Taxation Laws Amendment Act (No. 2) 1989 (Cth)
This compilation was prepared on 6 October 2010
taking into account amendments up to Act No. 75 of 2010
The text of any of those amendments not in force
on that date is appended in the Notes section
The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section
Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra
TABLE OF PROVISIONS
PART I – PRELIMINARY
Section
Short title [
Commencement [
PART II - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936
Principal Act
Expenditure on scientific research
Repeal of sections 115 and 116
Insertion of new Division:
159GZZZC. Interpretation - general
159GZZZD. Meaning of ''eligible entity'', ''eligible interest'' and
''eligible proportion''
159GZZZE. Share cancellations to which this Division applies
159GZZZF. Effect on subsidiary of share cancellations to which this
Division applies
159GZZZG. Pre-cancellation disposals of eligible interests
159GZZZH. Post-cancellation disposals of eligible interests etc.
159GZZZI. Additional application of sections 159GZZZG and 159GZZZH to
associates
Consideration in respect of disposal
Amendment of assessments
Insertion of new Part:
PART IX - TAXATION OF SUPERANNUATION BUSINESS AND RELATED BUSINESS
Interpretation
Trustees of funds not constituted as trusts
Issue, revocation etc. of OSS notices
Part to apply to government funds etc.
Part has effect subject to the Constitution
Assumption to be made in calculating taxable income
Special income
Taxable contributions
Transfer of taxable contributions
Contribution notices given after return lodgment date
Contributions treated as assessable in determining deductions
Liability to taxation
Deduction for premiums for death or disability cover
No deduction in respect of benefits
Assessable income to include taxable contributions
Exclusion from assessable income of amounts that accrued
before 1 July 1988
Exemption of income attributable to current pensions
Special component of taxable income
Standard component of taxable income
Liability to taxation
No deduction in respect of benefits
Assessable income to include taxable contributions
Liability to taxation
Assessable income to include taxable contributions
Exclusion from assessable income of amounts that accrued
before 1 July 1988
Special component of taxable income
Standard component of taxable income
Liability to taxation
Assessable income to include taxable contributions
Liability to taxation
Exclusion from assessable income of amounts that accrued
before 1 July 1988
Special component of taxable income
Standard component of taxable income
Rebates and provisional tax
Amendment of assessments
10. Other amendments relating to superannuation business and related
business
11. Application - Division 16J of Part III
12. Application of superannuation and related amendments
13. Transitional - section 73A
14. Transitional - superannuation and related amendments
PART III - AMENDMENT OF OTHER ACTS IN CONNECTION WITH THE AMENDMENTS
OF THE
SUPERANNUATION BUSINESS AND RELATED BUSINESS
16. Amendment of other Acts
17. Application
of amendment of the
SCHEDULE 1
OTHER
AMENDMENTS OF THE
SUPERANNUATION BUSINESS AND RELATED BUSINESS
SCHEDULE 2
AMENDMENT
OF OTHER ACTS IN CONNECTION WITH THE AMENDMENTS OF THE
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989 - LONG TITLE
An Act to amend the law relating to taxation
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 1
Short
title [
1. This Act may be cited as the Taxation Laws Amendment Act (No. 2)
1989.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 2
Commencement
[
2. This Act commences on the day on which it receives the Royal Assent.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 3
Principal Act
3. In this Part, "Principal Act" means the Income Tax Assessment Act
1936.*1*
*1* No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No.
5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69,
1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37,
1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48,
1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No.
43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65,
1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960;
Nos. 17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46,
68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos.
19, 38, 76 and 85, 1967; Nos. 4, 70, 87 and 148, 1968; Nos. 18, 93 and 101,
1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972;
Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20,
1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143,
165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171
and 172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24,
57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and
175, 1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49,
51, 54 and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984;
No. 123, 1984 (as amended by No. 65, 1985); Nos. 47, 49, 104, 123, 168 and
174, 1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 51,
109, 112 and 154, 1986; No. 49, 1986 (as amended by No. 141, 1987); No. 52,
1986 (as amended by No. 141, 1987); No. 90, 1986 (as amended by No. 141,
1987); Nos. 23, 58, 61, 120, 145 and 163, 1987; No. 62, 1987 (as amended by
No. 108, 1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as
amended by No. 11, 1988); No. 139, 1987 (as amended by Nos. 11 and 78, 1988);
Nos. 8, 11 59, 75, 78, 80, 87, 95, 97, 127 and 153, 1988; Nos. 2, 11, 56, 70
and 73, 1989.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 4
Expenditure on scientific research
4. Section 73A of the Principal Act is amended by omitting "Health, by the
Secretary to the Department of Science or by the Secretary to the Department
of Employment and Industrial Relations" from the definition of "an approved
research institute" in subsection (6) and substituting "Community Services and
Health or by the Secretary to the Department of Employment, Education and
Training".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 5
Repeal of sections 115 and 116
5. (1) Sections 115 and 116 of the Principal Act are repealed.
(2) The amendment made by subsection (1) applies to assessments in respect
of income of the year of income commencing on 1 July 1988 and of all
subsequent years of income.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 6
6. After Division 16H of Part III of the Principal Act the following
Division is inserted:
"Division 16J-Effect of Cancellation of Subsidiary's Shares in Holding
Company
Interpretation-general
"159GZZZC. (1) In this Division:
'associate' has, subject to subsection (2), the same meaning as in
subsection 26AAB (14);
'cancellation' includes redemption;
'disposal' includes cancellation;
'entity' means a company, a partnership or a trust estate;
'pre-cancellation period', in relation to a cancellation of shares to which
this Division applies, means the period beginning when the holding company
concerned became a holding company of the subsidiary concerned and ending at
the time of the cancellation;
'security' means stock, a bond or debenture, or any other document
evidencing the indebtedness of a person, whether or not the debt is secured.
"(2) For the purposes of the definition of 'associate' in subsection (1),
any reference in subsection 26AAB (14), or in any other provision of this Act
that has effect for the purposes of that subsection, to the spouse of a person
(in this subsection called the 'relevant person') shall be taken:
to include a reference to a person who is living with the relevant
person as the husband or wife of the relevant person on a bona fide domestic
basis although not legally married to the relevant person; but
not to include a reference to a person who is legally married to the
relevant person but is living separately and apart from the relevant person on
a permanent basis.
"(3) For the purposes of this Division, a company is:
a subsidiary of another company; or
the holding company of another company;
if the first-mentioned company is such for the purposes of the Companies Act
1981 or a corresponding law in force in a State or Territory.
"(4) For the purposes of this Division, a reference to an interest in an
entity is a reference to a legal or equitable interest in:
if the entity is a company-shares in the company;
if the entity is a partnership-capital or profits of the partnership;
if the entity is a trust estate-corpus or income of the trust estate;
or
in any case-securities issued by the entity.
Meaning of ''eligible entity'', ''eligible interest'' and ''eligible
proportion''
"159GZZZD. For the purposes of this Division, where a holding company holds
interests in a subsidiary of the holding company either directly or indirectly
through interposed entities:
a reference to an eligible entity in relation to the holding company
and the subsidiary is a reference to the holding company or any of the
interposed entities;
a reference to an eligible interest of an eligible entity is a
reference to any interest held by the eligible entity directly in the
subsidiary or directly in any other eligible entity in relation to the holding
company and the subsidiary; and
a reference to the eligible proportion in relation to an eligible
interest of an eligible entity is a reference to the proportion of the total
interests held directly in the subsidiary by all persons and entities that is
represented by:
if the eligible entity holds the eligible interest directly in the
subsidiary-the eligible interest; or
if, by virtue of holding the eligible interest, the eligible
entity
holds an interest in the subsidiary indirectly through another eligible entity
or other eligible entities-that interest in the subsidiary.
Share cancellations to which this Division applies
"159GZZZE. Where a holding company cancels shares in itself that are held by
a subsidiary of that company, this Division applies to the cancellation of the
shares.
Effect on subsidiary of share cancellations to which this Division applies
"159GZZZF. (1) Where:
this Division applies to a cancellation of shares; and
apart from this section, either:
the subsidiary concerned would not receive or be entitled to receive
any consideration in respect of the cancellation; or
the consideration that the subsidiary concerned would receive or be
entitled to receive in respect of the cancellation would be less than the
adjusted market value of the shares;
the following provisions have effect for the purposes of this Act:
where subparagraph (b) (i) applies-the subsidiary shall be taken to
have received or to be entitled to receive, as consideration in respect of the
cancellation, an amount equal to the adjusted market value of the shares;
where subparagraph (b) (ii) applies-the amount of the consideration
that the subsidiary receives or is entitled to receive in respect of the
cancellation shall be taken to be increased by an amount so that it equals the
adjusted market value of the shares.
"(2) For the purposes of subsection (1), the adjusted market value of the
shares is the amount that would have been their market value at the time of
the cancellation if the cancellation did not occur and was never proposed to
occur.
Pre-cancellation disposals of eligible interests
"159GZZZG. (1) Where:
this Division applies to a cancellation of shares;
during the pre-cancellation period, there is a disposal of an eligible
interest held by an eligible entity in relation to the holding company and the
subsidiary concerned; and
apart from this section, either:
the eligible entity would not have received or been entitled to
receive any consideration in respect of the disposal; or
the consideration that the eligible entity would have received or
been entitled to receive in respect of the disposal would have been less than
the adjusted market value of the eligible interest;
the following provisions have effect for the purposes of this Act:
where subparagraph (c) (i) applies-the eligible entity shall be taken
to have received or to have been entitled to receive, as consideration in
respect of the disposal, an amount equal to the adjusted market value of the
eligible interest;
where subparagraph (c) (ii) applies-the amount of the consideration
that the eligible entity received or was entitled to receive in respect of the
disposal shall be taken to be increased by an amount so that it equals the
adjusted market value of the eligible interest.
"(2) For the purposes of subsection (1), the adjusted market value of the
eligible interest is the amount that would have been its market value at the
time of the disposal if the cancellation of the shares to which this Division
applies did not occur and was never proposed to occur.
Post-cancellation disposals of eligible interests etc.
"159GZZZH. (1) Where:
as a result of the application of section 159GZZZF in relation to a
cancellation of shares, the subsidiary concerned is taken to have received or
to be entitled to receive an amount of consideration or an increase in an
amount of consideration (which amount or increase is in this section called
the 'cancellation adjustment amount') in relation to the cancellation of the
shares; and
an eligible entity in relation to the holding company and the
subsidiary concerned holds an eligible interest at the time of the share
cancellation; then this section applies in relation to the eligible interest.
"(2) For the purposes of this Act (other than Part IIIA):
if the eligible interest is not trading stock-in determining:
the amount of any deduction allowed or allowable to the eligible
entity in respect of the acquisition of the eligible interest; or
the amount of any profit included in, or loss allowable as a
deduction from, the assessable income of the eligible entity in respect of the
acquisition and any subsequent disposal of the eligible interest;
the consideration in respect of the acquisition of the eligible interest
shall be taken to have been reduced by the eligible interest's eligible
proportion of the cancellation adjustment amount; and
if the eligible interest is trading stock-the consideration in respect
of any subsequent disposal of the eligible interest shall be taken to be
increased by the eligible interest's eligible proportion of the cancellation
adjustment amount.
"(3) For the purposes of Part IIIA:
in determining whether a capital gain accrues to the eligible entity in
the event of any subsequent disposal of the eligible interest-the eligible
entity shall be taken to have:
disposed of the eligible interest at the time of the share
cancellation for a consideration equal to the indexed cost base (or, where the
actual disposal occurs within 12 months of the actual acquisition of the
eligible interest, the cost base) to the eligible entity in respect of the
eligible interest; and
immediately re-acquired the eligible interest for a consideration
equal to the indexed cost base or the cost base, as the case may be, reduced
by the eligible interest's eligible proportion of the cancellation adjustment
amount;
in determining whether the eligible entity incurs a capital loss in the
event of any subsequent disposal of the eligible interest-the eligible entity
shall be taken to have:
disposed of the eligible interest at the time of the share
cancellation for a consideration equal to the reduced cost base to the
eligible entity in respect of the eligible interest; and
immediately re-acquired the eligible interest for a consideration
equal to the reduced cost base reduced by the eligible interest's eligible
proportion of the cancellation adjustment amount; and
the reference in subsection 160Z (3) to the day on which the eligible
interest was acquired by the eligible entity shall be taken to be a reference
to the day on which the eligible interest was actually acquired by the
eligible entity.
"(4) Expressions used in subsection (3) that are also used in Part IIIA have
the same respective meanings in that subsection as in that Part.
"(5) This section applies in relation to the acquisition or disposal of the
eligible interest held by the eligible entity at the time of the share
cancellation even if the entity was not an eligible entity, and the interest
was not an eligible interest, at the time of the acquisition or disposal.
Additional application of sections 159GZZZG and 159GZZZH to associates
"159GZZZI. (1) Subject to this section, where a natural person is an
associate of a holding company (otherwise than solely because of being the
trustee of a trust estate), sections 159GZZZG and 159GZZZH apply (in addition
to any application apart from this application of this section) as if
references in those sections to:
an eligible entity in relation to the holding company and the
subsidiary concerned;
an eligible interest of such an entity; or
the eligible proportion in relation to such an interest;
were references to what would, if the natural person were a holding company in
relation to the subsidiary, be respectively:
an eligible entity in relation to the natural person and the
subsidiary;
an eligible interest of such an entity; or
the eligible proportion in relation to such an interest.
"(2) For the purposes of applying section 159GZZZG or 159GZZZH in accordance
with subsection (1):
any interest of an entity that is an eligible interest for the purposes
of the application of that section apart from subsection (1) shall be taken
not to be an eligible interest; and
any eligible interest of an eligible entity (including the natural
person) held in the actual holding company referred to in subsection (1), or
in any eligible entity interposed between the natural person and that holding
company, shall be taken not to be an eligible interest.".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 7
Consideration in respect of disposal
7. Section 160ZD of the Principal Act is amended by adding at the end the
following subsection:
"(6) This section has effect subject to Division 16J of Part III.".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 8
Amendment of assessments
8. Section 170 of the Principal Act is amended by inserting in subsection
(10) "159GZZZH (2)," before "159ZJ (2B)".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 9
9. After section 266 of the Principal Act the following Part is inserted:
"PART IX-TAXATION OF SUPERANNUATION BUSINESS AND RELATED BUSINESS
"Division 1-Preliminary
Interpretation
"267. (1) In this Part, unless the contrary intention appears:
'actuary' has the same meaning as in the Life Insurance Act 1945;
'approved person' means a person included in a class of persons for the time
being approved by the Commissioner in writing for the purposes of this
definition;
'arm's length premium', in relation to an insurance policy, means the amount
that the insured could reasonably be expected to be required to pay to obtain
the insurance policy under a transaction where the parties to the transaction
are dealing with each other at arm's length in relation to the transaction;
'complying ADF', in relation to a year of income, means a fund in respect of
which:
the Insurance and Superannuation Commissioner has given a notice
under section 14 of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the fund satisfied the approved deposit fund
conditions in relation to the year of income; or
the Insurance and Superannuation Commissioner has given a notice
under section 15 of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the fund should be treated as if it had
satisfied the approved deposit fund conditions in relation to the year of
income;
'complying superannuation fund', in relation to a year of income, means a
fund in respect of which:
the Insurance and Superannuation Commissioner has given a notice
under section 12 of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the fund satisfied the superannuation fund
conditions in relation to the year of income; or
the Insurance and Superannuation Commissioner has given a notice
under section 13 of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the fund should be treated as if it had
satisfied the superannuation fund conditions in relation to the year of
income;
'constitutionally protected fund' has the meaning given by subsection 271
(2); 'death or disability benefit', in relation to a member of a complying
superannuation fund, means:
a benefit provided to a dependant of the member in the event of the
death of the member;
a benefit provided to the member in the event of the permanent
disability of the member; or
a benefit provided to the member, by way of income, during a period
when the member is unable to perform the normal duties of the member's
employment, being a period not exceeding 2 years or, if the Commissioner
approves in writing a longer period in relation to the fund, that period;
'dependant' has the same meaning as in the OSS Act;
'eligible ADF', in relation to a year of income, means a fund that is a
complying ADF, or a non-complying ADF, in relation to the year of income;
'eligible entity', in relation to a year of income, means:
a fund that is an eligible ADF in relation to the year of income;
a fund that is an eligible superannuation fund in relation to the
year of income; or
a unit trust that is a PST in relation to the year of income;
'eligible superannuation fund', in relation to a year of income, means a
fund that is a complying superannuation fund, or a non-complying
superannuation fund, in relation to the year of income;
'eligible termination payment' has the same meaning as in Subdivision AA of
Division 2 of Part III;
'life assurance company' has the same meaning as in Division 8 of Part III;
'non-complying ADF', in relation to a year of income, means a fund that, at
all times during the year of income when the fund is in existence, is an
approved deposit fund within the meaning of the OSS Act, but does not include
a fund that is a complying ADF in relation to the year of income;
'non-complying superannuation fund', in relation to a year of income, means
a fund that, at all times during the year of income when the fund is in
existence, is:
a provident, benefit, superannuation or retirement fund; or
a superannuation fund within the meaning of the OSS Act;
but does not include a fund that is a complying superannuation fund in
relation to the year of income;
'normal assessable income' means assessable income other than:
special income; or
taxable contributions;
'OSS Act' means the Occupational Superannuation Standards Act 1987;
'OSS notice' means a notice under the OSS Act;
'pooled superannuation trust' or 'PST', in relation to a year of income,
means a unit trust in respect of which:
the Insurance and Superannuation Commissioner has given a notice
under section 15B of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the unit trust satisfied the pooled
superannuation trust conditions in relation to the year of income; or
the Insurance and Superannuation Commissioner has given a notice
under section 15C of the OSS Act stating that the Insurance and Superannuation
Commissioner is satisfied that the unit trust should be treated as if it had
satisfied the pooled superannuation trust conditions in relation to the year
of income;
'registered organization' has the same meaning as in Division 8A of Part
III;
'special component':
in relation to a complying ADF-has the meaning given by section
292;
in relation to a complying superannuation fund-has the meaning
given
by section 284; or
in relation to a PST-has the meaning given by section 298;
'special income' has the meaning given by section 273;
'specified roll-over amount', in relation to an eligible entity, means so
much of an amount paid to the eligible entity as is required, by the operation
of section 27D in relation to:
an eligible termination payment that comes within paragraph (a) or
(aa) of the definition of 'eligible termination payment' in subsection 27A
(1); or
an eligible termination payment made from a fund that is a
constitutionally protected fund in relation to the year of income of the fund
in which the payment is made;
to be regarded as being the application of some or all of an amount
referred to in sub-subparagraph 27D (1) (b) (iii) (A);
'standard component':
in relation to a complying ADF-has the meaning given by section
293;
in relation to a complying superannuation fund-has the meaning
given
by section 285; or
in relation to a PST-has the meaning given by section 299;
'superannuation policy' has the same meaning as in Division 8 of Part III;
'taxable contribution' has the meaning given by section 274;
'unit trust' has the same meaning as in Division 6C of Part III.
"(2) The Commissioner, in giving an approval for the purposes of paragraph
(c) of the definition of 'death or disability benefit' in subsection (1),
shall have regard to:
any relevant approval given in relation to the fund concerned for the
purposes of the definition of 'superannuation fund' in subsection 3 (1) of the
OSS Act; and
any other relevant circumstances.
"(3) A reference in this Part to a fund or unit trust shall, where
appropriate, be read as a reference to the trustee of the fund or unit trust.
Trustees of funds not constituted as trusts
"268. Where, apart from this section, there is in relation to a fund no
person who is a trustee of the fund for the purposes of this Part, the person,
or each of the persons, who manages the fund shall be taken, for the purposes
of this Part, to be the trustee, or a trustee, as the case requires, of the
fund.
Issue, revocation etc. of OSS notices
"269. For the purposes of this Part, where an OSS notice is given in
relation to a fund or unit trust in relation to a year of income:
the notice shall be deemed to have been given at the beginning of the
year of income; and
if:
the notice is revoked; or
the decision to give the notice is set aside;
the notice shall be deemed never to have been given.
Part to apply to government funds etc.
"270. A reference in this Part to a fund or unit trust includes a reference
to a fund or unit trust established by:
a law of the Commonwealth or of a State or Territory; or
a public authority constituted by or under a law of the Commonwealth or
of a State or Territory.
Part has effect subject to the Constitution
"271. (1) It is the intention of the Parliament that if, but for this
section, this Part would have the effect that a law imposing taxation would
impose tax on property of any kind belonging to a State within the meaning of
section 114 of the Constitution, this Part shall not have that effect.
"(2) For the purposes of this Part, a fund is a constitutionally protected
fund in relation to a year of income if subsection (1) applies to the fund in
relation to any tax in relation to the year of income.
Assumption to be made in calculating taxable income
"272. The taxable income of an eligible entity shall be calculated as if the
trustee were a taxpayer and a resident.
Special income
"273. (1) This section applies to income derived in a year of income by a
fund or unit trust (in this section called the 'entity') that is a complying
superannuation fund, a complying ADF or a PST in relation to the year of
income.
"(2) A dividend paid to the entity by a company that is a private company in
relation to the year of income of the company in which the dividend was paid
is special income of the entity unless the Commissioner is of the opinion that
it would be reasonable not to treat the dividend as special income of the
entity, having regard to:
the paid-up value of the shares in that company that are assets of the
entity;
the cost to the entity of the shares on which the dividend was paid by
the company;
the rate of the dividend paid to the entity by the company on the
shares in the company that are assets of the entity;
whether the company has paid a dividend on other shares in the company
and, if so, the rate of that dividend;
whether any shares have been issued by the company to the entity in
satisfaction of, or of a part of, a dividend paid by the company and, if so,
the circumstances of the issue of those shares; and
any other matters that the Commissioner considers relevant.
"(3) For the purposes of subsection (2), income that, in the opinion of the
Commissioner, was derived by the entity indirectly from a dividend paid by a
company, being a private company in relation to the year of income of the
company in which the dividend was paid, shall be deemed to have been a
dividend paid to the entity by the company.
"(4) Income (other than a dividend to which subsection (2) applies) derived
by the entity from a transaction is special income of the entity if the
parties to the transaction were not dealing with each other at arm's length in
relation to the transaction and that income is greater than the income that
might have been expected to have been derived by the entity from the
transaction if those parties had been dealing with each other at arm's length
in relation to the transaction.
"(5) A reference in subsection (4) to a transaction includes a reference to
a series of transactions.
"Division 2-Taxable Contributions
Taxable contributions
"274. (1) Subject to this Division, the following amounts paid to an
eligible entity (other than a PST) are taxable contributions:
if the eligible entity is an eligible superannuation fund:
an amount in respect of which a deduction is allowable, or would but
for subsection 73B (20) be allowable, under section 82AAC to the person making
the payment;
a contribution made by a person (in this section called the
'contributor') to obtain superannuation benefits for the contributor or, in
the event of the death of the contributor, for dependants of the contributor,
but not including so much of such a contribution as is deemed by section 27D
to have been expended in making a payment as mentioned in paragraph 27A (12)
(a);
a contribution made by an exempt entity (within the meaning of
Division 6C of Part III) for the purpose of making provision for
superannuation benefits for, or for dependants of, a person;
a specified roll-over amount;
if the eligible entity is an eligible ADF-a specified roll-over amount.
"(2) Contributions to which subparagraph (1) (a) (ii) applies that are made
to a complying superannuation fund in a year of income are not taxable
contributions to the extent to which they are contributions covered by a
notice under subsection 82AAT (1A) given to the trustee of the fund before the
date on which the trustee lodges the return of income of the fund of the year
of income.
"(3) Contributions to which subparagraph (1) (a) (ii) applies that are made
to a complying superannuation fund in a year of income are not taxable
contributions if a notice under subsection (4) has been given in relation to
the contributor in relation to the year of income before the date on which the
trustee lodges the return of income of the fund of the year of income.
"(4) An approved person may give a notice to the trustee of a complying
superannuation fund stating that the approved person is satisfied that, apart
from subsection 82AAS (3), a person specified in the notice (who may be the
approved person) would not be an eligible person (within the meaning of
Subdivision AB of Division 3 of Part III) in relation to a year of income
specified in the notice.
"(5) The notice under subsection (4):
shall be in the prescribed form;
shall be given in the prescribed manner; and
is irrevocable.
Transfer of taxable contributions
"275. (1) Where:
the whole or a part of a taxable contribution made to a complying
superannuation fund or a complying ADF in a year of income of the fund (in
this section called the 'fund's year of income'):
is applied by the trustee of the fund in the purchase of a
superannuation policy from a life assurance company or registered organization
(in this subsection called the 'transferee'); or
is applied by the trustee of the fund in the purchase of units in a
PST (in this subsection also called the 'transferee'); and
the trustee of the fund, with the consent of the transferee, gives to
the Commissioner a notice stating that this section is to apply to the whole
or a specified part of so much of the contribution as was so applied;
the amount to which the notice relates shall be taken, for the purposes of
this Act:
to be included in the assessable income of the transferee of the year
of income of the transferee in which the end of the fund's year of income
occurs; and
not to be included in the assessable income of the fund of the fund's
year of income.
"(2) The notice under paragraph (1) (b):
shall be in the prescribed form;
shall be given in the prescribed manner;
shall be given on or before the date of lodgment of the return of
income of the fund for the fund's year of income; and
is irrevocable.
Contribution notices given after return lodgment date
"276. (1) Subject to this section, if:
a notice under subsection 82AAT (1A) in relation to a contribution made
to a fund in a year of income (in this section called the 'contribution year')
is given to the trustee of the fund in a later year of income (in this section
called the 'notice year') and on or after the date specified in subsection 274
(2); and
apart from this section, the assessable income of the fund of the
contribution year would include an amount (in this section called the
'clawback amount') that would not have been included if the notice had been
given to the trustee before that date;
the clawback amount is allowable as a deduction from the assessable income of
the fund of the notice year.
"(2) In determining whether paragraph (1) (b) is satisfied, section 275
shall be disregarded.
"(3) If the Commissioner is satisfied, having regard to the matters
specified in subsection (4), that it would be appropriate for the clawback
amount not to be included in the assessable income of the fund of the
contribution year:
so much of the contribution referred to in paragraph (1) (a) as is
equal to the clawback amount shall be taken for the purposes of this Part
(other than this section) never to have been a taxable contribution; and
the clawback amount is not allowable as a deduction under subsection
(1).
"(4) The matters to which the Commissioner is to have regard are:
whether the clawback amount exceeds the amount that would be the
taxable income of the fund of the notice year apart from this section;
the amount of the rebates (if any) allowable to the trustee of the fund
under Part IIIAA in relation to the notice year; and
such other matters as the Commissioner considers relevant.
"(5) This section applies only once in respect of a particular contribution
or part of a contribution.
Contributions treated as assessable in determining deductions
"277. In determining the deductions allowable from the assessable income of
an eligible entity (other than a PST), any amount to which subsection 274 (1)
applies shall be treated as if it were assessable income of the eligible
entity (whether or not it is a taxable contribution).
"Division 3-Complying Superannuation Funds
Liability to taxation
"278. (1) The trustee of a complying superannuation fund is liable to pay
tax on the taxable income of the fund of the year of income.
"(2) Except as provided by Division 11A of Part III, the income of a
complying superannuation fund of the year of income is not subject to tax
except as provided by this Part.
Deduction for premiums for death or disability cover
"279. (1) Where, in a year of income, the trustee of a complying
superannuation fund pays a premium for an insurance policy that is, in whole
or in part, in respect of a current or contingent liability of the fund to
provide death or disability benefits for members of the fund, so much of the
premium as is attributable to the liability is allowable as a deduction in
respect of the year of income.
"(2) Where:
during the whole or a part of a year of income, a complying
superannuation fund is subject to a current or contingent liability to provide
death or disability benefits for members of the fund; and
that liability, to some extent, is not covered by an insurance policy;
the lowest arm's length premium for an insurance policy in respect of that
liability, to the extent to which it is not so covered, is an allowable
deduction in respect of the year of income.
"(3) A deduction is not allowable under this section unless the return of
the fund of the year of income is accompanied by a certificate by an actuary,
in the prescribed form, with respect to the operation of this section.
No deduction in respect of benefits
"280. No deduction is allowable from the assessable income of a complying
superannuation fund in respect of benefits.
Assessable income to include taxable contributions
"281. Subject to section 275, the assessable income of a complying
superannuation fund of a year of income includes taxable contributions made to
the fund in the year of income.
Exclusion from assessable income of amounts that accrued before 1 July 1988
"282. The assessable income of a complying superannuation fund of a year of
income shall not include so much of any amount derived in the year of income
as accrued to the fund before 1 July 1988.
Exemption of income attributable to current pensions
"283. (1) For each amount that, apart from this section, would be normal
assessable income of a complying superannuation fund, the percentage (if any)
calculated under subsection (2) is exempt from tax.
"(2) The percentage is calculated in accordance with the formula:
Current pension liabilities
Total liabilities
where:
Current pension liabilities is so much of the average liabilities of the
fund of the year of income as, in the opinion of the Commissioner, represents
liabilities to pay pensions during the year of income; and
Total liabilities is the average liabilities of the fund of the year of
income.
"(3) An amount of income of a fund of a year of income is not exempt from
tax under this section unless the return of the fund of the year of income is
accompanied by a certificate by an actuary, in the prescribed form, with
respect to the operation of this section.
Special component of taxable income
"284. The special component of the taxable income of a complying
superannuation fund is the amount (if any) remaining after deducting from the
special income:
any allowable deductions that relate exclusively to the special
income;
and
so much of any other allowable deductions as, in the opinion of the
Commissioner, may appropriately be related to the special income.
Standard component of taxable income
"285. The standard component of the taxable income of a complying
superannuation fund is the amount (if any) remaining after deducting the
special component from the taxable income.
"Division 4-Non-complying Superannuation Funds
Liability to taxation
"286. (1) The trustee of a non-complying superannuation fund is liable to
pay tax on the taxable income of the fund of the year of income.
"(2) Except as provided by Division 11A of Part III, the income of a
non-complying superannuation fund of the year of income is not subject to tax
except as provided by this Part.
No deduction in respect of benefits
"287. No deduction is allowable from the assessable income of a
non-complying superannuation fund in respect of benefits.
Assessable income to include taxable contributions
"288. The assessable income of a non-complying superannuation fund of a year
of income includes taxable contributions made to the fund in the year of
income.
"Division 5-Complying Approved Deposit Funds
Liability to taxation
"289. (1) The trustee of a complying ADF is liable to pay tax on the taxable
income of the fund of the year of income.
"(2) Except as provided by Division 11A of Part III, the income of a
complying ADF of the year of income is not subject to tax except as provided
by this Part.
Assessable income to include taxable contributions
"290. Subject to section 275, the assessable income of a complying ADF of a
year of income includes taxable contributions made to the fund in the year of
income.
Exclusion from assessable income of amounts that accrued before 1 July 1988
"291. The assessable income of a complying ADF of a year of income shall not
include so much of any amount derived in the year of income as accrued to the
fund before 1 July 1988.
Special component of taxable income
"292. The special component of the taxable income of a complying ADF is the
amount (if any) remaining after deducting from the special income:
any allowable deductions that relate exclusively to the special
income;
and
so much of any other allowable deductions as, in the opinion of the
Commissioner, may appropriately be related to the special income.
Standard component of taxable income
"293. The standard component of the taxable income of a complying ADF is the
amount (if any) remaining after deducting the special component from the
taxable income.
"Division 6-Non-complying Approved Deposit Funds
Liability to taxation
"294. (1) The trustee of a non-complying ADF is liable to pay tax on the
taxable income of the fund of the year of income.
"(2) Except as provided by Division 11A of Part III, the income of a
non-complying ADF of the year of income is not subject to tax except as
provided by this Part.
Assessable income to include taxable contributions
"295. The assessable income of a non-complying ADF of a year of income
includes taxable contributions made to the fund in the year of income.
"Division 7-Pooled Superannuation Trusts
Liability to taxation
"296. (1) The trustee of a PST is liable to pay tax on the taxable income of
the trust of the year of income.
"(2) Except as provided by Division 11A of Part III, the income of a PST of
the year of income is not subject to tax except as provided by this Part.
"(3) Subsection (2) does not affect any liability arising under paragraph 26
(b) or under Division 6 of Part III, in relation to a year of income, in
relation to a unitholder that is not a complying ADF, a complying
superannuation fund or a PST in relation to that year of income.
Exclusion from assessable income of amounts that accrued before 1 July 1988
"297. The assessable income of a PST of a year of income shall not include
so much of any amount derived in the year of income as accrued to the trust
before 1 July 1988.
Special component of taxable income
"298. The special component of the taxable income of a PST is the amount (if
any) remaining after deducting from the special income:
any allowable deductions that relate exclusively to the special income;
and
so much of any other allowable deductions as, in the opinion of the
Commissioner, may appropriately be related to the special income.
Standard component of taxable income
"299. The standard component of the taxable income of a PST is the amount
(if any) remaining after deducting the special component from the taxable
income.
"Division 8-Miscellaneous
Rebates and provisional tax
"300. (1) The trustee of a fund that is an eligible superannuation fund or
an eligible ADF in relation to a year of income:
is entitled to a rebate as provided by section 160AB;
is not entitled to a rebate as provided by section 46 or 46A; and
except where the fund is a non-complying superannuation fund, or a
non-complying ADF, in relation to the year of income, is not liable to pay
provisional tax under Division 3 of Part VI in respect of income of the fund.
"(2) The trustee of a PST:
is entitled to a rebate as provided by section 160AB;
is not entitled to a rebate as provided by section 46 or 46A; and
is not liable to pay provisional tax under Division 3 of Part VI in
respect of income of the PST.
Amendment of assessments
"301. Where:
an assessment has been made in relation to a year of income; and
a provision of this Part that is relevant to the assessment is
dependent on a circumstance that occurs or may occur after the end of the year
of income;
nothing in section 170 prevents the amendment of the assessment at any time
for the purpose of giving effect to this Act in relation to the occurrence of
that circumstance after the end of the year of income.".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 10
Other amendments relating to superannuation business and related business
10. The Principal Act is amended as set out in Schedule 1.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 11
Application-Division 16J of Part III
11. (1) The amendment made by section 6 applies in relation to a
cancellation of shares:
in the case of a cancellation by resolution that is subject to
confirmation by a court-where the order of the court confirming the resolution
is or was made after 11 August 1988 (whether or not the cancellation has
effect from an earlier date); and
in any other case-after 11 August 1988.
(2) Where:
if paragraph (1) (a) applies-the order of the court was made before 1
December 1988; or
if paragraph (1) (b) applies-the cancellation of the shares took place
before 1 December 1988;
the following provisions have effect:
if the adjusted market value, referred to in subsection 159GZZZF (1) of
the amended Act, in relation to the shares exceeds the consideration in
respect of the acquisition of the shares then, for the purposes of the
application of the amended Act (other than Part IIIA or section 159GZZZH) in
relation to the cancellation:
paragraph 159GZZZF (1) (c) of the amended Act has effect as if the
reference in that paragraph to the adjusted market value of the shares were
instead a reference to the amount of the consideration; and
paragraph 159GZZZF (1) (d) of the amended Act has effect as if the
reference in that paragraph to an amount being increased so that it equals the
adjusted market value of the shares were instead a reference to that amount
being increased or decreased so that it equals the amount of the
consideration;
if the adjusted market value, referred to in subsection 159GZZZF (1) of
the amended Act, in relation to the shares exceeds their indexed cost base to
the subsidiary concerned or, where the shares were cancelled within 12 months
of their acquisition, their cost base then, for the purposes of the
application of Part IIIA of the amended Act in relation to the cancellation:
paragraph 159GZZZF (1) (c) of the amended Act has effect as if the
reference in that paragraph to the adjusted market value of the shares were
instead a reference to the indexed cost base or cost base, as the case may be;
and
paragraph 159GZZZF (1) (d) of the amended Act has effect as if the
reference in that paragraph to an amount being increased so that it equals the
adjusted market value of the shares were instead a reference to that amount
being increased or decreased so that it equals the indexed cost base or the
cost base, as the case may be.
(3) Expressions used in paragraph (2) (d) that are also used in Part IIIA of
the amended Act have the same respective meanings in that paragraph as in that
Part.
(4) In this section:
"amended Act" means the Principal Act as amended by this Act.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 12
Application of superannuation and related amendments
12. (1) In this section:
"1 July 1988 year" means the year of income in which 1 July 1988 occurred.
"amended Act" means the Principal Act as amended by this Act.
(2) The following amendments of the Principal Act made by this Act apply to
assessments in respect of income of the 1 July 1988 year and of all subsequent
years of income:
the amendment made by section 9;
the amendments repealing paragraph 23 (jaa), sections 23FC and 23FD,
and Division 9B of Part III, of the Principal Act;
the amendment of section 160AAB of the Principal Act.
(2A) The amendments of Part IX of the amended Act made by the Taxation Laws
Amendment (Superannuation) Act 1989 apply to assessments in respect of income of
the 1 July 1988 year and of all subsequent years of income.
(3) The amendments of sections 102M, 121G, 121H and 124ZA of the Principal Act
made by this Act, and the amendments of sections 160Y and 160ZZJ of the Principal
Act made by the Taxation Laws Amendment (Superannuation) Act 1989, apply in
relation to a fund or a PST in relation to the 1 July 1988 year of the fund or the
PST and in relation to all subsequent years of income.
(4) The amendment of the definition of "salary expenditure" in subsection
73B (1) of the Principal Act, and the amendments of Subdivision AA of Division
3 of Part III of the Principal Act, made by this Act:
insofar as the amendments relate to contributions-apply in relation to
contributions made on or after 1 July 1988; and
insofar as they relate to amounts set apart-apply to amounts set apart
after 30 November 1988.
(5) The amendments of Subdivision AB of Division 3 of Part III of the
Principal Act made by this Act apply in relation to contributions made on or
after 1 July 1988.
(6) The following amendments of the Principal Act made by this Act apply in
relation to dividends paid on or after 1 July 1988:
the amendments of sections 160AQT, 160AQU and 221YDA;
the amendment inserting section 160AQYA.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 13
Transitional-section 73A
13. Where, immediately before the commencement of this section, a body was,
because of an approval for the purposes of section 73A of the Principal Act,
an approved research institute within the meaning of that section of that Act,
that body continues to be an approved research institute for the purposes of
section 73A of the Principal Act as amended by this Act until that approval is
withdrawn by any person or body empowered to give approvals for the purposes
of that section of the Principal Act as so amended.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 14
Transitional-superannuation and related amendments
14. (1) In this section:
"amended Act" means the Principal Act as amended by this Act and the Taxation
Laws Amendment (Superannuation) Act 1989;
"income" includes assessable income;
means the year of income in which 1 July 1988 occurred.
(2) Where:
a taxpayer is the trustee of an eligible entity, within the meaning of
Part IX of the amended Act, in relation to the taxpayer's 1 July 1988 year;
and
any part of the taxpayer's 1 July 1988 year occurred before 1 July
1988; the following provisions have effect:
subsection 160AAB (5A) and Part IX of the amended Act do not apply to
income derived by the entity before 1 July 1988;
notwithstanding the repeal of paragraph 23 (jaa), sections 23FC and
23FD, Division 9B of Part III and subsection 160AAB (5A) of the Principal Act,
those provisions of the Principal Act continue to apply to the taxpayer's 1
July 1988 year in relation to income derived by the entity before 1 July 1988
as if they had not been repealed;
for the purposes of Division 9B of Part III of the Principal Act as
applied by paragraph (d), in determining whether section 121CC, 121DA, 121DAA
or 121DAB of the Principal Act applied in relation to the entity in relation
to the 1 July 1988 year, so much of the year of income as occurred after 30
June 1988 shall be disregarded;
where a particular amount (in this paragraph called the "deductible
amount"):
is allowable, or would be allowable but for paragraph (c), as a
deduction in calculating the taxable income of the entity of the 1 July 1988
year in accordance with Part IX of the amended Act; and
if Division 9B of Part III of the Principal Act had not been
repealed by this Act, would have been allowable as a deduction in calculating
an amount (if any) upon which the trustee of the entity is liable to be
assessed under that Division in respect of the 1 July 1988 year;
the Commissioner may, to such extent as the Commissioner considers
reasonable, apportion the deductible amount so that:
a part of the deductible amount is allowable as a deduction in
calculating the taxable income of the entity of the 1 July 1988 year in
accordance with Part IX of the amended Act; and
the remainder of the deductible amount is allowable as a deduction
in calculating an amount (if any) upon which the trustee of the entity is
liable to be assessed under Division 9B of Part III of the Principal Act, in
its application by virtue of this section, in respect of the 1 July 1988
year;
where a particular amount (in this paragraph called the "deductible
amount"):
is allowable, or would be allowable but for paragraph (c), as a
deduction in calculating the taxable income of the entity of the 1 July 1988
year in accordance with Part IX of the amended Act; and
if the amendments made by this Act had not been made, would not have
been allowable as a deduction to the entity in respect of the 1 July 1988
year;
only so much of the deductible amount as the Commissioner considers
reasonable is allowable as a deduction in calculating the taxable income of
the entity of the 1 July 1988 year in accordance with Part IX of the amended
Act;
a reference in section 82AAS of the Principal Act to a fund to which
paragraph 23 (jaa) applies in relation to a year of income includes a
reference to a fund to which that paragraph, in its application by virtue of
this section, applies in relation to the 1 July 1988 year;
notwithstanding the amendment of section 124ZA of the Principal Act
made by this Act, that section, insofar as it relates to paragraph 23 (jaa) of
the Principal Act, continues to apply in relation to a fund to which that
paragraph, in its application by virtue of this section, applies in relation
to the 1 July 1988 year, as if that amendment had not been made;
(ja) notwithstanding the amendment of section 124ZA of the Principal Act
made by this Act, that section, insofar as it relates to section 23FC or 23FD
of the Principal Act, continues to apply in relation to a fund to which section
23FC or 23FD, in its application by virtue of this section, applies in relation
to the 1 July 1988 year, as if that amendment had not been made;
notwithstanding the amendments of sections 121G and 121H of the
Principal Act made by this Act, those sections continue to apply in relation
to the entity in relation to the 1 July 1988 year, as if those amendments had
not been made;
a reference in section 121F of the amended Act to paragraph 23 (jaa) or
section 23FC or 23FD of the Principal Act includes a reference to that paragraph
or that section, in its application, by virtue of this section, in relation to
the 1 July 1988 year;
a reference in section 121G of the Principal Act to section 121CC of
the Principal Act includes a reference to that last-mentioned section in its
application, by virtue of this section, in relation to the 1 July 1988 year;
a reference in section 121H of the Principal Act to section 121DB of
the Principal Act includes a reference to that last-mentioned section in its
application, by virtue of this section, in relation to the 1 July 1988 year;
a reference in section 27A of the amended Act or section 82AAC of the
Principal Act to a fund to which section 121CC, 121DA or 121DAB of the
Principal Act applies, or has applied, in relation to a year of income
includes a reference to a fund to which the section concerned, in its
application by virtue of this section, applies or has applied in relation to
the 1 July 1988 year;
a reference in section 160AQU of the Principal Act to a trustee of a
fund who is liable to be assessed under section 121CC, 121DA, 121DAA or 121DAB
of the Principal Act includes a reference to the trustee of a fund who is
liable to be assessed under the section concerned in its application, by
virtue of this section, to the 1 July 1988 year;
a reference in section 160K of the amended Act to paragraph 23 (jaa) or
section 23FC or 23FD of the Principal Act includes a reference to that paragraph
or that section, in its application, by virtue of this section, in relation to
the 1 July 1988 year.
(3) In determining, for the purposes of subsection (2), whether income was
derived by an entity before 1 July 1988, income that:
is included in the assessable income of the entity under subsection 92
(1) or Division 6 of Part III of the amended Act; or
is derived by the entity during, but not at a particular time during, a
year of income; shall be taken to have been derived by the entity at such
time, or at such times and in such proportions, as the Commissioner considers
reasonable having regard to:
where paragraph (a) applies in respect of a partnership or a trust
estate-the time, or the times, when income was derived by the partnership or
by the trustee of the trust estate, as the case may be; and
in any case-any relevant matters.
(4) If, apart from the amendments made by this Act, a fund would have been a
fund to which paragraph 23 (jaa) of the Principal Act applied in relation to
the 1 July 1988 year or a later year of income that is earlier than the year
of income commencing on 1 July 1990, the fund shall be taken, for the purposes
of the amended Act, to be a complying superannuation fund (within the meaning
of Part IX of the amended Act) in relation to the year of income concerned.
(5) Where paragraph 23 (jaa), section 23FC or section 23FD of the Principal
Act applied to a fund in relation to the year of income in which 1 July 1987
occurred:
for the purposes of ascertaining under Subdivision B of Division 2 of
Part III of the amended Act the value to be taken into account in respect of
trading stock of the fund on hand at the beginning of the 1 July 1988 year:
the fund may, in accordance with subsection (6), exercise any
option, and give any notice, under section 31, paragraph 32 (5) (c) or (d) or
subsection 32 (6) of the amended Act in relation to the value of the trading
stock at the end of the year of income in which 1 July 1987 occurred; and
if the fund does not exercise an option under subparagraph (i) in
relation to particular trading stock, the value to be taken into account in
accordance with that subparagraph in relation to that tradiing stock shall be
the cost price; and
if the fund adopts under Subdivision B of Division 2 of Part III of
the amended Act cost price as the basis of valuation in relation to any
trading stock on hand at the end of the 1 July 1988 year that was on hand at
the end of the preceding year of income, then, for the purposes of that
Subdivision, the cost price of that trading stock shall be taken to be equal
to the value at which the trading stock was taken into account in accordance
with subparagraph (a) (i).
(6) The option or notice referred to in subparagraph (5) (a) (i):
shall be exercised or given in writing to the Commissioner; and
shall be lodged with the Commissioner on or before the date of lodgment
of the fund's return of income of the 1 July 1988 year, or before such later
date as the Commissioner allows.
(7) Where:
a fund, being a complying superannuation fund or complying ADF within the
meaning of Part IX of the amended Act, first uses a particular unit of property
of the fund for the purpose of producing assessable income, or first installs a
particular unit of property of the fund ready for use for that purpose and holds
it in reserve, in a year of income, being the 1 July 1988 year or a later year
of income; and
apart from this section, section 57AH, or section 57AL, of the amended Act
(as that section continues to apply in spite of its repeal by the Taxation Laws
Amendment Act (No. 4) 1988) would apply in relation to the unit of property of
the fund in relation to that year of income;
then that section of the amended Act does not apply in relation to the unit of
property of the fund in relation to that year of income or any later year of
income.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 16
Amendment of other Acts
16. The Acts specified in Schedule 2 are amended as set out in that
Schedule.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989
- SECT 17
Application of amendment of the Fringe Benefits Tax Assessment Act 1986
17. The amendment made by this Act to the definition of "superannuation
fund" in subsection 136 (1) of the Fringe Benefits Tax Assessment Act 1986
applies in relation to a fund in relation to the year of income of the fund in
which 1 July 1988 occurred and in relation to all subsequent years of income.
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989 - SCHEDULE 1
SCHEDULE 1
Section 10
OTHER AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 RELATING TO
SUPERANNUATION BUSINESS AND RELATED BUSINESS
Subsection 6 (1) (definition of "superannuation fund"):
Omit the definition, substitute the following definition:
" 'superannuation fund' (except in Part IX) includes an eligible
superannuation fund within the meaning of Part IX;".
Section 6E:
Repeal the section.
Paragraph 23 (jaa):
Omit the paragraph.
Sections 23FC and 23FD:
Repeal the sections.
Subsection 26AFB (1) (definition of "exempt fund"):
Omit the definition, substitute the following definition:
" 'exempt fund' means:
a fund to which section 23FC, as in force at any time before the
commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1989, has
applied in relation to any year of income; or
a fund that is or has been a complying superannuation fund, within
the meaning of Part IX, in relation to any year of income;".
Subsection 27A (1) (subparagraph (a) (iii), and sub-subparagraph (aa) (iv) (C),
of the definition of "eligible termination payment"):
Omit "applies, or has applied,", substitute ", as in force at any time
before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2)
1989, has applied".
Subsection 27A (1) (definition of "eligible termination payment"):
After subparagraph (a) (iii), insert the following subparagraph:
from a fund that is or has been a non-complying superannuation fund,
within the meaning of Part IX, in relation to any year of income;".
Subsection 27A (1) (sub-subparagraph (aa) (iv) (B) of the definition of
"eligible termination payment"):
Omit "or" from the end of the sub-subparagraph.
Subsection 27A (1) (subparagraph (aa) (iv) of the definition of "eligible
termination payment"):
Add at the end the following word and sub-subparagraph:
"or (D) from a fund that is or has been a non-complying superannuation fund,
within the meaning of Part IX, in relation to any year of income;".
Subsection 27A (1) (definition of "superannuation fund"):
Before subparagraph (a) (i), insert the following subparagraphs:
a fund to which paragraph 23 (jb) applies, or has applied, in relation
to any year of income;
a fund that is or has been a complying superannuation fund, within the
meaning of Part IX, in relation to any year of income;".
Subsection 27A (1) (subparagraph (a) (i) of the definition of
"superannuation fund"):
Omit the subparagraph, substitute the following subparagraph:
a fund to which paragraph 23 (jaa) or section 23FC, 121CC or 121DAB, as
in force at any time before the commencement of section 1 of the Taxation Laws
Amendment Act (No. 2) 1989, has applied in relation to any year of income;".
Subsection 73B (1) (subparagraph (c) (i) of the definition of "salary
expenditure"):
Omit "(other than expenditure by way of contributions to superannuation funds
or expenditure that would, apart from subsection 82AAC (2) or (3) or section
82AAE, be allowable as a deduction to the company under section 82AAC)".
Subsections 82AAA (2) and (3):
Omit the subsections, substitute the following subsection:
"(2) For the purposes of this Subdivision, a director of a company shall be
taken to be employed by the company.".
Subsection 82AAA (5):
Omit the subsection.
Sections 82AAB to 82AAP (inclusive):
Repeal the sections, substitute the following section:
Deduction for contributions to eligible superannuation fund for employees
"82AAC. Where:
a taxpayer makes a contribution to a fund for the purpose of making
provision for superannuation benefits for, or for dependants of, an eligible
employee; and
the fund is an eligible superannuation fund, within the meaning of Part
IX, in relation to the year of income of the fund in which the contribution is
made;
the amount of the contribution is an allowable deduction in respect of the year
of income of the taxpayer in which the contribution is made.".
Section 82AAR:
Omit "set apart or paid by a taxpayer as or", substitute "paid by a
taxpayer as a contribution".
Section 82AAR:
Add at the end the following subsection:
"(2) A deduction is not allowable under this Act in respect of an amount set
apart by a taxpayer as a fund for the purpose of making provision for
superannuation benefits for, or for dependants of, an employee or employees.".
Subsection 82AAS (1) (definition of "superannuation contributions"):
Omit "an eligible", substitute "a complying".
Subsection 82AAS (1) (definition of "eligible superannuation fund"):
Omit the definition.
Subsection 82AAS (1):
Insert the following definition:
" 'complying superannuation fund' means a fund that is a complying
superannuation fund, within the meaning of Part IX, in relation to the year of
income;".
Paragraph 82AAT (1) (b):
Omit "section 23FC applies in relation to the fund", substitute "the fund
is a complying superannuation fund, within the meaning of Part IX,".
After subsection 82AAT (1):
Insert the following subsections:
"(1A) Subsection (1) does not apply to a contribution to the extent to which
the contribution is specified in a notice under subsection (1B).
"(1B) A taxpayer may, at the time of making a contribution to a fund or at
any later time, give to the trustee of the fund a notice in relation to the
whole or a specified part of the contribution.
"(1C) The notice:
shall be in the prescribed form;
shall be given in the prescribed manner; and
is irrevocable.
"(1D) Nothing in section 170 prevents the amendment of an assessment at any
time for the purpose of giving effect to subsection (1A) of this section.".
Subsection 82AAT (2):
Omit "$1,500", substitute "$3,000".
Section 102M (paragraph (b) of the definition of "exempt entity"):
Omit the paragraph, substitute the following paragraph:
the trustee of:
an exempt life assurance fund;
a fund to which paragraph 23 (j) applies; or
a complying superannuation fund, a complying ADF, or a PST, within
the meaning of Part IX;".
Division 9B of Part III:
Repeal the Division.
Subsection 121F (1) (paragraph (a) of the definition of "relevant
exempting provision"):
Omit ", (jaa)".
Subsection 121F (1) (paragraph (bb) of the definition of "relevant
exempting provision"):
Omit the paragraph, substitute the following paragraph:
paragraph 23 (jaa) or section 23FC or 23FD, as in force at any time
before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2)
1989;".
Paragraphs 121G (4) (c), (5) (c) and (6) (c):
Add at the end "and".
Paragraphs 121G (4) (d), (5) (d) and (6) (d):
Omit the paragraphs.
Subsection 121H (3):
Omit the subsection.
Subsection 124ZA (1) (definition of "exempt body"):
Omit the definition, substitute the following definition:
" 'exempt body' means a body, association or fund to which paragraph 23 (d),
(e), (ea), (eb), (ec), (f), (g), (h), (i), (j) or (k) applies.".
Subsection 160AAB (5A):
Omit the subsection, substitute the following subsection:
"(5A) A taxpayer being the trustee of an eligible entity within the meaning
of Part IX is entitled in the taxpayer's assessment in respect of income of a
year of income to a rebate of tax equal to 29% of any eligible section 26AH
amount included in the taxpayer's assessable income of the year of income.".
Section 160AQT:
Add at the end the following subsection:
"(4) For the purposes of subsection (1), in determining whether a dividend is
exempt income, section 283 shall be disregarded.".
Subparagraph 160AQU (b) (ii):
Omit the subparagraph, substitute the following subparagraph:
a trustee other than the trustee of an eligible entity within the
meaning of Part IX;".
Section 160AQU:
Add at the end the following subsection:
"(2) For the purposes of subsection (1), in determining the amount included
under section 160AQT in the assessable income of a shareholder, section 283
shall be disregarded.".
After section 160AQY:
Insert the following section:
Franking rebate for trustees of superannuation funds, ADF's and PST's
"160AQYA. (1) Where:
a trust amount is included in the assessable income of a taxpayer of a
year of income;
the taxpayer is the trustee of an eligible entity within the meaning of
Part IX; and
there is a flow-on franking amount in relation to the trust amount;
the taxpayer is entitled to a rebate of tax in the taxpayer's assessment in
respect of income of the year of income of an amount equal to the potential
rebate amount in relation to the trust amount.
"(2) Where:
a partnership amount is included in, or allowable as a deduction from,
the assessable income of a taxpayer of a year of income;
the taxpayer is a trustee of an eligible entity within the meaning of
Part IX; and
there is a flow-on franking amount in relation to the partnership
amount; the taxpayer is entitled to a rebate of tax in the taxpayer's
assessment in
respect of income of the year of income of an amount equal to the potential
rebate amount in relation to the partnership amount.".
Paragraph 221YDA (1) (da) and subparagraph 221YDA (2) (a) (ii):
Insert ", 160AQYA" after "160AQY".
TAXATION LAWS AMENDMENT ACT (No. 2) 1989No. 97, 1989 - SCHEDULE 2
SCHEDULE 2
Section 16
AMENDMENT OF OTHER ACTS IN CONNECTION WITH THE AMENDMENTS OF THE INCOME TAX
ASSESSMENT ACT 1936 RELATING TO SUPERANNUATION BUSINESS AND RELATED BUSINESS
Fringe Benefits Tax Assessment Act 1986
Subsection 136 (1) (subparagraph (k) (i) of the definition of "fringe
benefit"):
Insert ", (iiia)" after "(iii)".
Subsection 136 (1) (subparagraph (k) (ii) of the definition of "fringe
benefit"):
Insert "or (iiia)" after "(a) (iii)".
Subsection 136 (1) (paragraph (a) of the definition of "superannuation fund"):
Omit the paragraph, substitute the following paragraph:
an eligible superannuation fund within the meaning of Part IX of the
Income Tax Assessment Act 1936; or".
Occupational Superannuation Standards Act 1987
Title:
Omit "and approved deposit funds", substitute ", approved deposit funds and
pooled superannuation trusts".
Subsection 3 (1) (definitions of "protected document" and "protected
information"):
Omit "or approved deposit fund", substitute ", approved deposit fund or
pooled superannuation trust".
Subsection 3 (1) (definition of "year of income"):
Insert "or unit trust" after "fund" (wherever occurring).
Subsection 3 (1) (definition of "reviewable decision"):
Omit the definition, substitute the following definition:
" 'reviewable decision' means:
a decision of the Commissioner to give a notice in relation to a fund
under section 12, 13, 14 or 15 stating that the Commissioner is not satisfied
that the fund complied with the superannuation fund conditions or the approved
deposit fund conditions, as the case may be, in relation to a year of income;
a decision of the Commissioner to give a notice in relation to a unit
trust under section 15B or 15C stating that the Commissioner is not satisfied
that the unit trust complied with the pooled superannuation trust conditions in
relation to a year of income;".
Subsection 3 (1) (definition of "fund affected by a reviewable decision"):
Omit the definition.
Subsection 3 (1):
Insert the following definitions:
" 'fund or unit trust affected by a reviewable decision', in relation to a
reviewable decision, means the fund or unit trust in relation to which the
decision was made;
'pooled superannuation trust' means a unit trust that, under the
regulations,
is a unit trust to which this definition applies;
'trustee', in relation to a fund, has the same meaning as in Part IX of the
Tax Act;
'unit trust' has the same meaning as in Part IX of the Tax Act;".
After section 3:
Insert the following section:
Crown to be bound
"3A. (1) This Act binds the Crown in right of the Commonwealth, of each of
the States, of the Northern Territory and of Norfolk Island.
"(2) Nothing in this Act renders the Crown in right of the Commonwealth, of a
State, of the Northern Territory or of Norfolk Island liable to be prosecuted
for an offence.".
Section 4:
Add at the end the following subsection:
"(5) Where any of the first regulations made for the purposes of the
definition of 'pooled superannuation trust' in subsection 3 (1) or for the
purposes of subsection 8A (1) specify a day (not being a day before 1 July
1988) before the date of notification of the regulations in the Gazette as the day
on which specified regulations are to be taken to have come into operation, those
regulations shall be taken to have come into operation on the day so
specified.".
After section 6:
Insert the following section:
Satisfaction of pooled superannuation trust conditions
"6A. A reference in this Act to a unit trust satisfying the pooled
superannuation trust conditions in relation to a year of income is a reference
to the following conditions being satisfied in relation to the unit trust in
relation to the year of income:
the unit trust was a pooled superannuation trust:
if part of the year of income occurred before 1 July 1988-at all
times during so much of the year of income as occurred on or after 1 July 1988
when the unit trust was in existence; or
in any other case-at all times during the year of income when the
unit trust was in existence;
at all times during the year of income when the unit trust was in
existence and there were in force regulations for the purposes of subsection 8A
(1) prescribing standards applicable to the unit trust, the unit trust complied
with those standards;
the trustees of the unit trust complied with:
any requirement made in relation to the unit trust during the year
of income by or under subsection 10 (1AA) or section 11; and
any requirement made in relation to the unit trust in relation to
the year of income under subsection 10 (2).".
Heading to Part II:
Omit "AND APPROVED DEPOSIT FUNDS", substitute
", APPROVED DEPOSIT FUNDS AND POOLED SUPERANNUATION TRUSTS".
Subsection 7 (3):
Omit "section 23FC, 121CC or 121D of".
Subsection 8 (3):
Omit "section 23FD or 121DAAA of".
After section 8:
Insert the following section:
Operating standards for pooled superannuation trusts
"8A. (1) The regulations may prescribe standards applicable to the operation
of pooled superannuation trusts.
"(2) The standards that may be prescribed include, but are not limited to,
standards relating to the following matters:
the ownership and disposal of units in pooled superannuation trusts;
the investment of assets of pooled superannuation trusts;
the persons who may be trustees of pooled superannuation trusts;
the number of trustees, and the composition of boards or committees of
trustees, of pooled superannuation trusts;
the keeping and retention of records in relation to pooled
superannuation trusts;
the financial and actuarial reports to be prepared in relation to pooled
superannuation trusts;
the disclosure of information to unitholders in pooled superannuation
trusts;
the matters required, permitted or not permitted to be included, from
time to time, in the trust deeds of pooled superannuation trusts.
"(3) Nothing in the Tax Act limits the standards that may be prescribed.".
After subsection 10 (1):
Insert the following subsection:
"(1AA) The trustees of a pooled superannuation trust established after the
commencement of this subsection shall, within the prescribed period after
establishment, give to the Commissioner the prescribed information.".
Subsection 10 (1A):
Add at the end "or (1AA)".
Subsections 10 (2) and 11 (2):
", an approved deposit fund
or a pooled superannuation trust".
Subsection 11 (2):
Add at the end "or trust".
Subsections 11 (3) and (4):
Insert "or trust" after "fund" (wherever occurring).
After section 15A:
Insert the following sections:
Notices as to satisfaction of the pooled superannuation trust conditions
"15B. (1) Where:
after the end of a year of income of a unit trust, the trustees of the
unit trust give to the Commissioner, in relation to the year of income:
a return, in a form approved by the Commissioner, in writing, for
the purposes of this section, providing such information relating to the unit
trust and to the unit trust's satisfaction of the pooled superannuation trust
conditions during the year of income as is required by the form to be provided;
a certificate by the trustees of the unit trust, in the prescribed
form;
a certificate by an approved auditor, in the prescribed form; and
the prescribed application fee; and
either:
the return, certificates and fee referred to in paragraph (a) are
received by the Commissioner on or before the day specified in the form of
return as the day by which the return is to be given to the Commissioner; or
the return, certificates and fee referred to in that paragraph are
received by the Commissioner, but are not all received until after the day
referred to in subparagraph (i), and any prescribed late lodgment fee has also
been received by the Commissioner;
subsection (3) applies in relation to the unit trust in relation to the year of
income.
"(2) A certificate referred to in subparagraph (1) (a) (ii) or (iii) may be
endorsed on a return referred to in subparagraph (1) (a) (i).
"(3) Where this subsection applies in relation to a unit trust in relation to
a year of income, the Commissioner shall, subject to subsection (6), give
notice in writing to the trustees of the unit trust stating whether the
Commissioner is satisfied that the unit trust satisfied the pooled superannuation
trust conditions in relation to the year of income, having regard to:
the return and certificates given under subsection (1); and
any other information available to the Commissioner.
"(4) If:
the Commissioner has, under this section or section 15C, given a notice
to the trustees of a unit trust stating that the Commissioner is not satisfied
that the unit trust satisfied the pooled superannuation trust conditions in
relation to a year of income of the unit trust; and
the Commissioner, after considering information that was not previously
considered by the Commissioner, becomes satisfied that the unit trust so
satisfied the pooled superannuation trust conditions;
the Commissioner shall give notice in writing to the trustees of the unit trust
revoking the notice referred to in paragraph (a) and stating that the
Commissioner is satisfied that the unit trust satisfied the pooled
superannuation trust conditions in relation to the year of income.
"(5) If:
the Commissioner has, under this section, given a notice to the
trustees of a unit trust stating that the Commissioner is satisfied that the unit
trust satisfied the pooled superannuation trust conditions in relation to a year
of income of the unit trust; and
the Commissioner, after considering information that was not previously
considered by the Commissioner, ceases to be satisfied that the unit trust so
satisfied the pooled superannuation trust conditions;
the Commissioner shall, subject to subsection (6), give notice in writing to
the trustees of the unit trust revoking the notice referred to in paragraph (a)
and stating that the Commissioner is not satisfied that the unit trust satisfied
the pooled superannuation trust conditions in relation to the year of income.
"(6) Where:
but for this subsection, the Commissioner would be required to give a
notice stating that the Commissioner is not satisfied that a unit trust
satisfied the pooled superannuation trust conditions in relation to a year of
income; and
the Commissioner decides to give a notice under subsection 15C (1)
stating that the Commissioner is satisfied that the unit trust should be
treated as if it had satisfied the pooled superannuation trust conditions in
relation to the year of income;
the Commissioner is not required to give the notice referred to in paragraph
(a).
"(7) A notice under this section stating that the Commissioner is not
satisfied that a unit trust satisfied the pooled superannuation trust
conditions in relation to a year of income shall set out the reasons why the
Commissioner is not so satisfied.
"(8) The Commissioner shall advise the Commissioner of Taxation of
particulars of all notices given under this section.
Discretion to treat unit trusts as satisfying the pooled superannuation trust
conditions
"15C. (1) Where, in relation to a unit trust in relation to a year of income
of the unit trust:
the trustees of the unit trust have not given the Commissioner the
return, certificates and fee or fees referred to in subsection 15B (1), or the
trustees of the unit trust have given the Commissioner the return, certificates
and fee or fees referred to in that subsection but the Commissioner is not
satisfied that the unit trust satisfied the pooled superannuation trust
conditions; and
the trustees of the unit trust satisfy the Commissioner that, because of
special circumstances that existed in relation to the unit trust during the
year of income, it would be reasonable for the unit trust to be treated as if it
had satisfied the pooled superannuation trust conditions;
the Commissioner shall give notice in writing to the trustees of the unit trust
stating that the Commissioner is satisfied that the unit trust should be
treated as if it had satisfied the pooled superannuation trust conditions in
relation to the year of income.
"(2) If:
the Commissioner has given a notice under subsection (1) in relation to
a unit trust in relation to a year of income of the unit trust; and
the Commissioner, after considering information that was not previously
considered by the Commissioner, becomes satisfied that the unit trust should
not be treated as if it had satisfied the pooled superannuation trust conditions
in relation to the year of income;
the Commissioner shall give notice in writing to the trustees of the unit
trust
revoking the notice referred to in paragraph (a) and stating that the
Commissioner is not satisfied that the unit trust satisfied the pooled
conditions in relation to the year of income.
"(3) A notice under this section stating that the Commissioner is not
satisfied that a unit trust satisfied the pooled superannuation trust
conditions in relation to a year of income shall set out the reasons why the
Commissioner is not so satisfied.
"(4) The Commissioner shall advise the Commissioner of Taxation of
particulars of all notices given under this section.".
Subsection 16 (1):
Insert "or unit trust" after "fund" (wherever occurring).
Subsections 17 (1) and (2):
Insert "or unit trust" after "fund".
Subsection 19 (1):
Omit "and approved deposit funds", substitute ", approved deposit funds and
pooled superannuation trusts".
Subsection 19 (2):
Omit "or approved deposit fund", substitute ", approved deposit fund or
pooled superannuation trust".
Subsection 19 (2):
Add at the end "or trust, as the case requires".
Taxation Administration Act 1953
Subsection 8W (1A):
Omit "or 15", substitute ", 15, 15B or 15C".
NOTE ABOUT SECTION HEADING
On the day on which the Taxation Laws Amendment Act (No. 2) 1989 receives the
Royal Assent, the heading to section 26AFB of the Income Tax Assessment Act
1936 is altered by inserting "Part IX or former" before "section 23FC".
The
Act No. 97, 1989 amended as indicated in the Tables below.
Act |
Number and year |
Date of Assent |
Date of commencement |
Application, saving or transitional provisions |
97, 1989 |
30 June 1989 |
30 June 1989 |
||
105, 1989 |
30 June 1989 |
Ss. 77–81: |
— | |
75, 2010 |
28 June 2010 |
Schedule 6 (item 41): 29 June 2010 |
— |
(a) Subsection 2(1) of theTaxation Laws Amendment (Superannuation) Act 1989 provides as follows:
(1) Subject to this section, this Act commences, or shall be taken to have commenced, as the case requires,
immediately after the commencement of the
Taxation Laws Amendment Act (No. 2) 1989 .The
Taxation Laws Amendment Act (No. 2) 1989 commenced on 30 June 1989.
am. = amended rep. = repealed rs. = repealed and substituted | |
Provision affected | How affected |
S. 12........................................ | am. No. 105, 1989 |
S. 14........................................ | am. No. 105, 1989 |
S. 15........................................ | rep. No. 75, 2010 |
S. 18........................................ | rep. No. 105, 1989 |
Schedule 1.............................. | am. No. 105, 1989 |
Schedule 2.............................. | am. No. 105, 1989 |
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0
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