FIN2106 Lecture Notes - Lecture 4: Dividend Imputation, Medicare (Australia)
FIN2106 – Module 4
- Personal Tax Code
oTax = [(Assessable Income – Allowable Deductions) x Tax Rate] + Medicare Levy + ML
Surcharge – Offsets and rebates
- Assessable Income
oPersonal exertion income
oIncome from government
oIncome from investment
oFringe benefits
oCapital gains
oSuperannuation
- Allowable Deductions
oGeneral Deductions
Must fall under positive limbs:
Incurred in earnings assessable income
Incurred carrying on business
Must not fall under negative limbs:
Not personal in nature
Not capital in nature
Not incurred in earning non-assessable income
Not otherwise excluded
oSpecific Deductions
Allowed by law even if there are no sufficient nexus to income production
- Personal Tax Rates (2017 / 2018)
oAdults
$0 - $18,200 = Nil tax
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Document Summary
Personal tax code: tax = [(assessable income allowable deductions) x tax rate] + medicare levy + ml. Assessable income: personal exertion income, income from government, income from investment, fringe benefits, capital gains, superannuation. Allowed by law even if there are no sufficient nexus to income production. Personal tax rates (2017 / 2018: adults. ,001 and over = plus sh. 45 for each over ,000: people under 18. Pays the same rate as an adult if excepted person (e. g. have finished full time study and working full time) If not an excepted person, may be taxed at a higher rate for income that is not from employment or business. This is to discourage adults from diverting income to children. Medical levy and ml surcharge: medicare levy. Reduced rates for low income earners: medicare levy surcharge. Applies to high income earners who do not have private health insurance. Ranges from 0% to 1. 5% depending on income.
