Income Tax Regulations (Amendment) (Cth)

Statutory Rules 1998

No. 14 1

__________________

Income Tax Regulations 2(Amendment)

I, The Governor-GeneraL of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Income Tax Assessment Act 1936.

Dated 18 February 1998.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

____________

1.   Commencement

1.1   These Regulations commence on 1 July 1998.

2.   Amendment

2.1   The Income Tax Regulations are amended as set out in these Regulations.

3.   Regulation 42 (Eligible termination payments—roll-over)

3.1   Omit the regulation.

4.   Regulation 70 (Interpretation)

4.1   Paragraph 70 (3) (a):

Omit “subsection 221A (1)”, substitute “subsection 27A (1)”.

5.   Part 7, Subdivision 3 (Deductions from Eligible Termination Payments)

5.1   Omit the heading, substitute:

“Subdivision 3—Eligible termination payments”.

6.   Regulation 97 (Interpretation)

6.1   Subregulation 97 (1):

After “used in this Subdivision”, insert “or Subdivision 3A”.

6.2   Subregulation 97 (2):

Omit “Subdivision:”, substitute “Subdivision and Subdivision 3A:”.

6.3   Subregulation 97 (2) (definition of “dependant”):

Omit the definition, substitute:

“‘dependant’ has the meaning given by paragraph (b) of the definition of ‘dependant’ in subsection 27A (1) of the Act;”.

6.4   Subregulation 97 (2):

Insert the following definitions:

“‘15 February 1990 roll-over balance’, for a person, means the amount mentioned in paragraph 53C (1) (d) or (e);

‘applied amount’ has the meaning given by subparagraph 27D (1) (b) (ii) of the Act;

‘approved deposit fund’ has the meaning given by subsection 27A (1) of the Act;

‘cash amount’ has the meaning given to ‘retained amount’ by subsection 27AC (2) of the Act;

‘CGT exempt component’ has the meaning given by subsection 27A (1) of the Act;

‘commencement day’ has the meaning given by subsection 27AAAA (6) of the Act;

‘commutation ETP’ has the meaning given by subsection 27AAAA (2) of the Act;

‘concessional component’ has the meaning given by subsection 27A (1) of the Act;

‘death benefit’ is a payment of a kind mentioned in Table 1 of subsection 27AAA (2) of the Act;

‘eligible service period’ has the meaning given by subsection 27A (1) of the Act;

‘ETP’ has the meaning given to ‘eligible termination payment’ in subsection 27A (1) of the Act;

‘ETP group certificate’ means a form authorised under regulation 99J;

‘ETP pre-payment statement’ means a statement, given by the payer to the taxpayer, under regulation 99;

‘ETP roll-over statement’ means a statement given under regulation 99D;

‘non-qualifying component’ has the meaning given by subsection 27A (1) of the Act;

‘original underlying commutation ETP’ has the meaning given by subsection 27AAAA (5) of the Act;

‘PAYE account number’ means a registration number allotted under subregulation 115 (1);

‘payer’ means a person or entity who makes an ETP;

‘preserved benefits’ has the same meaning as in Part 6 of the Superannuation Industry (Supervision) Regulations;

‘qualifying eligible termination payment’ has the meaning given by subsection 27A (12) of the Act;

‘receiving fund’ means the recipient of a qualifying eligible termination payment;

‘regulated superannuation fund’ has the meaning given by section 19 of the Superannuation Industry (Supervision) Act 1993;

‘restricted non-preserved benefits’ has the same meaning as in Part 6 of the Superannuation Industry (Supervision) Regulations;

‘retirement savings account provider’ has the meaning given by section 12 of the Retirement Savings Accounts Act 1997;

‘underlying commutation ETP’ has the meaning given by subsection 27AAAA (3) of the Act;

‘unrestricted non-preserved benefits’ has the same meaning as in Part 6 of the Superannuation Industry (Supervision) Regulations;”.

7.   Regulation 98 (Rates of deduction—ETP)

7.1   Paragraph 98 (1) (b):

Omit the paragraph, substitute:

• “(b)

  to which a roll-over election, made under section 27D of the Act, does not apply;”.

8.   Regulation 99 (Statement of termination payment)

8.1   Omit the regulation.

9.   Regulation 99A (Circumstances in which regulation 99 does not apply)

9.1   Omit the regulation, substitute:

“Subdivision 3A—Eligible termination payments (records to be kept)

Payer must give taxpayer ETP pre-payment statement

 “99.(1) Before an ETP is made in respect of a taxpayer, the payer must give to the taxpayer or an agent of the taxpayer an ETP pre-payment statement.

 “(2) However, the payer does not have to give the taxpayer an ETP pre-payment statement if:

• (a)

  the payer is:

  • (i)

    a regulated superannuation fund or an approved deposit fund; and

  • (ii)

    allowed, under the Superannuation Industry (Supervision) Act 1993, to transfer or roll-over the benefit without the consent of the taxpayer; or

• (b)

  the payer is:

  • (i)

    a retirement savings account provider; and

  • (ii)

    allowed, under the Retirement Savings Accounts Act 1997, to transfer or roll-over the benefit without the consent of the taxpayer; or

• (c)

  the payment is a death benefit; or

• (d)

  the payment is of a kind mentioned in paragraph (a) or (jaa) of the definition of ‘eligible termination payment’ in subsection 27A (1) of the Act, and is:

  • (i)

    not more than $5000; or

  • (ii)

    a CGT exempt component; or

• (e)

  the payer has received from the taxpayer or an agent of the taxpayer authority to make the payment and payment instructions in accordance with regulation 99E.

Contents of ETP pre-payment statement

 “99A. (1)An ETP pre-payment statement must set out at least the following information:

• (a)

  the name, business address and contact telephone number of the payer;

• (b)

  the name, contact address last known to the payer, and date of birth (if known), of the taxpayer;

• (c)

  the amount, or notional amount, of the ETP that is payable to the taxpayer;

• (d)

  the amounts, or the notional amounts, of so much of the ETP as comprises each of the following:

  • (i)

    the preserved benefits;

  • (ii)

    the restricted non-preserved benefits;

  • (iii)

    the unrestricted non-preserved benefits;

• (e)

  an explanation of the effect of the classification of amounts, or notional amounts, under paragraph (d) that:

  • (i)

    are available to be taken in cash (if any);

  • (ii)

    can be rolled-over (if any);

  • (iii)

    must be rolled-over (if any);

• (f)

  the amounts, or the notional amounts, of so much of the ETP as comprises each of the following:

  • (i)

    each component mentioned in section 27AA of the Act;

  • (ii)

    each element mentioned in section 27AB of the Act;

• (g)

  the commencement date of the eligible service period;

• (h)

  the number of pre‑July 83 days, and post‑June 83 days, in the eligible service period, as calculated by the payer to the date mentioned in subregulation (3);

• (i)

  the amount, or notional amount, of the 15 February 1990 roll-over balance (if known);

• (j)

  the date in relation to which the information given under paragraphs (a) to (i) was, or is expected to be, correct;

• (k)

  the date when the ETP pre-payment statement is issued.

 “(2) If an amount referred to in subregulation (1) is nil, the payer does not have to set out that amount in the ETP pre-payment statement.

 “(3) For subregulation (1), ‘notional amount’ means an amount calculated by the payer to a particular date and may include projected figures.

Taxpayer to give payer instructions

 “99B.(1) The ETP pre-payment statement given under regulation 99 must also include a request that the taxpayer give payment instructions in accordance with regulation 99E to the payer within 30 days after the statement is issued or a shorter time reasonably required by the payer.

 “(2) The ETP pre-payment statement may include a statement about how, if no instructions are received, the payer will deal with the payment.

 “(3) For subregulation (1), a shorter time may reasonably be required if:

• (a)

  both:

  • (i)

    the payment is of a kind mentioned in paragraph (a) of the definition of ‘eligible termination payment’ in subsection 27A (1) of the Act; and

  • (ii)

    an agreement, including an employment contract or award, between the payer and the taxpayer provides that a payment should be made in a shorter time; or

• (b)

  the payer considers it is in the taxpayer’s best interests.

Instructions to make a payment

 “99C.(1) Subject to subregulation (2), a payer who has received payment instructions in accordance with regulation 99E must comply with those instructions.

 “(2) Nothing in subregulation (1) is taken to require a payer to do anything in breach of the requirements of:

• (a)

  a law of the Commonwealth, a State or a Territory; or

• (b)

  the terms of any agreement between the payer and the taxpayer.

[NOTE:  For paragraph 99C (2) (a), the following are examples of Commonwealth laws:

(a) Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936;

• (b)

  Part 4 of the Retirement Savings Accounts Regulations;

• (c)

  Part 6 of the Superannuation Industry (Supervision) Regulations.]

Payer to give receiving fund an ETP roll-over statement

 “99D.(1) A payer must give to the receiving fund, directly or in accordance with payment instructions under regulation 99E, within 7 days after the roll-over, an ETP roll-over statement setting out at least the following information:

• (a)

  the taxpayer’s name and date of birth (if known);

• (b)

  the contact address of the taxpayer last known to the payer;

• (c)

  the taxpayer’s tax file number, if required or permitted under subsection 299M (2) or 299N (2) of the Superannuation Industry (Supervision) Act 1993, or subsection 138 (2) of the Retirement Savings Accounts Act 1997;

• (d)

  the name and contact telephone number of the payer;

• (e)

  the name and address of the receiving fund;

• (f)

  the amount paid to the receiving fund;

• (g)

  the amounts of the preserved benefits, restricted non‑preserved benefits and unrestricted non-preserved benefits in the applied amount;

• (h)

  the commencement date of the eligible service period;

• (i)

  the number of pre-July 83 days and post-June 83 days in the eligible service period;

• (j)

  subject to regulation 99F, the amount of each tax component of the roll-over payment mentioned in subparagraph 27D (1) (b) (iii) of the Act;

• (k)

  the amount of the 15 February 1990 roll-over balance (if known);

• (l)

  whether, in accordance with regulation 99G, the applied amount relates to a pre-1 July 1994 pension or annuity;

• (m)

  the name, telephone number and address of the taxpayer’s agent, if the taxpayer asks that this information be included.

 “(2) If an amount referred to in subregulation (1) is nil, the payer does not have to set out that amount in the statement.

Payment instructions

 “99E. Payment instructions are in accordance with this regulation if they are sufficient to enable the payer to make an ETP, including, in particular, information sufficient:

• (a)

  to identify the amount and destination of any roll-over payment; and

• (b)

  to identify the amount of any cash amount; and

• (c)

  to identify the tax components and preservation amounts of each roll-over payment and cash amount; and

• (d)

  to indicate how any 15 February 1990 roll-over balance (if known) is to be distributed.

Aggregated amount of pre‑July 83 component and taxed element of post-July 83 component

 “99F. For paragraph 99D (1) (j), the pre‑July 83 component and the taxed element of the post-July 83 component may be shown as an aggregated amount.

Applied amount

 “99G.For paragraph 99D (1) (l), an applied amount relates to a pre-1 July 1994 pension or annuity if the applied amount is a commutation ETP and the pension or annuity that gives rise to the commutation ETP:

• (a)

  has a commencement day before 1 July 1994; or

• (b)

  has 1 or more underlying commutation ETPs and, for each original underlying commutation ETP, the commencement day of the relevant pension or annuity is before 1 July 1994.

[NOTE:  The circumstances in which a pension or annuity gives rise to a commutation ETP are set out in subsection 27AAAA (4) of the Act.]

ETP roll-over statement to be given to taxpayer

 “99H. The payer must give to the taxpayer or an agent of the taxpayer a copy of the ETP roll-over statement within 30 days after the roll-over, unless the payer is of a kind mentioned in paragraph 99 (2) (a) or (b).

Records to be kept

 “99I.(1) If instructions of the kind mentioned in paragraph 99 (2) (e) or regulation 99B are given, the payer and the taxpayer must each keep a copy of the instructions for 5 years from the date when the instructions were given.

 “(2) If a payer gives an ETP roll-over statement to a receiving fund under regulation 99D, the payer and the receiving fund must each keep a copy of the statement for 5 years after the date of the roll-over.

 “(3) If an ETP, or any part of an ETP, is paid in cash, the payer must give to the taxpayer and to the Commissioner an ETP group certificate.

 “(4) However, the payer does not have to give an ETP group certificate to the taxpayer or the Commissioner if the payment is:

• (a)

  a payment of a kind mentioned in paragraph (a) or (jaa) of the definition of ‘eligible termination payment’ in subsection 27A (1) of the Act; and

• (b)

  a CGT exempt component.

ETP group certificate

 “99J. For subregulation 99I (3), the Commissioner may:

• (a)

  authorise a form as an ETP group certificate; and

• (b)

  approve different forms for use in different cases; and

• (c)

  approve forms that provide for different information in different cases; and

• (d)

  by notice published in the Gazette, specify how an ETP group certificate may be electronically transmitted to the Commissioner.

Contents of ETP group certificates

 “99K.(1) An ETP group certificate must set out the following information:

• (a)

  the name, address and date of birth of the taxpayer;

• (b)

  the name, address and PAYE account number of the payer;

• (c)

  the eligible service period, including the number of pre‑July 83 and post‑June 83 days;

• (d)

  the date when the payment is made;

• (e)

  the date when the ETP group certificate is issued;

• (f)

  whether the payment is a death benefit and, if so, whether the taxpayer is a dependant of the deceased, or a trustee of the estate of the deceased;

• (g)

  the cash amount of the ETP;

• (h)

  the amount of each component of the cash amount;

• (i)

  the assessable amount;

• (j)

  the taxpayer’s tax file number, if the payer has it for taxation purposes;

• (k)

  the amount of tax instalments deducted from the ETP.

 “(2) For paragraph (1) (i), the assessable amount:

• (a)

  is nil if the ETP is a death benefit that is paid to a dependant of the deceased; or

• (b)

  in any other case—is worked out by:

  • (i)

    adding together the pre-July 83 component and the concessional component; and

  • (ii)

    calculating 5% of that sum; and

  • (iii)

    adding the figure calculated in subparagraph (ii) to the post‑June 83 component and the non‑qualifying component.

Who has authority to sign forms

 “99L.(1) If a payer is required by this Subdivision to give a form to a person, the form must be signed and dated by the payer on the day when the form is issued to the person.

 “(2)For subregulation (1), the payer may give another person written authorisation to sign and date forms.

 “(3) An authorisation given under subregulation (2) must:

• (a)

  specify the date when the authorisation starts; and

• (b)

  be kept for 5 years from the date when the authorisation ceases to have effect.

 “(4) If the name of the authorised person appears on the form, the form is taken to be signed by the payer unless it is proved that the form was issued without authority.

Electronic transmission and storage of forms

 “99M. (1) Any information that is required by this Subdivision to be given to a person may be transmitted electronically.

 “(2) Any information that is required by this Subdivision to be kept may be kept electronically.”.

10.   Regulation 100 (Employee may quote tax file number)

10.1   Omit the regulation, substitute:

Employee may quote tax file number

 “100. (1) Before an ETP is made in respect of a taxpayer, the taxpayer may quote his or her tax file number in a statement in a form approved by the Commissioner for the purpose.

 “(2) If the taxpayer quotes his or her tax file number in a statement on the form mentioned in subregulation (1), the form must be made available to the employer.”.

11.   New Subdivision 3B

11.1   After regulation 100, insert:

“Subdivision 3B—Eligible termination payments (contravention notices)

Interpretation

 “100A. In this Subdivision:

‘officer’ means an officer of the ATO.

Contravention notice

 “100B.If the Commissioner has reason to believe that a person has contravened regulation 99C, 99D, 99H or 99I, or subregulation 99 (1), 99A (1), 99B (1), 99K (1), 99L (1) or 99L (3), the Commissioner may cause a notice (a ‘contravention notice’) to be served on the person in accordance with this Subdivision.

Contents of contravention notice

 “100C. An contravention notice must set out:

• (a)

  particulars of the alleged contravention; and

• (b)

  the penalty for the contravention; and

• (c)

  the person to whom, the place at which, and the manner in which, the penalty may be paid; and

• (d)

  the date of the notice and a statement that the penalty may be paid within 14 days after that date; and

• (e)

  any other particulars the Commissioner thinks necessary.

Notification that person may pay penalty

 “100D. A contravention notice must state that, if the person does not wish the matter to be dealt with by a court, the person may lodge with the Commissioner a signed statement to that effect in the manner stated in the notice and pay the penalty for the contravention.

Contents of contravention notice—other matters

 “100E. A contravention notice may contain any other matter that the Commissioner considers relevant.

Penalty

 “100F. For this Subdivision, the penalty for a contravention is $100.

No requirement to serve contravention notice

 “100G. This Subdivision does not require the service of a contravention notice or affect the liability of a person to be prosecuted in a court for a contravention of a provision mentioned in regulation 100B for which a contravention notice has not been served.

Consequences of payment of penalty

 “100H. If:

• (a)

  a contravention notice has been served on a person; and

• (b)

  before the end of the period of 14 days stated in the notice or, if the Commissioner so allows, at any time before service of a summons for the contravention, the penalty is paid under the notice; and

• (c)

  a statement, signed by the person, to the effect that the person does not wish the matter to be dealt with by a court, is received by the person to whom the penalty is paid; and

• (d)

  the contravention that resulted in the service of the contravention notice has ceased;

the following provisions have effect:

• (e)

  any liability of the person for the contravention is taken to be discharged;

• (f)

  no further proceedings are to be taken for the contravention;

• (g)

  no conviction for the contravention is taken to have been recorded.

Payment by cheque

 “100I. If the penalty is paid by cheque, payment is taken not to be made unless the cheque is honoured on presentation.

Other proceedings not affected

 “100J. Except as provided by regulation 100H, this Subdivision does not prejudice or affect the institution or prosecution of proceedings for a contravention of a provision mentioned in regulation 100B or limit the amount of the fine that may be imposed by a court for such a contravention.”.

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 18 February 1998.

2. Statutory Rules 1936 No. 94 as amended by 1939 Nos. 6 and 42; 1940 Nos. 138 and 289; 1941 Nos. 120 and 327; 1942 Nos. 339 and 553; 1943 Nos. 80, 127 and 151; 1944 Nos. 90 and 124; 1945 Nos. 12, 85, 169 and 192; 1946 No. 135; 1947 Nos. 77 and 173; 1948 Nos. 115 and 162; 1949 Nos. 25 and 50; 1950 Nos. 63 and 101; 1951 Nos. 136 and 157; 1952 Nos. 89, 90 and 102; 1953 Nos. 55 and 88; 1954 Nos. 11, 99 and 112; 1955 No. 23; 1956 Nos. 34, 35 (repealed by 1956 No. 96) and 96; 1957 Nos. 39 and 74; 1958 Nos. 27 and 70; 1959 Nos. 25 and 81; 1960 Nos. 44 and 74; 1962 Nos. 15, 44 and 112; 1963 Nos. 53 and 92; 1964 Nos. 74, 121 and 134; 1965 Nos. 133 and 187; 1966 No. 156; 1967 Nos. 112 and 126; 1968 No. 1; 1969 No. 68;

NOTES—continued

 1970 Nos. 43, 126, 168 and 213; 1971 Nos. 120 and 148; 1972 Nos. 48, 50 and 137; 1973 No. 266; 1974 Nos. 193, 226 and 267; 1975 Nos. 88, 89, 99, 101 and 213; 1976 Nos. 115, 188 and 212; 1977 Nos. 77, 107 and 248; 1978 Nos. 85 and 193; 1979 Nos. 126 and 239; 1980 Nos. 86, 137 and 149; 1981 Nos. 116 and 360; 1982 Nos. 115, 128, 267 and 280; 1983 Nos. 79, 87, 111, 213 and 319; 1984 Nos. 172, 286, 408 and 416; 1985 Nos. 21, 148, 274 and 278; 1986 No. 325; Acts Nos. 28, 49 and 112, 1986; Statutory Rules 1987 Nos. 92 and 120; 1988 Nos. 196, 208, 262, 381, 382, 383 and 384; Act No. 97, 1988; Statutory Rules 1989 Nos. 67, 80, 115 (as amended by 1989 No. 358), 123, 124, 141, 250 and 358; 1990 Nos. 19, 126, 151, 152, 192, 347, 390, 398 and 468; 1991 Nos. 20, 121, 156, 158, 240, 300, 301, 390 and 391; 1992 Nos. 38, 129, 216, 313 and 449; 1993 Nos. 15, 46, 47, 65, 91, 159, 202, 216, 275, 288 and 370; 1994 Nos. 95, 96, 127, 174, 195, 219, 399, 412, 460, 461 and 462; 1995 Nos. 58, 107, 139, 152, 153, 194, 316, 356, 381, 382, 383 and 447; Act No. 30, 1995; Statutory Rules 1996 Nos. 38, 56, 114, 124, 133, 150, 185, 274, 320, 345 and 346; 1997 Nos. 68, 141, 148, 169, 176, 191, 196, 197, 270, 338, 368 and 416.