1.1.R.105 Reference tax year (CSHC)
For the purposes of CSHC, the reference tax year is usually the tax year immediately before the current tax year. If the applicant has not received a TNA for that tax year, the tax year immediately before that will be the reference tax year.
Example: If the current tax year is 2012-13, details should be provided for 2011-12 or, if the TNA is not yet available, the 2010-11 tax year is acceptable.
Alternatively if the applicant wishes to have their entitlement determined on the current tax year, this will be the reference tax year.
Explanation: If an applicant wishes their current tax year income to be used to determine their entitlement, they must provide an estimate of their adjusted taxable income for the current tax year. Where such an estimate is provided, the applicant will be required to supply a TNA for that year as soon as it is received BUT NOT later than 12 months after the end of that tax year.
Members of a couple must use the same reference tax year.
Act reference: SSAct section 23(1)-'tax year'
Reference tax year scenarios
The following are examples of possible reference tax year scenarios.
- George lodges a claim for a CSHC on 15 March 2012. His reference tax year is 2010-11. As he has received his TNA for the 2010-11 tax year his entitlement is determined on his 2010-11 income.
- If George had not received his TNA for the 2010-11 tax year, he would be able to provide his TNA from the tax year immediately preceding that year. In this case it would be the 2009-10 tax year.
- Fred and Wilma are a couple and have lodged a claim for a CSHC. Fred has a TNA for the 2010-11 tax year. Wilma does not. She only has a TNA for 2009-10. In this instance Fred and Wilma would need to provide an estimate of their income for the current tax year for the following reasons:
- As they are members of a couple they must use the same reference tax year.
- Although they both have a TNA for 2009-10 Fred is not able to use his TNA for that year as he has a more recent one.
- To be able to use the same reference tax year Fred and Wilma's only option is to provide an estimate for the current year.
- John and Fiona are a couple and lodged a claim on 10 October 2012. John has a TNA for the 2010-11 tax year. Fiona does not lodge a tax return due to her low income. In this instance John and Fiona would estimate their income for the 2012-13 tax year.