The Income of Minors and Taxation - Part 2

Are all types of income received by minors covered by the special rules?

No. Even though a minor may not be an excepted person, ordinary rates of tax still apply to certain types of income. Such income is called excepted income.


Excepted income includes:

• employment income
• taxable pensions or payments from Centrelink or the Department of Veterans’ Affairs
• compensation, superannuation or pension fund benefits
• income from a deceased person's estate
• income from property transferred to the minor as a result of the death of another person or family breakdown, or income in the form of damages for an injury they suffer
• income from their own business
• income from a partnership in which they were an active partner
• net capital gains from the disposal of any property or investments listed above, and
• income from the investment of any of the amounts listed above.

Excepted net income – that is, excepted income minus deductions relating to that income – is taxed at ordinary rates. All other income of a minor who is not an excepted person will be taxed at higher rates.

Source: Australian Taxation Office