Commonwealth Consolidated Regulations

INCOME TAX ASSESSMENT REGULATIONS 1997 - REG 307.205.02

         (1)   For paragraph 307-205 (a) of the Act, this regulation:

                (a)    applies to a superannuation income stream or a superannuation annuity, other than:

                          (i)    a superannuation income stream of a type prescribed by regulation 295-385.01; or

                         (ii)    a superannuation income stream or a superannuation annuity for which the rules providing for the income stream or annuity are based on:

                                   (A)     an identifiable lump sum amount; or

                                   (B)     the amount available in the member's account; or

                        (iii)    a superannuation income stream that is supported by a superannuation interest that can be valued under paragraph 307-205.02B (a); and

               (b)    specifies a method for determining the value of a superannuation interest at a particular time if the interest supports a superannuation income stream to which this regulation applies.

Note    The proportioning rule requires the tax-free and taxable components of superannuation to be paid out as benefits in the same proportion as they make up of the underlying interest. A value of a superannuation interest is required to ensure that the proportioning rule operates appropriately.

         (2)   The value of the interest at a particular time is the sum of:

                (a)    the product of:

                          (i)    the annual amount of the superannuation income stream payable in respect of the superannuation interest at that time; and

                         (ii)    the applicable factor set out in clause 1 of Schedule 1B; and

               (b)    the product of:

                          (i)    the nominal value of the superannuation lump sum, if any, which is payable in respect of the interest
at a time in the future, other than a future lump sum which is a commutation of the income stream included in subparagraph (a) (i); and

                         (ii)    the applicable factor set out in clause 2 of Schedule 1B.