MB 1 Adjustments for calculation of family scheme income
Family scheme income: derivation

(1)

The calculation of an entitlement and tax credit under the family scheme is based on a person’s family scheme income. A person’s family scheme income is an amount based on their net income, and is adjusted as provided by this subpart. The following paragraphs apply in relation to assessable income derived by the person in a relationship period in an income year:

(a)

to the extent to which the income is derived from employment during all or part of the income year, it is treated as derived at a uniform daily rate during the period of the employment; and

(b)

to the extent to which the income is derived as an income-tested benefit, it is treated as derived at a uniform daily rate during the period in the income year for which the benefit is paid to the person; and

(c)

despite section 38(1) of the Tax Administration Act 1994,—

(i)

to the extent to which the income is derived otherwise than under paragraph (a) or (b), it is treated as derived at a uniform daily rate during the income year; and

(ii)

any expenditure incurred in deriving the income referred to in subparagraph (i) that is allowed as a deduction is treated as incurred at a uniform daily rate during the income year.

Exempt income included

(2)

For the purposes of subsection (1), an amount derived by the person in the income year is not treated as exempt income if it is—

(a)

an amount referred to in section CW 28(2)(a) or CW 32 (which relate to overseas pensions and maintenance payments):

(b)

an amount of salary or wages that is exempt from income tax under an Act, or under a regulation or Order in Council made under an Act, that is listed in schedule 38 (Acts exempting income from tax: income included in family scheme income).

Deduction

(3)

For the purposes of subsection (1), the person is allowed a deduction for—

(a)

the amount of any payment, made by the person during the income year, of the kind referred to in section CW 32 (Maintenance payments); and

(b)

the amount of any payment made by the person during the income year under section 27K of the Social Security Act 1964, as saved by section 256 of the Child Support Act 1991.

Tax loss of qualifying company[Repealed]

(4)

[Repealed]

Income from portfolio investment entities

(5)

For the purposes of subsection (1),—

(a)

an amount of income attributed by a portfolio investment entity to the person for an income year—

(i)

is not included in family scheme income of the person for the income year if the portfolio investment entity is a superannuation fund or retirement savings scheme:

(ii)

is included in family scheme income of the person for the income year if subparagraph (i) does not apply:

(b)

a distribution from a listed PIE that is derived by the person in an income year is included in family scheme income of the person for the income year.

Retirement scheme contributions

(5B)

For the purposes of subsection (1), an amount of retirement scheme contribution that is not excluded income of the person and would be their excluded income in the absence of section CX 50B(2) (Contributions to retirement savings schemes) is not included in family scheme income.

Amounts of depreciation loss on disposal of building

(5C)

For the purposes of subsection (1), in relation to a building from the disposal of which the person derives assessable income, an amount of depreciation loss allowed in the 2002–03 or earlier income year is not included in family scheme income. However, this subsection does not apply to an amount of depreciation loss of a business or investment activity that under section MB 3 is treated as having no net income for the purposes of calculating family scheme income.

Deposits in main income equalisation accounts

(5D)

For the purposes of subsection (1), the person’s family scheme income is increased by the amount of a main income equalisation deposit the person makes for the income year.

Refunds from main income equalisation accounts

(5E)

For the purposes of subsection (1), the person’s family scheme income does not include the amount of a main income equalisation refund the person receives for the income year.

All known income sources[Repealed]

(6)

[Repealed]

Transitional adjustments

(7)

The amounts described in section MZ 2 (Calculation of child tax credit) are not included in the person’s family scheme income.

Defined in this Act: amount, assessable income, business, Commissioner, deduction, depreciation loss, excluded income, exempt income, family scheme, family scheme income, income, income from employment, income tax, income-tested benefit, income year, listed PIE, main income equalisation account, main income equalisation deposit, main income equalisation refund, net income, pay, portfolio investment entity, qualifying company, relationship period, retirement savings scheme, retirement scheme contribution, salary or wages, shareholder, superannuation fund, tax credit, tax loss, tax year

Compare: 2004 No 35 s KD 1(1)(a), (b), (e)(vii), (i), (3)

Section MB 1(1) heading: replaced, on 1 April 2014 (applying for the 2014–15 and later income years), by section 108(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).

Section MB 1(1): amended, on 1 April 2014 (applying for the 2014–15 and later income years), by section 108(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).

Section MB 1(2): substituted, on 1 April 2011, by section 111(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(2)(a): amended, on 17 July 2013, by section 75 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1(4) heading: repealed, on 17 July 2013, pursuant to section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1(4): repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1(5) heading: substituted, on 1 April 2011, by section 111(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(5): substituted, on 1 April 2011, by section 111(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(5B) heading: inserted, on 1 April 2008, by section 456(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MB 1(5B): inserted, on 1 April 2008, by section 456(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MB 1(5C) heading: inserted (with effect on 1 April 2008), on 7 December 2009, by section 84(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1(5C) heading: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(5C): inserted (with effect on 1 April 2008), on 7 December 2009, by section 84(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1(5C): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(5C): amended (with effect on 1 April 2011), on 30 June 2014, by section 135 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section MB 1(5D) heading: replaced (with effect on 1 April 2011), on 24 February 2016, by section 206(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(5D): replaced (with effect on 1 April 2011), on 24 February 2016, by section 206(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(5E) heading: inserted (with effect on 1 April 2011), on 24 February 2016, by section 206(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(5E): inserted (with effect on 1 April 2011), on 24 February 2016, by section 206(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1(6) heading: repealed, on 1 April 2011, pursuant to section 111(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(6): repealed, on 1 April 2011, by section 111(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms business: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1 list of defined terms depreciation loss: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1 list of defined terms income tax: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms income statement: repealed, on 2 November 2012, by section 121 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MB 1 list of defined terms LAQC: repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1 list of defined terms listed PIE: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms main income equalisation account: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms main income equalisation deposit: inserted (with effect on 1 April 2011), on 24 February 2016, by section 206(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1 list of defined terms main income equalisation refund: inserted (with effect on 1 April 2011), on 24 February 2016, by section 206(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MB 1 list of defined terms portfolio investment entity: inserted, on 1 April 2010, by section 351(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MB 1 list of defined terms portfolio investor allocated income: repealed, on 1 April 2010, by section 351(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MB 1 list of defined terms retirement savings scheme: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms retirement scheme contribution: inserted, on 1 April 2008, by section 456(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MB 1 list of defined terms salary or wages: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of defined terms superannuation fund: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).