Income Tax Laws Amendment Act 1980 (Cth)
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BE IT ENACTED by the Queen, and the Senate and House of Representatives of the Commonwealth of Australia, as follows:
“26aaaa. In determining, for the purposes of the application of paragraph (e) of section 26, the value to a taxpayer of a benefit granted to the taxpayer in respect of or in relation to his employment, being a benefit by way of the grant of a lease or licence in respect of residential accommodation that is occupied by the taxpayer or by the taxpayer and his family, the Commissioner shall have regard to all relevant matters and, in particular, where—
(a) the residential accommodation is situated in a place that is remote from a major centre of population;
(b) it is customary for employers in the industry in which the taxpayer is employed to provide residential accommodation for their employees without charge or for a rent or other consideration that is less than the market value of the right to occupy the accommodation concerned;
(c) the taxpayer has no reasonable alternative other than to occupy the residential accommodation by reason of the unavailability on reasonable terms and conditions of suitable alternative residential accommodation (other than accommodation provided by or on behalf of his employer) within a reasonable distance from his place of employment;
(d) the residential accommodation is of a higher standard than could reasonably be expected to be provided for the taxpayer or is of a larger size than is necessary to accommodate the taxpayer or the taxpayer and his family; or
(e) any onerous conditions are attached to the lease or licence,
the Commissioner shall take that matter into account and make such reduction in the amount that would otherwise be the value to the taxpayer of that benefit as is appropriate in the circumstances.”.
(a) by inserting after sub-paragraph (xlix) of paragraph (a) of sub-section (1) the following sub-paragraphs:
“; (1) the I.D.E.C. Kampuchean Relief Appeal;
(1i) The Australian Red Cross East Timor Appeal,”; and
(b) by inserting after sub-section (6) the following sub-section:
“(6aa) A gift to the fund specified in sub-paragraph (1) or sub-paragraph (li) of paragraph (a) of sub-section (1) is not an allowable deduction unless the gift was or is made on or after 1 July 1979 and on or before 30 June 1980.”.
(a) an amount (in this sub-section referred to as the “relevant amount”) is included in the assessable income of a taxpayer (in this sub-section referred to as the “recipient taxpayer”) of the year of income that commenced on 1 July 1978 (in this sub-section referred to as the “relevant year of income”);
(b) the relevant amount is a loss, outgoing or expenditure (which loss, outgoing or expenditure is in this sub-section referred to as the “relevant expenditure”) incurred (whether before or after the commencement of this section) to the recipient taxpayer by another taxpayer (in this sub-section referred to as the “associated taxpayer”);
(c) but for this sub-section, a deduction would be allowable to the associated taxpayer in relation to a year of income in respect of the whole or a part of the relevant expenditure;
(d) if the relevant amount were not included in the assessable income of the recipient taxpayer of the relevant year of income, the recipient taxpayer would be deemed to have incurred a loss in the relevant year of income;
(e) if, in determining whether the recipient taxpayer is deemed to have incurred a loss in the relevant year of income and in determining the amount of any such loss—
(i) the relevant amount were not included in the assessable income of the recipient taxpayer of the relevant year of income; and
(ii) the conditions specified in the paragraphs of sub-section 80 (5) of the
Income Tax Assessment Act 1936, as amended and in force immediately after the commencement of this section, were taken to be applicable,the recipient taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss referred to in paragraph (d); and
(f) the associated taxpayer incurred the whole or a part of the relevant expenditure (which whole or part is in this sub-section referred to as the “prescribed relevant expenditure”) to the recipient taxpayer for the purpose, or for purposes that included the purpose, of wholly or partly preventing the operation of any of the relevant loss provisions in relation to the recipient taxpayer or, if the recipient taxpayer is a partnership, in relation to a partner or partners in the partnership, by securing that the recipient taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss that the recipient taxpayer would be deemed to have incurred in the relevant year of income if an amount equal to the prescribed relevant expenditure were not included in the assessable income of the recipient taxpayer of the relevant year of income,
then,
notwithstanding anything contained in the
(a) the value of the trading stock of a taxpayer that, but for this sub-section, would be taken into account at the end of the year of income that commenced on 1 July 1978 (in this sub-section referred to as the “relevant year of income”) for the purposes of the
Income Tax Assessment Act 1936 is greater than the value of that trading stock that would be taken into account at that time if the taxpayer had valued that trading stock in such a way that the value of that trading stock to be taken into account at that time would have been the lowest possible amount at which the value of that trading stock could be taken into account at that time in accordance with Subdivision B of Division 2 of Part III of theIncome Tax Assessment Act 1936;(b) if the taxpayer had valued the trading stock of the taxpayer in such a way that the value of that trading stock to be taken into account at the end of the relevant year of income would have been the lowest possible amount at which the value of that trading stock could have been taken into account at that time in accordance with Subdivision B of Division 2 of Part III of the
Income Tax Assessment Act 1936, the taxpayer would have been deemed to have incurred a loss in the relevant year of income;(c) if, in determining whether the taxpayer is deemed to have incurred a loss in the relevant year of income and in determining the amount of any such loss—
(i) the value of the trading stock of the taxpayer to be taken into account at the end of the relevant year of income were the value referred to in paragraph (b); and
(ii) the conditions specified in the paragraphs of sub-section 80 (5) of the
Income Tax Assessment Act 1936, as amended and in force immediately after the commencement of this section, were taken to be applicable,the taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss referred to in paragraph (b); and
(d) some or all of the trading stock was valued by the taxpayer in the way in which it was valued by the taxpayer for the purpose, or for purposes that included the purpose, of wholly or partly preventing the operation of any of the relevant loss provisions in relation to the taxpayer or, if the taxpayer is a partnership, in relation to a partner or partners in the partnership, by securing that the taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss that the taxpayer would be deemed to have incurred in the relevant year of income if the trading stock of the taxpayer had been valued by the taxpayer at a lesser value,
then,
notwithstanding anything contained in the
(e) in a case to which paragraph (f) does not apply—the value referred to in paragraph (b); or
(f) if the taxpayer satisfies the Commissioner that, if the taxpayer had not valued any of the trading stock of the taxpayer for the purpose, or for purposes that included the purpose, mentioned in paragraph (d), the taxpayer might reasonably be expected to have valued the trading stock of the taxpayer in such a way that the value of the trading stock of the taxpayer to be taken into account at the end of the relevant year of income would be greater than the value of the trading stock referred to in paragraph (b)—that greater value.
(a) a reference to trading stock shall be read as not including a reference to live stock; and
(b) a reference to the valuation of trading stock by a taxpayer shall be read as a reference to the exercise by the taxpayer of an option or options under section 31 of the
Income Tax Assessment Act 1936 in relation to the trading stock of the taxpayer.
(a) in a case where the taxpayer is a partnership that is being treated as a taxpayer for the purposes of section 90 of the
Income Tax Assessment Act 1936—a partnership loss for the purposes of section 92 of theIncome Tax Assessment Act 1936; and(b) in any other case—a loss for the purposes of section 80 or 80aa of the
Income Tax Assessment Act 1936.
(a) sections 3 and 4 of the
Income Tax Assessment Amendment Act (No. 5) 1979;(b) section 13 of the
Income Tax Laws Amendment Act 1979; and(c) section 5 of this Act.
(a) by omitting “or” (last occurring) from paragraph (d) of the definition of “relevant expenditure” in sub-section (1);
(b) by adding at the end of the definition of “relevant expenditure” in sub-section (1) the following word and paragraph:
“or (f) a bad debt incurred by the taxpayer in respect of money lent by the taxpayer in the course of carrying on a business to the extent to which a deduction would, apart from section 82kl, be allowable to the taxpayer under section 51 or 63 in respect of the bad debt;”;
(c) by inserting after sub-section (1a) the following sub-sections:
“(1aa) A reference in this Subdivision to the incurring by a taxpayer of a bad debt shall be read as a reference to a debt owed to the taxpayer becoming a bad debt.
“(1ab) A reference in sub-section (2) of section 82kl, and a reference in section 80, in relation to this Subdivision, to the incurring by a taxpayer of a loss or outgoing shall be read as including a reference to the incurring by a taxpayer of a bad debt.”;
(d) by inserting after sub-section (1f) the following sub-section:
“(1fa) For the purposes of the application of sub-section (1f) in relation to an amount of relevant expenditure to which paragraph (f) of the definition of ‘relevant expenditure’ in sub-section (1) applies, any benefit obtained by the taxpayer in relation to the making of the loan in respect of which the bad debt is incurred shall be taken to be a benefit obtained by the taxpayer in relation to that relevant expenditure being incurred.”;
(e) by omitting “and” from paragraph (d) of sub-section (1g);
(f) by adding at the end of sub-section (1g) the following word and paragraph:
“; and (f) in a case where the relevant expenditure incurred by the taxpayer was in respect of a bad debt—any interest received or receivable by the taxpayer in respect of the loan in respect of which the bad debt was incurred.”;
(g) by inserting after sub-section (1j) the following sub-sections:
“(1ja) For the purposes of the application of sub-section (1h) in relation to an amount of relevant expenditure incurred by a taxpayer, being relevant expenditure to which paragraph (f) of the definition of ‘relevant expenditure’ in sub-section (1) applies, a reference in paragraph (b) of sub-section (1h) to the acquisition by the taxpayer or an associate of the taxpayer, in relation to that relevant expenditure being incurred, of the right to recover a debt shall be read as including a reference to the acquisition by the taxpayer or an associate of the taxpayer, in relation to the making by the taxpayer of the loan in respect of which the relevant expenditure was incurred, of such a right.
“(1jb) For the purposes of the application of sub-section (1j) in relation to an amount of relevant expenditure incurred by a taxpayer, being relevant expenditure to which paragraph (f) of the definition of ‘relevant expenditure’ in sub-section (1) applies, a reference in paragraph (b) of sub-section (1j) to a debt becoming owing, or having become owing, by the taxpayer or an associate of the taxpayer in relation to that relevant expenditure being incurred, shall be read as including a reference to a debt becoming owing, or having become owing, by the taxpayer or an associate of the taxpayer, in relation to the making by the taxpayer of the loan in respect of which the relevant expenditure was incurred.”;
(h) by omitting “and” from paragraph (d) of sub-section (1l);
(j) by adding at the end of sub-section (1l) the following word and paragraph:
“; and (f) in a case where paragraph (f) 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
(k) by omitting sub-section (1p) and substituting the following sub-section:
“(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—
(a) in a case to which paragraph (b) does not apply—the incurring by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of relevant expenditure; or
(b) in a case where the relevant expenditure is of the kind referred to in paragraph (f) of the definition of ‘relevant expenditure’ in sub-section (1)—the incurring by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of that relevant expenditure or the making by the taxpayer, by reason of, as a result of or as part of that tax avoidance agreement, of the loan in respect of which the bad debt was incurred,
shall be taken to be a benefit that was obtained by the taxpayer by reason of that tax avoidance agreement and in relation to that relevant expenditure being incurred by the taxpayer, or that loan being made by the taxpayer, as the case may be.”.
(a) by omitting from sub-paragraph (iii) of paragraph (a) of sub-section (1) “sixteen years on the last day of the year of income of the partnership” and substituting “18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership”;
(b) by inserting in paragraph (a) of sub-section (2) “of a year of income” after “income of the partnership”;
(c) by omitting from sub-paragraph (i) of paragraph (c) of sub-section (2) “in relation to whose share of the income of the trust estate sub-section (4) applies” and substituting “who was under the age of 18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership”;
(d) by omitting from paragraph (d) of sub-section (2) “in relation to whose share of the income of the trust estate sub-section (4) applies” and substituting “who was under the age of 18 years on the last day of the year of income of the person that corresponds with the year of income of the partnership”;
(e) by omitting sub-sections (3) and (4);
(f) by omitting from paragraph (a) of sub-section (6) “, or paragraph (b) of sub-section (4)”;
(g) by omitting sub-section (7); and
(h) by omitting from sub-section (13) the definition of “prescribed trust”.
“(2) For the purposes of this Act, where a beneficiary has a vested and indefeasible interest in any of the income of a trust estate but is not presently entitled to that income, the beneficiary shall be deemed to be presently entitled to that income of the trust estate.”.
(a) to assessments in respect of income of the year of income that commenced on 1 July 1979 and in respect of income of all subsequent years of income; and
(b) for the purpose of the ascertainment of withholding tax payable in respect of income to which section 128b of the
Income Tax Assessment Act 1936 applies where that income was derived on or after 1 July 1979.
“(2) A reference in this section to income of a trust estate to which a beneficiary is presently entitled shall, except in the case of a beneficiary to whom sub-section (1) or (1a) of section 97a applies in relation to the year of income, be read as not including a reference to any of the income of the trust estate to which a beneficiary is deemed to be presently entitled by virtue of the operation of sub-section (2) of section 95a.”.
“(1a) Where a beneficiary who is deemed, by virtue of the operation of sub-section (2) of section 95a, to be presently entitled to any of the income of a trust estate derived during a year of income of the beneficiary—
(a) is not under a legal disability;
(b) is deemed, by sub-section (1) of section 159gb, to have carried on in Australia a business of primary production during the whole or a part of that year of income; and
(c) has made a deposit during the period that is the relevant period in relation to that year of income,
that beneficiary is, for the purposes of the application of this Division in relation to that beneficiary in relation to that year of income, a beneficiary to whom this sub-section applies.”.
“(2) Where a beneficiary of a trust estate—
(a) is deemed to be presently entitled to a share of the income of the trust estate of a year of income by virtue of the operation of sub-section (2) of section 95a;
(b) is not a beneficiary to whom sub-section (1) or (1a) of section 97a applies in relation to the year of income; and
(c) is not under a legal disability,
the trustee of the trust estate shall be assessed and liable to pay tax in respect of—
(d) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and
(e) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia,
as if it were the income of an individual and were not subject to any deduction other than the concessional deductions (if any) that would have been allowable to the beneficiary if the beneficiary had been assessed in respect of the amount, or the sum of the amounts, applicable by virtue of paragraphs (d) and (e).
“(3) The net income of a trust estate in respect of which the trustee of the trust estate is liable to be assessed and to pay tax under sub-section (2) does not include so much of the net income of the trust estate as, in the opinion of the Commissioner, relates to the income of the trust estate to which a beneficiary, being—
(a) a body, association or fund to which paragraph (d), (e), (ea), (eb), (ec), (f), (g), (h), (i) or (j) of section 23 applies;
(b) an organization that is prescribed for the purposes of paragraph (x) of that section; or
(c) an organization the income of which is exempt from tax by virtue of a regulation in force under the
International Organizations (Privileges and Immunities )Act 1963,
is deemed, by virtue of sub-section (2) of section 95a, to be presently entitled.
“(4) A reference in this Act to net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax in pursuance of this section shall be read as including a reference to net income of the trust estate in respect of which the trustee would, but for sub-section (3) of this section, be liable to be assessed and to pay tax in pursuance of this section.”.
(a) by omitting sub-section (2) and substituting the following sub-section:
“(2) This section does not apply in relation to a trust estate in relation to a year of income, being a trust estate—
(a) that resulted from—
(i) a will, a codicil or an order of a court that varied or modified the provisions of a will or a codicil; or
(ii) an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate;
(b) that consists of the property of a person who has become bankrupt, being property that has vested in The Official Receiver in Bankruptcy under the
Bankruptcy Act 1966;(c) that is administered under Part XI of the
Bankruptcy Act 1966; or(d) that consists of property of a kind referred to in paragraph (c) of sub-section (2) of section 102ag,
if the Commissioner is of the opinion that it would be unreasonable that this section should apply in relation to that trust estate in relation to that year of income.”;
(b) by inserting after sub-section (3) the following sub-section:
“(3a) For the purposes of the application of paragraph (a) of sub-section (3) in relation to a trust estate of the kind referred to in paragraph (a) of sub-section (2), a reference in that first-mentioned paragraph to the trust estate shall be read as including a reference to the person as a result of whose death the trust estate arose.”; and
(c) by omitting sub-section (5).
“(1) The assessable income of any beneficiary who—
(a) is under a legal disability or is deemed to be presently entitled to any of the income of a trust estate by virtue of the operation of sub-section (2) of Section 95a; and
(b) is a beneficiary in more than one trust estate or derives income from any other source,
shall include—
(c) so much of the individual interest of the beneficiary in the net income of the trust estate or of each of the trust estates as is attributable to a period when the beneficiary was a resident; and
(d) so much of the individual interest of the beneficiary in the net income of the trust estate or of each of the trust estates as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia.”.
“(a) in the application of this Division in relation to the trust estate in relation to the year of income—
(i) section 98 shall be read as if sub-section (4) of that section were omitted; and
(ii) section 99a shall be read as if sub-sections (2), (3) and (3a) of that section were omitted; and”.
“102aa. (1) In this Division, unless the contrary intention appears—
‘agreement’ means any agreement, arrangement, understanding or scheme, whether formal or informal, whether express or implied and whether or not enforceable or intended to be enforceable, by legal proceedings;
‘occupation’ includes any office, employment, trade, business, profession, vocation or calling, but does not include a course of education at a school, college, university or similar institution;
‘property’ means any property, whether real or personal, and includes money.
“(2) In this Division—
(a) a reference to the derivation by a person of assessable income shall be read as including a reference to the inclusion of an amount in the assessable income of the person; and
(b) a reference to the derivation by a person of any assessable income from particular property shall be read as including a reference to the inclusion of an amount in the assessable income of the person in respect of that property.
“(3) In this Division, a reference to the share of a beneficiary of the net income of a trust estate shall be read as a reference to a share of the beneficiary of the net income of a trust estate—
(a) that is included in the assessable income of the beneficiary under section 97 or 100; or
(b) in respect of which the trustee of the trust estate is liable to be assessed and to pay tax in pursuance of section 98.
“(4) A reference in this Division to income that is derived from particular property shall be read as including a reference to income that is derived from property that, in the opinion of the Commissioner, represents that property.
“102ab. This Division applies in relation to the year of income that commenced on 1 July 1979 and in relation to all subsequent years of income.
“102ac. (1) For the purposes of this Division, a person is a prescribed person in relation to a year of income if—
(a) the person is less than 18 years of age on the last day of the year of income; and
(b) the person is not an excepted person in relation to the year of income.
“(2) Subject to this section, a person (in this sub-section referred to as the ‘minor’) is an excepted person in relation to a year of income for the purposes of this Division if, and only if—
(a) the minor was a married person on the last day of the year of income;
(b) the minor was engaged in full-time occupation on the last day of the year of income;
(c) a handicapped child’s allowance or an invalid pension was payable in respect of the minor under the
Social Services Act 1947 in respect of a period that included the last day of the year of income;(d) the Commissioner—
(i) has received a certificate issued by a legally qualified medical practitioner certifying that the minor is—
(a) a handicapped child, or a severely handicapped child, within the meaning of Part VIb of the
Social Services Act 1947; or(b) a person who is permanently incapacitated for work within the meaning of Division 3 of Part III of the
Social Services Act 1947 or is permanently blind; and(ii) is satisfied that, on the last day of the year of income, the minor was a person of the kind mentioned in clause (a) or (b) of sub-paragraph (i);
(e) a double orphan’s pension was payable in respect of the minor under the
Social Services Act 1947 in respect of a period that included the last day of the year of income;(f) but for sub-section (2) of section 10b of the
Social Services Act 1947, a double orphan’s pension would have been payable in respect of the minor under that Act in respect of a period that included the last day of the year of income; or(g) the Commissioner—
(i) has received a certificate issued by a legally qualified medical practitioner certifying that the minor is a person who, by reason of a permanent disability, is unlikely to be able to engage in a full-time occupation; and
(ii) is satisfied that, on the last day of the year of income, the minor was such a person.
“(3) Where—
(a) a double orphan’s pension was payable, or would, but for sub-section (2) of section 105b of the
Social Services Act 1947, have been payable, in respect of a person under that Act in respect of a period during a year of income, being a period that included the last day of the year of income; and(b) during the whole of the period referred to in paragraph (a), the person was wholly or substantially dependent for support on a relative or relatives of the person,
that person shall not be taken by virtue of paragraph (e) or (f) of sub-section (2) to be an excepted person in relation to the year of income.
“(4) Where—
(a) the Commissioner is of the opinion that, during a period during a year of income, being a period that included the last day of the year of income, a person was a person who, by reason of a permanent disability, was unlikely to be able to engage in a full-time occupation; and
(b) during the whole of the period referred to in paragraph (a), the person was wholly or substantially dependent for support on a relative or relatives of the person,
that person shall not be taken, by virtue of paragraph (g) of sub-section (2), to be an excepted person in relation to the year of income.
“(5) For the purposes of sub-sections (3) and (4), a person shall be taken to have been wholly or substantially dependent for support on a relative or relatives of the person during any period during which that person resided with a relative or relatives of the person unless the contrary is established to the satisfaction of the Commissioner.
“(6) Subject to this section, a person shall be taken, for the purposes of sub-section (2), to have been engaged in a full-time occupation on the last day of a year of income if, and only if—
(a) the person was, on the last day of the year of income, a person engaged in a full-time occupation; or
(b) in a case to which paragraph (a) does not apply—the person was engaged in a full-time occupation during the year of income for a period of not less than 3 months or for periods the aggregate of which is not less than 3 months.
“(7) Where—
(a) during a period during a year of income, a person was engaged in a full-time occupation; and
(b) during the year of income and after the expiration of that period, the person was engaged in a course of full-time education at a school, college, university or similar institution,
no regard shall be had to that period in determining whether the person is to be taken, by virtue of paragraph (b) of sub-section (6), to have been engaged in a full-time occupation on the last day of the year of income.
“(8) A person shall not be taken to have been engaged in a full-time occupation on the last day of a year of income unless the Commissioner is satisfied that, on that day—
(a) the person had the intention of engaging in a full-time occupation or full-time occupations during the whole or a substantial part of the next succeeding year of income; and
(b) the person did not have the intention of engaging in a course of full-time education at a school, college, university or similar institution at any time during the next succeeding year of income.
“102ad. The eligible taxable income of a year of income of a person who is a prescribed person in relation to the year of income is the amount (if any) remaining after deducting from the eligible assessable income of the person of the year of income—
(a) any deductions allowable to the person in relation to the year of income that relate exclusively to that eligible assessable income;
(b) so much of any other deductions (other than apportionable deductions) allowable to the person in relation to the year of income as, in the opinion of the Commissioner, may appropriately be related to that eligible assessable income; and
(c) the amount that bears to the apportionable deductions allowable to the person in relation to the year of income the same proportion as the amount that, but for this paragraph, would be the eligible taxable income of the person of the year of income bears to the sum of—
(i) the taxable income of the person of the year of income; and
(ii) the apportionable deductions allowable to the person in relation to the year of income.
“102ae. (1) For the purposes of this Division, the eligible assessable income of a year of income of a person is so much of the assessable income of the person of the year of income as is not excepted assessable income.
“(2) Subject to this section, an amount included in the assessable income of a person (in this sub-section referred to as the ‘minor’) is excepted assessable income to the extent to which the amount—
(a) is employment income or business income;
(b) is derived by the minor from the investment of any property transferred to the minor—
(i) by way of, or in satisfaction of a claim for, damages in respect of—
(a) loss by the minor of parental support; or
(b) personal injury to the minor, any disease suffered by the minor or any impairment of the minor’s physical or mental condition;
(ii) pursuant to any law relating to worker’s compensation;
(iii) pursuant to any law relating to the payment of compensation in respect of criminal injuries;
(iv) directly as the result of the death of another person and under the terms of a policy of life assurance;
(v) directly as the result of the death of another person and out of a provident, benefit, superannuation or retirement fund;
(vi) directly as the result of the death of another person by an employer of the deceased person;
(vii) out of a public fund established and maintained exclusively for the relief of persons in necessitous circumstances; or
(viii) pursuant to—
(a) a decree or order of dissolution or annulment of marriage, being a dissolution or annulment that, by reason of the
Family Law Act 1975, has effect, or continues to have effect, in Australia or is recognized as valid in Australia; or(b) a decree or order of judicial separation or a similar decree or order;
(c) is derived by the minor from the investment of any property—
(i) that devolved upon the minor from the estate of a deceased person;
(ii) that was transferred to the minor by another person out of property that devolved upon that other person from the estate of a deceased person and was so transferred within 3 years after the date of the death of the deceased person; or
(iii) that was acquired by the minor as the beneficial owner of a verifiable prize in a legally authorized and conducted lottery;
(d) not being business income, is included in the assessable income of the minor under section 92;
(e) is included in the assessable income of the minor under section 97 or 100; or
(f) is derived by the minor from the investment of any property that, in the opinion of the Commissioner, represents accumulations of—
(i) excepted assessable income derived by the minor during a year of income in relation to which this Division applies;
(ii) assessable income derived by the minor during a year of income in relation to which this Division does not apply, being assessable income that would, in the opinion of the Commissioner, have been excepted assessable income if this Division were applicable in relation to the year of income during which the assessable income was derived; or
(iii) exempt income derived by the minor to which sub-paragraph (i) or (ii) would, in the opinion of the Commissioner, apply if that exempt income had been assessable income.
“(3) A reference in paragraph (d) of sub-section (2) to an amount (not being business income) that is included in the assessable income of a person under section 92 in respect of the individual interest of the person in the net income of a partnership shall be read as a reference to so much of an amount so included in that assessable income as, in the opinion of the Commissioner, is attributable to so much of the assessable income of the partnership as would, in the opinion of the Commissioner, have been excepted assessable income if the assessable income of the partnership had been derived by that person.
“(4) A reference in paragraph (e) of sub-section (2) to an amount included in the assessable income of a person under section 97 or 100 shall be read as not including a reference to any part to which this Division applies of an amount included in that assessable income under either of those sections.
“(5) Subject to sub-sections (6) and (7), a reference in paragraph (a) of sub-section (2), in relation to a person (in this sub-section referred to as the ‘minor’), to business income shall, in relation to any business income derived by the minor during a year of income from the carrying on of a business, be read as a reference to—
(a) in a case where during the year of income, the business was carried on by the minor either alone or in partnership with another person who was, or other persons each of whom was, under the age of 18 years on the first day of the year of income—so much of that business income as the Commissioner considers fair and reasonable having regard to—
(i) the extent to which, during the year of income, the minor had the real and effective conduct and control of the business and participated in the operations and activities of the business;
(ii) the extent to which the minor had the real and effective control over the disposal of income derived by the minor from the business during the year of income;
(iii) the extent to which the capital of the business consisted of property contributed by the minor, being property the income from which would, in the opinion of the Commissioner, be excepted assessable income in relation to the minor; and
(iv) such other matters (if any) as the Commissioner thinks fit; and
(b) in any other case—the amount that, in the opinion of the Commissioner, is reasonable remuneration by way of salary or wages for any services rendered by the minor during the year of income in the production of assessable income of the business increased by such amount (if any) as, in the opinion of the Commissioner, is reasonable, having regard to the extent to which the capital of the business consisted of property contributed by the minor the income from which would, in the opinion of the Commissioner, be excepted assessable income in relation to the minor.
“(6) Subject to sub-section (7), where assessable income is derived by a person, directly or indirectly, under or as a result of an agreement (whether entered into before or after the commencement of this sub-section) any 2 or more of the parties to which were not dealing with each other at arm’s length in relation to the agreement and the amount of the assessable income so derived is greater than the amount (in this sub-section referred to as the ‘arm’s length amount’) of the assessable income that, in the opinion of the Commissioner, would have been derived by the person, directly or indirectly, under or as a result of that agreement if the parties to the agreement had dealt with each other at arm’s length in relation to the agreement, sub-section (2) does not apply in relation to that assessable income to the extent to which the amount of the assessable income exceeds the arm’s length amount.
“(7) Sub-section (2) does not apply in relation to assessable income derived by a person directly or indirectly under or as a result of an agreement that was entered into or carried out by any person (whether before or after the commencement of this sub-section) for the purpose, or for purposes that included the purpose, of securing that that assessable income would not be eligible assessable income.
“(8) In determining whether sub-section (7) applies in relation to an agreement, no regard shall be had to a purpose that is a merely incidental purpose.
“(9) Where—
(a) any assessable income is derived by a person from the investment of any property transferred to the person by way of, or in satisfaction of a claim for, damages in respect of—
(i) loss by the person of parental support; or
(ii) personal injury to the person, any disease suffered by the person or any impairment of the person’s physical or mental condition; and
(b) that property was transferred to that person otherwise than in pursuance of an order of a court,
paragraph (b) of sub-section (2) applies only to so much (if any) of that assessable income as the Commissioner considers fair and reasonable.
“(10) Where—
(a) the assessable income of a person (in this sub-section referred to as the ‘minor’) of a year of income—
(i) includes an amount derived by the minor from property that—
(a) was transferred to the minor by another person out of property that devolved upon that other person from the estate of a deceased person; and
(b) was so transferred within 3 years after the date of the death of the deceased person,
but does not include any amount that—
(c) was derived by the minor from property that devolved upon the minor from the estate of that deceased person; or
(d) is included in the assessable income of the minor under section 97 or 100 in respect of the share of the minor of the net income of a trust estate that resulted from a will or codicil of that deceased person, an order of a court that varied or modified the provisions of a will or codicil of that deceased person, a partial intestacy of that deceased person or an order of a court that varied or modified the application, in relation to the estate of that deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate; or
(ii) includes an amount derived by the minor from property that—
(a) was transferred to the minor by another person out of property that devolved upon that other person from the estate of a deceased person; and
(b) was so transferred within 3 years after the date of death of the deceased person,
and also includes an amount or amounts to which clause (c) or (d) of sub-paragraph (i) applies; and
(b) the amount to which sub-paragraph (i) of paragraph (a) applies or the sum of the amounts to which sub-paragraph (ii) of paragraph (a) applies, as the case may be, exceeds the amount that, in the opinion of the Commissioner, would have been included in the assessable income of the minor of the year of income in respect of an amount or amounts derived by the minor from property that, in the opinion of the Commissioner, would have devolved upon or for the benefit of the minor from the estate of that deceased person if that deceased person had died intestate,
the amount of the assessable income of the minor of the year of income that would, apart from this sub-section, have been excepted assessable income by virtue of sub-paragraph (ii) of paragraph (c) of sub-section (2) shall be reduced by the amount of that excess.
“102af. (1) Subject to sub-section (2), a reference in this Division to employment income shall be read as a reference to—
(a) salary or wages within the meaning of Division 2 of Part VI; and
(b) payments made for services rendered or to be rendered.
“(2) For the purposes of the application, for the purposes of paragraph (a) of sub-section (1), of the definition of ‘salary or wages’ in sub-section (1) of section 221a, paragraph (f) of that definition shall be read as if the words ‘, but not including payments made under a policy of insurance to the owner of the policy’ were omitted.
“(3) In this Division, a reference, in relation to a person in relation to a year of income, to business income shall be read as a reference to income, not being employment income, derived by the person during the year of income from carrying on of a business either alone or together with another person or other persons.
“102ag. (1) Where a beneficiary of a trust estate is a prescribed person in relation to a year of income, this Division applies to so much of the share of the beneficiary of the net income of the trust estate of the year of income as, in the opinion of the Commissioner, is attributable to assessable income of the trust estate that is not, in relation to that beneficiary, excepted trust income.
“(2) Subject to this section, an amount included in the assessable income of a trust estate is excepted trust income in relation to a beneficiary of the trust estate to the extent to which the amount—
(a) is assessable income of a trust estate that resulted from—
(i) a will, codicil or an order of a court that varied or modified the provisions of a will or codicil; or
(ii) an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate;
(b) is employment income;
(c) is derived by the trustee of the trust estate from the investment of any property transferred to the trustee for the benefit of the beneficiary—
(i) by way of, or in satisfaction of a claim for, damages in respect of—
(a) loss by the beneficiary of parental support; or
(b) personal injury to the beneficiary, any disease suffered by the beneficiary or any impairment of the beneficiary’s physical or mental condition;
(ii) pursuant to any law relating to worker’s compensation;
(iii) pursuant to any law relating to the payment of compensation in respect of criminal injuries;
(iv) directly as the result of the death of a person and under the terms of a policy of life insurance;
(v) directly as the result of the death of a person and out of a provident, benefit, superannuation or retirement fund;
(vi) directly as the result of the death of a person by an employer of the deceased person;
(vii) out of a public fund established and maintained exclusively for the relief of persons in necessitous circumstances; or
(viii) pursuant to—
(a) a decree or order of dissolution or annulment of marriage, being a dissolution or annulment that, by reason of the
Family Law Act 1975, has effect, or continues to have effect in Australia or is recognized as valid in Australia; or(b) a decree or order of judicial separation or a similar decree or order;
(d) is derived by the trustee of the trust estate from the investment of any property—
(i) that devolved for the benefit of the beneficiary from the estate of a deceased person;
(ii) that was transferred to the trustee for the benefit of the beneficiary by another person out of property that devolved upon that other person from the estate of a deceased person and was so transferred within 3 years after the date of the death of the deceased person; or
(iii) being a verifiable prize in a legally authorized and conducted lottery and being a prize of which the beneficiary is the beneficial owner; or
(e) is derived by the trustee of the trust estate from the investment of any property that, in the opinion of the Commissioner, represents accumulations of—
(i) assessable income derived by the trustee during a year of income in relation to which this Division applies, being assessable income that, in relation to the beneficiary, is excepted trust income;
(ii) assessable income derived by the trustee during a year of income in relation to which this Division does not apply, being assessable income that would, in the opinion of the Commissioner, have been excepted trust income in relation to the beneficiary if this Division were applicable in relation to the year of income during which the assessable income was derived; or
(iii) exempt income derived by the trustee to which sub-paragraph (i) or (ii) would, in the opinion of the Commissioner, apply if that exempt income had been assessable income.
“(3) Subject to sub-section (4), where assessable income is derived by a trustee, directly or indirectly, under or as a result of an agreement (whether entered into before or after the commencement of this sub-section) any 2 or more of the parties to which were not dealing with each other at arm’s length in relation to the agreement and the amount of the assessable income so derived is greater than the amount (in this sub-section referred to as the ‘arm’s length amount’) of the assessable income that, in the opinion of the Commissioner, would have been derived by the trustee, directly or indirectly, under or as a result of that agreement if the parties to the agreement had dealt with each other at arm’s length in relation to the agreement, sub-section (2) does not apply in relation to that assessable income to the extent to which the amount of the assessable income exceeds the arm’s length amount.
“(4) Sub-section (2) does not apply in relation to assessable income derived by a trustee directly or indirectly under or as a result of an agreement that was entered into or carried out by any person (whether before or after the commencement of this sub-section) for the purpose, or for purposes that included the purpose, of securing that that assessable income would be excepted trust income.
“(5) In determining whether sub-section (4) applies in relation to an agreement, no regard shall be had to a purpose that is a merely incidental purpose.
“(6) Where—
(a) any assessable income is derived by a trustee of a trust estate from the investment of any property transferred to the trustee for the benefit of a beneficiary of the trust estate by way of, or in satisfaction of a claim for, damages in respect of—
(i) loss by the beneficiary of parental support; or
(ii) personal injury to the beneficiary, any disease suffered by the beneficiary or any impairment of the beneficiary’s physical or mental condition; and
(b) that property was transferred to the trustee otherwise than in pursuance of an order of a court,
paragraph (c) of sub-section (2) applies only to so much (if any) of that assessable income as the Commissioner considers fair and reasonable.
“(7) Where—
(a) any assessable income is derived by a trustee of a trust estate from the investment of any property transferred to the trustee for the benefit of a beneficiary of the trust estate by another person out of property that devolved upon that other person from the estate of a deceased person and was so transferred to the trustee within 3 years after the date of death of the deceased person; and
(b) the amount referred to in paragraph (a) or, if the assessable income of that beneficiary of the year of income includes any amount that—
(i) was derived by the beneficiary from property that was transferred to the beneficiary by another person out of property that devolved upon that other person from the estate of that deceased person and was so transferred within 3 years after the date of death of that deceased person;
(ii) was derived by the beneficiary from property that devolved upon the beneficiary from the estate of that deceased person; or
(iii) is included in that assessable income under section 97 or 100 in respect of the share of that beneficiary of the net income of another trust estate, being a trust estate that resulted from a will or codicil of that deceased person, an order of a court that varied or modified the provisions of a will or codicil of that deceased person, a partial intestacy of that deceased person or an order of a court that varied or modified the application, in relation to the estate of that deceased person, of the provisions of the law relating to the distribution of estates of persons who die intestate,
the sum of the amount referred to in paragraph (a) and the amount or amounts applicable by virtue of sub-paragraphs (i), (ii) and (iii) of this paragraph, exceeds the amount that, in the opinion of the Commissioner, would have been included in the assessable income of the beneficiary of the year of income in respect of an amount or amounts derived by the beneficiary from property that, in the opinion of the Commissioner, would have devolved directly upon that beneficiary if that deceased person had died intestate,
the amount of the assessable income of the trust estate that would, apart from this sub-section, have been excepted trust income in relation to that beneficiary by virtue of sub-paragraph (ii) of paragraph (d) of sub-section (2) shall be reduced by the amount of that excess.
“(8) For the purposes of this section, where—
(a) any property is transferred to the trustee of a trust estate; and
(b) the trustee has a discretion to pay or apply the income derived from that property to or for the benefit of specified beneficiaries or beneficiaries included in a specified class of beneficiaries,
that property shall be taken to have been transferred to the trustee for the benefit of each of those specified beneficiaries or for each of the beneficiaries in that specified class of beneficiaries, as the case may be.
“102ah. (1) Subject to this section, where it is established to the satisfaction of the Commissioner that, in relation to income derived during a year of income by a prescribed person, or by a trustee on behalf of a prescribed person, under arrangements entered into on or before 26 July 1979, it would be unreasonable that the whole of the additional amount of tax payable in respect of that income by virtue of the application of this Division should be payable, the Commissioner may grant to the prescribed person or the trustee, as the case may be, in an assessment in respect of any such income, a rebate of tax of such amount (if any) as the Commissioner considers fair and reasonable, not exceeding that additional amount.
“(2) In a case where a parent of the prescribed person, or the parents of the prescribed person, has or have in relation to the year of income a taxable income or taxable incomes, neither the prescribed person nor any trustee is entitled to a rebate under sub-section (1) in relation to income that is subject to tax by virtue of the application of this Division, unless it is established to the Commissioner’s satisfaction that the tax payable in respect of that income under this Act, apart from this section and section 102aj, is greater than the tax that would have been payable in respect of that income if the parent of the prescribed person who has the higher taxable income (or in a case where the parents have equal taxable incomes, the father) had been liable to pay tax in respect of an amount equal to the taxable income of that parent increased by so much of the aggregate of the incomes of the children of that parent, or of trustees for the children, as represents income to which this Division applies that was derived under arrangements entered into on or before 26 July 1979.
“(3) In determining the amount of any rebate that may be granted to a person in accordance with sub-section (1)—
(a) the Commissioner may, if he is satisfied that the aggregated taxable income referred to in sub-section (2) was, by reason of any tax avoidance agreement, lower than it would have been but for any such agreement, take that factor into account as a factor operating against the granting of the rebate; and
(b) the Commissioner may have regard to such other matters as he thinks fit.
“(4) Where the Commissioner, in an assessment, has granted a rebate to a person under this section and the Commissioner subsequently forms the opinion that the rebate should not have been granted or that a lesser rebate should have been granted, nothing in section 170 prevents the amendment of the assessment for the purpose of disallowing or reducing the rebate, as the case may be.
“(5) Nothing in section 170 prevents the amendment of an assessment at any time for the purpose of granting a rebate under this section or increasing a rebate granted under this section.
“(6) In this section, ‘tax avoidance agreement’ means an agreement, not being an agreement entered into or carried out in the course of ordinary family or commercial dealing, that was entered into or carried out by any person for the purpose, or for purposes that included the purpose, of securing that a person who, if the agreement had not been entered into or carried out, would have been liable to pay income tax in respect of a year of income would not be liable to pay income tax in respect of that year of income or would be liable to pay less income tax in respect of that year of income than that person would have been liable to pay if the agreement had not been entered into or carried out.
“102aj. (1) In any case where it is established to the satisfaction of the Commissioner that—
(a) the tax, that, apart from this section and apart from section 265, would be payable by a person in respect of a year of income exceeds the tax that, apart from section 265, would be payable by the person in respect of that year of income if this Division had not been enacted; and
(b) for any reason, the exaction of the full amount of tax that, apart from this section and apart from section 265, would be payable by the person in respect of that year of income would entail serious hardship,
that person is entitled, in his assessment in respect of that year of income, to a rebate of tax of such amount, not exceeding the amount of the excess referred to in paragraph (a), as the Commissioner considers reasonable.
“(2) A reference in sub-section (1) to tax payable by a person shall be read as including a reference to tax payable by a trustee of a trust estate in pursuance of section 98 in respect of a share of a beneficiary of the net income of the trust estate.
“(3) Nothing in section 170 prevents the amendment of an assessment at any time for the purpose of granting a rebate under this section or increasing a rebate granted under this section.”.
(a) by omitting from paragraph (b) of sub-section (4) “and section 94” (wherever occurring) and substituting “, section 94 and Division 6aa”; and
(b) by omitting from paragraph (b) of sub-section (5) “and section 94” (wherever occurring) and substituting “, section 94 and Division 6aa”.
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