TaxPack 2007 - Australian Taxation Office€¦ · n You are entitled to the private health insurance tax offset – see question T5 on pages 91–2. n You carried on a business. n

Lodge online.

e-tax – your online alternative for preparing and lodging your tax return

Go to www.ato.gov.au

Most refunds are issued within 14 days.

You may also need the separate publication TaxPack 2007 supplement – see page 8.

Lodge your tax return by 31 October 2007.

NAT 0976–6.2007

TaxPack2007To help you complete your tax return 1 July 2006 – 30 June 2007

Instructions for taxpayers

TaxPack 2007 provides advice and information to help you complete your 2007 tax return for individuals correctly.

I do not expect you to know more than what we have put in TaxPack 2007 and its related publications. However, I do ask you to take care in completing your tax return and make sure that the information you provide to us is complete and accurate.

There have been some changes since TaxPack 2006. To see if any apply to you, check the What’s new this year? section on page 9.

If you have access to the internet, you can prepare and lodge your tax return online using e-tax. It’s fast, free and easy, and most refunds are issued within 14 days.

We also have a range of advice and information services that can assist you when completing your tax return. The inside back cover provides details about how you can access our information services and how you can contact us.

Michael D’Ascenzo Commissioner of Taxation

OUR COMMITMENT TO YOUWe are committed to providing you with advice and information you can rely on and we make every effort to ensure that our advice and information is correct.

TaxPack 2007 is a public ruling for individuals who use it reasonably and in good faith to complete their 2007 personal tax return. This means that if we state the law incorrectly and as a result you do not pay enough tax, we will not ask you to pay the extra tax.

If any other information in TaxPack 2007 is incorrect and as a result you do not pay enough tax, we may ask you to pay the extra tax. However, we will not charge you a penalty or interest.

If our advice in TaxPack 2007 is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it. However, we will not charge you a penalty or interest if you acted reasonably and in good faith.

If you make an honest mistake when you try to follow our advice and you owe us money as a result, we will not charge you a penalty. However, we will ask you to pay the money, and we may also charge you interest.

If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.

HOW TO USE TAXPACK 2007n Have on hand all your necessary documentation and records

for the 2006–07 income year (1 July 2006 to 30 June 2007).n Read all the preliminary pages – they provide valuable

information ranging from whether you need to lodge a tax return to how you can get a faster refund.

n Read each question caption carefully and:− if it applies to you, read the question carefully so that

you provide the required details on your tax return− if it does not apply to you, go to the next question.

n The Index at the back of TaxPack 2007 can help you to find information that is relevant to your circumstances.

n Make sure you complete the Medicare levy surcharge item (question M2) – it applies to all taxpayers.

n Use the checklist on page 112 before you lodge your tax return.

TAXPACK 2007 www.ato.gov.au �

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CONTENTSThesectionheadingsandquestionnumbersarecolour-codedtomatchthoseonthetaxreturnforyoureaseofreference.

T5 Privatehealthinsurance 91

T6 30%childcaretaxrebate 93

T7 Babybonus 95

Taxoffsetsfromthesupplementarysection 97

Totaltaxoffsets 97

PRIVATE HEALTH INSURANCE POLICY DETAILS 98

MEDICARE LEVY 99

M� Medicarelevyreductionorexemption 100

M2 Medicarelevysurcharge 104

ADJUSTMENTSA� Under18 108

A2 Part-yeartax-freethreshold 109

SPOUSE DETAILS – MARRIED OR DE FACTO 110

INFORMATIONChecklist–taxreturnpages1–8 112

Lodgingyourtaxreturn 112

Ifyoumadeamistakeonyourtaxreturn 113

Payingyourtaxdebt 114

Yournoticeofassessment 115

Privacyandaccesstoinformation 116

DealingwiththeTaxOffice 118

Yourrighttocomplain 118

Howweworkoutyourtax 119

Workingoutyourtaxrefundortaxdebt 120

Finalworksheet 130

TaxOfficeshopfronts 131

Index 132

Publications/Infolines insidebackcover

Doyouhavetolodgeataxreturn? 2Non-lodgmentadvice2007 4Whatareyourchoicesfordoingyourtaxreturn? 6Ifyouneedmorehelp 7DoyoualsoneedTaxPack 2007 supplement? 8What’snewthisyear? 9Importantmessages 10Completingpage1ofyourtaxreturn 11Exemptincome–incomeyoudonotpaytaxon 13

INCOME� Salaryorwages 15

2 Allowances,earnings,tips,director’sfeesetc 16

3 Lumpsumpayments 18

4 Eligibleterminationpayments 19

5 AustralianGovernmentallowancesandpayments 23

6 AustralianGovernmentpensionsandallowances 24

7 OtherAustralianpensionsorannuities 25

8 Attributedpersonalservicesincome 26

Totaltaxwithheld 27

9 Totalreportablefringebenefitsamounts 28

�0 Grossinterest 29

�� Dividends 30

Incomefromthesupplementarysection 34

Totalincomeorloss 35

DEDUCTIONSClaimingdeductionsforexpensesthatrelatetoyourworkasanemployee 36

D� Work-relatedcarexpenses 38

D2 Work-relatedtravelexpenses 45

D3 Work-relatedclothing,laundryanddry-cleaningexpenses 47

D4 Work-relatedself-educationexpenses 49

D5 Otherwork-relatedexpenses 52

D6 Low-valuepooldeduction 54

D7 Interestanddividenddeductions 56

D8 Giftsordonations 57

D9 Deductibleamountofundeductedpurchaseprice(UPP)ofanAustralianpensionorannuity 61

D�0 Costofmanagingtaxaffairs 63

Deductionsfromthesupplementarysection 64

Totaldeductions 64

Subtotal 64

LOSSESL1 Taxlossesofearlier

incomeyears 65

TAxAbLE INCOME OR LOSS 68

INFORMATIONDependantsandseparatenetincome 69

Familytaxbenefit 71

TAx OFFSETS 76

T� Spouse(withoutdependentchildorstudent),child-housekeeperorhousekeeper 77

EligibilityfortheseniorAustralianstaxoffset 84

T2 SeniorAustralians 86

T3 Pensioner 88

T4 Superannuationannuityandpension 90

TaxPack 2007isapublicrulinginaccordancewithDivision358ofSchedule1totheTaxation Administration Act 1953.However,itisapublicrulingonlyforindividualsactingreasonablyandingoodfaithwhileusingTaxPack 2007tocompletetheir2007personaltaxreturn.

©CommonwealthofAustralia2007

Thisworkiscopyright.ApartfromanyuseaspermittedundertheCopyright Act 1968,nopartmaybereproducedbyanyprocesswithoutpriorwrittenpermissionfromtheCommonwealth.RequestsandenquiriesconcerningreproductionandrightsshouldbeaddressedtotheCommonwealthCopyrightAdministration,Attorney-General’sDepartment,RobertGarranOffices,NationalCircuit,BartonACT2600orpostedathttp://www.ag.gov.au/cca

TaxpayersmaycopypartsofTaxPack 2007andTaxPack 2007 supplementfortheirpersonalrecords.

PublishedbytheAustralianTaxationOffice,Canberra,May2007.PrintedbyPMPPrintPtyLtd.DistributioncoordinatedbyPMPDistributionandeffectedbyPMPDistribution,AustraliaPostandGordon&GotchLimited.

ThankstothestaffoftheTaxOffice,taxprofessionalsandmembersofthecommunitywhocontributedtoTaxPack 2007.

2 www.ato.gov.au TAXPACK 2007

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DO YOU HAVE TO LODGE A TAX RETURN?

n Youreceivedapension,allowanceorpaymentlistedatquestion6onpage24andyourtaxableincomewasmorethanthefollowingrelevantamount:– $21,637–ifyouweresingle,widowedorseparated

atanytimeduringtheyear– $20,710–ifyouhadaspousebutoneofyoulivedin

anursinghomeoryouhadtoliveapartduetoillness– $18,330–ifyoulivedwithyourspouseforthefullyear.

REASON 4You were not eligible for the senior Australians tax offset and you did not receive an Australian Government pension, allowance or payment listed at question 5 or 6 but you received or earned income.Youneedtolodgeataxreturnifyourtaxableincomeexceededthefollowingrelevantamount:n $6,000–ifyouwereanAustralianresidentfortax

purposesforthefullyearn $1,333–ifyouwereunder18yearsofageat30June

2007andyourincomewasnotsalaryorwagesn $1–ifyouwereanon-residentandyouhadincome

taxableinAustralia–excludingincomethathadnon-residentwithholdingtaxwithheldfromit

n yourpart-yeartax-freethresholdamount–ifyoubecameorstoppedbeinganAustralianresidentfortaxpurposes,youwillhaveapart-yeartax-freethresholdwhichdetermineswhetheryouhavetolodgeataxreturn.Page120showsyouhowtoworkoutthisamount.

OTHER REASONSYouneedtolodgeataxreturnifanyofthefollowingappliedtoyou:n Youaretheliableparentunderachildsupport

assessment.n Youhaveareportablefringebenefitsamountonyour

PAYG payment summary – individual non-business.n Youareentitledtotheprivatehealthinsurancetaxoffset

–seequestionT5onpages91–2.n Youcarriedonabusiness.n Youmadealossoryoucanclaimalossyoumadein

apreviousyear.n Youwereentitledtoadistributionfromatrustor

youhadaninterestinapartnershipandthetrustorpartnershipcarriedonabusinessofprimaryproduction.

n YouwereanAustralianresidentfortaxpurposesandyouhadexemptforeignemploymentincomeand$1ormoreofotherincome.(Pagess20–5inTaxPack 2007 supplement explainwhatismeantby‘exemptforeignemploymentincome’.)

n Youareaspecialprofessionalcoveredbytheincomeaveragingprovisions.Theseprovisionsapplytoauthorsofliterary,dramatic,musicalorartisticworks;inventors;performingartists;productionassociatesandactivesportspeople.

Thereareanumberofreasonsyoumayhavetolodgeataxreturnforthe2006–07incomeyear(1July2006to30June2007).Checkeachreasonlistedbelow,inorder,fromReason1toOtherreasons.Ifyou:n findareasonthatappliestoyourcircumstances,you

havetolodgeataxreturn.Youdonothavetoreadanyfurtheronthispage–gotopage5.

n don’tfindareasonthatappliestoyou,gotothenextpagetofindoutifyouneedtocompleteaNon-lodgment advice 2007.

NOTEYoucanusetheDoIneedtolodgeataxreturn?toolonourwebsitetofindoutifyouhavetolodgeataxreturnforthe2006–07incomeyear–gotowww.ato.gov.au/individuals

REASON �You paid tax during 2006–07.YouneedtolodgeataxreturnifyouwereanAustralianresidentfortaxpurposes(seepages11–12)andyou:n hadamountsoftaxwithheldfromincomeyoureceived

orearnedn paidanamountunderthepayasyougo(PAYG)

instalmentsystemduringtheyearorn hadamountswithheldfrominterestbecauseyoudidnot

quoteyourtaxfilenumber(TFN)orAustralianbusinessnumber(ABN)totheinvestmentbody.

REASON 2You were eligible for the senior Australians tax offset. You must meet all four conditions set out on pages 84–5.Youneedtolodgeataxreturnifyourtaxableincome(notincludingyourspouse’s)wasmorethanthefollowingrelevantamount:n $24,867–ifyouweresingle,widowedorseparatedat

anytimeduringtheyearn $23,600–ifyouhadaspousebutoneofyoulivedin

anursinghomeoryouhadtoliveapartduetoillnessn $20,680–ifyoulivedwithyourspouseforthefullyear.

REASON 3You received an Australian Government pension, allowance or payment but you were not eligible for the senior Australians tax offset.Youneedtolodgeataxreturnifanyofthefollowingappliedtoyou:n Youreceivedanallowanceorpaymentlistedat

question5onpage23andyouhadothernon-exemptincome,whichtogethermadeyourtaxableincomemorethan$10,000.

TAXPACK 2007 www.ato.gov.au 3

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?n Youreceivedincomefromdividendsordistributions

exceeding$6,000(or$416ifyouwereunder18yearsofageat30June2007)andyouhadfrankingcreditsattachedoramountswithheldbecauseyoudidnotquoteyourtaxfilenumberorAustralianbusinessnumbertotheinvestmentbody.

n YoumadepersonalcontributionstoacomplyingsuperannuationfundorretirementsavingsaccountandwillbeeligibletoreceiveaSuperCo-contributioninrelationtothosecontributions.

Deceased estateIfyouarelookingaftertheestateofsomeonewhodiedduring2006–07,considerallthereasonsontheirbehalfand,ifataxreturnisnotrequired,completetheNon-lodgment advice 2007 onthenextpageandsendittous.Ifataxreturnisrequired,seepage12formoreinformation.

Franking creditsIfyouhaveafrankingcreditshownonyourdividendstatementoryourdistributionstatementfromamanagedfundfor2006–07youmaybeabletoclaimarefundofthisfrankingcreditwithoutlodgingataxreturn.

SeeRefund of franking credits instructions and application for individuals 2007(NAT4105–6.2007)formoreinformation.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

baby bonusIfyouarenotrequiredtolodgeataxreturnfor2006–07youcanlodgeyourbabybonusclaimonitsown:n onlineusinge-taxwhichhasaseparatebabybonus

application–gotowww.ato.gov.auformoreinformation,or

n byusingthepublication Baby bonus instructions and claim 2007(NAT6580–6.2007)andlodgingyourclaimbymail.

Ifyouarelodgingbothaclaimforbabybonusandanapplicationforarefundoffrankingcredits,youmustsendthemtoustogetherinoneenvelope.Youcanalsolodgethemtogetherusinge-taxbutyouwillberequiredtocompleteafulltaxreturninthee-taxapplication.

ThepublicationBaby bonus instructions and claim 2007isavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

30% child care tax rebateIfyoudonotneedtolodgea2007taxreturnbutwanttotransferyour30%childcaretaxrebateentitlementtoyourspouse,thenyoucan:n lodgethetransferadviceonlineusingthetransferadvice

ine-tax–gotowww.ato.gov.auformoreinformation,orn usethepublication30% child care tax rebate

instructions and transfer advice for individuals 2007 (NAT14719–06.2007)–availableatwww.ato.gov.auortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Youwillbeeligibleforthe30%childcaretaxrebateifintheperiod1July2005to30June2006you:n hadachildinapprovedchildcaren wereentitledtoreceivechildcarebenefit,andn passedthework/training/studytestforthepurposes

oftherebate.

If you do not need to lodge a tax returnIfyoudonotneedtolodgeataxreturn,youshouldcompletethenon-lodgmentadviceonthenextpageandsendittousunlessoneofthefollowingappliestoyou:n Youhavealreadysentusataxreturn,non-lodgment

advice,formorlettertellingusthatyoudonotneedtolodgeataxreturnforallfutureyears.

n Youarelodgingababybonusclaimand/orapplyingforarefundoffrankingcreditsfor2007.

n Youronlyincomewasfromanallowanceorpaymentlistedatquestion5onpage23oryoureceivedapension,allowanceorpaymentlistedatquestion6onpage24andyourtaxableincomewaslessthantherelevantamountinReason2(ifyouareeligiblefortheseniorAustralianstaxoffset)orReason3.(Theagenciesthatpaythesehaveprovidedinformationforustodeterminethatyoudonotneedtolodgeataxreturn.)

Tax Help – serving the communityARE YOU ON A LOW INCOME?FREE HELP WITH YOUR TAX RETURN

Ifyouwanttocompleteyourowntaxreturn,applicationforarefundoffrankingcreditsorbabybonusclaimbutthinkyoumayneedsomeassistance,thenTaxHelpmaybetheanswer.Wetrainandsupportthisnetworkofcommunityvolunteerstohelpyou.

TaxHelpisafreeandconfidentialserviceforpeopleonlowincomes.PeoplewhouseTaxHelpincludeseniors,peoplefromnon-Englishspeakingbackgrounds,peoplewithadisability,Aboriginalpeople,TorresStraitIslanderpeople,andstudents.

Volunteerscanexplainyourtaxobligationsandhelpyouprepareyourtaxreturnaccurately.Theycanhelpyouifyou

haveincomefromAustralianandoverseaspensions,salaryorwages,interest,dividendsandgovernmentallowancesandbenefits.Volunteerscannothelpwithmorecomplextaxaffairssuchasbusinessincomeandincomefromrentalproperties.

ThereareTaxHelpcentresthroughoutAustralia.Ifyouwanttovisitoneofthetrainedvolunteers,youneedtomakeanappointment.Takeallyourrelevantpaperswithyouwhenyouvisit.

FormoreinformationortofindoutwhereyournearestTaxHelpcentreis,phonethePersonalInfolineon132861.


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Non-lodgment advice 2007� July 2006 to 30 June 2007

Print neatly in BLOCK LETTERS with a black or blue ballpoint pen only. Do not use correction fluid or tape.

Your phone number during business hours – if it is convenient

AreacodePhone

number

Your postal address

Suburbortown

Countryifnot

AustraliaState Postcode

Surnameorfamilyname

Givennames

Title–forexample,Mr,Mrs,Ms,MissYour name

Your date of birth

DAY MONTH YEAR

Your tax file number

TheTaxOfficeisauthorisedbytheTaxation Administration Act 1953 torequestyoutoquoteyourtaxfilenumber(TFN).ItisnotanoffencenottoquoteyourTFN.However,yourTFNhelpstheTaxOfficetocorrectlyidentifyyourtaxrecords.

Have you changed your postal address since your last tax return?

Printtheaddressonyourlastnoticeofassessmentortheaddressyoulasttoldusabout.

YES

NOSuburbor

townCountry

ifnotAustralia

State Postcode

Use the pre-addressed envelope provided with TaxPack to send your non-lodgment advice to the Tax Office by 3� October 2007. If you are not using the pre-addressed envelope, see pages ��2–�3 for more information and the address to use.

Date

The tax law imposes heavy penalties for giving false or misleading information.

Signature

IdeclarethattheinformationIhavegiveninthisnon-lodgmentadviceistrueandcorrect.Seetheprivacyinformationonpages116–117.

DAY MONTH YEAR

Reason for not lodging a tax return

Iwillnothavetolodgeataxreturnforfutureyearsbecause:

Iwillnothavetolodgeataxreturnfor2007becausenoneofthereasonslistedonpages2–3inTaxPack 2007apply.


Your alternative to TaxPack 2007

Lodge online using e-taxMost refunds in 14 daysUser-friendlystep-by-stepprocessHelpisavailableonlineoroverthephoneSafeandsecure

Gotowww.ato.gov.au


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WHAT ARE YOUR CHOICES FOR DOING YOUR TAX RETURN?

Signing your tax returnYoumustsignanddatetheTaxpayer’s declaration onpage8ofyourtaxreturntoconfirmthattheinformationonyourtaxreturnistrueandcorrect.Ifaregisteredtaxagentpreparesyourtaxreturn,youmustalsosignadeclarationstatingthat:n youhaveauthorisedtheagenttolodgeyourtaxreturn,

andn theinformationyouprovidedtotheagentforthe

preparationofyourtaxreturnistrueandcorrect.

Someoneelsemaysignyourtaxreturnonyourbehalfiftheyhaveyourauthorityunderapowerofattorney.AcertifiedcopyofthecurrentpowerofattorneymustbeattachedtoyourtaxreturnifyouhavenotpreviouslylodgedacertifiedcopywiththeTaxOffice.

MAKING IT EASIER TO COMPLYAspartofourprogramtomaketax‘easier,cheaperandmorepersonalised’wearecurrently:n providingashorttaxreturnthatcanbelodgedover

thephoneorbymail(Wewouldhavesentittoyouifyouwereeligibletouseit.)

n expandinge-tax,ouronlinelodgmentservice,forexample,youcannowsavetimeandpre-fillyoure-taxreturnwith– paymentdetailsfromCentrelinkandtheDepartment

ofEducation,ScienceandTraining– interestorunittrustdistributiondetailsfromsome

banks,creditunionsandotherfinancialinstitutions– dividenddetailsfromsomeshareregistries– medicalexpensesdetailsfromMedicareAustralia

n providingcalculatorsanddecisiontoolstohelpyoun tailoringourwebsitetoparticularaudiences–for

example,ato.gov.au/youthforunder-25s,andn providingapersonaltaxrecordkeeperthatwillhelp

youkeepyourtaxrecordsfortheyear.

MOREINFORMATIONYouwillfindmoredetailaboutourplansinMaking it easier to comply.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

IN THE FUTUREWhenusinge-taxyouwillbeabletopre-fillyoure-taxreturnwithevenmoreinformation,suchassalaryandwagesdetails.Thiswillsaveyoutime,andreducethechancesoferror.Yourtaxagentwillalsohaveaccesstothisinformation.

LODGE ONLINE USING E-TAx Toprepareandlodgeyourtaxreturnonline,usee-tax–gotowww.ato.gov.au

e-taxisauser-friendlystep-by-stepprocess.Itissafeandsecure,withbuilt-inchecksandcalculatorstohelpyougetitright.Helpisavailableonlineandoverthephone.Mostrefundsareissuedwithin14days.

DO IT YOURSELF USING TAXPACK 2007Justfollowtheinstructionsonthefollowingpagesandmakesureyoulodgeyourtaxreturnby31October2007.Youshouldnotlodgeyourtaxreturnifitisincomplete.Ifyouthinkyouwillstillbemissinginformationon31October,askusifyoucanlodgeatalaterdate.Pages10–11tellyouhowtodothis.

SOMEONE ELSE CAN DO IT FOR YOU

Family member or friendAfamilymemberorfriendcanhelpyoubuttheycannotchargeyouafee.

Evenifafamilymemberorfriendhelpsyoutoprepareyourtaxreturn,youmustsignityourselfandyouarestilllegallyresponsiblefortheaccuracyoftheinformationonyourtaxreturn.SeeSelf-assessment–it’syourresponsibilityonpage10.

Tax Help community volunteersTaxHelpisanetworkofcommunityvolunteerstrainedtohelppeoplepreparetheirtaxreturns,babybonusclaimsandclaimsforrefundsoffrankingcredits.Thisfreeserviceisavailabletopeopleonlowincomes–includingpeoplewhoareseniors,arefromnon-Englishspeakingbackgrounds,haveadisability,areAboriginalorTorresStraitIslanders,orarestudents.Seepage3 formoreinformation.

Registered tax agentsRegisteredtaxagentsaretheonlypeoplewhocanprepareandlodgeyourtaxreturnforafee.Youshouldensurethatyouareusingaregisteredtaxagent.Alistofregisteredtaxagentscanbefoundatwww.tabd.gov.auoryoucancheckwiththeTaxAgents’Boardon1300362829.Ifyoudidnotgotoataxagentlastyear–oryouwillbegoingtoadifferenttaxagentthisyear–makesurethatyouseethembefore31October2007.


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Youcanaskforareviewofyourprivaterulingifyoudisagreewithit.However,ifwehaveissuedanassessmentfortheperiodtowhichtherulingrelates,theprivaterulingcannotbereviewed.Ifwehaveissuedyourassessmentyoucanaskforyourassessmenttobereviewed.Wesendyoudetailsofthereviewprocedureswhenwesendyourrulingtoyou.

Oral rulingsYoucanapplyforanoralrulingfromtheTaxOfficeoverthephoneonasimplenon-businesstaxenquirythatrelatesspecificallytoyourowntaxaffairsorthetaxaffairsofsomeoneforwhomyouarethelegalpersonalrepresentative.AnoralrulingisbindingontheTaxOfficeinmuchthesamewayasaprivateruling.

Tobeeligibleforanoralrulingyoumustmeetcertainconditions.Yourenquirymustbeaboutasimplenon-businessrelatedincometaxmatterandyoumustbeabletoconfirmyouridentity.YourTFNandmostrecentnoticeofassessmentwillusuallybesufficientproofofidentity.

Wewillconfirmyoureligibilityforanoralrulingbyaskingyouaseriesofquestions.Ifyoureceiveanoralrulingwewillprovideyouwithareceiptnumberforyourruling.

TogetfurtherinformationortoapplyforanoralrulingphonethePersonalInfoline(seetheinsidebackcover).

Product rulingsTofindoutifthereisaproductrulingforamanagedinvestmentschemeyouhaveinvestedin,visitourwebsiteatwww.ato.gov.au/atpwhichhasmoreinformationaboutproductrulingsandlistsofcurrentproductrulings.

Aproductrulingprovidescertaintyforinvestorsinthearrangementitrelatestobyconfirmingthatthetaxbenefitssetoutintheproductrulingareavailable,providedthatthearrangementiscarriedoutinaccordancewiththedetailsprovidedbytheapplicantanddescribedintheproductruling.

PUbLICATIONS

TaxPack 2007 referred publicationsBecausewecan’tcovereverythinginTaxPack 2007 and TaxPack 2007 supplement,wewillsometimesreferyoutootherpublicationsthatwillhelpyoutocompleteyourtaxreturn.Somepublicationsareessentialtocompletesomeitems.Thesepublicationsareavailableonourwebsiteortofindouthowtogetprintedcopies,seetheinsidebackcover.

Tax returnsAdditionalcopiesoftaxreturnsareavailablefromourPublicationsDistributionServiceandshopfronts.

TaxPack 2007 and TaxPack 2007 supplementFrom1Julyto31October2007youcangetadditionalcopiesofTaxPack 2007 and TaxPack 2007 supplementfrommostnewsagents.CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.

YOU CAN VISIT OUR WEbSITEYoucanvisitourwebsiteatwww.ato.gov.auforinformationonanythingthatyoureadinTaxPack 2007.

Youcanusethetoolsandcalculatorsonthewebsitetohelpyoucompleteyourtaxreturn.

YOU CAN PHONE US Youcanphoneuson132861ifyouneedassistancewithaquestioninTaxPack 2007orTaxPack 2007 supplement.Ifyoudecidetophoneus,haveyourTaxPack 2007 orTaxPack 2007 supplementhandy.Seetheinsidebackcoverforthecorrectphonenumbertouse.

Wecanofferamorepersonalisedserviceifyouprovideyourtaxfilenumber(TFN)andhaveyourlastnoticeofassessmentwithyouwhenyouphoneus.

IfyourequireaccesstoyourTaxOfficerecordsyouwillbeaskedtoproveyouridentitybyprovidingyourTFNandeitherdetailsfromyourlastnoticeofassessmentorsomepersonaldetails.

Ifyouwouldliketovisitusandspeaktousinperson,phonethePersonalInfolineon132861foranappointment.

Hearing or speech impairmentIfyouaredeaforhaveahearingorspeechimpairment,youcanphoneusthroughtheNationalRelayService:n IfyouareaTTYormodemuser,phone133677

andaskforthenumberyouwant.For1800freecallnumbers,phone1800555677andaskforthenumberyouwant.

n Ifyouareavoice-only(speakandlisten)user,phone1300555727andaskforthenumberyouwant.For1800freecallnumbers,phone1800555727andaskforthenumberyouwant.

YOU CAN ASK FOR A RULING

Private rulingsIfyouhaveacomplexqueryaboutyourtaxaffairs,youcanaskusforaprivaterulingthatwillrelatetoyourparticularcircumstances.Todothis,eithercontactusorcompleteaPrivate ruling application form (non-tax professionals) (NAT13742)whichisavailableonourwebsite.

Lodgeyourtaxreturnbytheduedate,evenifyouarewaitingforthereplytoyourprivateruling.Youmayneedtorequestanamendmenttoyourtaxreturnonceyouhavereceivedtheprivateruling.

Wepublishallprivaterulingsonourwebsite.(Beforewepublishthem,weeditthetexttomakesurewedonotpublishinformationthatidentifiesyou.)Formoreinformation,seeHow to apply for a private ruling(NAT9188)whichisavailableonourwebsite.


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DO YOU ALSO NEED TAXPACK 2007 SUPPLEMENT?

NOTEIfyouhavenotreceivedTaxPack 2007 supplement andneedit,youcangetacopyfrommostnewsagentsfrom1Julyto31October2007.CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.

RENTAL PROPERTY INVESTORSDoyouknow:n thatrentisincomefortaxpurposesn whatdeductionsyoucanclaimforyourrentalpropertyn howtodividetherentalincomeandexpensesbetween

yourselfandotherowners?

Ifyouhavearentalproperty,readquestion20Rentonpagess26–7ofTaxPack 2007 supplement.Tocompleteitem20youmayneedtoreadRental properties 2007(NAT1729–6.2007).Thispublicationexplainshowtotreatrentalincomeandexpenses,includinghowtotreatmorethan230residentialrentalpropertyitems.

DOES THE CAPITAL GAINS TAx QUESTION APPLY TO YOU?Youmaynotbeawarethatquestion17Capitalgainsappliestoyourcircumstances.Thefollowinginformationisprovidedasageneralguidelinetohelpyouworkoutifyouneedtocompleteitem17onthetaxreturn(supplementarysection).

Capital gains or capital lossesYougenerallymakeacapitalgainorcapitallossifacapitalgainstax(CGT)eventhappens.Youcanalsomakeacapitalgainifyouhaveaninvestmentinamanagedfundorothertrustandyouareentitledtoashareofacapitalgainmadebythetrust.

ThemostcommonCGTeventhappensifyoudisposedofanassettosomeoneelse–forexample,yousolditorgaveitaway.CGTassetsincluderealestate,sharesinacompanyandunitsinaunittrust.

HereareexamplesofothercommonCGTevents.n Anassetyouownedwaslostordestroyed.n Anasset(suchassharesyouowned)wascancelled,

surrenderedorredeemed.n Aliquidatororadministratordeclaredthatsharesyou

ownareworthless.n Youreceivedanamountinrespectofashareortrust

interestthatwasnotincomeandwasnotforthedisposaloftheshareortrustinterest(knownasa‘returnofcapital’or‘non-assessablepayment’).

n YouceasedtobeanAustralianresident.

Remember,e-taxcanhelpyouworkoutifyouhaveacapitalgainorcapitalloss.Italsohasacalculatorthatmayhelpyouworkouttheamountofanycapitalgainorcapitallossyouhavemade.Downloade-taxatwww.ato.gov.au

TaxPack 2007 supplement andtheTax return for individuals (supplementary section) 2007containquestionswhicharenotincludedinTaxPack 2007 andtheTax return for individuals 2007.

ThelistbelowshowsyouthequestionsinTaxPack 2007 supplement.ChecktoseeifyouneedtouseTaxPack 2007 supplementtocompleteyourtaxreturn.

Questionsmarked*havearelatedpublicationwhichyoumustreadbeforeyoucancompletetheitemonyourtaxreturn.Thedetailsareexplainedattherelevantquestion.

TAXPACK 2007 SUPPLEMENT

INCOME�2 Partnershipsandtrusts�3 Personalservicesincome(PSI)*�4 Netincomeorlossfrombusiness*�5 Deferrednon-commercialbusinesslosses*�6 Netfarmmanagementdepositsorwithdrawals�7 Capitalgains*�8 Foreignentities�9 Foreignsourceincomeandforeignassetsorproperty

–includingforeignsourcepensionorannuity20 Rent2� Bonusesfromlifeinsurancecompaniesand

friendlysocieties22 Otherincome–notlistedelsewhere

DEDUCTIONSD�� Australianfilmindustryincentives*D�2 Deductibleamountofundeductedpurchaseprice

ofaforeignpensionorannuityD�3 Personalsuperannuationcontributions–generally

fortheself-employedD�4 DeductionforprojectpoolD�5 Otherdeductions

TAx OFFSETST8 SuperannuationcontributionsonbehalfofyourspouseT9 ZoneoroverseasforcesT�0 20%taxoffsetonnetmedicalexpensesoverthe

thresholdamount–thethresholdfor2007is$1,500T�� Parent,spouse’sparentorinvalidrelativeT�2 LandcareandwaterfacilityT�3 Netincomefromworking–supplementarysectionT�4 EntrepreneurstaxoffsetT�5 Othertaxoffsets

ADJUSTMENTSA3 Amountonwhichfamilytrustdistributiontaxhas

beenpaid

CREDIT FOR INTEREST ON TAx PAIDC� Creditforinterestonearlypayments–

amountofinterest


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MEDICARE LEVY SURCHARGE LUMP SUM TAx OFFSET (QUESTION M2)YoumaybeentitledtoclaimataxoffsetifyouhavetopaytheMedicarelevysurchargeasaresultofyouoryourspousereceivingalumpsumpaymentinarrears.ReadquestionM2onpages104–7formoreinformation.

PRIMARY PRODUCTION AND NON-PRIMARY PRODUCTION DEFERRED NON-COMMERCIAL bUSINESS LOSSES (QUESTION �5 TAXPACK 2007 SUPPLEMENT)Thetotalamountofdeferrednon-commercialbusinesslosseshasbeendividedintotwoseparatetotalsforprimaryproductiondeferrednon-commercialbusinesslossesandnon-primaryproductiondeferrednon-commercialbusinesslosses.Readquestion15onpages12–13inTaxPack 2007 supplementformoreinformation.

EMPLOYEE SHARE SCHEMES AND STAPLED SECURITIES (QUESTIONS �7 AND 22 TAXPACK 2007 SUPPLEMENT)From12April2007stapledsecuritiesandrightstoacquirethemcanbeacquiredunderemployeeshareschemes.Readquestion17onpagess16–18andquestion22onpagess29–32inTaxPack 2007 supplementformoreinformation.

NON-COMMERCIAL LOANS AND PRIVATE COMPANIESInDecember2006theGovernmentannouncedamendmentstotheintegrityruleswhichapplytodistributionsbyprivatecompanies.TheCommissionerofTaxationwillhavethediscretiontonottreatamountsasdividendswhereataxpayerhasattemptedtocomplywithDivision7Abutmadeanhonestmistake.Thisdiscretionisexpectedtobebackdatedto1July2002.Otheramendmentswillprovidemoreflexibilityfortaxpayers.Theseamendmentsareexpectedtoapplyfrom1July2006inmostcases.Atthetimeofprinting,theseamendmentshadnotbecomelaw.Theinformationonourwebsitewww.ato.gov.auwillbeupdatedoncethenewlawisenacted.

ELECTRONIC FUNDS TRANSFER OF REFUNDSIfyouwantyourtaxrefund,familytaxbenefitoranybabybonusdepositeddirectlyintoanAustralianbank,creditunionorbuildingsocietyaccountofyourchoice,youmustprovideyouraccountdetailsonpage1ofyourtaxreturn.ReadElectronicfundstransfer(EFT)onpage12formoreinformation.

DO NOT ATTACH YOUR PAYMENT SUMMARIES UNLESS YOU HAVE AN ELIGIbLE TERMINATION PAYMENTYounolongerneedtoattachyourpaymentsummaries(orstatutorydeclarationsinrespectofmissingpaymentsummaries)toyourtaxreturn,otherthanthoseforeligibleterminationpayments.Generally,youmustkeepyourpaymentsummariesandstatutorydeclarationswithyourtaxrecordsforfiveyears.

FULL-YEAR TAx-FREE THRESHOLD WHEN CEASING FULL-TIME EDUCATIONFrom1July2006thepart-yeartax-freethresholdthatappliedwhenyouceasedfull-timeeducationforthefirsttimehasbeenabolished.Ifyouceasedfull-timeeducationforthefirsttimeatanytimeduringtheincomeyearyouwillreceivethefull-yeartax-freethresholdof$6,000withnopro-rating.Apart-yeartax-freethresholdstillappliesifyoubecame,orceasedtobe,anAustralianresident.

SUPERANNUATION CHANGESIfyouareaged60yearsandoverandyouronlysourceofincomeisfromsuperannuationbenefits(bothlumpsumandincomestreams)thathavealreadybeensubjecttotaxinthesuperannuationfundyoumaynothavetolodgeataxreturninthefuture.ReadWillyouneedtolodgeanAustralianincometaxreturninthefuture?onpage12formoreinformation.

FOREIGN INCOME ExEMPTION FOR TEMPORARY RESIDENTSFrom1July2006ifyoumeetthetemporaryresidentrequirementsyouwillnotpaytaxonmostofyourforeignincomeandcandisregardsomecapitalgains.Forfurtherinformation,readExemptincomeonpages13–14orseetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.

GIFTS TO POLITICAL PARTIES AND INDEPENDENTS (QUESTION D8)Therulesondeductibilityforcontributionsandgiftsmadeonorafter22June2006toregisteredpoliticalpartiesandtoindependentmembersof(orcandidatesfor)anAustralianparliamentorlegislativeassemblyhavechanged.ReadquestionD8onpages57–60formoreinformation.

�0 www.ato.gov.au TAXPACK 2007

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n youreceivedatrustdistributionandthetrustwasnotanSTStaxpayerforthatyear

n anypersonenteredintoorcarriedoutaschemewiththedominantpurposeofobtainingforyouabenefitinrelationtoincometax.

KEEP YOUR RECORDSYouneedtokeeprecords:n toprovidewrittenevidenceofyourincomeandexpensesn tohelpyouoryourtaxagentprepareyourtaxreturnn toensurethatyouareabletoclaimallyourentitlements,andn incaseweaskyoutoprovetheinformationyou

providedonyourtaxreturn.

Youmustkeepmostofyourwrittenevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifyouhaveclaimedadeductionfordeclineinvalue,haveacquiredordisposedofanasset,appliedalossoranetcapitalloss,orareindisputewiththeTaxOffice,youmustkeeptherecordslonger,asfollows:declineinvaluedeductions: fiveyearsfromthedateofyourlastclaimfordeclineinvalueassets: fiveyearsafterthecapitalgainstaxeventhappenedforwhichthoserecordswillbeneededtoworkoutacapitalgainorcapitallosslosses: generallyfouryearsfromtheyearofincomewhenthetaxlossisfullydeductedoranetcapitallossisfullyapplieddisputewiththeTaxOffice: fiveyearsfromthedateyoulodgedyourtaxreturn,orwhenthedisputeissettled,whicheverislater.SeeTaxation Determination TD 2007/2 – Income tax: should a taxpayer who has incurred a tax loss or made a net capital loss for an income year retain records relevant to the ascertainment of that loss only for the record retention period prescribed under income tax law?.

Youonlyneedtokeepyourpaymentsummaryandyourfamilyagreement(seequestionM1)fortwoyearsifyouareanAustralianresidentandhavesimpletaxaffairs.Tocheckwhetheryouqualifyforthisshorterrecord-keepingperiod,refertoourwebsite.

LODGE YOUR TAx RETURN bY 3� OCTObER 2007Youhavefrom1Julyto31October2007tolodgeyourtaxreturn,unlessitispreparedbyaregisteredtaxagent.

Don’tdelaysendingyourtaxreturn,evenifyouthinkyouwillowetax.Theearliestduedateforpaymentofany2006–07personalincometaxliabilityis21November2007.Ifyoulodgeyourowntaxreturnby31October2007,yourtaxispayablebythedatespecifiedonyournoticeofassessment.

Ifyoulodgeyourincometaxreturnlate,ornotatall,anytaxwillbepayableon21November2007andageneralinterestchargewillbecalculatedfromthatdateuntilfullpaymentisreceived.Inadditionapenaltyforfailuretolodgeontimemaybeapplied(seetheinformationonthenextpage).

TaxPack 2007willhelpyoucompleteyourTax return for individuals 2007fortheincomeyear1July2006to30June2007.TherearetwocopiesofthetaxreturnandanenvelopeforlodgmentineachTaxPack 2007package.Ifyouneedmorecopiesofthetaxreturn,seepage7.

Tocheckifyouhavetolodgeataxreturnthisyear,readDoyouhavetolodgeataxreturn?onpage2.

SELF-ASSESSMENT – IT’S YOUR RESPONSIbILITYUnderoursystemofself-assessmentweprepareTaxPack 2007,TaxPack 2007 supplementandothertax-timepublicationsannuallytoprovideyouwiththeinformationandguidanceyouneedtocompleteyourtaxreturn.Itisyourresponsibilitytolodgeataxreturnthatissigned,completeandcorrect.Wethenusetheinformationonyourtaxreturntoissueyournoticeofassessment.

Whenyoureceiveyournoticeofassessment,youmayfindthatwehavemadesomeadjustments–forexample,youmayhavemadeanerroraddingupyourfigures.However,wedonotcheckeverythingonyourtaxreturnbeforeissuingyournoticeofassessment.

Wemaynotinitiallyadjustanyclaimsyoumakeonyourtaxreturn.Wedonottakeresponsibilityforcheckingthatdetailsonyourtaxreturnarecorrect–thatisyourresponsibility.

Atalaterdatewemaychecksomeofthedetailsonyourtaxreturnmorethoroughly.Underthelaw,wearegenerallyallowedtwoyears(dependingonyourcircumstances–seeAmendmentperiodbelow)toreviewyourtaxreturnandifnecessaryincreaseordecreasetheamountoftaxpayable.

Remember,evenifsomeonehelpsyoutocompleteyourtaxreturn,youmustsigntheTaxpayer’s declarationandyouareresponsiblefortheinformationprovidedonyourtaxreturn.Anotherpersonmaysignyourtaxreturnonyourbehalfiftheyhaveauthoritytodosounderapowerofattorney.Acertifiedcopyofthecurrentpowerofattorneymustbeattachedtoyourtaxreturnifyouhavenotpreviouslylodgedtheauthoritywithus.

If,afterlodgingyourtaxreturn,youbelieveyouhavemadeamistake,seepage113tofindoutwhattodo.

AMENDMENT PERIOD Ifyouareamongthemajorityoftaxpayers,yourincometaxaffairsforaparticularincomeyearwillbeconsideredfinalisedtwoyearsaftertheCommissionerissuesyournoticeofassessment(formoreinformation,gotowww.ato.gov.au/notices).However,sometaxpayerswillhaveafour-yearamendmentperiod.

Generally,youwillhaveafour-yearamendmentperiodif:n youcarriedonabusinessandyouarenotasimplified

taxsystem(STS)taxpayerforthatyearn youwereapartnerinapartnershipthatwascarryingon

abusinessandthepartnershipwasnotanSTStaxpayerforthatyear

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Ifyoucannotlodgeby31October2007duetocircumstancesbeyondyourcontrol,contactusassoonaspossible–andcertainlybefore31October2007–tofindoutifyoucanlodgeatalaterdate.PhonethePersonalInfoline(seetheinsidebackcover)orsendawrittenrequesttotheaddressthatappearedonyournoticeofassessmentfortheyearending30June2006,ifyouhaveone,ortoyournearesttaxoffice(seepage131).Explainwhyyouneedtolodgelateandsuggestanotherdate.Wewillconsideryourrequestandcontactyou.

Wewillnotnormallyacceptthefollowingexplanationsasreasonsforallowingalatelodgment:n adelayinreceivingyourpaymentsummaryn losingyourpaymentsummary,orn beingabsentfromAustralia.

FAILURE TO LODGE ON TIME PENALTYWemayimposeafailuretolodgeontimepenaltyifyoulodgeyourtaxreturnlate.

Ifyourtaxreturnisincomplete–forexample,ifitisnotsignedordoesnotincludearequiredattachment–wemaysenditbacktoyouaskingyoutocompleteitandreturnittous.Weconsiderthatyourtaxreturnhasnotbeenlodgeduntilitisreturnedtouscomplete.

Generally,weapplyapenaltyof$110forevery28days(orpartthereof)yourtaxreturnisoverdue,toamaximumof$550.Wemayapplythepenaltyevenwherethereisnotaxpayable.However,ourpolicyisnottoapplyapenaltywhere:n youlodgeyourtaxreturnvoluntarily,andn notaxispayable.

Wearelikelytoapplythepenaltyif:n youhavemorethanonetaxreturnoutstanding

n youhaveapoorlodgmenthistoryorn youhavenotcompliedwitharequesttolodgeyour

taxreturn.

Thepenaltyisinadditiontoanygeneralinterestchargethatmayapplyifyouhaveanytaxamountoutstandingaftertheduedate.

FAMILY TAx bENEFITIfyouareafamilytaxbenefit(FTB)claimant:n youmustlodgeyour2007FTBtaxclaimby30June

2009andn youmustlodgeyour2007taxreturnandn yourspouse(ifyouhaveone)mustalsolodgetheir

2007taxreturn,iftheyarerequiredtodoso.

Ifyourspouseoryouarenotrequiredtolodgeataxreturnfor2007,youmustinformtheFamilyAssistanceOffice(FAO)on136150by30June2008.

ForFTBpurposes,youhaveuntil30June2009tolodgeyour2007FTBclaim.Ifyouhavenotalreadydoneso,youhaveuntil30June2008tolodgeany2006FTBtaxclaimorinformtheFAOyouarenotrequiredtolodge.

Ifyouand/oryourspouse(ifyouhadone)receivedFTB,youneedtolodgeyour2007taxreturnsby30June2008–ifyoudonot,thefullFTBamountyoureceivedinthe2006–07incomeyearmaybetreatedasadebt.Ifyoulodgethesetaxreturnsafter30June2009,youwillnotbeentitledtoanytop-uporsupplementsthatmayotherwisehavebeenduetoyou.Rememberthatwemayimposeapenaltyifyoulodgeyourtaxreturnaftertheduedatefortaxreturns–seeLodgeyourtaxreturnby31October2007onthepreviouspage.

Formoreinformation,seepages71–5.

IfyoudonothaveaTFNandyouarenotapermanentmigrantortemporaryvisitortoAustraliawithavisathatallowsworkrights,youwillneedtocompletetheformTax file number application or enquiry for an individual(NAT1432–12.2005).Thisformisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Youwillneedtoprovideoriginal,unaltereddocumentsthatproveyouridentitywithyourapplication.Youwillfindalistofacceptableproofofidentitydocumentsontheapplication.

From1July2007,ithasbecomemoreimportanttoquoteyourTFNfortaxationandsuperannuationpurposes.Togetthefullbenefitofthenewsuperannuationrules,makesureallyoursuperannuationfundshaveyourTFN.

ARE YOU AN AUSTRALIAN RESIDENT?ThetaxratesthatapplytoyourtaxableincomedependonwhetherornotyouareanAustralianresident.Ahigherrateoftaxisappliedtoanon-resident’staxableincomeandnon-residentsarenotentitledtoatax-freethreshold.Seepages120–2formoreinformation.

Werequiretheinformationyouprovideonpage1ofyourtaxreturnbeforewecanstartprocessingit.Itisimportantthatyoucompletethispageaccuratelytoavoiddelays.Manyoftheitemsonpage1ofyourtaxreturnrelatetoyourpersonaldetailsandneednoexplanation.Forthetax-relateditems,wehaveprovidedsomeadditionalinformationtohelpyoucompletethem.Ifyouneedfurtherhelp,phonethePersonalInfoline(seetheinsidebackcover).

YOUR TAx FILE NUMbERIfyoualreadyhaveataxfilenumber(TFN),itwillbeshownonyourlastnoticeofassessmentorthepaymentsummaryyoureceivedfromyouremployerorotherpayer.IfyoucannotfindyourTFN,phonethePersonalInfoline.Youwillneedtoprovidepersonalinformationtoconfirmyouridentity.

IfyoudonothaveaTFNandyouareapermanentmigrantortemporaryvisitortoAustraliaandhaveavisathatallowsworkrights,avisathatallowspermanentmigration,avalidoverseasstudentvisaoravalidvisatostayinAustraliaindefinitely,youmayapplyforaTFNonlinebyvisitingourwebsiteatwww.ato.gov.auandselecting‘Forindividuals’–‘Applyforataxfilenumber’–‘Onlineindividualtaxfilenumber(TFN)registration(NAT4157)’.

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ThestandardstheTaxOfficeusestodetermineyourresidencystatusarenotthesameasthoseusedbytheDepartmentofImmigrationandCitizenshiporCentrelink.Generally,weconsideryoutobeanAustralianresidentfortaxpurposesif:n youhavealwayslivedinAustraliaoryouhavecometo

Australiaandliveherepermanentlyn youhavebeeninAustraliacontinuouslyforsixmonths

ormoreandformostofthattimeyouworkedintheonejobandlivedatthesameplace,or

n youhavebeeninAustraliaformorethanhalfoftheincomeyear2006–07–unlessyourusualhomeisoverseasandyoudonotintendtoliveinAustralia.

Ifyougooverseastemporarilyandyoudonotsetupapermanenthomeinanothercountry,wemaycontinuetotreatyouasanAustralianresidentfortaxpurposes.OverseasstudentswhocometoAustraliatostudyandareenrolledinacoursethatismorethansixmonthslongaregenerallytreatedasAustralianresidentsfortaxpurposes.IfyouneedhelpindecidingwhetherornotyouareanAustralianresidentfortaxpurposes,youcangototheAreyouaresident?toolonourwebsiteorphonethePersonalInfoline.

HASYOURRESIDENCY STATUSCHANGED?Ifyourresidencystatusfortaxpurposeschangedduring2006–07,youwillneedtoanswerquestionA2onpage109.Weneedthisinformationtoworkoutyourtax-freethreshold.

WILL YOU NEED TO LODGE AN AUSTRALIAN TAx RETURN IN THE FUTURE?Thismaybeyourlasttaxreturnif:n yourannualtaxableincomeinthefuturewillbebelow

thetax-freethreshold($6,000for2007–08)n youronlysourceofincomeinthefuturewillbean

AustralianGovernmentpensionn youwillbecomeeligiblefortheseniorAustralianstax

offsetintheincomeyear2007–08,andyourtaxableincomeisbelowthethresholdforlodgingataxreturnthisyear(forthresholdlevelsandeligibilityfor2006–07,seepages84–5)

n youaremovingoverseaspermanently,orn youareaged60yearsandoverandyouronlysourceof

incomeisfromsuperannuationbenefits(bothlumpsumandincomestreams)thathavealreadybeensubjecttotaxinthefund.Thiscoversthegreatmajorityofsuperannuationmembers.Youmayberequiredtolodgeataxreturninthefuturewhereyoursuperannuationbenefitcontainsanamount(otherthanthetax-freecomponent)thathasnotbeensubjecttotaxinthefund(anuntaxedelement).Thisamountissubjecttotaxbutatconcessionalrates.ThisgenerallyappliestomembersofsuperannuationfundsestablishedbytheAustralianGovernmentorastategovernment.

DECEASED ESTATE – ARE YOU LODGING A TAx RETURN FOR SOMEONE WHO DIED DURING THE YEAR?Page3willtellyouifyouneedtocompleteataxreturn.Ifyouneedtocompleteataxreturn,prepareitfortheincomeyearuptothedateofdeath.

PrintDECEASEDESTATEonthetopofpage1ofthetaxreturnandatthequestionWillyouneedtolodgeanAustraliantaxreturninthefuture?printXintheNObox.Theexecutororadministratoroftheestatemustsignthetaxreturnonbehalfofthedeceasedpersonandsendittous.

Certaintypesofincomereceivedafterthedateofdeathmayneedtobeshownonatrusttaxreturn.Ifyouhaveanyquestions,phonethePersonalInfoline.

ELECTRONIC FUNDS TRANSFERDirect refundUsingelectronicfundstransfer(EFT),wecandeposityourtaxrefund,familytaxbenefitand/oranybabybonusdirectlyintoanAustralianbank,creditunionorbuildingsocietyaccountofyourchoice.AnEFTdepositwillgiveyouquickeraccesstoyourmoney.Directdepositofyourrefundisnotavailableonthefullrangeofaccounts.Ifyouareindoubt,checkwithyourfinancialinstitution.

IfyouwouldliketouseEFT,printXintheYESboxatthequestionDoyouwanttouseelectronicfundstransfer(EFT)thisyearforyourtaxrefundorfamilytaxbenefitpaymentwhereapplicable?onpage1ofyourtaxreturn.

Completethefollowingstepsonpage1ofyourtaxreturn.

IMPORTANTMakesureyouraccountdetailsarecorrect–ifyougiveanotherperson’saccountdetails,yourrefundwillbesenttothataccount.

Ifyouusedataxagentlastyearbutarepreparingyourowntaxreturnthisyear,remembertoprovidetheaccountdetailsofyourchosenaccount.

Completethefollowingsteps.

STEP1 WritetheBSB(bankstatebranch)number.Donotincludespaces,dashesorhyphens.TheBSBnumberisthesix-digitnumberthatidentifiesafinancialinstitution.Itcanbefoundonanaccountstatementorachequeform.IfyoudonotknowtheBSBnumberortheoneyouhavehasfewerthansixdigitsorisforacreditunionaccount,checkwiththefinancialinstitution.

STEP2 Writetheaccountnumberasshownontheaccountrecords.Donotincludespaces.Anaccountstatement,chequebookorotherdocumentfromthefinancialinstitutionwillshowthisinformation.Youcannotuseanaccountnumberthathasmorethanninecharacters(numbersorletters).

STEP3 Printtheaccountname(alsocalledtheaccounttitle)asshownontheaccountrecords.Includeaspacebetweeneachwordandbetweenanyinitialsintheaccountname.Donotprinttheaccounttype–savings,cheque,mortgageoffsetetc.

MOREINFORMATIONIfyouneedmoreinformationonusingEFTforyourrefund,phonetheEFTInfoline(seetheinsidebackcover).

Direct debitIfyouhaveataxdebt,yournoticeofassessmentwillshowaduedateforpayment.IfyouwanttopayusingEFTdirectdebitfromyouraccount,phonetheEFTInfoline.

IfyouhaveprovideduswithaDirect debit requestbutyournoticeofassessmentdoesnotstatethatthepaymentwillbedebitedfromyouraccount,phonetheEFTInfoline.

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Education paymentsn Supplementaryallowancesforstudentspaidunderthe

AssistanceforIsolatedChildrenSchemen Allowancesforstudentsunder16yearsofageincluding

thosepaidunderABSTUDY,austudypayment,youthallowance,AssistanceforIsolatedChildrenScheme,CommonwealthsecondaryeducationassistanceandtheVeterans’ChildrenEducationScheme

n Australian–AmericanEducationalFoundationgrantn Commonwealthscholarshipsorbursariesprovidedto

foreignstudentsn Commonwealthsecondaryassistanceotherthan

thatalreadyreferredton CommonwealthTradeLearningScholarshipn Pensionereducationsupplementandfaresallowance

paidbyCentrelinkn Somescholarshipsandbursariesreceivedbyfull-time

studentsn Language,literacyandnumeracysupplementn PaymentsundertheMilitaryRehabilitationand

CompensationActEducationandTrainingScheme2004foreligibleyoungpersonswhoseeligibilitywasdeterminedunder:– paragraph258(1)(a)oftheMilitary Rehabilitation

and Compensation Act 2004andtheeligibleyoungpersonwasunder16yearsofage,or

– paragraph258(1)(b)oftheMilitary Rehabilitation and Compensation Act 2004

Other paymentsn AustralianGovernmentdisasterrecoverypaymentsn CarerallowancepaidundertheSocial Security Act 1991n Childcarebenefitn The2006one-offpaymenttoolderAustralians

undertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986

n The2006one-offpaymenttocarers(carerpaymentrelated,wifepensionrelated,partnerservicepensionrelated,carerservicepensionrelatedandcarerallowancerelated)undertheSocial Security Act 1991

n DFISAbonusn Disasterreliefpaymentn Employmententrypaymentn Familytaxbenefitn Farmhouseholdsupportpaymentsthathavebeen

convertedtoagrantn F-111deseal/resealex-gratialumpsumpaymentsn SuperCo-contributionsn LumpsumpensionbonuspaidundertheSocial Security

Act 1991ortheVeterans’ Entitlements Act 1986

Youmayhavereceivedincomethatisexemptfromtaxandyoudonotneedtoincludeitonyourtaxreturnasincome.However,somequestionsinTaxPack 2007 andTaxPack 2007 supplement askyoutoshowyouroryourspouse’sexemptincome.Themostcommontypesofexemptincomeyoumayhavereceivedarelistedhere.

ExEMPT AUSTRALIAN GOVERNMENT PENSIONS, ALLOWANCES AND PAYMENTS

Pensionsn Carerpaymentwhere:

– boththecarerandeitherthecarereceiverorallofthecarereceiversareunderage-pensionage,or

– thecarerisunderage-pensionageandanyofthecarereceivershasdied

n DefenceForceincomesupportallowance(DFISA)wherethepension,paymentorallowancetowhichitrelatesisexempt

n DisabilitysupportpensionpaidbyCentrelinktoapersonwhoisunderage-pensionage

n Doubleorphanpensionn Invalidityservicepensionwheretheveteranis

underage-pensionagen Partnerservicepensionwhereeither:

– thepartner(excludingthenon-illnessseparatedspouseofaveteran)andtheveteranareunderage-pensionageandtheveteranreceivesaninvalidityservicepension,or

– thepartnerisunderage-pensionageandtheveteranhasdiedandwasreceivinganinvalidityservicepensionatthetimeofdeath

n Veterans’Affairsdisabilitypensionandallowances,warwidowsandwarwidowerspension

n Wifepensionwhereboththerecipientandpartnerareunderage-pensionageortherecipientisunderage-pensionageandthepartnerhasdied

NOTELumpsumbereavementpaymentsreceivedaspartofanyoftheabovepaymentsareexemptonlyuptothetax-freeamount.PhoneourPersonalInfoline(seetheinsidebackcover)tofindouthowmuchofyourpaymentisexempt.Superannuation Act 1976andDefence Forces Retirement Benefits Act 1948pensionsandpaymentsaretaxable.Showthematitem7onyourtaxreturn.


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En Maternityimmunisationallowancen Maternitypaymentn MobilityallowancepaidundertheSocial Security

Act 1991n Openemploymentincentivebonusunderthe

Handicapped Persons Assistance Act 1974n PaymentsfromtheAustralianGovernmentunder

theincentivespaymentsschemerelatingtocertainprivatehealthinsurancepolicies

n Theone-offpaymentstofamiliesandcarersundertheFamilyAssistance(One-offPaymenttoFamiliesandCarers)Scheme2004

n PaymentstoolderAustraliansundertheschemedeterminedunderSchedule2totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006

n PaymentstocarersundertheschemedeterminedunderSchedule4totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006

n PharmaceuticalallowancespaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986

n Remoteareaallowancen Rentassistancen Seniorsconcessionallowancepaidunderthe

Social Security Act 1991ortheVeterans’ Entitlements Act 1986

n Sugarindustryexitgrantwhereyoucompliedwithaconditionofthegrantnottoownoroperateanyagriculturalbusinesswithinfiveyearsafterreceivingthegrant

n TelephoneallowancepaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986

n UtilitiesallowancepaidundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986

n LossofearningsallowancepaidundertheVeterans’ Entitlements Act 1986

EXEMPT DEFENCE FORCE AND UNITED NATIONS PAYMENTSn CertainpayandallowancesforDefenceForcepersonnel

–youremployerwilladviseyouifanamountisexemptn Compensationpaymentsforimpairmentorincapacity

resultingfromservicewithaUnitedNationsarmedforcen CompensationpaymentsmadeundertheMilitary

Rehabilitation and Compensation Act 2004,exceptthosethatareincome-relatedpayments

n Payandallowancesforpart-timeserviceintheAustralianNaval,ArmyorAirForceReserve

n SomeallowancespaidtoDefenceForcepersonnelwhoservedinprescribedoverseasareas–youremployerwilladviseyouifanallowanceisexempt

NON-ASSESSABLE NON-EXEMPT INCOME FOR TEMPORARY RESIDENTSIfyouareatemporaryresident:n yourforeignincomeisnon-assessablenon-exempt

income,exceptincomeyouearnfromyouremploymentoverseasforshortperiodswhileyouareatemporaryresident

n capitalgainsandcapitallossesyoumadefromthedisposalofassetsfrom1July2006until11December2006thatdonothavethenecessaryconnectionwithAustraliaaredisregarded,exceptcertaingainsonsharesandrightsacquiredunderemployeeshareschemes

n capitalgainsandcapitallossesyoumadefromthedisposalofassetsotherthan‘taxableAustralianproperty’onorafter12December2006aredisregarded,exceptcertaingainsonsharesandrightsacquiredunderemployeeshareschemes.

Anyincomethatisnon-assessablenon-exemptbecauseyouareatemporaryresidentshouldnotbeshownonyourincometaxreturn.

Forfurtherinformation,seetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.

WHO IS A TEMPORARY RESIDENT?Youareatemporaryresidentif:n youholdatemporaryvisagrantedundertheMigration

Act 1958n youarenotanAustralianresidentwithinthemeaning

oftheSocial Security Act 1991,andn yourspouse(ifapplicable)isnotanAustralianresident

withinthemeaningoftheSocial Security Act 1991.

IfyouareanAustralianresidentfortaxpurposesbutnotatemporaryresidentonorafter6April2006,youwillnotbeentitledtothetemporaryresidentexemptionsfromthattime,evenifyoulaterholdatemporaryvisa.

Forfurtherinformation,seetheelectronicpublicationForeign income exemption for temporary residents.Itisavailableonourwebsite.

OTHER EXEMPT PAYMENTSn Amountsonwhichfamilytrustdistributiontaxhas

beenpaid(seequestionA3onpages61in TaxPack 2007 supplement)

n JapaneseinternmentcompensationpaymentsmadeundertheCompensation (Japanese Internment) Act 2001ortheVeterans’ Entitlements Act 1986

n CertainpaymentsrelatingtopersecutionduringtheSecondWorldWar

n CompensationpaymentsreceivedundertheGermanForcedLabourCompensationProgramme(GFLCP)

n Certainannuitiesandlumpsumswhicharepaidtoaninjuredpersonunderastructuredsettlement

n Mostchildsupportorspousemaintenancepaymentsn MortgageandRentReliefSchemepayments

NOTEForinformationonthetypeofpaymentyoureceived,contactthepersonoragencythatpaidyou.

Ifyouareunsureifapaymentisexemptincome,phonethePersonalInfoline(seetheinsidebackcover).


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IncomeQUESTION �SALARY OR WAGES

YOU NEED TO KNOWLate, lost or wrong payment summaries, letters or signed statements from your payerIfyoudonothaveallofyourdocuments,oranydocumentiswrong,contactyourpayer.Askyourpayertogiveyouasignedcopyofyourpaymentsummary,oraletterorsignedstatementshowingthecorrectdetails.

Ifyouareunabletogetthesedocumentsfromyourpayer,youwillneedtocompleteaStatutory declaration(NAT4135),availablefromtheTaxOffice,andkeepitwithyourtaxrecords.Youwillneedaseparatestatutorydeclarationforeachpayerforwhomyouhavenodocuments.

Thisstatutorydeclarationidentifiesthecategoriesofinformationyouneedtoshowonyourtaxreturn,suchastheperiodorperiodscoveredbyyourmissingdocumentsduringwhichpaymentsweremade,thenamesofyourpayers,theamountsoftaxwithheldandtheamountofgrosspaymentsyouearned.

Tofindouthowtogetthisstatutorydeclaration,seetheinsidebackcover.

NOTEYounolongerneedtoattachpaymentsummaries(orstatutorydeclarationsformissingpaymentsummaries)toyourtaxreturn,otherthanthoseforeligibleterminationpayments.Generally,youmustkeepyourpaymentsummariesandstatutorydeclarationsforfiveyears(seeKeepyourrecordsonpage10).

COMPLETING THIS ITEM

STEP1 PrinttheoccupationfromwhichyouearnedmostofyoursalaryorwagesincludedatthisitemintheYourmainsalaryandwageoccupationboxatitem1onyourtaxreturn.

STEP2 Printthepayer’sABNorWPNshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–inaPayer’sAustralianbusinessnumberboxatitem1onyourtaxreturn.

STEP3 Writetheamountoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–attheleftofC toG item1onyourtaxreturn.Donotshowcents.

STEP4 Writetheamountofgrosspaymentsshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer–orstatutorydeclarationyouhavecompleted–atC toG item1onyourtaxreturn.Donotshowcents.Ifthegrosspaymentisexemptfrom

Did you receive payments of salary, wages, commissions, bonuses etc, including income earned from part-time and casual jobs, from which tax was withheld?

Includeamountsforlostsalaryorwagespaidunderanaccidentorinsurancepolicyorworker’scompensationschemeiftaxwaswithheldfromthepayment.

NO Gotoquestion2.

YES Readbelow.

STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n amountsshownonanypaymentsummaryotherthan

thePAYG payment summary – individual non-businessn AustralianGovernmentpensions,allowances

andpaymentsn amountspaidfromaCommunityDevelopment

EmploymentProject(CDEP)n amountsinthe‘Allowances’and‘Lumpsum

payments’boxesonyourpaymentsummaryn amountsinthe‘Otherincome’boxonyourpayment

summary–ifthisisexemptincomeyouwillnotneedtoshowtheamountonyourtaxreturn;ifthisisforeignemploymentincomerefertotheIndex

n foreignemploymentincome(includingincomeearnedfromworkingoverseas)

n reportablefringebenefitsamountsn incomefromanAustralianannuityorsuperannuation

pensionn incomepaidtoyouasapartnerinapartnership.

Otherquestionsdealwiththesematters.RefertotherelevanttopicsintheIndex.

NOTEn Employersarepayers.n Employeesarepayees.

WHAT YOU NEEDTocompletethisitemyouneedyourPAYG payment summary – individual non-businesswhichshows:n yourgrossincome(inthe‘Grosspayments’box)n totaltaxwithheld,andn yourpayer’sAustralianbusinessnumber(ABN)or

withholdingpayernumber(WPN).

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taxorisforeignemploymentincome(includingincomeearnedfromworkingoverseas)whichyoushowatitem19onyourtaxreturn(supplementarysection),show0asthegrosspayment.

Did you have more than five payers?Thetaxreturnonlyhasspacesforinformationfromfivepaymentsummaries,signedcopies,lettersorstatementsfromyourpayers,orstatutorydeclarations.Ifyouhavemorethanfive,completesteps2to4atthisitemforyourfirstfourdocumentsonly.Foryourremainingdocuments,addupthetaxwithheldshownonthesedocumentsandwritethetotalattheleftofG item1onyourtaxreturn.Donotshowcents.LeavethePayer’sAustralianbusinessnumberboxattheleftofG blank.

AlsoadduptheamountsofgrosspaymentsshownonthesedocumentsandwritethetotalatG item1onyourtaxreturn.Donotshowcents.

CHECK THAT YOU HAVE . . . printedonyourtaxreturnyouroccupation printedonyourtaxreturntheAustralianbusinessnumbersorwithholdingpayernumbersofyourpayers

writtenonyourtaxreturntheamountsoftaxwithheld writtenonyourtaxreturntheamountsofgrosspayments

keptallyourpaymentsummaries,signedcopies,lettersorstatementsfromyourpayers,orthestatutorydeclarationsyouhavecompleted.Donotattachthemtoyourtaxreturn.

KEEPYOURRECORDSYouneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn,oriftheCommissionerhasdeterminedthatyouaresubjecttoashorterperiodofreview,forthatperiod.

QUESTION 2ALLOWANCES, EARNINGS, TIPS, DIRECTOR’S FEES ETC

STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n salaryorwagesshownatitem1n amountsshownonanypaymentsummaryotherthan

thePAYG payment summary – individual non-businessn AustralianGovernmentpensions,allowancesand

paymentsn lumpsumpaymentsinarrearsshownat‘E’inthe

‘Lumpsumpayments’boxonyourpaymentsummaryn reportablefringebenefitsamountsn amountsinthe‘Otherincome’boxonyourpayment

summary–ifthisisexemptincomeyouwillnotneedtoshowthatamountonyourtaxreturn;ifthisisforeignemploymentincome,refertotheIndex

n incomefromsicknessandaccidentinsurancepoliciesnotshownonapaymentsummary

n foreignemploymentincome(includingincomeearnedfromworkingoverseas)

n incomepaidtoyouasapartnerinapartnershipn incomeyouearnedbecauseyouwereself-employed,

includingcommissionincomen incomeyouearnedasanon-employeetaxidriver(for

example,adriveroperatingunderastandardbailmentagreementwithanowner/operator)–fortaxreturnpurposes,thisisincomeearnedasasoletrader.


Did you receive any income from working (whether or not it is shown on a PAYG payment summary – individual non-business)?Thisincomemightinclude:n allowancesn paymentsofsalary,wages,commissions,bonusesetc,

includingincomeearnedfrompart-timeandcasualjobs,fromwhichtaxwasnotwithheld

n tips,gratuitiesandpaymentsforyourservicesn consultationfeesandhonoraria–paymentsforvoluntary

servicesn juryattendancefees–exceptwhereyouhavetopaythe

feestoyouremployerbecauseyoureceivedyournormalemploymentincomewhileyouwereonjuryduty.

Showatthisitemincomefromsicknessandaccidentinsurancepoliciesshownonapaymentsummarywherenotaxhasbeenwithheld.

NO Gotoquestion3.

YES Readon.

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NOTEn Employersarepayers.n Employeesarepayees.

WHAT YOU NEEDn YourPAYG payment summary – individual non-businessn Otherdetailsofyourincome

Ifyoudonothaveallofyourdocuments,contactthepersonwhopaidyou.

YOU NEED TO KNOWAllowancesandearningsfromyourpayermayinclude:n car,travelortransportallowancesn awardtransportpayments–theseareallowances

coveringeithertransportorcarexpenseswhicharepaidunderanindustriallaworawardthatwasinforceon29October1986

n allowancesfortools,clothingorlaundryn dirt,height,site,risk,mealorentertainmentallowancesn allowancesforqualifications–forexample,afirstaid

certificaten anyreimbursementofcarexpenses–calculatedby

referencetothedistancetravelledbythecar–whichisanexemptcarexpensepaymentbenefitforfringebenefitstaxpurposes.

Juryfeescanincludeattendancefeesandtravelandmealallowances.Onlytheattendancefeesshownonyourpaymentsummaryareassessablefortax.

Reasonable travel allowances and overtime meal allowances not shown on a payment summaryPayersdonothavetoshowbonafidetravelallowancespaidfortravelawayfromyourhomeinthecourseofyourdutiesasanemployeeorbonafideovertimemealallowancespaidunderanindustriallaw,awardoragreementonpaymentsummariesunlesstheallowancesexceedtheCommissioner’sreasonableallowanceamounts.Thereasonableovertimemealallowanceforthe2006–07yearis$21.90.Ifyouhavereceivedsuchanallowanceanditisnotshownonyourpaymentsummary,youdonothavetoincludeitasincomeatthisitemprovidingyouhavespentalltheallowanceondeductibleexpensesandyouarenotmakingaclaimforexpensesrelatingtotheallowanceonyourtaxreturn(seequestionD2fortravelexpensesandquestionD5forovertimemealexpenses).

DeductionsYoucannotautomaticallyclaimadeductionjustbecauseyoureceivedanallowance.CarefullyreadtheDeductionssectionthatstartsonpage36.


STEP1 Addupalltheamountsoftaxwithheldfromyourallowances,earningsandothersalaryandwageincome.WritethetotalamountoftaxwithheldattheleftofK item2onpage2ofyourtaxreturn.Donotshowcents.

Donotincludeanyamountsoftaxwithheldalreadyshownonyourtaxreturn.

STEP2 Addupallyourallowances,earningsandothersalaryandwageincome.DonotincludeamountslistedintheStopboxonthepreviouspage.

Includeallallowancesandearningsyoureceived,whetherornottheyareshownonapaymentsummary,signedcopy,letterorstatementfromyourpayer.

Makesureyouincludeanyreimbursementsofcarexpensesyoureceivedthatwereworkedoutbyreferencetothedistancetravelledbythecar.

STEP3 Writethetotalat K item2onyourtaxreturn.Donotshowcents.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturnthetotalamountoftaxwithheldfromallowances,earningsandothersalaryandwageincome

writtenonyourtaxreturnthetotalamountofallowances,earningsandothersalaryandwageincomerequiredtobeshown

keptallyourpaymentsummaries;signedcopies,lettersorstatementsfromyourpayers;orthestatutorydeclarationsyouhavecompleted.Donotattachthemtoyourtaxreturn.

Youneedtokeepyourrecordsasevidence(seeKeepyourrecordsonpage10).

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QUESTION 3LUMP SUM PAYMENTS


What to do with amounts shown at ‘A’ on your payment summary, signed copy, letter or statementSTEP1 Adduptheamountsoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Donotincludeanyamountsalreadyincludedatitem1or2.Writethetotalattheleftof R item3onyourtaxreturn.Donotshowcents.

STEP2 Adduptheamountsshownat‘A’oneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Writethetotalat R item3onyourtaxreturn.Donotshowcents.

STEP3 Ifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme,printtheletterRintheTYPEbox attherightof R item3onyourtaxreturn.Otherwise,printtheletterTintheTYPEbox .Checkwithyourpayerifyouarenotsure.

What to do with amounts shown at ‘b’ on your payment summary, signed copy, letter or statementSTEP1 Adduptheamountsoftaxwithheldasshownoneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Donotincludeanyamountsalreadyincludedatitem1or2oratstep1above.WritethetotalattheleftofH item3onyourtaxreturn.Donotshowcents.

STEP2 Adduptheamountsasshownat‘B’oneachpaymentsummary,signedcopy,letterorstatementfromyourpayer.Thendivideby20toworkout5%oftheamount.

STEP3 Writetheanswerfromstep2atH item3onyourtaxreturn.Donotshowcents.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountsoftaxwithheld writtenonyourtaxreturntheamountsofincome keptcopiesofallyourpaymentsummaries,signedcopies,lettersorstatementsfromyourpayers.Donotattachthemtoyourtaxreturn.

Did you receive any lump sum payments for unused annual leave or unused long service leave?

NO Gotoquestion4.

YES Readbelow.

STOPDonotshowatthisitem:n approvedearlyretirementschemepayments

andbonafideredundancypaymentsshownas‘LumpsumD’onyourpaymentsummary.Theseamountsareoftenpaidatthesametimeasaneligibleterminationpayment(ETP).LumpsumDamountsarenottaxedandarenotshownasincomeatanyitemonyourtaxreturn.IfyoureceivedanETP,completeitem4Eligibleterminationpayments.

n lumpsumpaymentsinarrearsshownas‘LumpsumE’onyourpaymentsummary.Theseamountsaredealtwithatquestion22OtherincomeinTaxPack 2007 supplement.

WHAT YOU NEEDn YourPAYG payment summary – individual non-business

showinganamountat‘A’or‘B’inthelumpsumpaymentsbox

orn Asignedcopy,letterorstatementfromyourpayer

What are the amounts at ‘A’ and ‘b’ in the lump sum payments box on your payment summary, signed copy, letter or statement?Theamountat‘A’waspaidtoyou:n forunusedlongserviceleavethataccruedafter

15August1978ifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme

n forunusedannualleaveifyouleftyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme

n forunusedlongserviceleavethataccruedafter15August1978andbefore18August1993ifyoudidnotleaveyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme,or

n forunusedannualleavethataccruedbefore18August1993ifyoudidnotleaveyourjobbecauseofbonafideredundancy,invalidityorunderanapprovedearlyretirementscheme.

Theamountat‘B’waspaidtoyouforunusedlongserviceleavewhichyouaccumulatedbefore16August1978.

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QUESTION 4ELIGIBLE TERMINATION PAYMENTS

IfyouhavereceivedanETP,thenyoushouldhavereceivedanETPpaymentsummaryfromyourpayer,employerorsuperannuationfund.InformationonyourETPpaymentsummaryincludestheassessableamountoftheETPandtheamountoftaxthathasbeenwithheld.IfyoudidnotreceiveanETPpaymentsummary,contactthepersonwhopaidyourETPtoobtainone.

STOPDonotshowatthisitemalumpsumpaymentyoureceived:n onterminationofforeignemployment–showthisat

item19onyourtaxreturn(supplementarysection)n fromanon-residentsuperannuationfund–showthis

atitem19onyourtaxreturn(supplementarysection),or

n asthetrusteeofadeceasedestate–thisETPmustbeshownonthetrusttaxreturn,notonyourpersonaltaxreturn.

DonotshowatthisitemtheamountofyourrolledoverETP.FormoreinformationonwhatarolledoverETPis,refertothedefinitionssectiononpage22.

IfyouenteredAustraliaonatemporaryresident’svisaandhavepermanentlydepartedAustralia,youmayhavereceivedadepartingAustraliasuperannuationpaymentfromyoursuperannuationfund.ThispaymentisnotanETPanddoesnotformpartofyourassessableincome.Donotshowitanywhereonyourtaxreturn.

NO Gotoquestion5.

YES Readbelow.

WHAT YOU NEEDYourETPpaymentsummary.Ifyouhavelostit,youwillneedasignedcopyofthesummary,aletterorstatementfromthepayerthatshowsallthedetailsofyourETP.IfyouthinkthedetailsonyourETPpaymentsummaryarewrong,contactthepersonwhopreparedit.YouneedthedetailsonyourETPpaymentsummarytocompleteyourtaxreturnunlessyouhavereceivedareasonablebenefitlimit(RBL)determinationnotice.

YourRBLdeterminationnotice.WewouldhavesentyouanRBLdeterminationnoticeifyourETPexceededyourRBL.IfyouhavereceivedanRBLdeterminationnotice,youwillalsoneedthistocompleteyourtaxreturn.

YourRBListhemaximumamountofretirementandterminationofemploymentbenefitsyoucanreceiveoveryourlifetimeatconcessional(reduced)taxrates.Inmostcases,youremployerorsuperannuationfundwillhavereportedthepaymenttous.UsingthispaymentinformationweworkoutwhetheryourETPwaswithinyourRBL.

Did you receive an eligible termination payment (ETP)?

AnETPcanbeanyofthefollowing:n alumpsumpaymentfromyouremployerwhenyou

retiredorceasedemploymentn alumpsumpaymentfromasuperannuationfund,

approveddepositfund,retirementsavingsaccountorlifeinsurancecompany

n asimilarpaymenttothoseabove,paidtoyouasthebeneficiaryofapersonwhohasdied.Wecallthisa‘deathbenefitETP’.However,ifthepaymentsweremadetoyouasthetrusteeofadeceasedestatetheymustbeshownonthetrusttaxreturn,notonyourpersonaltaxreturn

n apaymentfromtheTaxOfficeofamountscollectedfromanemployereitherbywayofSuperannuationGuaranteeChargepaymentsorpaymentstotheSuperannuationHoldingAccountsSpecialAccount.

Examplesofalumpsumpaidtoyoubyyouremployerwhenyouretiredorceasedemploymentare:n apaymentinlieuofnoticeora‘goldenhandshake’n apaymentforunusedsickleaveorunusedrostered

daysoffn compensationforlossofajoborwrongfuldismissaln abonafideredundancypaymentoranapprovedearly

retirementschemepaymentthatexceededthetax-freethresholdforsuchpayments–currently$6,783plus$3,392foreachcompleteyearofservice

n apaymentreceivedbecauseofinvalidity.

Examplesofalumpsumpaymentfromasuperannuationfund,approveddepositfund,retirementsavingsaccountorlifeinsurancecompanyare:n paymentsyoureceivedwhenyouchangedyour

superannuationpensionorannuityintoalumpsumn paymentsyoureceivedwhenyoumadeawithdrawal

fromanapproveddepositfundn otherpaymentsyoureceivedfromasuperannuation

fund,excludingapensionorannuityoradepartingAustraliasuperannuationpayment.

IfyouarestillunsurewhetherthepaymentyoureceivedisanETP,visitourwebsiteatwww.ato.gov.au/superorphonetheSuperannuationInfoline(seetheinsidebackcover).

MOREINFORMATIONn Eligible termination payments: an employee’s guide to

lump sum payments from your employer (NAT2700)n Eligible termination payments: an individual’s guide to

lump sum superannuation payments (NAT2701)Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

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E Formoreinformation,seeReasonable benefit limits

– how these may affect you(NAT5256).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Weworkoutthetaxpayablebasedonthecomponentsofyoureligibleterminationpayment(ETP).ItisimportantyouattachyourETPpaymentsummaryandyourreasonablebenefitlimit(RBL)determinationnoticeifyouhavereceivedone,topage3ofyourtaxreturn.

NOTEIfyoulodgeyourtaxreturnwithETPincomeatitem4butdonotattachanETPpaymentsummary,asignedcopyofit,oraletterorstatementfromyourpayer,wewillsendyourtaxreturnbackaskingyoutolodgeitagainwiththenecessarydocument.

AnswerthequestionsinpartsAandBbelow,thenfollowthestepsunderCompletingthisiteminthenextcolumnfortheamountstoincludeatitem4onyourtaxreturn.

IfyoureceivedmorethanoneETP,checkpartsAandBforeachETPyouhavereceived.Youmayneedtoaddthetotalsbeforetransferringthemtoyourtaxreturn.

PART A

Did you receive an RbL determination notice for your ETP?

NO GotopartB.

YES Readbelow.

WewouldhavesentyouanRBLdeterminationnoticeifyourETPexceededyourRBL.YourRBLdeterminationnoticeprovidestheadjustedETPcomponentsthatyouusetorecalculatetheassessableamountatstep1andtheexcessivecomponentamountatstep3underCompletingthisitem.

PART b

Did you receive a death benefit ETP – that is, a lump sum you received because of the death of another person?

NO GotoCompletingthisiteminthenextcolumn.

YES Readbelow.

YOU NEED TO KNOWYouwillfindthenecessaryETPcomponentsat‘Section3–ETPcashpaymentdetails’onyourETPpaymentsummaryoronyourRBLdeterminationnoticeifyourETPexceededyourRBL.

Ifyoureceivedapaymentastrusteeofadeceasedestate,thefollowinginstructionsdonotapplytoyou.Thetrusteemustlodgeatrusttaxreturnforthedeceasedestateandfollowtheinstructionsforthattaxreturn.Theobligationtopaytax,ifany,iswiththetrustee.

Ifyoureceivedapaymentandyouwereadependant(seethedefinitionssection)ofthedeceased,thedeathbenefitETPisnottaxable.DonotshowitanywhereonyourtaxreturnunlessyouhavereceivedanRBLdetermination

noticeforthisETP.IfyouhavereceivedanRBLdeterminationnotice,youonlypaytaxontheexcessivecomponentofthedeathbenefitETP.Gotostep3underCompletingthisitemonthenextpage.

Ifyoureceivedapaymentandyouwerenotadependantofthedeceased,youmustshowalloftheassessableamountofthispaymentonyourtaxreturn.IfyouhavereceivedanRBLdeterminationnoticeshowinganexcessivecomponent,youmustshowtheexcessivecomponentamountfromyourRBLdeterminationnoticeandrecalculateanewassessableamounttocompleteyourtaxreturn.Gotostep1underCompletingthisitem.


STEP1 Totalalltheassessableamounts(otherthantheexcessivecomponent).AddtheassessableamountsshownonyourETPpaymentsummaries.

IfanRBLdeterminationnoticehasbeenissuedforanyofyourETPs,donotusetheassessableamountshownonthatETPpaymentsummary.Instead,youmustrecalculatetheassessableamountbyapplyingthefollowingpercentagesinthetablebelowtotheadjustedETPcomponentsshownonyourRBLdeterminationnotice.

THE PERCENTAGE OF EACH ETP COMPONENT TO bE INCLUDED IN YOUR ASSESSAbLE AMOUNT

ETPcomponent Assessableamountofcomponent

Pre1July1983 5%

Post-June1983taxed 100%

Post-June1983untaxed 100%

Undeductedcontributions Nil

Post-June1994invaliditycomponent

Nil

CGT-exemptcomponent Nil

Concessionalcomponent 5%

IfyouhaveanETPpaymentsummaryorRBLdeterminationnoticeshowinganon-qualifyingcomponent(seethedefinitionssection),subtracttheamountofthiscomponentfromyourETPassessableamount.Thenon-qualifyingcomponentamountisassessableincome.Showthisamountatitem22ofyourtaxreturn(supplementarysection).

RepeatthisstepforeachETPyouhavereceived.Addallassessableamountsandwritethetotalassessableamount(otherthanexcessivecomponent)at I item4onpage2ofyourtaxreturn.Donotshowcents.

STEP2 TotaltaxwithheldamountsWritethetotalamountoftaxwithheldfromallofyourETPsinthetaxwithheldcolumnatitem4onyourtaxreturn.Donotshowcents.ThisamountcanbefoundonyourETPpaymentsummary.

YoumustincludeonyourtaxreturnthetaxwithheldamountshownonyourETPpaymentsummaryevenifanRBLdeterminationnoticewasissuedfortheETP.

TAXPACK 2007 www.ato.gov.au 2�

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ESTEP3 Totalexcessivecomponents–ifapplicableIfyouhavereceivedareasonablebenefitlimit(RBL)determinationnoticewhichshowsanexcessivecomponent,writetheamountoftheexcessivecomponentatN item4onyourtaxreturn.ThisincludesanRBLdeterminationnoticeinrespectofadeathbenefiteligibleterminationpayment(ETP).Donotshowcents.

STEP4 Attachthe‘Payee’sTaxReturnCopy’ofyourETPpaymentsummaryandacopyofyourRBLdeterminationnoticeifyouhavereceivedonetopage3ofyourtaxreturn.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofalltaxwithheld writtenonyourtaxreturnthetotalassessableamount(otherthanexcessivecomponents)ofyourETPs

writtenonyourtaxreturnthetotaloftheexcessivecomponentsfortheETPsforwhichyoureceivedanRBLdeterminationnotice

attachedtopage3ofyourtaxreturnthe‘Payee’sTaxReturnCopy’ofyourETPpaymentsummaries,signedcopiesofthesedocuments,orlettersorstatementsfromyouremployer,andacopyofanyRBLdeterminationnoticeyouhavereceivedfromtheTaxOffice

keptcopiesofyourETPpaymentsummaries,signedcopies,orlettersorstatementsfromyouremployer.Youneedtokeeptheserecordsasevidence(seeKeepyourrecordsonpage10).

HOW YOUR TAx IS WORKED OUTTheamountoftaxpayableonyourETPdependsonthefollowing:n thepercentageofeachETPcomponenttobeincluded

inyourassessableamountandthetaxratesthatapplyforeachofthosecomponents

n whetheryouwereaged55yearsorolderwhenyoureceivedtheETPandtheamountofthelowratethresholdavailabletoyou

n whetheryouhaveexceededyourRBL,andn whetheryourETPisadeathbenefitETP.

Taxation of ETP componentsWewillworkoutyourtaxbasedontheindividualcomponentsofyourETP.ThetaxratesthatapplyforeachoftheETPcomponentsareexplainedbelow.

Concessionalcomponentandpre-July1983component–5%ofeachofthesecomponentsisincludedinyourassessableincomeandtaxedatyourusualrate.

Undeductedcontributions,post-June1994invaliditycomponentsandCGT-exemptcomponentsareexemptfromtaxandarenotincludedinyourassessableamount.

Non-qualifyingcomponent–100%ofthisamountisincludedinyourassessableincomeandtaxedatyourusualrate.Showthisamountatitem22onyourtaxreturn(supplementarysection).

Post-June1983component–thismaybeeithera‘taxedelement’oran‘untaxedelement’.Somepaymentswillhavebothelementspresent.‘Taxedelement’meansthatthepayer–usuallyasuperannuationfund–has

alreadypaidacontributionstaxonthiselement.‘Untaxedelement’meansthatthepaymenthasnotbeensubjecttocontributionstax.Forthisreason,theelementsaretaxeddifferently,asshowninthetablebelow.

TAx RATES ON POST-JUNE �983 ELEMENTS

TheseratesandthresholdsdonotapplytodeathbenefitETPs.

Agewhenreceived Taxedelement

Untaxedelement

Under55years 20% 30%

55yearsorover– upto$135,590– excessover$135,590

0%15%

15%30%

AnyMedicarelevyisaddedtotheserates.AMedicarelevywillnotapplytoataxedelementwherethetaxrateiszero.

Yourpost-June1983componentisincludedinfullinyourassessableincomeonyourtaxreturnevenwhereitissubjecttoaniltaxrate.Whereapplicablewegiveyouataxoffsettoensurethatthecorrecttaxratesareapplied.

Theinclusionofthepost-June1983componentinfullinyourassessableincomemayaffectyourentitlementtoothertaxoffsets,forexample,theseniorAustralians,beneficiaryandlowincometaxoffsets.

TheassessableamountsoftheotherETPcomponentsmaysimilarlyaffectthesetaxoffsets.

Excessivecomponent–thiscomponentistaxedatahigherratethantheotherETPcomponents.Thetaxrateis45%plusMedicarelevyiftheETPwaspaidbyanemployer;andeither38%or45%plusMedicarelevyiftheETPwaspaidbyasuperannuationfund.Wewillcalculatethetaxontheexcessivecomponentforyou.

Taxation of an ETP when you are aged 55 years or olderIfyouwereaged55yearsorolderwhenyoureceivedyourETPandhaveapost-June1983componentshownonyourETPpaymentsummary,someorallofthisportionoftheETPmaybetaxedatalowerrate.Thereisalimittotheamountofthepost-June1983componentsthataretaxedatthelowerrate.Thisiscalledthe‘lowratethreshold’(seethetableonthenextpage).Thelimitisindexedeachyear.

Thelowratethresholdappliestothetotalofallthepost-June1983components(taxedanduntaxed)youhavereceivedsince1July1988,providedyouwere55yearsorolderatthetimeyoureceivedtheETP.Wekeeparecordofthepost-June1983componentsofETPspaidtoyouandcalculatewhetherthecurrentETPisbelowthislimit.

Oncethelimithasbeenreached,youcannotuseitinfutureyears,thoughyoumayuseanyamountsaddedforannualindexation.Ifyouexceedthislimityouwillpaytaxontheamountinexcessofthethresholdattheratessetoutinthetableonthenextpage.

Ifyouturnedage55yearsonorafter1July1988andyoudidnotreceivethebenefitofthelowratethresholdincreasedbyindexation,writetous.Intheletter,stateyourageatthetimeyoureceivedtheETP,theamountof

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Etheeligibleterminationpayment(ETP),theamountofthepost-June1983componentandthenameandaddressofthepayer.EnclosecopiesofanyETPgroupcertificatesorpaymentsummariesyoureceivedfromthepayer.WewillworkoutwhetheryouareentitledtohavetheamountoftaxonyourETPrecalculated.

LOW RATE THRESHOLDS

2006–07 $135,590 1996–97 $86,917

2005–06 $129,751 1995–96 $83,574

2004–05 $123,808 1994–95 $79,975

2003–04 $117,576 1993–94 $77,796

2002–03 $112,405 1992–93 $76,949

2001–02 $105,843 1991–92 $73,776

2000–01 $101,188 1990–91 $68,628

1999–2000 $97,109 1989–90 $64,500

1998–99 $94,189 1988–89 $60,000

1997–98 $90,916

Taxation of an ETP that exceeded your reasonable benefit limit (RbL)RefertotheExcessivecomponentinformationinTaxationofETPcomponentsonthepreviouspage.

Taxation of death benefit ETPsDeathbenefitETPsaretaxeddifferentlydependingonwhothepaymenthasbeenmadeto.

ApaymenttoadependantofthedeceasedthathasnotexceededtheRBLisnottaxable.IfyoureceivedanRBLdeterminationnotice,theexcessivecomponentmustbeshownonyourtaxreturn.ThetaxationoftheexcessivecomponentisexplainedinTaxationofETPcomponents.

ApaymenttoapersonwhowasnotadependantistaxedthesameasotherETPswiththeexceptionofthetaxratesapplicabletothepost-June1983component.RefertotheinformationinTaxationofETPcomponents.

Apaymenttothetrusteeofthedeceasedestatemustbedeclaredonthedeceasedestate’strusttaxreturn.

DEFINITIONS

DependantYouwereadependantofthedeceasedif,atthetimeofdeathorthetimethepaymentwasmade,youwere:n thesurvivingspouse(includingadefacto)n aformerspousen achildofthedeceasedwhowasunder18yearsoldn financiallydependentonthedeceased,orn inaninterdependencyrelationshipwiththedeceased.Seethedefinitionofspouseonpage110.

Excessive componentAnexcessivecomponentistheamountbywhichyourETPexceedsyourRBL.

Interdependency relationshipAninterdependencyrelationshipexistsifthereisaclosepersonalrelationshipbetweentwopeoplewholivetogetherandoneorbothprovideforthefinancial,domesticandpersonalsupportoftheother.

Aninterdependencyrelationshipcanalsoexistifthereisaclosepersonalrelationshipbuttheotherconditionsarenotsatisfiedbecauseofthephysical,intellectualorpsychiatricdisabilityofoneofthepeople.

Non-qualifying componentThiscomponentisveryrare.Itrelatestotheearningsonannuitiesthatwerepurchasedwithnon-superannuationmoneyanddoesnotqualifyforconcessionaltaxrates.

Reasonable benefit limitsIn2006–07,thelumpsumRBLis$678,149andthepensionRBLis$1,356,291.YoumaybeentitledtothepensionRBLifyoutakemorethanhalfofthevalue(forRBLpurposes)ofyourbenefits,orusemorethanhalfofyourpensionRBLasapensionorannuitywhichmeetsthepensionorannuitystandards.

DeathbenefitETPsarealwaysmeasuredagainstthepensionRBLofthedeceasedperson.

Rolled over ETPYouhaverolledoveryourETPifyoutransferredapartorallofittoacomplyingsuperannuationfund,retirementsavingsaccountoranapproveddepositfund;orusedapartorallofittobuyanannuity.IfyourolledsomeorallofyourETP,youshouldhavereceivedanETProll-overstatementfromthepayer.YoudonotneedtodeclaretherolledovercomponentofyourETPonyourtaxreturnatthisstage.Thetaxpayableontherolledovercomponentisdeferreduntilyoureceivethebenefit.


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QUESTION 5AUSTRALIAN GOVERNMENT ALLOWANCES AND PAYMENTS

Donotshowatthisitemthepaymentslistedinthefollowingbox.

STOPDonotshowanyofthesepaymentsatthisitem:n exemptpayments–thesearelistedonpages13–14n OverseasStudentHigherEducationLoanProgramme

amountsfromyourhighereducationprovider–thesepaymentsshouldnotbeincludedanywhereonyourtaxreturn

n emergencyandgeneralassistancepayments–thesepaymentsareshownatitem22Otherincomeonyourtaxreturn(supplementarysection).


orn Aletterfromtheagencythatpaidyourallowanceor

paymentstatingtheamountthatyoureceived

Ifyouhavenotreceivedthisinformationoryouhavelostit,contacttheagencythatpaidyou.


STEP1 Addupalltheamountsoftaxwithheldasshownoneachpaymentsummaryorletter.Writethetotalamountoftaxwithheldattheleftof A item5onyourtaxreturn.Donotshowcents.

STEP2 Addupallthetaxableamountsyoureceived.Writethetotalamountat A item5.Donotshowcents.

Donotattachtheletterorpaymentsummaryaboutthesepaymentstoyourtaxreturn.

NOTEYoumaybeentitledtoataxoffsetonthisincome.Taxoffsetsreducetheamountoftaxyouhavetopay.Ifyoureceivedoneormoreofthepaymentslistedatthisquestion,youmaybeentitledtoabeneficiarytaxoffset.Youdonothavetoworkoutyourtaxoffset.WeworkitoutforyoufromtheincomeyoushowatA item5.Ifyouwanttoworkitoutbeforeyoureceiveyournoticeofassessment,youcanusethebeneficiarytaxoffsetcalculatoronourwebsite,orworksheet4.1onpage123.

Did you receive any of the following Australian Government payments?n Parentingpayment(partnered)n Newstartallowancen Youthallowancen Matureageallowancen Partnerallowancen Sicknessallowancen Specialbenefitn Widowallowancen Austudypaymentn Exceptionalcircumstancesreliefpayment

orfarmhelpincomesupportn Interimincomesupportpaymentn CycloneLarryorCycloneMonicaincome

supportpaymentn Educationpaymentofanyofthefollowingand

youwereaged16yearsorolder– ABSTUDYlivingallowance– paymentundertheVeterans’Children

EducationScheme– paymentundertheMilitaryRehabilitation

andCompensationActEducationandTrainingScheme2004–shownas‘MRCAEducationAllowance’onyourPAYG payment summary – individual non-business

n TrainingforEmploymentProgramallowance;NewEnterpriseIncentiveSchemeallowance;textile,clothingandfootwearspecialallowance;GreenCorpstrainingallowance;orothertaxableCommonwealtheducationortrainingpayments

n IncomesupportcomponentfromaCommunityDevelopmentEmploymentProject(CDEP)–shownas‘CDEPSalaryorWages’onyourPAYG payment summary – individual non-business

n CDEPschemeparticipantsupplement

NO Gotoquestion6.

YES Readbelow.

Showyourincomefromthesepaymentsatthisitem.

NOTEInterimincomesupportpaymentsandCycloneLarryorCycloneMonicaincomesupportpaymentsarenotreportedasseparateamountsonCentrelinkPAYGpaymentsummaries,butareincludedinthetotalamountreportedforemergencyandgeneralassistancepayments.IfyoureceivedthesepaymentsyouwillneedaletterfromCentrelinknotifyingyouoftheamountyouhavereceived.Showtheseamountsatthisiteminordertogetthecorrecttaxoffset.ShowthebalanceoftheamountforemergencyandgeneralassistancepaymentsshownonyourCentrelinkPAYGpaymentsummaryatitem22Otherincomeonyourtaxreturn(supplementarysection).

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QUESTION 6AUSTRALIAN GOVERNMENT PENSIONS AND ALLOWANCES


orn Aletterfromtheagencythatpaidyourpension,

allowanceorpaymentstatingtheamountthatyoureceived

Ifyouhavenotreceivedthisinformation,oryouhavelostit,contacttheagencythatpaidyou.


STEP1 Addupalltheamountsoftaxwithheldasshownonyourpaymentsummariesorletters.Writethetotalamountoftaxwithheldattheleftof b item6onpage2ofyourtaxreturn.Donotshowcents.

STEP2 Addupalltheincomeyoureceived.Writethetotalamountat b item6.Donotshowcents.

Donotattachtheletterorpaymentsummaryaboutthesepaymentstoyourtaxreturn.

IMPORTANTYoumaybeentitledtoataxoffsetonthisincome.Taxoffsetsreducetheamountoftaxyouhavetopay.

WorkthroughquestionsT2SeniorAustraliansandT3Pensionertoseeifyouareentitledtoataxoffset.Fillintherelevantitemonyourtaxreturn.Weworkoutyourtaxoffsetentitlementbasedonthetaxoffsetcodeandveterancode(ifapplicable)thatyouprintonyourtaxreturn.

Makesureyouprintthecorrectcodeletters;otherwise,youmaynotreceiveyourcorrectentitlement.

Did you receive any of the following payments from Centrelink or the Department of Veterans’ Affairs?n Agepensionn Bereavementallowancen Carerpaymentn Disabilitysupportpensionandyouhave

reachedage-pensionagen Educationentrypaymentn Parentingpayment(single)n WidowBpensionn Wifepensionandeitheryouoryourpartner

wasofage-pensionagen Ageservicepensionn Incomesupportsupplementn DefenceForceincomesupportallowance(DFISA)

wherethepension,paymentorallowancetowhichitrelatesistaxable

n DFISA-likepaymentfromtheDepartmentofVeterans’Affairs(DVA)

n Invalidityservicepensionandyouhavereachedage-pensionage

n Partnerservicepension

NO Gotoquestion7.

YES Readbelow.

Showyourincomefromthesepaymentsatthisitem.Donotshowatthisitemthepaymentslistedintheboxbelow.

STOPDonotshowthefollowingpaymentsatthisitemoryoumaybetaxedincorrectly:n exemptpayments–thesearelistedonpages13–14n SuperannuationActandDefenceForcesRetirement

BenefitsActpensionsandpaymentsn eligibleterminationpaymentsn foreignpensions.


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QUESTION 7OTHER AUSTRALIAN PENSIONS OR ANNUITIES


orn AstatementfromyourAustralianannuity,

superannuation,otherpensionfundorRSAprovider

Ifyouhavenotreceivedyourpaymentsummaryorstatement,oryouhavelostit,contactyourpayertoobtainacopy.


STEP1 Printthetypeofannuityorpension–forexample,‘superannuationpension’–intheTYPEbox atitem7onpage2ofyourtaxreturn.Ifyoureceivedmorethanonetype,printthetypethatgaveyouthelargestamountofincome.

STEP2 Addupallthetaxwithheldamountsasshownonyourpaymentsummariesandstatementsandwritethetotalamountattheleftof J item7.Donotshowcents.Donotincludeamountsalreadyshownatitems1,3and4.

STEP3 Addupallthegrossamountsshownonyourpaymentsummariesandstatementsandwritethetotalamountat J item7.Donotshowcents.

Donotattachthepaymentsummariesandstatementsaboutthesepaymentstoyourtaxreturn.

DEDUCTIONSANDTAXOFFSETSUndeducted purchase priceIfyourannuityorpensionhadanundeductedpurchaseprice,youcanclaimthedeductibleamount.ReadquestionD9onpages61–2.

Senior Australians tax offsetYoumaybeentitledtotheseniorAustralianstaxoffset.ReadquestionT2onpages86–7tofindoutmoreaboutthistaxoffset.

Superannuation annuity and pension tax offsetYoumaybeentitledtoataxoffsetforyourannuityorpension.ReadquestionT4onpage90tofindoutmoreaboutthistaxoffset.

Did you receive an Australian:n annuityn superannuation pension n pension not shown at question 6?

STOPDonotshowforeignpensionsorforeignannuitiesatthisitem.Incomefromaforeignsourceisdealtwithatquestion19ForeignsourceincomeandforeignassetsorpropertyinTaxPack 2007 supplement.

NO Gotoquestion8.

YES Readbelow.

YOU NEED TO KNOWAustralianannuitiesandpensionsinclude:n superannuationandsimilarpensionsandannuities

paidtoyoubyanAustraliansuperannuationfund,lifeassurancecompanyorretirementsavingsaccount(RSA)provider,and

n pensionspaidbyafundestablishedforthebenefitofCommonwealth,stateorterritoryemployeesandtheirdependants–forexample,fundsmanagedbyComSuperandVicSuper.

AlsoshowatthisitemAustralianannuitiesandpensionspaidtoyouwhileyouwerestillworking.

NOTES1 Ifyouhavenotgivenyourtaxfilenumber(TFN)toyour

fundorRSAprovider,theymaywithholdagreaterrateoftaxfromyourbenefitthanifyouhadprovidedit.YoucanphoneorwritetoyourfundorRSAproviderandquoteyourTFN.

2 SuperannuationfundsandRSAprovidersalsouseTFNstokeeptrackofsuperannuationbenefits.

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QUESTION 8ATTRIBUTED PERSONAL SERVICES INCOME

Wherethepaymenthasbeenmadetoapersonalservicesentity,theincome(lessanydeductionsallowabletothepersonalservicesentityingainingorproducingthepersonalservicesincome)willbeattributedtoyouunless:n thepersonalservicesentitygainedtheincomeinthe

courseofconductingapersonalservicesbusiness,orn theincomehasbeenpromptlypaidtoyoubytheentity

assalary.

YoucanfindanexplanationoftherulesrelatingtotheattributionofpersonalservicesincomeinTaxation Ruling TR 2003/6: Income tax – attribution of personal services income.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Wherethepersonalservicesentityhasanetpersonalservicesincomelossrelatingtoyourpersonalservicesincomethereisnoamountattributedtoyou.YouareentitledtoadeductionforthelossandyoumustanswerquestionD15inTaxPack 2007 supplement.

IfyouneedhelpinrelationtotheserulesvisitourwebsiteorphonetheBusinessInfoline(seetheinsidebackcover).


STEP1 WritethetotalamountoftaxpaidorwithheldfrompersonalservicesincomeattributedtoyouattheleftofO item8onyourtaxreturn.Donotshowcents.Donotshowanytaxwithheldamountthatyouhaveincludedelsewhereonyourtaxreturn.

STEP2 WritethetotalamountofpersonalservicesincomeattributedtoyouatO item8onyourtaxreturn.Donotshowcents.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountsoftaxpaidorwithheld

writtenonyourtaxreturntheamountsofpersonalservicesincomeattributedtoyou

keptcopiesofallyourpaymentsummaries.Donotattachthemtoyourtaxreturn.

Did you have personal services income attributed to you from a company, partnership or trust?IfyouhavereceivedaPAYG payment summary – personal services attributed income,youranswertothisquestionisYESandyoumustcompleteitem8onyourtaxreturn.

Whereyouhaveprovidedpersonalservicesforrewardandthepaymentforyourserviceswasmadetoyouasasoletrader,youranswertothisquestionisNO.Inthatcaseyoumustanswerquestion13inTaxPack 2007 supplementandcompleteitemP1intheBusiness and professional items schedule for individuals 2007(NAT2816–6.2007).Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

STOPDonotshowatthisitemamountsshownonaPAYG payment summary – individual non-business.

Youshouldhavealreadyshowntheseamountsatitem1Salaryorwagesoritem2Allowances,earnings,tips,director’sfeesetc.

NO GotoTotaltaxwithheldonthenextpage.

YES Readbelow.

WHAT YOU NEEDn YourPAYG payment summary – personal services

attributed incomeshowingtheamountofpersonalservicesincomeattributedtoyouandthetotalamountoftaxpaidorwithheld

n Detailsofanyotherpersonalservicesincomeattributedtoyou

Ifyoudonothaveallofyourdocuments,contactthepersonwhopaidyou.

YOU NEED TO KNOWTherearespecialrulesfortheincometaxtreatmentofcertainpersonalservicesincome.

Personalservicesincomeisincomethatismainlyarewardforyourpersonaleffortsorskillsandisgenerallypaideithertoyouortoapersonalservicesentity(acompany,partnershiportrust).

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PAY AS YOU GO (PAYG) INSTALMENTS YoudonotneedtoshowinstalmentsmadeunderthePAYGinstalmentssystemanywhereonyourtaxreturn.Theamountsarecreditedautomaticallyinyourassessment.

Toensureyouarecreditedwiththecorrectamount,makesureyoulodgeallyouractivitystatementsbeforeyoulodgeyourtaxreturn.Youshouldlodgeanyoutstandingactivitystatementsevenifyouhavepaidyourinstalmentsorhavenothingtopay.

Addupalltheamountsinthetaxwithheldboxesatitems1to8onpage2ofyourtaxreturn.

Writethetotalamountat $ TOTALTAXWITHHELDonyourtaxreturn.Gotoquestion9.

Tax offsets and your tax withheldIfyourtaxoffsetorfamilytaxbenefitentitlementshavechangedsinceyoulastfilledinaWithholding declaration(NAT3093–7.2007)authorisingyourpayertovarytheamountoftaxwithheld,youmayneedtofillinanewdeclaration.Ifyourfamilytaxbenefitentitlementshavechanged,youwillalsoneedtocompletetheWithholding declaration family tax benefit worksheet(NAT7089–7.2007).Contactyourpayerformoreinformation.Failuretofillinanewdeclarationmayresultinataxdebt.Pages76–97tellyouabouttaxoffsets.Formoreinformationaboutfamilytaxbenefit,seepages71–5.

Additional tax withheld for the Higher Education Loan Programme and the Student Financial Supplement SchemeIfyouhad:n anaccumulatedHigherEducationLoanProgramme

debt,orn anaccumulatedStudentFinancialSupplement

Schemedebttheadditionaltaxwithheldfromyourpayformspartofyournormaltaxwithheld–shownonyourpaymentsummary–andisthereforealreadyincludedinthetotalamountyoushowat $ TOTALTAXWITHHELDonyourtaxreturn.Pages120–130showyouhowweworkoutyourtax.

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QUESTION 9TOTAL REPORTABLE FRINGE BENEFITS AMOUNTS

ThehighestmarginalrateofincometaxplusMedicarelevyisusedtogrossupyourfringebenefits,soafringebenefithavingataxablevalueof$1,000.01becomesareportablefringebenefitsamountof$1,869.

Ifyourpaymentsummaryshowsareportablefringebenefitsamountoflessthan$1,869youwillneedtocheckwithyouremployerabouttheamountorthemethodofcalculatingtheamount.

ThetotalamountofreportablefringebenefitsthatyoushowonyourtaxreturnisnotincludedinyourtotalincomeorlossamountandyoudonotpayincometaxorMedicarelevyonit.

However,itwillbeusedindeterminingyourentitlementtoorliabilityfor:n Medicarelevysurchargen deductionsforsuperannuationcontributionsn superannuationcontributionstaxoffsetn SuperCo-contributionsn matureageworkertaxoffsetn HigherEducationLoanProgrammerepaymentsn StudentFinancialSupplementSchemerepaymentsn childsupportobligationsn certaingovernmentbenefits.


STEP1 Addupthereportablefringebenefitsamountsshownonyourpaymentsummaries.

STEP2 WritethetotalatW item9onyourtaxreturn.Donotshowcents.DonotshowanamountatW thatislessthan$1,869.

Do you have a reportable fringe benefits amount shown on a PAYG payment summary – individual non-business?

NO Gotoquestion10.

YES Readbelow.


MOREINFORMATIONYoucanfindmoreinformationinReportable fringe benefits – facts for employees (NAT2836).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

YOU NEED TO KNOWYouneedtocompletethisitemifyouand/oranassociatereceivedcertainfringebenefitsandanypaymentsummariesprovidedbyyouremployershowedareportablefringebenefitsamount.

Youremployerhastokeeprecordsofthevalueofanyfringebenefitsgiventoyouand/oryourassociate,butonlyneedstoshowthefringebenefitsonyourpaymentsummaryiftheirtaxablevalueexceeds$1,000inthefringebenefitstaxyear1April2006to31March2007.

Additionally,fortaxreturnpurposesyouremployerhastogrossupthetaxablevalueofthefringebenefitstoensuretheirvalueiscomparablewithotherformsofincomeonyourpaymentsummary.Asyoudonotpayincometaxonfringebenefits,thegrossed-uptaxablevalueofabenefitreflectsthegrosssalaryyouwouldhavetoearntopurchasethebenefitfromafter-taxdollars.

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QUESTION �0GROSS INTEREST

n writetheamountsofinterestyoureceivedduringanyperiod(s)youwereanon-resident,fromwhichwithholdingtaxwasnotdeducted

n signyourscheduleandattachittopage3ofyourtaxreturn.

PrintXintheYESboxatTaxpayer’s declaration question2aonpage8ofyourtaxreturn.Wewillworkouttheamountofnon-residentwithholdingtaxyouhavetopayonthisinterestandadviseyouoftheamount.

WHAT YOU NEEDn Yourstatement,passbookorotherdocumentation

fromyourfinancialinstitutionorothersourcethatshows2006–07interestincome

n AnyTaxOfficenoticeofassessmentoramendedassessmentyoureceivedduring2006–07thatshowsinterestonearlypaymentsorinterestonoverpayments


STEP1 Usingyourrecords,addupalltheamountsofgrossinterestyoureceivedorthatwerecreditedtoyou.Youdonothavetoshowanamountifthetotalgrossinterestyouearnedfromallaccountsduringtheyearwaslessthan$1.Donotshowamountsthatwereorshouldhavebeensubjecttonon-residentwithholdingtax.

Ifyouwerenotthesoleholderofanaccount,showonlyyourshareofinterest.Foranyaccountwheretheaccountholdersdonotshareequallyintheinterest,keeparecordtoshowhowyouworkedoutyourshare.

Thegrossinterestamountyoushowatthisitemmustincludeanytaxfilenumber(TFN)amounts.TheseareamountsoftaxwithheldbythefinancialinstitutionbecauseyoudidnotquoteyourTFNorAustralianbusinessnumber(ABN)totheinstitution.TheywillbeshownonyourstatementorotherdocumentasCommonwealthtaxorTFNwithholdingtax.

NOTEDonotdeductaccount-keepingfeesandchargesfromyourgrossinterestamount.YoumaybeabletoclaimtheseatitemD7Interestanddividenddeductions.

STEP2 Writeyourgrossinterestat L item10onpage2ofyourtaxreturn.Donotshowcents.

STEP3 AddupalltheTFNamountsshownonyourstatementandtakeawayanyTFNamountsalreadyrefundedtoyou.Thesewillalsobeshownonyourstatementorotherdocument.

STEP4 Writetheanswerfromstep3atM item10.Showcents.Thisamountwillbecreditedtoyouonyournoticeofassessment.

Did you receive, or were you credited with, interest from any source within Australia?

STOPDonotshowatthisitem:n distributionsofinterestyoureceived,orwereentitled

toreceive,fromapartnershiportrust–includingacashmanagementtrust,moneymarkettrust,mortgagetrust,propertytrust,unittrustorothersimilartrustinvestmentproduct

n interestfromaforeignsourcen interestfromthelandtransportfacilitiestaxoffset

schemeorinfrastructureborrowingsscheme.


Includeinterestearnedfromfinancialinstitutionaccountsandtermdepositsunlessyouwereanon-residentandhavepaid,orshouldhavepaid,non-residentwithholdingtaxonthatinterest(seeNon-residentsbelow).

IncludeanyinteresttheTaxOfficegaveyouorcreditedyouwith.Ifyouwereanon-residentandwegaveyouorcreditedyouwithinterest,seeNon-residentsbelow.

NO Gotoquestion11.

YES Readbelow.

Children’s accountsIfyouopenedoroperatedanaccountforachildandthefundsinthataccountbelongedtoyou,oryouspentorusedthefundsintheaccountasiftheybelongedtoyou,youmustincludeanyinterestfromtheaccountatthisitem.

Taxation Ruling IT 2486 – Income tax: children’s savings accounts hasmoredetail.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Non-residentsIfyouwereanon-residentfortaxpurposesforallorpartoftheyear(seepages11–12)andyoureceivedorwerecreditedwithinterestduringtheperiod,donotincludethatinterestatthisitem.

Ifwithholdingtaxwasdeductedfromyourinterestyoudonothavetowriteitanywhereonyourtaxreturnbecausewithholdingtaxpaidbynon-residentsisafinaltax.

However,ifwithholdingtaxwasnotdeductedfromthatinterest,youmustattachascheduleshowingthedetails.

Onaseparatepieceofpaper:n print:SCHEDULEOFADDITIONALINFORMATION

–ITEM10

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QUESTION ��DIVIDENDS

Dividendsinclude:n distributionsmadebyacorporatelimitedpartnership

(apartnershiptaxedinaccordancewithDivision5AofPartIIIoftheIncome Tax Assessment Act 1936)

n dividendspaidtoyoubyalistedinvestmentcompany.

Adividendisassessableincomeintheyearitwaspaidorcreditedtoyou.Yourdividendstatementshouldhavetherelevantdate(oftenreferredtoasthepaymentdateordatepaid).

ExAMPLE

Sallyreceivedadividendstatementnotifyingherofafinaldividendfortheyearended30June2006.Thepaymentdateshownonthedividendstatementwas30July2006.Sallymustincludetheamountofthedividend,aswellasanyfrankingcredits,inherassessableincomeonher2007taxreturn.

Demerger dividendsDividendspaidunderademergeraregenerallynotassessabledividends.Donotshowdemergerdividendsatthisitemunlessyouareadvisedbythecompanythattheyareassessable.

FindoutmoreaboutdemergersinYou and your shares 2007(NAT2632–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

DON’TLEAVEITTOOLATE!Didyou:n purchaseorinheritanysharesn receiveanysharesaspartofadivorcesettlement

orasagiftordonationn receiveownershipinterestsunderademerger,orn participateinadividendreinvestmentplan?

Ifyoudid,startkeepingorupdatingyourrecordsnow.Incompleterecordscouldmeanpayingmoretaxthanyouneedtowhenyoudisposeofyourshares.Forfurtherinformationaboutsharesandotherassetsthatattractcapitalgainstax,includingwhatrecordsyouneedtokeep,seethepublicationGuide to capital gains tax 2007(NAT4151–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Payments, loans and forgiven debts that are treated as dividends Ifyouwereashareholder(oranassociateofashareholder)ofaprivatecompanyandreceivedpaymentsorloansfromthecompanyorhaddebtsforgivenbythecompany,thevalueofthosepayments,loansorforgivendebtsaretreatedasdividends(unlessspecificallyexcludedbylaw).

Did an Australian company (including a listed investment company), corporate unit trust, public trading trust or corporate limited partnership pay or credit you with any dividends or distributions?

STOPDonotshowatthisitem:n dividenddistributionsfromotherpartnershipsortrusts

–includingacashmanagementtrust,moneymarkettrust,mortgagetrust,unittrustormanagedfundsuchasapropertytrust,sharetrust,equitytrust,growthtrust,imputationtrust,balancedtrustorsimilartrustinvestmentproduct(seequestion12)

n dividendsfromforeigncompanies(seequestion19)n thatpartofadividendordistributiononwhichfamily

trustdistributiontaxhasbeenpaid(seequestionA3).

QuestionsrelatingtotheseamountsareinTaxPack 2007 supplement.

Donotclaimdividendexpenseshere.ClaimthematitemD7.

Ifyoucarriedonthebusinessoftradinginshares,includeanydividendincomeandfrankingcreditatthisitem;ifyouhaveaprofitorlossonthesaleofshares,readquestion14inTaxPack 2007 supplement.

Ifyousoldsharesduringtheyearandyoudidnotcarryonabusinessoftradinginshares,youmustreadquestion17inTaxPack 2007 supplementtoseeifyouneedtoshowacapitalgainorcapitalloss.

IfaNewZealandcompanyhaspaidyouadividendwithAustralianfrankingcreditsattached,youmaybeeligibletoclaimthefrankingcredits.YoushowthedividendsandclaimtheAustralianfrankingcreditsatitem19Foreignsourceincomeandforeignassetsorproperty.Readquestion19inTaxPack 2007 supplement.

NO GotoIncomefromthesupplementarysectiononpage34.

YES Readbelow.

YOU NEED TO KNOWYouneedtoshowatthisitemallyourassessabledividendsincluding:n thosepaiddirectlytoyoun dividendsappliedunderadividendreinvestmentplann dividendsthatwereotherwisedealtwithonyourbehalf,

andn bonussharesthatqualifyasdividends.

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shareholder)ofaprivatecompanythathad(orwasgoingtohavebyacertaintime)anunpaidpresententitlementfromatrustestateand

n thetrusteeofthetrustestatemadeapaymentorloan,orforgaveadebt,inyourfavour.

Combinetheamountsthatweretreatedasdividendswithanyunfrankeddividendsyoureceivedandincludethetotalamountinyourassessableincomeat S item11onyourtaxreturn.

Formoreinformation,readYou and your shares 2007.

Returns on non-share equity interestsDividendsalsoincludedividendspaidonanon-shareequityinterest.Tofindoutmoreaboutthis,readYou and your shares 2007.

Non-residentsWithholdingtaxpaidbynon-residentsisafinaltax.

IfyouwerenotanAustralianresidentfortaxpurposesforallorpartoftheyear(seepages11–12),includedividendincomepaidorcreditedtoyouduringthatperiodatthisitemunless:n thedividendwasfullyfranked,orn thedividendwasnotfullyfranked,buteither:

– withholdingtaxwas(orshouldhavebeen)withheldfromtheunfrankedamount,or

– theunfrankedamountwasdeclaredtobeconduitforeignincomeinthedividendstatement.

Onaseparatepieceofpaper,printSCHEDULEOFADDITIONALINFORMATION–ITEM11.Providedetailsofanydividendyoureceivedduringanyperiodyouwereanon-residentthatwasnotfullyfranked,andwasnotdeclaredtobeconduitforeignincome,oronwhichyouhavenotpaidwithholdingtax.

Signyourscheduleandattachittopage3ofyourtaxreturn.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Wewillworkouttheamountofwithholdingtaxyouhavetopayonthedividends,andadviseyouoftheamount.

IMPUTATION SYSTEMDividendsthatAustralianresidentcompaniespaytheirshareholdersaretaxedunderasystemknownas‘imputation’.Itiscalledanimputationsystembecausethetaxthecompanypaysisimputedorattributedtotheshareholders.Thetaxpaidbythecompanyisallocatedtoshareholdersbywayoffrankingcreditsattachedtothedividendstheyreceive.

Youincludeanamountequaltothefrankingcreditattachedtoyourdividendinyourassessableincome.Youarealsoentitledtoafrankingtaxoffsetequaltotheamountincludedinyourincome(therearesomeexceptionstothisrule,seeFrankingcredittrading–qualifiedpersons,inthenextcolumn).

Thefrankingtaxoffsetwillbeusedtocover,orpartlycover,thetaxpayableonthedividends.Ifthetaxoffsetismorethanthetaxpayableonthedividends,theexcesstaxoffset

willbeusedtocover,orpartlycover,anytaxpayableonothertaxableincomereceived.

Ifthereisanytaxoffsetamountleftoverafterthat,werefundthatamounttoyou.

NOTEIfyouhaveafrankingcreditbutdonothavetolodgeataxreturn,seeFrankingcreditsonthenextpage.YoucanclaimyourrefundonashorterformincludedinthepublicationRefund of franking credits instructions and application for individuals 2007.

Somesituationsarenotcoveredbytheimputationsystemandthetaxpaidbythecompanyisnotallocatedtoshareholdersbywayoffrankingcredits.Frankingcreditsdonotattachtothefollowingdividends:n thepartofthedividendonwhichfamilytrustdistribution

taxhasbeenpaid.Thesedividendsareexemptincomeandyoucannotclaimthefrankingcredit.(Thecompanyorcorporatelimitedpartnershipthatpaidthedividendshouldtellyouiffamilytrustdistributiontaxhasbeenpaidonit.)

n adividendthatisincludedinatrustdistributiononwhichultimatebeneficiarynon-disclosuretaxhasbeenpaid.(Thetrusteewillletyouknowifadistributionfitsthiscategory.)

n dividendswhereyouengagedinfrankingcredittradingandfailedtosatisfythe‘holdingperiod’ruleorthe‘relatedpayments’rule(seebelow)

n dividendstotheextentthatafrankingtaxoffsetisdeniedbecauseyouhaveexceededthesmallshareholderfrankingtaxoffsetlimitcontainedinthefrankingcredittradingrules

n dividendsfromanon-equitysharewhich,althoughashareinlegalform,isnottreatedasanequityinterest,sothedividendsarenotfrankable.(You and your shares 2007hasmoreinformationonnon-equityshares.)

n demergerdividends.

Franking credit trading – qualified personsMeasuresdesignedtocurbtheunintendeduseoffrankingcreditsapplytopeoplewhodonoteffectivelyownthesharesorwhoonlybrieflyowntheshares.Underthesemeasures,knownasthe‘holdingperiodrule’andthe‘relatedpaymentsrule’,youmustsatisfycertaincriteriabeforeyouqualifyforfrankingtaxoffsets.Inotherwords,onlyqualifiedpeopleareabletohavethebenefitofthefrankingcreditattachedtotheirdividends.Thesemeasuresaddresstheissueoffrankingcredittrading.

Theholdingperiodruleappliestosharesboughtonorafter1July1997.Itwillapplytoyouifyousellshareswithin45daysofbuyingthem.Italsoappliesifyouenterintoariskdiminutionarrangement,suchasaderivativetransaction,withinthattime.Theholdingperiodis90daysforcertainpreferenceshares.

Therelatedpaymentsruleappliestoarrangementsenteredintoafter7.30pm(AustralianEasternStandardTime)on13May1997.Itappliestoyouifyouwereunderanobligationtomakearelatedpaymentforadividendandyoudidnotholdyourshares‘atrisk’duringaspecifiedqualifyingperiod.

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EIfyoufailedtosatisfytheholdingperiodrule,andtherelatedpaymentsruledoesnotapplytoyou,youmaystillbeentitledtoafrankingtaxoffsetifyouqualifyforthesmallshareholderexemption.Thesmallshareholderexemptionappliesprovidedthatyoudonotexceedthefrankingtaxoffsetlimitof$5,000onallofyourfrankingtaxoffsetentitlementsinagivenyear,whetherreceiveddirectlyorindirectly(suchasthroughatrustorpartnership).

Ifanyofthesemeasuresarelikelytoaffectyou,readYou and your shares 2007.

Unfranked dividends UnfrankeddividendsarepaidbyanAustralianresidentcompanythathasnotalreadypaidAustraliancompanytax.Ifyourdividendwasunfranked,youarenotentitledtoafrankingtaxoffset.Youmustincludetheunfrankeddividendinyourassessableincomeat S item11onyourtaxreturn.

NOTEIfyourdividendstatementshowsthatyourunfrankeddividendwaspaidoutofconduitforeignincome,youmuststillincludethisamountasunfrankeddividendincome.

Ifyoudidnotquoteyourtaxfilenumber(TFN)toyourinvestmentbodyforthesharesorunitsyouheld,taxmayhavebeenwithheldfromanyunfrankeddividendsatthehighestmarginalrateplustheMedicarelevy,atotalof46.5%.

TFNamountswithheldfromyourunfrankeddividendswillbeshownonyourdividendstatement.YoucanclaimacreditforanyTFNamountswithheldat V item11onyourtaxreturn.IfyouhavereceivedarefundofsomeoralloftheTFNamountswithheld,youcannotclaimacreditfortheseamounts.

Franked dividendsYoumustincludetheamountofanyfrankeddividendsyoureceivedfromaresidentcompanyinyourassessableincomeat T item11.

Franking creditsYoumustalsoincludeanyfrankingcreditinyourassessableincomeatU item11onyourtaxreturn,sowecancalculatethecorrectamountoftaxandMedicarelevy.However,donotincludeanyfrankingcreditifyoudonotqualifyforafrankingtaxoffsetbecauseoftheapplicationoftheholdingperiodruleortherelatedpaymentsruleorbecauseyouexceededthesmallshareholderexemptionlimit(seethefrankingcredittradingmeasuresdescribedonthepreviouspage).

Thefrankingcreditsattachedtodividendsarefromdividendsfrankedatthecompanytaxrateof30centsinthedollar(thatis,thecompanypaidtaxonitstaxableincomeattherateof30%).

Anamountequaltothefrankingcreditwillbeautomaticallyallowedasataxoffsettoreduceanytaxpayableonyourdividendsandanyothertaxableincomereceived.

Formoreinformation,readYou and your shares2007.

WHAT YOU NEEDYouneedyourstatementsfromthecompany,corporateunittrust,publictradingtrustorcorporatelimitedpartnershipthatpaidyouthedividendsormadethedistributions.

Thesestatementsshouldshow:n theamountsofunfrankedandfrankeddividends

youreceivedn theamountsoffrankingcreditsyoureceived(the

companyworksthisoutandallocatesittothedividendordistribution),and

n theTFNamountswithheldfromunfrankeddividends.

Ifyouhavenotreceivedyourdividendordistributionstatements,contactthecompany,corporateunittrust,publictradingtrustorcorporatelimitedpartnershipthatpaidorcreditedyouwiththedividendsordistributions.

NOTEShowonlyyourshareofanydividendsthatwerepaidorcreditedtoyou(forexample,ifyouandanotherpersonownedthesharesinyourjointnames,showonlyyourportionofthedividendincomeonyourtaxreturn).


Thereisanexampleonthenextpageonhowtoshowunfrankedandfrankeddividends.Itmayhelpyoucompletethefollowingsteps.

STEP1 Addupalltheunfrankeddividendamountsonyourstatements–includinganyTFNamountswithheld–plusanyamountstreatedasdividends.Writethetotalamountat S item11onpage2ofyourtaxreturn.Donotshowcents.

STEP2 Addupallthefrankeddividendamountsonyourstatementsandanyotherfrankeddividendspaidorcreditedtoyou.Writethetotalamountat T item11.Donotshowcents.

NOTEIfyourstatementdoesnotshowthefrankedandunfrankedportionsofthedividend,includethetotaldividendamountat T item11.

STEP3 Addupalltheallowablefrankingcreditamountsonyourstatements.WritethetotalamountatU item11.Donotshowcents.

STEP4 AddupanyTFNamountswithheldthathavenotbeenrefundedtoyou.Writethetotalamountat V item11.Showcents.Thisamountwillappearasacreditonyournoticeofassessment.


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ECHECK THAT YOU HAVE . . . writtenonyourtaxreturnthetotalunfrankedamount writtenonyourtaxreturnthetotalfrankedamount writtenonyourtaxreturnthetotalallowablefrankingcreditamount

writtenonyourtaxreturnthetotaltaxfilenumber(TFN)amountwithheldfromdividends,and

keptyourdividendstatementswithyourotherrecords.

ExAMPLE

Howtoshowunfrankedandfrankeddividends

RanjinihassharesinCoalsTyreLtd,TelsbraLtd,JTCorporateUnitTrustandSYFPtyLtd.ShehasnotgivenherTFNtoTelsbraorSYF.

Forthe2006–07year,Ranjini’sdividendstatementsfromthecompaniesshehassharesinshowed:a)CoalsTyreLtd–fullyfrankeddividendsof$70and

a$30frankingcreditb)Telsbra–anunfrankeddividendof$100.ATFN

amountof$46.50waswithheldfromherpayment,soshereceived$53.50.TheunfrankeddividendamountRanjinimustshowonhertaxreturnis$100($53.50plus$46.50)

c) JTCorporateUnitTrust–unfrankeddividendsof$50,frankeddividendsof$70anda$30frankingcredit

d)SYFPtyLtd–adividendof$240,madeupofanunfrankeddividendof$100andafrankeddividendof$140.ATFNwithheldamountof$46.50waswithheldfromtheunfrankeddividendamount,soRanjinireceived$53.50.Theunfrankeddividendamountshemustshowonhertaxreturnis$100($53.50plus$46.50).Forthefrankeddividendof$140,shehadafrankingcreditof$60.NoTFNamountiswithheldfromfrankeddividends.

Companyortrust

Unfrankedamount*

Frankedamount

Frankingcredit

TFNamountswithheldfromdividends

a)CoalsTyreLtd $0.00 $70.00 $30.00 $0.00

b)TelsbraLtd $100.00 $0.00 $0.00 $46.50

c)JTCUTrust $50.00 $70.00 $30.00 $0.00

d)SYFPtyLtd $100.00 $140.00 $60.00 $46.50

Total S $250.00 T $280.00 U $120.00 V $93.00

*UnfrankedamountincludesboththeamountreceivedorcreditedandtheTFNamountwithheld.

Formoreexamples,refertoYou and your shares 2007.


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INCOME FROM THE SUPPLEMENTARY SECTION

‘Otherincome’includes:– anon-qualifyingcomponentofaneligibletermination

payment– discountsonshares,stapledsecuritiesorrightsto

acquirethemunderanemployeesharescheme– lumpsumpaymentsinarrears– foreignexchangegains– royalties– bonusamountsdistributedfromfriendlysociety

incomebonds– taxablescholarships,bursaries,grantsorother

educationalawards– benefitsorprizesfrominvestment-relatedlotteries

andsomegame-showwinnings– incomefromyouractivitiesasaspecialprofessional,

suchasauthorofaliterary,dramatic,musicalorartisticwork;aninventor;aperformingartist;aproductionassociateoranactivesportsperson

– reimbursementsoftax-relatedexpensesorelectionexpenseswhichyouhaveclaimedasadeduction

– anassessablebalancingadjustmentfromthedisposal,lossordestructionofanydepreciatingasset,includingyourcar,forwhichyouhaveclaimedadeductionfordeclineinvalue

– paymentsfromsicknessandaccidentinsurancepoliciesotherthanthoseshownonyourpaymentsummary

– interestfromthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowings

– gainsfromthedisposalorredemptionoftraditionalsecurities

– allowancesorpaymentsyoureceivedasamemberofalocalgovernmentcouncilthatyouhavenotalreadyshownatitem1or2

– othertaxableallowancesorpaymentsyoureceivedfromCentrelinkthatarenotshownatitem5or6.

Loss typesn Abusinessloss(includingifyouareself-employed)n Adeferrednon-commercialbusinesslossn Acapitalloss,forexample,ondisposalofaCGTassetn Non-capitallossfromthedisposalorredemptionof

traditionalsecurities

NO GotoTotalincomeorlossonthenextpage.

YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readbelow.

Ifyouhadpersonalservicesincome,netincomeorlossfrombusiness,ordeferrednon-commercialbusinesslossesyouwillneedtoreadthepublicationBusiness and professional items 2007 (NAT2543–6.2007)thencompletetheBusiness and professional items schedule for individuals 2007andattachittopage3ofyourtaxreturn.

CAUTIONReadthisquestioncarefully–consultTaxPack 2007 supplementifyouarenotfamiliarwiththetermsused.

Did you derive any of the following types of income or incur any of the following types of losses?

Income typesn Partnershipandtrustdistributionsn Personalservicesincome(otherthansalaryorwages)*n Incomefromabusiness(includingifyouare

self-employed)n Incomeunderapayasyougo(PAYG)voluntary

agreementn Incomefromwhichanamountwaswithheldbecause

youdidnotquoteyourAustralianbusinessnumbern Incomereceivedasanindependentcontractorunder

alabourhirearrangementn Incomeyouearnedasanon-employeetaxidriver,for

example,adriveroperatingunderastandardbailmentagreementwithanowner/operator

n Incomefromwhichanamountwaswithheldduetotheoperationofforeignresidentwithholding

n Incomeyoudepositedintoafarmmanagementaccountn Incomeyouwithdrewfromafarmmanagementaccountn Acapitalgain,forexample,ondisposalofacapital

gainstax(CGT)assetn Adistributionfromaforeignentityn Incomeattributedtoyoufromacontrolledforeign

company,foreigninvestmentfund,foreignlifepolicyoratransferortrust(foreignincome)

n Incomereceivedfromaforeignsource,includingforeignpensionsandforeignemploymentincome,andforeigndividends,forexample,NewZealanddividendswithAustralianfrankingcredits**

n Rentn Bonusesfromlifeinsurancecompaniesandfriendly

societiesn Otherincomenotshownatitems1to11

* Personalservicesincomeincludesthefollowingpaymentsspecifiedbyregulation(‘specifiedpayments’):– incomeasaperformingartistinapromotionalactivity– paymentfortutorialservicesprovidedfortheIndigenous

TutorialAssistanceSchemeoftheDepartmentofEducation,ScienceandTraining

– paymentfortranslationandinterpretationservicesfortheTranslatingandInterpretingServiceoftheDepartmentofImmigrationandCitizenship.

**Youmustalsocompletethesupplementarysectionif:– youownforeignassets(includinganinterestinaforeignlife

policyorforeigncompanyortrust,orshares)– youhaveeverdirectlyorindirectlycausedthetransferof

property(includingmoney)orservicestoanon-residenttrustestate.

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YoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’thaveacopyofthissupplement,youcangetonefrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.


STEP1 Completethedetailsatthetopofpage9onyourtaxreturn(supplementarysection).UseTaxPack 2007 supplement tohelpyoucompletetheIncomesection.

STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTINCOMEORLOSSonpage11to I onpage2ofyourtaxreturn.Ifitisalossamount,printLintheLOSSbox besideit.

TOTAL INCOME OR LOSS

Ifyouhavenotbeenabletocompleteanyoftheincomeitemsbecauseyoudonothaveallthedocumentsyouneedtoworkouttherightamount–forexample,youaremissingapaymentsummary–donotcompletethissectionyet.

Rememberthatyouhaveuntil31October2007tolodgeyourtaxreturn.Youshouldnotlodgeyourtaxreturnifitisincomplete.Ifyouthinkyouwillstillbemissinginformationon31October,asktheTaxOfficeifyoucanlodgeatalaterdate.Seepages10–11forinformationonhowtodothis.


STEP1 Addupalltheamountsintheright-handcolumnofitems1to11and I –donotinclude I ifitisaloss–onyourtaxreturn.

STEP2 Takeanylossamountat I awayfromtheamountyouworkedoutatstep1.Youranswerisyourtotalincomeorloss.

STEP3 Writeyouranswerfromstep2atTOTALINCOMEORLOSSonpage2ofyourtaxreturn.Donotshowcents.

Ifyoumadeanoverallloss,printLintheLOSSbox attherightofTOTALINCOMEORLOSS.

You have now reached the end of the Income section.Beforeaddingupyourincomeamountsfromitems1to11andanyamountat I onpage2ofyourtaxreturn,pleasenotethefollowing:n Themorecommontypesofexemptincomearelisted

onpages13–14.Generallyyourexemptincomeisnotincludedonyourtaxreturn.

n Youmusthaveshownallofyourincomefortaxpurposes.TheTaxpayer’s declaration onpage8ofyourtaxreturnwillrequireyoutosignthatthisistrue.Theprecedingpages15–35giveyoutheinformationyouneedtoshowtherightamounts.Ifyoustillhaveincomethatyouhavenotputatanyitemanditisnotexemptincome,youwillneedtogobackthroughtheIncomesectionandincludeit.

Ifyouareinanydoubt,phonethePersonalInfoline(seetheinsidebackcover).

Ourauditactivitiesincludecheckingtheincomedetailsyouprovideonyourtaxreturnwithothersources–forexample,youremployer,yourbankortheAustralianGovernmentagencythatpaysyourpension,allowanceorpayment.

NOTEIfyouwere55yearsorolderon30June2007,youmaybeentitledtothematureageworkertaxoffset.Certainincomefromthesupplementarysectionwillbeusedtocalculateyournetincomefromworking.SeequestionT13Netincomefromworking–supplementarysectionforfurtherinformation.


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SDeductionsCLAIMING DEDUCTIONS FOR ExPENSES THAT RELATE TO YOUR WORK AS AN EMPLOYEE

expenditureinapriorincomeyearandapportioneditundertheadvanceexpenditurerulesandtheprepaidserviceextendedintothe2006–07incomeyear,youmayclaimtherelevantportionoftheexpenditureonyour2007taxreturn.

Ifyouneedtoknowmore,refertoDeductions for prepaid expenses(NAT4170–6.2007).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

AllowancesReceivinganallowancefromyouremployerdoesnotautomaticallyentitleyoutoadeduction.Youmuststillmeetthebasicruleslistedinthepreviouscolumntomakeaclaim.Youcanclaimonlythetotalamountyouincurredeveniftheallowanceismore.Forexample,ifyoureceivedatoolsallowanceof$500andyourtoolexpenseswere$400,youmustincludethewholeamountoftheallowanceatitem2onyourtaxreturnandthedeductionyoucanclaimatitemD5is$400.

Written evidence rule – records you need to keep for claims of more than $300Youmusthavewrittenevidencetoproveyourclaimsifyourtotalclaimsexceed$300.Therecordsyoukeepmustprovethetotalamount,notjusttheamountover$300.

The$300limitdoesnotapplytoclaimsforcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.Therearespecialwrittenevidencerulesfortheseclaimswhichareexplainedattherelevantquestions.

NOTEDonotsendinyourreceiptsorotherrecordswithyourtaxreturnunlesswerequestyoutodosoinwriting.

What is written evidence?Writtenevidencecanbe:n adocumentfromthesupplierofthegoodsorservices,

showing:– thenameofthesupplier– theamountoftheexpense– thenatureofthegoodsorservices–ifnotshown,

youmaywritethisonthedocumentbeforeyoulodgeyourtaxreturn

– thedatetheexpensewasincurred– thedateofthedocument

n anotherdocumentorcombinationofdocumentscontainingtheinformationlistedabove.

Ifyouuseacombinationofdocuments,thedatesofthedocumentsarenotrequiredbuttheyneedtocontainthedateyouincurredtheexpense.

Thesedocumentscanbeinwrittenorelectronicform.Theyinclude:– bankandotherfinancialinstitutionstatements– creditcardstatements

Youcanclaimdeductionsforwork-relatedexpensesyouincurredwhileperformingyourjob.Youincurawork-relatedexpensewhen:n youreceiveabillorinvoiceforanexpensethatyouare

liableforandmustpayn youdonotreceiveabillorinvoicebutyouarecharged

andyoupayforit. RefertoTaxation Ruling TR 97/7 – Income tax:

subsection 51(1) – meaning of ‘incurred’ – timing of deductionsformoreinformation.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.Ifyourwork-relatedexpenseincludesanamountofgoodsandservicestax(GST),theGSTispartofthetotalexpenseandisthereforepartofanyallowablededuction.

basic rulesn Youmusthaveincurredtheexpensein2006–07.n Youcannotclaimanexpensethatyouremployer(or

anyotherperson)hasorwillreimburseyoufor.n Youmusthaveincurredtheexpenseinthecourseof

earningyourassessableincomeanditmustnotbeprivate,domesticorcapitalinnature.Forexample,thecostsofnormaltraveltoandfromworkorbuyingluncheachdayareprivate.Ifyouincurredanexpensethatwasbothworkrelatedandprivateordomestic,youcanonlyclaimadeductionforthework-relatedportionoftheexpense.

n Ifyouincurredanexpenseforservicespaidinadvance,readAdvanceexpenditurebelowtodecidewhatpartoftheexpenseisallowablein2006–07.

n Youmustbeabletosubstantiateyourclaimswithwrittenevidenceifthetotalamountyouareclaimingforexpenses,notincludingclaimsforcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses,isgreaterthan$300(seeWrittenevidencerule–recordsyouneedtokeepforclaimsofmorethan$300inthenextcolumn).

n Ifthetotalamountyouareclaimingis$300orless,youneedtobeabletoshowhowyouworkedoutyourclaimsbutyoudonotneedwrittenevidence.

BUSINESSEXPENSESIfyourincomecomesfromcarryingonabusinessyouclaimyourbusinessexpensesusingtheBusiness and professional items schedule for individuals 2007.Seequestions13and14inTaxPack 2007supplement.

Advance expenditureYoumustfollowtheapportionmentrulesforadvanceexpenditureifyouprepayforaservicecosting$1,000ormoreandtheserviceextendsforaperiodofmorethan12monthsorbeyond30June2008.Undertheserulesyoumaybeentitledtoclaimonlypartoftheexpenditurethisyearandtheremainderinfutureyears.Ifyouincurred


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S– BPAYreferencenumbers,oftenalsocalledreceipt

ortransactionnumbers– emailreceipts– yourPAYG payment summary – individual

non-business;thismayshow,forexample,yourtotalunionfees

– paperorelectroniccopiesofdocuments–thesemustbeatrueandclearreproductionoftheoriginal

n evidenceyouhaverecordedyourself:– forexpensesof$10eachorless,providingthetotal

oftheseexpensesisnotmorethan$200– ifyouhavebeenunabletoobtainwrittenevidence–

forexample,fortollorparkingfeeswhereyoucannotgetareceipt.

Yourrecordsmustshowthesamedetailsasadocumentfromasupplierasdescribedabove.

YourdocumentationmustbeinEnglishunlessyouincurredtheexpenseoutsideAustralia.

Formoreinformation,seeLaw Administration Practice StatementPS LA 2005/7 – Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Electronic recordsWerecommendthatifyoustoreyourrecordselectronicallyyoumakeaback-upcopytoensuretheevidenceiseasilyaccessibleiftheoriginalbecomesinaccessibleorunreadable(forexample,whereacompactdisk,floppydiskorharddriveiscorrupted).

Claims of $300 or lessWemayaskyoutotellushowyouworkedoutyourclaimandexplainwhyyourclaimisreasonable,basedontherequirementsofyouroccupation.Youdonotneedwrittenevidence;youcanmakereasonableestimates.

DON’TLEAVEITTOOLATE!Willyourtotalclaimsforwork-relatedexpensesexceed$300nextyear?Ifyouareunsure,youmaywanttokeepwrittenevidenceofyourexpensesduringtheyear.Youwillneedthisevidenceifyouwanttoclaimmorethan$300.

How long you need to keep your recordsYoumustkeepyourwrittenevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.IfattheendofthisperiodyouareinadisputewiththeTaxOfficethatrelatestoaworkexpense,youmustkeeptherelevantrecordsuntilthedisputeisresolved.

Fordepreciatingassets,youmustkeeprecordsfortheentireperiodoverwhichyouclaimdeductionsforthedeclineinvalueofthoseassets.Youmustkeepyourrecordsforafurtherfiveyearsfromthedateofyourlastclaim.Forexample,ifthiswasyourlastclaimyear,thefiveyearsstartfromthedateyoulodgeyour2007taxreturn.Thisperiodisextendedif,whenthefiveyearsend,youareinadisputewithusthatrelatestoadepreciatingasset.

DEFINITIONAdepreciating assetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.

EXAMPLE

Keeping recordsLindabuysacomputerfor$4,000inJuly2003.Lindauseshercomputerforwork60%ofthetime.Sheclaims60%ofthedeclineinvalueonthecostofhercomputeroverfouryears.Linda’slastclaimforadeductionfordeclineinvalueisonher2007taxreturnwhichshelodgeson14October2007.

Lindamustkeepherrecordsuntil31October2012.IfatthistimesheisinadisputewiththeTaxOfficethatrelatestothisclaim,shemustkeepherrecordsuntilthedisputeisresolved.

Ifyouhavelostyourrecordsortheyhavebeendestroyed,phonethePersonalInfoline(seetheinsidebackcover)tofindoutwhatyoucando.

Why you need to keep your recordsWewillworkoutyourrefundortaxdebtusingtheinformationyouprovideonyourtaxreturn.Wemayaskformoreinformationorauditthisinformationatalaterdate.Youneedtokeepyourrecordstoproveyourdeductionclaimsincaseweaudityou.

Questions D1 to D6 on the following pages show you how to claim deductions for expenses that relate to your work as an employee.

Extra information for some occupationsWeprovidesummariesoftaxrulingsfor16occupations:n Airline employees(NAT2331–6.2007)n Australian Defence Force members(NAT2321–6.2007)n Building workers(NAT2324–6.2007)n Cleaners(NAT2328–6.2007)n Factory workers(NAT2329–6.2007)n Hairdressers(NAT2320–6.2007)n Hospitality industry employees(NAT2326–6.2007)n Journalists(NAT2782–6.2007)n Lawyers(NAT2327–6.2007)n Nurses(NAT2319–6.2007)n Performing artists(NAT2325–6.2007)n Police officers(NAT2316–6.2007)n Real estate employees(NAT2323–6.2007)n Shop assistants(NAT2322–6.2007)n Teachers(NAT2317–6.2007)n Truck drivers(NAT2318–6.2007)

Youremployer,tradeunionorprofessionalassociationshouldhavecopiesofthesepublications.Theyarealsoavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

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QUESTION D�WORK-RELATED CAR EXPENSES

n youhadtotravelbetweenhomeandworkmorethanonceaday

n youwereoncall–forexample,youwereonstandbydutyandyouremployercontactedyouathometocomeintowork

n therewasnopublictransportnearwhereyouworkn youworkedoutsidenormalbusinesshours–for

example,shiftworkorovertime,orn yourhomewasaplaceofbusinessandyoutravelled

directlytoaplaceofemployment.

WHAT YOU MAY NEEDn Writtenevidenceofyourcarexpenses–receipts,

invoicesordiaryentriesn Carlogbookandodometerrecordsn Guide to depreciating assets 2007(NAT1996–6.2007)n Law Administration Practice Statement PS LA 1999/2

– Calculating car expense deductions where the car is jointly owned, jointly leased or jointly hired under a hire purchase agreement (but is not owned, leased or hired by a partnership)

n Law Administration Practice Statement PS LA 2005/7 – Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income

Thesepublicationsareavailableonourwebsiteortofindouthowtogetprintedcopies,seetheinsidebackcover.

Youcanclaimthecostoftripsbetweenhomeandworkif:n youusedyourcarbecauseyouhadtocarrybulkytools

orequipmentthatyouusedforworkandcouldnotleaveatwork–forexample,anextensionladderorcello

n yourhomewasabaseofemployment–youstartedyourworkathomeandtravelledtoaworkplacetocontinuethework,or

n youhadshiftingplacesofemployment – youregularlyworkedatmorethanonesiteeachdaybeforereturninghome.

Taxation Ruling TR 95/34 – Income tax: employees carrying out itinerant work hasmoreinformationontravelexpensesforemployeeswhohaveshiftingplacesofemployment.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Youcanclaimthecostofusingyourcartotraveldirectlybetweentwoseparateplacesofemployment–forexample,whenyouhaveasecondjob.

Did you have any car expenses relating to your work as an employee?Donotincludeexpensesforvehiclesotherthancars–forexample,utilitytrucksorpanelvanswithacarryingcapacityofonetonneormore,vehicleswithacarryingcapacityofnineormorepassengers,ormotorcycles.ShowexpensesforthesevehiclesatitemD2.

Donotincludetravelexpensesincludingshort-termcarhire,publictransportfares,bridgeandroadtolls,parkingfees,taxifares,orthework-relatedrunningcostsofacarownedorleasedbysomebodyelse–aborrowedcar.YoumaybeabletoclaimtheseatitemD2.

NO GotoquestionD2.

YES Readbelow.

CAUTIONIfyoureceivedanallowanceforcarexpensesorareimbursementthatwasworkedoutbyreferencetothedistancethecartravelled,youmustshowtheamountofthereimbursementorallowanceasincomeatitem2onyourtaxreturn.

Youcanclaimatthisitemyourwork-relatedexpensesforusingacarthatyouowned,leasedorhired(underahirepurchaseagreement).

Youcannotclaimatthisitemanyexpensesrelatingtoacarownedorleasedbysomeoneelse,includingyouremployeroranothermemberofyourfamily.However,weconsideryoutobetheownerorlesseeofacarandeligibletoclaimexpenseswhereafamilyorprivatearrangementmadeyoutheownerorlesseeeventhoughyouwerenottheregisteredowner.Forexample,wewouldallowyoutoclaimforafamilycarthatwasgiventoyouasabirthdaypresentandwhich,althoughitwasnotregisteredinyourname,youusedasyourownandforwhichyoupaidallexpenses.

Ifyouownedorleasedacarorhiredoneunderahirepurchaseagreement,youcanuseoneofthefourmethodsexplainedinthisquestiontoclaimyourwork-relatedcarexpenses.

Dependingonthemethodyouchoose,youwillneedtoknoworestimateyourbusinesskilometres.Businesskilometresarethekilometresyoutravelledinthecarinthecourseofusingitforwork-relatedpurposes.

YOU NEED TO KNOW

Using your car for workYoucannotclaimthecostofnormaltripsbetweenhomeandworkasthattravelisprivate.Youcannotclaimitevenif:n youdidminortasks–forexample,pickingupthemail

onthewaytoworkorhome

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ExAMPLE

Willisaclerkatalargedepartmentstore.During2006–07heusedhisowncartotravelfromhisnormalplaceofemploymenttohissecondjobasawaiter.Afterfinishingworkasawaiter,hewentdirectlyhome.Will’stravelcostfromhisnormalplaceofemploymenttohissecondjobisanallowablededuction.However,hecannotclaimthecostoftravellinghomefromhissecondjob.

Youcanclaimthecostofusingyourcartotravel:n fromyournormalworkplacetoanalternativeworkplace

–forexample,aclient’spremises–whilestillondutyandbacktoyournormalworkplaceordirectlyhome

n fromyourhometoanalternativeworkplaceforworkpurposesandthentoyournormalworkplaceordirectlyhome.

ExAMPLE

Becisaclerkatalargedepartmentstoreinthecity.In2006–07shewasrequiredtoattendmeetingsatheremployer’sotherstoreinthesuburbs.Sheusedherowncartotraveltothemeetings.Asthemeetingsfinishedlate,Becwentdirectlyhomeafterthemeetings.

Beccanclaimthecostofeachjourney.

Calculating your deductionYoucanuseoneofthefourmethodssummarisedbelowtoworkoutyourcarexpenses.Choosethemethodthatgivesyouthelargestdeductionandensureyouhavethenecessaryevidence.

METHOD � – Cents per kilometre n Yourclaimisbasedonasetrateforeach

businesskilometre.n Youcanclaimamaximumof5,000businesskilometres.n Youdonotneedwrittenevidence.

METHOD 2 – �2% of original value n Yourclaimisbasedon12%oftheoriginalvalueof

yourcar.n Thevalueissubjecttoluxurycarlimits.n Yourcarmusthave(orwouldhave)travelledmorethan

5,000businesskilometresintheincomeyear.n Youdonotneedwrittenevidence.

METHOD 3 – One-third of actual expenses n Youclaimone-thirdofyourcar’sexpenses.n Yourcarmusthave(orwouldhave)travelledmorethan

5,000businesskilometresintheincomeyear.n Youneedwrittenevidenceorodometerrecordsforfuel

andoilcosts.n Youneedwrittenevidenceforalltheotherexpenses

forthecar.

METHOD 4 – Logbook n Yourclaimisbasedonthebusinessusepercentage

ofeachcarexpense.n Youneedalogbooksoyoucanworkoutthe

percentage.n Youneedodometerreadingsforthestartandendof

theperiodyouownedorleasedthecar.n Youcanclaimfuelandoilcostsbasedonodometer

records.n Youneedwrittenevidenceforalltheotherexpenses

forthecar.

Jointly owned carsTherearespecialrulesforjointlyownedcars.Forexample,iftwopeoplehaveequalsharesinacar,underthe‘12%oforiginalvalue’method,theywouldeachclaim6%ofthevalueastheirdeduction.LawAdministrationPracticeStatementPSLA1999/2 tellsyoumoreabouttheserules.

Deductions for decline in valueIfyouareclaimingadeductionforthedeclineinvalueofacar,youshouldrefertothepublicationGuide to depreciating assets 2007.Itcontainsdetailsofhowtoworkoutdeductionsfordeclineinvalueandbalancingadjustmentsforcars.(Youmayneedtomakeabalancingadjustmentifyoudisposedofyourcar.Seethenextpage.)

Youcanonlyclaimadeductionfordeclineinvalueif:n youownedthecarorhireditunderahirepurchase

agreement,andn youusedeitherthe‘one-thirdofactualexpenses’or

‘logbook’methodtocalculateyourcarexpenses.

Ifyouleasedacaryoucannotclaimadeductionforitsdeclineinvalue(becauseyouwerenottheownerofthecar),unlessitwasaluxurycar.Specialrulesapplytoleasedluxurycars(seebelow).

Someimportantthingstoremember:n Thedeclineinvalueisworkedoutfromthedayyou

firstusethecarforanypurpose.n Youcanonlyclaimadeductionfordeclineinvaluein

ayearyouusethecarforwork-relatedpurposes.n Youwillneedtoapportionyourdeductionfordecline

invalueifyouusedthe‘logbookmethod’andownedthecarforonlypartoftheyear.

n Whencalculatingadeductionforthedeclineinvalue,thecostofthecarisrestrictedtotheluxurycarlimit(seepage41).

Leased luxury carsIfyouleasedaluxurycaryoucanclaimadeductionforitsdeclineinvalue.Specialrulesapplyifyouwanttoclaimadeductionforthedeclineinthevalueofaluxurycar:n youmustusethe‘one-thirdofactualexpenses’or

‘logbook’methodtocalculateyourcarexpenses,andn thevalueofthecarisrestrictedtotheluxurycarlimit

(seepage41).

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SAcarisconsideredtobealuxurycarifthecostofthecar–whetherneworsecond-hand–atthetimetheleasebeginsismorethantheluxurycarlimitapplyingforthatyear.PhonethePersonalInfoline(seetheinsidebackcover)tofindoutmoreaboutthespecialrules.

Decline in value and low-value pools Ifyouincludedacaryouusedforworkinyourlow-valuepool,donotincludeanamountforthedeclineinvalueofthatcarinyourcarexpensesatitemD1.Youclaimthedeductionfordeclineinvalueofthelow-valuepoolatitemD6.SeeGuide to depreciating assets 2007 forinformationonthelow-valuepoolmethodandhowtocalculatethedeclineinvalueofyourlow-costandlow-valuedepreciatingassets.

Decline in value using the simplified tax systemIfyouwereinthesimplifiedtaxsystem(STS)for2006–07,donotclaimanamountforthedeclineinvalueofyourcaratitemD1.Youmustcalculateyourwork-relateddeductionfordepreciatingassets,includingyourcar,usingtheSTSrules.YouclaimyourSTSdepreciatingassetsdeductionsatitemP8ontheBusiness and professional items schedule for individuals 2007.

NOTETousetheSTSrulesyoumustbeinbusinessandhaveelectedtoenterorcontinueintheSTSatitemS1ontheBusiness and professional items schedule for individuals 2007.

Ifyoudidnotcarryonanybusinessduring2006–07buthaveSTSpooldeductionsbecauseyouhaveallocateddepreciatingassets(suchasacar)toanSTSpoolinaprioryear,makeyourclaimforSTSpooldeductionsatitemD15onyourtaxreturn(supplementarysection).

Formoreinformation,refertoThe simplified tax system – a guide for tax agents and small businesses (NAT6459).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Was your car disposed of, lost or destroyed?Youmayneedtomakeabalancingadjustmentifyouhavedisposedofyourcarandyouhaveclaimedadeductionforitsdeclineinvalue.Thebalancingadjustmentisnecessaryifyou:n usedonlythe‘one-thirdofactualexpenses’or

‘logbook’methodn switchedbetweenthe‘one-thirdofactualexpenses’

methodandthe‘logbook’method,orn switchedbetweenthe‘one-thirdofactualexpenses’

or‘logbook’methodandthe‘centsperkilometre’or‘12%oforiginalvalue’method.

ThepublicationGuide to depreciating assets 2007 explainshowtomakethesecalculations.

Ifyouhadalossaftermakingtheadjustment,claimthelossamountatthisitem.Ifyouhadaprofit,includetheamountascategory1incomeatitem22onyourtaxreturn(supplementarysection).RefertotheIndexformoreinformation.

IMPORTANTAbalancingadjustmentisnotrequiredifyouhaveusedonlythe‘centsperkilometre’or‘12%oforiginalvalue’methodforcalculatingexpensesforthecar.

Award transport paymentsAwardtransportpaymentsareallowancescoveringeithertransportexpensesorcarexpensereimbursementsthatarepaidunderanindustriallaworawardthatwasinforceon29October1986.Thecarexpensereimbursementiscalculatedinrespectofacertainnumberofkilometres.

Changesmadetotheindustriallaworawardafterthatdatearetreatedasiftheyhadbeenmadeonthatday.Yourunionoremployercantellyouthe‘29October1986’amount.

Awardtransportpaymentsareassessableincomeandyoumustincludeanypaymentsasincomeonyourtaxreturn.Ifyouhaveincurredtransportorcarexpensescoveredbythesepayments,youmaybeabletoclaimadeduction:n fortransportexpenses–atitemD2n forcarexpenses–ateitherthisitemoritemD2.

Ifyourclaimforwork-relatedtransportorcarexpensesisnomorethantheawardamount,maketheclaimatitemD2.Youdonotneedwrittenevidence.

Ifyoualsohaveaclaimforanyadditionalkilometresnotcoveredbytheawardtransportpayment,youcanmaketheclaimatthisitembutyoucanonlyusethe‘logbook’method(youwillneedwrittenevidence)orthe‘centsperkilometre’method.

Remember,kilometresthatarecoveredbytheawardtransportpaymentandclaimedatitemD2arenotcountedasbusinesskilometresundereitherthe‘centsperkilometre’or‘logbook’methodbuttheyarecountedaspartofthetotalkilometrestravelledforthe‘logbook’method.Ifyoudonotknowhowmanybusinesskilometresrelatetoyourawardtransportpayment,youcanmakeareasonableestimate.

Alternatively,youmaychoosenottolimitanypartofyourclaimforwork-relatedcarexpensestotheawardamount.Ifthisisthecase,makeyourclaimatthisitem(anddonotclaimcarexpensescoveredbyyourawardtransportpaymentatitemD2).Whenmakingyourclaimatthisitemyoucanuseanyofthefourmethodstocalculateyourcarexpenses.Treatanywork-relatedkilometrescoveredbytheawardtransportpaymentasbusinesskilometres.Youwillneedtoprovidethewrittenevidencerequiredbytheparticularmethodyouselect.

Theexampleonthenextpageexplainsthedifferentwaysyoucanclaimwhenyoureceiveanawardtransportpayment.


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ExAMPLE

Emmatravelled22,000kilometresintotalduring2006–07.Halfofthesewereworkrelated.Shereceivedanawardtransportpaymentof$2,000which,underheraward,coveredtravelof5,000work-relatedkilometres.Thisleftherwith6,000businesskilometresnotcoveredbythepayment.The‘29October1986’awardtransportpaymentwas$1,400.

Emmahastoshowthe$2,000atitem2.Shecanclaimhercarexpensesinoneofthefollowingways:n Shecanclaim$1,400atitemD2.n Shecanclaim$1,400atitemD2andthenuse5,000

ofheradditional6,000businesskilometrestowardsaclaimfortotalcarexpensesatitemD1usingthe‘centsperkilometre’method(seebelow).

n Ifshehaswrittenevidenceofherexpenses,shecanclaim$1,400atitemD2andthenusealltheoutstanding6,000businesskilometrestowardsaclaimfortotalcarexpensesusingthe‘logbook’method(seepages43–4).Shedividesher6,000businesskilometresbyher22,000totalkilometrestoworkoutherbusinessusepercentage:

6,0005 100 = 27%

22,000n Ifshehaswrittenevidenceofherexpenses,she

canignoreitemD2andtreatthekilometrescoveredbytheawardtransportpaymentasbusinesskilometres,andclaimthematthisitem.Thisgivesheratotalof11,000businesskilometrestowardsaclaimfortotalcarexpensesusingthe‘logbook’method(seepages43–4).Shedividesher11,000businesskilometresbyher22,000totalkilometrestoworkoutherbusinessusepercentage:

11,0005 100 = 50%

22,000

METHOD � – Cents per kilometreYoucanusethismethodtoclaimuptoamaximumof5,000businesskilometrespercarevenifyouhavetravelledmorethan5,000businesskilometres.Forexample,ifyoutravelled5,085businesskilometres,youcanonlyclaimthecostoftravelling5,000kilometreswiththismethod.Youcannotclaimfortheextra85kilometres.

Youdonotneedwrittenevidencebutyoumayneedtobeabletoshowhowyouworkedoutyourbusinesskilometres.

STEP1 Multiplythetotalbusinesskilometrestravelled(amaximumof5,000foreachcar)bythenumberofcentsallowedforyourcar’senginecapacity(fromtheRatesperbusinesskilometretableinthenextcolumn).Divideyouranswerby100toworkouttheamountindollarsthatyoucanclaim.

RATES PER bUSINESS KILOMETRE

Ordinarycar–enginecapacity

Rotaryenginecar–enginecapacity

Centsperkilometre

1600cc(1.6litre)orless

800cc(0.8litre)orless 58cents

1601–2600cc(1.601–2.6litre)

801–1300cc(0.801–1.3litre) 69cents

2601cc(2.601litre)andover

1301cc(1.301litre)andover 70cents

Workouttheamountyoucanclaimforeachcarandaddupalltheamounts.

STEP2 Writethetotalamountat A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterSintheCLAIMTYPEbox besidetheamount.

METHOD 2 – �2% of original value Youcanusethismethodifyouusedyourcartotravelmorethan5,000businesskilometresin2006–07.Thismethodisalsoavailableifyouwouldhaveusedyourcartotravelmorethan5,000businesskilometreshadyouuseditforthewholeof2006–07.

Youdonotneedwrittenevidencetousethismethodbutyoumayneedtobeabletoshowhowyouworkedoutyourbusinesskilometres.

Ifyouboughtthecar,youcanclaim12%ofthecost.Ifyouleasedthecar,youcanclaim12%ofitsmarketvalueatthetimethatyoufirstleasedit.Themaximumdeductionyoucanclaimis12%oftheluxurycarlimitintheyearinwhichyoufirstusedorleasedthecar.Theluxurycarlimitsforthepast10yearsareshowninthetablebelow.

LUxURY CAR LIMITS FOR THE PAST �0 YEARS

2006–07 $57,009 2001–02 $55,134

2005–06 $57,009 2000–01 $55,134

2004–05 $57,009 1999–2000 $55,134

2003–04 $57,009 1998–99 $55,134

2002–03 $57,009 1997–98 $55,134

STEP1 Multiplythecostofthecarortheluxurycarlimit,whicheverisless,by12anddividetheresultby100.Thisistheamountyoucanclaimifyouownedorleasedyourcarforthewholeof2006–07anduseditforworkduringthatyear.

Ifyouareusingthismethodtoclaimadeductionformorethanonecar,workouttheamountyoucanclaimforeachcar.

Ifyouownedorleasedallthecarsforthewholeof2006–07,gotostep3.Otherwise,gotostep2.

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SSTEP2 Ifyoudidnotownorleasethecarforallof2006–07,youneedtoworkoutwhetheryoucanusethismethod.

Firstworkoutthenumberofdaysyouownedorleasedthecarin2006–07.

Ifyoutravelled5,000businesskilometresorless,multiplythenumberofbusinesskilometresyoutravelledby365.Dividetheresultbythenumberofdaysyouownedorleasedthecarduring2006–07.Weconsidertheanswertobethenumberofkilometresyouwouldhavetravelledifyouhadusedthecarforthewholeyear.

Ifyouranswerismorethan5,000,youcanusethismethodtoclaimyourexpenses.GotoWorkingouttheamountyoucanclaimbelow.

Ifyouransweris5,000orless,youcannotusethismethod;usethe‘centsperkilometre’or‘logbook’method.

Working out the amount you can claimMultiplytheamountyouworkedoutatstep1bythenumberofdaysyouownedorleasedthecar.Dividetheresultby365.

ExAMPLE

Aaronboughtacaron1March2007for$40,000andhetravelled3,600kilometresforworkbetween1March2007and30June2007(122days).

Becausehedidnotownthecarforthefullyear,Aaronneedstoworkoutifhecanusethe‘12%oforiginalvalue’method.

Ashetravelledlessthan5,000businesskilometres,Aaronmultipliesthebusinesskilometreshetravelledby365anddividestheresultbythenumberofdaysheownedthecar:

3,6005365= 10,770kilometres

122

Becausethisismorethan5,000businesskilometres,heisabletousethismethod.

Aaronfollowstheinstructionsinstep1toget12%ofthecostofthecar:

$40,000512= $4,800

100

Hemultipliesthisamountbythenumberofdaysheownedthecaranddividestheresultby365:

$4,8005122= $1,605

365

ThisistheamountAaroncanclaimforcarexpenses.

STEP3 Writeyourclaimat A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterTintheCLAIMTYPEbox besidetheamount.

METHOD 3 – One-third of actual expenses Thismethodallowsyoutoclaimone-thirdofyourexpensesforeachcar.Carexpensesdonotincludecapitalcostssuchastheinitialcostofyourcarorimprovementstoit.

Youcanusethismethodifyouusedyourcartotravelmorethan5,000businesskilometresin2006–07.Thismethodisalsoavailableifyouwouldhaveusedyourcartotravelmorethan5,000businesskilometreshadyouuseditforthewholeof2006–07.

Youmusthavewrittenevidenceforallyourcarexpensesexceptfuelandoilcosts.

Therearetwowaystoworkoutyourfuelandoilcosts:n useyourfuelandoilreceipts,ifyouhavethemn keepodometerrecordsandmakeareasonable

estimatebasedonthoserecords.

Odometerrecordsneedtoshowtheodometerreadingsofthecaratthestartandendoftheperiodthatyouownedorleasedthecarduring2006–07.Theyshouldalsoshowthecar’senginecapacity,make,modelandregistrationnumber.Youmayalsoneedtobeabletoshowhowyouworkedoutyourbusinesskilometresandanyreasonableestimateyoumade.

ExAMPLE

Simhasmadeareasonableestimatethatshetravelled7,000businesskilometresduring2006–07.Sheisabletousethismethod.

Herodometerrecordsshowsheusedthecartotravelatotalof25,000kilometresduring2006–07.

Shealsoestimatedthatthecarused10litresoffuelper100kilometrestravelled,basedonthemanufacturer’sguidelines,andtheaveragefuelpricefortheperiodinherareawas$1.30perlitre.

Simwouldworkoutherfuelclaimlikethis:

25,000510= 2,500litres

100

2,5005$1.30=$3,250

ThisistheamountSimwouldincludeforfuelinstep1.

Completethefollowingstepstoworkouthowmuchyoucanclaimusingthe‘one-thirdofactualexpenses’method.

STEP1 Addupyourtotalexpensesforfuelandoil,registration,insurance,interest,repairsandmaintenance,thedeclineinvalueorleasepaymentsandanyothercostsofrunningyourcar.Seepages39–40toworkouttheamounttoshowherefordeclineinvalue.

STEP2 Divideyourtotalcarexpensesby3.Theansweristheamountyoucanclaim.

STEP3 Writetheamountfromstep2at A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterOintheCLAIMTYPEbox besidetheamount.


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SMETHOD 4 – Logbook Usingthe‘logbook’method,youworkoutthebusinessusepercentageofyourcar.Youcanthenclaimthispercentageofeachcarexpense.Carexpensesdonotincludecapitalcostssuchasthepurchasepriceofyourcarorimprovementstoit.

Youmustkeep:n alogbookn odometerrecords,andn writtenevidenceforallyourcarexpensesexceptfuel

andoilcosts.

business use percentageYoucanclaimthebusinessusepercentageofallyourcarexpenses.Toworkoutyourbusinessusepercentage,usethedetailsfromyourlogbookandodometerrecords.

Fromyourrecords,workoutthetotalkilometresyoutravelled.

Workouthowmanywerebusinesskilometres.Dividethisnumberbythetotalnumberofkilometrestravelled.Multiplytheanswerby100.

ExAMPLE

Attheendofthelogbookperiod,Tim’slogbookshowsthathetravelledatotalof11,000kilometresofwhich6,600werebusinesskilometres.

Timwouldworkouthisbusinessusepercentagelikethis:

6,6005 100 = 60%

11,000

ThisisthebusinessusepercentageTimwouldusetoworkouthiscarexpensesclaim.

Itisinyourinteresttowriteinthelogbookalljourneysyoumakeinyourcarforworkactivities.Ifawork-relatedjourneyisnotrecorded,thelogbookwillindicatealowerbusinessusepercentagethanitcould.

Did the pattern of use of your car change during 2006–07?Ifthepatternofuseofyourcarchanged,makeareasonableestimateofwhatyourbusinessusepercentagewouldhavebeenforthewholeof2006–07,takingintoaccountyourlogbook,odometerandotherrecords,anyvariationsinthepatternofuseofyourcarandanychangesinthenumberofcarsyouusedinthecourseofearningyourincome.

Your logbookYourlogbookisvalidforfiveyears.Ifthisisthefirstyearyouareusingthismethod,youmusthavekeptalogbookduring2006–07.Thelogbookmustcoveratleast12continuousweeks.Ifyoustartedtouseyourcarforbusinesspurposeslessthan12weeksbeforetheendof2006–07,youareabletocontinuetokeepalogbookinto2007–08sothatyourlogbookcoverstherequired12weeks.Ifyouwanttousethelogbookmethodfortwoormorecars,thelogbookforeachcarmustcoverthesameperiod.

Ifyouhavenotkeptalogbooksince2001–02,youmusthavekeptanewlogbookfor2006–07.Ifyoudidnotkeepanewlogbookfor2006–07,youcannotusethe‘logbook’method.Youmustuseanothermethod.

Whereyouhavekeptalogbookfor2006–07itmustcontainthefollowinginformation:n whenthelogbookperiodbeginsandendsn thecar’sodometerreadingsatthestartandendof

thelogbookperiodn thetotalnumberofkilometresthatthecartravelled

duringthelogbookperiodn thenumberofkilometrestravelledforworkactivities

basedonjourneysrecordedinthelogbook.Ifyoumadetwoormorejourneysinarowonthesameday,youcanrecordthemasasinglejourney

n thebusinessusepercentageforthelogbookperiod.

Ifyouestablishedyourbusinessusepercentageusingalogbookfromanearlieryearyouneedtokeepthatlogbookandmaintainodometerrecords.

Youalsoneedalogbookifwetoldyouinwritingtokeepone.Wedonotsupplylogbooks.Pre-printedlogbooksareavailablefromstationerysuppliersoryoucandrawupyourown.

Logbook entries Yourlogbookmustshowdetailsofeachbusinesstrip.Youmustwritedown:n thedatethejourneybeganandthedateitendedn thecar’sodometerreadingsatthestartandendof

thejourneyn howmanykilometresthecartravelledonthejourney,

andn thereasonforthejourney.

Thelogbookentriesmustbemadeattheendofthejourney,orassoonaspossibleafterwards,andtheymustbeinEnglish.

Odometer recordsYoumustkeepwrittenodometerrecordsfortheperiodyouownedorleasedthecarduring2006–07.Youneedtorecord:n thecar’sodometerreadingsatthestartandendofthe

period,andn themake,model,enginecapacityandregistration

numberofthecar.

Odometerrecordscanbekeptaspartofyourlogbookifyoukeptonefor2006–07.Ifyoudidnotkeepalogbookin2006–07,youneedtohaveaseparaterecordoftheodometerreadingsandotherdetails.

Working out your claimOnceyouhaveworkedoutyourbusinessusepercentage,youcanapplyittoyourcarexpenses.

Youneedtokeepwrittenevidenceofallyourcarexpensesexceptfuelandoilcosts,forexample,forregistration,repairs,interestandinsurance.

Therearetwowaystoworkoutyourfuelandoilcosts:n useyourfuelandoilreceipts,ifyouhavethemn makeareasonableestimatebasedonyourodometer

records.

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ExAMPLE

Bayden’sodometerrecordsshowheusedhiscartotravelatotalof7,000kilometresduring2006–07.

Basedonthemanufacturer’sguidelines,heestimatedthatthecarused10litresoffuelper100kilometrestravelledandtheaveragefuelpricefortheperiodinhisareawas$1.20perlitre.

Baydenwouldworkouthisfuelclaimlikethis:

7,000510= 700litres

100

7005$1.20=$840

ThisistheamountBaydenwouldincludeforfuelinstep1.

Completethefollowingstepstoworkouthowmuchyoucanclaimusingthe‘logbook’method.

STEP1 Addupyourtotalexpensesforfuelandoil,registration,insurance,interest,repairsandmaintenance,thedeclineinvalueorleasepaymentsandanyothercostsofrunningyourcar.Seepages39–40toworkouttheamounttoshowherefordeclineinvalue.

STEP2 Multiplytheamountyouworkedoutatstep1byyourbusinessusepercentage.Theansweristheamountyoucanclaim.

STEP3 Writetheamountfromstep2at A itemD1onpage3ofyourtaxreturn.Donotshowcents.PrintthecodeletterBintheCLAIMTYPEbox besidetheamount.

Claiming under more than one methodIfyouhadmorethanonecarandyouareclaimingexpensesunderdifferentmethods,addtheamountsyouworkedoutundereachmethodandwritethetotalatitemD1onyourtaxreturn.Donotshowcents.PrintthecodeletterforthemethodthatgaveyouthelargestamountintheCLAIMTYPEbox besidetheamount.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofyourclaimforcarexpenses

printedthecorrectcodeletterintheCLAIMTYPEbox besidetheamount:S–ifyouusedthe‘centsperkilometre’methodT–ifyouusedthe‘12%oforiginalvalue’methodO–ifyouusedthe‘one-thirdofactualexpenses’methodB–ifyouusedthe‘logbook’method

writtenevidenceofyourcarexpenses,whererequired.Keepthisevidenceforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.


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n yourhomewasabaseofemployment–youstartedyourworkathomeandtravelledtoaworkplacetocontinuethework,or

n youhadshiftingplacesofemployment–youregularlyworkedatmorethanonesiteeachdaybeforereturninghome.

Taxation Ruling TR 95/34 – Income tax: employees carrying out itinerant workhasmoreinformationontravelexpensesforemployeeswhohaveshiftingplacesofemployment.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Youcanclaimthecostoftravellingdirectlybetweentwoseparateplacesofemployment–forexample,whenyouhaveasecondjob.

ExAMPLE

Sueisaclerkatalargedepartmentstore.During2006–07shetravelledbybusfromhernormalworkplacetohersecondjobasawaitress.Afterfinishingworkasawaitress,shewentdirectlyhome.

Sue’stravelcostsfromhernormalworkplacetohersecondjobareanallowablededuction.However,shecannotclaimthecostoftravellinghomefromhersecondjob.

Youcanclaimthecostoftravelling:n fromyournormalworkplacetoanalternativeworkplace

–forexample,aclient’spremises–whilestillondutyandbacktoyournormalworkplaceordirectlyhome

n fromyourhometoanalternativeworkplaceforworkpurposesandthentoyournormalworkplaceordirectlyhome.

ExAMPLE

Janetisaclerkatalargedepartmentstoreinthecity.In2006–07shewasrequiredtoattendmeetingsatheremployer’sotherstoreinthesuburbs.Shetravelledbybustothesuburbanstore.Asthemeetingsfinishedlate,shewentstraighthomebytrain.

Janetcanclaimthecostofeachjourney.

Records you needThetableonthenextpageexplainswhatrecordsyouneedifyouareclaimingdomesticoroverseastravelexpensesforaccommodation,food,drinkorincidentals.

Ifyouareclaimingtravelexpensesandyoureceivedatravelallowancefromyouremployer,youmustshowtheallowanceatitem2onyourtaxreturn.

Wesetthereasonableallowanceamountforyourcircumstancesinanannualtaxationdeterminationwhichexplainswhenyoudonotneedevidenceofyourexpensesandthewayinwhichyoucanclaimthem.

Did you have any travel expenses relating to your work as an employee?Atthisitemyouclaimtravelexpenses,includingforvehiclesotherthancars–forexample,utilitytrucksorpanelvanswithacarryingcapacityofonetonneormore,vehicleswithacarryingcapacityofnineormorepassengers,andmotorcycles.Youcanalsoclaimwork-relatedrunningcostsyouincurredforacarownedorleasedbysomebodyelse–aborrowedcar.

NO GotoquestionD3.

YES Readbelow.

YOU NEED TO KNOWYoucanclaimtravelexpensesdirectlyconnectedwithyourwork.Ifyourtravelwaspartlyprivateandpartlyforwork,youcanclaimonlythepartthatrelatedtowork.Travelexpensesyoumaybeabletoclaimincludemeals,accommodationandincidentalexpensesyouincurredwhileawayovernightforwork–forexample,goingtoaninterstateworkconference.Generally,ifyourtraveldidnotinvolveanovernightstay,youcannotclaimformealsevenifyoureceivedatravelallowance.Othertravelexpensesyoumaybeabletoclaimincludeair,bus,train,tramandtaxifares,bridgeandroadtolls,andparkingandcarhirefees.Youcannotclaimadeductionforexpensesyouincurredforthedirectoperationofacarthatyouremployerprovided,ifatanytimeyouoryourrelativesuseditforprivatepurposes,eveniftheexpenseswereworkrelated.Examplesofdirectoperationexpensesarepetrol,oilandrepairs.Suchexpensesformpartofthevaluationofthecarforfringebenefitstaxpurposes.However,youmaybeabletoclaimexpenseslinkedtothecarthatarenotrelatedtoitsdirectoperation,suchasparkingfeesandbridgetolls.Youcannotclaimthecostofnormaltripsbetweenyourhomeandyourworkplaceasthattravelisprivate.Youcannotclaimitevenif:n youdidminortasks–forexample,pickingupthemail

onthewaytoworkorhomen youhadtotravelbetweenyourhomeandyour

workplacemorethanonceadayn youwereoncall–forexample,youwereonstandbydutyand

youremployercontactedyouathometocomeintoworkn therewasnopublictransportnearwhereyouworkn youworkedoutsidenormalbusinesshours–for

example,shiftworkorovertime,orn yourhomewasaplaceofbusinessandyoutravelled

directlytoaplaceofemployment.Youcanclaimforthecostoftripsundertakenbetweenyourhomeandyourworkplaceif:n youusedyourvehicleorhadothertravelexpenses

becauseyouhadtocarrybulkytoolsorequipmentthatyouusedforyourworkandcouldnotleaveatyourworkplace–forexample,anextensionladderorcello

QUESTION D2WORK-RELATED TRAVEL EXPENSES D2

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For2006–07refertoTaxation Determination TD 2006/43 – Income tax: what are the reasonable travel and meal allowance expense amounts for 2006–07?. ThisdeterminationshouldbereadtogetherwithTaxation Ruling TR 2004/6 – Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses.Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.Youremployermayalsobeabletotellyouwhattheamountis.

Ifyourtravelallowancewasnotshownonyourpaymentsummaryandwasnotmorethanthereasonableallowanceamountforyourcircumstances,youdonothavetoincludetheallowanceatitem2providedthatyouhavefullyexpendedtheallowanceondeductibletravelexpensesandyoudonotclaimadeductionfortheseexpenses.

TRAVEL ExPENSE RECORDS

DOMESTICTRAVEL

OVERSEASTRAVEL

Writtenevidence

Traveldiary1

Writtenevidence

Traveldiary1

Ifyoudidnotreceiveatravelallowance:

n travellessthan6nightsinarow

Yes No Yes No

n travel6ormorenightsinarow

Yes Yes Yes Yes

Ifyoureceivedatravelallowanceandyourclaimdoesnotexceedthereasonableallowanceamount:


No No No2 No


No No No2 Yes3

Ifyoureceivedatravelallowanceandyourclaimexceedsthereasonableallowanceamount:


Yes No Yes No


Yes Yes Yes Yes3

1Atraveldiaryisadocumentinwhichyourecordthedates,places,timesanddurationofyouractivitiesandtravel.

2Writtenevidenceisrequiredforoverseasaccommodationexpensesregardlessofthelengthofthetrip.

3Membersofinternationalaircrewsdonothavetokeepatraveldiaryiftheylimittheirclaimtotheamountoftheallowancereceived.

Written evidenceYoumusthavewrittenevidenceforthewholeofyourclaim,notjusttheexcessoverthereasonableamount.Writtenevidenceisexplainedonpages36–7.

Utility trucks, panel vans, large passenger- carrying vehicles and motorcyclesIfyouowned,leasedorhired(underahirepurchaseagreement)oneormoreofthefollowingvehiclesand

usedthemforworkpurposes,youcanclaimthecostsyouincurredrelatingtothisworkuse(forexample,thecostofpetrolandoil):n autilitytruckorpanelvanwithacarryingcapacity

ofonetonneormoren avehiclewithacarryingcapacityofnineormore

passengersn amotorcycle.Youcanclaimthecostsyouactuallyincurred.Asthesetypesofvehiclesarenotconsideredtobecarsyoucannotusethe‘centsperkilometre’methodoranyothermethoddescribedatquestionD1tocalculateyourclaim.

Car owned or leased by somebody else – a borrowed carYoucanclaimthecostsyouactuallyincurredwhenusingacarownedorleasedbysomebodyelseforwork-relatedpurposes–forexample,thecostsofpetrolandoil.Youcannotusethe‘centsperkilometre’methodoranyothermethoddescribedatquestionD1tocalculateyourclaim.

Award transport paymentsAwardtransportpaymentsareallowancescoveringeithertransportexpensesorcarexpensereimbursementsthatarepaidunderanindustriallaworawardthatwasinforceon29October1986.Somechangesmadetotheindustriallaworawardafterthatdatearetreatedasiftheyhadbeenmadeonthatday.Yourunionoremployercantellyouthe‘29October1986’amount.Awardtransportpaymentsareassessableincomeandyoumustincludeanypaymentsasincomeonyourtaxreturn.Ifyouhaveincurredwork-relatedtransportexpensesorcarexpensescoveredbythesepayments,youmaybeabletoclaimadeductionfortheseexpenses.Ifyouchoosetoclaimnomorethanthe‘29October1986’amount,claimtheseexpensesatthisitem.Youdonotneedwrittenevidence.Ifyouchoosetoclaimmorethanthe‘29October1986’amountfor:n transportexpenses,maketheclaimatthisitem.Youwill

needwrittenevidenceforthewholeoftheclaimn carexpenses,maketheclaimatitemD1.

YoucanalsoclaimadditionalcarexpensesnotcoveredbytheawardtransportpaymentatitemD1.


STEP1 Addupallyourallowabletravelexpenses.

STEP2 Writethetotalamountat b itemD2onpage3ofyourtaxreturn.Donotshowcents.

CHECK THAT YOU HAVE . . . writtenonyourtaxreturntheamountofyourclaimfortravelexpenses

writtenevidenceofyourtravelexpenses,whererequired.Youneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.


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DEFINITIONClothingisuniqueifithasbeendesignedandmadeonlyfortheemployer.

Clothingisdistinctiveifithastheemployer’slogopermanentlyattachedandtheclothingisnotavailabletothepublic.

Compulsory work uniformThisisasetofclothingthatidentifiesyouasanemployeeofanorganisationwhichhasastrictlyenforcedpolicythatmakesitcompulsoryforyoutoweartheuniformwhileyouareatwork.

Youmaybeabletoclaimadeductionforshoes,socksandstockingswheretheyareanessentialpartofadistinctivecompulsoryuniform,thecharacteristicsofwhich(colour,style,andtype)arespecifiedinyouremployer’suniformpolicy.

Formoreinformation,readTaxation Determination TD 1999/62 – Income tax: what are the criteria to be considered in deciding whether clothing items constitute a compulsory corporate uniform/wardrobe?. Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Youmaybeabletoclaimforasingleitemofdistinctiveclothing,suchasajumper,ifitiscompulsoryforyoutowearitatwork.

Non-compulsory work uniformYoucannotclaimexpensesincurredfornon-compulsoryworkuniformsunlessyouremployerhasregisteredthedesignwithAusIndustry–checkwithyouremployer(whowillbeabletofindtheinformationatwww.ausindustry.gov.au).

Shoes,socksandstockingscanneverformpartofanon-compulsoryworkuniform,andneithercanasingleitemsuchasajumper.

Occupation-specific clothingThisisclothingthatisspecifictoyouroccupation,isnoteverydayinnatureandwouldallowthepublictoeasilyrecogniseyouroccupation,forexample,thecheckedpantsachefwears.

Protective clothingThisisclothingandfootwearthatyouweartoprotectyourselffromtheriskofillnessorinjuryposedbyyourincome-earningactivitiesortheenvironmentinwhichyouarerequiredtocarrythemout.Tobeconsideredprotective,theitemsmustprovideasufficientdegreeofprotectionagainstthatrisk.Examplesofprotectiveclothingincludefire-resistantandsun-protectionclothing,safety-colouredvests,non-slipnurse’sshoes,rubber

Did you have expenses for any of the following items that relate to your work as an employee:n protective clothingn uniformn occupation-specific clothing, orn laundry or dry-cleaning?

NO GotoquestionD4.

YES Readbelow.

Ifyoureceivedanallowancefromyouremployerforclothing,uniforms,laundryordry-cleaning,makesurethatyouhaveshowntheamountatitem2.

Youcanclaimthecostofbuying,renting,repairingandcleaningoccupation-specificclothing,protectiveclothingandcertainworkuniforms.

Youcannotclaimthecostofpurchasingorcleaningaplainuniformorclothesyouboughttowearforworkthatarenotprotectiveorspecifictoyouroccupationevenifyouremployertellsyoutowearthem,forexample,abartender’sblacktrousersandwhiteshirtoramanager’ssuitorstockings.

Formoreinformation,read:n Taxation Ruling TR 98/5 – Income tax: calculating and

claiming a deduction for laundry expensesn Taxation Ruling TR 97/12 – Income tax: deductibility of

expenses on clothing, uniform and footwearn Taxation Ruling TR 2003/16 – Income tax: deductibility

of protective itemsn Taxation Ruling TR 94/22 – Income tax: deductibility of

expenditure on conventional clothing.

Thesepublicationsareavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

WHAT YOU MAY NEEDn Writtenevidencefromyourgoodsorservicessuppliern Diaryrecordsofyourlaundrycosts,ifyouneedwritten

evidence

YOU NEED TO KNOWYoucannotautomaticallyclaimadeductionsimplybecauseyoureceivedauniform,clothing,laundryordry-cleaningallowancefromyouremployer.CarefullyreadthesectionClaimingdeductionsforexpensesthatrelatetoyourworkasanemployeeonpages36–7beforeclaimingadeduction.

Work uniformThisisauniform,eithercompulsoryornon-compulsory,thatisuniqueanddistinctivetotheorganisationthatyouworkfor.

QUESTION D3WORK-RELATED CLOTHING, LAUNDRY AND DRY-CLEANING EXPENSES D3

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Sbootsforconcreters,steel-cappedboots,hardhats,gloves,overalls,andheavydutyshirtsandtrousers.Wealsoconsiderthatoveralls,smocksandapronsyouweartoavoiddamageorsoilingtoyourordinaryclothesduringthecourseofyourincome-earningactivitiesareprotectiveclothing.Ordinaryclothes,suchasjeans,drillshirtsandshorts,trousersandsocksthatlackprotectivequalitiesdesignedfortherisksofyourworkarenotprotectiveclothing.

Laundry expensesYoucanclaimthecostsofwashing,dryingandironingeligibleworkclothes.Thesecostscanincludelaundromatexpenses.

Youmusthavewrittenevidence,forexample,diaryentriesandreceipts,foryourlaundryexpensesif:n theamountofyourclaimisgreaterthan$150,andn yourtotalclaimforworkexpensesexceeds$300

–notincludingcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.

Ifyoudonotneedtoprovidewrittenevidenceforyourlaundryexpenses,youmayuseareasonablebasistoworkoutyourclaim.

Forwashing,dryingandironingyoudidyourself,weconsiderthatareasonablebasisforworkingoutyourlaundryclaimwouldbe$1perload–thisincludeswashing,dryingandironing–iftheloadismadeuponlyoftheclothesdescribedinthisquestion,and50centsperloadifotherlaundryitemsareincluded.Ifyouchooseadifferentbasistoworkoutyourclaim,wemayaskyoutoexplainthatbasis.

Dry-cleaning expensesYoucanclaimthecostofdry-cleaningeligibleworkclothes.Youmusthavewrittenevidencetosubstantiateyourclaimifyourtotalclaimforworkexpensesexceeds$300–notincludingcar,mealallowance,awardtransportpaymentsallowanceandtravelallowanceexpenses.


Toworkoutyourclaimyoucanusethework-relateduniformexpensescalculatoronourwebsiteandthengotostep3.Otherwise,gotostep1.

STEP1 Workoutthetotalcostoflaunderingyouroccupation-specificclothing,protectiveclothingorworkuniforms.(Forinformationaboutusingareasonablebasistoworkoutlaundryexpenses,seeLaundryexpensesinthepreviouscolumn.)

STEP2 Addupallyourallowableuniform,clothing,laundryanddry-cleaningexpenses.

STEP3 WritethetotalamountatC itemD3onpage3ofyourtaxreturn.Donotshowcents.

STEP4 Selectthecodeletterthatdescribesthemajorityoftheclothingforwhichyouareclaiming:C compulsoryworkuniformN non-compulsoryworkuniformSoccupation-specificclothingPprotectiveclothing

PrintthecodeletterintheCLAIMTYPEbox attherightofC itemD3onyourtaxreturn.

CHECK THAT YOU HAVE . . .

writtenonyourtaxreturnthetotalamountofyouruniform,occupation-specificclothing,protectiveclothing,laundryanddry-cleaningexpenses

printedyourcodeletterintheCLAIMTYPEbox writtenevidencetoproveyourclaims,whererequired.Youneedtokeeptheserecordsforfiveyearsfromthedateyoulodgeyourtaxreturn.Ifattheendofthisperiodyouareinadisputewithusthatrelatestothisworkexpense,youmustkeepyourrecordsuntilthedisputeisresolved.


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QUESTION D4WORK-RELATED SELF-EDUCATION EXPENSES

YOU NEED TO KNOWYoucanonlyclaimself-educationexpensesthatrelatedtoyourworkasanemployeeatthetimeyouwerestudying.Ifyourself-educationwastohelpyougetanewjoborcommenceanewincome-earningactivity,youcannotclaimyourexpenses.

Self-educationexpensesareexpensesrelatedtoacourseofeducationprovidedbyaschool,college,universityorotherplaceofeducation.Youmusthaveundertakenthecoursetogainaformalqualificationforuseincarryingonaprofession,businessortrade,orinthecourseofemployment.

What you cannot claimYoucannotclaimdeductionsforthefollowingexpenses:n self-educationexpensesthatyouincurrediftheonly

incomeyoureceivedwasfromyouthallowance,austudy,ABSTUDYorsimilarschemesprovidingpaymentsinthenatureoffinancialassistance

n self-educationexpensesforacontributionamountpaidtoaneducationproviderbyyouorbytheAustralianGovernmentunderHECS-HELP

n therepaymentsyoumade,whethercompulsoryorvoluntary,ondebtsyouhaveunderthefollowingstudentloanschemes:– StudentFinancialSupplementScheme(SFSS)– HigherEducationLoanProgramme(HELP)

TheHigherEducationLoanProgramme(HELP)isthestudentloanschemethatwasintroducedon1January2005.

HELPhasthreetypesofloans:n HECS-HELPforeligiblestudentsenrolledin

aCommonwealthsupportedplacen FEE-HELPforeligiblefee-payingstudentsenrolled

ataneligiblehighereducationproviderorOpenUniversitiesAustralia

n OS-HELPwhichhelpsstudentswhowishtoundertakesomeoftheirstudyoverseas.

FormoreinformationonHELP,seetheDepartmentofEducation,ScienceandTrainingwebsiteatwww.goingtouni.gov.au

n thecostofmealsgenerally;forwhenyoucanclaimthecostofmeals,seeWhatyoucanclaimonthenextpage.

Did you have any self-education expenses relating to your work as an employee?

STOPDonotshowatthisitem:n thecostofformaleducationcoursesprovidedby

professionalassociations.ShowtheseatitemD5Otherwork-relatedexpenses

n thecostofattendingseminars,educationworkshopsorconferencesthatwereconnectedtoyourworkactivitiesbutdidnotrelatetoyourcourseofeducation.ShowtheseatitemD5Otherwork-relatedexpenses

n amountsfordeclineinvalueofitemsincludedinalow-valuepool.ShowtheseatitemD6Low-valuepooldeduction

n deductionsfordepreciatingassetsifyouwereinbusinessandhavechosentoenterorcontinueinthesimplifiedtaxsystem(STS).ShowtheseatitemP8ontheBusiness and professional items schedule for individuals 2007

n STSpooldeductionsfordepreciatingassetsifyouwerenotcarryingonanybusinessduring2006–07.ShowtheseatitemD15onyourtaxreturn(supplementarysection).

NO GotoquestionD5.

YES Readbelow.

WHAT YOU MAY NEEDn Writtenevidence.Readpages36–7foranexplanation

ofthewrittenevidencerule.n Taxation Ruling TR 98/9 – Income tax: deductibility of

self-education expensesn Guide to depreciating assets 2007.Thispublication

containsinformationaboutdeductionsfordeclineinvalue,balancingadjustmentsandimmediatedeductionsforcertaindepreciatingassets.Italsoexplainstheoptiontopoollow-valuedepreciatingassetsforwhichyoucannotclaimanimmediatededuction.Ifyouchoosethisoption,seequestionD6Low-valuepooldeduction.


DEFINITIONAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.

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SWhat you can claimYoucanclaimdeductionsforthefollowingexpenses:n yourtuitionfeespayableunderFEE-HELPprovided

therewasadirectconnectionbetweenthecourseandyourworkactivitiesatthetimeyouincurredthedebt–eveniftheAustralianGovernmentpaidyourfeesforyouunderFEE–HELP

n self-educationexpensespaidwithyourOS-HELPloanprovidedtherewasadirectconnectionbetweenthecourseandyourworkactivitiesatthetimeyouincurredtheexpenses

n thecostofmealsduringanabsencefromhomeif:– youwereparticipatinginself-educationdirectly

connectedtoyourcurrentwork,and– thatself-educationrequiredyoutobetemporarily

awayfromyourhomeforoneormorenightsn otherexpensessuchastextbooks,stationery,student

unionfeesandthedeclineinvalueofyourcomputer.Ifyoudidnotuseyourcomputersolelyforself-educationpurposes,youwillneedtoapportionyourdeduction.Thismeansyoudividetheamountbetweenprivateuseandwork-relateduse.Forexample,ifyouusedyourcomputer40%ofthetimefordeductibleself-educationpurposesand60%ofthetimeforprivatepurposes,thenyoucanonlyclaim40%ofthedeclineinvalue.

n expensesfortravelbetween:– yourhomeandyourplaceofeducation– yourplaceofeducationandyourhome– yourworkplaceandyourplaceofeducation,and– yourplaceofeducationandyourworkplace.However,onlythefirstlegofeachtripisdeductiblewhereyoutravelled:– fromyourhometoyourplaceofeducationandthen

toyourworkplace,or– fromyourworkplacetoyourplaceofeducationand

thentoyourhome.Toworkouttheamountsofallowablecarorothertravelexpenses,youwillneedtoreadquestionD1(carexpenses)orD2(travelexpenses).However,youmustgenerallyclaimtheseamountshereatitemD4.

$250 reductionIncertaincircumstancesyoumayhavetoreduceyourallowableself-educationexpensesby$250.However,youmayhaveothertypesofexpenses–someofwhicharenotallowableasadeduction(seecategoryEinHowtoworkoutyourclaim)–thatcanbeoffsetagainstthe$250beforeyouhavetoreducetheamountyoucanclaimforallowableexpenses.

HOW TO WORK OUT YOUR CLAIMYoucanusetheself-educationexpensescalculatoronourwebsitetoworkoutyourclaimamountandthengotoCompletingthisitem.Alternatively,followtheinstructionsbelow.

First,listyourexpensesunderthefollowingcategories.

Category ACategoryAexpensesaregeneralexpensesthatareallowableasadeduction.Includeinthiscategorythecostoftextbooks,stationery,studentunionfees,coursefees,publictransportfaresandcarexpenses(excludingamountsfordeclineinvalue)workedoutunderthe‘logbook’or‘one-thirdofactualexpenses’method.

InsomecasesyoumayneedtoreduceyourcategoryAexpensesby$250–seeexample1onthenextpage.

Category b*CategoryBexpensesaredeductionsforthedeclineinvalueofdepreciatingassetsusedforself-educationpurposes,includingacarforwhichyouareclaimingdeductionsunderthe‘logbook’or‘one-thirdofactualexpenses’method.

Category C*CategoryCexpensesareexpensesforrepairstoitemsofequipmentusedforself-educationpurposes.

Category D*CategoryDexpensesarecarexpensesrelatedtoyourself-educationactivitieswhichareclaimedusingthe‘centsperkilometre’or‘12%oforiginalvalue’method.Seepages41–2forinformationonthesemethods.

YoucannotclaimcarexpensesunderthiscategoryifyouhaveincludeddeductionsfordeclineinvalueorrepairstoyourcarundercategoryBorC.

*YoudonothavetoreducecategoryB,CandDexpensesby$250.

Category ECategoryEexpensesareself-educationexpensesyouhaveincurredthatarenotallowableasadeduction.Forexample:n travelexpensesinrespectofthelastlegofeachtrip:

– fromyourhometoyourplaceofeducationandthentoyourworkplace,or

– fromyourworkplacetoyourplaceofeducationandthentoyourhome

n childcarecostsrelatedtoattendanceatlecturesorotherself-educationactivities,or

n capitalcostofitemsacquiredin2006–07andusedforself-educationpurposes–forexample,acomputerordesk.


STEP1 IfyouusedthecalculatortoworkoutyourclaimamountwritethisamountatD itemD4onpage3ofyourtaxreturnthengotostep7.Otherwise,readon.

STEP2 IfyouhadanycategoryAexpenses,gotostep3.Otherwise,readon.

IfyoudonothaveanycategoryAexpenses,youdonothavetoreduceyourclaim.AddanycategoryB,CandDamountstogetherandwritethetotalatD itemD4onpage3ofyourtaxreturn.Donotshowcents.Gotostep7.

STEP3 IfthetotalofyourcategoryC,DandEamountsislessthan$250,gotostep4.Otherwise,readon.


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SIfthetotalofyourcategoryC,DandEamountsis$250ormoreyoudonothavetoreduceyourclaim.AddanycategoryA,B,CandDamountstogetherandwritethetotalatD itemD4onpage3ofyourtaxreturn.Donotshowcents.Gotostep7.

STEP4 TakeawaythetotalofanycategoryC,DandEamountsfrom$250.

STEP5 Takeyouranswerfromstep4awayfromyourtotalcategoryAamount.Ifthisleavesyouwithzeroorless,yourcategoryAamountisreducedtozero.

STEP6 Addyourstep5amount,ifany,tothetotalofyourcategoryB,CandDamounts.WriteyouransweratD itemD4onyourtaxreturn.Donotshowcents.

STEP7 Selectfromthelistbelowthecodeletterthatbestdescribesyourself-education.K Atthetimeyouincurredtheexpense,therewasadirect

connectionbetweenyourself-educationandyourworkactivitiesasanemployee,becausethestudymaintainedorimprovedaskillorspecificknowledgerequiredforthoseworkactivities.

I Atthetimeyouincurredtheexpense,therewasadirectconnectionbetweenyourself-educationandyourworkactivitiesasanemployee,becauseyoucanshowthatthestudywasleadingto,orwaslikelytoleadto,increasedincomefromthoseworkactivities.

O Atthetimeyouincurredtheexpense,othercircumstancesexistedwhichestablishedadirectconnectionbetweenyourself-educationandyourworkactivitiesasanemployee.

STEP8 Printyourcodeletter(K,IorO)fromstep7intheCLAIMTYPEboxattherightofD itemD4onyourtaxreturn.

Examples of how to work out a claim

ExAMPLE �

MaureenstudiedhairdressingataTAFEcollegeandthecoursewasdirectlyrelatedtohercurrentemploymentasanapprenticehairdresser.

Herexpenses Category

Coursefees $180 A

Textbooks $70 A

Studentunionfees $40 A

Totalexpenses $290

Takeaway $250

Maureencanclaim $40

ExAMPLE 2

IanwasunemployedandgotaNewstartallowance.Hewenttoacoursetogainasecondqualificationtohelphisjobprospects.

Iancannotclaimanyself-educationexpensesastherewasnodirectconnectionbetweentheexpenseandhisincomesource.

ExAMPLE 3

Lachlanwasaclerkinthepublicservicewhowasstudyinggourmetcookingparttimeinordertobecomeachef.Lachlancannotclaimanyself-educationexpensesastherewasnodirectconnectionbetweentheexpenseandhisincomesource.

ExAMPLE 4

Katelinstudiedfulltimeatauniversityandreceivedanaustudypaymentasheronlysourceofincome.

Katelincannotclaimanyself-educationexpensesastherewasnotasufficientconnectionbetweentheexpenseandheraustudypayment.

ExAMPLE 5

Angusstudiedparttimeatauniversityandthecoursewasdirectlyrelatedtohiscurrentemployment.Hetravelledbybusfromhisworktouniversity.

Hisexpenses Category

Stationery $10 A

Textbooks $240 A

Coursefees $200 A

Busfares $150 A

Studentunionfees $150 A

Repairtohomeprinter $70 C

Totalallowableexpenses $820

Self-educationexpensesnotallowableasadeduction:

Childcarecosts $520 E

Thegeneralexpensesforstationery,textbooks,coursefees,busfaresandstudentunionfeesarecategoryAamounts.TherepairexpenseisacategoryCamount.

AngusdoesnothavetoreducehiscategoryAexpensesasthetotalofhiscategoryC(repairs$70)andcategoryEamounts(childcarecosts$520)ismorethan$250.

Anguscanclaim$820–hiscategoryAandcategoryCamounts.

However,ifAngushadnochildcarecoststhenhisclaimwouldbeworkedoutusingthestepsfromthepreviouspages,asfollows:

STEP3 $250less$70(thecategoryCamount)=$180

STEP4 $750(categoryAamount)less$180(step3amount)=$570

STEP5 $570(step4amount)plus$70(categoryCamount)=$640

Anguscouldclaim$640.

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n Guide to depreciating assets 2007.Thispublicationcontainsinformationaboutdeductionsfordeclineinvalueandbalancingadjustments,andimmediatedeductionsforcertaindepreciatingassetswhosecost(whenaddedtothecostofothersubstantiallyidenticalassetsorassetsthatmakeupaset)doesnotexceed$300.Italsoexplainstheoptiontopoollow-valuedepreciatingassetsforwhichyoucannotclaimanimmediatededuction.(Ifyouchoosethisoption,seequestionD6Low-valuepooldeduction.)


DEFINITIONAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.

Simplified tax systemIfyouareinthesimplifiedtaxsystem(STS)youwillneedtocalculateyourwork-relateddeductionfordepreciatingassetsusingtheSTSrules.YouclaimyourSTSdepreciatingassetsdeductionsatitemP8ontheBusiness and professional items schedule for individuals 2007.

NOTETousetheSTSrulesyoumustbeinbusinessandhavechosentoenterorcontinueintheSTSatitemS1ontheBusiness and professional items schedule for individuals 2007.

Ifyoudidnotcarryonanybusinessduring2006–07buthaveSTSpooldeductionsbecauseyouhaveallocateddepreciatingassetstoanSTSpoolinaprioryear,makeyourclaimforSTSpooldeductionsatitemD15onyourtaxreturn(supplementarysection).

Formoreinformation,refertoThe simplified tax system – a guide for tax agents and small businesses.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

YOU NEED TO KNOWReceivinganallowancefromyouremployerdoesnotautomaticallyentitleyoutoadeduction.Toclaimadeduction,youmusthaveincludedthewholeoftheallowanceatitem2onyourtaxreturnandincurredtheexpense,anditmustberelatedtoyourworkasanemployee.

Ifyourtotalclaimforallworkexpensesasanemployeeexceeds$300,youmayneedwrittenevidencetoproveyourclaim.Readaboutthewrittenevidenceruleonpages36–7.

Did you have any other expenses relating to your work as an employee?Otherexpensesincludeunionfees;overtimemeals;attendingformaleducationcoursesprovidedbyprofessionalassociations;seminars,conferencesoreducationworkshops;books,journalsandtrademagazines;toolsandequipment;protectiveitemssuchassunscreensandsunglasses;computersandsoftware;telephoneandhomeofficeexpenses.PhonethePersonalInfoline(seetheinsidebackcover)ifyouarenotsureifyoucanclaimanexpense.

Youcannotclaimthecostofentertainment,finesorpenalties.Youcannotclaimprivateexpensessuchaschildcareexpensesorfeespaidtosocialclubs.

STOPDonotshowatthisitemclaimsfor:n expensesnotrelatedtoyourworkn protectiveclothingitems(showtheseatitemD3Work-relatedclothing,laundryanddry-cleaningexpenses)

n declineinvalueofitemsincludedinalow-valuepool(showtheseatitemD6Low-valuepooldeduction)

n taxcosts–suchastaxagentfees(showtheseatitemD10Costofmanagingtaxaffairs)

n thecostofsicknessandaccidentinsurancepremiums(showtheseatitemD15Otherdeductions)

n expensesfromcarryingonabusiness(showtheseontheBusiness and professional items schedule for individuals 2007).

NO GotoquestionD6.

YES Readbelow.

WHAT YOU MAY NEEDn Statementsfromyourbank,buildingsocietyor

creditunionn Writtenevidencefromyoursupplierorassociationn Otherwrittenevidence(seepages36–7)n YourPAYG payment summary – individual non-businessn Taxation Ruling TR 93/30 – Income tax: deductions for

home office expensesn Law Administration Practice Statement PS LA 2001/6

– Home office expensesn Law Administration Practice Statement PS LA 2005/7

– Substantiation of deductions claimed by individual taxpayers for work and car expenses incurred in the course of earning non-business and non-investment income

QUESTION D5OTHER WORK-RELATED EXPENSES D5


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SUnion fees and subscriptions to associationsYoucanclaimadeductionforunionfeesandsubscriptionstotrade,businessorprofessionalassociations.Youcanonlyclaimpaymentsofleviestoastrikefundwherethefundisusedsolelytomaintainorimprovethecontributors’pay.Yourpaymentsummarymayshowfeesorsubscriptionspaidbyyou.

Overtime mealsYoucanclaimadeductionforovertimemealexpensesyouincurredifyouworkedovertimeandyoureceivedabonafideovertimemealallowancefromyouremployerwhichwaspaidunderanindustriallaw,awardoragreement.Youcanclaimonlytheamountofexpenditureyouincurred.Ifyourclaimismorethan$21.90permeal,youwillneedwrittenevidence.Anamountforovertimemealsthathasbeen‘foldedin’(forexample,underaworkplaceagreement)aspartofyournormalsalaryorwagesincomeisnotconsideredtobeanovertimemealallowance.

Amountsreceivedasovertimemealallowancesmustbeincludedasincomeatitem2onyourtaxreturn,subjecttothenotebelow.

NOTEIfyourawardovertimemealallowancewasnotshownonyourpaymentsummaryandwasnotmorethan$21.90foreachmeal,youdonothavetoincludetheamountatitem2providedthatyouhavefullyexpendedtheallowanceanddonotclaimadeductionforovertimemealexpenses.

Seminars, conferences or education workshopsYoucanclaimthecostofattendingseminars,conferencesoreducationworkshopsthataresufficientlyconnectedtoyourworkactivities.

books, journals and professional librariesYoucanclaimthecostoftrademagazines,technicaljournalsandreferencebooksthatyouneedtodoyourwork.

Youcanclaimadeductionforthedeclineinvalueofaprofessionallibrarythatincludesbooks,tapes,compactdiscs,records,DVDsandvideosthatyouneedtodoyourwork.

Protective equipment and other itemsThisisequipmentorotheritems,otherthanclothingitems,thatyouusedtoprotectyourselffromtheriskofillnessorinjuryposedbyyourincome-earningactivitiesortheenvironmentinwhichyouwererequiredtocarrythemout,forexample,safetyequipment,sunscreensandsunglasses.MakeyourclaimforthecostofprotectiveclothingandfootwearatitemD3.

Computers and softwareYoucanclaimadeductionforthework-relatedproportionofthedeclineinvalueofcomputers.Ifyouusedyourcomputerforprivatepurposesyoumustdivideyourdeclineinvalueamountbetweenyourwork-relatedandprivateuse.Forexample,ifyouusedacomputer30%ofthetimeforworkand70%ofthetimefornon-workpurposes,youcanclaim30%ofthedeclineinvalue.

Youcanalsoclaimadeductionforthework-relatedproportionofthecostofrepairstoyourcomputerandinterestonmoneyborrowedtofinancethecostofyourcomputer.

Youmayneedtomakeabalancingadjustmentifyouceasedtoholdortouseacomputerwhereyouhavepreviouslyclaimedadeductionforitsdeclineinvalue.SeetheGuide to depreciating assets 2007 forinformationonhowtoworkoutyourclaim.

Telephone expensesYoucanclaimadeductionforthecostofwork-relatedphonecalls.Youcanclaimadeductionforyourtelephonerentalifyoucanshowyouwereoncallorwereregularlyrequiredtophoneyouremployerorclientswhileyouwereawayfromyourworkplace.Ifyoualsousedyourtelephoneforprivatepurposesyoumustapportionthecostoftelephonerentalbetweenwork-relatedandprivateuse.

Home office expensesYoucanclaimtheadditionalrunningexpensesofahomeoffice–forexample,thedeclineinvalueofandrepairstoyourhomeofficefurnitureandfittings,heating,cooling,lightingandcleaning.Youcankeepadiarytoworkouthowmuchofyourrunningexpensesrelatetodoingworkinyourhomeoffice.Alternatively,youcanuseafixedrateof26centsperhourforhomeofficeexpensesforheating,cooling,lightingandthedeclineinvalueoffurnitureinsteadofkeepingdetailsofactualcosts.

Whenyouuseyourhomeofficeforworkasanemployee,notethattimeinyourdiary.Diaryrecordsareacceptableevidenceofaconnectionbetweentheuseofahomeofficeandyourwork.Keepdiaryrecordsforarepresentativefour-weekperiod.

Thereisahomeofficeexpensescalculatoronourwebsiteyoucanusetoworkoutyourclaimamount.

Forfurtherinformation,refertoLaw Administration Practice Statement PS LA 2001/6 – Income tax: home office expenses.Foracompleteexplanationofthelimitedcircumstancesinwhichyoumayclaimforoccupancyexpensesofyourhome,suchasrates,rent,mortgageinterestandinsurance,refertoTaxationRulingTR93/30.

Low-value poolingIfyouchoosethelow-valuepoolmethodtocalculatethedeclineinvalueoflow-costandlow-valuedepreciatingassets,makeyourclaimatitemD6.

Other expensesYoucanclaimadeductionhereforanyotherexpensesyouincurredinearningyoursalaryorwagesthatyouhavenotalreadyclaimed.


STEP1 Addupalltheexpensesthatyoucanclaimatthisitem.

STEP2 Writethetotalamountat E itemD5onpage3ofyourtaxreturn.Donotshowcents.

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QUESTION D6LOW-VALUE POOL DEDUCTION

n atthisiteminallothercases–theseincludewhereyourlow-valuepoolcontainedassetsusedinrelationtoyourworkasanemployee(questionsD1toD5)ortogainrentalincome(question20inTaxPack 2007 supplement).

Working out your deductionYouworkoutyourdeductionforthedeclineinvalueofdepreciatingassetsinalow-valuepoolusingadiminishingvaluerateof37.5%.

Fortheincomeyearinwhichyoufirstallocateoneormorelow-costassetstoalow-valuepool,youworkoutyourdeductionatarateof18.75%,orhalfthenormalpoolrate.Halvingtheraterecognisesthatassetsmaybeallocatedtothepoolthroughouttheincomeyearandeliminatestheneedforseparatecalculationsforeachassetbasedonthedateitisallocatedtothepool.

YoumayneedthepublicationGuide to depreciating assets 2007.Thispublicationisavailableonourwebsiteortogetaprintedcopy,seetheinsidebackcover.

Taxable use percentageWhenyouallocateanassettoalow-valuepool,youmustmakeareasonableestimateofthepercentageofyouruseoftheassetthatwillbeforataxablepurposeoveritseffectivelife(foralow-costasset)orremainingeffectivelife(foralow-valueasset).Thisestimateisthetaxableusepercentage.Onlythetaxableusepercentageofthecost(ofalow-costasset)orthetaxableusepercentageoftheopeningadjustablevalue(ofalow-valueasset)isallocatedtothepoolandusedtocalculatethedeductionfordeclineinvalue.

How to calculate your low-value pool deductionWorksheet1onthenextpageshowsyouhowtoworkoutyourlow-valuepooldeduction,usingtheexamplebelow.Thereisalsospaceforyourowncalculations.

ExAMPLE

Edwardboughtaprinterfor$600in2006–07andallocatedittoalow-valuepool.Heestimatedthattheprinterwouldbeused40%ofthetimefortaxablepurposesoveritseffectivelife.ThisisthefirstyearofEdward’slow-valuepool.

In2006–07Edwardalsodecidedtoallocateanexistinglaptopcomputertothelow-valuepool.Hehaspreviouslyclaimeddeductionsforthelaptopworkedoutunderthediminishingvaluemethod.Thelaptop’sopeningadjustablevalueat1July2006was$900andEdwardwilluseitonlyfortaxablepurposesoveritsremainingeffectivelife.

Youcanclaimadeductionatthisitemforthedeclineinvalueoflow-costassetsandcertainotherdepreciatingassetswhichyouhaveallocatedtoalow-valuepool.

Did you allocate assets used for a taxable purpose to a low-value pool in 2006–07, or have you done so in a previous year?

ReadYouneedtoknowbelowfortherulesaboutlow-valuepools.

NO GotoquestionD7.

YES Readbelow.

DEFINITIONSAdepreciatingassetisanassetthathasalimitedeffectivelifeandcanreasonablybeexpectedtodeclineinvalueoverthetimeitisused.Ataxablepurposeisthepurposeofproducingassessableincome,thepurposeofexplorationorprospecting,thepurposeofminingsiterehabilitationorenvironmentalprotectionactivities.

YOU NEED TO KNOWYoucanonlyhaveonelow-valuepool.Onceyouchoosetoallocatealow-costassettoalow-valuepool,alllow-costassetsyoustarttoholdinthatandanysubsequentincomeyearmustalsobeallocatedtothepool.Youcanallocatethefollowingtypesofdepreciatingassetstoalow-valuepoolfor2006–07:n low-costassets–assetscostinglessthan$1,000,andn low-valueassets–assetsthatarenotlow-costassets

butwhichhave,underthediminishingvaluemethod,beenwrittenofftolessthan$1,000asat1July2006.

Youcannotallocatethefollowingdepreciatingassetstoalow-valuepool:n assetsforwhichyouhavepreviouslyclaimeddeductions

workedoutusingtheprimecostmethodn assetsthatcost$300orlessforwhichyoucanclaim

animmediatedeductionn assetsforwhichyoudeductamountsunderthe

simplifiedtaxsystem(STS),andn horticulturalplants.

Claiming your low-value pool deductionYoumustclaimyourdeduction:n atitemP8ontheBusiness and professional items

schedule for individuals 2007 ifyourlow-valuepoolcontainedonlyassetsusedinbusinessandnotforanyotherincome-producingpurpose

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WORKSHEET �: Low-value pool deduction

Edward You

Theclosingbalanceofthepoolfor2005–06.Ifyoudidnothavealow-valuepoolin2005–06,write0at(a). (a) $0 (a) $

Foreachlow-valueassetallocatedtothepoolin2006–07,multiplytheopeningadjustablevalue(at1July2006)bythetaxableusepercentage.Adduptheamountsandwritethetotalat(b). (b) $900 (b) $

Add(a)and(b). (c) $900 (c) $

Multiply(c)by37.5%. (d) $337 (d) $

Foreachlow-costassetallocatedtothepoolin2006–07,multiplythecost(includingadditionalcapitalcostsincurredin2006–07,suchascostsofimprovements)bythetaxableusepercentage.Adduptheamountsandwritethetotalat(e).

(eg$600x40%)

(e) $240 (e) $

Foreachn assetallocatedtothe

poolinaprioryear,and

n low-valueassetaddedthisyear

forwhichyouincurredadditionalcapitalcosts(suchascostsofimprovements)in2006–07,multiplythecostsbythetaxableusepercentage.Adduptheamountsandwritethetotalat(f). (f) $0 (f) $

Add(e)and(f). (g) $240 (g) $

Multiply(g)by18.75%. (h) $45 (h) $

Add(d)and(h). (i) $382 (i) $

Theamountat(i)isthetotallow-valuepooldeduction.Edwardwillshow$382at K itemD6onhistaxreturn.


Writetheamountofyourtotallow-valuepooldeductionat K itemD6onpage3ofyourtaxreturn.

Closing pool balanceYouwillneedtheclosingpoolbalancefor2006–07tocalculateyourlow-valuepooldeductionfornextyear.Useworksheet2belowtoworkouttheamount.

Disposal of depreciating assets in a low-value poolIfa‘balancingadjustmentevent’happenedtoanassetinalow-valuepoolin2006–07(suchasthesale,lossordestructionoftheasset),youneedtoreducetheclosingpoolbalancefor2006–07bythetaxableusepercentageoftheasset’sterminationvalue.(Theasset’sterminationvalueisusuallytheproceedsfromtheasset’ssaleortheinsurancepayoutforitslossordestruction.)Ifthetaxableusepercentageoftheasset’sterminationvalueismorethantheclosingpoolbalance,youreducetheclosingpoolbalancetonilandincludetheexcessinyourassessableincomeatitem22.

WORKSHEET 2: Closing pool balance for 2006–07

Edward You

Closingpoolbalancefor2005–06[from(a)onworksheet1] $0 $

plusAmountsallocatedtothepoolin2006–07for:n low-valueassets[from(b)

onworksheet1] $900 $

n low-costassets[from(e)onworksheet1] $240 $

n additionalcapitalcostsrelatingtopooledassets[from(f)onworksheet1] $0 $

lessTotallow-valuepooldeductionfordeclineinvalue[from(i)onworksheet1] $382 $

SUBTOTAL $758 $

lessTaxableusepercentageofterminationvalueofeachassetsubjecttoabalancingadjustmenteventin2006–07(seeDisposalofdepreciatingassetsinalow-valuepoolabove) $0 $

CLOSINGPOOLBALANCEFOR2006–07 $758 $

Keeparecordofyour2006–07closingpoolbalancefornextyear’staxreturn.

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QUESTION D7INTEREST AND DIVIDEND DEDUCTIONS

income-producingpurposes,thenyoumustapportiontheinterestbetweeneachpurpose.Onlyinterestincurredforanincome-producingpurposeisdeductible.UndertheTax Laws Amendment (2006 Measures No. 7) Act 2007someinterestonborrowingsforshares,unitsinunittrusts,andstapledsecurities,whichisattributabletocapitalprotectionunderacapitalprotectedborrowingisnotdeductible,andistreatedasapaymentforaputoption.Formoreinformation,visitourwebsiteatwww.ato.gov.auYoucanclaimforongoingmanagementfees,retainersandamountspaidforadvicerelatingtochangesinthemixofinvestment.However,youcannotclaimafeechargedfordrawingupaninvestmentplanunlessyouwerecarryingonaninvestmentbusiness.Youcannotclaimafeepaidtoaninvestmentadviserfordrawingupaninitialinvestmentplanwhichincludespre-existinginvestments.Youmayalsobeabletoclaimaportionofothercostsiftheywereincurredinmanagingyourinvestments.Suchcostswouldincludetravelexpenses,thecostofspecialistinvestmentjournalsorsubscriptions,borrowingcosts,thecostofinternetaccessandacapitalallowanceforthedeclineinvalueofyourcomputer.

Formoreinformation,readthepublicationYou and your shares 2007.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Deduction for 50% of a listed investment company (LIC) capital gain amountIfyouwereanAustralianresidentwhenaLICpaidyouadividend,andthedividendincludedaLICcapitalgainamount,youcanclaimadeductionof50%oftheLICcapitalgainamount.TheLICcapitalgainamountwillbeshownseparatelyonyourdividendstatement.ShowdividendsreceivedfromaLICatitem11Dividends.

Thin capitalisationIfyouhavedebtdeductions,suchasinterest,yourclaimsmaybeaffectedbythethincapitalisationrules.TheserulesmayapplyifyouareanAustralianresidentfortaxpurposesandyou(oranyassociateentities)havecertainoverseasinterests,oryouareaforeignresidentwithoperationsorinvestmentsinAustralia,andyourdebtdeductions(combinedwiththoseofyourassociateentities)for2006–07weremorethan$250,000.IfyouareaforeignresidentthethresholdappliesinrespectofdebtdeductionsagainstAustralianassessableincome.Moreinformationisavailableonourwebsite.

WHAT YOU NEED n Yourbankorfinancialinstitutionstatementsorpassbooksn YourdividendstatementsshowinganyLICcapital

gainamount

COMPLETING THIS ITEMSTEP1 Addupallyourinterestanddividenddeductionsand50%ofanyLICcapitalgainamount.STEP2 Writethetotalamountat I itemD7onpage3ofyourtaxreturn.Donotshowcents.

Did you have any of the following:n expenses that you can claim as deductions

against assessable interest and dividend income

n a ‘listed investment company (LIC) capital gain amount’ included in a dividend received from a LIC?

Yourexpensesmightinclude:n account-keepingfeesormanagementfeesn interestchargedonmoneyborrowedtopurchaseshares.Youcanclaimadeductionifyouareabletoshowthattheexpenseswereincurredinearninginterestanddividendincome.Youcannotclaimadeductionforexpensesincurredinderivinganexemptdividendorotherexemptincome.

NO GotoquestionD8.

YES Readbelow.

STOPDonotshowatthisitem:n anamountforfees,chargesortaxesrelatingtoan

accountkeptasanessentialpartofabusiness.ShowthisamountatP8onyour Business and professional items schedule for individuals 2007

n expensesincurredinearningforeignsourceinterestordividends.Taketheseexpensesintoaccountinworkingouttheamountyoushowatitem19orinthecaseofdebtdeductions,claimatitemD15onyourtaxreturn(supplementarysection)

n expensesincurredinrelationtoapartnershiportrustdistribution,rentalincome,businessincome,taxcostsandthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowingsscheme.RefertotherelevanttopicsintheIndexformoreinformationonthesematters.

YOU NEED TO KNOW

Account-keeping feesSomefinancialinstitutionschargeaccount-keepingfees.Youcanclaimthesefeeswheretheaccountwasheldforinvestmentpurposes,forexample,acashmanagementaccount.Youwillfindthesefeeslistedonyourstatementsorinyourpassbooks.Ifyouwerenotthesoleholderofanaccountyoucanonlyclaimyourshareoffees,chargesortaxesontheaccount.Forexample,ifyouheldanequalshareinanaccountwithyourspouse,youcanonlyclaimhalfofanyallowableaccount-keepingfeespaidonthataccount.

Other deductionsYoucanclaimforinterestincurredonmoneyborrowedtopurchasesharesandotherrelatedinvestmentsfromwhichyouderivedassessableinterestordividendincome.Ifyouusedthemoneyyouborrowedforbothprivateand

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QUESTION D8GIFTS OR DONATIONS

n AcertificateofapprovalfromtheMinisterforCommunications,InformationTechnologyandtheArtsforaculturalbequest

n YourPAYG payment summary – individual non-businessorotherformofadvicefromyouremployershowingtheamountyouhavedonatedthroughaworkplace-givingprogram

n YourvaluationcertificatefromtheAVOinrelationtoaconservationcovenantyouhaveenteredinto

n WrittenapprovalfromtheMinisterfortheEnvironmentandWaterResourcesforaconservationcovenantyouhaveenteredinto

YOU NEED TO KNOW Generally,youcannotclaimadeductionforadonationifyoureceivedsomethinginreturn–forexample,apen,raffleticket,dinnerorareductioninyourchild’sschoolfees(seeDeductionsforcontributionsrelatingtofund-raisingeventsonthenextpagefortheexceptiontothisrule).

Ifyoumadeadonationtoaschoolbuildingfundandyourreceiptincludesotherpayments,youcanclaimonlythepartthatisthevoluntarydonation.

Youcanclaimdeductionsfordonationsmadetoprescribedprivatefunds.

Gifts of money Youcanclaimadeductionfortheamountofmoneyyoudonatedtoaneligibleorganisation.Youcanelecttospreadyourdeductionforthisdonationoverfiveincomeyearsorless.Youneedtomaketheelectioninwritingbeforelodgingyourtaxreturn,settingoutthepercentageofthedeductionyouwillclaimineachyear.Youmaymaketheelectionusingtheformonpage60.

Workplace-giving programIfyoumadedonationsduringtheyeartoaneligibleorganisationthroughyouremployer’spayrollsystem(knownas‘workplace-giving’)youstillneedtorecordthetotalamountofyourdonationsatthisitem.

Yourpaymentsummaryorotherformofadvicefromyouremployer,showingthedonatedamount,issufficientevidencetosupportyourclaimforthededuction.Youdonotneedtohaveareceiptfromtheeligibleorganisation.

Donations and gifts to political parties and independent candidates and membersYoucanclaimadeductionforcontributionsorgiftstoregisteredpoliticalparties,independentmembersofparliament(stateorCommonwealth)orindependentcandidatesinanelectionforparliament.Contributionsmustbe$2ormore.Thecontributionorgiftmustbemoney,orpropertythatyoupurchasedduringthe12monthsbeforemakingthecontributionorgift.

Did you make:n a gift or donation of $2 or more to an eligible

organisation (an organisation that is eligible to receive tax-deductible gifts, see below)

n a contribution to an eligible organisation of more than $250 in respect of a fund-raising event before � January 2007

n a contribution to an eligible organisation of more than $�50 in respect of a fund-raising event on or after � January 2007

n a contribution of $2 or more to – a registered political party – an independent candidate in an election

for parliament, or– an independent member of parliament

OR did you:n make an approved cultural bequestn enter into a conservation covenant?

Aneligibleorganisationisanorganisationthatislistedinthetaxlaw,orhasbeenendorsedbytheTaxOffice,asadeductiblegiftrecipient,suchas:n certainorganisationsorcharitieswhichprovidehelp

inAustralian anapprovedoverseasaidfundn aschoolbuildingfundn anapprovedenvironmentalorculturalorganisation.

NO GotoquestionD9.

YES Readbelow.

NOTEIfyoudonotknowwhetheryoucanclaimadeduction,seeiftheinformationisonthereceiptforyourdonation.Ifnot,contacttheorganisationforconfirmation.Ifyoustilldonotknow,youcancheckonwww.abn.business.gov.auorphonethePersonalInfoline(seetheinsidebackcover).

WHAT YOU MAY NEED n Yourreceiptsfordonationsorcontributionsn Thepurchasepriceandpurchasedateofanyproperty

donatedn Yourvaluationsbytwoormoreapprovedvaluersforany

donationsofpropertyundertheCulturalGiftsProgramortoabodyoftheNationalTrust

n YourvaluationcertificatefromtheAustralianValuationOffice(AVO),ifrequired,foryourdonationofpropertyvaluedatmorethan$5,000

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SThemaximumamountyoucandeductintotalforallyourcontributionsorgiftstopoliticalpartiesduringtheyearis$1,500.Aseparatelimitof$1,500appliesinrespectofthetotaldeductionforallyourcontributionsorgiftstoindependentcandidatesorindependentmembersofparliamentfortheyear.

ThecontributiontoapoliticalpartymustbetoaregisteredpoliticalpartyunderCommonwealth,stateorterritoryelectorallaws.Acontributiontoapoliticalpartycanincludemembershipfees.

Thecontributiontoanindependentcandidateorindependentmembermustbetoacandidateforelectionto,ormemberof,theCommonwealthParliamentorastateparliament,ortheLegislativeAssemblyoftheNorthernTerritoryortheAustralianCapitalTerritory.

Anindependentcandidateisanindividualwhosecandidatureinanelectionforparliamentisnotendorsedbyaregisteredpoliticalparty.Anindependentmemberisamemberofparliamentwhoisnotamemberofaregisteredpoliticalparty.

NOTEOn22June2006themaximumamountyoucanclaimforacontributionorgifttopoliticalparties,andtoindependentmembersandcandidatesincreasedfrom$100to$1,500.Ifyoucontributedmorethan$100between22and30June2006anddidnotclaimthefullamount,youmaybeentitledtoanamendmentofyour2006assessment.Formoreinformationonhowtorequestanamendment,seeIfyoumadeamistakeonyourtaxreturnonpage113.

Deductions for contributions relating to fund-raising events Youcanclaimadeductionforcontributionstoeligibleorganisationsthatrelatetocertainfund-raisingeventswhereyoureceiveaminorbenefitforyourcontribution,providedthat:n thecontributionmeetscertainconditions,andn thebenefityoureceiveddoesnotexceeda

specifiedlimit.

Afund-raisingeventincludesafete,ball,galashow,dinner,performanceorsimilarevent.

Subjecttotheconditionslistedbelow,youcanclaimadeductionifyoumade:n acontributionofmoneyorpropertytoattendor

participate(orfortherighttoattendorparticipate)inafund-raisingevent

n acontributionofmoneytopurchasegoodsorservicesatacharitableauctionatthefund-raisingevent(orthecharitableauctionwasitselfthefund-raisingevent).

Ifyourcontributionwasmadebefore1January2007,itmustmeetthefollowingconditions:n itmusthavebeenmadetoaneligibleorganisationn itmusthavebeenworthmorethan$250n ifitwasproperty,youmusthaveeither:

– purchaseditwithin12monthsofmakingthecontribution,or

– owneditformorethan12monthsandtheAustralianValuationOffice(AVO)valueditatmorethan$5,000(seethefirstboxonthenextpage)

n thefund-raisingeventwasheldinAustralia,andn themarketvalueoftheminorbenefityoureceivedfor

yourcontributionwasworthnomorethan$100or10%ofthevalueofthecontribution(whicheverisless).Thereceiptfromtheeligibleorganisationwillshowthemarketvalueoftheminorbenefityoureceived.

NOTEThecontributionisthegoodsandservicestax(GST)-inclusiveamount.

Ifyourcontributionwasmadeonorafter1January2007,itmustmeetthefollowingconditions:n itmusthavebeenmadetoaneligibleorganisationn itmusthavebeenworthmorethan$150n ifitwasproperty,youmusthaveeither:

– purchaseditwithin12monthsofmakingthecontribution,or

– owneditformorethan12monthsandtheAustralianValuationOffice(AVO)valueditatmorethan$5,000(seethefirstboxonthenextpage)

n thefund-raisingeventwasheldinAustralia,andn themarketvalueoftheminorbenefityoureceived

foryourcontributionwasworthnomorethan$150or20%ofthevalueofthecontribution(whicheverisless).Thereceiptfromtheeligibleorganisationwillshowthemarketvalueoftheminorbenefityoureceived.

Yourdeductionislimitedtothepartofthecontributioninexcessofthemarketvalueoftheminorbenefityoureceived.

Youcanclaimadeductionforuptotwocontributionsthatyoumaketoattendorparticipateinthesamefund-raisingevent.

Eachsuccessfulbidatafund-raisingeventisasinglecontribution.Providedtheconditionsaremetthereisnolimittothenumberofdeductionsyoucanclaimforthepurchaseofgoodsorservicesbywayofsuccessfulbids.

ExAMPLE

Steveandhispartnerattendedafund-raisingeventinAugust2006.Hecontributed$600fortheopportunitytoattendthedinnerandauction($300each).Theminorbenefit(thedinner)heandhispartnerreceivedwasvaluedbytheeligibleorganisationat$30perhead($60intotal).

Intheauction,Stevemadefoursuccessfulbidsat$70each($280intotal).Stevecannotclaimadeductionfortheseitemsbecauseeachcontributionwasnotmorethan$250.

Stevealsomadetwosuccessfulbidsat$290each($580intotal).Bothitemswerevaluedat$5each($10intotal).

Stevecanclaimdeductionsfor: $540($600lesstheminorbenefit[thedinner]of$60) $570($580forthetwosuccessfulbidsat$290each

lesstheminorbenefitof$10)

Steve’stotalclaimis$1,110.


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SIftheeligibleorganisationissuesareceipt,itshouldstate:n thenameandAustralianbusinessnumber(ABN)

oftheorganisationn thatyourcontributionwasmadetoattendthe

fund-raisingeventorforyourpurchasesasasuccessfulbidderatthecharitableauction

n theamountofthecontribution(ifmoney),andn theGST-inclusivemarketvalueoftheminorbenefit.

Gifts of property Underthegeneralgiftprovisionsyoucanclaimadeductionforadonationofpropertytoaneligibleorganisationif:n thepropertywaspurchasedwithin12monthsof

donatingit,orn thepropertywaspurchasedmorethan12months

beforeyoudonateditandtheAustralianValuationOffice(AVO)hasvalueditatmorethan$5,000.

Theamountdeductibleisthelesserofthemarketvalueofthepropertyatthetimeofthedonationandtheamountyoupaidfortheproperty.

Youcannotclaimadeductionforadonationofpropertyifyoudidnotpurchaseit(forexample,youinheritedorwontheproperty)unlesstheAVOhasvalueditatmorethan$5,000.

YoucanelecttospreadthedeductionforadonationofpropertywhichisvaluedbytheAVOatmorethan$5,000,overfiveincomeyearsorless.Youneedtomaketheelectioninwritingbeforelodgingyourtaxreturnfortheincomeyearinwhichyoumadethedonation,settingoutthepercentageofthedeductionyouwillclaimineachyear.Youmaymaketheelectionusingtheformonthenextpage.

AUSTRALIANVALUATIONOFFICEFormoreinformationaboutpropertyvaluations,phonetheAVOon(08)81981900,fax(08)82963398orvisittheAVO’swebsiteatwww.avo.gov.au

Cultural and environmental property giftsYoucanelecttospreadthedeductionfordonationsmadeundertheCulturalGiftsProgramandforenvironmentalandheritagegiftsvaluedbytheAVO,overfiveincomeyearsorless.Youmustlodgeyourelectionwiththerelevantdepartmentbeforeyoulodgeyourtaxreturn.

Formoreinformationabout:n theCulturalGiftsProgramandtheelectionprocess,

phonetheDepartmentofCommunications,InformationTechnologyandtheArtson(02)62711643,[email protected]’swebsiteatwww.dcita.gov.au/cgp

n makingdonationstoenvironmentalandheritageorganisationsandtheelectionprocess,phonetheDepartmentoftheEnvironmentandWaterResourceson(02)62742436,[email protected]’swebsiteathttp://www.environment.gov.au/tax/reo/index.html

If,onorafter1July2002,youenteredintoaconservationcovenantoverlandyouownedyoumaybeentitledtoclaimadeductionifcertainconditionsweremet.Youcanelecttospreadthedeductionoverfiveyearsorless.ThecovenantneedstoeitherbeapprovedinwritingbytheMinisterfortheEnvironmentandWaterResourcesorenteredintounderaprogramapprovedinwritingbytheMinister.

Formoreinformation,phonetheDepartmentoftheEnvironmentandWaterResourceson(02)62741111andasktospeaktotherelevantofficerintheNaturalResourceManagementPolicyBranch,[email protected]’swebsiteatwww.environment.gov.au/tax/reo/index.html

Ifyouareanexecutororadministratorofanestate,youcanclaimadeductiononthedonor’sfinalindividualtaxreturnforaculturalbequestmadeundertheCulturalBequestsProgram.Ifthevalueofthebequestreducesthedonor’staxableincometonil,anyexcessvaluecanbeclaimedonthefirsttaxreturnoftheestate.YouneedacertificateofapprovalissuedtothedonorbytheMinisterforCommunications,InformationTechnologyandtheArtsduringthe1998,1999or2000incomeyears.


STEP1 Addupalltheamountsofyoureligiblegifts,donationsandcontributions.

NOTEIfyouhavebeengivenmorethanonereceiptorformofadvice(forexample,thecharityyoudonatedtoandyouremployerhavebothprovidedwrittenconfirmationofyourdonations),makesureyouclaimthedeductionforyourdonationsonlyonce.

STEP2 Writethetotalat J itemD8onpage3ofyourtaxreturn.Donotshowcents.

Spreading a deduction over five years

NOTEThissectiondoesnotapplytocultural,environmentorheritagegifts.

Youcanonlyelecttospreadyourdeductionoverfiveyearsifitwasagiftofpropertyvaluedatmorethan$5,000bytheAVO,oragiftofcash.Theelectionisnotavailablefordonationsandgiftstopoliticalpartiesandindependentcandidatesandmembers.

Youdonotneedtofillintheelectionifyouwishtoclaimthefulldeductionintheyearofdonation.

Whereyouelecttospreadyourdeductionyougiveuptherighttoclaimthefulldeductionamountintheyearthedonationwasmade.

Ifyoumadeadonationinconjunctionwithotherdonorsandyouelecttospreadyourshareofthededuction,youmustcompleteyourownseparateelectionformandadviseusofyourpercentageshareinthedonation.

Youcanvaryyourelectionatanytimebutonlyforyearsthatyouhavenotlodgedataxreturn.

Yourelectionmust:n bemadeinwriting,signedanddatedn bemadebeforeyoulodgeyourtaxreturnfortheincome

yearinwhichthedonationwasmaden statethepercentageofthedeductionyouwillclaimin

theincomeyearthedonationwasmadeandforeachyearuptofiveyears,thetotalofwhichcannotexceed100%oftheoriginaldeduction.

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ELECTION TO SPREAD DEDUCTION FOR A GIFT(Doesnotcovercultural,environmentalorheritagegifts)

Nameofdonor:

Nameofrecipientfund,authorityorinstitution:

Referencenumberfromcertificateofvaluation(ifproperty):

Percentageownershipshare(ifgiveninconjunctionwithotherindividuals):

Dateofdonation:

Apportionmentelectionorvariation

Year1 Year2 Year3 Year4 Year5

% % % % %

(Note:Ensurethatyourapportionmentstotal100%.)

Thisismyfirstelectionforthisgift(ordonation).

Thisisavariationtoapreviouselection.

Ticktheappropriatebox.

Signature: Date:

//

Youmustkeepyourelectionforfiveyearsfromthedateyoulodgeyourtaxreturnwiththeclaimforyourlastapportionment.Donotattachittoyourtaxreturnorsendittous.


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QUESTION D9DEDUCTIBLE AMOUNT OF UPP OF AN AUSTRALIAN PENSION OR ANNUITY


Ifyoualreadyknowyourdeductibleamount(oryouhavemorethanoneandyouknowthemall),gotostep1.

Ifyoudonotknowyourdeductibleamount:n yourpayermaybeabletotellyoun thecalculatoronourwebsitecanhelpyoutowork

itoutifyourpensionorannuitycommencedafter1July2004,or

n gotostep2.

Ifyouhavemorethanonedeductibleamountandyoudonotknowsomeofthem,youwillneedtocompletesteps1and2.

STEP1 WritethedeductibleamountofyourUPPat L itemD9onpage3ofyourtaxreturn.Donotshowcents.IfyouhavemorethanoneAustralianpensionorannuity,writethetotalofthedeductibleamountsat L itemD9.Ifyouhavedeductibleamountsyoudonotknow,gotostep2.

NOTEThedeductibleamountofyourUPPcannotbemorethanthepensionorannuitytowhichitrelates–theamountshownatitem7.

Youhavefinishedthisquestion.GotoCheckthatyouhave...onthenextpage.

STEP2 YouwillneedtocompletetheRequest for a determination of the deductible amount of UPP of an Australian pension or annuity(NAT16544).

Thisformisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Wewilladdressyourrequestintheformofaprivatebindingruling(PBR)whichislegallybindingontheCommissioner.

YouwillneedtoanswerallthequestionsontheRequest for a determination of the deductible amount of UPP of an Australian pension or annuityandprovidetheadditionaldocumentationrequired.WewillprocessyourtaxreturnoncethePBRisfinalised.

IfyoudonotknowanyofyourdeductibleamountsleaveL itemD9blank.

PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.SigntheRequest for a determination of the deductible amount of UPP of an Australian pension or annuityandattachittopage3ofyourtaxreturn.

Youhavenowfinishedthisquestion.

Did you receive an Australian pension or annuity that has a deductible amount of undeducted purchase price (UPP)?IfyoushowedincomefromanAustralianpensionorannuityatitem7onyourtaxreturn,youmaybeabletoclaimadeductionagainstthetaxableamountofyourpensionorannuityincome.

TheUPPistheamountyoucontributedtowardsthepurchasepriceofthepensionorannuityforwhichyoudidnotclaim,andwerenoteligibletoclaim,ataxdeduction.

NO GotoquestionD10.

YES Readbelow.

STOPIfyouareentitledtoaUPPdeductibleamountforaforeignpensionorannuitythenclaimthisatitemD12onyourtaxreturn(supplementarysection).AustralianGovernmentpensionsincludingpensionsfromCentrelinkandtheDepartmentofVeterans’Affairs(DVA)listedatquestion6donothaveadeductibleamount.

YOU NEED TO KNOW

UPP of a pension or annuityYourpensionorannuitymayhaveaUPPif:n youreceivedasuperannuationpensionandyou

werenotentitledtoclaimataxdeductionforsomeorallofthepersonalcontributionsyoumadetoyoursuperannuationfundorretirementsavingsaccount

n youreceivedapensionorannuitythatrevertedtoyouonthedeathofanotherperson,or

n youreceivedapensionorannuitythatyouboughtwithyourowncapital.

Eachyear,youdeductthepartofyourpensionorannuitythatrepresentsareturntoyouofyourpersonalcontributionswhichwerenotclaimedasataxdeductionfromyourtaxablepensionorannuityincome.Thistax-freepartiscalledthedeductibleamountoftheUPP,anditisusuallycalculatedbydividingtheUPPofyourpensionorannuitybyalifeexpectancyfactordeterminedaccordingtolifeexpectancystatistics.

NOTEIfyouhavetakenanypartofyourpensionorannuityasalumpsumoriftherearechangestoyourpensionorannuitydueto,forexample,commutation,divorceorre-marriagethenthedeductibleamountofyourUPPmayneedtoberecalculated.

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attachedtopage3ofyourtaxreturnyoursignedRequest for a determination of the deductible amount of UPP of an Australian pension or annuityifyoudonotknowyourdeductibleamount.

Ifyouneedinformationorassistancewiththisquestion,phoneourSuperannuationInfoline(seetheinsidebackcover).


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QUESTION D�0COST OF MANAGING TAX AFFAIRS

Youcannotclaimforthecostoftaxadvicegivenbyapersonwhoisnotarecognisedtaxadviser.

Taxshortfallandotherpenaltiesforfailingtomeetyourobligationsarenotdeductible.

Expenses relating to an FTb tax claimYoucanclaimthecostofadvicefromarecognisedtaxadviserinrelationtoanFTBtaxclaimlodgedwiththeTaxOfficeatthisitem.

Expenses incurred as an interest chargeTheTaxOfficeimposesaninterestchargeon:n latepaymentsoftaxesandpenaltiesn theamountofanyincreaseinyourtaxliabilityas

aresultofanamendmenttoyourassessment,andn theamountofanyincreaseinothertaxliabilities,such

asGSTorPAYGamounts.

Youcanclaimanyinterestchargeweimposeiftheinterestchargewasincurredin2006–07.Interestchargesimposedwhenanincometaxassessmentisamendedareincurredwhenyouarechargedtheinterest.Interestchargesintheothersituationslistedaregenerallyincurredintheyearinwhichtheinterestaccrues.

Expenses incurred for underestimating a varied GST or PAYG instalment IfwehavechargedyouanamountforunderestimatingavariedinstalmentforGSTorPAYGin2006–07,youcanclaimthatexpenseatthisitem.

Expenses for complying with your legal obligations relating to another person’s tax affairsThiscategoryincludesexpensesrelatingto:n complyingwiththePAYGwithholdingobligations–

forexample,whereyouwithheldtaxfromapaymenttoasupplierbecausethesupplierdidnotquoteanAustralianbusinessnumber,and

n providinginformationrequestedbytheTaxOfficeaboutanothertaxpayer.


STEP1 Adduptheamountsofyourexpensesformanagingyourowntaxaffairs,expensesrelatingtoanFTBclaimlodgedthroughthetaxsystem,anyinterestchargeoranyamountchargedforGSTorPAYGunderestimationandanyexpensesforcomplyingwithyourlegalobligationsrelatingtoanotherperson’staxaffairs.

STEP2 WritethetotalamountatM itemD10onpage3ofyourtaxreturn.Donotshowcents.

Did you have expenses:n relating to managing your own tax affairsn for advice relating to a claim for family tax

benefit (FTb) lodged through the tax systemn imposed by the Tax Office as an interest

chargen imposed by the Tax Office for underestimating

a varied goods and services tax (GST) or pay as you go (PAYG) instalment

n for complying with your legal obligations relating to another person’s tax affairs?

NO GotoDeductionsfromthesupplementarysectiononthenextpage.

YES Readbelow.

YOU NEED TO KNOWExpenses for managing your own tax affairs Theseincludeexpensesrelatingto:n preparingandlodgingyourtaxreturnandactivity

statementsn travel,totheextentthatitisassociatedwithobtaining

taxadvice–forexample,thetravelcostsofattendingameetingwitharecognisedtaxadviser

n appealingtotheAdministrativeAppealsTribunalorcourts,and

n obtainingavaluationneededforadeductiblegiftordonationofpropertyorforadeductionforenteringintoaconservationcovenant.

Expensesrelatingtopreparingandlodgingyourtaxreturnandactivitystatementsincludecostsassociatedwith:n buyingtaxreferencematerialn lodgingyourtaxreturnthrougharegisteredtaxagentn obtainingtaxadvicefromarecognisedtaxadviser,andn dealingwiththeTaxOfficeaboutyourtaxaffairs.

Youcanclaimfeespaidtoarecognisedtaxadviserforpreparingorlodgingyourtaxreturnifthosefeeswereincurredin2006–07.Generally,youincurthefeestheyearyoupaythem.Arecognisedtaxadviserisaregisteredtaxagent,barristerorsolicitor.Seepage6forinformationonhowtocheckwhetheryourtaxagentisregistered.

ExAMPLE

Louiseengagedaregisteredtaxagenttoprepareandlodgeher2007taxreturn.ThetaxagentlodgedhertaxreturninSeptember2007andchargedLouise$100,whichshepaidimmediately.Louisecanclaimadeductionforthetaxagent’sfeeonher2008taxreturn.

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n Simplifiedtaxsystem(STS)pooldeductionsthatyoucanclaimundertheSTSrulesandyounolongercarryonanybusiness

n Adeductionforthenetpersonalservicesincomelossofapersonalservicesentitythatrelatedtoyourpersonalservicesincome

n UnitedMedicalProtectionLimited(UMP)supportpayments

NO GotoTotaldeductionsbelow.

YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readthenotebelow.

NOTEYoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’talreadyhaveacopyofthissupplementyoucangetacopyfrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.


STEP1 Completethedetailsatthetopofpage9onyourtaxreturn(supplementarysection)ifyouhaven’talreadydoneso.UseTaxPack 2007 supplementtocompletetheDEDUCTIONSsectiononpage11ofyourtaxreturn(supplementarysection).

STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTDEDUCTIONSonpage11to D onpage3ofyourtaxreturn.

CAUTIONReadthisquestioncarefully–consultTaxPack 2007 supplementifyouarenotfamiliarwiththetermsused.

Can you claim any of the following types of deductions?n Australianfilmindustryincentivesn Thedeductibleamountoftheundeductedpurchase

priceofaforeignpensionorannuityn Personalsuperannuationcontributionsn Certaincapitalexpendituredirectlyconnectedwith

aprojectn Electionexpensesforlocal,territory,stateorfederal

candidatesn Deductionsallowableforsubscriptionsforsharesinthe

filmlicensedinvestmentcompany(FLIC)schemen Certaindeductiblecapitalexpenditureyouhadnotclaimed

infullpriortoceasingaprimaryproductionbusinessn Non-capitallossesincurreduponthedisposalor

redemptionofatraditionalsecurityn Insurancepremiumspaidforsicknessandaccidentcovern Deductibleforeignexchangelossesn Interestyouincurredonmoneyborrowedtoinvest

underthelandtransportfacilitiestaxoffsetschemeorinfrastructureborrowingsscheme

n Debtdeductionsyouincurredinearningcertainforeignnon-assessablenon-exemptincomeorinearningassessableincomethatyouhavenotclaimedelsewhere

n Amountsdeductibleunderthefive-yearwrite-offforcertainbusiness-relatedcapitalexpenditureundersection40-880oftheIncome Tax Assessment Act 1997

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TOTAL DEDUCTIONSSTEP1 Addupallthedeductionamountsintheright-handcolumnofitemsD1toD10and D onpage3ofyourtaxreturn.

STEP2 Writetheamountfromstep1atTOTALDEDUCTIONSonyourtaxreturn.Donotshowcents.Readbelow.

SUbTOTALIfyouhaveanamountatTOTALDEDUCTIONSonyourtaxreturn,takeitawayfromtheamountatTOTALINCOMEORLOSSonpage2ofyourtaxreturn.WritetheresultatSUBTOTAL.

IftheamountatSUBTOTALislessthanzero,printLintheLOSSbox attherightoftheamount.

NOTEIftheamountatTOTALINCOMEORLOSSisaloss,workoutSUBTOTALbyincreasingtheamountofthisloss(thatis,byaddingtheamountatTOTALDEDUCTIONStoit).MakesureyouprintLintheLOSSbox attherightofSUBTOTAL.

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YOU NEED TO KNOWYoumustshowtheamountofyourtaxlossescarriedforwardfromearlieryears,separatedintoprimaryproductionandnon-primaryproduction.Werequirethisinformationevenifyouarenotabletoclaimalossfromanearlieryearagainstyourincomethisyear.YoucanprovideyourprioryearlossamountsatitemL1Q Primaryproductionlossescarriedforwardfromearlierincomeyearsand R Non-primaryproductionlossescarriedforwardfromearlierincomeyears.

Youcancarryforwardprimaryproductionlossesincurredinanyearlierincomeyear.Yourdeductiblenon-primaryproductionlossesarelimitedtolossesincurredin1989–90oralateryear.Non-primaryproductionlossesincurredbefore1989–90cannolongerbedeductedfromincome.

Ifyouhadtaxlossesformorethanoneearlierincomeyearyoumust,generally,deductyourlossesintheorderyouincurredthem,oldestfirst.Youcanonlydeductataxlosstotheextentthatyouhavenotalreadydeductedit.

Beforeyoucandeducttaxlossesofearlierincomeyearsyoumustreducethembyyournetexemptincomeforthecurrentyearand,ifrelevant,byanyamountyouelecttousetoreduceyournetforeignsourceincome.SeeAustralianlossesandforeignsourceincomeonthenextpageformoredetails.

NOTEYourtaxlossesofearlierincomeyearscanonlyreduceyourAustraliansourceincometozero.IfyourtaxlossesofearlierincomeyearsweremorethanyourAustraliansourceincomeyouwillneedtokeeprecordsofthelossestoclaiminfutureyears.

Net exempt incomeIfyouwereanAustralianresident,yournetexemptincomeincludesallyourexemptincome,includinganyexemptforeignemploymentincome.Toworkoutyournetexemptincomeyoudeductanynon-capitalexpensesyouincurredinearningyourexemptincomeandanyforeigntaxpayableonthatincomefromyourtotalexemptincome.

Ifyouwereanon-resident,yournetexemptincomeincludesallyourexemptincomefromAustraliansourcesandfilmincomeexemptundersection26AGoftheIncome Tax Assessment Act 1936.Toworkoutyournetexemptincomeyoudeductanynon-capitalexpensesyouincurredinearningyourexemptAustralianincomeandanyforeigntaxpayableonfilmincomeexemptundersection26AGfromyourtotalexemptincome.

Did you have any undeducted tax losses of earlier income years?ThisquestiononlyappliestolossesincurredinrelationtoearningincomefromAustraliansources.

NO GotoTaxableincomeorlossonpage68.

YES Readbelow.

Ataxlossoccurswhenthetotalofyourallowabledeductionsforanincomeyear–excludingtaxlossesofearlierincomeyears–isgreaterthanthetotalofyourassessableincomeandyournetexemptincome.However,somedeductions,suchasgiftsordonations(seequestionD8)andpersonalsuperannuationcontributions(seequestionD13inTaxPack 2007 supplement)arelimitedforthispurposeandcannotbeusedeithertocreateorincreasealoss.

Youareentitledtoclaimalossofanearlieryearagainsttaxableincomeinasubsequentyearbutyoumustclaimthelossatyourfirstopportunitytodoso.Ifyouhadataxableincomelastyearanddidnotclaimanearlierlossagainstit,youcannotclaimthatlossagainstyour2006–07income.Ifyouwereabletoclaimalosslastyearbutdidnot,youcanrequestanamendment.Youmustcompletethisitemwhetherornotyouareabletoclaimthelossesagainsttaxableincomethisyear.

STOPDonotshowatthisitem:n deferrednon-commercialbusinesslossesfrom

aprioryear.Showthematthefollowingrelevantitem:– forpartnershipactivities–item12onyourtax

return(supplementarysection),or– forsoletraderactivities–itemP8onthe

Business and professional items schedule for individuals 2007

n capitallosses.Showtheseatitem17Capitalgainsonyourtaxreturn(supplementarysection)

n expensesandlossesinrelationtoearningforeignsourceincome.Taketheseintoaccountatitem19onyourtaxreturn(supplementarysection).

WHAT YOU MAY NEEDn Recordsofyourtaxlossesofearlierincomeyearsn Yourforeignsourceincomestatement

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Australian losses and foreign source incomeYoucanchoosetousesomeorallofyourtaxlossesofearlierincomeyearsincurredinearningAustraliansourceincometoreduceyournetforeignsourceincome,asshownintheexamplebelow.Youmaychoosenottoreduceyournetforeignsourceincomeandinsteadreturnsomeorallofthenetforeignsourceincomeasassessableincome.Areasoncouldbetheavailabilityofforeigntaxcreditsonsomeorallofthenetforeignsourceincome.

DEFINITIONNetforeignsourceincomeisassessableforeignsourceincomelessthoseallowableexpensesincurredinderivingtheforeignsourceincome.

ExAMPLE

Peterownsasmallgoodsbusinessandhasaccumulatednon-primaryproductiontaxlossesofearlierincomeyearsof$6,000.Hemadeallhislossesin1989–90andlateryears.

In2006–07Peterhadnoexemptincomebuthereceived$1,500incomefromGermany.Hehaselectedtouse$500ofhistaxlossesofearlierincomeyearstoreducethisforeignincome.

Peter’staxlossesfromearlierincomeyears (a) $6,000

Peter’snetexemptincomefor2006–07 (b) nil

Take(b)awayfrom(a).ThisistheamountoflossesavailabletoPeterfor2006–07. (c) $6,000

TheamountoftaxlossesofearlierincomeyearsPeterusedtoreducenetforeignsourceincome (d) $500

Peterwillshowthebalanceoftheforeignsourceincomeof$1,000atitem19onpage10ofhistaxreturn(supplementarysection).

Take(d)awayfrom(c).Theamountat(e)isthetotaltaxlossesofearlierincomeyearsavailabletoPetertoreducehisnetAustraliansourceincomeshownatSUBTOTALonpage3ofhistaxreturn.PeterwillshowthisamountatR itemL1onpage3ofhistaxreturn. (e) $5,500

PeterthenneedstodeterminehowmuchoftheselosseshecanactuallydeductfromhisnetAustraliansourceincome.IfPeterhasatleast$5,500ofnetAustraliansourceincomeatSUBTOTALhewillshow$5,500at Z itemL1onpage3ofhistaxreturn.

Ifyouchoosetouseyourtaxlossesofearlierincomeyearstoreduceyournetforeignsourceincome,youwillneedtoprovideadditionalinformationwithyourtaxreturn.PrintSCHEDULEOFADDITIONALINFORMATION–ITEML1onthetopofaseparatepieceofpaperandexplainyoursituation.Includeyourname,address,taxfilenumberandtheamountoftaxlossesofearlierincomeyearsyouhaveusedtoreduceyournetforeignsourceincome.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

COMPLETING THIS ITEMYourtaxlossesofearlierincomeyearscanonlyreduceyourtaxableincometozero.Thisruleaffectshowyoucompletethisitem.

STEP1 IfyouramountatSUBTOTALonpage3ofyourtaxreturnisaloss,readon.Otherwise,gotostep2.WritetheamountofyourprimaryproductiontaxlossescarriedforwardfromearlierincomeyearsatQ itemL1onpage3ofyourtaxreturn.Donotshowcents.Writetheamountofyournon-primaryproductiontaxlossescarriedforwardfromearlierincomeyearsat R itemL1onpage3ofyourtaxreturn.Donotshowcents.Donotcomplete F or Z itemL1.Gotostep5.STEP2 IfyouramountatSUBTOTALonpage3ofyourtaxreturnisanincomeamount,workoutwhatcarry-forwardlossamountyouhaveavailabletoclaimagainstthisyear’snetAustraliansourceincome.Useworksheet1belowtoworkoutseparateprimaryproductionandnon-primaryproductionlossamounts.

WORKSHEET �

Primaryproductionlosses

Non-primaryproductionlosses

Taxlossesfromearlierincomeyearsatthebeginningof2006–07* (a) $ $**

Netexemptincomefor2006–07*** (b) $ $

Totallossesavailablethisyear:take(b)awayfrom(a). (c) $ $

Theamountoftaxlossesofearlierincomeyearsusedtoreducenetforeignsourceincome (d) $ $

YourtotaltaxlossestodeductfromSUBTOTALonpage3ofyourtaxreturn:take(d)awayfrom(c). (e) $ $

* Ifyourlossesincludeanyfilmlosses,specialdeductionrulesapply.Formoreinformation,phonethePersonalInfoline.

** Donotincludeat(a)anynon-primaryproductionlossesmadein1988–89andearlierincomeyears.

*** Ifyouhavebothprimaryandnon-primaryproductionlossesyoucanchoosewhereyoudeductyournetexemptincome.

Ifyouhaveshownanamountofprimaryproductionlossesat(e)inworksheet1above,gotostep3.


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STEP3 PrimaryproductionlossesAtQ itemL1onpage3ofyourtaxreturn,writetheamountyouworkedoutat(e)inthe‘Primaryproductionlosses’columnofworksheet1instep2.Donotshowcents.

IfyouramountatSUBTOTALonpage3ofyourtaxreturnis:n greaterthanyouramountatQ ,youcandeductall

yourprioryearprimaryproductionlosses.At F writetheamountyouhaveatQ

n lessthanyouramountatQ ,youcandeductsomeofyourprioryearprimaryproductionlosses.At F writetheamountyouhaveatSUBTOTAL.

Ifyoudidnotshowanamountofnon-primaryproductionlossesat(e)inworksheet1,gotostep5.Otherwise,readon.

STEP4 Non-primaryproductionlossesWorkoutthefollowingamount:

SUBTOTALminus F itemL1 (i) $

At R itemL1,writetheamountyouworkedoutat(e)inthe‘Non-primaryproductionlosses’columnofworksheet1instep2.Donotshowcents.

Ifyouramountat(i)is:n greaterthanyouramountat R ,youcandeductall

yourprioryearnon-primaryproductionlosses.At Z writetheamountyouhaveat R

n lessthanyouramountat R ,youcandeductsomeofyourprioryearnon-primaryproductionlosses.At Z writetheamountyouhaveat(i)

n zero,youcannotdeductanynon-primaryproductiontaxlossesofearlieryears.

STEP5 Carry-forwardlossesattheendof2006–07Youcancarryforwardfordeductioninfutureincomeyears:n anyundeductedtaxlossesofearlierincomeyears,andn anyundeductedlossfromthisincomeyear.

Youneedarecordofyourlossesseparatedintoprimaryandnon-primaryproductionamounts.Useworksheet2inthenextcolumntoworkoutyourtaxlossestocarryforwardfordeductioninfutureyears.

Ifyouhavenoamountsat F and Z itemL1,youmustbreakuptheamountatSUBTOTALintoprimaryandnon-primaryproductionlosses.Todothisfollow1to7inworksheet2below.

Ifyouhaveanamountat F and/or Z ,complete8and9inworksheet2below.

WORKSHEET 2

1 YouramountatSUBTOTAL (a) $(frompage3ofyourtaxreturn)

2 Your2007primaryproductionloss:theamountatb item14onpage10ofyourtaxreturn(supplementarysection)

(b) $

3 Your2007non-primaryproductionloss:take(b)awayfrom(a). (c) $

4 YouramountatQ itemL1 (d) $

5 Yourtotalcarry-forwardprimaryproductionlosses:add(b)and(d).

$

6 YouramountatR itemL1 (e) $

7 Yourtotalcarry-forwardnon-primaryproductionlosses:add(c)and(e).

$

8 Yourtotalcarry-forwardprimaryproductionlosses: $taketheamountat F awayfromtheamountatQ itemL1.

9 Yourtotalcarry-forwardnon-primaryproductionlosses:taketheamountat Z awayfromtheamountatR itemL1.

$



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TAx OFFSET FOR LOW INCOME TAxPAYERSIfyouwereanAustralianresidentfortaxpurposesandyourtaxableincomewaslessthan$40,000youmaygetataxoffset.

Themaximumtaxoffsetof$600appliesifyourtaxableincomewas$25,000orless.Thisamountisreducedby4centsforeachdollarover$25,000.

Wewillworkoutyourtaxoffsetandmakesureitcomesoffyourtax.Thetaxoffsetwillbeshownonyournoticeofassessment.Ifyouwanttoworkoutyourtaxoffset,usethelowincometaxoffsetcalculatoronourwebsiteorgotopage123.Donotincludeanythingaboutthistaxoffsetonyourtaxreturn.

CHILD SUPPORT AGENCY CLIENTSTheChildSupportAgency(CSA)mayuseyourtaxableincometomakeanassessmentofchildsupport.

TheCSAwillincludeyourtotalreportablefringebenefitsamounts,lossesfromrentalpropertiesandexemptforeignemploymentincomewhenassessingchildsupportliabilities.

Howyoucompletethisitemwilldependonwhetheryoucompleted F or Z atitemL1Taxlossesofearlierincomeyearsonpage3ofyourtaxreturn.

Have you completed F or Z at item L�?

YES GotoDeductyourlossesbelow.

NO TransfertheamountyouhaveshownatSUBTOTALonpage3ofyourtaxreturnto $ TAXABLEINCOMEORLOSS.Donotshowcents.Iftheamountat $ TAXABLEINCOMEORLOSSislessthanzero,printLintheLOSSbox .

Deduct your lossesAdduptheamountsat F and Z itemL1andtakethetotalawayfromtheamountyouhavewrittenatSUBTOTAL.Writetheanswerat $ TAXABLEINCOMEORLOSSonyourtaxreturn.Donotshowcents.

IftheamountatSUBTOTALisaloss,youhavenotaxableincomethisyearagainstwhichyoucanclaimalossofanearlieryear.PrintLintheLOSSbox .

NOTEAlthoughtheamountat $ TAXABLEINCOMEORLOSSislessthanzeroandyouhaveprintedLintheLOSSbox,thisamountmaynotbeyourtaxlossthatcanbecarriedforwardfornextyear.Adjustmentsmayhavetobemadetolimitcertaindeductions–forexample,giftsordonationsandpersonalsuperannuationcontributions–totakeintoaccountanyexemptincomeandtomakeothervariations.PhonethePersonalInfoline(seetheinsidebackcover)formoreinformation.

Yourtaxlossescarriedforwardfromearlierincomeyearsplusyourtaxlossfromthisincomeyearcanbecarriedforwardtobedeductedinfutureincomeyears.Youwillneedtokeeparecordoftheselosses.


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DEPENDANTS AND SEPARATE NET INCOME

WHAT IS SEPARATE NET INCOME?Separatenetincome(SNI)includesincomeandotherspecifiedamountsthatyourdependantearnedorreceivedin2006–07whileyoumaintainedthem.SNIalsospecificallyincludessomeamountswhicharenotincludedintherecipient’sassessableincome.TherearealsosomeamountsthatarespecificallyexcludedfromSNI.SNIearnedbyyourdependantmayaffectanyclaimyouareentitledto.

Income included in SNIn Salaryandwagesn Terminationpaymentsrepresentingunusedannual

leaveandlongserviceleaven Pensions,includingAustralianannuitiesand

superannuationpensionsandexemptpensionslistedonpage13

n Interestanddividendincome–butnotthefrankingcreditattachedtofrankeddividends

n Business,trustandrentalincomen Veterans’AffairspaymentsandmostCentrelink

payments,includingparentingpayment(partnered),carerpayment,remoteareaallowanceandthelanguage,literacyandnumeracysupplement

n Anynetcapitalgainfortheincomeyearn Anymaintenancepaymentsyourspousereceivedfor

theirownsupportafterdivorceorseparation–eventhoughyourspousemaynotneedtodeclaresuchincomefortaxpurposes

n ThemaintenanceoraccommodationcomponentofascholarshippaidbytheCommonwealthorastateexceptwherethatcomponentispaidforhelpingtoeducateisolatedchildrenagedunder16years

Income not included in SNIn ThefollowingCentrelinkpayments:

– childcarebenefit– familytaxbenefit(FTB)– theone-offpaymenttofamiliesandcarers

undertheFamilyAssistance(One-offPaymenttoFamiliesandCarers)Scheme2004

– the2006one-offpaymenttocarers(carerpaymentrelated,wifepensionrelated,partnerservicepensionrelated,carerservicepensionrelatedorcarerallowancerelated)paidundertheSocial Security Act1991

– paymentstocarersundertheschemedeterminedunderSchedule4totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006

– the2006one-offpaymenttoolderAustraliansundertheSocial Security Act 1991ortheVeterans’ Entitlements Act 1986

Thepurposeofthissectionistogiveyouimportantinformationaboutdependantsand‘separatenetincome’.VariousquestionsinTaxPack 2007 and TaxPack 2007 supplement willreferyoutothisinformationwhenyouneedit.

WHO IS A DEPENDANT?Adependantcanbe:n yourspouse–marriedordefacto(seethedefinition

ofspouseonpage110)n yourparentsorspouse’sparentsn astudentunder25yearsoldwhoisstudying

fulltimeatschool,collegeoruniversityn achild–includingyourstepchildoradoptedchild–

whoisunder21yearsoldandnotastudentn achild-housekeeper–yourchildofanyagewho

worksfulltimekeepinghouseforyoun aninvalidrelative–yourchild,brotherorsister–

whois16yearsorolderand:– receivesadisabilitysupportpensionoraspecial

needsdisabilitysupportpension,or– hasacertificatefromaCommonwealth-approved

doctorcertifyingacontinuinginabilitytowork.AdependantneedstobeanAustralianresidentfortaxpurposes(seepages11–12).Foraspouse,studentorchildonly,theywillbetreatedasaresidentiftheyhavealwayslivedinAustraliaortheycametoliveinAustraliapermanently,unlesstheyhavesetupapermanenthomeoutsideAustralia.

NOTEYoucanonlyclaimataxoffsetforadependantifyouwereanAustralianresidentfortaxpurposes.

Did you have dependants waiting to migrate to Australia?Ifyourspouseanddependentchildrenwereoverseasin2006–07,wewillconsiderthemtobeyourdependantsfortaxoffsetpurposesifyouweretakingthestepsnecessaryfortheirmigrationinatimelymanner.

WHAT IS MAINTAINING A DEPENDANT?Youmaintainedadependantifanyofthefollowingapplies:n youandyourdependantlivedinthesamehousen yougaveyourdependantfood,clothingandlodging,orn youhelpedthemtopayfortheirliving,medicaland

educationalcosts.Ifyouhadaspouseforthewholeincomeyearandyourspouseworkedatanytimeduringtheyear,westillconsideryoutohavemaintainedyourspouse–asadependant–forthewholeincomeyear.Weconsideryoutohavemaintainedadependantevenifthetwoofyouweretemporarilyseparated,forexample,duetoholidaysorbecausetheywereoverseas.Ifyoumaintainedadependantforonlypartoftheyear,youmayneedtoadjustyourclaim.


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– paymentstoolderAustraliansundertheschemedeterminedunderSchedule2totheSocial Security and Veterans’ Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006

– maternityimmunisationallowance– maternitypayment– carerallowance[butnotethatcarerpaymentsareincludedinseparatenetincome(SNI)]

n Babybonusn Frankingcreditsattachedtofrankeddividendsn Thevalueoramountofanynon-government

scholarshipreceivedinconnectionwiththeeducationofadependentchildorstudent

n ThevalueoramountofanyCommonwealthorstateassistanceprovidedforschoolfees,thepurchaseoftextbooksortravellingexpenses

n Lumpsumseveranceorretirementpaymentsofacapitalnatureoramountspaidascompensationforlosingajob

n Anymaintenancepaymentsyourspousereceivedforsupportoftheirdependentchildren

n Amountsreceivedundertheincentivepaymentsschemerelatingtocertainprivatehealthinsurancepolicies

n TheJapaneseinternmentcompensationpaymentsmadeundertheCompensation (Japanese Internment) Act 2001 ortheVeterans’ Entitlements Act 1986

n CompensationpaymentsreceivedundertheGermanForcedLabourCompensationProgramme(GFLCP)

What can reduce SNI?IncalculatingSNI,yourdependant’sincomecanbereducedby:n anyexpensestheyincurredin2006–07inearning

theirincomewhichtheycouldclaimasadeductionn anyamounttheycouldclaimin2006–07forthe

deductibleamountoftheundeductedpurchasepriceoftheirpensionorannuityatquestionD9orquestionD12inTaxPack 2007 supplement

n netchildcareexpensestheyincurredin2006–07becausetheywereworking–thatis,theamountpaidbythedependantlessanycashrebates(forexample,childcarebenefitandrebatesprovidedbyanemployerorunion)

n theirexpensesfortravelduring2006–07toandfromchildcarebecausetheywereworking

n theirexpensesfortravelduring2006–07toandfromwork

n expensestheyincurredin2006–07inconductingabusinessactivitythatresultedinadeferrednon-commercialbusinessloss,eveniftheydidnotlodgeataxreturn.

Whereanyoftheaboveexpensesincludecarexpenses,weacceptacalculationoftheexpensebasedonarateperkilometremultipliedbytheactualnumberofkilometrestravelled–seethe‘centsperkilometre’methoddescribedonpage41.Ifthismethodisused,the5,000kilometrelimitdoesnotapplyforthepurposeofcalculatingyourdependant’sSNI.

YourdependantmustbeabletodemonstratethattheyactuallyincurredtherelevantexpenseswhichreducetheirSNI.

What doesn’t reduce SNI?Yourdependant’sSNIcannotbereducedby:n amountstheypaidforgifts,donationsortaxagentfeesn taxwithheld,superannuationcontributionsorlosses

broughtforwardfrom2005–06orearlieryearsn self-educationexpensesthatwouldnotbetax-deductible

becausetheironlyincomewasfromaustudy,youthallowanceorworkthatwasnotconnectedwithself-education.

HOW MUCH SNI CAN YOUR DEPENDANT EARN?Forsomeofyourclaimsrelatingtodependants,theamountyoumaybeentitledtowillbeaffectedbytheirSNI.Forexample,sometaxoffsetsarereducedby$1forevery$4ofSNIover$282thatyourdependantsearnedin2006–07.WeexplainateachquestiontheamountofSNIyourdependantscanearnbeforeyourclaimisaffected.

TAXOFFSETSANDYOURTAXWITHHELDIfyourtaxoffsetorfamilytaxbenefitentitlementshavechangedsinceyoulastfilledinaWithholding declarationauthorisingyourpayertovarytheamountoftaxwithheld,youmayneedtofillinanewdeclaration.

Ifyourfamilytaxbenefitentitlementshavechanged,youwillalsoneedtocompletetheWithholding declaration – family tax benefit worksheet.Contactyourpayerformoreinformation.Failuretofillinanewdeclarationmayresultinataxdebt.

Pages76–97tellyouabouttaxoffsets.Formoreinformationaboutfamilytaxbenefit,seepages71–5.


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FAMILY TAX BENEFIT

childturns18years–providedthechildisstudyingfulltimeandisnotreceivingasocialsecuritypayment,suchasyouthallowanceoraprescribededucationalschemeallowance,suchasABSTUDY.

IfyouwereeligibleforFTBforachildwhohasdied,youmaybeentitledtoabereavementpayment.Formoreinformation,visittheFAOorphone136150.

WERE YOU ELIGIbLE FOR FTb?

FTBCALCULATORTheFTBcalculatoronourwebsitecanhelpyouworkoutwhetheryouwereeligibleforFTB.Ifyouwere,itcanalsoworkouttheamountyouareentitledtoclaim.

TobeeligibletoclaimFTByoumustsatisfythefollowingthreecriteria:n Youmusthaveprovidedcaretoadependentchild

(seethedefinitionunderDidyouhaveaneligibledependentchild?onthenextpage).

n Ifyousharedthecareofthedependentchildwithanotherpersonwhoisnotyourcurrentspouse,youmusthavecaredforthechildforaminimumof10%oftheassessmentperiod.Forexample,ifyousharedthecareoverthewhole2006–07incomeyearyoumusthavecaredforthedependentchildforatleast37nightsoftheincomeyear.

n Youmusthavesatisfiedtheresidencyrequirementsforfamilyassistancepurposes(seebelow).Thesedifferfromthosefortaxpurposes.

Residency requirements for family assistance purposesTobeanAustralianresidentforfamilyassistancepurposes,youmust:n resideinAustraliaonapermanentbasis,andn satisfyoneofthefollowing:

– youareanAustraliancitizen– youholdapermanentvisa,or– youareaNewZealandcitizenwhoentered

Australiaunderaspecialcategoryvisa.

IfyouholdacertainclassoftemporaryvisabutyoudonotresideinAustraliaonapermanentbasis,youmaystillbeentitledtoFTBwhileyouareinAustralia(forfurtherinformation,contacttheFAO).

IndecidingwhetheryouresideinAustraliaonapermanentbasis,theFAOmayneedtolookat:n thenatureofyouraccommodationn thenatureandextentoffamilyrelationshipsinAustralian thenatureandextentofemployment,businessor

financialtieswithAustralian thefrequencyanddurationoftraveloutsideAustralia,

andn anyotherrelevantmatters.

Did you have care of a dependent child aged under 2� years (or under 25 years if they were studying full time) at any time between � July 2006 and 30 June 2007?

EXPLANATIONOFTERMSCareandothertermsusedinthissectionaredefinedatExplanationoftermsonpages74–5.

NO Youcannotclaimfamilytaxbenefit(FTB)anddonotneedtocontinuereadingthissection.GotoTaxoffsetsonpage76.

YES Readbelow.

Did you or your spouse receive FTb payments directly from the Family Assistance Office (FAO) for the full income year?

YES YoudonotneedtolodgeaclaimforFTB.YouonlyneedtoreadHowdoesincomeaffectyourFTBPartBonpage74tofindoutifyouareeligibletoclaimataxoffsetatitemT1.YourFTBpaymentswouldhaveincludedPartBifyousatisfythePartBeligibilitytests.

IfyouhavebeenpaidtoomuchFTB,theFAOwillrecoveranyamountyoushouldnothavereceived.Yourtaxrefund–oryourspouse’siftheygaveconsent–canbeusedtorecovertheseamountsdirectly.

FormoreinformationonreconciliationofFTB,seethepublicationFamily tax benefit (FTB) tax claim instructions 2007(NAT4108–6.2007).

GotoHowdoesincomeaffectyourFTBPartBonpage74.

NO Readbelow.

WHAT IS FAMILY TAx bENEFIT?FTBhastwoparts,PartAandPartB.PartAisdesignedtohelpwiththecostofraisingchildren.PartBisdesignedtogiveextrahelptofamilieswithonemainincome,includingsingleparentfamilies.YoumaybeeligibleforPartAorPartB,orboth.

PartAispaidforeachdependentchildyoucareforwherethedependentchildisagedunder21yearsandforthosedependentchildrenaged21yearsto24yearswhoarestudyingfulltime.

PartBisafamilypayment(thatis,itisnotpaidperchild)andcanbepaiduntiltheyoungestchildturns16yearsoruntiltheendofthecalendaryearinwhichtheyoungest


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THavingataxfilenumberdoesnotnecessarilymeanyoumeettheresidencyrequirementforfamilyassistance.

Ifyouareunsureofyourresidencystatus,phonetheFamilyAssistanceOffice(FAO)on136150orvisittheFAOwebsiteatwww.familyassist.gov.au

Did you have an eligible dependent child?Tobeeligibleforfamilytaxbenefit(FTB),yourdependentchildmust:n havebeeninyourcareandyoumusthavebeen

responsible(whetheraloneorjointlywithsomeoneelse)fortheirday-to-daycare,welfareanddevelopment

n havebeenanAustralianresidentforfamilyassistancepurposesorhavelivedwithyou

n nothavebeenyourspousen haveresidedinAustraliaforsomeoftheperiod

1July2003to30June2007.

Achildisnotadependentchildif:n they(orsomeoneontheirbehalf,forexample,aparent)

receivedanyofthepaymentslistedatquestions5and6onpages23–4

n theywere16yearsorolderandreceivedpaymentsunderanABSTUDYschoolingortertiaryscheme,theStudentFinancialSupplementScheme,theVeterans’ChildrenEducationScheme,orthePost-graduateAwardsScheme,or

n theyhadanadjustedtaxableincomeofmorethantheincomelimitinthetablebelow.

Ageofchild Incomelimits

Under5years Nolimit

5to15yearsstudyingfulltime Nolimit

5to15yearsnotstudyingfulltime $11,548

16to24years $11,548

Did you satisfy the eligibility criteria AND did at least one dependent child or full-time student that you provided care for satisfy the dependent child eligibility criteria?

NO YouarenoteligibletoclaimFTB.GotoTaxoffsetsonpage76.

YES Readbelow.

IfyouareunsureofhowyouwouldliketoclaimyourFTB,workthroughthefollowingstepstofindoutwhichwayisbestforyou.

STEP1 Did you receive an income support payment from Centrelink for the whole income year? (Incomesupportpaymentsarelistedatquestions5and6onpages23–4.)

NO Gotostep2.

YES YourFTBwouldhavebeenpaidinadditiontoyourincomesupportpayment.YoushouldnotlodgeanFTBtaxclaim.Ifyouwouldlikefurtherinformation,contacttheFAO.GotoTaxoffsetsonpage76.

STEP2 Were you entitled to a health care card and/or rent assistance from the FAO? Forfurtherinformationonhealthcarecardsandrentassistance,phonetheFAOon136150orvisittheirwebsiteatwww.familyassist.gov.au

NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration(NAT3093),youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.

YES Healthcarecardsandrentassistancearenotavailablethroughthetaxsystem.ToreceiveyourhealthcarecardyoushouldclaimyourFTBdirectlyfromtheFAO.GotoTaxoffsetsonpage76.

STEP3 Did you or your spouse receive child support for all or part of the 2006–07 income year that was registered for collection by the Child Support Agency (CSA)?

NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.

YES Gotostep4.

STEP4 Did you or your spouse receive arrears of child support in the 2006–07 income year?

Forthepurposesofthemaintenanceincomecredit‘arrearsofchildsupport’meansanamountinexcessofthechildsupportentitlementamountfor2006–07asworkedoutbytheCSA.

NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFAOorfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.

YES Gotostep5.


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UsethetablebelowtohelpyoudetermineifyouareentitledtoallorsomeofPartA.Inthetable,usetheageofyourdependentchildorchildrenat30June2007.Ifyourdependentchildturned25yearsduringtheincomeyear,countthechildinthe‘Numberofdependentchildrenaged18to24years’row.

Youcanusethecalculatoronourwebsitetoworkoutyourrate.ThereisalsoarateestimatorontheonlineservicespageoftheFAOwebsiteatwww.familyassist.gov.au

Inthetablebelow:Ifallyourchildrenwereaged0to17yearsat30June2007,findtherowthatshowsthenumberofdependentchildrenyouhad.Yourincomelimitistheamountshadedblue inyourrow.Ifallyourchildrenwereaged18to24years,findthecolumnthatshowsthenumberofdependentchildrenyouhad.Yourincomelimitistheamountshadedpink inyourcolumn.Ifyouhadchildreninbothagegroups,findtherowthatshowsthenumberofdependentchildrenyouhadaged0to17yearsandthecolumnthatshowsthenumberofdependentchildrenyouhadaged18to24years.Yourincomelimitistheunshadedamountwhereyourcolumnandyourrowmeet.

IfyourfamilyATIisequaltoormorethantheincomelimitsinthetableyouarenotentitledtoPartAbutyoumaybeentitledtoPartB.Readon.

NOTEYoumayhavebecomeorceasedtobeeligibleforPartAduringtheincomeyearif:n yourmaritalstatuschangedn anyofyourdependentchildrenaged21to24years

stoppedstudyingfulltime,orn yougainedthecareof,orceasedtocarefor,

adependentchild.

NOTEThefollowingquestionrelatestopreviousincomeyears.

STEP5 During the period � July 2000 to 30 June 2006:n did you or your spouse receive child support that

was less than the maintenance income-free area (see Explanation of terms) for any of the income years, and the amount of child support received in that year was also less than the amount due for that year, and

n were you or your spouse eligible for family tax benefit (FTb) for all or part of that period?

NO YoucanchoosehowyouwouldliketoreceiveyourFTB–fromtheFamilyAssistanceOffice(FAO)orfromtheTaxOffice.IfyoureducedtheamountoftaxthatwaswithheldfromyourpayinanticipationofyourFTBentitlementbylodgingaWithholding declaration,youshouldclaimyourFTBfromtheTaxOfficeoryoumayincurataxdebt.

YES Youmayhaveamaintenanceincomecreditthatcanbeusedtooffsetthechildsupportarrearsyoureceivedinthe2006–07incomeyear.ToaccessthiscredityoushouldclaimyourFTBdirectlyfromtheFAO.

Themaintenanceincomecreditmay,insomecases,increasetheamountofFTByouwillreceivein2006–07.Forfurtherinformation,contacttheFAO.

IfyouwouldliketoclaimyourFTBfromtheFAO–eitherasalumpsumorasfortnightlypayments–contacttheFAOtogettheappropriateFAOclaimform.Otherwise,readon.

HOW DOES INCOME AFFECT YOUR FTb PART A?TheamountofPartAyoureceivedependsonyourfamilyadjustedtaxableincome(ATI).YourfamilyATIisthetotalofyourandyourspouse’sATI.

FTb PART A FAMILY ADJUSTED TAxAbLE INCOME LIMIT (INCLUDING THE PART A SUPPLEMENT)

Numberofdependentchildrenaged18to24years

Numberofdependentchildrenaged0to17years

0 1 2 3

0 $96,081 $107,043 $118,857

1 $94,718 $105,680 $117,494 $129,308

2 $104,317 $116,131 $127,945 $139,759

3 $114,769* $126,582* $138,396* $150,210*

*Incomelimitishigherthanstatedifyouhavethreechildrenaged13to15years.ContacttheFAOifyouhavefurtherqueries.

Note:Youcannotusethistableif:n youhadmorethanthreechildrenineitheragegroupn yousharedcareforanyofyourchildrenn youhadtripletsorquadruplets(orchildrenfromalargermultiplebirth)whowereundersixyearsold,orn youreceivedgovernmentrentassistancepayments.Ifanyoftheseapplytoyou,usethefamilyassistanceestimatoravailableontheFAOwebsiteatwww.familyassist.gov.auorphonetheFAOon136150.

ExAMPLES

n Ifyouhadonedependentchildaged0to17yearsandnodependentchildrenaged18to24years,yourincomelimitis$94,718.

n Ifyouhadnodependentchildrenaged0to17yearsandthreedependentchildrenaged18to24years,yourincomelimitis$118,857.

n Ifyouhavethreedependentchildrenaged0to17yearsandtwodependentchildrenaged18to24years,yourincomelimitis$138,396.


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TWere you entitled to family tax benefit (FTb) Part A?

NO YoumaystillbeentitledtoPartB.SeeHowdoesincomeaffectyourFTBPartB?below.

YES SeeHowtoclaimFTBfromtheTaxOfficeinthenextcolumn.YoumayalsobeentitledtoPartB.Readbelow.

Unsure? ContacttheFamilyAssistanceOffice(FAO).

HOW DOES INCOME AFFECT YOUR FTb PART b?IfyouwereasingleparentatanytimeduringtheclaimperiodyourincomewillnotaffectyourPartBentitlementforthattime.Ifyouwereamemberofacouple,onlythelowerearner’sadjustedtaxableincome(ATI)istakenintoaccountwhendeterminingentitlementtoPartB.UsethetablebelowtoworkoutifyouareentitledtoPartB.

Ageofdependentchild Lowerearner’sincomelimitatwhichPartBstopsbeingpaid

Under5years $21,572

5to18years* $16,790

*Ifyouryoungestchildwasaged16to18yearsatanytimeduringtheclaimperiodyoucanonlybeentitledtoPartBforthatchildiftheywerestudyingfulltime.Ifthechildwas18yearsyouwillbeentitledtoPartBuntil31Decemberoftheyeartheyturned18years.

Ifyouhadashared-carearrangementforanyofyourchildren,PartBiscalculatedforeacheligiblechildandpaymentisbasedonthechildwiththehighestrate.

Return to workIfyouwereaparentwhoreturnedtoworkforthefirsttimeafter1July2006:n afterthebirthofyourchild,orn aftercaringforachildwhohascomeintoyourcareyoumaybeentitledtothemaximumrateofFTBPartBfortheperiodthatyouwerenotatworkduringtheyear.

EligibilityforthisextraassistancewillbecalculatedaftertheendoftheincomeyearwhenFTBpaymentsarereconciled.

Startinganewjobmaybeconsideredareturntowork.

Forfurtherinformation,refertoFamily tax benefit (FTB) tax claim instructions 2007.

Were you entitled to FTb Part b?

NO GotoTaxoffsetsonpage76.

YES SeeHowtoclaimFTBfromtheTaxOfficeinthenextcolumn.

Unsure? ContacttheFAO.

NOTEIfyourentitlementtoPartBwas:n foronlypartoftheyear–youmaybeabletoclaima

spousetaxoffsetatitemT1fortherestoftheyear,orn ataratebasedonachildyouoryourspouse

sharedthecareofwithsomeoneelse,forexample,anex-spouse–youmaybeabletoclaimaspousetaxoffsetatitemT1fortheperiodswhenthechildwasnotinthecareofyouoryourspouse.

HOW TO CLAIM FTb FROM THE TAx OFFICEIfyouwouldliketoclaimyourFTBfromtheTaxOfficeyouwillneedtocompleteaseparateform,theFamily tax benefit (FTB) tax claim 2007andthenlodgeitwithorafteryourTax return for individuals 2007.

ThisformisincludedwiththeFamily tax benefit (FTB) tax claim instructions 2007.Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.AnFTBtaxclaimforthe2006–07incomeyearcanbeaccepteduntil30June2009.However,toavoidpenaltiesforlatelodgmentofyourtaxreturnyoumustlodgebytheduedate–seeLodgeyourtaxreturnby31October2007onpages10–11.

Ifyouhavea2005–06FTBtaxclaimthatyouhavenotlodgedwiththeTaxOfficeyoumustdosoby30June2008.

ExPLANATION OF TERMSBelowisanexplanationoftermsusedinthisinformationsection.Ifyouarestillunsureaboutatermafterreadingtheexplanation,contacttheFAO.

Adjusted fringe benefitsThisisthereportablefringebenefitsamount‘grosseddown’.

Anyreportablefringebenefitswillappearonyourpaymentsummary.YouneedtowritethereportablefringebenefitsamountonyourFTBtaxclaimoronyourtaxreturn.TheFAOwillautomaticallyreduceanyamountsthatappearonyourpaymentsummarytotheadjustedamount.

To‘grossdown’youradjustedfringebenefitsamountusethefollowingformula:

reportablefringebenefitsamount 53.5%

Adjusted taxable income (ATI)Thecomponentsofadjustedtaxableincomeare:n taxableincomen adjustedfringebenefitsn netrentalpropertylossesn tax-freepensionsorbenefitsn targetforeignincome,andn deductiblechildmaintenanceexpenditure.

Eachofthesecomponentsisdescribedindetail.

Assessment periodAnassessmentperiodisusedtocalculateyourshared-carepercentage.


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Anassessmentperiodbeginsonthelatestof:n thedayonwhichthecareofthedependentchildstarts

tobesharedn thedayonwhichcarearrangementsforthedependent

childchangedorn 1Julyintheincomeyearoftheclaim.

Anassessmentperiodendsontheearlierof:n 30Juneoftheincomeyearinwhichtheperiodbegann thedaybeforethedayonwhichthecarearrangements

ofthedependentchildchangedorn thedayonwhichthecareofthedependentchild

stopped.

Theassessmentperiodisnotaffectedifthereareshort-termabsencesorminorvariationstoyourshared-carearrangements–forexample,ifachildwhonormallystayswithyourex-spouseforaweekenddoesnotdosobecauseofillness.

CareCaremeansthatyouhadresponsibilityfortheday-to-daycare,welfareanddevelopmentofthechild.Generally,day-to-daycareincludesphysicalcare.

Youcanstillcareforyourdependentchildiftheywerebeingeducatedawayfromyourhome–forexample,atuniversity.

Deductible child maintenance expenditureDeductiblechildmaintenanceexpenditureistheamountofchildmaintenance(alsoknownaschildsupport)youarerequiredtopaytoanotherpersontomaintainyournaturaloradoptedchild.Toworkoutyouradjustedtaxableincome(ATI)deductthisamountfromthetotalofalltheotherATIamounts.

Full careYouhadfullcareofyourchildrenifyouand/oryourcurrentspousecaredforyourchildrenforthewholeassessmentperiodandyouareclaimingfamilytaxbenefit(FTB)onbehalfofyourfamily.

Maintenance income-free areaThemaintenanceincome-freeareaistheamountofchildsupport(maintenance)youcanreceivebeforeyourFTBPartApaymentisreduced.MaintenanceincomeabovethefreeareareducesyourFTBPartApaymentby50centsinthedollaruntilthebaserateofFTBPartAisreached.

Themaintenanceincome-freeareaismadeupofabasicamountforthefirstchildandasupplementaryamountforeachsubsequentchild.Themaintenanceincome-freeareasfor2006–07areshownbelow.

Individual’ssituation Basicamount(1child)

Foreachadditionalchild,add

Single $1,215.45 $405.15

Acouple,andbothhavemaintenanceincome

$2,430.90 $405.15

Acouplebutonlyonehasmaintenanceincome

$1,215.45 $405.15

Ifyouneedthemaintenanceincome-freeareasforpreviousincomeyears,phonetheFamilyAssistanceOffice(FAO)on136150orvisittheirwebsiteatwww.familyassist.gov.au

Net rental property lossesNetrentalpropertylossesareshownatitem20Netrentonpage11ofyourtaxreturn(supplementarysection).Onlyincludethisamountifyouhaveshownarentalloss–youwouldhaveprintedLintheLOSSbox attherightofitem20.ThevalueofanynetpropertylossiscountedasincomeforATIpurposes.

Shared careSharedcareiswhereyouand/oryourspousecaredforachildforsomeofthetimeduringtheassessmentperiodandsomeoneelse–forexample,yourex-spouse–caredforthechildfortherestofthetime,suchasweekendsorschoolholidays.Youcanworkoutyourshared-carepercentageasfollows:

Numberofnightsyouand/oryourspousecaredforthechildinanassessmentperiod 100Numberofnightsintheassessmentperiod

YouwillneedaccuraterecordstoclaimyourcorrectpercentageofFTB,particularlyifyourcarearrangementschangedduringtheyear.Thepercentagecanbedifferentfordifferentperiodsifyourpatternofcarechangedduringtheyear.Ifyouneedhelptoworkoutyourshared-carepercentagecontacttheFAO.

SpouseYourspouseisapersonoftheoppositesextowhomyouwerelegallymarried,orwithwhomyoulivedinamarriage-likerelationshipatanytimeduringtheclaimperiod,providedyouwerenotlivingseparatelyandapartonapermanentorindefinitebasis.Youmayhavehadmorethanonespouseduringtheclaimperiod–forexample,ifyouweremarriedatthebeginningoftheclaimperiod,thenseparated,thenlivedwithanewspouseattheendoftheclaimperiod.

Target foreign incomeTargetforeignincomeisincome,calculatedinAustraliandollars,fromsourcesoutsideAustralia.Donotincludeanyamountsyouhavealreadyincludedinyourtaxableincomeandanyforeignincomereceivedintheformofafringebenefit.

Ifyoureceivedamountsoftargetforeignincomethroughouttheincomeyear,usetheexchangerateapplicableon1July2007toconvertforeignamountstoAustraliandollars.YouwillfindtheapplicableexchangeratesontheFAOwebsiteunder‘Howtocalculateincome’oryoucangetthemfromtheFAO.

Taxable incomeThisistheamountthatyouhavewrittenatTAXABLEINCOMEORLOSSonyourTax return for individuals 2007.Ifyouhavealosstheamounttobeincludedinyourcalculationofadjustedtaxableincomeiszero.

IfyouarecompletingyourFTBtaxclaimseparatelyfromyourtaxreturn,taxableincomeisalsoshownonyourincometaxnoticeofassessmentissuedbytheTaxOffice.

Tax-free pensions or benefitsThesearelistedunderPensionsonpage13.ForFTBpurposesdoubleorphanpensionisnotincluded.

Tax-freepensionsorbenefitsdonotincludebereavementpayment,pharmaceuticalallowance,rentassistance,remoteareaallowance,language,literacyandnumeracysupplement.


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Generally,therearethreetypesoftaxoffsets.They:n providetaxreliefforpersonalcircumstances(for

example,taxoffsetsforseniorAustraliansandpeoplelivinginremoteareas)

n giveyouacreditforanamountoftaxthathaseffectivelyalreadybeenpaid(forexample,creditsforfrankeddividendsandforeigntax)

n provideanincentive(forexample,thetaxoffsetformatureageworkersandtheprivatehealthinsurancerebate).

Sometaxoffsetsappearonthefollowingpages;somearepartofotherquestions.

Taxoffsetsdirectlyreducetheamountoftaxyoumustpay.Theyarenotthesameasdeductions,whicharetakenoffyourincomebeforeyourtaxisworkedout.

Withataxoffset,weworkoutthetaxdueonyourtaxableincomethenreduceitbythetotalamountofyourtaxoffsets.

Taxoffsetscanonlyreducetheamountoftaxyoupaytozero,thatis,ifyourtaxoffsetsaregreaterthanyourtaxdue,youdonotgetarefundoftheexcessamount–withthreeexceptions.Thethreerefundabletaxoffsetsare:n theprivatehealthinsurancerebate(seequestionT5)n thefrankingtaxoffset(seequestion11)n thebabybonus(seequestionT7).

Taxoffsets,ingeneral,donotreduceyourMedicarelevy;however,whereyouhaveexcessrefundabletaxoffsets,youcanusethemtoreduceyourtax,includingyourMedicarelevy.


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QUESTION T�SPOUSE (WITHOUT DEPENDENT CHILD OR STUDENT), CHILD-HOUSEKEEPER OR HOUSEKEEPER

Were you or your spouse (during any period they were your spouse) entitled to FTb Part b for the whole year?

NO GotoDependentspouseeligibilitychecklistbelow.

YES Readbelow.

Were you or your spouse (during any period they were your spouse) entitled to FTb Part b for any part of the year at a rate based on sharing care of the child with someone else, such as a former spouse (shared-care rate)?

NO Youcannotclaimadependentspousetaxoffsetorachild-housekeepertaxoffset.GotopartConpage82.

YES GotoDependentspouseeligibilitychecklistbelow.

Dependent spouse eligibility checklistYouareeligibletoclaimadependentspousetaxoffsetforanyperiodin2006–07thatyouhadaspouseandyoumetalltheseconditions: youmaintainedyourspouse–seeWhatismaintainingadependant?onpage69

yourspousewasaresident–ifyouareunsure,readAreyouanAustralianresident?onpages11–12

youwerearesidentatanytimein2006–07 neitheryourspouse(iftheywereyourspouseduringthatperiod)noryouwereentitledtoFTBPartBorwereonlyentitledtoitattheshared-carerate(formoreinformationonFTB,readpages71–5).

NOTEYourspouse’sseparatenetincome(SNI)fortheperiod(s)youareclaimingaspousetaxoffsetreducesyourclaimby$1forevery$4bywhichtheirSNIexceeds$282(seesteps6–10ofworksheet1onthenextpage).Youcannotclaimaspousetaxoffsetifyouhadadependentspouseforthewholeyearandyourspouse’sSNIwasmorethan$6,901.ReadWhatisseparatenetincome?onpages69–70.

How much can you claim?Themaximumspousetaxoffsetyoumaybeabletoclaimis$1,655.Youmaybeentitledtoapartialtaxoffsetif:n youhadaspouseforonlypartoftheincomeyear,orn youmetalloftheeligibilityconditionsforonlypartofthe

incomeyear–forexample,ifyourspouseceasedtobearesidentduring2006–07,orneitheryourspousenoryouwereentitledtoFTBPartBforpartoftheyear.

Did you have any of the following for any part of the year:n a spousen a child-housekeeper, orn a housekeeper?

DEFINITIONSAspousecanbemarriedordefacto(seethedefinitionofspouseonpage110).

Achild-housekeeperisyourchild,adoptedchildorstepchildwhokepthouseforyoufulltime.

Ahousekeeperissomeonewhokepthouseforyoufulltimeandalsocaredforyoureligibledependentchild,studentorinvalidrelative,oryourdependentspousewhoreceivedadisabilitysupportpension.

NO GotoEligibilityfortheseniorAustralianstaxoffsetonpage84.

YES Readbelow.

PART A Dependent spouse – married or de factoYouhadadependentspouseifyoumaintainedthem.ReadWhatismaintainingadependant?onpage69.

Did you have a dependent spouse – married or de facto?

NO GotopartBonpage80.

YES Readbelow.

Did you have a dependent child or student for any part of the year?

NO GotoDependentspouseeligibilitychecklistinthenextcolumn.

YES Readbelow.

STOPYoucannotclaimaspousetaxoffsetforanyperiodthatyouoryourspouse(duringanyperiodtheywereyourspouse)wasentitledtofamilytaxbenefit(FTB)PartBataratebasedonhavingfullcareofachild(full-carerate).ThisruleappliesevenifneitheryounoryourspouseclaimedFTBPartBwheneligibletodoso.TofindoutifyouoryourspousewaseligibleforFTBPartB,youwillneedtoreadtheinformationonfamilytaxbenefitonpages71–5.Thenreturntothispageandworkthroughthequestionsinthenextcolumn.

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NO GotopartBonpage80.

YES Gotoworksheet1below.Followsteps1–5toworkoutyourmaximumavailabletaxoffsetamountfortheperiod(s)youareeligibletoclaim.Thenfollowsteps6–10toworkoutyourallowabletaxoffsetclaimafteranyreductionforyourspouse’sseparatenetincome(SNI).Thenworkthroughsteps11–14,iftheyapplytoyou,tocompletethissection.

WORKSHEET �: How to claim your dependent spouse tax offset

STEP1 Ifyouhadadependentspouseforthewholeyearandneitherofyouwereentitledtofamilytaxbenefit(FTB)PartBatANYtimeduringtheyear:

1 Write$1,655at(a). (a) $

2 Gotostep5.

STEP2 IfyouhadadependentspouseforonlypartoftheyearandneitherofyouwereentitledtoFTBPartBduringthatperiod:

1 Workoutthenumberofdaysyouhadaspouseandmultiplythisnumberby$4.53(thedailyrate).Writetheamountat(b). (b) $

2 Gotostep5.

STEP3 IfyourspouseoryouwereentitledtoFTBPartBatanytimeduringtheyear(seeexample1onthenextpage):

1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatneitherofyouwereentitledtoFTBPartB.

2 Multiplyby$4.53(thedailyrate)thenumberofthosedaysyouworkedoutinno.1.Writetheamountat(c). (c) $

STEP4 IfyourspouseoryouwereentitledtoFTBPartBattheshared-carerateatanytimeduringtheyear(seeexample2onthenextpage):

1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatyourspouseoryouwereentitledtoFTBPartBattheshared-carerate.

2 Multiplythenumberofthedaysworkedoutinno.1by$4.53(youransweris$1,655ifyouhadadependentspouseforthewholeyear).

3 Workoutyourshared-carepercentage–seeexplanationonpage75andexample2onthenextpage.

4 Deductyourshared-carepercentagefrom100%.

5 Multiplytheamountyouworkedoutinno.2bythepercentageyouworkedoutinno.4.Writetheamountat(d). (d) $

STEP5 Addupanyamountsat(a),(b),(c)and(d)andwritethetotalat(e). (e) $

Thisisyourmaximumavailabletaxoffset.Itcannotbemorethan$1,655.

STEP6 Ifyourspouse’sSNIfortheyear(orfortheperiodyouareclaimingaspousetaxoffsetifthisisnotforthewholeyear)waslessthan$286,writetheamountfrom(e)at(j)instep10,thengotostep12.Otherwise,gotostep7.

STEP7 Ifyourspouse’sSNIwas$286ormore,writeat(f)theirSNIfortheyear(orfortheperiodyouareclaimingaspousetaxoffsetifthisisnotforthewholeyear). (f) $

STEP8 SNIatwhichthetaxoffsetbeginstoreduce (g) $282

Take(g)awayfrom(f)andwritetheamountat(h). (h) $

STEP9 Divide(h)by4andwritetheamountat(i). (i) $

STEP10 Take(i)awayfrom(e)andwritetheamountat(j). (j) $

NOTEIfyouhadadependentspouseforpartoftheyearandadifferentdependentspouseforanotherpartoftheyear,youwillneedtogothroughthestepstwice–onceforeachspouse–andthenaddtheresults.


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SSTEP11 Iftheamountat(j)is$0orless,youcannotclaimadependentspousetaxoffset.

GotopartBonthenextpage.Iftheamountat(j)ismorethan$0,thisisyourallowabletaxoffset.Gotostep12.

STEP12 Writeyourallowabletaxoffsetfrom(j)at P itemT1onpage4ofyourtaxreturn,oronapieceofnotepaperifyouaregoingtoclaimachild-housekeeperorhousekeepertaxoffsetforanotherpartoftheyear.Donotshowcents.

STEP13 LeaveblanktheCLAIMTYPEbox attherightof P itemT1.

STEP14 CompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Providerelevantdetailsincludingyourspouse’sseparatenetincome(SNI)atR .IfyourspousedidnothaveanySNI,write0.

Ifyouaregoingtoclaimachild-housekeeperorhousekeepertaxoffset,gotopartBonthenextpage.

Ifnot,gotoCheckthatyouhave...onpage83.

ExAMPLE �: Eligible for family tax benefit (FTb) Part b at any time during the year (see step 3 in worksheet � on the previous page)

Samremarriedon1October2006,sohehadaspousefor273daysduring2006–07.

From1October2006SamhadfullcareofElla,hisdaughterfromhispreviousrelationship.

Ellaleftschoolattheendofthe2006schoolyear.Sheturned16yearsoldon1May2007.

SamisentitledtoclaimFTBPartBforEllafrom1October2006until30April2007(212days).Hecanalsoclaimadependentspousetaxoffsetfor61days(273dayshehadadependentspouselessthe212dayshewasentitledtoclaimFTBPartBforElla).

Sam You

1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatneitherofyouwereentitledtoclaimFTBPartB. 61

2 Multiplythenumberofdaysyouworkedoutinno.1by4.53(thedailyrate).Transferthisamountto(c)inworksheet1onthepreviouspage. $276 $

ExAMPLE 2: Eligible for FTb Part b at the shared-care rate (see step 4 in worksheet � on the previous page)

Kobyhadadependentspouseforthewholeyear.

Kobyandhisformerspousesharedthecareoftheirson,Aiodan,forthewholeyear.Koby’sshareofthecarewas146nights:Koby’sshared-carepercentagefortheyearis40%(146nightsdividedby365,multipliedby100).

Koby You

1 Fortheperiodyouhadadependentspouse,workoutthenumberofdaysthatyourspouseoryouwereentitledtoFTBPartBattheshared-carerate. 365

2 Multiplythenumberofdaysworkedoutinno.1by$4.53(oruse$1,655ifyouhadadependentspouseforthewholeyear). $1,655 $

3 Workoutyourshared-carepercentage–seeabove. 40% %

4 Deductyourshared-carepercentagefrom100%. 60% %

5 Multiplytheamountworkedoutinno.2bythepercentageworkedoutinno.4. $993 $

Transferthisamountto(d)inworksheet1onthepreviouspage.

NOTEIftheshared-carepercentagechangedduringtheyear,youwillneedtodothiscalculationforeachperiodduringtheyearthatthepercentagewasdifferent.

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PART b Child-housekeeperAchild-housekeeperisyourchild,adoptedchildorstepchildwhokepthouseforyoufulltime.Achildwhoisafull-timestudentorafull-timeemployeeisnotconsideredtokeephousefulltime.Keepinghousemeansmorethansimplychild-mindingorperformingdomesticduties.Itincludeshavingsomeresponsibilityforthegeneralrunningofthehousehold.

Did you have a child-housekeeper?

NO GotopartConpage82.

YES Readbelow.

Child-housekeeper eligibility checklistYouareeligibletoclaimachild-housekeepertaxoffsetforanyperiodin2006–07thatyouhadachild-housekeeperandyoumetalltheseconditions: youmaintainedyourchild-housekeeper–seeWhatismaintainingadependant?onpage69

yourchild-housekeeperwasaresident–ifyouareunsure,readAreyouanAustralianresident?onpages11–12

youwerearesidentatanytimein2006–07 youwerenoteligibleforadependentspousetaxoffsetunderpartAonpage77

youwerenotentitledtofamilytaxbenefit(FTB)PartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.

NOTEYourchild-housekeeper’sseparatenetincome(SNI)fortheperiodyouareclaimingachild-housekeepertaxoffsetreducesyourclaimby$1forevery$4bywhichtheirSNIexceeds$282(seesteps6–10ofworksheet2onthenextpage).Youcannotclaimachild-housekeepertaxoffsetifyouhadachild-housekeeperforthewholeyearandyourchild-housekeeper’sSNIwasover$6,901(or$8,217ifyouhadanothereligibledependentchildorstudent).ReadWhatisseparatenetincome?onpages69–70.

How much can you claim?Themaximumchild-housekeepertaxoffsetyoumaybeabletoclaimis$1,655(or$1,984ifyouhadanothereligibledependentchildorstudent).Apartialtaxoffsetmayapplyif:

n youhadachild-housekeeperforonlypartoftheincomeyear,or

n youmetalltheeligibilityconditionsforonlypartoftheincomeyear.

Were you eligible to claim a child-housekeeper tax offset?

NO GotopartC.

YES Gotoworksheet2below.Followthestepstoworkoutyourallowabletaxoffsetamountfortheperiod(s)youareeligibletoclaim.

WORKSHEET 2: How to claim your child-housekeeper tax offset

Usecolumn1ifyouhadachild-housekeeperanddidnothaveanotherdependentchildunder21yearsoldorstudentunder25yearsold.

Usecolumn2ifyouhadachild-housekeeperandanotherdependentchildunder21yearsoldorstudentunder25yearsoldandtheSNIofthedependentchildorstudentwaslessthan$1,786.IftheSNIwas$1,786ormore,usecolumn1.

Iftheadditionalchildorstudentwasyourdependantforonlypartof2006–07,usethecolumn2dailyrateiftheirSNIwaslessthan$282plus$28.92foreachweekyoumaintainedthem.Otherwise,usethecolumn1dailyrate.

COLUMN1Nootherdependentchildorstudent

COLUMN2Anotherdependentchildorstudent

$1,655forthewholeyear(maximum)or$4.53aday

$1,984forthewholeyear(maximum)or$5.44aday

STEP1 Ifyouhadachild-housekeeperforthewholeyearandyouwereNOTentitledtoFTBPartBatANYtimeduringtheyear:

1 Writeat(a):n $1,655incolumn1ifyouhadnootherdependentchildorstudent,orn $1,984incolumn2ifyouhadanotherdependentchildorstudent.

2 Gotostep5. (a) $ (a) $

STEP2 Ifyouhadachild-housekeeperforonlypartoftheyearandyouwereNOTentitledtoFTBPartBatANYtimeduringthatperiod:

1 Workouthowmanydaysduringtheyearyouhadachild-housekeeper.

2 Multiplythenumberofdaysthatyouworkedoutinno.1bythefollowingdailyrate:n $4.53ifyouhadnootherdependentchildorstudent,writethe

answerat(b)incolumn1,orn $5.44ifyouhadanotherdependentchildorstudent, writetheanswerat(b)incolumn2.

3 Gotostep5. (b) $ (b) $


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atanytimeduringtheyear:

1 Workouthowmanydaysduringtheyearyouhadachild-housekeeperandyouwerenotentitledtoFTBPartB.

2 Multiplythenumberofdaysworkedoutinno.1bythefollowingrelevantdailyrate:n $4.53ifyouhadnootherdependentchildorstudent,writethe

answerat(c)incolumn1,orn $5.44ifyouhadanotherdependentchildorstudent,writethe

answerat(c)incolumn2. (c) $ (c) $

STEP4 IfyouwereentitledtoFTBPartBattheshared-carerateatanytimeduringtheyear:

1 Workouthowmanydaysduringtheyearyouhadachild-housekeeperandyouwereentitledtoFTBPartBattheshared-carerate.

2 Multiplythenumberofdaysyouworkedoutinno.1bythefollowingdailyrate:n $4.53ifyouhadnootherdependentchildorstudent(youranswer

is$1,655ifyouhadachild-housekeeperforthewholeyear),orn $5.44ifyouhadanotherdependentchildorstudent(youranswer

is$1,984ifyouhadachild-housekeeperforthewholeyear).3 Workoutyourshared-carepercentage–seeexplanationonpage75

andexample2onpage79.4 Deductyourshared-carepercentagefrom100%.5 Multiplytheamountyouworkedoutinno.2bythepercentage

youworkedoutinno.4.

6 Writetheamountyouworkedoutinno.5at(d)column1ifyouused$4.53or(d)column2ifyouused$5.44. (d) $ (d) $

Note:Iftheshared-carepercentagechangedduringtheyearyouwillneedtorepeatthiscalculationforeachofthoseperiods,thenadduptheseamounts.

STEP5 Addupanyamountsat(a),(b),(c)and(d)andwritethetotalat(e).Thisisyourmaximumavailabletaxoffset.Theamountcannotbemorethan$1,655(ifcolumn1)or$1,984(ifcolumn2). (e) $ (e) $

STEP6 Writeat V itemT1onpage4ofyourtaxreturnyourchild-housekeeper’sseparatenetincome(SNI)fortheyear(orfortheperiodyouareclaimingachild-housekeepertaxoffset,ifthisisnotforthewholeyear).Donotshowcents.Ifyourchild-housekeeperdidnothaveanySNI,write0.Ifyourchild-housekeeper’sSNIwaslessthan$286,youwillreceivethefulltaxoffsetshownat(e)inyourcolumn.Thisisyourallowabletaxoffset–gotostep11.Otherwise,gotostep7.

STEP7 Ifyourchild-housekeeper’sSNIwas$286ormore,writeat(f)theirSNIfortheyear(orfortheperiodyouareclaimingachild-housekeepertaxoffset,ifthisisnotforthewholeyear).Donotshowcents.Makesureyouhavealsowrittenthisamountat V itemT1onyourtaxreturn. (f) $ (f) $

STEP8 SNIatwhichthetaxoffsetbeginstoreduce (g) $282 (g) $282

Take(g)awayfrom(f)andwritetheamountat(h). (h) $ (h) $

STEP9 Divide(h)by4andwritetheamountat(i). (i) $ (i) $

STEP10 Take(i)awayfrom(e)atstep5andwritetheamountat(j).Iftheamountat(j)is$0orless,youcannotclaimachild-housekeepertaxoffset–gotopartConthenextpage.Iftheamountat(j)ismorethan$0,thisisyourallowabletaxoffset–gotostep11. (j) $ (j) $

STEP11 Writeyourallowabletaxoffsetat P itemT1onpage4ofyourtaxreturnoraddittotheamountyouareclaimingforspousetaxoffset.IfyouarenotgoingtoclaimahousekeepertaxoffsetforanotherpartoftheyearatpartCofthisquestion,writethetotalat P itemT1.Donotshowcents.Ifyouaregoingtoclaimahousekeepertaxoffset,writeyourtaxoffsetentitlementsofaronapieceofnotepaperandgotopartC.Otherwise,gotostep12.

STEP12 PrintoneofthefollowingcodelettersintheCLAIMTYPEbox attherightof P itemT1onpage4ofyourtaxreturn:H–ifyouareclaimingachild-housekeepertaxoffsetonlyC–ifyouareclaimingaspousetaxoffsetforpartoftheyearandachild-housekeepertaxoffsetforanotherpartoftheyear.

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PART C HousekeeperAhousekeeperisapersonwhoworkedfulltimekeepinghouseforyouandcaredfor:n achildofyoursagedunder21years,irrespectiveof

thechild’sseparatenetincome(SNI)n anyotherchildagedunder21years(includingastudent

agedunder21years)whowasyourdependantandwhoseSNIwaslessthan$1,786

n yourinvalidrelativewhowasyourdependant(seepage69)andforwhomyoucanclaimadependanttaxoffset–ifyouareunsureyouwillneedtoreadquestionT11inTaxPack 2007 supplement,or

n yourspousewhoreceivedadisabilitysupportpension.

Keepinghousemeansmorethansimplychild-mindingorperformingdomesticduties.Itincludeshavingsomeresponsibilityforthegeneralrunningofthehousehold.

Did you have a housekeeper?

NO IfyouareclaimingataxoffsetatpartAorpartB,gotoCheckthatyouhave...onthenextpage.Ifnot,gotopage84.

YES Readbelow.

Housekeeper eligibility checklistIfyouwereanAustralianresidentatanytimein2006–07,youareeligibletoclaimahousekeepertaxoffsetforanyperiodin2006–07thatyouhadahousekeeperandyoumetalltheconditionsbelowforthecategorythatappliedtoyou.

You did not have a spouse. Youwerenotentitledtoclaimachild-housekeepertaxoffsetunderpartBonpage80.

Youwerenotentitledtofamilytaxbenefit(FTB)PartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.

You had a spouse who received a disability support pension. Youwerenotentitledtoclaimachild-housekeepertaxoffsetunderpartBonpage80.

You had a spouse who did not receive a disability support pension. YouwerenotentitledtoclaimadependentspousetaxoffsetunderpartAonpage77orachild-housekeepertaxoffsetunderpartBonpage80.

NeitheryourspousenoryouwereentitledtoFTBPartBorwereonlyentitledtoitattheshared-carerate–formoreinformationonFTB,readpages71–5.

Specialcircumstancesapplied–seeWherespecialcircumstancesapplyinthenextcolumn.

Where special circumstances applyExamplesofspecialcircumstancesinclude:n yourspousedesertedyouandyourchildren–and

youdidnotenterintoadefactorelationshipn youhadachildwithaseverementaldisabilitywho

requiredconstantattention,orn yourspousesufferedfromanextendedmentalillness

andwasmedicallycertifiedasbeingunabletotakepartinthecareofyourchildren.

Whereyouconsiderthatspecialcircumstancesappliedyouwillneedtocompletethisitemandprovideadditionalinformation.PrintSCHEDULEOFADDITIONALINFORMATION–ITEMT1PARTConthetopofaseparatepieceofpaperandexplainyoursituation.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

IftheCommissionerdoesnotconsiderthatspecialcircumstancesapplied,wewilladviseyou.Readon.

How much can you claim?Themaximumhousekeepertaxoffsetyoucanclaimis:n $1,655,orn $1,984ifyouhadaneligibledependentchildorstudent.

Youmaybeentitledtoapartialtaxoffsetif:n youhadahousekeeperforonlypartoftheincome

year,orn youmetalloftheeligibilityconditions(forthecategory

thatappliedtoyou)foronlypartoftheincomeyear.

Were you eligible to claim a housekeeper tax offset?

NO IfyouareclaimingataxoffsetatpartAorpartB,gotoCheckthatyouhave...onthenextpage.Ifnot,gotopage84.

YES Gotoworksheet3onthenextpage.


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COLUMN1Nodependentchildorstudent

COLUMN2Withadependentchildagedunder21yearsorastudentagedunder25years

$1,655forthewholeyearor$4.53aday

$1,984forthewholeyearor$5.44aday

STEP1 IfyouareeligibleforahousekeepertaxoffsetforthewholeyearAND:n neitheryourspouse(duringanyperiodtheywereyourspouse)noryouwereentitledtofamilytaxbenefit(FTB)PartBatANYtimeduringtheyear,or

n yourspousereceivedadisabilitysupportpensionforthewholeyear:

1 Writetheappropriateamountfromcolumn1($1,655)orcolumn2($1,984)at(d)step5,thenfollowtheinstructionsinstep5.

STEP2 Ifyouareeligibleforahousekeepertaxoffsetforthewholeyear:

1 Workoutthenumberofdaysthat:n neitheryourspouse(duringanyperiodtheywere

yourspouse)noryouwereentitledtoFTBPartB,orn eitheryourspouse(duringanyperiodtheywereyourspouse)

oryouwereentitledtoFTBPartB,butyourspousewasreceivingadisabilitysupportpension.

2 Multiplythenumberofdaysyouworkedoutinno.1bythedailyrate($4.53or$5.44).Writetheamountyoucalculatedat(a),thengotostep4. (a) $ (a) $

STEP3 Ifyouareeligibleforahousekeepertaxoffsetforonlypartoftheyear:1 Workoutthenumberofdaysduringthatpartyearthat:

n neitheryourspouse(duringanyperiodtheywereyourspouse)noryouwereentitledtoFTBPartB,or

n eitheryourspouse(duringanyperiodtheywereyourspouse)oryouwereentitledtoFTBPartB,butyourspousewasreceivingadisabilitysupportpension.

2 Multiplythenumberofdaysyouworkedoutinno.1bythedailyrate($4.53or$5.44)andwritetheamountyoucalculatedat(b). (b) $ (b) $

STEP4 If,foranyperiodduringtheyear,youdidNOThaveaspousereceivingadisabilitysupportpensionandyouareeligibleforahousekeepertaxoffset:1 Workoutthenumberofdaysduringthatperiodthatyourspouse

(duringanyperiodtheywereyourspouse)oryouwereentitledtoFTBPartBbasedonashared-carerate.

2 Multiplythenumberofdaysbythedailyrate($4.53or$5.44).

3 Multiplytheamountyouworkedoutinno.2by100%minustheshared-carepercentage(seeexample2onpage79)andwriteat(c)theamountyoucalculated. (c) $ (c) $

Note:Iftheshared-carepercentagechangesduringtheyearyouwillneedtodothisstepforeachperiodduringtheyearthatthepercentagewasdifferent.

STEP5 Addupanyamountsat(a),(b)and(c)andwritethetotalat(d).Ifyouarealsoclaimingaspouseorchild-housekeepertaxoffset,addtheamountat(d)totheotheramountonyournotepaper.Writetheamountat(d)orthetotalfromyournotepaperat P itemT1onpage4ofyourtaxreturn.PrinttheletterCintheCLAIMTYPEbox attherightof P itemT1ifyouarealsoclaimingaspousetaxoffset.Ifnot,printtheletterH. (d) $ (d) $

CHECK THAT YOU HAVE . . . workedoutyourchild-housekeeper’sseparatenetincome(SNI),ifrequired,andwrittentheamountonyourtaxreturn

writtenonyourtaxreturnyourtotaltaxoffset printedonyourtaxreturnthecorrectcodeletterintheCLAIMTYPEbox ,ifrequired

completedSpousedetails–marriedordefactoincludingyourspouse’sSNIonpages6–7ofyourtaxreturn

attachedtopage3ofyourtaxreturnyoursignedSCHEDULEOFADDITIONALINFORMATION–ITEMT1PARTC,ifyouneedtosendusone.


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ELIGIBILITY FOR THE SENIOR AUSTRALIANS TAX OFFSET

CONDITION 2 – Eligibility for Australian Government pensions and similar paymentsTherearethreewaysofmeetingthiscondition.

� Youmeetthisconditionif:n youreceivedanAustralianGovernmentagepension,

orapension,allowanceorbenefitfromVeterans’Affairsatanytimeduringthe2006–07incomeyear.

2 Youalsomeetthisconditionif:n youwereeligibleforanAustralianGovernmentage

pensionbutdidnotreceiveitbecauseyoudidnotmakeaclaimorbecauseoftheapplicationoftheincometestortheassetstest

andn yousatisfyoneofthefollowing:

– youhavebeenanAustralianresidentforage-pensionpurposesforeither10continuousyearsorformorethan10years,ofwhichfiveyearswerecontinuous

– youhaveaqualifyingresidenceexemption(becauseyouarrivedinAustraliaasarefugeeorunderaspecialhumanitarianprogram)

– youareawomanwhowaswidowedinAustralia(atatimewhenbothyouandyourlatepartnerwereAustralianresidents),youhavemadeaclaimfortheagepensionandyouhadtwoyears’residenceimmediatelypriortoyourclaim

– youreceivedawidowBpension,widowallowance,matureageallowanceorpartnerallowanceimmediatelybeforeturningage-pensionage,or

– youwouldqualifyunderaninternationalsocialsecurityagreement.

IfyouneedassistanceindeterminingyoureligibilityforasocialsecurityorCentrelinkpensiononly,phoneCentrelinkon132300;forallotherenquiriesrelatingtotheseniorAustralianstaxoffset,phoneourPersonalInfoline(seetheinsidebackcover).

3 Youalsomeetthisconditionif:n youareaveteranwitheligiblewarservice,orn youareaCommonwealthveteran,alliedveteranor

alliedmarinerwithqualifyingservice andn youwereeligibleforapension,allowanceor

benefitfromVeterans’Affairsbutdidnotreceiveitbecauseyoudidnotmakeaclaimorbecauseoftheapplicationoftheincometestortheassetstest.

IfyouarenotsureifyouwereeligibleforapaymentyoucangetfurtherinformationfromtheDVAwebsiteorbyphoningVeterans’Affairs.

YoumustmeetthefollowingfourconditionstobeeligiblefortheseniorAustralianstaxoffset.Theseconditionsrelatetosuchfactorsasage,income,andeligibilityforAustralianGovernmentpensionsandsimilarpayments.

ELIGIBILITYCALCULATORTheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsitecanhelpyouworkoutwhetheryouareeligible.Ifyouare,itcanalsoworkouttheamountyouareentitledtoclaim.

CONDITION � – AgeYoumeetthisconditionif,on30June2007youwere:n amaleaged65yearsormoren amaleveteranorwarwidoweraged60yearsormore

whomettheveteranpensionagetestn afemaleaged63yearsormore,orn afemaleveteranorwarwidowaged58yearsormore

whomettheveteranpensionagetest.

NOTEYoumettheveteranpensionagetestifoneofthefollowingappliedtoyouandyouwereeligibleforapension,allowanceorbenefitundertheVeterans’ Entitlements Act 1986:n youhaveeligiblewarservice,thatis,servicein

WorldWarIorWorldWarIIoroperationalserviceasamemberoftheAustralianDefenceForce

n youareaCommonwealthoralliedveteranwhoservedinaconflictinwhichtheAustralianDefenceForcewasengagedduringaperiodofhostilities,thatis,WorldWarIorWorldWarII,orinKorea,Malaya,IndonesiaorVietnam

n youareanAustralianoralliedmarinerwhoservedduringWorldWarII

n youarethewarwidoworwidowerofaformermemberoftheAustralianDefenceForce.

‘Pension,allowanceorbenefit’includes:n disabilitypensionn servicepension,andn whiteorgoldRepatriationhealthcardsfortreatment

entitlements.

Ifyouareunsureifyoumettheveteranpensionagetest,visittheDepartmentofVeterans’Affairs(DVA)websiteatwww.dva.gov.auorphoneVeterans’Affairson133254.


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TCONDITION 3 – Taxable income thresholdYoumeetthisconditionbysatisfyingtheincomethresholdthatappliestoyou,fromthefollowing:n Youdidnothaveaspouse–marriedordefacto–and

yourtaxableincomewaslessthan$42,707.n Youdidhaveaspouse–marriedordefacto–andyou

andyourspouse’scombinedtaxableincome*waslessthan$66,992.

n Youdidhaveaspouse–marriedordefacto–andforsomeorallof2006–07you‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghome,andyouandyourspouse’scombinedtaxableincome*waslessthan$79,840.

*Combinedtaxableincomeincludesyourspouse’ssharefor2006–07ofanynetincomeofatrustestatetowhichtheyarepresentlyentitledandonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936.

ThethresholdamountsshownhererelatetodeterminingyoureligibilityfortheseniorAustralianstaxoffset.Theyarenottax-freethresholds.

DEFINITIONHadtoliveapartduetoillnessisatermusedtodescribeasituationwherethelivingexpensesofyouandyourspouse,marriedordefacto,areincreasedbecauseyouwereunabletolivetogetherinyourhomeduetotheindefinitelycontinuingillnessorinfirmityofeitherorbothofyou.

CONDITION 4 – Not in jailYoumeetthisconditionunlessyouwereinjailforthewholeincomeyear.

Are you eligible?Ifyoumeetconditions1,2,3and4,youareeligiblefortheseniorAustralianstaxoffset.

BeingeligiblemeansthatyouareentitledtotheseniorAustralianstaxoffsetbutitdoesnotmeanyouwillautomaticallygetanamountofseniorAustralianstaxoffset.Weuseyourtaxableincometoworkouttheamount,ifany,ofyourseniorAustralianstaxoffset.Thecombinedincomeamountsincondition3areusedforeligibilitypurposesandnotforworkingouttheamountofyourentitlement.

IfyoucametothissectionfromReason2inDoyouhavetolodgeataxreturn?onpage2,gobacktothatsection.Otherwise,youmustgotoquestionT2onthenextpage.

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Exceptionstothisrule:n IfbothAandBapplytoyouandyourspouse’staxable

incomewaslessthan$18,334,selectBasthisgivesyouthecorrecttaxoffset.Includeinyourspouse’staxableincomeanynetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936(ITAA1936).

n IfbothAandCapplytoyou,andyourspousereceivedanAustralianGovernmentpensionorallowancelistedatquestion6,andyourspouse’staxableincomewaslessthan$17,260,selectCasthisgivesyouthecorrecttaxoffset.

n IfbothAandDapplytoyouandyourspouse’staxableincomewaslessthan$12,494,selectDasthisgivesyouthecorrecttaxoffset.Includeinyourspouse’staxableincomeanynetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeisassessedundersection98oftheITAA1936.

n IfbothAandEapplytoyouandyourspousereceivedanAustralianGovernmentpensionorallowanceaslistedatquestion6,andyourspouse’staxableincomewaslessthan$11,960,selectEasthisgivesyouthecorrecttaxoffset.

STEP2 Printyourcodeletter(fromthetableinthepreviouscolumn)intheTAXOFFSETCODEbox attherightofN itemT2onpage4ofyourtaxreturn.

NOTEIfyoudonotprintacodeletteronyourtaxreturnoryouprintanincorrectcodeletter,youmaynotreceiveyourcorrectentitlement.

STEP3 If,in2006–07,yourspouseoryouwereaveteran,warwidoworwarwidower(seedefinitionintheNoteboxonpage84),readon.Otherwise,gotostep4.

Fromthefollowinglistselecttheveterancodethatappliestoyourcircumstances:

Youwereaveteran,warwidoworwarwidower. V

Yourspousewasaveteran,warwidoworwarwidower. W

BothVandWapplytoyou. X

PrintyourveterancodeintheVETERANCODEbox attherightof Y itemT2onpage4ofyourtaxreturn.

STEP4 Haveyouusedtaxoffsetcode(notveterancode)B,C,DorE?Ifso,youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Providerelevantdetailsincluding:n yourspouse’sdateofbirthat Kn yourspouse’staxableincomeatO .Ifthisamountis

zero,write0

CAUTIONIfthisquestionappliestoyou,youmustcompletetheitemonyourtaxreturnbeforegoingtothenextquestion.

Were you eligible for the senior Australians tax offset?Ifyouareunsure,pages84–5provideinformationoneligibilityforthistaxoffset.Ifyouhaveaspouse,youwillalsoneedtoworkoutifyourspousewaseligible.Seethedefinitionofspouseonpage110.

NO GotoquestionT3.

YES Readbelow.


STEP1 Findthetaxoffsetcodeletterthatappliestoyourcircumstancesinthetablebelow.Thiscodelettertellsustheamountoftaxoffsetyourentitlementwillbebasedon.

TAx OFFSET CODE LETTERS

Ifatanytimeduring2006–07,youweresingle,separatedorwidowed A

Ifyouandyourspouse,marriedordefacto,‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghomeatanytimein2006–07andyouwerebotheligiblefortheseniorAustralianstaxoffset B

Ifyouandyourspouse,marriedordefacto,‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghomeatanytimein2006–07,butyourspousewasnoteligiblefortheseniorAustralianstaxoffset C

Ifyouandyourspouse,marriedordefacto,werelivingtogetherandyouwerebotheligiblefortheseniorAustralianstaxoffset D

Ifyouandyourspouse,marriedordefacto,werelivingtogetherbutyourspousewasnoteligiblefortheseniorAustralianstaxoffset E

DEFINITIONHadtoliveapartduetoillnessisatermusedtodescribeasituationwherethelivingexpensesofyouandyourspouse,marriedordefacto,wereincreasedbecauseyouwereunabletolivetogetherinyourhomeduetotheindefinitelycontinuingillnessorinfirmityofeitherorbothofyou.

Ifmorethanonecodeletterappliestoyou,readon.Otherwise,gotostep2.

Selecttheletterthatappearsfirstinthefollowingorder:A,B,C,D,E.Forexample,ifbothBandDapplytoyou,selectB.

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Sn yourspouse’sshareoftrustincomeonwhichthe

trusteeisassessedundersection98oftheIncome Tax Assessment Act 1936 at T ,ifitisnotalreadyincludedinyourspouse’staxableincome.Ifthisamountiszero,write0

n yourspouse’sAustralianGovernmentpensionincomeat P .Ifthisamountiszero,write0

n yourspouse’sexemptpensionincomeatQ .Ifthisamountiszero,write0.

IfyouwereeligiblefortheseniorAustralianstaxoffsetandyourspousewaseligiblefortheseniorAustraliansorpensionertaxoffset,andoneofyoudoesnotfullyuseyourtaxoffset,theunusedportionmaybeavailablefortransfertotheotherperson.Byusingtheamountsyouwriteonthespousedetailssectionofyourtaxreturnwewillworkoutifyouareentitledtohavetheunusedportionofyourspouse’staxoffsettransferredtoyou.Ifanunusedamountisavailable,wewillmakesureitistakenintoaccountinworkingoutyourtaxoffset.

NOTEInworkingoutifthereisanyunusedspouse’sseniorAustraliansorpensionertaxoffsetavailablefortransfertoyou,wedonottakeyourspouse’sothercreditsandtaxoffsetsintoaccount.

ExAMPLE

SonyaismarriedtoRussellandtheylivedtogetherforthewhole2006–07incomeyear.Russell–whoisaveteran–receivedaservicepension.SonyaandRussellwerebothoverpensionageandtheircombinedtaxableincomewaslessthan$66,992.TheywerebotheligiblefortheseniorAustralianstaxoffset.Sonya’staxableincomewas$20,800andRussell’swas$10,200.

SonyawritestaxoffsetcodeletterDatN itemT2onhertaxreturn.

SonyaalsowritesveterancodeletterWat Y itemT2onhertaxreturn.

SonyacompletesSpousedetails–marriedordefactoonpages6–7ofhertaxreturn,soanytaxoffsetthatRusselldoesnotusewillbeautomaticallytransferredtoSonya,tobetakenintoaccountwhenhertaxoffsetiscalculated.

CHECK THAT YOU HAVE . . . writtenyourtaxoffsetcodeletteratN itemT2 ifrequired,writtenyourveterancodeat Y itemT2 writtenyourspouse’sdateofbirthat K andtherelevantamountsatO , T , P andQ atSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn

writtenyourdateofbirthonpage1.

DIDYOUCOMPLETETHISITEM?IfyouwereeligiblefortheseniorAustralianstaxoffset(thatis,ifyouprintedataxoffsetcodeletterandaveterancodeletter–ifapplicable–atitemT2onpage4ofyourtaxreturn)youcannotgetthepensionertaxoffsetatitemT3.GotoquestionT4.DonotcompleteitemT3Pensionertaxoffset.

DO YOU WANT TO WORK OUT YOUR TAx OFFSET?Youdonothavetoworkoutyourtaxoffset.Wewillworkitoutforyoufromyourtaxableincomedetailsandyourtaxoffsetcodeletterandyourveterancodeletter(ifapplicable).Makesureyouprintyourcodeletter(s)atitemT2onpage4ofyourtaxreturn.

Ifyoudowanttoworkoutyourtaxoffset,youcanusetheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsite,orgotopage123.

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QUESTION T3PENSIONER

STEP2 PrintyourtaxoffsetcodeletterintheTAXOFFSETCODEbox attherightofO itemT3onpage4ofyourtaxreturn.

NOTEIfyoudonotprintacodeletteronyourtaxreturnoryouprintanincorrectcodeletter,youmaynotreceiveyourcorrectentitlement.

STEP3 Ifyourspouseoryouwereaveteran,warwidoworwarwidower(seedefinitionintheNoteboxonpage84)readon.Otherwise,gotostep4.

Fromthefollowinglistselecttheveterancodethatappliestoyourcircumstances:

Youwereaveteran,warwidoworwarwidower. V

Yourspousewasaveteran,warwidoworwarwidower. W

IfbothVandWapplytoyou. X

PrintyourveterancodeintheVETERANCODEbox attherightof T itemT3onpage4ofyourtaxreturn.

STEP4 Ifyourtaxoffsetcode(notveterancode)isSgotoCheckthatyouhave...onthenextpage.

IfyourtaxoffsetcodeisP,Q,IorJyoumustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.

Providerelevantdetailsincluding:n yourspouse’sdateofbirthat Kn yourspouse’staxableincomeatO .Ifthisamountis

zero,write0n yourspouse’sshareoftrustincomeonwhichthe

trusteeisassessedundersection98ofthe Income Tax Assessment Act 1936 at T ,ifitisnotalreadyincludedinyourspouse’staxableincome.Ifthisamountiszero,write0

n yourspouse’sAustralianGovernmentpensionincomeat P .Ifthisamountiszero,write0

n yourspouse’sexemptpensionincomeatQ .Ifthisamountiszero,write0.

IfbothyouandyourspousewereeligiblefortheseniorAustralianstaxoffsetorpensionertaxoffsetandoneofyoudoesnotfullyuseyourtaxoffset,theunusedportionmaybeavailablefortransfertotheotherperson.Byusingtheamountsyouwriteonthespousedetailssectionofyourtaxreturnwewillworkoutifyouareentitledtohavetheunusedportionofyourspouse’staxoffsettransferredtoyou.Ifanunusedamountisavailable,wewillmakesureitistakenintoaccountinworkingoutyourtaxoffset.

Did you show any income at item 6? (Seequestion6onpage24.)

NO GotoquestionT4.

YES Readbelow.

Have you already claimed a tax offset at item T2?

NO Readbelow.

YES GotoquestionT4.


STEP1 Findthetaxoffsetcodeletterthatappliestoyourcircumstancesinthetablebelow.Thiscodelettertellsustheamountoftaxoffsetwewillbaseyourentitlementon.

TAx OFFSET CODE LETTERS

Ifatanytimeduring2006–07whileyouwerereceivinganAustralianGovernmentpensionorallowancelistedatquestion6

Youweresingle,widowedorseparated. S

Youandyourspouse(marriedordefacto)livedtogether. P

Youandyourspouse(marriedordefacto)‘hadtoliveapartduetoillness’orbecauseoneofyouwasinanursinghome. I

Ifmorethanonecodeletterapplies

IfbothPandIapplytoyou,select I

IfS,PandIallapplytoyou,select J*

IfbothSandIapplytoyou,select J*

IfbothSandPapplytoyou,select Q*

*TaxoffsetcodesJandQareusedtocalculatecorrectentitlementsincertainsituationsifmorethanonetaxoffsetcodeletterapplies.

DEFINITIONHadtoliveapartduetoillnessisatermthatrelatestothepaymentofpensions.ThiswouldapplytoyouifyouwerepaidthepensionatahigherratebecauseCentrelinkortheDepartmentofVeterans’Affairs(DVA)determinedthatyouandyourspousewereseparatedduetoillness.IfyouareunsurecheckwithCentrelinkorDVA.Seethedefinitionofspouseonpage110.

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NOTEInworkingoutifthereisanyunusedspouse’sseniorAustraliansorpensionertaxoffsetavailablefortransfertoyou,wedonottakeyourspouse’sothercreditsandtaxoffsetsintoaccount.

CHECK THAT YOU HAVE . . . writtenyourtaxoffsetcodeletterattherightofO itemT3 ifrequired,writtenyourveterancodeletterattherightof

T itemT3 writtenyourspouse’sdateofbirthat K andtherelevantamountsatO , T , P andQ atSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn

writtenyourdateofbirthonpage1ofyourtaxreturn.

DO YOU WANT TO WORK OUT YOUR TAx OFFSET?Youdonothavetoworkoutyourtaxoffset.Wewillworkitoutforyoufromyourtaxableincomedetailsandyourtaxoffsetcodeletterandveterancodeletter(ifapplicable).Makesureyouprintyourcodeletter(s)atitemT3onpage4ofyourtaxreturn.

Ifyoudowanttoworkoutyourtaxoffset,youcanusetheseniorAustraliansandpensionertaxoffsetcalculatoronourwebsite,orgotopage123.

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QUESTION T4SUPERANNUATION ANNUITY AND PENSION


PART A

STEP1 TakeawayanydeductibleamountatitemD9fromthepartofyourannuityorpensionthatiseligibleforataxoffset.

STEP2 Multiplytheanswerfromstep1bytherebatableproportionofyourannuityorpension.

STEP3 Workout15%oftheansweryougotatstep2.Thisisyourannuityorpensiontaxoffset.

Writethetotalamountyouareentitledtoclaimasataxoffsetfromthisquestionat S itemT4onpage4ofyourtaxreturn.Donotshowcents.

PART b

STEP1 Workouttheamountofyourannuityorpensionthatwaspaidtoyouonorafteryour55thbirthday.

STEP2 Workoutthenumberofdaysfromyour55thbirthdayto30June2007.

STEP3 Workoutthenumberofdaysfromthedayyourannuityorpensionstartedto30June2007.Ifitstartedbefore1July2006,use365days.

STEP4 Dividethenumberofdaysatstep2bythenumberofdaysatstep3.

STEP5 Multiplyanydeductibleamount(atitemD9)bytheansweryougotatstep4.

STEP6 Takeawaytheansweryougotatstep5fromtheansweratstep1.

STEP7 Multiplytheansweryougotatstep6bytherebatableproportionofyourannuityorpension.Yourrebatableproportionwillbeoneunlessyouwereissuedwithareasonablebenefitlimitdeterminationstatingotherwise.

STEP8 Workout15%oftheansweryougotatstep7.Thisisyourannuityorpensiontaxoffset.

Writethetotalamountyouareentitledtoclaimasataxoffsetfromthisquestionat S itemT4onpage4ofyourtaxreturn.Donotshowcents.

Did you receive income from an Australian superannuation annuity or pension (this income is shown at item 7 on your tax return)?

NO GotoquestionT5.

YES Readbelow.

IfyoushowedincomefromanAustralianannuityorpensionatitem7onyourtaxreturn,youmaybeentitledtoataxoffsetequalto15%ofallorpartofyourtaxableannuityorpensionincome.

Yoursuperannuationannuityorpensionstatementororiginalsuperannuationfunddocumentswilltellyouifyourannuityorpensionqualifiesforataxoffset.Yourstatementordocumentswillshowyouhowmuchofyourannuityorpensioniseligibleforthetaxoffset.Ifyoucannotfindyourdocuments,orarenotsurewhetheryoucanclaimataxoffset,contactyoursuperannuationprovider.

BeforeworkingoutyourAustralianannuityorpensiontaxoffset,youwillneedtoknow:n anydeductibleamountfromitemD9onpage3ofyour

taxreturnn therebatableproportion.Thisisthepartofyourannuity

orpensionthatmaybeeligibleforthepensiontaxoffset.Itmaybeone,lessthanone,orzero,dependingonthetypeandamountofannuityorpension.TheTaxOfficedeterminestherebatableproportionbymeasuringyourannuityorpensionagainstyourreasonablebenefitlimit(RBL).

Yourrebatableproportionwillbeone,unless– youwereissuedwithanRBLdeterminationstating

otherwise,or– youwerereceivingapensionthatwaspreviously

payabletosomeonewhohasdiedandanRBLdeterminationhadbeenissuedforthepensionwhenitoriginallycommencedthatshowedarebatableproportionoflessthanone.

Ifyouneedassistance,phonetheSuperannuationInfoline(seetheinsidebackcover).

GotopartAinthenextcolumntoworkoutyourAustralianannuityorpensionif:n youwere55yearsoldbefore1July2006n youturned55yearsoldonorafter1July2006and

yourpensionstartedonorafteryour55thbirthday,orn youwerereceivingadeathordisabilitypension,

regardlessofyourage.

GotopartBinthenextcolumntoworkoutyourAustralianannuityorpensionif:n youturned55yearsoldonorafter1July2006andyour

pensionstartedbeforeyour55thbirthday.

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QUESTION T5PRIVATE HEALTH INSURANCE

Youcanonlyclaimtherebateunderonemethodforeachperiod,thatis,ifyouhavealreadyreceivedtherebatebywayofareductioninyourpremiumthroughthehealthfundorasarebatefromMedicareyoucannotalsoclaimataxoffsetforthepremiumspaidforthesameperiod.

NOTEIftwopeoplemakepaymentsforthesamepolicy–forexample,youmakepaymentsfromajointbankaccount–eachpersoncanclaimtherelevantpercentagefortheproportionofthepremiumtheypaid.

How the rebate worksTherebateisbasedonthepremiumyoupaid,oryouremployerhaspaidforyou,forappropriatehealthinsurancecover.Youworkoutyourentitlementat30%,35%or40%ofthepremiumpaid,dependingontheageoftheoldestpersoncoveredbythepolicyandthenumberofdaysthispersonwasinthisagecategory.

Ageoftheoldestpersoncoveredbythepolicy*

Amountofrebate

Lessthan65years 30%oftheamountofpremiumpaid

65yearstounder70years 35%oftheamountofpremiumpaid

70yearsorover 40%oftheamountofpremiumpaid

*Iftheoldestpersonmovesintothenextagegroupduringtheyear,therebateisbasedonthenumberofdaysthatpersonwasineachgroup.Yourhealthfundwillcalculatethisautomatically.

Oncethepolicybecomeseligibleforthehigherrebate,itwillretainthiseligibilityevenifthepersonwhoestablishedtheeligibilitycomesoffthepolicy.Additionally,theeligibilitycontinuesevenifthepolicyholderchangesfundsorpoliciesafterthis.However,thisongoingeligibilityforthehigherratewillbeaffectedifanewpersonisaddedtothepolicyafterthepersonwhoestablishedtheeligibilityleavesthepolicy.Inthiscircumstanceyoushouldcontactyourhealthfundformoreinformationonhowyourrebatelevelwillbedetermined.

Ifthepolicywasinoperationbefore1January1999youmaybeentitledtoahigheramountunderthePrivateHealthInsuranceIncentiveScheme(oldincentivescheme).Ifyouhadaneligiblepolicyundertheoldincentiveschemethestatementyoureceivedfromyourhealthfundwillshowtheamountyoumaybeabletoclaim.

Ifyourhealthfundstatementshowsanamountinaboxfor‘Maximumprivatehealthinsuranceincentiveamount(afterpremiumreductionsandsubjecttoincometests)–G ’–thisistheamountundertheoldincentivescheme.

Ifyouhavethisboxandtheamountshownisgreaterthantheamountintheboxfor‘Maximumclaimablerebateonprivatehealthinsurance(afterpremiumreductions)–G ’,youmaybeeligibletoclaimthehigheramountifyoumeetcertaineligibilityandincometests.

Did you, or your employer on your behalf, pay the premium for an appropriate private health insurance policy?

NO GotoquestionT6.

YES Readbelow.

Did you receive your full entitlement to a private health insurance rebate from your health fund or Medicare?

NO Readbelow.

YES GotoquestionT6.

DEFINITIONAnappropriateprivatehealthinsurancepolicyisoneprovidedbyaregisteredhealthfundforhospital,ancillary–alsoknownas‘extras’–orcombinedhospitalandancillarycoverwhereeverypersoncoveredbythepolicyisapersonwhoiseligibletoclaimbenefitsundertheMedicaresystem.Tofindoutifyourhealthfundisaregisteredhealthfund,visitthePrivateHealthInsuranceAdministrationCouncilwebsiteatwww.phiac.gov.au

YOU NEED TO KNOW Theprivatehealthinsurancerebateisworkedoutasapercentageofthepremiumpaidtoaregisteredhealthfundforappropriateprivatehealthinsurancecover.Thepercentageofrebateyoumaybeentitledtoclaimisdeterminedbytheageoftheoldestpersoncoveredbythepolicy(seeHowtherebateworksinthenextcolumn).Therebateisnotaffectedbyyourlevelofincome.

Yourfundshouldhavesentyouyourprivatehealthinsurancestatementshowingthedetailsofyourrebatelevel.

NOTEIfyouhavestatementsfromallofthehealthfundsyoupaidpremiumstoandtheamountsatG onyourstatementsare0youhavealreadyreceivedyourfullentitlementandyoudonotneedtoreadanyfurtherinthisquestion.GotoquestionT6.

Claiming the rebateTherebatecanbeclaimedas:n areductioninyourprivatehealthinsurancepremium

throughthehealthfundn acashorchequerebatefromMedicaren arefundabletaxoffsetattheendoftheincomeyear

throughyourtaxreturn,orn acombinationofalltheoptions–eachforadifferent

periodduringtheyear.

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Ifyouwanttoknowmoreaboutcalculatingtheprivatehealthinsuranceincentiveamountorhowtocompletethisitemifyouareclaimingthehigheramountundertheoldincentivescheme,seetheinstructionsonourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).

Did you receive a private health insurance statement from your health fund?Yourhealthfundshouldhavesentyouastatementshowingthepremiumyouhavepaid.Ifyoupaidapremiumformorethanonepolicy,youshouldhavereceivedastatementforeachpolicy.

Ifyoudidnotreceiveastatementforoneormoreofthepoliciesyouhavepaidfor,youshouldcontactyourhealthfundandrequestone.

WHAT YOU NEEDn Aprivatehealthinsurancestatementn Theamountofanycashorchequerebatereceived

fromMedicareforyourprivatehealthinsurance


STEP1 IfyoudidnotreceiveanycashorchequerebatefromMedicareforyourprivatehealthinsurancepremium,transfertheamountatG fromyourstatementtoG itemT5onpage4ofyourtaxreturn.Ifyoupaidformorethanonepolicy,adduptheamountsatG onyourstatements.

STEP2 IfyoureceivedacashorchequerebatefromMedicareforyourprivatehealthinsurancepremium,useworksheet1belowtoworkoutyourentitlement.

WORKSHEET �

AmountshownatG onyourstatement (a) $

AmountofanycashorchequerebateyouhavereceivedfromMedicareforyourprivatehealthinsurancepremium (b) $

Take(b)awayfrom(a). (c) $

Ifyoupaidformorethanonepolicy,repeatthestepsinthisworksheetforeachpolicythenadduptheamountsat(c)ignoringanynegativeamount.

Iftheamountat(c)is0oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.

Iftheamountat(c)ispositive,thisisthetaxoffsetthatyouareeligibletoclaimatG itemT5onyourtaxreturn.Donotincludecents.

STEP3 CompletethePrivatehealthinsurancepolicydetailsonpage4ofyourtaxreturn.Seepage98forhowtocompletethesedetails.GotoquestionT6.

Itisbetterifyoucompletethisitemusingtheannualstatementwhichhealthfundsgivetoallpolicyholders.

However,ifyoucannotgetastatement,orifyourstatementshowsatotalamountexpectedtobepaidduringtheyearwhichisdifferenttothetotalamountactuallypaid(forexample,youdidnotmakeoneoftheexpectedpayments)youcanusethefollowingworksheettohelpyoucalculateyourtaxoffset.

Useworksheet2ifyourrebatepercentagedidnotchangeduringtheperiodthepaymentscover.

Useworksheet3ifyourrebatepercentagechangedduringtheperiodthepaymentscover–forexample,apersoncoveredbythepolicyturned65or70yearsold.

WORKSHEET 2

Totalpremiumspaidduring2006–07forthepolicybeforeanypremiumreductionfromyourhealthfundorrebatefromMedicare (a) $

Yourrebatepercentage (b) %

Multiply(a)by(b). (c)

Amount,ifany,ofpremiumreductionfromyourhealthfundorofrebatefromMedicare (d)

Take(d)awayfrom(c). (e)

Theamountat(e)iswhatyouareentitledtoclaim.If(e)is‘0’oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.

WORKSHEET 3

Totalpremiumspaidduring2006–07forthepolicybeforeanypremiumreductionfromyourhealthfundorrebatefromMedicare (a) $

Numberofdaystheamountshownat(a)covers (b)

COLUMN1Rebateforfirstperiod

COLUMN2*Rebateforsecondperiod

Yourrebatepercentagesforthedaysshownat(b) (c) % (c) %

Numberofdaystowhichtherebatepercentagesat(c)apply (d) (d)

Multiply(a)by(d). (e) $ (e) $

Divide(e)by(b). (f) $ (f) $

Multiply(f)by(c). (g) $ (g) $

Add(g)column1and(g)column2. (h) $

Amount,ifany,ofpremiumreductionfromyourhealthfundorofrebatefromMedicare (i) $

Take(i)awayfrom(h). (j) $

*Addanothercolumnifthepercentagechangedmorethanonce.

Theamountat(j)iswhatyouareentitledtoclaim.If(j)is‘0’oranegativeamountyouhavealreadyreceivedyourfullentitlement.GotoquestionT6.


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QUESTION T630% CHILD CARE TAX REBATE

Did you have a spouse on 30 June 2007?

NO GotoquestionT7.

YES Readbelowtoensureyourfamilyreceivesitsfull30%childcaretaxrebateentitlement.

DEFINITIONYourspouseisyourhusbandorwifetowhomyouarelegallymarried,orapersonwholiveswithyouonagenuinedomesticbasisasyourhusbandorwife.UnderAustralianlawyourhusbandorwifecannotbethesamesexasyou.

TRANSFER OF YOUR UNUSED CHILD CARE TAx REbATEThe30%childcaretaxrebatecanreduceyourtaxliabilitytonil.However,youcannotgetarefundofanyamountofrebatethatexceedsyourtaxliability.

Youcantransfertoyourspousethepartoftherebatethatisstillunusedafteryourtaxliabilityhasbeenreducedtonil.Thismaybeusedtoreduceyourspouse’staxliability.

NOTEIfyouareunsurewhetheryouwillhaveanyunusedrebatetotransfertoyourspouse,youshouldcompletetheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturnandwewilltransferanyunusedrebatetoyourspouse.

Thepersontowhomyoutransferthisamount(the‘unusedrebate’)musthavebeenyourspouseon30June2007.

Ifthepersonwhowaseligibletoclaimtherebatediedduringtheyear,theexecutororadministratorofthatperson’sestatecantransfertheunusedrebatetothepersonwhowasthedeceasedperson’sspouseatthetimeofdeath.

Do you want to transfer the unused rebate to your spouse?

NO GotoquestionT7.

YES Readbelow.

Youneedtonotethefollowing:n Youcannotcancelorreverseatransfer.n Theamountyoucantransferdependsonyourtax

liability.Asubsequentchangeinyourtaxliabilitywillchangetheamounttransferredtoyourspouseandmayaffecttheirtaxliability.

NOTEThisisthelasttimeyouwillclaimtherebateinyourtaxreturn.YournextrebatewillbepaidbytheFamilyAssistanceOffice.

Did you have to pay child care fees for approved child care for any period between � July 2005 and 30 June 2006?

NO GotoquestionT7.

YES Youmaybeeligibleforarebate.Readbelow.

Ifyouareeligibleforthe30%childcaretaxrebatetheTaxOfficewillcalculateyourrebateentitlementbasedoninformationprovidedbytheFamilyAssistanceOffice(FAO).Youmayalsobeeligibletotransferanyunusedrebatetoyourspouse–seeTransferofyourunused30%childcaretaxrebateinthenextcolumn.

YOU NEED TO KNOWYoumaybeentitledtoarebateof30%fortheout-of-pocketchildcareexpensesyouhadtopayfortheperiod1July2005to30June2006,uptoamaximumof$4,096perchild.Out-of-pocketchildcareexpensesareyourtotalfeesforapprovedchildcarelessthechildcarebenefit(CCB)towhichyouwereentitled.

Youwillbeeligibletoclaimtherebateforchildcarefeesyouhadtopayifforatleastoneweekstartingintheperiod1July2005to30June2006,you:n usedapprovedchildcaren wereentitledtoreceiveCCB,andn passedtheCCBwork/training/studytestforthe

purposesoftherebate.

Youwillreceivetherebateforanyperiodduringwhichyoumeteachoftheeligibilityrequirements.

NOTEYoucanclaimthe30%childcaretaxrebateonlyifyouwerethepersonwhoreceivedtheCCBfromtheFAO.

Whereyouwereinasalarysacrificearrangementforchildcareyouwillreceivetherebateforthechildcarefeesyoupaidifyouwerereimbursedbyyouremployeroryouremployerpaidthechildcarefeesonyourbehalf.

Youarenoteligiblefortherebateifyouremployerprovidedyouwithachildcareserviceontheirbusinesspremisesunderasalarysacrificearrangement.Youremployershouldbeabletoconfirmifthecostofyourchildcareismetunderasalarysacrificearrangement.

COMPLETING THIS ITEMPrintXintheYESboxatitemT6onpage4ofyourtaxreturntoclaimyourrebate.

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HOW TO TRANSFER YOUR UNUSED REbATEWewillautomaticallytransferanyunusedrebatetoyourspouseafteryourtaxreturnislodgedifyoufollowtheinstructionsbelow.n YoumustcompletetheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturn.Makesureyouincludeyourspouse’staxfilenumber.

n Youandyourspousemustalsocompletethetransferagreementinthenextcolumn.Keepthisagreementwithyourrecordsforthistaxreturn–donotsenditintotheTaxOffice.Yourspouseshouldalsokeepacopyofthisagreement.

n Yourspousedoesnotneedtoclaimtherebateontheirtaxreturn.Ifyourspousehasalreadylodgedtheir2007taxreturn,wewillautomaticallyamendittoincludeanyunusedrebate.

ExAMPLE

EmmaandJohnhadonechildinapprovedchildcareduringtheperiod1July2005to30June2006.Emmawasthechildcarebenefit(CCB)recipientwhichmeansthatsheiseligibletoclaimthe30%childcaretaxrebate.SheprintedXintheYESboxatitemT6onhertaxreturn.BecauseshewasunsurewhethershewouldhaveanyunusedrebatetotransfertoJohn,EmmaalsocompletedtheSpousedetails–marriedordefactosectiononpage6ofhertaxreturn,makingsurethatsheincludedJohn’staxfilenumber.SheandJohnalsocompletedthe30% child care tax rebate transfer agreement 2007andbothkeptacopywiththeirtaxrecords.WhenEmmalodgedhertaxreturn,theTaxOfficeappliedherrebateof$1,890tohertaxliabilityof$1,800.AsEmma’srebatewasmorethanhertaxliability,shehadanunusedrebateof$90.BecauseshehadcompletedtheSpousedetails–marriedordefactosectioncorrectly,theTaxOfficeautomaticallyappliedthisamounttoreduceJohn’staxliabilitywhenhelodgedhistaxreturn.Johndidnothavetoclaimtherebateonhistaxreturn.AsJohnhadalreadylodgedhistaxreturn,theTaxOfficeamendedhistaxreturntoincludetheunusedrebateamountof$90.

ExPLANATION OF TERMSApprovedchildcareiscareprovidedbylongdaycare,familydaycare,inhomecare,occasionalcare,beforeandafterschoolcare,andvacationcareapprovedbytheAustralianGovernmenttoreceiveCCBonbehalfoffamilies.

Ifyouareunsurewhetheryourchildcareisapproved,contactyourchildcareproviderorphonethechildcareaccesshotlineonFREECALL1800670305(TTYServiceFREECALL1800639327).

Childcarebenefit(CCB)isapaymentmadebytheFamilyAssistanceOffice(FAO)toassistwiththecostofchildcare.IfyouhaveusedapprovedchildcarebutnotclaimedCCB,contacttheFAOonwww.familyassist.gov.auorphone136150.

CCBentitlementistheamountofCCByouwereactuallyentitledtoforeachchildfortheperiod1July2005to30June2006.

CCBwork/training/studytestisadministeredbytheFAO.Youpassthetestifyouareinpaidwork,areactivelylookingforpaidwork,orarestudyingortraining.Ifyouhaveaspouse,theymustalsopassthetest.IfyouareunsurewhetheryoupassedthistestcontacttheFAOonwww.familyassist.gov.auorphone136150.

TotalfeesaretheamountofCCBpaiddirectlytoyourchildcareprovideraswellasanyadditionalamountthatyoupay.

CHECK THAT YOU HAVE . . . printedXintheYESboxatitemT6onpage4ofyourtaxreturn

completedtheSpousedetails–marriedordefactosectiononpage6ofyourtaxreturn(ifnecessary)

completedthetransferagreementbelow(ifnecessary)andbothyouandyourspousehavekeptacopyofthisagreement.

Ifyouwanttoworkoutyourrebateentitlement,youcanusetheworksheetonpage129.

30% child care tax rebate transfer agreement 2007Thisagreementmustbecompletedandretainedbybothyouandyourspouse.Cutoutandkeepwithyourtaxrecordsforthisyear.Printcarefully.Youneedtocompletethissectionofthisagreement.

I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .wanttotransfermyunused30%childcaretaxrebatetomyspouse.IamawarethatIcannotcancelorreversethetransfer.

Mytaxfilenumberis

......................................... . . . . . / . . . . ./. . . . . . . Yoursignature Date

Yourspouseneedstocompletethissectionofthisagreement.

I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .agreetoreceivethetransferoftheunused30%childcaretaxrebate.IamawarethatIcannotcancelorreversethetransfer.

Mytaxfilenumberis

Igivepermissionformytaxfilenumbertobedisclosedtoallowthetransfer.Ialsounderstandthattherebatetransferredtomecanbeincreasedordecreased,forexample,duetochangesinmyspouse’staxableincomeorchangestochildcarebenefit.

......................................... . . . . . / . . . . ./. . . . . . . Yourspouse’ssignature Date


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QUESTION T7BABY BONUS

PART AYoucannotclaimthebabybonusatthisitem.Howyouclaimthebabybonusthisyeardependsonwhetheryouarerequiredtolodgeataxreturnthisyear.

Ifyouarerequiredtolodgeataxreturnfor2006–07,youneedtogettheBaby bonus instructions and claim 2007,completetheclaimandlodgeitwithyourtaxreturn.Tofindouthowtogetthispublication,seetheinsidebackcover.

Ifyouarenotrequiredtolodgeataxreturnfor2006–07,youcanlodgeyourbabybonusclaimonitsownby:n usinge-taxandlodgingonline–gotowww.ato.gov.au

e-taxwillestimateyourbabybonusamountforyou.Mostclaimsareissuedwithin14days,or

n gettingtheBaby bonus instructions and claim 2007andcompletingtheclaim.Tofindouthowtogetthispublication,seetheinsidebackcover.

NowgotoTaxoffsetsfromthesupplementarysection.

PART b Workthroughthefollowingstepstodeterminethenumberofdaysthatyouwereeligibletoclaimthebabybonusforthisclaimyear.

STEP1WriteinboxAthenumberofdaysin2006–07thatallofthefollowingappliedtoyouatthesametime:n youhadlegalresponsibilityforandcareofthechildn thechildwasundertheageoffiveyears,andn youwereanAustralianresident

(seepages11–12).Gotostep2. A

Ifalltheseappliedtoyouforthewholeyearwrite365.

NOTEAdoptive parentYoumaybeentitledtoclaimfromthedateyouradoptedchildcameintoyourcareratherthanfromthedateyoubecamelegallyresponsibleforthechild.Formoreinformation,visitourwebsiteorphonethePersonalInfoline.

ExAMPLE

DanielleisanAustralianresidentfortaxpurposes.ShehadlegalresponsibilityforandcareofMitchellforthefullyear.Mitchell’sfifthbirthdaywason20September2006.Daniellewouldwrite81inboxA,thenumberofdaysfrom1Julyto19September.

Did you have a baby – or gain legal responsibility for a child aged under five years – on or after � July 200� and before � July 2004?

NOTEYouhavealegalresponsibilityforachildif:n youareresponsible(whetheraloneorwithsomeone

else)fortheday-to-daycare,welfareanddevelopmentofthechildand

n youaretheirbirthmotherornaturalfather,orn youhaveacourtordergivingyoulegalresponsibility

(forexample,throughadoption).

NO GotoTaxoffsetsfromthesupplementarysectiononpage97.

YES Readbelow.

YOU NEED TO KNOWThemotherisusuallythepersonwhowillclaimthebabybonus.

Youcanclaimthebabybonuseachyearuntilthechildturnsfive.Thebabybonusispaidwhetherornotyougetanyotherfamilybenefitsandcanbeclaimedevenifyoudonotpaytax.

Ifyouaretransferringyoureligibilityforthebabybonustoyourspousefortheincomeyearthisquestiondoesnotapplytoyou.Youshouldonlytransferyoureligibilityifyourspousewasyourspouseforthewholeclaimperiodandtheywouldgetahigherbabybonusamountthanyou.Seethedefinitionofspouseonpage110.Formoreinformation,visitourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).

GotopartAinthenextcolumnif:n thisisthefirstyearyouwillclaimthebabybonusn youwereatransfereein2005–06orn youwereatransfereein2006–07.

DEFINITIONAtransfereeissomeonewhoprovidedtheirspouse’sdetailsontheir2006babybonusclaimorwillprovidetheirspouse’sdetailsontheir2007babybonusclaim.

GotopartBinthenextcolumnif:n youclaimedthebabybonusinapreviousyear(not

asatransferee)andyouareclaimingforthesamechildthisyearand

n youarerequiredtolodgeataxreturnthisyear.

IfyoudonotmeetthesetwopointsgotopartA.

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bereavementIfyourchilddiedbeforetheirfifthbirthday,write365inboxAinstep1andgotostep6.

Child’s fifth birthday on � July 2006Ifyourchildturnedfiveon1July2006andtheincomeyearyougainedlegalresponsibilityforthechildisalsoyourbaseyearandyoudidnottransferyoureligibilityinyourbaseyear–writeinboxAinstep1thenumberofdaysfromthedateyoubecamelegallyresponsibleto30Juneofyourbaseyear.Gotostep6.

STEP2Did the legal responsibility for your child change, for example, through a court order, during 2006–07?

Achangeinlegalresponsibilityforyourchildmayaffectthenumberofdaysyouareeligibletoclaimandthestepsyouhavetocomplete.

NO Gotostep6.

YES Gotostep3.

STEP3Was there another person (including your spouse) who had legal responsibility for and care of your child during any of the days you have written in box A?

NO Donotcompletesteps4and5.Gotostep6.

YES WriteinboxBthetotalnumberofdaysthatthisapplied. B

Gotostep4.

STEP4Has this person been eligible for the baby bonus for another child without being a transferee?

NO Gotostep5.

YES Youcannotclaimforafullyear.TakeBawayfromA.WritetheanswerinboxC.Thisisyournumberofeligibledays. C

Gotostep6.

STEP5In the following list, are you listed after the person referred to in step 3?n Birthmothern Adoptivemothern Anyotherwomann Naturalfathern Adoptivefathern Anyotherman

NO Gotostep6.

YES Youcannotclaimforafullyear.TakeBawayfromA.WritetheanswerinboxD.Thisisyournumberofeligibledays. D

Gotostep6.

STEP6ThenumberofdaysyouareeligibletoclaimthebabybonuswillbethelowestofthenumberofdaysyouhavewritteninboxA,CandD.IfyouhavenothinginboxCorDyournumberofeligibledaysisinboxA.WritethenumberofeligibledaysatH itemT7onpage4ofyourtaxreturn.

Ifyourchilddiedduringtheyearbutbeforetheirfifthbirthday,printBintheCODEbox attherightofH itemT7.Thiswillallowyoutoclaimthebabybonusforanothereligiblechildinalateryear.

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NO GotoTotaltaxoffsetsbelow.

YES YoumustcompletetheTax return for individuals (supplementary section) 2007.Readon.

COMPLETING THIS ITEMSTEP1 Completethedetailsatthetopofpage9ofyourtaxreturn(supplementarysection)ifyouhaven’talready.UseTaxPack 2007 supplement tocompletethetaxoffsetssection.

STEP2 TransfertheamountyouwroteatTOTALSUPPLEMENTTAXOFFSETSonpage12to T onpage4ofyourtaxreturn.

NOTEYoucanfindtheTax return for individuals (supplementary section) 2007atthebackofTaxPack 2007 supplement.Ifyoudon’thaveacopyofthissupplement,youcangetonefrommostnewsagentsduringthelodgmentperiod(1Julyto31October2007).CopiesarealsoavailableallyearfromourPublicationsDistributionService(seetheinsidebackcover)andshopfronts.

CAUTIONReadthisquestioncarefully–consultTaxPack 2007supplementifyouarenotfamiliarwiththetermsused.

Are you entitled to claim a tax offset for any of the following?n Superannuationcontributionsonbehalfofyourspousen LivinginaremoteorisolatedareaofAustralian ServingoverseasasamemberoftheAustralianDefence

ForceoraUnitedNationsarmedforcen Netmedicalexpensesoverthethresholdamountn Maintenanceofyourparent,spouse’sparentor

invalidrelativen Landcareandwaterfacilitytaxoffsetbroughtforward

fromanearlieryearn Interestfromthelandtransportfacilitiestaxoffset

schemeorinfrastructureborrowingsschemen PerformingworkorservicesintheJointPetroleum

DevelopmentArea(JPDA)

TOTAL TAx OFFSETS

STEP1 AddupallthetaxoffsetamountsatitemsT1,T4,T5and T intheright-handcolumnonyourtaxreturn.

STEP2 WritethetotalamountatU TOTALTAXOFFSETSonpage4ofyourtaxreturn.Donotshowcents.Ifyoudonothaveanytaxoffsets,write0.Readon.

Tax offset for low income taxpayersIfyouareanAustralianresidentfortaxpurposesandyourtaxableincomeislessthan$40,000,youmaygetataxoffset.Wewillworkoutthistaxoffsetandmakesureitcomesoffyourtax.Thistaxoffsetwillbeshownonyournoticeofassessment.

Mature age worker tax offsetIfyouareanAustralianresidentaged55yearsorolderon30June2007andyouhavereceivedcertainincomefromworking,youmaybeeligibleforthematureageworkertaxoffset.Ifyouonlyhavenetincomefromworkingfromitemsonyourtaxreturn,wewillworkoutyourmatureageworkertaxoffsetforyou.Ifyouhavenetincomefromworkingfromitemsonyourtaxreturn(supplementarysection),youwillneedtocompleteitemT13Netincomefromworking–supplementarysectionsothatwecanusethisamounttoworkoutyourmatureageworkertaxoffsetentitlement.

ADJUSTMENTS FROM THE SUPPLEMENTARY SECTION

Did you receive a distribution for 2006–07 on which family trust distribution tax has been paid?

NO Readthenextcolumn.

YES ReadquestionA3onpages61inTaxPack 2007 supplement.

Did you make a payment to the Tax Office more than �4 days before the due date for payment?

NO GotoPrivatehealthinsurancepolicydetailsonthenextpage.

YES ReadquestionC1onpages62inTaxPack 2007 supplement.

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STEP1 Printtheidentification(ID)codeofyourhealthfundat b HealthfundIDonpage4ofyourtaxreturn.

STEP2 PrintyourprivatehealthinsurancemembershipnumberatC Membershipnumber.

STEP3 IntheTypeofcoverbox printthecodeletterfromthetablebelowthatbestdescribesthetypeofprivatehealthinsurancecoveryouhad.

Typeofcover Codeletter

Ancillarycover,alsoknownas‘extras’ A

Hospitalcover H

Combinedhospitalandancillarycover C

NOTEIfyouhaveusedcodeletterHorCyourliabilityfortheMedicarelevysurchargemaybereduced.MakesureyoucarefullyreadquestionM2Medicarelevysurchargeonpages104–7.

Ifyouchangedyourtypeofcoverduringtheyear,printthecodeletterforthetypeofcoverthatgaveyouthehighestlevelofcover.Forexample,ifyouhadhospitalcoverandaddedancillarycoverduringtheyear,usecodeletterC(forcombinedhospitalandancillarycover).

Did you have more than one policy during the year?Thetaxreturnonlyhasspaceforinformationonthreepolicies.

Ifyouhadmorethanthreepolicies,completesteps1to3forthefirstthreepolicies.OnaseparatepieceofpaperprintSCHEDULEOFADDITIONALINFORMATION–PRIVATEHEALTHINSURANCEPOLICYDETAILS.Includeyourname,addressandtaxfilenumber,andlistthehealthfundIDcode,membershipnumberandtypeofcoverforeachoftheotherpoliciesyouheld.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

YOU NEED TO KNOW TheinformationonthispagewillhelpyoucompletePrivatehealthinsurancepolicydetailsonpage4ofyourtaxreturn.YouwillneedtocompletethisitemifyouclaimedataxoffsetatitemT5.QuestionM2Medicarelevysurchargeonpages104–7mayalsodirectyoutocompletethisitem.

Ifyoureceivedastatementfromyourregisteredhealthfund,yourprivatehealthinsurancepolicydetailswillbeshownonthestatement.Ifyoudidnotreceiveastatementfromyourhealthfund,contactyourfund.Ifyoudonothaveastatementbecauseyouremployerpaidthepremiumforyou,contactyourfundorspeaktoyouremployer.

Youmaybecoveredunderafamilypolicyeventhoughyouoryouremployermaynothavepaidthepremium.Youcancompletethisitemshowingthetypeofcoverthatyouhadunderthatfamilypolicy.

Tofindoutifyourhealthfundisaregisteredhealthfund,visitthePrivateHealthInsuranceAdministrationCouncilwebsiteatwww.phiac.gov.au

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IndividualsandfamiliesonincomesabovetheMedicarelevysurchargethresholds(seepage106)whodonothaveprivatepatienthospitalcovermayhavetopaytheMedicarelevysurcharge.ThisisthesubjectofquestionM2.

ThissurchargeisinadditiontotheMedicarelevy.Wecalculateitattherateof1%ofyourtaxableincome(includingyourtotalreportablefringebenefits).Youwillneedtoreadpages104–7toseeifyouhavetopaythesurcharge.

ITEMM2ISCOMPULSORYFORALLTAXPAYERS.IfyoudonotcompleteitemM2onyourtaxreturnyoumaybechargedthefullMedicarelevysurcharge.

MedicareistheschemethatgivesAustralianresidentsaccesstohealthcare.

Tohelpfundthescheme,residenttaxpayersaresubjecttoaMedicarelevy.Normally,wecalculateyourMedicarelevyattherateof1.5%ofyourtaxableincome.Avariationtothiscalculationmayoccurincertaincircumstances.

Generally,taxoffsetsdonotreduceyourMedicarelevy.However,ifyouhaveexcessrefundabletaxoffsets,weusethemtoreduceyourtax,includingyourMedicarelevy.(Formoreinformationonrefundabletaxoffsets–forexample,theprivatehealthinsurancerebate–seepage91.)

InsomecasesyoumaybeexemptfromtheMedicarelevyoritmaybereduced.ThisisthesubjectofquestionM1.Youonlyneedtocompletethisitemifyoubelongtoanexemptioncategoryoryouareabletoclaimareductionbasedonfamilyincome.Readpages100–3toworkoutifyouareeligiblefortheexemptionorthereductionbasedonfamilyincome.


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QUESTION M�MEDICARE LEVY REDUCTION OR EXEMPTION

PART A Low income earnerYoudonotneedtocompletethisitemifyourtaxableincomewas:n equaltoorlessthantherelevantthresholdamount

(seethetablebelow).YoudonothavetopaytheMedicarelevy.DonotwriteanythingatitemM1onyourtaxreturn.GotoquestionM2

n morethantherelevantthresholdamountbutequaltoorlessthanthephase-inlimit(seethetablebelow)andyouwerenotin:– aMedicarelevyreductioncategorybasedonfamily

income(seepartBbelow),or– oneoftheexemptioncategoriesgivenonpage102.

YourMedicarelevyisreduced.Itiscalculatedat10centsforeverydollarabovetherelevantthresholdamountbutequaltoorlessthanthephase-inlimit.DonotwriteanythingatitemM1.WewillworkouthowmuchMedicarelevyyouhavetopay.GotoquestionM2.

Relevantthresholdamount

Phase-inlimit

IfyouareeligiblefortheseniorAustralianstaxoffset(seepages84–5) $24,867 $29,255

Ifyouareeligibleforthepensionertaxoffset(seepages88–9) $21,637 $25,455

Allothertaxpayers $16,740 $19,694

IftheabovepointsinpartAdonotapplytoyou,gotopartBbelow.

PART b Reductions based on family income‘Dependentchildrenandstudents’means:n anychildunder21yearsoldyoumaintainedwhowas

notafull-timestudentandwhoseseparatenetincomewaslessthan$1,786forthefirstchild,and$1,410foranyadditionalchild

n anyfull-timestudentunder25yearsoldyoumaintainedwhoseseparatenetincomewaslessthan$1,786.

SeeWhatismaintainingadependant?andWhatisseparatenetincome?onpages69–70.

Ifyouweresingleorseparatedon30June2007,youmusthavebeeneligibleforfamilytaxbenefitforthewholeorpartof2006–07foranychildorstudentyouwanttoincludeundertheterm‘dependentchildrenandstudents’(seepages71–5).

Were you a low income earner or were you in one of the Medicare levy reduction or exemption categories listed on page �02?

NO GotoquestionM2.

YES Readbelow.

YOU NEED TO KNOWMostAustraliansareliabletopaytheMedicarelevy.ThestandardMedicarelevyis1.5%ofyourtaxableincome.However,thismayvaryaccordingtoyourcircumstances.YourtaxableincomeisusuallytheamountyouwroteatTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn.

Post-June �983 elementsForMedicarelevypurposes,taxableincomeexcludesanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero(seequestion4onpages19–22).Ifyouareunsureofthetaxrate,phonetheSuperannuationInfoline(seetheinsidebackcover).

NOTETheamountsinthetablesinthisquestionreflectproposedchangestoMedicarelevythresholdsfor2006–07.AtthetimeofprintingTaxPack 2007 thesechangeshadnotbecomelaw.

TheTaxOfficewillworkoutyourMedicarelevy,includinganyMedicarelevyreduction,fromtheinformationyouprovideonyourtaxreturn.

WHAT YOU MAY NEEDn Your2006–07taxableincomen The2006–07taxableincomeofyourspouse,ifyou

hadoneon30June2007(seethedefinitionofspouseonpage110).Ifyourspousediedduring2006–07andyoudidnothaveanotherspousebeforetheendoftheyear,weconsideryoutohavehadaspouseon30June2007forthepurposesofcalculatinganyMedicarelevyreductionsbasedonfamilyincome

n Thenumberofdependentchildrenandstudentsyouhadduring2006–07

n Thenumberofdaysyou,yourspouseanddependentchildrenandstudentswereinanexemptioncategory–seepage102.

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Part b categoriesIfyourtaxableincomewasabovetherelevantthresholdamountinpartA,youmaystillbeeligibleforareducedMedicarelevybasedonyourfamilyincome.

TobeeligibleforareducedMedicarelevybasedonfamilyincome,youmusthavebeeninoneofthefollowingcategories:n Youhadaspouse–marriedordefacto–on

30June2007.n Yourspousediedduring2006–07andyoudidnothave

anotherspousebeforetheendoftheyear.n Youareentitledtoachild-housekeeperorhousekeeper

taxoffsetatitemT1onyourtaxreturnorwouldbeentitledifyouwerenoteligibleforthefamilytaxbenefit–seepages71–5.

n Youwereasoleparentatanytimeduring2006–07,thatis,youhadsolecareofanydependentchildrenorstudents.Thisincludesanychildforwhomyouhadsolecare,notjustyourownchild.

DEFINITIONSolecaremeansthatyoualonehadfullresponsibility,onaday-to-daybasis,fortheupbringing,welfareandmaintenanceofachildorstudent.Youarenotconsideredtohavesolecareifyouarelivingwithaspouse–marriedordefacto–unlessspecialcircumstancesexist.Generally,forspecialcircumstancestoexist,youmustbefinanciallyresponsibleforthedependentchildorstudentandhavesolecarewithoutthesupportaspousenormallyprovides.

Examplesofsituationswherespecialcircumstancesmayarise:n Youweremarriedatanytimeduring2006–07but

duringtheyearyouseparatedfromorweredesertedbyyourspouseandforthatperiodyouwerenotinadefactorelationship.

n Yourspousewasinprisonforasentenceofatleast12months.

n Yourspouseismedicallycertifiedasbeingpermanentlymentallyincapableoftakingpartincaringforthechildorstudent.

IfyouareunsureofwhetherspecialcircumstancesapplyphonethePersonalInfoline(seetheinsidebackcover).

Ifyouhadaspouseon30June2007oryourspousediedduringtheyear,yourfamilyincomeisyourandyourspouse’scombinedtaxableincomeforMedicarelevypurposes(seePost-June1983elementsonthepreviouspage).Otherwise,itisyourtaxableincome.

YoudonotpaytheMedicarelevyifyouwereinoneofthepartBcategoriesaboveandyourfamilyincomewasequaltoorlessthantherelevantlowerincomelimit.Findthelimitthatappliestoyourcircumstancesintable1or2inthenextcolumn.However,youstillneedtocompletesteps1and2.Gotostep1.

Ifyourfamilyincomewasgreaterthantherelevantlowerincomelimitbutequaltoorlessthantherelevantupperincomelimit,youpayareducedMedicarelevy.Gotostep1.

IfyourfamilyincomewasabovetherelevantupperincomelimityoudonotqualifyforareducedMedicarelevy.GotoExemptioncategoriesonthenextpage.

Twofamilyincometablesareshownbelow.Usetable1ifyouareeligiblefortheseniorAustralianstaxoffset.Usetable2inallothercircumstances.

TAbLE �: Family income table for taxpayers who are eligible for the senior Australians tax offset

Numberofdependentchildrenandstudentsduring2006–07

Lowerincomelimit

Upperincomelimit

0 $33,500 $39,411

1 $36,094 $42,463

2 $38,688 $45,515

3 $41,282 $48,567

4 $43,876 $51,618

Ifyouhadmorethanfourdependentchildrenorstudents,youcanextendthistable.Thelowerincomelimitincreasesby$2,594andtheupperincomelimitincreasesby$3,051foreachadditionalchildorstudent.

TAbLE 2: Family income table for taxpayers other than those eligible for the senior Australians tax offset

Numberofdependentchildrenandstudentsduring2006–07

Lowerincomelimit

Upperincomelimit

0 $28,247 $33,231

1 $30,841 $36,283

2 $33,435 $39,335

3 $36,029 $42,387

4 $38,623 $45,438

Ifyouhadmorethanfourdependentchildrenorstudents,youcanextendthistable.Thelowerincomelimitincreasesby$2,594andtheupperincomelimitincreasesby$3,051foreachadditionalchildorstudent.

Claiming your reduced Medicare levySTEP1 Ifyouhadaspouseat30June2007oryourspousediedduringtheyear,youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.

Ifyourspouse’staxableincomeincludesanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero,printSCHEDULEOFADDITIONALINFORMATION–ITEMM1SPOUSE’STAXABLEINCOMEonaseparatepieceofpaperandwritethisamount.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declaration question2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

STEP2 Writehowmanydependentchildrenandstudentsyouhadduring2006–07at Y itemM1onpage5ofyourtaxreturn.

Ifyouhadnodependentchildorstudent,write0.WewillworkoutyourreducedMedicarelevybasedonthisinformation.IfyouwishtocalculatetheMedicarelevyyourself,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetsonpages125–7.


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NOTEIfyoureceivedanyexemptforeignemploymentincomeweuseaspecialformulatoworkouttheamountoftax–includingMedicarelevy–youhavetopayonyourtaxableincome.YouwillnotbeabletoworkoutyourMedicarelevy.Wewillworkitoutforyou.

Readontoseeifyouareentitledtoanexemption.

PART C Medicare levy exemption

Exemption categoriesYouwereinanexemptioncategoryif:� Youwereablindpensioneroryoureceivedthesickness

allowancefromCentrelink.2 Youwereentitledtofullfreemedicaltreatmentfor

allconditionsunderdefenceforcearrangementsorVeterans’AffairsRepatriationHealthCard(GoldCard)orrepatriationarrangements.

3 YouwerenotanAustralianresidentfortaxpurposes.4 YouwerearesidentofNorfolkIsland.5 Youwereamemberofadiplomaticmissionorconsular

postinAustralia–oramemberofsuchaperson’sfamilyandyouwerelivingwiththem–andyouwerenotanAustraliancitizenandyoudonotordinarilyliveinAustralia.

6 YouhaveacertificatefromtheMedicareLevyExemptionCertificationUnitofMedicareAustraliashowingthatyouarenotentitledtoMedicarebenefits.AletterfromMedicareisnotsufficient.Formoreinformationonhowtoapplyforanexemptioncertificate,contactMedicareAustraliaon1300300271orvisittheirwebsitewww.medicareaustralia.gov.au

Ifyouwerenotinoneoftheseexemptioncategories,youarenotentitledtoanexemption.GotoquestionM2.

DEFINITIONForpartsCandD,dependantmeansanAustralianresidentyoumaintainedwhowas:n yourspousen yourchildagedlessthan21years,orn yourchildaged21yearsoroverbutlessthan25years

whowasreceivingfull-timeeducationataschool,collegeoruniversityandwhoseseparatenetincomewaslessthan$1,786.

SeeWhatismaintainingadependant?andWhatisseparatenetincome?onpages69–70.

Iftheparentsofachildlivedseparatelyorapartforallorpartoftheincomeyearandthechildwasadependantofeachofthem,thechildistreatedasadependantofeachparent.WebasetheMedicarelevycalculationonthepercentageoffamilytaxbenefitPartAthatwaspaidorispayableforthatchildforthatperiod.

Ifyouwereinexemptioncategory3or4forthewholeincomeyearyouqualifyforafullMedicarelevyexemptionregardlessofwhetherornotyouhaddependants.Write365at V itemM1onyourtaxreturnandgotoquestionM2.

Ifyouwereinanyotherexemptioncategory,orwereinexemptioncategory3or4foronlypartof2006–07,readon.

ExAMPLE

Leannewasamemberofthedefenceforcesforthewholeincomeyear.ShesharedthecareofDanielwithherex-spouseandreceived14%familytaxbenefitPartAbasedontheshared-carearrangement.ThismeansthatDanielisconsideredtobeLeanne’sdependantfor51days(14%of365)forMedicarelevyexemptionpurposesfortheyear.

Full levy exemption Youmayqualifyforafullexemptionforallorpartof2006–07.

Category � or 2YouwillqualifyforafullexemptionfromtheMedicarelevyforaperiodin2006–07ifyouwereinexemptioncategory1or2(seethepreviouscolumn)andyousatisfiedanyofthefollowingconditionsduringthewholeofthatperiod:n Youhadnodependantsforthatperiod.n Allyourdependants(includingyourspouseifyouhad

one)werealsoinoneoftheexemptioncategories,ortheyhadtopaytheMedicarelevy(forexample,youronlydependantwasyourspousewhowasnotinanexemptioncategoryandhadtopaytheMedicarelevy).

n Youhaddependentchildrenwhowerenotinanexemptioncategorybuttheywerealsodependantsofyourspouse,whoeither:– hadtopaytheMedicarelevy,or– wasinexemptioncategory1or2andyouhave

completedaFamilyagreementonthenextpagedeclaringthatyourspousewillpaythehalflevyforyourjointdependants.

TobeeligibletocompleteaFamilyagreementitisaconditionthatbothyouandyourspousewould,apartfromyourexemptioncategorystatus,havetopaytheMedicarelevy.

Category 3 or 4 for only part of the income year, or category 5 or 6 for any period of the income yearIfyouwereinexemptioncategory3or4(seethepreviouscolumn)foronlypartof2006–07orexemptioncategory5or6foranyperiodof2006–07,youwillqualifyforafullMedicarelevyexemptionforthatperiodifoneofthefollowingconditionsapplies:n Youhadnodependantsforthatperiod.n Allyourdependantswerealsoinanexemptioncategory

forthatperiod.

Ifyoumetanyoftheconditionsforanyfullexemptioncategoryyouwerein,gotoFulllevyexemptionforaperiodonthenextpage.

Ifyoudidnotmeetanyoftheconditionsforanyfullexemptioncategoryyouwerein,goto:n PartD:Halflevyexemptionifyouwereinexemption

category1or2foraperiodin2006–07,orn questionM2ifyouwerenotinexemptioncategory1

or2foraperiodin2006–07.Otherwise,readon.


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Full levy exemption for a period

STEP1 Writethetotalnumberofdaysthatyouandallyourdependants,ifany,mettherequiredconditions,atV itemM1onpage5ofyourtaxreturn.

Ifyouwereinmorethanoneexemptioncategoryandthetimeyouwereinonecategoryoverlappedwiththetimeyouwereinanother,onlyaddupthenumberofdaysfromthedayyoustartedinthefirstcategorytothelastdayyouwereinthelastcategory.Donotcounteachoverlappingperiodseparately.

ExAMPLE

Youwereincategory1from1Augustto30Septemberandcategory2from15Septemberto1November.Thenumberofdaysfrom1Augustto1Novemberis93.Youwouldshow93daysat V itemM1.

STEP2 Ifyouhavecompleted V andyouareinexemptioncategory6,printtheletterCintheCLAIMTYPEbox attherightof V itemM1.

Otherwise,leavetheboxblank.

STEP3 Ifyouhadaspouseatanytimein2006–07youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.

STEP4 Ifthenumberofdaysyouwroteat V is365,youwillnothavetopayanyMedicarelevy.Youhavefinishedthisquestion.GotoquestionM2.

Ifyouwereinexemptioncategory3,4,5or6,youhavefinishedthisquestion.GotoquestionM2.

Ifthenumberofdaysyouwroteat V islessthan365,andyouwereinexemptioncategory1or2,youmayqualifyforahalflevyexemption.Readon.

PART D Half levy exemption Youmayqualifyforahalflevyexemptionforallorpartof2006–07.

YouqualifyforahalfexemptionfromtheMedicarelevyforaperiodin2006–07ifyouwereinexemptioncategory1or2(seethepreviouspage)andyousatisfiedeitherofthefollowingconditionsduringthewholeofthatperiod:n Youhadatleastonedependant(forexample,aspouse)

whowasnotinanexemptioncategoryandwhodidnothavetopaytheMedicarelevy(forexample,becausetheywerealowincomeearner–seepartA).

n Yourspousewasinexemptioncategory1or2(seethepreviouspage)andyouandyourspousehadachildwhowasadependantofbothofyouandthechildwasnotinanexemptioncategory.Inthiscase,eitheryouoryourspousecanclaimafulllevyexemptionatpartCandtheothercanclaimahalflevyexemptionatpartD.YoudothisbycompletingaFamilyagreementinthenextcolumn.

Ifyoudidnotmeetoneoftheseconditions,gotoquestionM2.

Getting a half levy exemption

STEP1 WriteatW itemM1onpage5ofyourtaxreturnthetotalnumberofdaysthatyouandyourdependantsmettherequiredconditions.

Ifyouwereinbothexemptioncategoriesandthetimeyouwereinoneexemptioncategoryoverlappedwiththetimeyouwereintheotherexemptioncategory,onlyaddupthenumberofdaysfromthedayyoustartedinthefirstcategorytothelastdayyouwereinthesecondcategory.Donotcounteachoverlappingperiodseparately.

ExAMPLE

Youwereincategory1fortheperiod1Augustto30Septemberandcategory2from15Septemberto1November.Thenumberofdaysfrom1Augustto1Novemberis93.Youwouldshow93daysatW itemM1.

STEP2 Ifyouhadaspouseatanytimeduring2006–07youmustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.

STEP3 Ifyouhadachildwhowasadependantofbothyouandyourspouse,andyouoryourspousewasclaimingahalflevyexemptionunderpartD,bothyouandyourspousewillneedtocompleteaFamilyagreementdeclaringwhichoneofyouwillpaythehalflevyforyourjointdependants.Adraftformforthisagreementisshownbelow.

FAMILY AGREEMENT

We (Yourname)

(Yourspouse’sname)

hereby agree that the half Medicare levy payable in respect of our dependant or dependants for 2006–07 will be paid by

(Nameofpersonclaiminghalfexemption)

Spouse’s signature

Your signature

NOTEIfyouaretheoneclaimingafullexemptionfromtheMedicarelevyatpartC,youwillneedtokeepthisFamilyagreementwithyourtaxrecords:n forfiveyearsfromthedateyoulodgeyourtaxreturn,

orn iftheCommissionerhasdeterminedthatyouare

subjecttoashorterperiod,thatshorterperiod.

Wewillworkoutyourexemptionbasedontheinformationonyourtaxreturn.Ifyouwishtocalculatetheexemptionyourself,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetonpage127.Otherwise,gotoquestionM2.


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QUESTION M2MEDICARE LEVY SURCHARGE

Explanation of termsForMLSpurposesyouwillneedtounderstandthefollowingterms:

PrivatepatienthospitalcoveriscoverprovidedbyaninsurancepolicyissuedbyaregisteredfundforsomeorallhospitaltreatmentprovidedinanAustralianhospitalordayhospitalfacility.However,ifyoutakeoutaninsurancepolicyforhospitalcoverafter24May2000thatcontainsan‘annualfront-enddeductible’amountorexcessofmorethan$500inthecaseofapolicycoveringonlyoneperson,andmorethan$1,000forallotherpolicies,youwillnotbeconsideredtohaveprivatepatienthospitalcover.Thesameappliestoaninsurancepolicyforhospitalcoverwithahighfront-enddeductibleamountorexcesstakenoutbefore24May2000thatceasedtoprovidecontinuouscoverafterthatdate.

Ifyoumadeapaymenttocoverashortfallinthecostofhospitaltreatment,otherthantheexcessagreedinyourpolicy,thisisnotafront-enddeductibleamountorexcess.Yourhealthfundmayincludedetailsoftheleveloffront-enddeductibleamountorexcessthatappliedtoyourpolicyintheprivatehealthinsurancestatementthatitsentyou.

Yourhealthfundstatementwillindicatethemaximumnumberofdaysthatyourpolicymayhaveprovidedanappropriatelevelofprivatepatienthospitalcoverat A .

TravelinsuranceisnotprivatepatienthospitalcoverforMLSpurposes.Privatepatienthospitalcoverdoesnotincludecoverprovidedbyanoverseasorunregisteredfund.

NOTETofindoutifyourhealthfundisaregisteredhealthfund,contactthePrivateHealthInsuranceAdministrationCouncilorvisittheirwebsiteatwww.phiac.gov.au

Ancillarycoveriscommonlyknownas‘extras’.Ancillarycoverisnotprivatepatienthospitalcover.Itcoversitemssuchasoptical,dental,physiotherapyorchiropractictreatment.

Dependants–adependantisanAustralianresident,being:n yourspouse–eveniftheyworkedduring2006–07or

hadtheirownincomen anyofyourchildrenwhowereunder21yearsofagen anyofyourchildrenaged21yearsandolderbutunder

25yearsofagewhowerefull-timestudents.

ForMLSpurposesyouneedtohavecontributedtoyourdependant’smaintenance.SeeWhatismaintainingadependant?onpage69.

THIS QUESTION IS COMPULSORY FOR ALL TAxPAYERS.

For the whole of 2006–07 did you and all of your dependants (this includes your spouse even if they had their own income) – if you had any – have private patient hospital cover?

Forthedefinitionsofprivatepatienthospitalcover,dependants,family,taxableincomeforMedicarelevysurcharge(MLS)purposesandotherrelevanttermsseeExplanationoftermsinthenextcolumn.

YES PrintXintheYESboxattherightof E itemM2onyourtaxreturn.MakesureyouhavecompletedPrivatehealthinsurancepolicydetails.Seepage98forassistance.GotoquestionA1onpage108.

NO PrintXintheNOboxattherightof E itemM2onyourtaxreturn.Readbelow.

For the whole of 2006–07 were you:n a single person – without a dependent child

or children – with a taxable income for MLS purposes of $50,000 or less

ORn a member of a family and the combined taxable

income for MLS purposes of you and your spouse (if you had one) was $�00,000 (plus $�,500 for each dependent child after the first, that is, for the second and subsequent child, if you had children) or less?

NO YoumayhavetopaytheMedicarelevysurcharge.PrintXintheappropriateNOboxatitemM2onyourtaxreturn.Ifyouhadaspouseduring2006–07youmayalsohavetocompleteyourspousedetailsonpages6–7ofyourtaxreturn.GotoYouneedtoknowbelow.

YES YoudonothavetopaytheMedicarelevysurchargeforanypartoftheyear.PrintXintheappropriateYESboxatitemM2onyourtaxreturn.GotoCompletingthisitemonpage107.

YOU NEED TO KNOWIndividualsandfamiliesonincomesabovetheMLSthresholdswhodonothaveprivatepatienthospitalcoverpayMLSforanyperiodduring2006–07thattheydidnothavethiscover.

MLSis1%oftheirtaxableincome.Itisadditionaltothe1.5%Medicarelevy.

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Spouse–marriedordefacto–Ifyouarelivingseparatelyandapartfromyourspousewetreatyouasnotbeingmarried(seethedefinitionofspouseonpage110).

Family–weconsideryoutobeamemberofafamilyduringanyperiodof2006–07thatyoucontributedtothemaintenanceofadependant.Anyparent(includingasoleparent)whocontributedtothemaintenanceofadependentchildorchildrenisconsideredtobeamemberofafamily.

TaxableincomeforMedicarelevysurcharge(MLS)purposes–isthetotalof:n yourtaxableincomen yourtotalreportablefringebenefitsamountsatW item9

onyourtaxreturnn theamountonwhichfamilytrustdistributiontaxhas

beenpaid(seequestionA3onpages61inTaxPack 2007 supplement)

lessn anypost-June1983elementsofaneligibletermination

payment(ETP)wherethemaximumtaxrateiszero.Ifyouareunsureofthetaxrate,phonetheSuperannuationInfoline(seetheinsidebackcover).

Ifyouhadanyexemptforeignemploymentincomeandataxableincomeof$1ormore,youneedtocompletethisitemasiftheexemptincomewereaddedtoyourtaxableincome.

ThetaxableincomeofyourspouseforMLSpurposesisthetotalof:n yourspouse’staxableincomen yourspouse’stotalreportablefringebenefitsamountsn theamountonwhichfamilytrustdistributiontaxhas

beenpaidwhichyourspousewouldhavehadtoshowasassessableincomeifthattaxhadnotbeenpaid

n anyshareinthenetincomeofatrustestatetowhichyourspouseispresentlyentitledandonwhichthetrusteeofthetrustisassessedundersection98oftheIncome Tax Assessment Act 1936(ITAA1936)andwhichhasnotbeenincludedinyourspouse’staxableincome*

lessn anypost-June1983elementsofanETPwherethe

maximumtaxrateiszero.*Atrusteeisassessedundersection98oftheITAA1936inrelationtoapresentlyentitledbeneficiaryunderalegaldisability.Apersonisunderalegaldisabilityiftheyare:n under18yearsofageon30June2007n abankrupt,orn apersonwhohasbeendeclaredlegallyincapablebecause

ofamentalcondition.

NOTEIfyouhaveshownalumpsumpaymentinarrearsatitem19Foreignsourceincomeandforeignassetsorpropertyoritem22Otherincomeonyourtaxreturn(supplementarysection)andyouareliableforMLS,youmaybeentitledtoataxoffsetuptotheamountofMLSyouhavetopayonthelumpsumpayment.Wewillcalculatethetaxoffsetforyou.

IfyouareliableforMLSonlybecauseyourspousehasshownalumpsumpaymentinarrearsatitem19Foreignsourceincomeandforeignassetsorpropertyoritem22Otherincomeontheirtaxreturn(supplementarysection),youmaybeentitledtoataxoffsetuptotheamountofMLSyouhavetopay.Wewillcalculatethetaxoffsetforyou.Youwillneedtoprovideadditionalinformation.PrintSCHEDULEOFADDITIONALINFORMATION–ITEMM2onthetopofaseparatepieceofpaperandexplainthatyourspousereceivedalumpsumpaymentinarrears.Includeyourname,address,taxfilenumberanddetailsofyourspouse.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

When don’t you have to pay the Medicare levy surcharge?YoudonothavetopayMLSifyouwereinanexemptioncategoryforthewholeof2006–07andyoudidnothaveanydependantsor,ifyouhaddependants,theywerealsoallinanexemptioncategoryand/ortheyallhadprivatepatienthospitalcoverforthewholeof2006–07.

FormoreinformationontheexemptioncategoriesfortheMedicarelevy,readpage102.Iftheaboveparagraphappliestoyou,gotoCompletingthisitemonpage107.

YoudonothavetopayMLSifyouhadprivatepatienthospitalcoverforthewholeof2006–07andyoudidnothaveanydependantsor,ifyouhaddependants,theyalsoallhadprivatepatienthospitalcoverforthewholeof2006–07and/ortheywereallinanexemptioncategory.Ifthisappliestoyou,gotoCompletingthisitemonpage107.

YoudonothavetopayMLSforthefullyearifyouhadprivatepatienthealthcoverforpartoftheyearand:n youandyourdependants,ifany,werenotinan

exemptioncategoryatanytimeduring2006–07,andn yourtaxableincomeorcombinedtaxableincomefor

MLSpurposeswasabovetherelevantthreshold.

However,youmustpayMLSforthenumberofdaysyouoranyofyourdependantsdidnothaveprivatepatienthospitalcover.Examples1and2mayhelpyouworkthisout.GotoCompletingthisitemonpage107.

ExAMPLE �: Part-year private patient hospital cover

Jacintaisnotmarriedandhadnodependants.In2006–07shehadataxableincomeforMLSpurposesof$59,000.ShewasnotinaMedicarelevyexemptioncategoryatanytimeduringtheyear.

Jacintatookoutprivatepatienthospitalcoveron15December2006.BecauseJacinta’staxableincomewasabovethesinglesurchargethresholdof$50,000andshedidnothaveprivatepatienthospitalcoverforthefullyearshewillhavetopayMLSforthepartoftheyearthatshedidnothaveprivatepatienthospitalcover.

JacintawillnothavetopayMLSforthetimeshehadprivatepatienthospitalcover–15December2006to30June2007(198days).

Jacintawillwritethenumberofdaysin2006–07thatsheisnotliableforMLS–198–at A itemM2onhertaxreturnandcompletePrivatehealthinsurancepolicydetailsonpage4ofhertaxreturn.


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ExAMPLE 2: Part-year liability

KathyandMarkhavebeenmarriedforanumberofyears.Theyhavethreedependentchildren.Kathy,MarkandtheirchildrenwerenotinaMedicarelevyexemptioncategoryatanytimeduringtheyear.Kathyandthechildrenwerecoveredbyprivatepatienthospitalcoverforthefullincomeyear.Markhadhisnameaddedtothepolicyon10December2006.

KathyandMarkhadacombinedtaxableincomeforMedicarelevysurcharge(MLS)purposesof$115,000.Becausenoteveryonewascoveredforthefullperiod1July2006to9December2006,KathyandMarkarebothliableforMLSforthisperiod–162days.KathyandMarkwouldbothwritethenumberofdaysin2006–07thattheywerenotliableforMLS–203–at A itemM2ontheirtaxreturnsandcompletePrivatehealthinsurancepolicydetailsonpage4oftheirtaxreturns.

When do you have to pay the Medicare levy surcharge?YouwillhavetopaytheMLSforanyperiodduring2006–07thatyouoranyofyourdependantsdidnothaveprivatepatienthospitalcoverandyouwere:n asinglepersonwithnodependantsandhadataxable

incomeforMLSpurposesgreaterthan$50,000,orn amemberofafamilyandthecombinedtaxableincome

forMLSpurposesofyouandyourspouse(ifyouhadoneforthewholeof2006–07)wasabovetherelevantfamilysurchargethresholdshowninthetablebelow.

NOTEIfyourspousediedduringtheincomeyearandyoudidnothaveanotherspousebeforetheendoftheyear,weconsideryoutohavehadaspouseuntiltheendoftheincomeyearandyouretainthebenefitofthefamilysurchargethreshold.

FAMILY SURCHARGE THRESHOLD

Numberofdependentchildren

Surchargeincomethreshold

0–1 $100,000

2 $101,500

3 $103,000

4 $104,500

Morethan4 $104,500plus$1,500foreachadditionalchild

Itispossiblethatboththesingleandfamilysurchargethresholdsappliedtoyouatdifferentperiodsduring2006–07becauseyourcircumstanceschangedduringtheyear–seeWhatifyourcircumstanceschangedduringtheyear?inthenextcolumn.However,ifonlyoneoftheMLSthresholds–singleorfamily–appliedtoyouforthewholeof2006–07and:n yourtaxableincomeorcombinedtaxableincomefor

MLSpurposesdidnotexceedthisthreshold,youarenotliableforMLSforanypartoftheyear.GotoCompletingthisitemonthenextpage.Otherwise,readon

n youandyourspouse’scombinedtaxableincomeforMLSpurposesexceededthefamilysurchargethresholdbutyourowntaxableincomeforMLSpurposesdidnotexceed$16,740,youarenotliableforMLSforanypartoftheyear.(Thisamountreflectsaproposedchangetothelawfor2006–07whichatthetimeofprintingTaxPack 2007hadnotbecomelaw.)However,yourspousemaystillbeliableforMLS.GotoCompletingthisitemonthenextpage.Otherwise,readon

n yourtaxableincomeorcombinedtaxableincomeforMLSpurposesexceededthisthresholdthenyouwillhavetopayMLSforthewholeofthe2006–07incomeyearifforthewholeof2006–07youoranyofyourdependants:– didnothaveprivatepatienthospitalcover,and– werenotinoneoftheMedicarelevyexemption

categoriesonpage102.GotoCompletingthisitemonthenextpage.

What if your circumstances changed during the year?Ifyouhadanewspouseoryouseparatedfromyourspouse,oryoubecameorceasedtobeasoleparent,boththesingleandthefamilysurchargethresholdsmayapplytoyoufordifferentperiods.

ToworkoutifyouwereliableforMLSforanyperiodduring2006–07thatyou:n weresingle(thatis,youhadnospouseandno

dependentchildorchildren)–applythesinglesurchargethresholdof$50,000toyourowntaxableincomeforMLSpurposes

n hadaspouseoradependentchildorchildren–applythefamilysurchargethresholdof$100,000plus$1,500foreachdependentchildafterthefirst,toyourowntaxableincomeforMLSpurposes.

Example3mayhelpyouworkoutifyouwereliableforMLSforanyperiodduring2006–07.


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ExAMPLE 3: Spouse for part of the year

SallyseparatedfromAdrianon12October2006andstayedsingle.NeitherSallynorAdrianhadanydependentchildren.SallyandAdrianweredependantsofeachotherforMedicarelevysurcharge(MLS)purposesonlyfortheperiodtheyweretogether.For2006–07,Adrian’staxableincomeforMLSpurposeswas$45,000andSally’staxableincomeforMLSpurposeswas$60,000.SallyandAdriandidnothaveprivatepatienthospitalcoveratanytimeduring2006–07.

Astheyareconsideredtobeafamilyfortheperiod1July2006to12October2006,theyareeachentitledtothefamilysurchargethresholdof$100,000forthisperiod.Fortheperiod1July2006to12October2006,SallyisnotliableforMLSashertaxableincomeforMLSpurposesof$60,000wasunderthefamilysurchargethreshold.AdrianisalsonotliableforMLSforthisperiodashistaxableincomeforMLSpurposesof$45,000wasalsounderthefamilysurchargethreshold.

Fortheperiod13October2006to30June2007–261days–thesinglepersonsurchargethresholdof$50,000appliestobothofthem.Forthisperiod,AdrianisnotliableforMLSbecausehehadataxableincomeforMLSpurposesof$45,000.Adrianwillwrite365at A itemM2onhistaxreturn.

SallyisliabletopayMLSfortheperiod13October2006to30June2007–261days–becausehertaxableincomeforMLSpurposeswas$60,000.Sallywillwrite104,thenumberofdaysin2006–07thatsheisnotliableforMLS,at A itemM2onhertaxreturn.


WHAT YOU MAY NEEDn YourtaxableincomeforMLSpurposesn Yourspouse’staxableincomeforMLSpurposes,ifyou

hadaspouseforthewholeof2006–07oryourspousediedduringtheyear

n Thenumberofyourdependentchildrenduring2006–07n Thenumberofdaysyouandallyourdependantshad

privatepatienthospitalcoverduring2006–07n Yourprivatehealthinsurancepolicydetailsn ThenumberofdaysyoudonothavetopayMLS

SeeTaxableincomeforMedicarelevysurcharge(MLS)purposesonpage105forthecalculationofyourandyourspouse’staxableincome.

STEP1 Ifyouandallyourdependants(thisincludesyourspouseeveniftheyhadtheirownincome)hadprivatepatienthospitalcoverforthewholeof2006–07,printXintheYESboxattherightof E itemM2onpage5ofyourtaxreturn.MakesureyoualsocompleteyourPrivatehealthinsurancepolicydetails.Seepage98forassistance.Youhavenowfinishedthisquestion.GotoquestionA1.

Ifyouandallyourdependants(includingyourspouse)didnothaveprivatepatienthospitalcoveroronlyhadcoverforpartoftheyear,printXintheNOboxattherightof E initemM2onpage5ofyourtaxreturn.Gotostep2.

STEP2 Writethenumberofdaysduring2006–07thatyoudonothavetopayMLSat A itemM2.

NOTEThenumberofdaysyouhadprivatehealthinsurancecoverwillbeshownonyourhealthfundstatementat A .

IfyoudonothavetopayMLSforthewholeperiod1July2006to30June2007,write365at A .

IfyouhavetopayMLSfor:n thewholeperiod1July2006to30June2007write0

at A n partoftheperiod1July2006to30June2007writethe

numberofdaysyoudonothavetopayMLSat A .

Ifyouhadadependentchildduring2006–07gotostep3.Otherwise,gotostep4.

STEP3 Writethenumberofyourdependentchildrenduring2006–07atD itemM2.

STEP4 Ifyouhadaspouseduring2006–07andyouandallofyourdependants(thisincludesyourspouseeveniftheyhadtheirownincome)werenotcoveredbyprivatepatienthospitalcoverforthefullyear,completeSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.Ifyoucannotfindoutanyoftheamountsrequired,youmaymakeareasonableestimate.

Ifyourspouse’staxableincomeatO onpage7ofyourtaxreturnincludedanypost-June1983elementsofaneligibleterminationpaymentwherethemaximumtaxrateiszero,printSCHEDULEOFADDITIONALINFORMATION–ITEMM2SPOUSE’STAXABLEINCOMEonaseparatepieceofpaperandwritethisamount.Includeyourname,addressandtaxfilenumber.PrintXintheYESboxatTaxpayer’s declarationquestion2aonpage8ofyourtaxreturn.Signyourscheduleandattachittopage3ofyourtaxreturn.

STEP5 IfyouhadprivatepatienthospitalcoverforanypartoftheyearyoumustcompletePrivatehealthinsurancepolicydetails.Seepage98forassistance.

Youhavenowfinishedthisquestion.GotoquestionA1.

DO YOU WANT TO WORK OUT YOUR MEDICARE LEVY SURCHARGE?YoudonothavetoworkoutyourMLSamount.Wewillworkitoutbasedontheinformationyouprovide.Ifyouwouldliketoworkitoutforyourrecords,youcanusetheMedicarelevycalculatoronourwebsiteortheworksheetonpage128.

NOTEIfyoureceivedanyexemptforeignemploymentincome,weuseaspecialformulatoworkouttheamountoftax–includingMLS–youhavetopayonyourtaxableincome.YouwillnotbeabletocalculateyourMLS.Wewilldothiscalculationforyou.


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AdjustmentsQUESTION A�UNDER 18

STEP1 Addupallofthefollowingincomeamountsthatyouhaveshownonyourtaxreturn:n employmentincomen taxablepensionsorpaymentsfromCentrelinkorthe

DepartmentofVeterans’Affairsn acompensation,superannuationorpensionfundbenefitn incomefromadeceasedperson’sestaten incomefrompropertytransferredtoyouasaresultof

another’sdeathorfamilybreakdown,ortosatisfyaclaimfordamagesforaninjuryyousuffered

n incomefromyourownbusinessn incomefromapartnershipinwhichyouwerean

activepartnern netcapitalgainsfromthedisposalofanyoftheproperty

orinvestmentsreferredtoaboven incomefrominvestmentofamountsreferredtoabove.

Althoughyouwillbeshowingthisincometwice,youwillnotbetaxedtwice.

STEP2 Addupallyourdeductionsthatrelatetotheincomefromstep1.(SeetheDeductionssectiononpages36–64.)Takeawaythetotalofthosedeductionsfromthetotalincomeworkedoutatstep1.

STEP3 Writetheamountfromstep2at J itemA1onyourtaxreturn.Donotshowcents.Thisisyourexceptednetincome.Ifyoudidnothaveanyoftheincomelistedinstep1ortheamountfromstep2iszero,write0at J itemA1onyourtaxreturn.

ExAMPLE

Joshuaisaschoolstudentwhoworksparttimeatasupermarket.Heearned$2,200in2006–07andisentitledtoadeductionof$100forprotectiveclothing.Atstep2hetakes$100from$2,200=$2,100.Hewrites$2,100at J itemA1andprintsMintheTYPEbox .

STEP4 PrintthecodeletterMintheTYPEbox attherightof J itemA1.

Theamountyouhaveshownat J itemA1willbetaxedatnormalrates.Ahigherrateoftaxwillapplyforyourotherincome.Formoreinformation,phonethePersonalInfoline(seetheinsidebackcover).

NOTEIfyoureceivedadistributionfromatrust,readquestion12Partnershipsandtrustsonpagess2–6inTaxPack 2007 supplement.

STOPIfyouwereunder18yearsofageon30June2007,youmustcompletethisitemoryoumaybetaxedatahigherratethannecessary.

Were you under �8 years of age on 30 June 2007?

NO GotoquestionA2.

YES Readbelow.

Therearedifferentratesoftaxfordifferenttypesofincome.Tomakesureyouarepayingtherightrate,completethisitem.

Did any of the following apply to you on 30 June 2007?n You:

– wereworkingfulltimeorhadworkedfulltimeforthreemonthsormorein2006–07(ignoringfull-timeworkthatwasfollowedbyfull-timestudy)

and– wereintendingtoworkfulltimeformostorall

of2007–08andnotstudyfulltime.n Youwereentitledtoadisabilitysupportpensionor

arehabilitationallowance,orsomeonewasentitledtoacarerallowancetocareforyou.

n Youwerepermanentlyblind.n Youweredisabledandwerelikelytosufferfromthat

disabilitypermanentlyorforanextendedperiod.n Youwereentitledtoadoubleorphanpensionandyou

receivedlittleornofinancialsupportfromyourrelatives.n Youwereunabletoworkfulltimebecauseofpermanent

mentalorphysicaldisabilityandyoureceivedlittleornofinancialsupportfromyourrelatives.

NO GotoCalculatingyour‘exceptednetincome’.

YES Readon.

Ifyouwereinanyoftheabovecategorieson30June2007,allofyourincomewillbetaxedatnormalrates.

Write0at J itemA1onpage6ofyourtaxreturn.ThenprintthecodeletterAintheTYPEbox attherightof J .Youhavenowfinishedthisquestion.GotoquestionA2.

Calculating your ‘excepted net income’Youneedtocalculatehowmuchofyourincomewillbetaxedatnormalrates.Thisincomeiscalled‘exceptednetincome’.

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QUESTION A2PART-YEAR TAX-FREE THRESHOLD

PART bDid you stop being an Australian resident in 2006–07?

NO GotoCheckthatyouhave...

YES Readbelow.

STEP1 WritethedateyoustoppedbeinganAustralianresidentfortaxpurposesintheDateboxatitemA2onpage6ofyourtaxreturn.

STEP2 Writethenumberofmonthsfrom1July2006towhenyouleftAustralia–countingthemonthduringwhichyouleftAustralia–atN itemA2onyourtaxreturn.

CHECK THAT YOU HAVE . . .ForpartA: writtenintheDateboxthedateyoubecameanAustralianresident

writtenthenumberofmonthsthatyoulivedinAustraliain2006–07.

ForpartB: writtenintheDateboxthedateyouleftAustralia writtenthenumberofmonthsfrom1July2006towhenyouleftAustralia.

In 2006–07 did you:n become an Australian resident orn stop being an Australian resident?

IfyouareunsurereadAreyouanAustralianresident?onpage11–12.

NO GotoSpousedetails–marriedordefactoonpage110.

YES Readbelow.

Thefull-yeartax-freethresholdis$6,000.Thetax-freethresholdmayapplytoyouforonlypartoftheyearandisthereforeaproportionofthefull-yeartax-freethreshold.Weusethefollowinginformationtoworkoutyourtax-freethreshold.

PART ADid you become an Australian resident in 2006–07?

NO GotopartB.

YES Readon.

STEP1 WritethedateyoubecameanAustralianresidentfortaxpurposesintheDateboxatitemA2onpage6ofyourtaxreturn.

STEP2 WritethenumberofmonthsthatyouwereanAustralianresidentin2006–07–countingthefirstmonthduringwhichyoubecameanAustralianresident–atN itemA2onyourtaxreturn.

NOTEIfyourresidencychangedduring2006–07andyoushowedincomeatitem5or6onyourtaxreturn,youmaynotneedtocompletethisitem.PhonethePersonalInfoline.

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STEP3 Ifyouhadaspouseforthefullyear–1July2006to30June2007,printXintheYESboxat L .Ifyoudidnothaveaspouseforthefullyear,printXintheNOboxat L andwritethedatesyouhadaspousebetween1July2006and30June2007atM andN .

STEP4 Do you have any unused 30% child care tax rebate you wish to transfer to your spouse?

Ifyouareeligibleforthe30%childcaretaxrebate,youcantransferyourunused30%childcaretaxrebatetoyourspouse,ifyouandyourspousehavecompletedatransferagreementandyouhaveobtainedyourspouse’sconsenttousetheirtaxfilenumber.SeequestionT6onpages93–4formoreinformation.

NO PrintXintheNOboxat A andgotostep5.

YES PrintXintheYESboxat A andwriteyourspouse’staxfilenumber(TFN)at b .

STEP5 Did you complete item T�, T2, T3, M�, M2 on your tax return or T8 in the supplementary section?

NO Gotostep6.

YES Readbelow.

Thefollowingtableshowswhichdetailsrelatingtoyourspouse’sincomeyouneedtocomplete.

Ifyouhavecompleted: youneedtocomplete:

itemT1 R

itemT2orT3 O , T , P andQ

itemM1( V orW ) O

itemM1( Y only) O ifyouhadaspouseon30June2007

itemM2andyouprintedXintheNOboxat E

O , T ,U and S ifyouhadaspouseforallof2006–07oryourspousediedduringtheyear

itemT8 O and S

LabelO WriteatO yourspouse’s2006–07taxableincome.Donotshowcents.Ifthisamountiszero,write0.Thisamountcanusuallybeobtainedfromyourspouse’staxreturnornoticeofassessment.Ifyourspousedoesnothavetolodgeataxreturn,pleaseprovideanestimateoftheirtaxableincome.

YoumustcompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturnifyouhadaspouseduring2006–07,andn youcompletedanyoftheitemslistedbelow,orn youconsentedtousepartorallofyour2007taxrefundto

repayyourspouse’sFamilyAssistanceOffice(FAO)debt.

DEFINITIONYourspouseisyourhusbandorwifetowhomyouarelegallymarried,orapersonwholiveswithyouonagenuinedomesticbasisasyourhusbandorwife.UnderAustralianlawyourhusbandorwifecannotbethesamesexasyou.

Did you complete any of the following items?T1 Spouse(withoutdependentchildorstudent)taxoffsetT2 SeniorAustralianstaxoffsetT3 PensionertaxoffsetT6 30%childcaretaxrebateM1 MedicarelevyreductionorexemptionM2 Medicarelevysurcharge–andyouprintedXinthe

NOboxat ET8 Superannuationcontributionsonbehalfofyour

spouse(onthetaxreturnsupplementarysection)

NO Youdonotneedtocompletethissection.GotoChecklist–taxreturnpages1–8onpage112.

YES Readbelow.

WHAT YOU MAY NEEDn Yourspouse’sPAYG payment summary – individual

non-businessn Therelevantdistributionstatements,ifany,fortrust

incomeandfamilytrustdistributiontax

YOU NEED TO KNOWTheinformationonthispagewillhelpyoucompleteSpousedetails–marriedordefactoonpages6–7ofyourtaxreturn.

Youmayhavehadmorethanonespouseduring2006–07.Thedetailsyouusetocompletethissectionshouldbethedetailsforyourspouseon30June2007,oryourlatestspouse.

COMPLETING THIS SECTION

STEP1 Printyourspouse’snameintheboxesprovided.

STEP2 Writeyourspouse’sdateofbirthat K andprintXintherelevantboxforyourspouse’ssex.

SDSpouse details – married or de facto

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Label T Writeat T yourspouse’sshareoftrustincomeonwhichthetrusteeisassessedundersection98oftheIncome Tax Assessment Act 1936ifitisnotalreadyincludedinyourspouse’staxableincome.Donotshowcents.Ifthisamountiszero,write0.Checkthetrustdistributionstatements.

LabelU WriteatU distributionstoyourspouseonwhichfamilytrustdistributiontaxhasbeenpaidwhichyourspousewouldhavehadtoshowasassessableincomeifthetaxhadnotbeenpaid.Donotshowcents.Ifthisamountiszero,write0.Checkthetrustdistributionstatements.

Label S Addupthereportablefringebenefitsamountsshownonyourspouse’spaymentsummariesandwritethetotalat S .Donotshowcents.Ifthisamountiszero,write0.

Label P Writeat P theamountofAustralianGovernmentpensionsandallowancesthatyourspousereceivedin2006–07(notincludingexemptpensionincome).Donotshowcents.Ifthisamountiszero,write0.AustralianGovernmentpensionsandallowancesarelistedonpage24.

LabelQ WriteatQ theamountofanyexemptpensionincomethatyourspousereceivedin2006–07.Makesureyouonlyincludeyourspouse’sexemptpensionincome.Donotshowcents.Ifthisamountiszero,write0.Exemptincomeislistedonpages13–14.

LabelR WriteatR yourspouse’s2006–07separatenetincome.Donotshowcents.Ifthisamountiszero,write0.Seepages69–70forinformationonseparatenetincome.

Ifyoucannotfindoutanyoftheamountsrequired,youmaymakeareasonableestimate.

STEP6 Do you consent to use part or all of your 2007 tax refund to repay your spouse’s Family Assistance Office (FAO) debt?

OnlyanswerYEStothisquestionifallofthefollowingapplytoyou:n youwerethespouseofanFTBclaimantorthespouse

ofachildcarebenefitclaimanton30June2007andyourincomewastakenintoaccountintheirclaim

n yourspousehasgivenyouauthoritytoquotetheircustomerreferencenumber(CRN)onyourtaxreturn–ifyourspousedoesnotknowtheirCRN,theycancontacttheFAO

n yourspousehasadebtduetotheFAOorexpectstohaveaFAOdebtfor2007

n youexpecttoreceiveataxrefundfor2007,andn youconsenttousepartoralloftherefundtorepay

yourspouse’sFAOdebt.

NO PrintXintheNObox.Youhavefinishedthissection.GotoChecklist–taxreturnpages1–8onthenextpage.

YES PrintXintheYESbox.Youmustcompleteyourspouse’sCRNat Z ,andsignanddatetheconsentforFTBpurposes.


Information

CHECKLIST – TAX RETURN PAGES 1–8

attachedcopiesofthefollowingtopage3ofyourtaxreturn:– anyeligibleterminationpayment(ETP)payment

summaries,lettersorreasonablebenefitslimits(RBL)determinations,and

– otherattachmentsasinstructedbyanysectionorquestioninTaxPack 2007

completedSpousedetails–marriedordefactoifrequired.Thisincludesifyouwanttotransferyourunused30%childcaretaxrebatetoyourspouse

completedyourspouse’sdetailsandprovidedyoursignatureonpage7ofyourtaxreturnifyouhaveconsentedtooffsetpartorallofyourtaxrefundagainstyourspouse’sFamilyAssistanceOfficedebt

ifyouwereunder18yearsofageasof30June2007,completeditemA1–thisiscompulsory(ifitisincomplete,youmaybetaxedatahigherratethannecessary)

readSelf-assessment–it’syourresponsibilityonpage10

read,completed,signedanddatedtheTaxpayer’s declaration

attachedpages9–12ofyourtaxreturn(supplementarysection)topage8

attachedyourBaby bonus claim 2007 tothebackofyourtaxreturnifyouareclaimingthebabybonusforthefirsttime

attachedyourFamily tax benefit (FTB) tax claim 2007tothebackofyourtaxreturnifyouareclaimingFTBwithyourtaxreturn

keptcopiesofyourtaxreturn,allattachmentsandrelevantpapersforyourownrecords.

UsethischecklisttomakesureyourtaxreturniscompletebeforeyoulodgeitwiththeTaxOffice.Toavoidanydelayinprocessing,pleaseusethepre-addressedenvelopeprovidedwithyourTaxPack 2007.Ifyoudon’thaveapre-addressedenvelope,seebelowfortheaddresstouse.

CHECK THAT YOU HAVE . . . writtenyourtaxfilenumber filledinallyourpersonaldetails filledintheappropriatedetailsforelectronicfundstransferifyouwanttohaveyourrefundpaiddirectlyintoafinancialinstitutionaccount

filledinthecodeboxes–ifyouwereaskedtodoso–atitems3, I ,TOTALINCOMEORLOSS,D1,D3,D4,SUBTOTAL,TAXABLEINCOMEORLOSS,T1,T2,T3,T7,M1andA1

completeditemM2–thisiscompulsoryforalltaxpayers

ifrequired,completedpages9–12ofthetaxreturn(supplementarysection)andworkedthroughthechecklistonpages63inTaxPack 2007 supplement

writtentotalsat: TOTALTAXWITHHELD TOTALINCOMEORLOSS TOTALDEDUCTIONS SUBTOTAL TAXABLEINCOMEORLOSS TOTALTAXOFFSETS

LODGING bY MAILTomakesurewecanprocessyourtaxreturnasquicklyaspossible,usethepre-addressedenvelopeenclosedwithyourcopyofTaxPack 2007.Theaddressshownonitisourofficiallodgmentaddress.Ifyoupostyourtaxreturntoanyofourotheraddressesyoumayexperiencedelays.

Onlyusethisenvelopeforlodgingyourtaxreturn(anditsattachments)oranon-lodgmentadvice.DonotuseittosendcorrespondenceintendedforotherTaxOfficelocations(thesearelistedwiththeiraddressesonpage131).

IfyoudidnotreceiveanenvelopewithyourTaxPack 2007,orhavemisplacedit,postyourtaxreturninabusiness-sizedenvelopeto:

AustralianTaxationOfficeGPOBox9845INYOURCAPITALCITY

DonotreplacethewordsINYOURCAPITALCITYwiththenameofyourcapitalcityanditspostcode–becauseofaspecialagreementwithAustraliaPost,theyarenotneeded.

LODGING FROM OVERSEASYoucanlodgeyourtaxreturnonlineusinge-tax–gotowww.ato.gov.auformoreinformation.Mostrefundsareissuedwithin14days.

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Itwillassistusifyoucrossoutthebarcodeabovetheaddress.

NOTEBeforeyoulodgeyourtaxreturn,makesureyouhavereadSelf-assessment – it’s your responsibilityonpage10.

Ifyourealisethatyoudidnotincludesomethingonyourtaxreturnthatyoushouldhave,orthereissomeothererroronyourtaxreturn,youneedtocorrectitassoonaspossiblebyrequestinganamendment.

Torequestanamendment,writealettertotheTaxOffice.

Intheletterprovideyourname,address,phonenumber,taxfilenumberandinformationaboutwhatyouwanttoamend.Include:n theyearshownonthetaxreturnyouwanttoamend–

forexample,2007n thetaxreturnitemnumberanddescriptionaffectedby

thechangen theamountofincomeordeductionstobeaddedor

takenaway,ifrelevantn theamountoftaxoffsetstobeincreasedordecreased,

ifrelevantn theclaimtypecode–ifoneappliestotheitemyou

arechangingn anexplanationofwhyyoumadethemistaken adeclarationasfollows:‘Ideclarethatalltheinformation

Ihavegiveninthisletter,includinganyattachments,istrueandcorrect.’

n thedate,andn yoursignature.

Itisveryimportantthatyourletterexplainswhyyoumadethemistake,sothatwecanassessanypenaltyorinterestchargecorrectly.Makesureyouattachtoyourletteranyadditionalinformationthatappliestotheitembeingchanged.Post your letter and attachments to the tax office that sent your notice of assessment.Keepacopyforyourrecords.Donotsendanothertaxreturnunlessweaskyouto.

Example of a letter requesting an amendment

RileyFinn 3WoodSt,Collingville1234

Taxfilenumber:123456789Phone:(01)23456789

DearDeputyCommissionerofTaxationPleaseamendmy2007taxreturn.Myemployersentmealetteradvisingthatmypaymentsummarywasincorrect.Pleaseincreasemyincomeatitem1by$1,450andalsoincreasemytaxwithheldby$368.Acopyoftheletterisattached.IdeclarethatalltheinformationIhavegiveninthisletter,includinganyattachments,istrueandcorrect.

RileyFinn20September2007

IF YOU MADE A MISTAKE ON YOUR TAX RETURN

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Wewillnotimposeapenaltyiftheamendmentreducestheamountoftaxyouhavetopay–forexample,whereyouincreaseyourdeductionsortaxoffsets.

Ifyouvoluntarilytellusthatyoumadeamistakeandanamendmentwillresultinyoupayingmoretax,theamountofanypenaltywill,inmostcases,bereduced.

IfyoumadeamistakebecausewestatedthelawincorrectlyinTaxPack 2007,wewon’tchargeyouapenaltyorinterest,oraskyoutopaytheextratax.

IfanyotherinformationinTaxPack 2007isincorrectandasaresultyoudonotpayenoughtax,wemayaskyoutopaytheextratax.However,wewillnotchargeyouapenaltyorinterest.

IfouradviceinTaxPack 2007ismisleadingandyoumakeamistakeasaresult,wemuststillapplythelawcorrectly.Ifthatmeansyouoweusmoney,wemustaskyoutopayit.However,wewillnotchargeyouapenaltyorinterestifyouactedreasonablyandingoodfaith.

Ifyoumakeanhonestmistakewhenyoutrytofollowouradviceandyouoweusmoneyasaresult,wewillnotchargeyouapenalty.However,wewillaskyoutopaythemoney,andwemayalsochargeyouinterest.

Ifcorrectingthemistakemeansweoweyoumoney,wewillpayittoyou.Wewillalsopayyouanyinterestyouareentitledto.

Is there any time limit for you to request an amendment?Ifyouareeligibleforatwo-yearamendmentperiod,youmustlodgeyourrequestforanamendmentwithintwoyearsofthedatetheCommissionerissuedyournoticeofassessment.Ifafour-yearamendmentperiodappliestoyou,youmustlodgeyourrequestforanamendmentwithinfouryears.Seepage10formoreinformation.


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PAYING YOUR TAX DEBT

WHERE DO YOU PAY YOUR TAx DEbT?WedonotacceptpaymentsoverthecounteratTaxOfficeshopfronts.Informationaboutpaymentoptionsisonthebackofyournoticeofassessment.Ifyouneedmoreinformation,phone1800815886(8.00amto6.00pmAustralianEasternStandardordaylight-savingtime).

TheTaxOfficedoesnotacceptpaymentbycreditcard.

DO YOU HAVE TO PAY YOUR TAx IF YOU DON’T AGREE WITH THE ASSESSMENT?Youmustpayyourtaxontimeevenifyouhavelodgedanobjectionoraskedforanamendment.Iftheobjectionisdecidedinyourfavour,youwillnormallyreceivearefundoftheamountyouhaveoverpaidplusinterest.

WHAT IF YOU CANNOT PAY YOUR TAx DEbT ON TIME?Ifyoucannotpayyourtaxdebtontime,contactusimmediatelyon131142todiscussyoursituation.Dependingonyourcircumstances,youmaybeableto:n deferthepayment,orn enterintoanarrangementtopaybyinstalments.

Insomecircumstancesyoumayneedtoprovidewrittendetailsofyourfinancialposition,includingastatementofyourassetsandliabilitiesanddetailsofyourincomeandexpenditure.

Wealsoneedtounderstandwhatstepsyouhavetakentoobtainfundstopayyourtaxandwhatstepsyouaretakingtomakesureyoupayfuturetaxdebtsontime.

Ifweagreetodeferthetimeforpayment,GICwillnotapplyuntilafterthedeferreddateforpayment.Alternatively,ifweallowyoutopaybyinstalments,wewillchargeyouGIContheoutstandingbalancefromtheoriginalduedate.

Youcanclaimanyinterestwechargeasataxdeductionintheincomeyearinwhichitisincurred.Inadditionyoucanrequestaremissionofallorpartoftheinterest.Phoneuson131142ifyouwouldliketorequestaremission.

WHAT IF PAYMENT WILL CAUSE YOU HARDSHIP?Serioushardshipexistswhenyouareunabletoprovidefood,accommodation,clothing,medicaltreatment,educationorothernecessitiesforyourself,yourfamily,orotherpeopleforwhomyouareresponsible.Ifyouaresufferingfromhardship,youcanapplyforareleasefrompaymentofyourtaxdebt.Formoreinformationandanapplicationform,phoneuson131142.

HOW DO YOU KNOW HOW MUCH YOU HAVE TO PAY?Yournoticeofassessmentwilltellyouhowmuchtaxyouhavetopay,ifany,andwhenyoumustpaytoavoidbeingchargedinterestforlatepayment.

WHEN DO YOU PAY YOUR TAx DEbT?Youmustlodgeyourincometaxreturnby31October2007,unlessyouhavebeengivenadeferraloftimetolodge,oryourtaxreturnisbeingpreparedbyaregisteredtaxagent.Ifyoudidnotuseataxagentlastyearbutintendtodosothisyear–oryouwillbeusingadifferenttaxagentthisyear–makesureyoucontacttheagentbefore31October2007.

Ifyoulodgeyourtaxreturnontime,anytaxpayablewillbeduethelaterof:n 21daysafteryoureceiveyournoticeofassessment,orn 21daysafteryourtaxreturnwasduetobelodged.

Ifyou:n prepareyourowntaxreturnanditislodgedby

31October2007,anytaxpayablewillbeduenoearlierthan21November2007

n havecontactedtheTaxOfficeandbeengivenadeferraloftimetolodgeyourtaxreturn,anytaxpayablewillbeduenoearlierthan21daysafterthedeferreddateforlodgment.

Ifyoudonotlodgeyourtaxreturnontime,thelawtreatsanytaxpayableasbeingdueforpayment21daysafteryourtaxreturnwasdueforlodgment,irrespectiveofthedateyoulodgeditorareadvisedofthedebt.

Generalinterestcharge(GIC)willaccrueonanyamountthatisnotpaidbytheduedateforpayment.

WHAT IF YOUR TAx DEbT IS INCREASED bECAUSE YOUR ASSESSMENT IS AMENDED? Whereyourassessmentisamendedandthetaxpayableincreased,theduedateforpaymentoftheadditionaltaxis21daysaftertheCommissionergivesyournoticeofamendedassessmenttoyou.

Youwillalsobeliabletopayashortfallinterestcharge(SIC)fromtheduedateofyouroriginalassessmenttothedaybeforetheissueofthenoticeofamendedassessment.WhereyouroriginalassessmentdidnothaveaduedatebecausetherewasnotaxpayabletheSICiscalculatedfromthedaytaxwouldhavebeenpayableiftherehadbeenanytaxdue.TheSICwillalsobedue21daysaftertheCommissionergivesyournoticeofamendedassessmenttoyou.GICwillcontinuetoapplytoanyunpaidamountoftheamendedassessmentandtheSICaftertheduedatefortheamendedassessment.

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YOUR NOTICE OF ASSESSMENT

ReconciliationWhenyouractualfamilyincomeisknown,theFAOwillmakesureyouhavebeenpaidthecorrectamountofFTB.Ifyouandyourspouse(ifyouhaveone)arerequiredtolodgeataxreturn,theTaxOfficewillsendyouractualincomedetailstotheFAOforcalculationofyourcorrectFTBentitlement.TheFAOwillcomparetheamountofFTByoureceivedthroughouttheyearwiththeamountyouareentitledto,basedonyourandyourspouse’sactualincome.Ifyourspouse(ifyouhaveone)isnotrequiredtolodgeataxreturn,youneedtoadvisetheFAO.

IfyouwerepaidlessFTBthanyouareentitledto,yourpaymentmaybetoppedup.Thetop-upwillbeincludedinyourassessmentor,ifthatisnotpossible,theFAOwillpayittoyoudirectly.Yourtop-upmaybeusedtopayanytaxdebtyouhave.

IfyouhavebeenpaidtoomuchFTB,theFAOwillrecoveranyamountyoushouldnothavereceived.Atreconciliation,theFAOmayalsorecoveranydebtyoumayhavefromanoverpaymentinrespectofapreviousyear.Yourtaxrefund–oryourspouse’siftheygaveconsent–canbeusedtorecovertheseamountsdirectly.

IfyoureceivedFTBdirectlyfromtheFAO–forexample,asafortnightlypayment–andyournoticeofassessmentdoesnotshowanFTBreconciliationresult,donotbeconcerned.ThereasonmaybethattheFAOwasunabletoreconcileyourFTBpaymentbythetimeweissuedyournoticeofassessment.IfyouhaveanFTBoverpaymentorareentitledtoatop-uptheFAOwillcontactyoudirectly.

NOTETheFAOwilldetermineyourfinalentitlementtoFTB.Ifthispaymentisnotshownonyournoticeofassessment,theFAOwillpayyouatalatertime.

IfyouareunsureaboutanFTBamountormessageonyournoticeofassessment,phone136150orvisittheFAO.

Child Support AgencyIfyouhaveoutstandingliabilitiestotheChildSupportAgency(CSA),yourtaxrefundcanbeusedtomeetthem;incertaincircumstancesyourFTBentitlementcanalsobeused.

WHAT IS YOUR NOTICE OF ASSESSMENT?Thenoticeofassessmentwesendyouisanitemisedaccountoftheamountoftaxyouoweonyourtaxableincomebasedontheinformationprovidedonyourtaxreturn.Italsocontainsotherdetailsthatarenotpartoftheassessment,suchastheamountofcreditfortaxyouhavealreadypaidthroughtheincomeyear.

Whenyoureceiveyournoticeofassessment,makesurethateverythingiscorrect.

Formoreinformationabouttheitemsonyournoticeofassessment,visitourwebsitewww.ato.gov.au/individualsorphoneourinfolinesaslistedontheinsidebackcover.

Unlessyouareusingelectronicfundstransfer(EFT),thebottomsectionofyournoticeofassessmentwillbeeitheryourrefundchequeor,ifyouowetax,yourpaymentadvice.

Notethatifyouhaveanyotheroutstandingtaxdebts,childsupportdebts,familytaxbenefit(FTB)debtsorCentrelinkdebts,thesemaybedeductedfromanyrefundyouareentitledto.Ifthishappens,wewillgiveyoutherelevantdetails.

NOTEYoushouldreceiveyournoticeofassessmentwithinsixweeksofthedateyoulodgeyourtaxreturn(seeHowlongdoyouhavetowaitforyourassessment?onthenextpage).

Underthelawwehavesometimeduringwhichwecanreviewyourtaxreturn.Duringthistime,wemayincreaseordecreasetheamountoftaxpayable(orrefundable)asshownonyourinitialnoticeofassessment.Thisreviewperiodisnormallytwoyearsbutincertaincircumstancesitcanbefouryears(seeSelf-assessment–it’syourresponsibilityonpage10).

Family tax benefit and your notice of assessmentIfyoulodgedanFTBclaimwithyourtaxreturn,yournoticeofassessmentwillincludeinformationaboutyourFTBentitlement.IftheFamilyAssistanceOffice(FAO)wasunabletoprocessyourentitlementintime,itwillbeindicatedonyournoticeofassessment.Ifyouhaveataxdebt,yourFTBentitlementmaybeusedtowardspayingthatdebt.IfyouhaveanFAOdebt(whichincludesFTBandchildcarebenefitdebts),yourtaxrefund(includingFTBentitlement)maybeusedtowardspayingthatdebt.

IfyoureceivedFTBdirectlyfromtheFAO–forexample,asafortnightlypayment–yournoticeofassessmentmayincludeinformationaboutyourreconciliationresult.


HOW LONG DO YOU HAVE TO WAIT FOR YOUR ASSESSMENT?OurcurrentstandardforprocessingtaxreturnspostedtotheTaxOfficeissixweeks.Ifyoulodgedyourtaxreturnonlineusinge-tax,ourstandardprocessingtimeistwoweeks.

However,ifyoureceivedafamilytaxbenefit(FTB)paymentfromtheFamilyAssistanceOffice(FAO),oryouclaimeditfromtheTaxOffice,youre-taxreturnmaytakelongertoprocess.ThisadditionaltimeisnecessarytomakesurethatyouarepaidthecorrectamountofFTB.

Ifyousentyourtaxreturnbyordinarypost,waitsevenweeksbeforephoningtocheckonourprogresswithyourtaxreturn.Ifyoulodgedonlineusinge-tax,waitthreeweeks.

Afterthattimeyoucanusetheautomatedself-helpserviceon132865(available24hoursaday,everyday)tochecktheprogressofyourtaxreturn.Youwillneedtokeyinyourtaxfilenumber(TFN)usingyourphonekeypad.

CAN YOU GET YOUR REFUND FASTER?Wemaybeabletohelpyougetaquickerrefundifyouareinseriousfinancialhardship.Seriousfinancialhardshipmeansyouareunabletoprovidefood,accommodation,clothing,medicaltreatment,educationorothernecessitiesforyou,yourfamilyorotherpeopleforwhomyouareresponsible.

PhonethePersonalInfoline(seetheinsidebackcover)beforeyoulodgeyourtaxreturntofindoutifyouareeligibleforthisfasterservice.Haveonhandyourtaxreturn,TFN,pensionorbenefitstatement,paymentsummariesandotherpapersthatshowyouareinseriousfinancialhardship.

WHAT IF YOU THINK YOUR ASSESSMENT IS WRONG?Checkallthedetailsonyournoticeofassessmentwiththoseonyourtaxreturn.Ifyouthinkthereisaproblem,phonethePersonalInfoline(seetheinsidebackcover)forhelp.Youwillneedyournoticeofassessmentand,ifpossible,acopyofyourtaxreturn.

WHAT IF YOU STILL THINK YOUR ASSESSMENT IS WRONG?Youcanwritetousandobjecttoyourassessment.Ifyouwanttoobjecttoyourassessment,seethefactsheetonhowtolodgeanobjectiononourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

Generally,youmustlodgeyourobjectionwithinthetwo-yearorfour-yearamendmentperiod,whicheverappliestoyou.Formoreinformation,visitwww.ato.gov.au/notices

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COLLECTING YOUR TAx INFORMATIONTheTaxOfficeisauthorisedbytheTaxation Administration Act 1953 torequestyoutoquoteyourtaxfilenumber(TFN).ItisnotanoffencenottoquoteyourTFN.However,yourassessmentmaybedelayedifyoudonotquoteyourTFN.

TheTaxOfficeisalsoauthorisedbytheIncome Tax Assessment Act 1936,theIncome Tax Assessment Act 1997 andtheA New Tax System (Family Assistance) (Administration) Act 1999 toaskfortheotherinformationonyourtaxreturn.Weneedthisinformationtohelpustoadministerthetaxlaws.

WHO ELSE CAN WE GIVE YOUR TAx INFORMATION TO?Wecangiveyourtaxinformationtosomegovernmentagenciesspecifiedintaxlaw,forexample:n benefitpaymentagenciessuchasCentrelink,the

DepartmentofEducation,ScienceandTraining,andtheDepartmentofFamilies,CommunityServicesandIndigenousAffairs

n lawenforcementagenciessuchasstateandfederalpolicen otheragenciessuchastheChildSupportAgency(CSA)

andtheAustralianBureauofStatistics.

Thisdisclosureisusuallytocheckeligibilityforgovernmentbenefits,forlawenforcementpurposesorforcollectingstatistics.Anyfurtheruseofyourinformationbytheseagenciesisalsocontrolledbylaw.Wecanalsodiscloseyourinformationinperformingourdutiesunderthetaxlaws.

Otherwise,wecangiveyourtaxinformationonlytoyouortosomeoneyouhaveappointedtoactforyou.

Reserve bank of AustraliaIfyoureceivearefundchequewithyournoticeofassessment,weprovidedetailsofyourrefundtotheReserveBankofAustraliatoassistinclearingyourcheque.

Child Support Agency clientsTheCSAmayusetheinformationyougiveustoassessorcollectchildsupport.

HOW DO WE PROTECT YOUR TAx INFORMATION?ThetaxlawscontainsecrecyprovisionsthatprohibitanyofficeroftheTaxOffice(includingemployeesandcontractors)oranyothergovernmentagencyfromimproperlyaccessing,recordingordisclosinganyone’staxinformation.Theseprovisionsallowofficerstodisclose

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informationinperformingtheirdutiesandincertainotherspecifiedcircumstances.Apersoncanbefinedupto$11,000andsentencedtotwoyearsinprisonforbreakingtheseprovisions.

Inaddition,thePrivacy Act 1988 protectspersonalinformationheldbyfederalgovernmentagencies.Italsoprotectstaxfilenumbers(TFNs),nomatterwhoholdsthem.

ASKING ABOUT YOUR ASSESSMENT

If you phoneWhenyouphonewewillaskyoutoprovideyourTFNandotherinformationtoconfirmyouridentity–forexample,detailsfromarecentnoticeofassessment.

Ifyouwantarepresentativetophoneusonyourbehalf,youmustfirstauthoriseus,inwriting,todiscussyourinformationwiththem.Whenthepersoncontactsus,theywillneedtoquoteyourwrittenauthorityandprovideinformationtoprovetheiridentity.

Thisrequirementistoprotectyourprivacy.

If you writeQuoteyourTFN,yourfullnameandyouraddress.Provideyourphonenumberifitisconvenient.Remembertosigntheletter.

WHO CAN ASK YOU FOR YOUR TFN?OnlycertainpeopleandorganisationscanaskyouforyourTFN.Theseincludeemployers,somefederalgovernmentagencies,trusteesforsuperannuationfunds,payersunderthepayasyougo(PAYG)system,highereducationinstitutions,theCSAandinvestmentbodiessuchasbanks.YoudonothavetogiveyourTFNbuttheremaybeconsequencesifyoudonot–forexample,ifyouareapplyingforagovernmentbenefitandyoudonotgiveyourTFN,youmaynotbepaidthebenefit.

AUSTRALIAN BUSINESS REGISTERWe are authorised by theA New Tax System (Australian Business Number) Act 1999 to collect certain information relating to your business.Wemayusethebusinessdetailsyouprovidedonyourtaxreturntoupdateyourtradingname,industryclassification,statusofbusiness,fundwind-update,publicofficer(ifacompany)andmainbusinessaddressontheAustralianBusinessRegister(ABR).NotethatyoumustadvisetheRegistraroftheABRwithin28daysofanychangestoyourregistereddetailsincludingyourcurrentpostaladdressfortheABR.WemayalsousepostaladdressdetailsfromyourincometaxreturnifwecannotcontactyouthroughyourABRpostaladdress.

Tohelpbusinessandgovernmentinteractmoreeasily,undercertaincircumstances,theRegistrarmaydiscloseinformationprovidedbytheentitytootherCommonwealth,state,territoryandlocalgovernmentagencies.

YoucanfinddetailsofthegovernmentagenciesregularlyreceivinginformationfromtheAustralianBusinessRegister(ABR)ontheinternetatwww.abr.gov.au oryoucanphone13 28 66 between8.00amand6.00pmMondaytoFridayandaskforalistofagenciestobeemailed,faxedorpostedtoyou.

TheseagenciesmayuseABRinformationforpurposesauthorisedbytheirlegislationorforcarryingouttheirotherfunctions.Examplesofpossibleusesincluderegistration,reporting,compliance,validationandupdatingofdatabases.

TheRegistraroftheABRrequiresallgovernmentagenciestodetailtheirspecificuseofABRinformationandsignamemorandumofunderstanding(MOU)beforetheycanaccessABRinformationorinteractwiththeABR.TheMOUsetsoutacommonunderstandingbetweenpartiesandensurestheRegistrarhasconsideredtheappropriateuseofABRinformationundertheA New Tax System (Australian Business Number) Act 1999.

Inadditiontothepubliclyavailableinformation,theseagenciescanalsoaccessthe:n nameoftheentity’sassociates,suchaspublicofficer,

directorortrusteen entity’saddressforserviceofnoticesn entity’sprincipalplaceofbusinessn entity’semailaddress,andn AustralianandNewZealandStandardIndustrial

Classification(ANZSIC)codeforthebusinessconductedbytheentity.

DO YOU NEED MORE INFORMATION?Ifyouneedmoreinformationabouthowthetaxlawsprotectyourpersonalinformationorhaveanyconcernsabouthowwehavehandledyourpersonalinformation,phonethePersonalInfolineon13 28 61.

Ifyouareunabletoresolveyourconcernswithusabouthowwehavehandledyourpersonalinformation,youcancontacttheOfficeofthePrivacyCommissionerbyvisitingtheirwebsiteatwww.privacy.gov.auorbyphoningtheirprivacyhotlineon1300 363 992.

FREEDOM OF INFORMATIONTheFreedom of Information Act 1982 (FOIAct)givesyoutherighttoseeyourtaxreturnandotherdocuments–forexample,paymentsummariesandnoticesofassessment.Insomecircumstancesthisinformationmaybeprovidedfreeofcharge,butusuallythereisachargetocoverthetimeandexpenseinvolvedingettingtheinformationforyou.WesuggestyouphonethePersonalInfolineon13 28 61beforeyouaskforinformationundertheFOIAct.

Keep copies of your tax returns, as a request for a copy from us may involve a charge.

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It is important that you are aware of both your rights and your obligations when dealing with us.Whenwemakeadecisionaboutyourtaxaffairs,wewilltellyouaboutyourrightsandobligationsinrelationtothatdecision.Wewillgiveyoucontactdetailsincaseyouhaveanyqueriesorneedmoreinformation.

Wealsohaveacharterwhichsetsoutthewayweconductourselveswhendealingwithyou.Thereisinformationunder‘Yourrights’onourwebsite.SeetheinsidebackcovertofindouthowtogetaprintedcopyoftheTaxpayers’ charter – what you need to know(NAT2548).

YOUR RIGHT TO COMPLAIN

Ifyouaredissatisfiedwithaparticulardecisionwehavemade,orwithoneofourservicesoractions,youhavetherighttocomplain.

Werecommendthatyoufirsttrytoresolvetheissuewiththetaxofficeryouhavebeendealingwith(orphonethenumberyouhavebeengiven).

Ifyouarenotsatisfied,talktothetaxofficer’smanager.

Ifyouarestillnotsatisfied,phoneourcomplaintslineon132870.

Youcanalsomakeacomplaintby:n writingto: Complaints AustralianTaxationOffice LockedBag40 DandenongVIC3175n lodgingonlineatwww.ato.gov.aun sendingaFREEFAXon1800060063.

THE COMMONWEALTH OMbUDSMANIfyouarenotsatisfiedwithourdecisionsoractions,youcanraisethematterwiththeCommonwealthOmbudsman.Beforelookingintoamatterforyou,theCommonwealthOmbudsmanmayaskyoutogotoourcomplaintsareaifyouhavenotalreadydoneso.

TheCommonwealthOmbudsman’sofficecaninvestigatemostcomplaintsrelatingtotaxadministrationandmayrecommendthatweprovideasolutionorremedytoyourproblem.Investigationsareindependent,private,informalandfreeofcharge.

YoucancontacttheCommonwealthOmbudsman’sofficeby:n visitingtheirwebsiteatwww.ombudsman.gov.aun phoning1300362072n visitingtheofficenearesttoyou(thereareofficesinall

Australiancapitalcities),orn writingto: TheCommonwealthOmbudsman GPOBox442 CanberraACT2601

THE PRIVACY COMMISSIONERThePrivacyCommissionerreceivescomplaintsunderthePrivacy Act 1988 andtaxfilenumberguidelines.YoucancontactthePrivacyCommissionerby:n visitingtheirwebsiteatwww.privacy.gov.aun phoningtheprivacyhotlineon1300363992,orn writingto: ThePrivacyCommissioner GPOBox5218 SydneyNSW2001

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INCOME YoushowthisamountatTOTALINCOMEORLOSSonpage2ofyourtaxreturn.

minus

ALLOWAbLE DEDUCTIONSYoushowthisamountatTOTALDEDUCTIONSonpage3ofyourtaxreturn.IfyoualsoshowanamountatL1,wewilltakethisamountawayfromyourincometoworkoutyourtaxableincome.

equals

TAxAbLE INCOMEYoushowthisamountatTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn.WeusethisamounttoworkouttheTAXONTAXABLEINCOME.

TAx ON TAxAbLE INCOMEIfyouwanttoestimatethetaxonyourtaxableincome,usethecalculatoronourwebsiteorgotopages120–2.

minus

TAx OFFSETS

YoushowmosttaxoffsetsatTOTALTAXOFFSETSonpage4ofyourtaxreturn.Ifyouareentitledtoalowincome,beneficiary,seniorAustralians,pensioner,matureageworker,orMedicarelevysurchargelumpsumtaxoffset,oratransferofunused30%childcaretaxrebatefromyourspouse,weworkitoutforyou.Youcanestimatesometaxoffsetsforyourselfusingthecalculatorsonourwebsiteorgotopages123–5.

Refundabletaxoffsets,ontheotherhand,areincludedbelowintheamountforTAXCREDITSANDREFUNDABLETAXOFFSETS.

equals

NET TAx PAYAbLE

plus

HELP AND SFSS REPAYMENTS

IfyouhaveaHigherEducationLoanProgramme(HELP)debtorStudentFinancialSupplementScheme(SFSS)debt,weworkoutyourrepayment.Ifyouwanttoestimateit,usethecalculatorsonourwebsiteorgotopages128–9.

plus

MEDICARE LEVY AND SURCHARGE

WeworkouttheseamountsfromitemsM1andM2onyourtaxreturn.Ifyouwanttoestimatethem,usethecalculatoronourwebsiteorgotopages125–8.

minus

TAx CREDITS AND REFUNDAbLE TAx OFFSETS

Weworkouttheseamountsfromtaxyoupaidduringtheyearandanyrefundabletaxoffsetsthathavenotalreadybeencreditedorrefunded.Thebabybonus(itemT7),privatehealthinsurancetaxoffset(itemT5)andfrankingcredits(item11or12)arerefundabletaxoffsets.

equals

REFUND OR AMOUNT OWING

Weshowthisamountonyournoticeofassessment.YourrefundmaybeaffectedbyanyoutstandingliabilitiestotheTaxOfficeortheChildSupportAgency.Theseamountswillappearonyournoticeofassessmentas‘Otheramountspayable’.Yourfamilytaxbenefit(FTB)entitlementortop-upmaybeaffectedbyanyFamilyAssistanceOfficedebt(whichincludesFTBandchildcarebenefitdebts).Thismayalsoaffectyourrefundoramountowing.


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Calculations

WORKING OUT YOUR TAX REFUND OR TAX DEBT

PART � Tax-free thresholdToworkoutthetaxonyourtaxableincomeyouneedtoknowyourtax-freethreshold.Thisistheamountofincomeyoucanearnbeforeyoumuststartpayingtax.

Australian residentIfyouwereanAustralianresidentfortaxpurposesforthefullyear,yourtax-freethresholdis$6,000.Gotopart2.

Non-residentIfyouwereanon-residentforthefullyearyouarenotentitledtoatax-freethreshold.Gotopart2.

Part-year residentIfyouwereanAustralianresidentfortaxpurposesforlessthanthefullyear,alowerthresholdamount–thepart-yeartax-freethreshold–mayapply.InthiscaseyouansweredYESatquestionA2onpage109.QuestionA2appliesifyou:n becameanAustralianresidentduring2006–07n stoppedbeinganAustralianresidentduring2006–07.

Workingoutyourpart-yeartax-freethreshold:n Ifyoualsoshowedincomeatitem5or6onyourtax

return,youmightbeentitledtoafulltax-freethreshold–phonethePersonalInfolineforhelp.

n Otherwise,workoutyourpart-yeartax-freethreshold.MultiplythenumberyouwroteatN itemA2onyourtaxreturnby$500.Theresultisyourpart-yeartax-freethreshold.Inthesecalculationswerefertoyourpart-yeartax-freethresholdamountasT.

PART 2 Tax on taxable incomeWeprovideanumberoftablesandworksheetsonthefollowingpagestohelpyouworkoutthetaxonyourtaxableincome.Theonesyouusedependonyourresidencystatus.Ifyouwere:n anAustralianresidentfortaxpurposesforthefullyear

youareentitledtoa$6,000tax-freethreshold,gotoAustralianresidentbelow

n anon-residentforthefullyear,gotoNon-residentonthenextpage

n apart-yearresidentfortaxpurposesandyourtax-freethresholdTislessthan$6,000,gotoPart-yearresidentonpage122.Ifyourtax-freethresholdTis$6,000,justusetable2.1andworksheet2.1.

Australian residentTousetable2.1,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.

Youdonothavetoworkoutyourtaxrefundortaxdebt.Wewillworkitoutfromtheinformationyouprovideonyourtaxreturnandadviseyouoftheresultonyournoticeofassessment.

Ifyoudowanttoworkoutyourtaxrefundortaxdebtforyourownpurposes,youcan:n usethetaxcalculatorsonourwebsiteatwww.ato.gov.au

orn followtheinstructionsonthefollowingpages.

Therearesomesituationswhereyoucannotworkoutyourtaxrefundortaxdebtbecausethecalculationistoocomplextoexplainhere.Thesearesituationswhereyou:n hadincomesubjecttocapitalgainstaxn hadaneligibleterminationpaymentn areentitledtotheunusedportionofyourspouse’s

seniorAustraliansorpensionertaxoffsetn hadanunusedamountofthe30%childcaretaxrebate

transferredtoyoun hadalumpsumpaymentinarrearsn hadalumpsumpaymentbecauseyouretiredor

finishedworkinginajobn wereunder18yearsoldandearnedmorethan$1,333

ininterest,dividendsorotherinvestmentincomen hadcreditfortaxpaidbyatrusteen hadafamilytaxbenefittaxclaimn hadexemptforeignemploymentincomen hadincomethatwassubjecttoaveragingn hadfilmindustryinvestmentdeductionsn hadadividendfromaNewZealandcompanywith

Australianfrankingcreditsattachedn haveclaimedtheentrepreneurstaxoffset.

Youneedtoworkoutthefollowingamountsiftheyapplytoyou.n Tax-freethreshold–seepart1.n Taxonyourtaxableincome–seepart2.n Lowincometaxoffset–seepart3n Beneficiarytaxoffset–seepart4.n SeniorAustraliansorpensionertaxoffset–seepart5.n Matureageworkertaxoffset–seepart6.n Medicarelevy–seepart7.n Medicarelevysurcharge–seepart8.n HigherEducationLoanProgramme(HELP)andStudent

FinancialSupplementScheme(SFSS)compulsoryrepayments–seepart9.

n 30%childcaretaxrebate–seepart10.n Babybonus–seepart11.

NOTEDonotwriteonyourtaxreturnanyoftheamountsyouworkouthere.


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TAbLE 2.�: Income tax rates – resident for full year

Taxableincome

Taxbracketthreshold

Taxonthresholdamount

Marginaltaxrateonamountabovethreshold

(a) (b) (c) (d)

$1to$6,000 $0 $0 Nil

$6,001to$25,000 $6,000 $0 0.15

$25,001to$75,000 $25,000 $2,850 0.30

$75,001to$150,000 $75,000 $17,850 0.40

$150,001andover $150,000 $47,850 0.45

Transfertheamountsat(b),(c)and(d)fromtherelevantrowto(b),(c)and(d)inworksheet2.1,andfollowthestepsinthatworksheet.

Intheexampleinworksheet2.1,Samhadataxableincomeof$28,682.Samlooksuptherowintable2.1whichappliestohistaxableincome($25,001to$75,000)andworksouthistaxontaxableincomeusingworksheet2.1asshown.

WORKSHEET 2.�: Working out your tax on taxable income – resident for full year

Sam’s Yours

Yourtaxableincome(fromTAXABLEINCOMEORLOSS

onpage3ofyourtaxreturn) $28,682 (a) $

Yourtaxbracketthresholdamount:(b)fromtable2.1 $25,000 (b) $

Taxonthatthresholdamount:(c)fromtable2.1 $2,850 (c) $

Marginaltaxrateonamountabovethreshold:

(d)fromtable2.1 0.30 (d)

Amountofincomeabovethreshold:

take(b)awayfrom(a). $3,682 (e) $

Taxonincomeabovethreshold:multiply(e)by(d). $1,104.60 (f) $

Add(c)and(f). $3,954.60 (g) $

Theamountat(g)isyourtaxontaxableincome.

Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotopage123.

Non-residentTousetable2.2,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.

TAbLE 2.2: Income tax rates – non-resident for full year

Taxableincome

Taxbracketthreshold



(a) (b) (c) (d)

$1to$25,000 $0 $0 0.29

$25,001to$75,000 $25,000 $7,250 0.30

$75,001to$150,000 $75,000 $22,250 0.40

$150,001andover $150,000 $52,250 0.45

Intheexampleinworksheet2.2,Jan’staxableincomewas$28,682.Janlooksuptherowintable2.2whichappliestohertaxableincome($25,001to$75,000)andworksouthertaxontaxableincomeusingworksheet2.2asshown.

WORKSHEET 2.2: Working out your tax on taxable income – non-resident for full year

Jan’s Yours



Yourtaxbracketthresholdamount:(b)fromtable2.2 $25,000 (b) $

Taxonthatthresholdamount:(c)fromtable2.2 $7,250 (c) $





Taxonincomeabovethreshold:multiply(e)by(d). $1,104.60 (f) $

Add(c)and(f). $8,354.60 (g) $


Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotopage123.


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Part-year residentYoucalculatedyourpart-yeartax-freethresholdTatpart1.Writeitat(b)inworksheet2.3.

Ifyourtaxableincomeis$25,000orless,gotostep1.Yourtaxrateis15%(or15cents)foreach$1overyourpart-yeartax-freethresholdT.

Ifyourtaxableincomeisover$25,000gotostep2.

STEP1 Intheexampleinworksheet2.3Karenhadatax-freethresholdTof$5,000andataxableincomeof$25,000.

WORKSHEET 2.3: Working out the tax on your taxable income of $25,000orless with a part-year tax-free threshold

Karen’s Yours



Yourtax-freethresholdT $5,000 (b) $

Amountofincomeabovetax-freethreshold:

take(b)awayfrom(a). $20,000 (c) $

Taxonincomeabovethreshold:

multiply(c)by0.15. $3,000 (d) $

Ifyourtaxableincomeis$25,000orless,theamountat(d)isyourtaxonyourtaxableincome.

Ifyourtaxableincomeis$25,000orless,transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.Youhavefinishedpart2,gotothenextpage.

STEP2 Ifyourtaxableincomeisgreaterthan$25,000,youfirstneedtoworkoutthetaxyoupayonthefirst$25,000ofyourtaxableincome.Useworksheet2.3,write$25,000at(a)anddothecalculation.Theamountat(d)isthetaxyoupayonthefirst$25,000ofyourtaxableincome.Transfertheamountat(d)fromworksheet2.3to(s)inworksheet2.4.WerefertothisamountasSintable2.3.

Tousetable2.3,firstfindincolumn(a)thetaxableincomerangetowhichyourtaxableincomebelongs,andthenrefertotheamountsinthatrow.

TAbLE 2.3: Income tax rates for part-year residents with part-year tax-free threshold

Taxableincome

Taxbracketthreshold



(a) (b) (c) (s) (d)

$1to$T $0 $0 $0 Nil

$(T+1)to$25,000 $T $0 $0 0.15

$25,001to$75,000 $25,000 $0 $S 0.30

$75,001to$150,000 $75,000 $15,000 $S 0.40

$150,001andover $150,000 $45,000 $S 0.45

Intheexampleinworksheet2.4Karenhadatax-freethresholdTof$5,000andataxableincomeof$76,000.n HertaxSonthefirst$25,000ofhertaxableincomeis

$3,000from(d)inworksheet2.3.n Shelooksuptherowintable2.3whichappliestoher

taxableincome($75,001to$150,000),transferstheamountsat(b),(c)and(d)fromtherelevantrowto(b),(c)and(d)inworksheet2.4andworksouthertaxasshown.

WORKSHEET 2.4: Working out the tax on your taxable income of over $25,000 with a part-year tax-free threshold

Karen’s Yours



Yourapplicabletaxbracketthresholdamount:(b)fromtable2.3 $75,000 (b) $

Taxamountsdueonthethresholdamount

(c)fromtable2.3 $15,000 (c) $

Sfrom(d)atworksheet2.3 $3,000 (s) $





Taxonincomeabovethreshold:multiply(e)by(d). $400 (f) $

Add(c),(s)and(f). $18,400 (g) $


Transferyourtaxontaxableincometostep1ontheFINALWORKSHEETonpage130.


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TPART 3 Low income tax offsetYouareentitledtothelowincometaxoffsetifyourtaxableincomeislessthan$40,000.

Yougetthemaximumtaxoffsetof$600ifyourtaxableincomeis$25,000orless.Thetaxoffsetreducesby4centsforeachdollaroftaxableincomeover$25,000.

Ifyourtaxableincomeismorethan$25,000butlessthan$40,000,useworksheet3.1toworkoutyourlowincometaxoffset.

WORKSHEET 3.�: Working out your low income tax offset

Maximumtaxoffset (a) $ 600


onpage3ofyourtaxreturn) (b) $

Thresholdatwhichtaxoffsetreduces (c) $ 25,000

Take(c)awayfrom(b). (d) $

Multiply(d)by0.04. (e) $

Take(e)awayfrom(a). (f) $

Theamountat(f)isyourlowincometaxoffset,ifitismorethanzero.

Transferyourlowincometaxoffsettostep2ontheFINALWORKSHEETonpage130.

PART 4 beneficiary tax offsetIfyouhaveshownincomeatitem5onyourtaxreturn,useworksheet4.1toworkoutyourbeneficiarytaxoffset.

WORKSHEET 4.�:Working out your beneficiary tax offset

Totalamountofallowanceorpaymentyoureceived(from A

item5onyourtaxreturn) (a) $

Yourtax-freethreshold:$6,000(orTifyouareapart-yearresident) (b) $


Iftheamountat(c)iszerooranegativeamount,youarenotentitledtoabeneficiarytaxoffset.

Multiply(c)by0.15. (d) $

Theamountat(d)isyourbeneficiarytaxoffset,ifitismorethanzero.Iftheamountat(a)ismorethan$25,000youareentitledtoanadditional15%taxoffsetontheamountover$25,000.

Take$25,000awayfrom(a). (e) $

Multiply(e)by0.15. (f) $

Theamountat(f)isanadditionaltaxoffset.

Add(d)and(f). (g) $

Theamountat(g)isyourbeneficiarytaxoffset.

Transferyourbeneficiarytaxoffset,either(d)or(g)asapplicable,tostep2ontheFINALWORKSHEETonpage130.

PART 5 Senior Australians or pensioner tax offset (from item T2 or T3 on your tax return)IfyoucompleteditemT2toclaimtheseniorAustralianstaxoffset,oritemT3toclaimthepensionertaxoffset,youcanworkouttheamountofyourtaxoffset.YouneedtorefertothetaxoffsetcodeletteryoushowedateitheritemT2orT3onyourtaxreturn.

Table5.1showsthetaxableincomethresholdsthatapplyforyourtaxoffsetcodeletter.

Youcanworkoutyourtaxoffsetatstep1.However,ifanyofthefollowingsituationsappliestoyou,youwillnotbeabletoworkoutyourtaxoffsethere.� Ifyouareeligibleforthepensionertaxoffsetandyou

usedtaxoffsetcodeletter:n S,Q,IorJandyourpensionwasmorethan

$13,356,orn Pandyourpensionwasmorethan$11,154

thenyouractualmaximumtaxoffsetmaybehigherthanyourmaximumtaxoffset(d)intable5.1,andyoumaygetataxoffsetifyourtaxableincomewasmorethantheuppertaxableincomethreshold(c)intable5.1.

2 Ifyourtaxableincomeisbetweenthelowertaxableincomethreshold(b)andtheuppertaxableincomethreshold(c)intable5.1,andanunusedportionofyourspouse’sseniorAustraliansorpensionertaxoffsetisavailablefortransfertoyou,youmayreceiveahighertaxoffset.

3 Ifyourtaxableincomeisequaltoormorethantheuppertaxableincomethreshold(c)intable5.1,youmaystillqualifyforataxoffsetfromthetransferofanyunusedportionofyourspouse’sseniorAustraliansorpensionertaxoffsettoyou,ifapplicable.

Ifthesesituationsapply,youcouldusethecalculatorsonourwebsitetoworkoutyourtaxoffset.

Whetherornotyoucancalculateyourtaxoffsethere,wewillworkouttheoptimumtaxoffsetwhichappliesforyou,andshowthatonyournoticeofassessment.

STEP1 Findincolumn(a)intable5.1therowwiththecodeletterthatyoushowedatitemT2orT3onyourtaxreturn.

STEP2 Refertotherowwithyourcodeletterintable5.1todeterminewhetheryouareentitledtoataxoffset.n Ifyourtaxableincomeisequaltoormorethanthe

amountat(c)youwillnotgetataxoffset.n Ifyourtaxableincomeisequalto,orlessthan,the

amountat(b),youmaygetuptothemaximumtaxoffsetshownat(d).

n Ifyourtaxableincomeismorethantheamountat(b)andlessthantheamountat(c)intable5.1,transfertheamounts(b)and(d)fromtable5.1to(b)and(d)inworksheet5.1toworkoutyourtaxoffset.


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TAbLE 5.�: Senior Australians and pensioner tax offset thresholds

Taxoffsetcodeletter

Lowertaxableincomethreshold

Uppertaxableincomethreshold

Maximumtaxoffset

(a) (b) (c) (d)

A $24,867 $42,707 $2,230

B,C $23,600 $39,920 $2,040

D,E $20,680 $33,496 $1,602

S,Q,J $19,454 $35,598 $2,018

I $18,527 $33,559 $1,879

P $16,147 $28,323 $1,522

STEP3 Workoutyourtaxoffsetusingworksheet5.1.

WORKSHEET 5.�: Working out your senior Australians or pensioner tax offset


onpage3ofyourtaxreturn) (a) $

Lowertaxableincomethreshold:(b)fromtable5.1 (b) $


Maximumtaxoffset:(d)fromtable5.1 (d) $

Divide(c)by8. (e) $

Take(e)awayfrom(d). (f) $

Theamountat(f),ifitismorethanzero,isyourseniorAustraliansorpensionertaxoffset.

TransferyourseniorAustraliansorpensionertaxoffsettostep2ontheFINALWORKSHEETonpage130.

PART 6 Mature age worker tax offsetTobeeligibleforthematureageworkertaxoffsetyoumusthave:n hadnetincomefromworkingwithincertainlimitsn beenanAustralianresidenton30June2007,andn beenaged55yearsorolderon30June2007.

Themaximummatureageworkertaxoffsetis$500.Tocalculateyourtaxoffset,youneedtoworkoutyournetincomefromworking.

STEP1 Workoutyournetincomefromworkingusingworksheet6.1.Youwillneedtotransfercertainamountsfromyourtaxreturnandfromyourtaxreturn(supplementarysection),ifrelevant.

WORKSHEET 6.�: Working out your net income from working

Ifanyoftheamountslistedbelowdonotapplytoyou,write0intheappropriatebox.

Totalincomefromworking

Salaryorwages(C toG item1) (a) $

Allowances,earnings,tipsdirectorsfeesetc(K item2) (b) $

Attributedpersonalservicesincome(O item8) (c) $

Totalreportablefringebenefitsamounts(W item9) (d) $

Add(a),(b),(c)and(d). (e) $

Theamountat(e)isyourtotalincomefromworking.

Relateddeductions

Work-relatedcarexpenses( A itemD1) (f) $

Work-relatedtravelexpenses(b itemD2) (g) $

Work-relateduniform,occupation-specificorprotectiveclothing,laundry

anddry-cleaningexpenses(C itemD3) (h) $

Work-relatedself-educationexpenses(D itemD4) (i) $

Otherwork-relatedexpenses( E itemD5) (j) $

Low-valuepooldeduction(K itemD6) (k) $

Addupallyourrelateddeductions,(f)to(k) (l) $

Theamountat(l)isyourtotalrelateddeductions.

Totalnetincomefromworking

Take(l)awayfrom(e). (m) $

IfyoucompletedM itemT13fromthesupplementarysection,

writethisamountat(n). (n) $

Theamountsat(m)and(n)canbezeroornegativeamounts.

Add(m)and(n). (o) $

Theamountat(o)isyourtotalnetincomefromworking.

STEP2 Usetable6.1tofindoutwhatyouneedtodotoworkoutyourmatureageworkertaxoffset.


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TAbLE 6.�: Find out whether you are eligible for the mature age worker tax offset

Yournetincomefromworking:(o)fromworksheet6.1

Yourmatureageworkertaxoffset

Actionrequired

$0oranegativeamount

$0 None.Youarenotentitledtothematureageworkertaxoffset.Youhavefinishedpart6.

$1to$9,999 5%ofyournetincomefromworking

Gotoworksheet6.2.

From$10,000to$53,000

$500 Thisisyourmatureageworkertaxoffset.Write$500atstep2ontheFINALWORKSHEETonpage130.Youhavefinishedpart6.

Morethan$53,000butlessthan$63,000

Reducedby5centsperdollarover$53,000

Gotoworksheet6.3.

$63,000andabove

$0 None.Youarenotentitledtothematureageworkertaxoffset.Youhavefinishedpart6.

WORKSHEET 6.2: Working out your mature age worker tax offset – net income from working from $� to $9,999

Yourtotalnetincomefromworking:(o)fromworksheet6.1 (a) $

Multiply(a)by0.05. (b) $

Theamountat(b)isyourmatureageworkertaxoffset.

Transferyourmatureageworkertaxoffsettostep2ontheFINALWORKSHEETonpage130.Youhavefinishedpart6.

WORKSHEET 6.3: Working out your mature age worker tax offset – net income from working from $53,00� to $62,999

Maximumtaxoffset (a) $ 500

Yourtotalnetincomefromworking,(o)fromworksheet6.1 (b) $

Thresholdatwhichtaxoffsetreduces (c) $ 53,000

Take(c)awayfrom(b). (d) $

Multiply(d)by0.05. (e) $

Take(e)awayfrom(a). (f) $

Theamountat(f)isyourmatureageworkertaxoffset.

Transferyourmatureageworkertaxoffsettostep2ontheFINALWORKSHEETonpage130.

PART 7 Medicare levy (from item M� on your tax return)

STEP1 WorkoutyourbasicMedicarelevy.ThebasicMedicarelevyyoupaydependsontheamountofyourtaxableincomeandwhetheryouareeligiblefortheseniorAustralianstaxoffsetorthepensionertaxoffset.n IfyouareeligiblefortheseniorAustralianstaxoffset,

usecolumn1inworksheet7.1.n Ifyouareeligibleforthepensionertaxoffset,use

column2inworksheet7.1.n Ifyouarenoteligibleforeitherofthosetaxoffsets,use

column3inworksheet7.1.

WORKSHEET 7.�: Working out your basic Medicare levy

COLUMN1 COLUMN2 COLUMN3EligiblefortheseniorAustralianstaxoffset

Eligibleforthepensionertaxoffset

Noteligibleforeitherofthosetaxoffsets

Whenyourtaxableincome*(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn)isbelowaspecifiedlowerthreshold,youpaynoMedicarelevy.

Lowertaxableincomethreshold

(a) $ 24,867 $ 21,637 $ 16,740

Ifyourtaxableincomeisequaltoorlessthanyourthresholdat(a),youpaynoMedicarelevy.Youhavefinishedpart7.

Whenyourtaxableincomeisaboveaspecifiedupperthreshold,youpayMedicarelevyattherateof1.5%ofyourtaxableincome.

Uppertaxableincomethreshold

(b) $ 29,255 $ 25,455 $ 19,694

Ifyourtaxableincomeisequaltoormorethanyourthresholdat(b),usethefollowingtoworkoutyourbasicMedicarelevy:

Yourtaxableincome (c) $ $ $

Multiply(c)by0.015. (d) $ $ $

Theamountat(d)isyourbasicMedicarelevy.Gotostep2.

Whenyourtaxableincomeisbetweenthelowerandupperthresholdat(a)and(b)above,youpayMedicarelevyattherateof10%onthatpartofyourtaxableincomeabovethelowerthreshold.UsethefollowingtoworkoutyourbasicMedicarelevy:

Yourtaxableincome (e) $ $ $

Yourlowerthreshold (f) $ 24,867 $ 21,637 $ 16,740

Take(f)awayfrom(e). (g) $ $ $

Multiply(g)by0.10. (h) $ $ $

Theamountat(h)isyourbasicMedicarelevy.Gotostep2.

*ForMedicarelevypurposes,taxableincomeexcludestheamountofanypost-June1983componentofaneligibleterminationpaymentonwhichthemaximumtaxrateiszero.


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NOTEIfyouhadexemptforeignemploymentincomeyouwillnotbeabletoworkoutyourMedicarelevy.Wewilldothiswhenworkingouttheamountoftax(includingMedicarelevy)youhavetopayonyourotherincome.

ExAMPLE 7.�

n CecilieiseligiblefortheseniorAustralianstaxoffset,sosheusescolumn1.Cecilie’staxableincomeis$24,000.Itislessthanthe$24,867thresholdincolumn1.ShepaysnoMedicarelevy.

n JoelisnoteligiblefortheseniorAustralianstaxoffsetnorthepensionertaxoffset,soheusescolumn3.

Joel’staxableincomeis$40,000.Itisabovethe$16,740thresholdincolumn3.HisbasicMedicarelevyis:

$40,000×1.5%=$600.

n Peteriseligibleforthepensionertaxoffset,soPeterusescolumn2.Peter’staxableincomeis$25,000.Itisbetweenthe$21,637and$25,455thresholdsincolumn2.HisbasicMedicarelevyis:

($25,000–$21,637)×10%=$336.30.

STEP2 DidyouclaimaMedicarelevyreductionorexemption?IfyouclaimedaMedicarelevyreductionorexemptionatitemM1,gotostep3.

IfyoudidnotclaimaMedicarelevyreductionorexemption,yourMedicarelevyistheamountat(d)or(h)atworksheet7.1.Transferthisamounttostep4ontheFINALWORKSHEETonpage130.Youhavefinishedpart7.

STEP3 DidyouclaimaMedicarelevyreduction?

IfyouclaimedaMedicarelevyreductionat Y itemM1,gotostep4.

IfyoudidnotclaimaMedicarelevyreduction,butclaimedonlyanexemptionatitemM1(at V orW ,orboth),transferyourbasicMedicarelevyfrom(d)or(h)atworksheet7.1directlyto(q)atstep7onthenextpage.

STEP4 Workoutwhetheryouareentitledtothefamilyreductionamount.

Ifyouhadaspouseon30June2007oryourspousediedduring2006–07,yourfamilyincomeisthecombinedtaxableincomeofyouandyourspouse.

Ifyoudidnothaveaspouseon30June2007andyouwereeligibleforareducedMedicarelevybasedonfamilyincome,yourfamilyincomeisyourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).

Tocompletestep4,findthelowerandupperincomelimitsthatapplytoyourcircumstancesintable7.1.

TAbLE 7.�: Family income table for 2006–07

Numberofdependentchildrenandstudents

Lowerincomelimit

Upperincomelimit

IfyouwereeligiblefortheseniorAustralianstaxoffset

0 $33,500 $39,411

1 $36,094 $42,463

2 $38,688 $45,515

Increment $2,594 $3,051

IfyouwerenoteligiblefortheseniorAustralianstaxoffset

0 $28,247 $33,231

1 $30,841 $36,283

2 $33,435 $39,335

Increment $2,594 $3,051

Ifyouhadmorethantwochildrenwhoweredependantsorstudents,youcanextendthistable.Increasetherelevantlowerandupperincomelimitsbytheappropriateincrementforeachadditionalchildorstudent.

Ifyourfamilyincomewaslessthanorequaltoyourlowerincomelimit,youdonotpaytheMedicarelevy.Youhavefinishedpart7.

Ifyourfamilyincomewasgreaterthanyourlowerincomelimitbutlessthanorequaltoyourupperincomelimit,youpayareducedMedicarelevy.

TheworksheetsatthefollowingstepsshowyouhowtoworkouttheamountofreducedMedicarelevyyoupay.

ExAMPLE 7.2

Trevor,whoisnoteligiblefortheseniorAustralianstaxoffset,hadtwodependentchildrenandaspouseon30June2007.Histaxableincomewas$21,000andhisspouse’staxableincomewas$17,000–afamilyincomeof$38,000.Hisfamilyincomeisbetweenthelowerandupperfamilyincomelimitsintable7.1.HisbasicMedicarelevyis$315,fromworksheet7.1.Gotostep5toseehowTrevorworksouthisMedicarelevy.

STEP5 Workoutyourfamilyreductionamountandyourshareofit.

WORKSHEET 7.2: Calculating your family reduction amount

Trevor’s Yours

Familyincome $38,000 (a) $

Lowerincomelimitfromtable7.1 $33,435 (b) $

Take(b)awayfrom(a). $4,565 (c) $

Multiply(b)by0.015. $501.52 (d) $

Multiply(c)by0.085. $388.02 (e) $

Take(e)awayfrom(d). $113.50 (f) $

Theamountat(f)isyourfamilyreductionamount.

Ifyourspouse’staxableincomewaslessthan$16,741,gotostep6toworkoutyourreducedMedicarelevy.


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TIfyourspouse’staxableincomewas$16,741ormore,youwillsharethefamilyreductionamountshowninworksheet7.3.

WORKSHEET 7.3: Calculating your share of the family reduction amount

Trevor’s Yours

Familyreductionamount(f)fromworksheet7.2 $113.50 (g) $

Taxableincome(fromTAXABLEINCOMEORLOSS

onpage3ofyourtaxreturn) $21,000 (h) $

Multiply(g)by(h). $2,383,500 (i) $

Familyincome(a)fromworksheet7.2 $38,000 (j) $

Divide(i)by(j). $62.72 (k) $

Theamountat(k)isyourshareofthefamilyreductionamount.

YourfamilyreductionamountisunlikelytobemorethanyourbasicMedicarelevyfromstep1.Ifitis,yourMedicarelevywillbereducedtozero,andanyexcessfamilyreductionamountmaybetransferredtoreduceyourspouse’sbasicMedicarelevy.Ifthisappliestoyou,youwillnotpayanyMedicarelevy,andyouhavefinishedpart7.

Similarly,itispossiblethatyourspousehasanexcessfamilyreductionamountwhichcanbetransferredtoyou.Todeterminewhetherthatisthecase,proceedwithworksheet7.4.

WORKSHEET 7.4: Calculating your share of the family reduction amount after a transfer from your spouse

Calculatingyourspouse’sshareofthefamilyreductionamount

Trevor’s Yours

Yourspouse’sbasicMedicarelevyusingstep1 $26.00 (aa) $

Yourfamilyreductionamount(f)fromworksheet7.2 $113.50 (f) $

Yourshareofthefamilyreductionamount(k)from

worksheet7.3 $62.72 (k) $

Take(k)awayfrom(f). $50.78 (bb) $

Theamountat(bb)isyourspouse’sshareofthefamilyreductionamount.

Transferofanyexcessfamilyreductionamountfromyourspouse

Take(aa)awayfrom(bb). $24.78 (l) $

If(l)iszeroorlessthanzero(negative),yourspousedoesnothaveanexcessfamilyreductionamount.Gotostep6andusetheamountat(k)aboveforthatstep.Otherwisetheamountat(l)istheexcessfamilyreductionamounttransferredtoyoufromyourspouse.

Add(k)and(l). $87.50 (m) $

Theamountat(m)isyournewshareofthefamilyreductionamountafterthetransfer.

STEP6 WorkoutyourreducedMedicarelevy.

Trevor’s Yours

YourbasicMedicarelevyfrom(d)or(h)atworksheet7.1 $315.00 (n) $

Yourfamilyreductionamount(f),(k)or(m)asapplicable,fromworksheets7.2,7.3

or7.4respectively $87.50 (o) $

Take(o)awayfrom(n). $227.50 (p) $

Theamountat(p)isyourreducedMedicarelevy.

IfyouclaimedanexemptionatitemM1(eitherat V orW ,orboth)onyourtaxreturn,gotostep7.

Otherwise,transferyourreducedMedicarelevytostep4ontheFINALWORKSHEETonpage130.Youhavefinishedpart7.

STEP7 WorkoutyourexemptionamountandyourMedicarelevy.

YourreducedMedicarelevy(p)fromstep6oryourbasicMedicarelevy(d)

or(h)fromworksheet7.1 (q) $

Fullexemption

Numberofdaysat V itemM1onyourtaxreturn (r)

Multiply(q)by(r). (s) $

Divide(s)by365. (t) $

Halfexemption

NumberofdaysatWitemM1onyourtaxreturn,ifany (u)

Multiply(u)by(q). (v) $

Divide(v)by365. (w) $

Divide(w)by2. (x) $

Add(t)and(x). (y) $

Theamountat(y)isyourexemptionamount.

Take(y)awayfrom(q). (z) $

Theamountat(z)isyourMedicarelevy,ifany.

TransferyourMedicarelevytostep4ontheFINALWORKSHEETonpage130.

PART 8 Medicare levy surcharge (from item M2 on your tax return)TheMedicarelevysurchargeappliesonlyifyouselectedNoat E itemM2onyourtaxreturnandthenumberyouwroteat A itemM2islessthan365.ToworkoutyourMedicarelevysurcharge,followthestepsbelow.


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NOTEIfyouhadexemptforeignemploymentincomeyouwillnotbeabletoworkoutyourMedicarelevysurcharge.Wewilldothiswhenweworkouttheamountoftax(includingtheMedicarelevysurcharge)youhavetopayonyourotherincome.

WORKSHEET 8.�: Working out your Medicare levy surcharge

Yourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).Ifyouhadaloss,write0. (a) $

Yourtotalreportablefringebenefitsamounts(fromitem9onyourtaxreturn) (b) $

AnyamountyouhaveshownatitemA3onyourtaxreturn

(supplementarysection) (c) $

Anypost-June1983componentofaneligibleterminationpayment

wherethemaximumtaxrateiszero (d) $

Add(a),(b)and(c),thentakeaway(d). (e) $

Divide(e)by100toget1%. (f) $

Theamountat(f)isthewhole-yearMedicarelevysurchargeyouhavetopay.

Ifthesurchargeappliesforthewholeyear,theMedicarelevysurchargeamountyouhavetopayis(f).Inthatcase,transfertheamountforthewhole-yearMedicarelevysurchargetostep4ontheFINALWORKSHEETonpage130.

Ifthesurchargeappliesforonlypartoftheyear,continuewiththestepsbelow.

Numberofdaysat A itemM2onyourtaxreturn (g)

Take(g)awayfrom365. (h)

Multiply(f)by(h). (i) $

Divide(i)by365. (j) $

Theamountat(j)isthepart-yearMedicarelevysurchargeyouhavetopay.

Transfertheamountforthepart-yearMedicarelevysurchargetostep4ontheFINALWORKSHEETonpage130.

PART 9 Compulsory Higher Education Loan Programme (HELP) and Student Financial Supplement Scheme (SFSS) repaymentsAcompulsoryHELPorSFSSrepaymentwillbeincludedwhen:n youhaveanaccumulatedHELPorSFSSdebt,andn yourHELPorSFSSrepaymentincomeat(e)inworksheet9.1ismorethan$38,148.

YouraccumulatedHELPdebtmayincludeHECS-HELP,FEE-HELPorOS-HELPdebts.OnlyonecompulsoryHELPrepaymentwillbecalculatedinthisassessmentbasedonyouraccumulatedHELPdebt.

YouraccumulatedSFSSdebton1June2007includesalloutstandingloanstakenoutfrom1993to2002.OnlyonecompulsorySFSSrepaymentwillbecalculatedinthisassessmentbasedonyouraccumulateddebt.

NOTEYouwillnothavetomakeacompulsoryHELPorSFSSrepaymentifyouhaveaspouseordependantsandif,duetolowfamilyincome,you:n areentitledtoareductionofyourMedicarelevy,orn donothavetopaytheMedicarelevy.

PartBofquestionM1onpages100–2showsyouhowtoworkoutifyouqualifyfortheMedicarelevyreduction.

YourcompulsoryHELPorSFSSrepaymentisapercentageofyourHELPorSFSSrepaymentincome.Followthestepsbelowtoworkoutyourcompulsoryrepayment.

STEP1 WorkoutyourHELPorSFSSrepaymentincome.

WORKSHEET 9.�

Yourtaxableincome(fromTAXABLEINCOMEORLOSSonpage3ofyourtaxreturn).Ifyouhadaloss,write0. (a) $

Yourtotalreportablefringebenefitsamounts(fromitem9onyourtaxreturn) (b) $

Netrentallossamountfromitem20onyourtaxreturn(supplementarysection) (c) $

Yourexemptforeignemploymentincomeamountsfromitem19onyour

taxreturn(supplementarysection) (d) $

Add(a),(b),(c)and(d). (e) $

Theamountat(e)isyourHELPorSFSSrepaymentincome.

STEP2 FindtherepaymentratethatappliestoyourHELPrepaymentincomeintable9.1andyourSFSSrepaymentincomeintable9.2.

TAbLE 9.�: HELP repayment rates as a percentage of HELP repayment income

Income Rate Income Rate

Below$38,149 nil $52,995–$57,394 6%

$38,149–$42,494 4% $57,395–$60,414 6.5%

$42,495–$46,838 4.5% $60,415–$66,485 7%

$46,839–$49,300 5% $66,486–$70,846 7.5%

$49,301–$52,994 5.5% $70,847andabove

8%

TAbLE 9.2: SFSS repayment rates as a percentage of SFSS repayment incomeRepaymentincome Repaymentrate

Below$38,149 Nil

$38,149–$46,838 2%

$46,839–$66,485 3%

$66,486andabove 4%


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TSTEP3 Multiplyyourrepaymentincome(e)fromworksheet9.1bytherelevantratefromstep2.TheresultisyourcompulsoryrepaymentwhichwillbeshownonyournoticeofassessmentatXforHELPandRforSFSS.Ifthebalanceofyouraccumulateddebtislessthanthecalculatedrepaymentamount,youpayonlythebalance.

TransferyourHELPrepaymentorSFSSrepaymentamounttostep7ontheFINALWORKSHEETonpage130.

FormoreinformationaboutrepayingyourHELPdebt,seeRepaying your HELP debt in 2006–07(NAT3913).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

FormoreinformationaboutrepayingyourSFSSloanstakenoutbetween1993and2002,seeRepaying your Financial Supplement loan 2006–07(NAT2789).Thispublicationisavailableonourwebsiteortofindouthowtogetaprintedcopy,seetheinsidebackcover.

PART �0 30% child care tax rebateToworkoutyour30%childcaretaxrebate,youwillneedtoknowyourtotalfeesandyourchildcarebenefit(CCB)entitlementwhichcanbeaccessedby:n goingtothewebsiteatwww.familyassist.gov.auand

byclickingon‘View30%childcaretaxrebatedetails’n phoningtheFamilyAssistanceOfficeon136150,orn phoninguson132861.

Foreachchildinapprovedcare,workdownacolumninworksheet10.1.

Ifyouhadmorethantwochildreninapprovedcare,continuetheworksheetonanotherpieceofpaper.

WORKSHEET �0.�: Calculating your 30% child care tax rebate

Child1 Child2

Totalfeesforeachchild (a) $ $

YourCCBentitlementforeachchild (b) $ $

Take(b)awayfrom(a). (c) $ $

Theamountsat(c)areyourout-of-pocketexpenses.

Multiply(c)by30%. (d) $ $

Therebateforeachchildislimitedto$4,096.

Writeheretheamountat(d)or$4,096

whicheverislower. (e) $ $

Addalltheamountsfrom(e). (f) $

Theamountat(f)isyour30%childcaretaxrebate.

Transferyour30%childcaretaxrebatetostep2ontheFINALWORKSHEETonpage130.

PART �� baby bonusIfyouareclaimingthebabybonusandyouwanttoworkouttheamount,usethebabybonuscalculatoronourwebsiteorphonethePersonalInfoline(seetheinsidebackcover).

Transfertheamountofyourbabybonustostep9ontheFINALWORKSHEETonpage130.


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To estimate your tax refund or debt, you can use the comprehensive tax calculator on our website or complete the steps below. Read pages 120–9 to work out the amounts which you need to complete this worksheet. If any of the amounts listed do not apply to you, write 0 in the appropriate box. Items marked with an asterisk (*) appear on your tax return (supplementary section), if you have completed one.

STEP 9 Tax credits and refundable tax offsets

Total credits from payment summaries – amounts at:

$ TOTAL TAX WITHHELD on your tax return $

E item 22* on your tax return $

Credits from tax withheld – amounts at:

P + A item 12* on your tax return $

G + H + J item 13* on your tax return $

D + W + E + F item 14* on your tax return $

Pay as you go (PAYG) instalments – from your instalment activity statement, if you have one $

Credits from tax file number amounts withheld – amounts at:

M item 10 on your tax return $

V item 11 on your tax return $

R item 12* on your tax return $

Credit for interest on early payments – amount at L item C1* on your tax return $

Private health insurance tax offset – amount at G item T5 on your tax return $

Franking tax offset (franking credit) – amounts at:

U item 11 on your tax return $

Q item 12* on your tax return $

Baby bonus (See page 129.) $

Add up all your tax credits and refundable tax offsets. $ J

STEP 10 Refund or net amount payable

Take J away from I. $ K

Are you entitled to a refund or do you have a tax debt?If K is negative (less than zero), this is the amount of refund due to you. If you have a Family Assistance Office debt (which includes family tax benefit and child care benefit debts), tax debts or outstanding child support payments, we may deduct some or all of them from your refund.

If K is positive (more than zero), this is the net amount you have to pay.

STEP 1 Tax on taxable income

Write the amount of tax you worked out on pages 120–2. $ A

STEP 2 Tax offsets

Total tax offsets claimed on page 4 of your tax returnDo not include your private health insurance tax offset ( G item T5 on your tax return), you show that amount at step 9. $

Low income tax offset from page 123 $

Beneficiary, senior Australians or pensioner tax offset from pages 123–4. If you have more than one, use the one that gives you the most. $

Mature age worker tax offset from pages 124–5 $

Tax offset on life insurance bonuses 30% of W item 21* on your tax return $

30% child care tax rebate from page 129 $

Add up all your tax offsets. $ B

STEP 3 Tax payable

Take B away from A. If this amount is less than zero, write 0. $ C

STEP 4 Medicare levy and Medicare levy surcharge

Medicare levy from pages 125–7 $

Medicare levy surcharge from pages 127–8 $

Add up your Medicare levy and Medicare levy surcharge. $ D

STEP 5 Total tax payable

Add C and D. $ E

STEP 6 Foreign tax credits

Amount at O item 19* on your tax return $ F

Take F away from E. If this amount is less than zero, write 0. $ G

STEP 7 HELP and SFSS repayments

HELP repayments from pages 128–9 $

SFSS repayments from pages 128–9 $

Add up your HELP and SFSS repayments. $ H

STEP 8 Add G and H. $ I


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Ourshopfrontaddresses,andmailingaddressesforcorrespondence,arelistedbelow.Pleasesendcorrespondencetotheofficeshownonyourlastnoticeofassessment,ifyouhaveone;otherwisesendittoyournearesttaxoffice.

Ifyouhaveanenquiryyoucanvisitourwebsiteatwww.ato.gov.auoryoucancontactusbyphone.Ourphoneservicesarelistedontheinsidebackcover.

Ifyouprefertomakeyourenquiryinperson,phone132861tomakeanappointmentatoneofourshopfronts.

STOPLodgeyourtaxreturnattheaddressonpage112orpage113.

PAYINGYOURTAXDEBTWedonotacceptpaymentsoverthecounteratourshopfronts.Thevariouswaysyoucanpayyourtaxdebtaresetoutonthebackofyournoticeofassessment.Ifyouneedmoreinformation,phone1800815886.

AUSTRALIAN CAPITAL TERRITORYCanberraGroundFloorEthosHouse28–36AinslieAvenue,CanberraGPOBox9990CanberraACT2601

NEW SOUTH WALESAlbury567SmollettStreet,AlburyPOBox9990AlburyNSW2640

ChatswoodShop43LemonGroveShoppingCentre441VictoriaAvenue,ChatswoodGPOBox9990SydneyNSW2001

Hurstville1stFloorMacMahonPlaza14–16WoodvilleStreet,HurstvillePOBox9990HurstvilleBCNSW1481

Newcastle266KingStreet,NewcastlePOBox9990NewcastleNSW2300

ParramattaGroundFloorCommonwealthOffices2–12MacquarieStreet,ParramattaPOBox9990ParramattaNSW2123

Sydney2LangStreet,SydneyGPOBox9990SydneyNSW2001

Wollongong93–99BurelliStreet,WollongongPOBox9990WollongongNSW2500

NORTHERN TERRITORYAliceSpringsJockNelsonCentre16HartleyStreet,AliceSpringsGPOBox9990AdelaideSA5001

Darwin24MitchellStreet,DarwinGPOBox9990AdelaideSA5001

QUEENSLANDBrisbane280AdelaideStreet,BrisbaneGPOBox9990BrisbaneQLD4001

TownsvilleStanleyPlace235StanleyStreet,TownsvillePOBox9990TownsvilleQLD4810

UpperMtGravattGroundFloorNexusBuilding96MtGravatt-CapalabaRoadUpperMtGravattPOBox9990UpperMtGravattQLD4122

SOUTH AUSTRALIAAdelaide91WaymouthStreet,AdelaideGPOBox9990AdelaideSA5001

TASMANIAHobart200CollinsStreet,HobartGPOBox9990HobartTAS7001

Launceston54CameronStreet,LauncestonGPOBox9990HobartTAS7001

VICTORIACheltenham4A,4–10JamiesonStreet,CheltenhamPOBox9990DandenongVIC3175

Dandenong14–16MasonStreet,DandenongPOBox9990DandenongVIC3175

Geelong92–100BroughamStreet,GeelongPOBox9990GeelongVIC3220

MelbourneLevel1,CasseldenPlace2LonsdaleStreet,MelbournePOBox9990DandenongVIC3175

WESTERN AUSTRALIANorthbridge45FrancisStreet,NorthbridgeGPOBox9990PerthWA6848

OTHER OFFICESBoxHilltaxofficePOBox9990BoxHillVIC3128

ChermsidetaxofficePOBox9990ChermsideQLD4032

MooneePondstaxofficePOBox9990MooneePondsVIC3039

PenrithtaxofficePOBox9990PenrithNSW2740

SHOPFRONTS


IND

EX

ABN,seeAustralianbusinessnumberABR,117ABSTUDY,13,23accidentinsurance,seesicknessandaccident

insuranceaccommodationcomponentofscholarships,69accommodationexpenses,45–6accounts,seefinancialinstitutionaccountsactivitystatements,27,63adjustedfringebenefits,74adjustedtaxableincome,72,73,74adjustments,108–9,s61

balancing,40,s31projectpoolvalues,s38

AdministrativeAppealsTribunal(AAT),63,s31adoptedchildren,seechildrenadvance(prepaid)expenditure,36,s26advertisingexpenses,s26advice,3,7,63

aboutinvestment,56non-lodgment,3–4

age,108childforwhombabybonusclaimed,95,96dependants,69familytaxbenefitchildren,71–4housekeepers,82matureageworkertaxoffseteligibility,s54oldestpersoncoveredbyprivatehealthinsurance policy,91personalsuperannuationcontributors,s36seniorAustralianstaxoffseteligibility,84taxationofETPsand,21–2

agepension,24,84agedAustralian,seeolderAustraliansagedcare,residential,s51agents

property,s26tax,6,12,63,114

agriculture,seeprimaryproductionaidsandappliances,s50airfares,45–6allowances,16–17,36

DefenceForcepersonnel,14foreignemployment,s22–3see alsogovernmentpensions

amendmentofassessments,10,114,s62requests,113

ancillaryprivatehealthinsurancecover,98,104annualleave,lumpsumpaymentsforunused,18,69annuities,seesuperannuationandannuitiesantiques,seecapitalgainsappeals,63,s31apportionmentrules,36approvedchildcare,93,94approveddepositfunds,seesuperannuationand

annuitiesaprons,48artificiallimbsoreyes,s50artists,seespecialprofessionalsassessablebalancingadjustment,s31assessmentnotices,10,115–16

see alsoamendmentofassessmentsassessmentperiod(FTB),71,74–5assets,s16–18

foreign,s20–1,s25transferredto/fromnon-residententities,s19,s20–1,s23see alsocapitalgains;depreciatingassets; dividends;gifts

AssistanceforIsolatedChildrenScheme,13associationsubscriptions,53attorney,powerof,6attributedforeignincome,seeforeignincomeattributedpersonalservicesincome,26auctions,charitable,58Austradeapprovedprojects,workon,s22–3Australian–AmericanEducationalFoundationgrants,

13Australianbusinessnumber(ABN),15

amountswithheldbecausenotquoted,29,s5,s7–11;expensesincurred,63

AustralianBusinessRegister,117AustralianDefenceForce,seeDefenceForce

personnelAustralianfilmindustryincentives,s33AustralianfrankingcreditsfromNZcompanies,

s24–5AustralianGovernmentpensions,seegovernment

pensionsAustralianresidents,2,11–12

became/stoppedbeing,12,109,120,122dependants,69forfamilyassistancepurposes,71–2NorfolkIslanders,102–3,105overseasinterests,56,s19–21,s25,s40taxoffseteligibility,77,80,82,95,s42,s50;seniorAustralians,84,s54

see alsoforeignincome;migrants;non-residents;temporaryresidents

AustralianTaxOffice,seeTaxOfficeAustralianValuationOffice(AVO),58,59Austrianpensions,s21,s34austudypayment,13,23authors,seespecialprofessionalsaveraging,s4,s31awardpayments,17,40–1,53

babybonus,70,95–6electronicfundstransferwanted?,12

baddebts,forgivenessof,30–1balancedtrusts,seetrustsandtrustincomebalancingadjustments,40,s31bankaccounts,seefinancialinstitutionaccountsbankruptcy,66,s2,s3

farmmanagementdeposits,s14spouses,105

barristers’fees,63bed,carersofpeopleconfinedto,s50beneficiarytaxoffset,23,123benefits,seegovernmentpensionsbereavement,seedeathblindpeople,102–3,105

carersof,s50under18yearolds,108

bodycorporatefees,s26bondmoney,s26bonusshares,30–3bonuses,15–17

forbabies,70,95–6;electronicfundstransfer,12exemptincome,13foreignemployment,s22–3lifeinsurancecompaniesandfriendlysocieties, s28,s30

booksandjournals,50,53,56,63bootsandshoes,47–8borrowedcars,46borrowedmoney,seeloansbridgetolls,37,45–6Britishpensions,s21,s33BSBnumber,12buildingsocietyaccounts,seefinancialinstitution

accountsbursariesandscholarships,13,69,70,s30busfares,45–6,50Business and professional items schedule for

individuals 2006,s8,s9,s10,s12,s13businessassociationsubscriptions,53businessestablishmentcosts,s40businessincome,s2–15,s19–20

dependants,69under18yearolds,108see alsolosses

businesskilometres,38,41–4BusinessRegister(ABR),117

Cabfares,45–6capitalexpenditure,s39

projects,s37–8rentalproperties,s27section48-880deductions,s40

capitalgainsandlosses(CGT),s16–18dependants,69listedinvestmentcompany(LIC)amount,56under18exceptednetincome,108

carers,24,69,70,s50exemptincome,13,14see alsodependants;familytaxbenefit

carry-forwardlosses,67,s24carsandmotorvehicles,38–46,50

allowancesandreimbursementofexpenses,17dependants’,70parkingandtollfees,37,45–6asprizes,s30–1

cashmanagementaccounts,56cashmanagementtrusts,seetrustsandtrust

incomecasualjobs,incomefrom,15–17CDEP,23CDs,53Centrelinkpayments,seegovernmentpensions‘centsperkilometre’method,40,41,44,50,70CFCmeasures,s19charitablegiftsanddonations,57–60,63chemists’expenses,s50childcare,50,70

taxrebate,3,93–4,110,129childcarebenefit(CCB),13,69,93,94childsupport(maintenance),68,115,116

exemptincome,14,70familytaxbenefitand,72–3,75liableparent,2

children(under18yearolds),69–83babybonus,70,95–6;electronicfundstransfer wanted?,12financialinstitutionaccounts,29

governmentpensionersandbeneficiaries,13, 23,108ashousekeepers,80–3,101,s45–6,s50–1income,2,72,108,s3;separatenet,69–70,s50maternitypayment/immunisationallowance,14,70medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7superannuationcontributions,s35–7zoneoroverseasforcestaxoffsetfor,s44–7see alsodependants;familytaxbenefit; sharedcare

cleaning,17,47–8,53clothingandaccessories,17,47–8,53

textile,clothingandfootwearspecialallowance,23co-ownershipofcars,39co-ownershipofrentalproperties,s26collectables,seecapitalgainscommissions,15–17

foreignemployment,s22–3topropertyagents,s26

CommonwealthOmbudsman,118Commonwealthpensions,seegovernmentpensionsCommonwealthscholarshipsandbursaries,13,69,

s30Commonwealthsecondaryeducationassistance,13CommonwealthTradeLearningScholarship,13CommunityDevelopmentEmploymentProjects

(CDEP),23communityinfrastructure,creatingorupgrading,

s37–8compactdiscs,53companies

director’sfees,16–17foreign,s19–20non-assessablepayments,s16,s17personalservicesincomeattributedtoyoufrom, 26see alsodividends(distributions)

compensationpayments,15–17,19–22exemptincome,14,70under18yearolds,108see alsoinsurance

complaints,seeobjections/complaintscomposers,seespecialprofessionalscomputerrecords,37computersandsoftware,50,53,56

allocatingtolow-valuepools,54see alsointernet

conduitforeignincome,32conferences,seminarsandworkshops,45–6,53conservationcovenants,59,63

see alsocapitalgainsconstructioncosts

projectpools,s37–8rentalproperties,s27

consularstaff,102–3,105,s22consultants,16–17,s7–8contactlenses,s50contractors,independent,s7–11controlledforeigncompanies,s19cooling,53cosmeticoperations,s50costs,seedeductionscouncils,seelocalgovernmentcoursefees,50courtappeals,63courtjuryattendancefees,16,17creditunionaccounts,seefinancialinstitution

accountscredits,seetaxcreditsculturalgiftsanddonations,57,58–9,63currencyexchange,seeforeignexchangeCycloneLarryorCycloneMonicaincomesupport

payment,23

Dateforlodgment,10–11see alsolatelodgment

defactospouses,seespousesdeathanddeceasedestates,3,12

child,71,96culturalbequests,59farmmanagementdeposits,s14governmentpensions,allowancesandpayments receivedafter,13,24,71,108inheritance,20,59,108;capitalgains,s17spouse,100,101,106,110see alsowidows/widowers

deathbenefitETPs,20–1,22debtdeductions,56,s26,s40

see alsointerestdebtforgiveness,30–1debtowingontax,12,114deceasedestates,seedeathdeclineinvalue,seedepreciatingassetsdeductions(expenses),36–64,s31,s33–41

dependants’separatenetincome,70farmmanagementdepositwithdrawals,s14–15partnershipandtrustdistributions,s4–5

INDEx ThisisacombinedindexcontainingreferencestobothTaxPack 2007andTaxPack 2007 supplement(pagenumbersprecededby‘s’refertothesupplement).


IND

EX

rentalincome,s26–7STSannualturnoverand,s56–7

DefenceForcepersonnel,37,s43–9exemptincome,13,14incomesupportallowance(DFISA),13,24Medicarelevy/levysurchargeexemption,102–3, 105MRCAEducationAllowance,13,23see alsoveterans

deferredlosses(earlierincomeyearlosses),65–7capital,s18non-commercialbusiness,s2,s4,s5,s12–13; dependants,70section40-880deductions,s40usedtoreducedforeignsourceincome,s25

demergerdividends,30,31dentalexpenses,s50DepartmentofAgriculture,FisheriesandForestry,s14DepartmentofCommunications,Information

TechnologyandtheArts,59DepartmentofEducation,ScienceandTraining,

IndigenousTutorialAssistanceScheme,s7,s9DepartmentofImmigrationCitizenship,Translating

andInterpretingService,s7,s9DepartmentoftheEnvironmentandWaterResources,59

DepartmentofVeterans’Affairspayments,seeveterans

dependants,69–83,s52ofdeceasedpersons,20,22medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7zoneoroverseasforcestaxoffsets,s44–7see alsochildren;separatenetincome;spouses

depreciatingassets,53,56,s31cars,39–40,42,44low-valuepools,54–5recordretentionperiod,37rentalproperties,s26–7self-educationexpenses,50sitepreparationfor,s37–8STSpooldeductions,s39usedforself-educationpurposes,50

destroyedassets,s31cars,40see alsocapitalgains

destroyedrecords,37DFISA,13,24diaries,53diplomaticstaff,102–3,105,s22directrefunds/debits,12director’sfees,16–17dirtallowances,17disability,peoplewith,7

exemptincome,13,14invalidrelatives,69–70,82,s44,s50–2medicalexpenses,s50–1pensioners,13,24;under18yearolds,108see alsoblindpeople;mentaldisability,peoplewith

disasterrecovery/reliefpayments,13discountsonsharesorrights,s29–30,s31disposalofassets,40

see alsocapitalgainsdividends(distributions),30–3,56,s2–6

dependants’,69employeeshareschemes,s17,s29–30,s31foreign,s20–1,s23–4,s62;withholdingtaxcredit, s3,s6traditionalsecurities,s31,s39see alsocapitalgains;familytrustdistributiontax; trustsandtrustincome

divorce,seemarriagebreakdowndoctors’expenses,s50dogs,s50donations,57–60,63doubleorphanpension,13,108doubletaxationagreements,s21,s22dramatists,seespecialprofessionalsdrycleaning/laundry,17,47–8Dutchpensions,s21,s34DVDs,53

E-tax,6,116earlierincomeyearlosses,seedeferredlossesearlypayments,s62earlyretirementpayments,seeretirementpaymentsearnings,seeincomeearsandhearing,s50educationandtraining,49–51

ageofdependentstudents,69attendanceatconferences,seminarsand workshops,45–6,53familytaxbenefitpaymentsand,71,72IndigenousTutorialAssistanceScheme,s7–11lumpsumpaymentsinarrears,s30,s31,s32qualificationsallowances,17scholarshipsandbursaries,13,69,70,s30schoolbuildingfunds,57,58–60stoppedfull-time,9studentallowancesandpayments,13,23,24studentloansschemes,27,49,50,128–9,s62see alsooverseasstudents

educationentrypayment,24electionexpenses,s31,s39,s41electiontospreaddeductionforgifts,59–60electoralcandidates,seeparliamentarianselectricityconnections,s4,s5electronicfundstransfer(EFT),12

farmmanagementdeposits,s14electroniclodgment(e-tax),6,116electronicrecords,37eligibleterminationpayment(ETP),18–22,24,34,

105,s29,s31dependants,69MedicareLevySurchargeand,105spouse’s,107see also retirementpayments,superannuation andannuitiesembassystaff,102–3,105

emigrants,12,109employeeshareschemes,s17,s29–30,s31employerlettersorstatements,seepayment

summariesemployers

childcareprovidedby,93privatehealthinsuranceprovidedby,91–2

employment,15–22,s7–11foreign,s20–1,s22–4governmentallowancesandpayments,13,14,23matureageworkertaxoffset,124–5,s54–5parentsreturningto,74personalsuperannuationcontributions,s35–7spousesworkingforpartofyear,69under18yearolds,108visaholderswithworkrights,11work-relatedexpenses,36–53workplace-givingprograms,57see alsofringebenefits;retirementpayments;superannuationandannuities

employmententrypayment,13entertainers,seeperformingartistsentertainmentallowances,17entrepreneurstaxoffset,s56–8environmentprotectionactivities

conservationcovenants,59,63,s16landcareoperations,s4,s5,s53projectassessments,s37–8waterconservation,s39waterfacilities,s4,s53

environmentalorganisations,giftsordonationsto,57,58–9,63

equitytrusts,seetrustsandtrustincomeerrors,seemistakesevidence,seepaymentsummaries;recordkeepingex-prisonersofwar,14,70ex-servicepersonnel,seeveterans‘exceptednetincome’,108exceptionalcircumstancesdeclarations,s14exceptionalcircumstancesreliefpayment,23,s44exemptincome,13–14

foreign,s22–3net,65separatenetincome(SNI),69–70spouses,87,88,111

expenses,seedeductionseyesandvision,53,s50

see alsoblindpeople

F-111deseal/resealex-gratialumpsumpayments,13failuretolodgeontimepenalty,11familyadjustedtaxableincome,73Familyagreement,102,103

record-keepingperiod,10FamilyAssistanceOffice(FAO),paymentsfrom,71,

72familyassistanceone-offpayment,14,69familyincome,100–2,115familytaxbenefit(FTB),71–4,115

advicerelatingtoclaims,63consenttousepartoftaxrefundtorepay spouse’sdebt,111electronicfundstransferwanted?,12exemptincome,13,69taxoffsetsand,77–83Withholding declaration(NAT3093–7.2007),27

Family tax benefit (FTB) tax claim 2007,74familytrustdistributiontax,s61

frankingcreditsdonotattachwhenpaid,31whichspousewouldhavetopay,105,111

fares,45–6,50faresallowance,13farmmanagementdepositsorwithdrawals,s14–15farmsupportpayments,13,23,s44farming,seeprimaryproductionfeasibilitystudies,s37–8FEE-HELP,49,50fees,6

deductions,45–6,49–53,56,63,s26; recordkeeping,37income,16–17see alsochildcare

fertilisationtreatment,s50FIFmeasures,s19–20filmindustryinvestments,s33,s41

finaltaxreturn,12financialinstitutionaccounts,29

electronicfundstransferwanted?,12feesandcharges,56,s26

financialinstitutionlotteries,s30–1fire-resistantclothing,47firstaidallowance,17fishing,seeprimaryproductionFLICdeductions,s41foodandmeals,17,45–6,50,53footwear,protective,47–8forcedlabourcompensationpayments,14,70foreignaidfunds,giftsanddonationsto,57,58–60foreignentities,s19–20

superannuationfunds,s19–21,s22–3trusts,s19,s62

foreignexchange(forex),s30,s31,s38losses,s40

foreignexchangerates,s21,s25foreignincome,s19–25

Australianlossesand,66capitalgains,s16conduit,32deductions,s33–4,s40familytaxbenefitand,74,75partnershipsandtrusts,s2–3,s6temporaryresidents,14

foreigninvestmentfunds,s19–20foreignpensionsandannuities,s19–23,s33–4

lumpsuminarrears,s30,s31,s32foreignresidentwithholding,s9–11

dividendincome,31interestincome,29partnershipandtrustincome,s2–3,s6

foreignresidents,seenon-residentsforeignstudents,seeoverseasstudentsforeigntaxcredits,s20,s21,s25forestry,seeprimaryproductionforgivendebts,30–1frankingcredits(imputationsystem),31–3,70,s6

fromNewZealandcompanies,s24–5freedomofinformation,117friendlysocietybonuses,s28,s30friendlysocietyscholarships,s30friends,helppreparingtaxreturnfrom,6fringebenefits,28

adjusted,74exemptcarexpensepayment,17spouses,105,111,s42

FTB,seefamilytaxbenefitfuelandoilcosts,42,44fund-raisingevents,contributionsrelatingto,58–9furnitureandfittings,50,53futureTaxOfficeplans,6futuretaxreturn?,12

Gainsfromforeignexchange,s30,s31,s38fromtraditionalsecurities,s31see alsocapitalgains

gameshowwinnings,s31gaol,peoplein,85,101,s46gardeningexpenses,s26generalinterestcharge(GIC),11,63,s31,s62GermanForcedLabourCompensationProgramme,

14,70Germanpensions,s21,s34gifts,57–60,63

cars,38glasses,53,s50gloves,53goldenhandshakes(ETPs),19–22,105,s29,s31goodsandservicestax,36,63,s31governmentpensions,allowancesandpayments,

12,23–4,111,s31dependants’separatenetincomeand,69–70exemptincome,13–14,87,88,111familytaxbenefitpaymentsand,72,75foreign,s21–2,s30,s33–4lumpsumpaymentsinarrears,s30,s31,s32Medicarelevyexemption,100,102–3,105taxoffsets,23,84–9,100,123–4taxableincomeforlodgingtaxreturns,2under18yearoldrecipients,108zonetaxoffsetreducedby,s44

GovernmentSuperCo-contribution,13,s36grapevines,s4gratuities,16–17GreenCorpstrainingallowance,23grossinterest,29grosspayment,15–16grossed-downfringebenefitsamount,74grossed-upfringebenefitsamount,28groupcertificates,seepaymentsummariesgrowthtrusts,seetrustsandtrustincomeGST,36,63,s31guidedogs,s50

Hardhats,53hardship,114,116health,s50–1


IND

EX

invalidityretirementpayments,18–22privateinsurance,14,70,91–2,98,104–6protectiveclothingandaccessories,47–8,53sickleave,paymentforunused,19–22sicknessallowance,23,102–3,105see alsoMedicarelevy;sicknessandaccident insurance

healthcarecards,72hearingaids,s50heating,53heavydutyshirtsandtrousers,48heightallowances,17helpservices,7,inside back coverheritage(cultural)

organisations,giftsanddonationsto,57,58–9,63HigherEducationContributionScheme(HECS),s62HigherEducationLoanProgramme(HELP),27,49,

50,128–9,s62hiredvehicles,38–46holdingperiodrule,31–2,s6holidayhomes,s61

see alsocapitalgainsholidayprizes,s30–1homeandcapitalgains,s17homeandeducation,travelbetween,50homeandwork,travelbetween,38,39,50

dependants,70homeofficeexpenses,38,53honoraria,16–17horticulturalplants,s4hospitalexpenses,s50hospitalinsurance,private,14,70,91–2,98,104–6hostelexpenses,s51housekeepers,80–3,101,s45–6,s50–1

see alsodependantshouses,s61

see alsocapitalgains;renthusbands,seespouses

Illness,seehealthimmigrants,seemigrantsimprovementstorentalproperties,s27imputationsystem,seefrankingcreditsimputationtrusts,seetrustsandtrustincomein-vitrofertilisationtreatment,s50income,2–3,13–35,s2–32

children(under18yearolds),2,72,108,s3receivedafterdateofdeath,12see alsoexemptincome;foreignincome; low-incomeearners;separatenetincome; tax-freethresholds;taxableincome

incomebondbonuses,s30incomeprotectioninsurancepremiums,s29,s39–40incomesupportpayments,seegovernment

pensionsincomesupportsupplement,24independentcontractors,s7–11IndigenousTutorialAssistanceScheme,s7–11information,accessto,116–17infrastructure,creatingorupgrading,s37–8infrastructureborrowingsscheme,s29,s39,s59inheritance,59,108

capitalgains,s17deathbenefitETP,20

injuries,compensationfor,14insolvency,seebankruptcyinsurance,15–16,s29

bonuses,s28,s30cars,42,44foreignlifepolicies,s19–20lumpsumpaymentsinarrears,s30,s31,s32premiumcosts,s39–40privatehealth,14,70,91–2,98,104–6rentalproperties,s26

intellectualpropertyrights,s37–8interest,29,69

deductions,56,s40foreignsource,s20–1,s23–4,s62infrastructureborrowings,s29,s39,s59landtransportfacilitiestaxoffsetscheme,s29,s39,s59paidoncars,42,44paidtoTaxOffice,11,63,114,s31,s62rentalpropertyloans,s26TaxOfficegaveorcreditedyouwith,29,s62see alsowithheldtax

interest-free/lowinterestloansasprizes,s30,s31interimincomesupportpayment,23internationalagreements,84,s21,s22internationalaidfunds,giftsanddonationsto,57,

58–60internationalexchange,seeforeignexchangeinternet,56

lodgmentby(e-tax),6,116OfficeofPrivacyCommissioner’swebsite,118TaxOfficewebsite,7

interpretingandtranslatingservices,s7–11invalidrelatives,69–70,s44,s50–2

see alsodependantsinvalidityretirementpayments,18–22invalidityservicepension,13,24inventors,seespecialprofessionals

investment,56inAustralianfilmindustry,s33inforeignentities,s19–25under18yearolds,108see alsocapitalgains;debtdeductions;dividends;rent

investment-relatedlotteries,s30–1isolatedareas,13,s43–9Italianpensions,s34itinerantwork,38–46

Jail,peoplein,85,101,s46Japaneseinternmentcompensationpayments,

14,70jewellery,seecapitalgainsjointfinancialinstitutionaccounts,29,56JointPetroleumDevelopmentArea,workor

servicesin,s59jointlyownedcars,39jointlyownedrentalproperties,s26journals,53,56juryattendancefees,16,17

Labourhirearrangements,independentcontractsunder,s7–11

land,conservationcovenantson,59,63see alsocapitalgains

landtax,s26landtransportfacilitiestaxoffsetscheme,s29,s39,

s59landcareoperations,s4,s5,s53language,literacyandnumeracysupplement,13,69lasereyesurgery,s50lasttaxreturn,12latelodgment,10–11,s62

record-keepingretentionperiodafter,37latepayment,114latepaymentsummaries,11,15laundry,17,47–8lawnmowingexpenses,s26lawyers’fees,63leasedvehicles,38–46leave,lumpsumpaymentsfor,18–22,69legaldisability,105,s3legalexpenses,63legalresponsibilityforchildren,95–6leviestostrikefunds,53libraries,professional,53lifeassurance/insurance,19–22,s28,s30

foreign,s19–20see alsosuperannuationandannuities

lighting,53limbs,artificial,s50liquidatedcompanies,sharesin,s17listedinvestmentcompanies(LICs),seedividends

(distributions)loans

interestpayments,56,s26low-interest/interest-free,s30–1toprivatecompanyshareholders,9,30–1studentschemes,27,49,50,128–9,s62see alsodebtdeductions;interest

localgovernment,s29electionexpenses,s31,s39,s41rates,s26

lodgment,2–6,10–11,112–13,116activitystatements,27,63costs,6,63,s31inthefuture,12record-keepingretentionperiodand,37see alsolatelodgment

‘logbook’method,39,40,43–4,50loneparents,24,74,101,106–7,s46–7longserviceleave,lumpsumpaymentsforunused,

18,69lossofearningspayments,15–16

Veterans’EntitlementsActallowance,14lossofjob,paymentfor,19–22losses,65–8,s9–13

capital,s16–18;madebytemporaryresidents,14foreign,s24foreignexchange,s40netrentalproperty,74partnerships,s2–5,s12–13personalservicesincome,s8,s41recordkeepingperiod,10traditionalsecurities,s39trusts,s2–5see alsodeferredlosses

lostassets,s31cars,40see alsocapitalgains

lostrecords,37paymentsummaries,11,15

lotterybenefitsandprizes,s30–1low-incomeearners,3,100

spouses,superannuationcontributionson behalfof,s42taxoffset,68,123see alsogovernmentpensions;taxableincome

lowratethresholds,21–2

low-valuepools,54–5lumpsumpayments,18–22

inarrears,s3-2;spouse’s,105dependants’separatenetincome,69,70exemptincome,13,14,70foreign,s20–1,s23–4

luxurycars,39–40,41–2

Magazinesandjournals,53,56‘mainresidence’exemption,s17maintenance,14,69

see alsochildsupportmaintenanceandrepairs,seerepairsand

maintenancemaintenanceincome-freearea,75managedfunds,seetrustsandtrustincomemanagementfees,56managingtaxaffairs,6,63,s31marriagebreakdown,2,82

assettransferon,s17see alsomaintenance;sharedcare

marriedspouse,seespousematernityimmunisationallowance,14,70

maternitypayment,14,70matureageallowance,23,84matureageworkertaxoffset,124–5,s54–5meals,17,45–6,50,53medicalexpenses,s50–1Medicarelevy,99–107,110,125–8MedicareLevyExemptionCertificationUnit,102Medicarelevysurcharge,104–7,110,127–8medicine(pharmaceuticals),14,s50membersofparliament,seeparliamentariansmembershipsubscriptions,53mentaldisability,peoplewith,s3

housekeepereligibility,82spouse,82,101,105,s46under18yearolds,108

migrantsdependantsawaitingoverseas,69,s50taxfilenumberapplications,11

migrationoverseas,12,109MilitaryRehabilitationandCompensationAct,14

EducationandTrainingScheme2004,13,23minors,seechildrenmistakes

onpaymentsummaries,15ontaxreturns,113see alsoobjections/complaints

mobilityallowance,14money,seeassetsmoneymarkettrusts,seetrustsandtrustincomeMortgageandRentReliefSchemepayments,14mortgagetrusts,seetrustsandtrustincomemotorvehicles,seecarsmotorcycles,45–6MRCAEducationAllowance,23musicians,seeperformingartists

Netcapitalgain,69,108,s18netcapitallosses,s18netexemptincome,65netfarmmanagementdepositsorwithdrawals,

s14–15netforeignsourceincome,seeforeignincomenetincomefromworking,124–5,s54–5netincomeorlossfrombusiness,s9–11netmedicalexpenses,s50–1netnon-primaryproduction,s5netpersonalservicesincome,s8,s41netprimaryproductiondistribution,s5netrent,s27Netherlandspensions,s21,s34NewEnterpriseIncentiveSchemeallowance,23NewZealandcitizens,71NewZealandcompanies,s24–5Newstartallowance,23non-commercialbusinesslosses,s2,s4,s5,s12–13

dependants,70non-lodgmentadvice,3–4non-primaryproduction,s10,s14

partnerships,s3,s5taxlossesofearlierincomeyears,65,66,67,s12trusts,s4,s5

non-residents,2,121became/stoppedbeing,12,109,120,122capitalgainstax(CGT),s17debtdeductions,56,s40Medicarelevy/levysurchargeexemption,102–3, 105netexemptincome,65overseasdependantswaitingtomigrate,69,s50see alsoforeignentities;foreignresidentwithholding

non-shareequityinterests,31non-slipshoes,47–8NorfolkIslandresidents,102–3,105noticeofassessment,10,115–16

see alsoamendmentofassessmentsnursingexpenses,s50nursinghomeexpenses,s51


IND

EX

Objections/complaints,114,116,118costsof,63,s31

occupations,15,37clothingandaccessoriesspecificto,47–8,53notreceivingemployersuperannuationsupport, s35–7see alsoprofessionals

odometerrecords,42,43offsets,seetaxoffsetsoffshoreincome,seeforeignincomeoilandfuelcosts,42,44olderAustralians,24

matureageallowance,23,84matureageworkertaxoffset,124–5,s54–5one-offpaymentsto,13,14,69–70seniorsconcessionallowance,14see alsoseniorAustralianstaxoffset;superannuationandannuities

Ombudsman,118one-offAustralianGovernmentpayments,13,14,69one-parentfamilies,24,74,101,106–7,s46–7‘one-thirdofactualexpenses’method,39,40,42,

44,50openemploymentincentivebonus,14operations(surgery),s50optician/optometristexpenses,s50oralhealthexpenses,s50oralrulings,7ornamentaltreesandshrubs,s37–8orthodontistexpenses,s50OS-HELP,49,50otherAustralianpensionsorannuities,see

superannuationandannuitiesotherdeductions,s39–41otherincome,s29–32

spousereceives,105othertaxoffsets,s59otherwork-relatedexpenses,52–3overalls,48overnightbusinesstrips,45–6overseasaidfunds,giftsanddonationsto,57,

58–60overseasdependantswaitingtomigrate,69,s50overseasforces,14,s43–8overseasincome,seeforeignincomeoverseasinterests,56,s19–21,s25,s40overseaslodgment,112–13overseasmove,permanent,12,109overseasresidents,seenon-residentsoverseasstudents,12

exemptincome,13OS-HELPforAustralians,49,50taxfilenumberapplications,11

overseastravellers,11,12,112–13onbusinesstrips,45–6medicalexpenses,s50

overtimemeals,17,53

Panelvans,45–6parentingpayment(partnered),23,69parentingpayment(single),24parents(yours/yourspouses),69,s44,s50–2

see alsochildrenparkingfees,37,45–6parliamentariansandelectoralcandidates,s39,s41

donationsandgiftsto,57–8partownershipofcars,39partownershipofrentalproperties,s26part-timejobs,incomefrom,15–17part-yeartax-freethreshold,109partners,seespouses,partnershipspartnerships,

s2–6,s12–13amendmentperiod,10entrepreneurstaxoffset,s56–8personalservicesincomeattributedtoyoufrom, 26section40-880deductions,s40under18exceptednetincome,108see alsodividends(distributions)

passiveincome,seedividends;rent;royaltiespay,seesalaryorwagespayasyougo(PAYG)instalments,63,s31payasyougo(PAYG)voluntaryagreements,s7–11payasyougo(PAYG)withholding,seewithheldtaxPayer’sAustralianbusinessnumberbox,15,16paymentsummaries,lettersorstatements,15–28,

53,57,110dividend/distributionstatements,30,32,56,s3forETPs,20,21financialinstituteaccountstatements,29,56late,lostorwrong,11,15lumpsumpayments,s30MedicareLevyExemptionCertificationUnit certificate,102personalsuperannuationcontributions,s35privatehealthinsurancestatements,92,98,104record-keepingperiod,10taxfilenumber(TFN)shownon,11travelandawardovertimemealallowancesnot shownon,17

paymentsreceived,seeincomepeacekeepingforces,14,s43–8penalties,11,63,s62pensionereducationsupplement,13pensionertaxoffset,88–9,100,110,123–4pensioners,seegovernmentpensions;

superannuationandannuitiesperformingartists,37,s7–11,s29,s30–1

instrumentsandequipment,38partnershiportrustdistributions,s5

periodicalsandjournals,53,56personalservicesincome,16–17,26,s7–8,s41personalsuperannuationcontributions,s35–7personaluseassets,seecapitalgainspestcontrolexpenses,s26petrolandoilcosts,42,44pharmaceuticalallowances,14pharmaceuticalexpenses,s50phoneallowance,14phoneexpenses,53,s26phonelines,s4phoningTaxOffice,7,117,inside back coverplants,s4,s37–8

see alsoprimaryproductionplaywrights,seespecialprofessionalspolitical(election)expenses,s31,s39,s41politicalparties,donationsandgiftsto,57–8‘post-June1983component’,21powerconnections,s4,s5powerofattorney,6prepaidexpenses,36,s26prescriptionexpenses,s50presents,seegiftsprimaryproduction,s9–11,s39

farmmanagementdepositsorwithdrawals, s14–15farmsupportpayments,13,23,s44partnershipincomederivedfrom,s3,s4,s5sugarindustryexitgrant,14trustincomederivedfrom,s4,s5

primaryproductionlosses,s9–11earlierincomeyears,65,66,67,s12partnershipsandtrusts,s2–5

prioryearlosses,seedeferredlossesprisoner-of-warcompensationpayments,14,70prisoners,85,101,s46privacy,116–17,118privatecompanydistributions,9,30–1privatehealthinsurance,14,70,91–2,98,104–6privatehospitalexpenses,s50privaterulings,7,61,s34prizes,59,s30–1productrulings,7productionassociates,seespecialprofessionalsprofessionalassociationsubscriptions,53professionallibraries,53professionals,s7–11,s29,s30–1

deductions,37,53partnershiportrustdistributions,s5

projectpools,s37–8property,seeassetspropertyagentfeesandcommissions,s26propertytrusts,seetrustsandtrustincomeprotectiveclothingandaccessories,47–8,53PSI,s7–8publichospitalexpenses,s50publictradingtrusts,seedividends(distributions)publictransportfares,45–6,50publications,50,53,56,63

Qualificationsallowances,17qualifyingresidenceexemption,84quizshowprizes,s31

Raffleprizes,s31rates,council,s26ratesoftax,seetaxratesRDOs,paymentforunused,19–22realestate,seecapitalgainsreasonablebenefitlimits(RBLs),19–22rebates,seetaxoffsetsrecordkeeping,10,36–7

employeeshareschemes,s30fringebenefits,28giftsanddonations,57,59–60homeoffices,53‘logbook’method,4330%childcaretaxrebatetransferagreement,94travelexpenses,45–6

recordsinprofessionallibraries,53recreationleave,lumpsumpaymentsforunused,

18,69redundancypayments,seeretirementpaymentsreferencebooks/material,50,53,63refugeequalifyingresidenceexemption,84refunds,12,115–16,s31registeredpoliticalparties,giftsanddonationsto,

57–8registeredtaxagents,6,12,63,114rehabilitationallowance,108relatedpaymentsrule,31–2,s6

relatives,69–70,s44,s50–2helppreparingtaxreturnfrom,6see alsodependants

religiouspractitioners,s35–7remoteareaallowance,14,69,s44remoteareazonetaxoffset,s43–9rent,s26–7

dependants,69familytaxbenefit(FBT)and,74foreign,s20–1,s23–4see alsocapitalgains

rentassistance/relief,14,72repairsandmaintenance,50,53

cars,42,44clothing,47rentalproperties,s26

reportablefringebenefitsamounts,seefringebenefits

Request for a determination of the deductible amount of UPP of an Australian pension or annuity(NAT16544),61

ReserveBankofAustralia,116residences,s61

see alsocapitalgains;rentresidency,seeAustralianresidents;non-residentsresidentialagedcareexpenses,s51retainers,56retirementexemption,smallbusiness,s18retirementpayments18–9,22,24-5,s29,s31

dependants’,70foreign,s20–1,s23–4see alsoeligibleterminationpayments,termination payments,superannuationandannuities

returnedservicespersonnel,seeveteransreturns,seetaxreturnsriskallowances,17roadtolls,37,45–6rolledoverETPs,19,22rostereddaysoff,paymentforunused,19–22royalties,s3,s20–1,s23–4,s30rulings,7,61,s34

Salaryorwages,15–17,69adjustments,108–9AustralianNaval,ArmyorAirForceReserve,14CDEP,23childcaresalarysacrificearrangement,93foreignemployment,s22–3lumpsumpaymentsinarrears,s30,s31,s32monthlylimitforpersonalsuperannuation contribution,s35partnershippaidyou,s2

saleofassets,seecapitalgainssavingsaccount,seefinancialinstitutionaccountsscholarshipsandbursaries,13,69,70,s30schoolbuildingfunds,57,58–60schooling,seeeducationandtrainingsecondjob,traveltoandfrom,39SecondWorldWar,paymentsrelatingto,14,70secondaryeducationassistance,13section40-880deductions,s40securities,seedividendsself-assessment,10self-education,seeeducationandtrainingself-employedpeople,s7–13,s35–7,s40,s56–8seminars,conferencesandworkshops,45–6,53seniorAustralianstaxoffset,84–7,110

calculating,123–4Medicarelevyreductionorexemption,100,101taxreturnlodgment,2,12

seniorsconcessionallowance,14separatenetincome(SNI),69–70,s50,s52

child-housekeepers,80,81,s46housekeepers,82Medicarelevyreductionorexemption,100spouse,77,78,111,s45zoneoroverseasforcestaxoffsetcalculations, s45–6

servicepensioners,seeveteransservicepersonnel,seeDefenceForcepersonnelservices,paymentfor,16–17,26,s7–8,s41servicestransferredtonon-residenttrusts,s19SFSS,128–9,s62sharetrusts,seetrustsandtrustincomesharedcare,71,74,75

taxoffsetcalculations,78,81;example,79zone/overseasforcestaxoffset,s46–7

shares,seecapitalgains,dividendsshirts,48shoesandboots,47–8shorttaxreturn,6shortfallinterestcharge,114,s62shrubsandtrees,s37–8sickleave,paymentforunused,19–22sickness,seehealthsicknessallowance,23,102–3,105sicknessandaccidentinsurance,15–17,s29

lumpsumpaymentsinarrears,s30,s31,s32premiums,s39–40

signingtaxreturns,6deceasedestates,12


IND

EX

simplifiedtaxsystem,40,52,s39,s56–8recordkeepingperiod,10

singleparents,24,74,101,106–7,s46–7siteallowances,17sitepreparation,s37–8smallshareholderexemption,32smocks,48SNI,seeseparatenetincomesocialsecuritypayments,seegovernmentpensionssoftwareandcomputers,50,53soleparents,24,74,101,106–7,s46–7soletraders,s7–13,s35–7,s40,s56–8solicitors’fees,63specialbenefit,23specialhumanitarianprogramarrivals,84specialprofessionals,s29,s31

netincomeorlossfrombusiness,s10partnershiportrustdistributions,s5personalservicesincome,s8

spectacles,53,s50sportspersons,seespecialprofessionalsspouse(partner),69–70,110–11

babybonustransferees,95childcaretaxrebatetransfers,3,93–4,110familytaxbenefitand,72–3,75,111governmentpensionersorbeneficiaries,2,13, 23–4,69,84,111housekeepertaxoffsetand,82jointfinancialinstitutionaccounts,29,56maintenancepaymentsreceivedby,14,69medicalexpenses,s50–1Medicarelevy/levysurcharge,100–7pensionertaxoffset,88–9,110seniorAustralianstaxoffset,2,85,86–7superannuationcontributionsplitting,s36superannuationcontributionsonbehalfof,s42taxoffset(withoutdependentchildorstudent), 77–9,110,s43,s45zoneoroverseasforcestaxoffsetcomponent, s43,s45see alsodependants

stapledsecurities,s17,s29–30,s31stationery,50,s26Statutory declaration(NAT4135),15steel-cappedboots,48stepchildren,seechildrenstrikefundlevies,53structuralimprovementstorentalproperties,s27STS,seesimplifiedtaxsystemStudentFinancialSupplementScheme(SFSS),27,

128–9,s62studentunionfees,50students,seedependants;educationandtrainingsubscriptions,53,56sugarindustryexitgrant,14sunprotection,47,53SuperCo-contribution,13,s36Superannuation Act 1976pensionsandpayments,

13superannuationandannuities,18–22,25,69,90, s30,s35-7contributions,s35–7;onbehalfofspouse,s42exemptincome,13,14foreign,s19–23,s30,s33–4lastreturn,12lumpsumpaymentsinarrears,s30,s31,s32taxoffset,90under18exceptednetincome,108see alsoundeductedpurchaseprice;governmentpensions,allowancesandpaymentssurgery,s50

Tapes,53targetforeignincome,74,75taxadvice,3,7,63taxagents,6,12,63,114taxassessment,seeassessmentnoticestaxcosts,6,63,s31taxcredits,s62

foreign,s20,s21,s25foreignresidentwithholding,s2–3,s6partnershipsandtrusts,s2–3,s5–6see alsofrankingcredits

taxdebt,12,114taxfilenumber(TFN),11,116,117

amountswithheldbecausenotquoted,29,32, s6;example,33

tax-free(taxdeferred,taxexempted)distributions,s2tax-freethresholds,2,9,12,120

eligibleterminationpayments(ETPs),19part-year,109reportablefringebenefits,28see alsotaxrates;taxableincome

TaxHelp,3taxlosses,seelosses

TaxOffice,7,116–17,118,inside back coverfamilytaxbenefitclaimsfrom,74futureplans,6interestandpenaltiescharged,11,63,114,s31, s62interestreceivedfrom/creditedwith,29lodgmentaddress,112–13

paymentofsuperannuationamountscollected by,19–22shopfronts,131

taxoffsets(rebates),3,76–97,110,123–5,s28, s42–60landtransportfacilitiesborrowings,s29,s39,s59lowincome,68,123Medicarelevyreductionorexemption,100-3;for Medicarelevysurcharge(MLS),105pensionersandbeneficiaries,23,84–9,123–4;Withholding declaration(NAT3093–7.2007),27see alsofrankingcredits;seniorAustralians taxoffset

taxrates,121,122eligibleterminationpayments(ETPs),21–2frankeddividends,32Medicarelevy,100Medicarelevysurcharge,104specialprofessionals,s31TFNwithholding,32usedtogrossupfringebenefits,28

taxrefunds,12,115–16,s31taxreturns,2–12,112–13

mistakeson,113preparing,6,63,s31see alsolodgment

taxwithheld,15–18,23–7ETPpayments,20partnershipsandtrusts,s2–3,s5–6TFN/ABNnotquoted,29,32,63,s5–6,s7–11; example,33see alsoforeignresidentwithholding;taxcredits

taxableincome,2,12,68,110calculatingtaxon,120–2familytaxbenefit(FBT)and,72–5Medicarelevy,100,101Medicarelevysurcharge,104,105–7non-primaryproductionandfarmmanagement deposits,s14seniorAustralianstaxoffset,2,85,86,100,101specialprofessionals,s31

taxableusepercentage,54taxationrulings,7,61,s34taxifares,45–6Taxpayer’s declaration,6technicaljournals,53,56teeth,s50telephoneallowance,14telephoneexpenses,53,s26telephonelines,s4telephoningTaxOffice,7,117,inside back cover

temporaryresidents,14capitalgainstax,s18departingAustraliasuperannuationpayment,19employeeshareschemes,s29–30familytaxbenefiteligibility,71foreignincome,assetsorproperty,s19,s21taxfilenumberapplications,11

termdeposits,29terminationpayments,seeeligibletermination

paymentstextbooks,50,53textile,clothingandfootwearspecialallowance,23TFN,seetaxfilenumbertherapeutictreatment,s50thincapitalisationrules,56,s4030%childcaretaxrebate,3,93–4,110,129TimorSeaJointPetroleumDevelopmentArea

(JPDA),s59tips,16–17tolls,37,45–6tools,38

allowances,17,36totaldeductions,64totalincomeorloss,35totalreportablefringebenefitsamounts,28,105totalsupplementdeductions,s41totalsupplementincomeorloss,s32totalsupplementtaxoffsets,s60totaltaxoffsets,97totaltaxwithheld,27tradeassociationsubscriptions,53TradeLearningScholarships,13trademagazines,53tradeunionfees,53traditionalsecurities,s31,s39train,tramandbusfares,45–6,50training,seeeducationandtrainingTrainingforEmploymentProgramallowance,23transferortrustmeasures,s19translatingandinterpretingservices,s7–11travelandtransport,38–46,70

allowances,17governmentpayments,13forinvestmentmanagementpurposes,56,s26landtransportfacilitiestaxoffsetscheme,s29, s39,s59forself-education,50fortaxadvice,63see alsocars;overseastravellers

treesandshrubs,s37–8

trousers,48trucks,45–6trustees,taxpaidby,105,s3,s6trustsandtrustincome,s2–6

amendmentperiod,10attributedpersonalservices,26dependants,69entrepreneurstaxoffset,s56–8spouse,87,88,105,111transferofproperty/servicestonon-resident,s19ultimatebeneficiarynon-disclosuretaxpaid,31see alsocapitalgains;dividends(distributions)

tutorialservices,s7–11‘12%oforiginalvalue’method,40,41–2,44,50

Ultimatebeneficiarynon-disclosuretax,31undeductedpurchaseprice(UPP),61–2,70

foreignpensionsandannuities,s22,s23,s33–4undeductedtaxlosses,seedeferredlossesunder18yearolds,seechildrenunfrankeddividends,32,33

non-residents,31uniforms,47–8unionfees,50,53unittrusts,seetrustsandtrustincomeUnitedKingdompensions,s21,s33UnitedMedicalProtectionLimited(UMP)support

payments,s41UnitedNationsforces,14,s43–8unusedleave,lumpsumpaymentsfor,18–22,69utilitiesallowance,14utilitytrucks,45–6

Valueofdeductiblegifts,57–60,63vans,45–6vests,safety-coloured,47veterans,24,69–70

exemptincome,13,14,70Medicarelevy/levysurchargeexemption,102–3, 105pensionertaxoffset,88seniorAustralianstaxoffset,84–6see alsogovernmentpensions

Veterans’ChildrenEducationScheme,13,23videos,53vision,53,s50

see alsoblindpeoplevoluntaryagreements,s7–11voluntaryservices,paymentsfor,16–17

Wages,seesalaryorwageswarwidows/widowers,13

pensionertaxoffset,88seniorAustralianstaxoffset,83–6

watercharges,s26waterconservationactivities,s39waterfacilities,s4,s53websites,seeinternetwheelchair,carersofpeopleconfinedto,s50widows/widowers,2,23,24

seniorAustralianstaxoffseteligibility,84see alsogovernmentpensions;warwidows/ widowers

wife,seespouseswinnings,s30–1Withholding declaration(NAT3093–7.2007),27withholdingpayernumber(WPN),15withholdingtaxsee taxwithheldwives,seespouseswork,seeemploymentwork-in-progressamounts,s29,s31work-relatedexpenses,36–53workuniforms,47–8worker’scompensation,seesicknessandaccident

insuranceworkplace-givingprograms,57workshops,seminarsandconferences,45–6,53WorldWarII,paymentsrelatingto,14,70worthlessshares,s17writers,seespecialprofessionalswritingtoTaxOffice,117writtenevidence,seerecordkeepingwrongpaymentsummaries,15wrongfuldismissal,paymentfor,19–22

Youth,seechildrenyouthallowance,13,23

Zonetaxoffset,s43–9

MORE INFORMATIONPUbLICaTIONS (including taxation rulings, practice statements and forms)

To get publications referred to in TaxPack 2007 you can:

n visit our website www.ato.gov.au/publications

n phone our Publications Distribution Service 1300 720 092

Before you phone, check whether there are other publications you may need – this will save you time and help us. For each publication you order, quote the full title printed in TaxPack 2007. An automated self-help publications ordering service is available 24 hours a day every day where you know the title of the publication. Alternatively, you can speak to an operator between 8.00am and 6.00pm Monday to Friday.

n visit a Tax Office shopfront. See page 131 for our addresses.

YOU CaN VISIT OUR WEbSITEYou can visit our website at www.ato.gov.au for information on anything that you read in TaxPack 2007.

You can use the tools and calculators on the website to help you complete your tax return.

INfOLINESIf you have an enquiry about your tax, phone the relevant infoline below. Make sure you have TaxPack 2007 handy when you phone us.

We can offer a more personalised service if you provide your tax file number (TFN) and have your last notice of assessment with you when you phone us.

If you require access to your Tax Office records you will be asked to prove your identity by providing your TFN and either details from your last notice of assessment or some personal details.

Our infolines are open Monday to Friday 8.00am to 6.00pm except where otherwise indicated. Our automated services are available 24 hours a day, every day of the year.

You can find a list of Tax Office infolines in your White Pages.

Phoning from overseasIf you are phoning us from overseas: +61 2 6216 1111 Phone during our business hours, 8.30am to 4.45pm (Australian Eastern Standard or daylight-saving time). Note that our infoline numbers may not work from all countries.

You can also fax us: +61 2 6216 2830

Personal Infoline 13 28 61Phone between 8.00am and 6.00pm. Enquiries about the following subjects can be made to this service:n tax affairs for seniors who are retired or planning to retiren family tax benefit and baby bonusn tax file numbers n pay as you go (PAYG), including instalment activity

statementsn student loan schemes (HECS, HELP and SFSS)

n capital gains, rental income, foreign income and questions in TaxPack 2007 supplement

n e-taxn notice of assessment n general income tax, including replacement cheque

and account queries, lodgment and queries about questions in TaxPack 2007

n binding oral advice.

business Infoline 13 28 66

Complaints 13 28 70

Fax (FREECALL) 1800 060 063

EfT Infoline 1800 802 308For enquiries about direct deposit of your tax refund

family assistance Office (faO) 13 61 50

Superannuation Infoline 13 10 20

aboriginal and Torres Strait Islander Infoline 13 10 30Specialises in helping Indigenous clients with their personal tax matters

Tax Office personal self-help 13 28 65 Our automated phone service is available 24 hours a day every day, so you can:n check the progress of your refundn find lost superannuationn make an arrangement to pay a tax debtn lodge your application for a refund of franking creditsn lodge your application for a baby bonusn order a publication where you know the title of

the publication.

Note: Although providing your TFN is voluntary, you need to quote your TFN to use these self-help services (except publications ordering).

fax 13 28 60Get information faxed to you about individual taxes. Follow the instructions to order information to be faxed to you.

People with a hearing, speech or vision impairmentIf you have a hearing or speech impairment, see page 7.

If you have a vision impairment you can prepare your tax return on your personal computer and lodge online using e-tax which is available on our website. You will need the internet and screen reader and/or screen magnification software. We recommend that you use a Microsoft Windows operating system.

We have available free audio tapes and compact disks of TaxPack 2007 and TaxPack 2007supplement. To get copies of these phone: 13 28 61

To report tax evasion confidentiallyPhone (FREECALL) 1800 060 062Fax (FREECALL) 1800 804 544Go to our website www.ato.gov.au/reportevasionMail Locked Bag 6050, Dandenong VIC 3175

Tax HelpIf you want to complete your own tax return or your claim for a refund of franking credits but think you may need some assistance, then Tax Help may be the answer.

We train and support this network of community volunteers to help taxpayers.

Tax Help is a free and confidential service for people on low incomes.

See page 3 for more information – including the Tax Help phone number.

blind or vision impairedIf you have a vision impairment you can lodge your Tax return for individuals 2007 online using e-tax. e-tax is compatible with common screen reader software.

The Tax Office has also developed tax-time products for people who are blind or vision impaired.

We have free audio tapes and compact disks of TaxPack 2007 and TaxPack 2007 supplement available. Phone us on 13 28 61 to get a copy.

If you do not speak English well and need help from the Tax Office, phone the Translating and Interpreting Service (TIS) on 13 14 50. TIS staff can assist with interpreting

in over 120 languages.

إذا كنت ال تجيد التكلم باللغة اإلنكليزية وتحتاج لمساعدة من مكتب الضرائب ، اتصل بخدمة الترجمة الخطية

.يتوفر لدى هذه الخدمة مترجمون في أكثر من مائة وعشرين لغة. 131450والشفهية على الرقم

ARABIC

如你不懂英語但需稅務局協助，請致電 131450 翻譯及傳譯服務處（TIS），翻譯及傳譯服務處的職員可提供超過 120 種語言的傳譯服務。 CHINESE

Ako imate poteškoća s engleskim, a potrebna vam je pomoć od Poreznog ureda, nazovite

Službu prevoditelja i tumača (Translating and Interpreting Service – TIS) na 13 14 50. Osoblje

TIS-a može pružiti pomoć u tumačenju na više od 120 jezika. CROATIAN

) Tax Office(درصورتيکه به لسان انگليسی خوب صحبت کرده نمی توانيد و ضرورت به کمکِ اداره ماليات

می توانند TISموظفين . تيلفون کنيد131450 به نمبر (TIS)تحريری و شفاهی انیداريد، به خدمات ترجم

. لسان کمک کنند120در ترجمانی شفاهی به بيشتر از

DARI

داريد، به خدمات ترجمه ) Tax Office(ه انگليسی خوب صحبت نمی کنيد و نياز به کمکِ اداره ماليات اگر ب

می توانند در ترجمه شفاهی به بيش از TISکارکنان . تلفن کنيد131450 به شماره (TIS)کتبی و شفاهی

. زبان ياری دهند120

FARSI

Αν δεν µιλάτε καλά Αγγλικά και χρειάζεστε βοήθεια από την Εφορία, τηλεφωνήστε στην

Υπηρεσία Μετάφρασης και ∆ιερµηνείας (ΤΙS) στο 13 14 50. Το προσωπικό της TIS µπορεί

να βοηθήσει µε διερµηνεία σε πάνω από 120 γλώσσες. GREEK

Se non parlate bene l’inglese e vi serve aiuto dall’Ufficio delle imposte, telefonate al

Servizio traduzioni e interpreti (TIS) al numero 13 14 50. Il personale del TIS può offrirvi

un servizio interpreti in oltre 120 lingue. ITALIAN

英語でお困りの方で、国税庁のサポートが必要な場合には、翻訳通訳サービス (TIS) 13 14 50 にお電話ください。 TIS では、各種言語との通訳（120 ヶ国語以上）を提供しています。

JAPANESE 영어에 어려움이 있는 분이 국세청으로부터 도움이 필요한 경우, 번역 및 통역

서비스 (TIS) 13 14 50 번으로 전화하십시요. TIS 직원은 120 여개 언어의 통역을

도와 드립니다. KOREAN

Ако не зборувате добро англиски и ви треба помош од Даночната управа,

телефонирајте во Службата за писмено и усмено преведување (Translating and

Interpreting Service - TIS) на 13 14 50. Персоналот од TIS може да помогне со усмено

преведување на над 120 јазици. MACEDONIAN

Если вы не говорите хорошо по-английски и нуждаетесь в помощи Налогового

управления, звоните в Переводческую службу TIS по тел. 13 14 50. Сотрудники TIS

могут помочь с устным переводом более чем на 120 языках. RUSSIAN

Ako ne govorite dobro engleski a potrebna vam je pomo} Poreske uprave, pozovite

Slu`bu za prevo|ewe i tuma~ewe (TIS) na 13 14 50 . Osobqe TIS-a pru`a prevodila~ke

usluge na vi{e od 120 jezika. SERBIAN

Si no habla bien el inglés y necesita ayuda de la Oficina de Impuestos, llame al Servicio

de Traducción e Interpretación (Translating and Interpreting Service - TIS) al 13 14 50. El

personal de TIS puede ayudar con la interpretación en más de 120 idiomas. SPANISH

��

�� (Translating and Interpreting Service - TIS) �� 13 14 50

�� TIS �� 120 �� THAI

İyi İngilizce konuşamıyorsanız ve Vergi Dairesi’nden yardıma ihtiyacınız varsa, Yazılı ve

Sözlü Çeviri Servisi’ni (TIS) 13 14 50 numaralı telefondan arayın. TIS görevlileri 120’den

fazla dilde sözlü tercüme yardımında bulunabilirler. TURKISH

Nếu không nói thạo tiếng Anh và cần Sở Thuế giúp đỡ, xin quý vị gọi điện cho Dịch Vụ

Thông Phiên Dịch (TIS) theo số 13 14 50. Nhân viên của TIS có thể làm thông dịch cho

trên 120 ngôn ngữ. VIETNAMESE

Documents

TaxPack 2007 - Australian Taxation Office€¦ · n You are entitled to the private health insurance tax offset – see question T5 on pages 91–2. n You carried on a business. n