in the £1; if he were an individual the rate would be the rate applicable to the income of an individual, which might be more or less that1s. in the £1. By this bill that anomaly is now being rectified.

Debate (on motion by Senator Needham) adjourned.







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