ATO Interpretative Decision
ATO ID 2005/274 (Withdrawn)
Mature Age Worker Tax Offset - Definition of net income from working
FOI status: may be released
||This ATO ID is withdrawn because it contains a view in respect of a provision of the Income Tax Assessment Act 1937 that does not apply after the 2013-2014 income year. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for income years up to, and including, the 2013-2014 income year.
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 28 July 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Does a taxpayer's 'net income from working' as defined in section 61-570 of the Income Tax Assessment Act 1997 (ITAA 1997) include income received from leasing an asset
No. A taxpayer's 'net income from working' as defined in section 61-570 of the ITAA 1997 does not include income received from leasing an asset.
The taxpayer owns an asset, being a taxi licence.
They lease the licence to another person who uses it in running a taxi business.
The taxpayer receives lease payments on a monthly basis from the lessee.
Reasons for Decision
Subdivision 61-K of the ITAA 1997 provides for a mature age worker tax offset. The amount of the tax offset is dependant on the amount of the taxpayer's net income from working.
Subsection 61-570(2) of the ITAA 1997 defines 'net income from working' as excluding, among other things, 'passive income' as defined in subsection 160AEA(1) of the Income Tax Assessment Act 1936 (ITAA 1936).
Section 6 of the ITAA 1936 defines 'passive income' as 'income derived by the taxpayer by way of rent (within the meaning of Part X). Section 317 of Part X of the ITAA 1936, in turn, defines 'rent' to mean '... any consideration ... paid or given by a lessee under a lease and includes consideration ... in the nature of a rental consideration.'
In the present case the taxpayer receives consideration in return for leasing their taxi licence. As such, this income is 'passive income' and is not included in the taxpayer's 'net income from working' for the purposes of section 61-570 of the ITAA 1997.
Note: Passive income is excluded regardless of whether such income is received directly by a taxpayer or indirectly through a business which they carry on (Explanatory Memorandum to the Taxation Laws Amendment (2005 Measures No.1) Bill 2005).
Date of decision: 15 September 2005
|Year of income:||Year ended 30 June 2005|
Income Tax Assessment Act 1936
Income Tax Assessment Act 1997
Explanatory Memorandum to the Tax Laws Amendment (2005 Measures No.1) Bill 2005
Rebates and offsets
Lease and hire income
Siebel/TDMS Reference Number: 4774790, 1-C0CKRRC
Business Line: Small Business/Individual Taxpayers
Date of publication: 7 October 2005
|ATO ID 2005/274 (Withdrawn) history