Income Tax Assessment Amendment Act (No. 4) 1979 (Cth)
An Act to amend the law relating to income tax.
BE IT ENACTED by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia, as follows:
(2)
The
(a) by omitting from paragraph (a) of sub-section (1) “a dividend (including an amount debited against an amount standing to the credit of a share premium account)” and substituting “an amount (in this section referred to as the ‘relevant amount’)”;
(b) by omitting paragraph (c) of sub-section (1) and substituting the following paragraph:
“(c) the relevant amount is applied by the company, in whole or in part, in payment or part payment of the moneys payable by the taxpayer in respect of the bonus shares or the liability of the company to pay the relevant amount to the taxpayer is otherwise satisfied, in whole or in part, by the issue of the bonus shares,”;
(c) by omitting sub-section (2) and substituting the following sub-sections:
“(1a) For the purposes of this section, an amount credited to a taxpayer by a company shall be taken to be an amount payable to the taxpayer by the company whether or not the taxpayer has a right to demand payment of the amount.
“(2) Subject to sub-sections (4), (5) and (6), no part of the relevant amount that is applied by the company in payment or part payment of the moneys payable by the taxpayer in respect of the bonus shares or the liability of the company to pay which is otherwise satisfied by the issue of the bonus shares shall be treated as being an amount paid or payable by the taxpayer in respect of the bonus shares or as in any other way constituting any part of the cost to the taxpayer of the bonus shares.”;
(d) by omitting from sub-section (3) “Subject to sub-section (4), in” and substituting “In”; and
(e) by omitting sub-section (4) and substituting the following sub-sections:
“(4) Subject to sub-section (6), where the taxpayer is—
(a) a taxpayer in the capacity of a trustee of a trust estate;
(b) a partnership that is being treated as a taxpayer for the purposes of section 90; or
(c) a taxpayer (other than a taxpayer referred to in paragraph (a) or (b)) not being a company that is a resident,
sub-section (2) does not apply in relation to any part of the relevant amount that has been or will be included in the assessable income of the taxpayer of any year of income.
“(5) Where the taxpayer, not being a trustee of a trust estate, is a company that is a resident, sub-section (2) does not apply in relation to any part of the relevant amount that has been or will be included in the assessable income of the taxpayer of any year of income to the extent that that part is not constituted by a dividend.
“(6) Where—
(a) the taxpayer is a taxpayer in the capacity of a trustee of a trust estate or a partnership that is being treated as a taxpayer for the purposes of section 90;
(b) by the application of sub-section (4), sub-section (2) would not, apart from this sub-section, apply in relation to an amount that has been or will be included in the assessable income of the taxpayer of a year of income;
(c) the amount referred to in paragraph (b) is constituted, in whole or in part, by a dividend; and
(d) an amount attributable to the dividend is included, through the taxpayer or through the taxpayer and any interposed partnerships or trusts, in the assessable income of any year of income (in this sub-section referred to as the ‘relevant year of income’) of a company being a resident but not being a trustee of a trust estate,
then, for the purposes of making an assessment of that company of the relevant year of income—
(e) sub-section (2) shall be taken to have applied in relation to the amount referred to in paragraph (b) to the extent that that amount is a dividend;
(f) the net income of the taxpayer of the relevant year of income shall be taken to be such amount as would have been the net income of the taxpayer of the relevant year of income if sub-section (2) had applied in relation to the amount referred to in paragraph (b) to the extent that that amount is a dividend; and
(g) the amount of the net income of the relevant year of income of any interposed partnership or trust shall be taken to be such amount as might reasonably be expected to have been the net income of the relevant year of income of that partnership or trust if sub-section (2) had applied in relation to the amount referred to in paragraph (b) to the extent that that amount is a dividend.
“(7) For the purposes of sub-sections (4), (5) and (6), where an amount that is payable to a taxpayer in respect of shares in a company has been or will be taken into account in determining the amount of any profit arising or loss incurred on the disposal by the taxpayer of those shares or other shares in the company, that amount shall be taken to be an amount that has been or will be included in the assessable income of the taxpayer of a year of income.”.
(2)
The amendments made by sub-section (1) apply where the shares referred to as
bonus shares in section 6ba
of
the
(3)
The amendments made by sub-section (1) are enacted for the avoidance of doubt
in interpreting section 6ba
of
the
(a) by omitting from sub-section (9) “prescribed”;
(b) by inserting after paragraph (c) of sub-section (9) the following paragraph:
“(ca) if, before the property was disposed of by the taxpayer, an agreement or arrangement (whether or not enforceable by legal proceedings and whether or not intended to be so enforceable) was entered into, or an understanding was reached, under which, or by reason of which, the person or persons who acquired the property from the taxpayer was or were under an obligation, or could reasonably be expected, to dispose of the property to another person or other persons (whether or not that other person was, or those other persons included, the taxpayer) for a consideration less than the market value of the property at the time when it was disposed of by the taxpayer—that agreement, arrangement or understanding;”; and
(c) by omitting sub-section (10) and substituting the following sub-section:
“(10) A reference in sub-section (9) to property shall be read as a reference to property being trading stock, standing or growing crops, crop-stools or trees which have been planted and tended for the purposes of sale.”.
(2) The amendments made by sub-section (1) apply in relation to property disposed of by a taxpayer after 24 September 1978.
(a) by inserting in sub-section (5) “, to the extent to which the notice is” after “24 May 1977”; and
(b) by adding at the end thereof the following sub-sections:
“(6) A notice for the purposes of sub-section (2) given after 10 May 1979, to the extent to which the notice is in respect of a change in the ownership of, or in the interests of persons in, property, being a chose in action that is not of a kind referred to in sub-section (5), does not have any effect unless the persons giving the notice establish to the satisfaction of the Commissioner that the change in ownership or interests occurred on or before that date.
“(7) Notwithstanding sub-section (2), a notice for the purposes of that sub-section given after 10 May 1979 does not have any effect to the extent to which the notice is in respect of a change in the ownership of, or in the interests of persons in, property—
(a) that is not a chose in action;
(b) the value of which for the purposes of section 36 is determined by the Commissioner under sub-section (9) of that section; and
(c) the value of which determined under sub-section (9) of that section is less than or equal to the value of the property applicable in accordance with sub-section (2) of this section,
unless the persons giving the notice establish to the satisfaction of the Commissioner that the change in ownership or interests occurred on or before that date.”.
(2)
The amendment made by paragraph (1)(a) applies in relation to notices for the
purposes of sub-section 36a(2) of
the
(a) by inserting after sub-section (2) the following sub-sections:
“(2a) Where—
(a) prescribed property that was acquired by a taxpayer after 24 September 1978 and before the commencement of this sub-section or is acquired after the commencement of this sub-section was or is treated or used by the taxpayer as an asset of a business carried on by the taxpayer;
(b) but for this sub-section, a deduction would be allowable to the taxpayer in respect of the value of that property; and
(c) the Commissioner considers that it would be unreasonable that a deduction be allowable to the taxpayer in respect of the value of the property to the extent to which, but for this sub-section, a deduction would be allowable to the taxpayer in respect of the value of the property,
a deduction shall be allowable to the taxpayer in respect of the value of the property to the extent only that the Commissioner considers that it is reasonable in the circumstances that a deduction be allowable to the taxpayer in respect of that value.
“(2b) Where—
(a) the value of any prescribed property that—
(i) was acquired by a taxpayer after 24 September 1978 and before the commencement of this sub-section or is acquired after the commencement of this sub-section; and
(ii) was or is used by the taxpayer in the carrying on or carrying out of any profit-making undertaking or scheme,
would, but for this sub-section, be taken into account for the purpose of ascertaining whether or not any profit arose, or any loss was incurred, from the carrying on or the carrying out of the undertaking or scheme and for the purpose of ascertaining the amount of any such profit or loss; and
(b) the Commissioner considers that it would be unreasonable that the value of the property be taken into account for those purposes to the extent to which the value would, but for this sub-section, be taken into account for those purposes,
the value of the property shall be taken into account for those purposes to the extent only that the Commissioner considers that it is reasonable in the circumstances that that value be taken into account for those purposes.”;
(b) by omitting from sub-section (3) all the words from and including “In forming an opinion” to and including “purposes referred to in sub-section (2)” and substituting:
“In forming an opinion for the purposes of sub-section (1) or (2a) as to the extent to which it is reasonable that a deduction be allowable to a taxpayer in respect of expenditure incurred in the purchase or acquisition of prescribed property or in respect of the value of prescribed property, as the case may be, or in forming an opinion for the purposes of sub-section (2) or (2b) as to the extent to which it is reasonable that expenditure incurred by a taxpayer in the purchase or acquisition of prescribed property should be taken into account for the purposes referred to in sub-section (2) or that the value of prescribed property should be taken into account for the purposes referred to in sub-section (2b), as the case may be”;
(c) by inserting in paragraph (a) of sub-section (3) “if the taxpayer expended moneys in purchasing or acquiring the prescribed property—” before “the Commissioner” (first occurring);
(d) by omitting from paragraph (f) of sub-section (3) “and” (last occurring);
(e) by omitting paragraph (g) of sub-section (3) and substituting the following paragraphs:
“(g) if the purchase or acquisition of the prescribed property by the taxpayer arose out of, or was made in the course of, a transaction, operation, undertaking, scheme or arrangement under which, or in the course of which, other prescribed property was to be issued or allotted by a company (whether to the taxpayer or any other person or persons) and it could reasonably be expected that, as a result of the issue or allotment of that other prescribed property, the value of the prescribed property purchased or acquired by the taxpayer would be substantially reduced—the Commissioner shall have regard to that transaction, operation, undertaking, scheme or arrangement;
“(h) if the purchase or acquisition of the prescribed property by the taxpayer arose out of, or was made in the course of, a transaction, operation, undertaking, scheme or arrangement under which, or in the course of which, rights in respect of the prescribed property or in respect of other prescribed property (whether that other prescribed property had been issued or allotted before the time of the purchase or acquisition by the taxpayer of the first-mentioned prescribed property or was to be issued or allotted at a later time) were to be withdrawn or varied and it could reasonably be expected that, as a result of a withdrawal or variation of those rights, the value of the prescribed property purchased or acquired by the taxpayer would be substantially reduced—the Commissioner shall have regard to that transaction, operation, undertaking, scheme or arrangement; and
“(j) the Commissioner shall have regard to any other matters that he considers relevant.”;
(f) by omitting sub-section (4) and substituting the following sub-section:
“(4) In this section, ‘prescribed property’ means any chose in action.”;
(g) by omitting sub-section (5) and substituting the following sub-sections:
“(4a) In the preceding provisions of this section, references to the value of any prescribed property shall, unless the contrary intention appears, be read as including references to part of the value of that prescribed property.
“(5) For the purposes of this section—
(a) a person to whom prescribed property is issued or allotted by a company shall be taken to have acquired that prescribed property;
(b) a person upon whom prescribed property devolves by reason of the death of a person shall be taken to have acquired that prescribed property; and
(c) a person in whom prescribed property vests by the operation of any trust or the exercise of any power under a trust shall be taken to have acquired that prescribed property.”; and
(h) by adding at the end thereof the following sub-section:
“(8) References in this section to expenditure incurred by a taxpayer in the purchase or acquisition of any prescribed property shall, in the case of prescribed property being a share or stock in the capital of a company, be read as including references to any payment made or other consideration given by the taxpayer to the company in respect of the prescribed property, whether as payment of a premium in respect of the prescribed property, as a payment of unpaid capital in respect of the prescribed property or otherwise and whether on application for or allotment of the prescribed property, to meet calls or otherwise.”.
(2) The amendments made by paragraphs (1)(b),
(c), (d), (e), (g) and (h) apply in relation to property,
being prescribed property referred to in section 52a of the
(3) The amendment made by paragraph (1)(f) applies in relation to property purchased or acquired after 10 May 1979.
(a) by inserting before the definition of “agreement” in sub-section (1) the following definition:
“‘additional benefit’, in relation to an amount of eligible relevant expenditure, means the additional benefit, or the aggregate of the additional benefits, as the case may be, referred to in paragraph (b) of sub-section (1f) in relation to that eligible relevant expenditure;”;
(b) by inserting after the definition of “associate” in sub-section (1) the following definition:
“‘expected tax saving’, in relation to an amount of eligible relevant expenditure incurred by a taxpayer, means—
(a) where only one amount is, under sub-section (1b), a tax saving amount for the purposes of the application of this definition in relation to the eligible relevant expenditure—that tax saving amount; and
(b) where 2 or more amounts are, under sub-section (1b), tax saving amounts for the purposes of the application of this definition in relation to the eligible relevant expenditure—the sum of those tax saving amounts;”;
(c) by inserting after the definition of “property” in sub-section (1) the following definitions:
“‘relevant expenditure’, in relation to a taxpayer, means—
(a) expenditure in respect of which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 67;
(b) expenditure in respect of which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 67a;
(c) a loss or outgoing incurred by the taxpayer in the purchase by the taxpayer of property (not being a chose in action) that, for the purposes of the application of this Act in relation to the taxpayer, is trading stock, to the extent to which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 51 in respect of the loss or outgoing;
(d) a loss or outgoing incurred by the taxpayer in respect of interest to the extent to which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 51 in respect of the loss or outgoing; or
(e) a loss or outgoing incurred by the taxpayer in respect of rent to the extent to which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 51 in respect of the loss or outgoing;
“‘rent’ means rent in respect of land or premises;”; and
(d) by inserting after sub-section (1) the following sub-sections:
“(1a) In determining for the purposes of this Subdivision whether an agreement is a tax avoidance agreement, no regard shall be had to a purpose that is a merely incidental purpose.
“(1b) for the purposes of the application of the definition of ‘expected tax saving’ in sub-section (1) in relation to an amount of eligible relevant expenditure incurred by a taxpayer—
(a) where—
(i) if a deduction were not allowable in respect of any part of that eligible relevant expenditure, a person (whether the taxpayer or another person and whether in the capacity of a trustee of a trust estate or otherwise) would be liable to pay income tax in respect of a year of income; and
(ii) if a deduction or deductions were allowable under this Act in respect of that eligible relevant expenditure, that person would be liable to pay a lesser amount of income tax in respect of that year of income,
the amount by which the amount of the tax referred to in sub-paragraph (i) exceeds the amount of the tax referred to in sub-paragraph (ii) is a tax saving amount; and
(b) where—
(i) if a deduction were not allowable in respect of any part of that eligible relevant expenditure, a person (whether the taxpayer or another person and whether in the capacity of a trustee of a trust estate or otherwise) would be liable to pay income tax in respect of a year of income; and
(ii) if a deduction or deductions were allowable under this Act in respect of that eligible relevant expenditure, that person would not be liable to pay income tax in respect of that year of income,
the amount of the tax referred to in sub-paragraph (i) is a tax saving amount.
“(1c) For the purposes of sub-section (1b)—
(a) references in that sub-section to income tax shall be read as not including references to any additional tax payable under section 104;
(b) references in that sub-section to income tax shall be read as including references to any tax payable under a State income tax law;
(c) where—
(i) an amount would, apart from this paragraph, be taken to be the amount of tax that would be payable by a person in respect of a year of income if a deduction were not allowable in respect of any part of an amount of eligible relevant expenditure; and
(ii) if that amount of tax were payable by the person in respect of the year of income, an amount paid to the Commonwealth by a State would, in part, be applied by the Commissioner under section 203 in partial discharge of the liability of the person to pay that amount of tax,
the amount of tax that would be payable by the person in respect of the year of income if a deduction were not allowable in respect of any part of the eligible relevant expenditure shall be taken to be the amount of the tax referred to in sub-paragraph (i) reduced by the amount that would be applied by the Commissioner as mentioned in sub-paragraph (ii); and
(d) where—
(i) an amount would, apart from this paragraph, be taken to be the amount of tax that would be payable by a person in respect of a year of income if a deduction or deductions were allowable under this Act in respect of an amount of eligible relevant expenditure; and
(ii) if that amount of tax were payable by the person in respect of the year of income, an amount paid to the Commonwealth by a State would, in part, be applied by the Commissioner under section 203 in partial discharge of the liability of the person to pay that amount of tax,
the amount of tax that would be payable by the person in respect of the year of income if a deduction or deductions were allowable under this Act in respect of the eligible relevant expenditure shall be taken to be the amount of the tax referred to in sub-paragraph (i) reduced by the amount that would be applied by the Commissioner as mentioned in sub-paragraph (ii).
“(1d) Subject to sub-section (1e), where, in respect of any 2 or more amounts of eligible relevant expenditure (whether incurred by one taxpayer or by 2 or more taxpayers and whether incurred in one year of income or in 2 or more years of income), the following conditions are satisfied, namely:
(a) if sub-section (1b) were applied in relation to one of those amounts of eligible relevant expenditure in relation to a person (whether or not that person is the person or one of the persons who incurred the eligible relevant expenditure) in relation to a year of income on the assumption that no deduction is or was allowable in respect of any part of the other amount of eligible relevant expenditure, or in respect of any part of any of the other amounts of eligible relevant expenditure, as the case may be, the tax saving amount determined in accordance with that sub-section would be greater than the tax saving amount that would be determined in accordance with that sub-section in relation to that amount of eligible relevant expenditure in relation to that person in relation to that year of income if that sub-section were applied on the assumption that a deduction or deductions were allowable under this Act in respect of the other amount of eligible relevant expenditure, or in respect of each of the other amounts of eligible relevant expenditure, as the case may be; and
(b) if paragraph (a) of this sub-section were applied in relation to that person in relation to that year of income in relation to the other amount of eligible relevant expenditure, or in relation to each of the other amounts of eligible relevant expenditure, as the case may be, the condition specified in that paragraph would be satisfied in relation to that other amount or in relation to each of those other amounts, as the case may be,
then, in the application of sub-section (1b) in calculating the tax saving amount in relation to that person in relation to the year of income in relation to any one of the amounts of eligible relevant expenditure first referred to in this sub-section, it shall be assumed that no deduction is or was allowable in respect of any part of the other of those amounts or in respect of any part of any of the other of those amounts, as the case may be.
“(1e) Where—
(a) but for this sub-section, sub-section (1d) would apply to require it to be assumed, for the purposes of the application of sub-section (1b) in relation to an amount of eligible relevant expenditure, that no deduction is or was allowable in respect of any part of another amount of eligible relevant expenditure (in this sub-section referred to as the ‘deductible relevant expenditure’); and
(b) section 82kl does not and will not operate to deem a deduction not to be allowable and never to have been allowable in respect of any part of the deductible relevant expenditure,
sub-section (1d) shall not apply and shall be taken never to have applied so as to require it to be assumed, in the application of sub-section (1b) in relation to an amount of eligible relevant expenditure other than the deductible relevant expenditure, that no deduction is or was allowable in respect of any part of the deductible relevant expenditure.
“(1f) For the purposes of this Subdivision, an amount of relevant expenditure incurred by a taxpayer shall be taken to be an amount of eligible relevant expenditure if—
(a) that amount of relevant expenditure was incurred after 24 September 1978 by reason of, as a result of or as part of a tax avoidance agreement entered into after that date; and
(b) by reason of, as a result of or as part of the tax avoidance agreement the taxpayer has obtained, in relation to that relevant expenditure being incurred, a benefit or benefits in addition to—
(i) the benefit in respect of which the relevant expenditure was incurred; and
(ii) any benefit that resulted directly or indirectly from the benefit in respect of which the relevant expenditure was incurred and is a benefit that, in the opinion of the Commissioner, might reasonably be expected to have resulted if the benefit in respect of which the relevant expenditure was incurred had been obtained otherwise than by reason of, as a result of or as part of a tax avoidance agreement.
“(1g) The reference in sub-section (1f) to the benefit in respect of which relevant expenditure was incurred by a taxpayer shall be read as a reference to—
(a) in a case where the relevant expenditure is expenditure incurred by the taxpayer in borrowing money, being expenditure in respect of which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 67—the making available to the taxpayer of the money borrowed by the taxpayer;
(b) in a case where the relevant expenditure is expenditure incurred by the taxpayer in connection with the discharge of a mortgage, being expenditure in respect of which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 67a—the discharge of the mortgage;
(c) in a case where the relevant expenditure was incurred by the taxpayer in the purchase of property that, for the purposes of the application of this Act in relation to the taxpayer, is or was trading stock—the acquisition of that property by the taxpayer;
(d) in a case where the relevant expenditure was incurred by the taxpayer in respect of interest—the availability to the taxpayer of the money borrowed by the taxpayer; and
(e) in a case where the relevant expenditure was incurred by the taxpayer in respect of rent—the use of the property in respect of which the rent was paid.
“(1h) For the purposes of paragraph (b) of sub-section (1f), but without limiting the generality of that paragraph, where—
(a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement;
(b) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, the taxpayer or an associate of the taxpayer acquires from another person the right to recover the amount of a debt that was owed to that other person; and
(c) by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, no consideration was paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of that right or the amount or value of the consideration paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of that right was less than the amount of the debt,
the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit having a value equal to—
(d) in a case where no consideration was paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of the right to recover the amount of the debt—the amount of the debt; and
(e) in any other case—the amount by which the amount of the debt exceeds the amount or value of the consideration paid or given by the taxpayer or the associate of the taxpayer, as the case may be, in respect of the acquisition of the right to recover the amount of the debt.
“(1j) For the purposes of paragraph (b) of sub-section (1f), but without limiting the generality of that paragraph, where—
(a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement;
(b) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement—
(i) a debt becomes owing by the taxpayer or an associate of the taxpayer; or
(ii) a debt became owing, before or at the time of the incurring of the relevant expenditure, by the taxpayer or an associate of the taxpayer; and
(c) it may reasonably be expected that, by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, the person to whom the debt is owed will release, abandon or fail to demand repayment of the debt or of a part of the debt,
the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit of an amount equal to the amount of the debt or that part of the debt, as the case may be.
“(1k) Where—
(a) 2 or more amounts of relevant expenditure are incurred by a taxpayer (whether in the same year of income or in different years of income) by reason of, as a result of or as part of the same tax avoidance agreement;
(b) the same paragraph of the definition of ‘relevant expenditure’ in sub-section (1) applies in relation to each of those amounts; and
(c) those amounts were incurred in respect of the same benefit,
those amounts shall, for the purposes of this Subdivision, be treated as together constituting one amount of relevant expenditure.
“(1l) For the purposes of sub-section (1k), 2 or more amounts of relevant expenditure shall be taken to have been incurred in respect of the same benefit if—
(a) in a case where paragraph (a) of the definition of ‘relevant expenditure’ in sub-section (1) applies in relation to each of those amounts—those amounts were incurred in respect of the same loan;
(b) in a case where paragraph (b) of the definition of ‘relevant expenditure’ in sub-section (1) applies in relation to each of those amounts—those amounts were incurred in respect of the discharge of the same mortgage;
(c) in a case where paragraph (c) of the definition of ‘relevant expenditure’ in sub-section (1) applies in relation to each of those amounts—those amounts were incurred in the purchase of the same property;
(d) in a case where paragraph (d) of the definition of ‘relevant expenditure ‘ in sub-section (1) applies in relation to each of those amounts—those amounts were incurred in respect of the same loan; and
(e) in a case where paragraph (e) of the definition of ‘relevant expenditure’ in sub-section (1) applies in relation to each of those amounts—those amounts were incurred in respect of the same property.
“(1m) For the purposes of this Subdivision, a person who obtains a benefit by reason of an act, transaction or circumstance that occurs as part of, in connection with or as a result of a tax avoidance agreement shall be deemed to have obtained that benefit by reason of the tax avoidance agreement.
“(1n) Where, for the purposes of the application of any provision of this Subdivision, it is required to be assumed that a deduction is not or was not allowable in respect of any part of an amount of eligible relevant expenditure and that expenditure is expenditure that was incurred in the acquisition of property that, for the purposes of the application of this Act in relation to the person who incurred the expenditure, is or was trading stock, it shall also be assumed, for the purposes of the application of that provision, that, for the purposes of the application of Subdivision B of Division 2 of Part III in relation to that property in relation to the person who incurred the expenditure, that the cost or cost price of that property is, and at all times was, nil.
“(1p) For the purposes of this Subdivision, any benefit that has been obtained by an associate of a taxpayer by reason of, as a result of or as part of a tax avoidance agreement, being a benefit that was obtained in relation to the incurring by the taxpayer of relevant expenditure by reason of, as a result of or as part of that tax avoidance agreement, shall be taken to be a benefit that was obtained by the taxpayer by reason of that tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer.”.
(2)
Sub-section 82kh (1a) of the
(2) The amendment made by sub-section (1) applies in respect of losses or outgoings incurred after 24 September 1978.
“(5) In determining whether paragraph (b) of sub-section (2) or paragraph (b) of sub-section (3) applies in relation to a loss or outgoing, no regard shall be had to a purpose that is a merely incidental purpose.”.
(2) The amendment made by sub-section (1) applies in relation to losses or outgoings incurred after 19 April 1978.
“82kl. (1) Where the sum of the amount or value of the additional benefit in relation to an amount of eligible relevant expenditure incurred by a taxpayer and the expected tax saving in relation to that amount of eligible relevant expenditure is equal to or greater than the amount of the eligible relevant expenditure, notwithstanding any other provision of this Act but subject to this section, a deduction is not and shall be deemed never to have been, allowable to the taxpayer in respect of any part of that amount of eligible relevant expenditure.
“(2) Where, at any time, the Commissioner is of the opinion that, apart from this sub-section, sub-section(1) might reasonably be expected, at a later time, to operate to deem a deduction not to be allowable and never to have been allowable to a taxpayer in respect of expenditure or a loss or outgoing incurred by the taxpayer then, notwithstanding any other provision of this Act but subject to this section, a deduction is not allowable and shall be deemed never to have been allowable to the taxpayer in respect of that expenditure or that loss or outgoing, as the case may be.
“(3) Where, in the making of an assessment, sub-section (2) has been applied by reason that the Commissioner was of the opinion that a particular circumstance would exist and the Commissioner later becomes satisfied that that circumstance will not exist, then, notwithstanding anything contained in section 170, the Commissioner may amend the assessment at any time for the purposes of ensuring that this Subdivision shall be taken always to have applied on the basis that that circumstance did not, and would not, exist.
“(4) Where—
(a) an amount of eligible relevant expenditure is incurred by a partnership;
(b) apart from this sub-section, this section would not operate to deem a deduction not to be allowable and never to have been allowable in respect of any part of that amount of eligible relevant expenditure; and
(c) the Commissioner is satisfied that any partner in the partnership became a partner in the partnership by reason of or as a result of an agreement (whether or not that agreement was the agreement by virtue of which the partner became a partner in the partnership) that was entered into by any of the parties to the agreement for the purpose, or primarily for the purpose, of ensuring that this section would not operate to deem a deduction not to be allowable and never to have been allowable in respect of any part of the amount of the eligible relevant expenditure,
then, notwithstanding any other provision of this Act, a deduction is not allowable and shall be deemed never to have been allowable in respect of any part of that amount of eligible relevant expenditure.
“(5) Where—
(a) in the making of an assessment, this section has been applied on the basis that a taxpayer was to be taken to have obtained a benefit by reason that it was reasonable to expect that a person to whom a debt was owed by the taxpayer or an associate of the taxpayer would release, abandon or fail to demand repayment of the debt or of a part of the debt; and
(b) the whole or a part of that debt or of that part of the debt is repaid,
then, notwithstanding anything contained in section 170, the Commissioner may amend the assessment at any time for the purposes of ensuring that this Subdivision shall be taken never to have applied on the basis that it was reasonable to expect that the person to whom the debt was owed would release, abandon or fail to demand repayment of the amount that was repaid.
“(6) Where sub-section (1), (2) or (4) deems a deduction not to be and never to have been allowable in respect of a loss or outgoing incurred by a taxpayer in the purchase of property that, for the purposes of the application of this Act in relation to the taxpayer is or was trading stock, then, notwithstanding any other provision of this Act, the cost or cost price of that property, for the purposes of the application of Subdivision B of Division 2 of Part III in relation to that property in relation to the taxpayer, shall be taken to be, and at all times to have been, nil.
“(7) Where, at any time after the making of an assessment in relation to a taxpayer, the taxpayer considers that the Commissioner ought to amend the assessment in accordance with sub-section (3) or (5), the taxpayer may post to or lodge with the Commissioner a request in writing for an amendment of the assessment in accordance with sub-section (3) or (5) or in accordance with sub-sections (3) and (5).
“(8) The Commissioner shall consider the request and shall serve on the taxpayer, by post or otherwise, a written notice of his decision on the request.
“(9) If the taxpayer is dissatisfied with the Commissioner’s decision on the request, the taxpayer may, within 60 days after service on the taxpayer of notice of the decision of the Commissioner, post to or lodge with the Commissioner an objection in writing against the decision stating fully and in detail the grounds on which the taxpayer relies.
“(10) The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under sub-section (9) in like manner as those provisions apply in relation to an objection against an assessment.”.
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