Section MB 1 — Income Tax Act 2007: Adjustments for calculation of family scheme income

MB 1 Adjustments for calculation of family scheme income Assessable income derived at uniform daily rate (1) To determine the net income (the family scheme income ) on which the calculation of an entitlement and tax credit under the family scheme is based, the following paragraphs apply in relation to the 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(1)(e) 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 (4) For the purposes of subsection (1), an amount of a tax loss of a qualifying company that is attributed to the person as a shareholder of the qualifying company under sections HA 20 and HA 24 (which relate to the treatment of tax losses of LAQCs) is not included in family scheme income. 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 sale of building (5C) For the purposes of subsection (1), in relation to a building from the sale 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 that under section MB 4 is treated as having no net income for the purposes of calculating family scheme income. Refunds from main income equalisation accounts (5D) For the purposes of subsection (1), a refund under sections EH 8 to EH 26 (which relate to refunds from main income equalisation accounts) of a deposit made on or after 1 April 2011 is not included in family scheme income of a person, except to the extent that the refund is interest payable to the person under section EH 6 (Interest on deposits in main income equalisation account). 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 , LAQC, listed PIE , main income equalisation account , 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(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(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): 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(5D) heading: inserted, on 1 April 2011, by section 111(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section MB 1(5D): inserted, on 1 April 2011, by section 111(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). 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 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 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).