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Income Tax (First Home Saver Accounts Misuse Tax) Bill 2008

 

 

 

 

 

 

Income Tax (First Home Saver Accounts Misuse Tax) Act 2008

 

No. 46, 2008

 

 

 

 

 

An Act to impose income tax in respect of certain payments from first home saver accounts

   

   

   



Contents

1............ Short title............................................................................................ 1

2............ Commencement.................................................................................. 2

3............ Definitions.......................................................................................... 2

4............ Imposition of tax................................................................................ 3

5............ Amount of tax..................................................................................... 3

6............ Clawback tax amount.......................................................................... 3

7............ Non-recognised Government FHSA contributions............................ 4

 



 

 

Income Tax (First Home Saver Accounts Misuse Tax) Act 2008

No. 46, 2008

 

 

 

An Act to impose income tax in respect of certain payments from first home saver accounts

[ Assented to 25 June 2008 ]

The Parliament of Australia enacts:

1   Short title

                   This Act may be cited as the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008 .

2   Commencement

                   This Act commences on the day after it receives the Royal Assent.

3   Definitions

                   In this Act:

adjusted maximum tax rate means the sum of:

                     (a)  the maximum rate specified in column 2 of the table in Part I of Schedule 7 to the Income Tax Rates Act 1986 ; and

                     (b)  the rate specified in subsection 6(1) of the Medicare Levy Act 1986 .

family law obligation has the meaning given by the First Home Saver Accounts Act 2008 .

FHSA has the meaning given by the First Home Saver Accounts Act 2008 .

FHSA eligibility requirements has the meaning given by the First Home Saver Accounts Act 2008 .

FHSA ineligibility payment has the meaning given by the First Home Saver Accounts Act 2008 .

FHSA payment conditions has the meaning given by the First Home Saver Accounts Act 2008 .

FHSA tax rate means the rate specified in paragraphs 23(3)(aa) and 23(3A)(a) and section 30 of the Income Tax Rates Act 1986 .

Government FHSA contribution has the meaning given by the First Home Saver Accounts Act 2008 .

hold : an individual holds an FHSA in the circumstances mentioned in section 9 of the First Home Saver Accounts Act 2008 .

non-recognised Government FHSA contribution has the meaning given by section 7.

personal FHSA contribution has the meaning given by the First Home Saver Accounts Act 2008 .

4   Imposition of tax

                   The tax known as income tax, to the extent that it is payable in accordance with section 345-100 of the Income Tax Assessment Act 1997 , is imposed in respect of a payment from an FHSA held by an individual.

5   Amount of tax

             (1)  If the payment is an FHSA ineligibility payment (but satisfies the FHSA payment conditions) the amount of the tax is the sum of:

                     (a)  the clawback tax amount for the FHSA (see section 6); and

                     (b)  the sum of each non-recognised Government FHSA contribution (see section 7) of the individual that is payable for a financial year that began before the payment is made.

             (2)  If the payment fails to satisfy the FHSA payment conditions, the amount of the tax is the sum of:

                     (a)  the clawback tax amount for the FHSA (see section 6); and

                     (b)  the sum of each Government FHSA contribution of the individual that is payable for a financial year that began before the payment mentioned in section 4 is made.

6   Clawback tax amount

             (1)  The clawback tax amount for the FHSA is the amount worked out under subsection (2) multiplied by the percentage worked out under subsection (3).

             (2)  Work out the amount using the following formula:

where:

earnings component of the FHSA means the balance of the FHSA just before the time the payment is made, reduced (but not below zero) by:

                     (a)  the amount of personal FHSA contributions made before that time to an FHSA held by the individual; and

                     (b)  the amount (if any) paid by way of Government FHSA contributions before that time to an FHSA held by the individual; and

                     (c)  the amount (if any) of contributions made before that time to an FHSA held by the individual because of a family law obligation.

payment fraction means:

                     (a)  if the payment is of the balance of the FHSA—1; or

                     (b)  otherwise—the amount of the payment divided by the balance of the FHSA just before the payment is made.

             (3)  The percentage is the adjusted maximum tax rate reduced by the FHSA tax rate.

7   Non-recognised Government FHSA contributions

                   A Government FHSA contribution that is payable for a financial year for an individual is a non-recognised Government FHSA contribution of the individual if the individual did not satisfy the FHSA eligibility requirements throughout the financial year.



 

 

[ Minister’s second reading speech made in—

House of Representatives on 28 May 2008

Senate on 16 June 2008 ]

(110/08)