Taxation Laws Amendment Act (No. 4) 1987 (Cth)

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Taxation Laws Amendment Act (No. 4) 1987

Act No. 138 of 1987 as amended

This compilation was prepared on 4 August 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

1. Short title [see Note 1]

2. Commencement [see Note 1]

PART II - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

3. Principal Act

 

4. Interpretation

 

5. Insertion of new section:

6E. Effect of issue, revocation etc. of notices under the Occupational

Superannuation Standards Act 1987

6. Officers to observe secrecy

 

7. Exemptions

 

8. Repeal of sections 23F, 23FA and 23FB and substitution of new

sections:

23FC. Exemption of income of certain superannuation funds

23FD. Exemption of income of certain approved deposit funds

9. Assessable income to include value of benefits received from or in connection

with former paragraph 23 (ja) funds or former section 23FB funds

 

10. Assessable income to include value of certain benefits received from or in

connection with former section 23F funds

 

11. Insertion of new section:

26AFB. Assessable income to include value of benefits received from or in

connection with funds that have obtained tax benefits under

section 23FC

12. Interpretation

 

13. Assessable income to include certain annuities and superannuation pensions

 

14. Notional income where assessable income includes consideration receivable

on disposal, loss or destruction of depreciated property

 

15. Gifts, pensions etc.

 

16. Transfer of loss within company group

 

17. Interpretation

 

18. Interpretation

 

19. Deductions for superannuation contributions by eligible persons

 

20. Deduction in respect of new plant installed on or after 1 January 1976

 

21. Limitation on deductions for rental property loan interest

 

22. Interpretation

 

23. Interpretation

 

24. Interpretation

 

25. Insertion of new section:

121BA. Ineligible income of section 121CC funds

26. Repeal of sections 121C, 121CA, 121CB and 121CC and substitution of new

sections:

121CC. Assessment of investment income of certain ineligible

superannuation funds

   

121D.

Assessment of private company dividend income and non-arm's length

income of superannuation funds to which section 23FC applies

27. Assessment of income of other superannuation funds

 

28. Assessment of income of ineligible approved deposit funds

 

29. Insertion of new section:

121DAAA. Assessment of private company dividend income and non-arm's

length income of approved deposit funds to which section 23FD

applies

30. Repeal of section 121DAB and substitution of new section:

121DAB. Assessment of income of certain other ineligible superannuation

funds

31. Income of superannuation funds and approved deposit funds to be taxed

exclusively under this Division

 

32. Repeal of section 121DC and substitution of new section:

121DC. Taxable income

33. Rebates and provisional tax

 

34. Interpretation

 

35. Interpretation

 

36. Deductions in respect of qualifying expenditure

 

37. Capital gains and abnormal income to be disregarded

 

38. Repeal of Division 16A of Part III and substitution of new Division:

Division 16A - Abnormal Income of Artists, Composers, Inventors,

Performers, Production Associates, Sportspersons and Writers

158B. Interpretation

158C. Joint authors and joint inventors

158D. 'Year of income' includes a pre-commencement year of income

158E. Qualifying resident taxpayer

158F. Activities that do not result in taxpayers being treated as

eligible persons

158G. Artists, composers, inventors and writers rendering services to

others not to be treated as eligible persons unless engaged to

produce specified works etc.

158H. Eligible assessable income

158J. Eligible taxable income

158K. Average eligible taxable income

158L. Abnormal income

39. Interpretation

 

40. Deductions allowable to issuer of qualifying security etc.

 

41. Insertion of new Division:

Division 16F - Thin capitalisation by non-residents

Subdivision A - General interpretative provisions

159GZA. Interpretation

159GZB. Assessable (non-resident partner) income and assessable

(non-resident beneficiary) income

159GZC. Associates

159GZD. Australian-owned non-resident company

159GZE. Foreign controller

159GZF. Foreign debt

159GZG. Foreign equity

159GZH. Indirect beneficial entitlements or interests

159GZI. Resident company group

159GZJ. Substantial control of voting power

Subdivision B - Deeming and other special interpretative provisions

159GZK. Effect of deemed section 128AC and 128AD interest payments

159GZL. Deemed recipient of certain subsection 128F (6) interest

159GZM. Adjustment of foreign equity product in certain cases involving

financial institutions

159GZN. Debt and equity where interposed partnerships and trusts

159GZO. Schemes involving debt owing to foreign controllers etc. through

intermediaries

159GZP. Schemes involving debt owing by foreign controllers etc. through

intermediaries

159GZQ. Equity borrowed from non-resident associates to be treated as debt

in certain cases

159GZR. Part year application of Division in certain circumstances

Subdivision C - Reduction of interest deductions

159GZS. Resident companies

159GZT. Resident company groups

159GZU. Partnerships

159GZV. Trust estates

159GZW. Foreign investors

159GZX. Effect of subsection 159GT (6) interest payments

42. Transfer of excess credit within company group

 

43. Other interpretative provisions

 

44. Transfer of net capital loss within company group

 

45. Transfer of asset between companies in the same group

 

46. Liability to pay instalments of provisional tax

 

47. Provisional tax on estimated income

 

48. Application of amendments etc.

 

49. Transitional-sections 27H and 159GP

 

50. Transitional-Subdivision AB of Division 3 of Part III

 

51. Transitional-Division 16F of Part III

 

PART III – AMENDMENT OF THE INCOME TAX RATES ACT 1986

53. Principal Act

 

54. Interpretation

 

55. Interpretation

 

56. Rates of tax and notional rates

 

57. Rates of tax and notional rates

 

58. Rates of tax payable by trustees of superannuation funds

 

59. Rates of tax payable by trustees of approved deposit funds

 

60. Amendment of Schedules

 

61. Application of amendments

 

PART IV - AMENDMENT OF THE OCCUPATIONAL SUPERANNUATION STANDARDS

ACT 1987

63. Principal Act

 

64. Interpretation

 

65. Application of Act in relation to periods before commencement etc.

 

66. Satisfaction of superannuation fund conditions

 

67. Satisfaction of approved deposit fund conditions

 

68. Operating standards for superannuation funds

 

69. Operating standards for approved deposit funds

 

70. Information to be given to Commissioner

 

71. Commissioner may require production of documents

 

72. Notices as to satisfaction of the superannuation fund conditions

 

73. Notices as to satisfaction of the approved deposit fund conditions

 

74. Insertion of new section:

15A. Application of Tax Act

75. Secrecy

 

76. Delegation

 

77. Annual reports

 

PART V - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953

78. Principal Act

 

79. Annual report

 

80. Secrecy

 

81. Interpretation

 

82. Insertion of new section:

8AA. Application of Part to the Occupational Superannuation Standards Act

1987

83. Interpretation

 

84. Court may order payment of amount in addition to penalty

 

85. Provision of Commonwealth taxation information to State taxation authorities

 

86. Certification by State taxation officer of copies of, and extracts from,

documents

 

87. Appearance by Commissioner etc.

 

88. Certification by Commissioner of copies of, and extracts from, documents

 

PART VI - AMENDMENT OF THE TAXATION LAWS AMENDMENT ACT (No. 3) 1987

89. Principal Act

 

90. Provisional tax for 1987-88 year

 

91. Application of amendments

 

PART VII - REPEAL OF ACTS

92. Repeal of Acts

 

SCHEDULE 1

AMENDMENT OF SCHEDULES TO THE INCOME TAX RATES ACT 1986

SCHEDULE 2

REPEAL OF CERTAIN ACTS

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987 - LONG TITLE

 

An Act to amend the law relating to taxation

 

PART I - PRELIMINARY

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 1

Short title [see Note 1]

 

1. This Act may be cited as the Taxation Laws Amendment Act (No. 4)

1987.

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 2

Commencement [see Note 1]

 

2. (1) Subject to this section, this Act shall come into operation on the

day on which it receives the Royal Assent.

(2) Section 6 and Parts IV and V shall come into operation immediately after

the commencement of the Occupational Superannuation Standards Act 1987.

 

PART II - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- 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 and 168,

1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 49, 51, 52,

90, 109, 112 and 154, 1986; and Nos. 23, 58, 61 and 62, 1987.

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 4

Interpretation

 

4. Section 6 of the Principal Act is amended by inserting in subsection (1)

the following definitions in their respective appropriate alphabetical

positions (determined on a letter-by-letter basis):

" 'proclaimed superannuation standards day' means the day fixed by

Proclamation for the purposes of section 5 of the Occupatiional Superannuation

Standards Act 1987;

'superannuation fund' includes:

(a) a superannuation fund within the meaning of the Occupational

Superannuation Standards Act 1987; and

(b) a fund to which section 23FC applies in relation to the year

of income concerned;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 5

 

5. After section 6D of the Principal Act the following section is inserted:

Effect of issue, revocation etc. of notices under the Occupational

Superannuation Standards Act 1987

"6E. (1) In this section:

'Standards Act notice' means a notice under section 12, 13, 14 or 15 of the

Occupational Superannuation Standards Act 1987.

"(2) For the purposes of this Act, where a Standards Act notice is given in

relation to a fund in relation to a year of income:

 

(a)

the notice shall be deemed to have been given at the beginning of the

year of income; and

 

(b)

if:

 

(i)

the notice is revoked; or

 

(ii)

the decision to give the notice is set aside;

the notice shall be deemed never to have been given.

"(3) Nothing in section 170 prevents the amendment of an assessment at any

time for the purposes of giving effect to this section.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 6

Officers to observe secrecy

 

6. Section 16 of the Principal Act is amended by omitting paragraph (4) (hc)

and substituting the following paragraph:

 

"(hc)

the Insurance and Superannuation Commissioner, for the purpose of the

administration of the Occupational Superannuation Standards Act 1987 or of the

prosecution provisions within the meaning of that Act;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 7

Exemptions

 

7. Section 23 of the Principal Act is amended by omitting paragraph (ja).

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 8

 

8. Sections 23F, 23FA and 23FB of the Principal Act are repealed and the

following sections are substituted:

Exemption of income of certain superannuation funds

"23FC. (1) Subject to this section, the income derived during a year of

income by a fund is exempt from income tax if:

 

(a)

the Insurance and Superannuation Commissioner has given a notice in

relation to the fund under section 12 of the Occupational Superannuation

Standards Act 1987 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

 

(b)

the Insurance and Superannuation Commissioner has given a notice in

relation to the fund under section 13 of the Occupational Superannuation

Standards Act 1987 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.

"(2) A dividend paid to a fund:

 

(a)

if the fund is a former paragraph 23 (ja) fund in relation to the year

of income of the fund in which the dividend was paid-in a year of income of

the fund and after 29 October 1987; or

 

(b)

in any other case-in a year of income of the fund; 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 not exempt from tax by virtue of subsection (1)

unless the Commissioner is of the opinion that it would be reasonable to

exempt the dividend from tax, having regard to:

 

(c)

the paid-up value of the shares in that company that are assets of the

fund;

 

(d)

the cost to the fund of the shares on which the dividend was paid by

the company;

 

(e)

the rate of the dividend paid to the fund by the company on the shares

in the company that are assets of the fund;

 

(f)

whether the company has paid a dividend on other shares in the company

and, if so, the rate of that dividend;

 

(g)

whether any shares have been issued by the company to the fund 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

 

(h)

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 a fund:

 

(a)

if the fund is a former paragraph 23 (ja) fund in relation to the year

of income of the fund in which the income was derived-in a year of income of

the fund and after 29 October 1987; or

 

(b)

in any other case-in a year of income of the fund; 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 fund:

 

(c)

if paragraph (a) applies-in the year of income of the fund and after 29

October 1987; or

 

(d)

if paragraph (b) applies-in the year of income of the fund; by the

company.

"(4) Income (other than a dividend to which subsection (2) applies) derived

by a fund:

 

(a)

if the fund is a former paragraph 23 (ja) fund in relation to the year

of income of the fund in which the income was derived-in a year of income of

the fund and after 29 October 1987; or

 

(b)

in any other case-in a year of income of the fund; from a transaction

is not exempt from tax by virtue of subsection (1) 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 fund 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.

"(6) In determining, for the purposes of subsection (3) or (4), whether

income was derived by a fund after 29 October 1987, income that:

 

(a)

is included in the assessable income of the fund under subsection 92

(1) or Division 6; or

 

(b)

is derived by the fund during, but not at a particular time during, a

year of income; shall be taken to have been derived by the fund at such time,

or at such times and in such proportions, as the Commissioner considers

reasonable having regard to:

 

(c)

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

 

(d)

in any case-any relevant matters.

"(7) For the purposes of this section, a fund is a former paragraph 23 (ja)

fund in relation to a year of income if, and only if:

 

(a)

the year of income ended before the proclaimed superannuation standards

day and the income of the fund of the year of income would, but for the

amendments made by the Taxation Laws Amendment Act (No. 4) 1987, have been

exempt from tax under paragraph 23 (ja) of this Act as in force immediately

before the commencement of section 1 of that Act; or

 

(b)

the proclaimed superannuation standards day occurred during the year of

income and, if the year of income had ended on the proclaimed superannuation

standards day, the income of the fund of the year of income would have been

exempt from tax under paragraph 23 (ja) of this Act as in force immediately

before the commencement of section 1 of that Act.

Exemption of income of certain approved deposit funds

"23FD. (1) Subject to this section, the income derived during a year of

income by a fund is exempt from income tax if:

 

(a)

the Insurance and Superannuation Commissioner has given a notice in

relation to the fund under section 14 of the Occupational Superannuation

Standards Act 1987 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

 

(b)

the Insurance and Superannuation Commissioner has given a notice in

relation to the fund under section 15 of the Occupational Superannuation

Standards Act 1987 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.

"(2) A dividend paid after 12 January 1987 to a fund 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 not exempt from tax by virtue of subsection (1) unless

the Commissioner is of the opinion that it would be reasonable to exempt the

dividend from tax, having regard to:

 

(a)

the paid-up value of the shares in that company that are assets of the

fund;

 

(b)

the cost to the fund of the shares on which the dividend was paid by

the company;

 

(c)

the rate of the dividend paid to the fund by the company on the shares

in the company that are assets of the fund;

 

(d)

whether the company has paid a dividend on other shares in the company

and, if so, the rate of that dividend;

 

(e)

whether any shares have been issued by the company to the fund 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

 

(f)

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 after 12 January 1987 by a fund 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 after that date to the fund by the company.

"(4) Income (other than a dividend to which subsection (2) applies) derived

after 12 January 1987 by a fund from a transaction is not exempt from tax by

virtue of subsection (1) 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 fund 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.

"(6) In determining, for the purposes of subsection (3) or (4), whether

income was derived by a fund after 12 January 1987, income that:

 

(a)

is included in the assessable income of the fund under subsection 92

(1) or Division 6; or

 

(b)

is derived by the fund during, but not at a particular time during, a

year of income; shall be taken to have been derived by the fund at such time,

or at such times and in such proportions, as the Commissioner considers

reasonable having regard to:

 

(c)

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

 

(d)

in any case-any relevant matters.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 9

Assessable income to include value of benefits received from or in connection

with former paragraph 23 (ja) funds or former section 23FB funds

 

9. Section 26AF of the Principal Act is amended:

 

(a)

by inserting after paragraph (1) (a) the following paragraph:

 

"(aa)

if the fund is an exempt fund within the meaning of section

26AFB-the benefit was received or obtained by the taxpayer before the

proclaimed superannuation standards day;";

 

(b)

by omitting from subsection (2) "paragraph 23 (ja) fund or a section

23FB fund," and substituting "fund, being a paragraph 23 (ja) fund or a

section 23FB fund and not being an exempt fund within the meaning of section

26AFB,";

 

(c)

by inserting "as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987" after "23 (ja)

(ii)" in paragraph (a) of the definition of "approved terms and conditions"

in subsection (3);

 

(d)

by inserting "as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987" after "23FB (2)" in

paragraph (b) of the definition of "approved terms and conditions" in

subsection (3);

 

(e)

by inserting "as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987" after "23 (ja)"

(last occurring) in the definition of "paragraph 23 (ja) fund" in subsection

(3);

 

(f)

by inserting "as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987" after "23FB" in

paragraph (a) of the definition of "section 23FB fund" in subsection (3); and

 

(g)

by adding at the end the following subsection:

"(4) For the purposes of this section, where either of the following

paragraphs applies in relation to an exempt fund within the meaning of section

26AFB of this Act in relation to the year of income of the fund commencing on

1 July 1986 or a subsequent year of income:

 

(a)

the year of income ended before the proclaimed superannuation

standards day and the income of the fund of the year of income would, but for

the amendments made by the Taxation Laws Amendment Act (No. 4) 1987, have been

exempt from tax under paragraph 23 (ja) or section 23FB of this Act, as in

force at any time before the commencement of section 1 of that Act;

 

(b)

the proclaimed superannuation standards day occurred during the

year

of income and, if the year of income had ended on the proclaimed

superannuation standards day, the income of the fund of the year of income

would have been exempt from tax under paragraph 23 (ja) or section 23FB of

this Act, as in force at any time before the commencement of section 1 of that

Act; paragraph 23 (ja) or section 23FB of this Act, as in force immediately

before the commencement of section 1 of that Act, shall be taken to have

continued to apply in relation to the fund in relation to the year of income

of the fund.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 10

Assessable income to include value of certain benefits received from or in

connection with former section 23F funds

 

10. Section 26AFA of the Principal Act is amended:

 

(a)

by inserting after paragraph (1) (a) the following paragraph:

 

"(aa)

if the fund is an exempt fund within the meaning of section

26AFB-the benefit was received or obtained by the taxpayer before the

proclaimed superannuation standards day;";

 

(b)

by omitting from subsection (3) "section 23F fund," and substituting

"fund, being a section 23F fund and not being an exempt fund within the

meaning of section 26AFB,";

 

(c)

by inserting "as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987" after "(iv)" in the

definition of "excessive benefit" in subsection (4);

 

(d)

by inserting "(as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987)" after "23F" (last

occurring) in the definition of "section 23F fund" in subsection (4); and

 

(e)

by adding at the end the following subsection:

"(5) For the purposes of this section, where either of the following

paragraphs applies in relation to an exempt fund within the meaning of section

26AFB of this Act in relation to the year of income of the fund commencing on

1 July 1986 or a subsequent year of income:

 

(a)

the year of income ended before the proclaimed superannuation

standards day and section 23F of this Act, as in force immediately before the

commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987,

would, but for the amendments made by that Act, have applied in relation to

the fund in relation to the year of income;

 

(b)

the proclaimed superannuation standards day occurred during the

year

of income and, if the year of income had ended on the proclaimed

superannuation standards day, section 23F of this Act, as in force immediately

before the commencement of section 1 of that Act, would, but for the

amendments made by that Act, have applied in relation to the fund in relation

to the year of income; section 23F of this Act, as in force immediately before

the commencement of section 1 of that Act, shall be taken to have continued to

apply in relation to the fund in relation to the year of income of the fund.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 11

 

11. After section 26AFA of the Principal Act the following section is

inserted:

Assessable income to include value of benefits received from or in connection

with funds that have obtained tax benefits under section 23FC

"26AFB. (1) In this section:

'exempt fund' means a fund to which section 23FC applies, or has applied, in

relation to any year of income.

"(2) Where:

 

(a)

in a year of income and on or after the proclaimed superannuation

standards day, a taxpayer receives or obtains a benefit of any kind out of, or

attributable to assets of, an exempt fund;

 

(b)

at the time when the benefit was provided, there were in force

regulations for the purposes of subsection 7 (1) of the Occupational

Superannuation Standards Act 1987 prescribing standards applicable to the

fund; and

 

(c)

the provision of the benefit resulted in a failure of the fund to

comply with such of those standards as are prescribed for the purposes of this

section by regulations made under this Act; the assessable income of the

taxpayer of the year of income shall include the amount or value of that

benefit.

"(3) Where:

 

(a)

in a year of income and on or after the proclaimed superannuation

standards day, a taxpayer receives or obtains a benefit of any kind out of, or

attributable to assets of, an exempt fund; and

 

(b)

at the time when the benefit was provided, the fund was not a

superannuation fund within the meaning of the Occupational Superannuation

Standards Act 1987; the assessable income of the taxpayer of the year of

income shall include the amount or value of that benefit.

"(4) Where:

 

(a)

subsection (2) or (3) would, but for this subsection, apply to the

amount or value of a benefit received or obtained by a taxpayer out of, or

attributable to assets of, an exempt fund; and

 

(b)

the Commissioner, having regard to:

 

(i)

the nature of the fund; and

 

(ii)

such other matters relating to the receiving or obtaining of the

benefit by the taxpayer as the Commissioner considers relevant; is satisfied

that it would be unreasonable for subsection (2) or (3) to apply to the whole

or a part of the benefit; that subsection does not apply to the benefit, or to

that part of the benefit, as the case may be.

"(5) Where, in a year of income, a taxpayer receives valuable consideration

in respect of the transfer by the taxpayer to another person (whether by

assignment, by declaration of trust or by any other means) of a right (whether

vested or contingent) to receive a benefit from an exempt fund, the assessable

income of the taxpayer of the year of income shall include the amount or value

of that consideration.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 12

Interpretation

 

12. Section 27A of the Principal Act is amended:

 

(a)

by omitting "or 26AFA (1)" from subparagraph (b) (iii) of the

definition of "eligible termination payment" in subsection (1) and

substituting ", 26AFA (1) or 26AFB (2) or (3)";

 

(b)

by omitting "or 26AFA (3)" from paragraph (b) of the definition of

"eligible termination payment" in subsection (1) and substituting ", 26AFA (3)

or 26AFB (5)"; and

 

(c)

by omitting paragraph (a) of the definition of "superannuation fund" in

subsection (1) and substituting the following paragraph:

 

"(a)

a provident, benefit, superannuation or retirement fund, being:

 

(i)

a fund to which paragraph 23 (jaa) or (jb) or section 23FC,

121CC

or 121DAB applies, or has applied, in relation to any year of income;

 

(ii)

a fund to which paragraph 23 (ja) or section 23F or 23FB, as in

force at any time before the commencement of this paragraph, has applied in

relation to the year of income that commenced on 1 July 1985 or a preceding

year of income; or

 

(iii)

a fund to which section 79, as in force at any time before 25

June 1984, has applied in relation to the year of income that commenced on 1

July 1983 or a preceding year of income; and".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 13

Assessable income to include certain annuities and superannuation pensions

 

13. Section 27H of the Principal Act is amended by adding at the end of the

definition of "annuity" in subsection (4) ", but does not include an annuity

that is a qualifying security for the purposes of Division 16E;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 14

Notional income where assessable income includes consideration receivable on

disposal, loss or destruction of depreciated property

 

14. Section 59AB of the Principal Act is amended:

 

(a)

by omitting from subsection (7) "or section 158D, or both of those

sections, applies or apply" and substituting "applies"; and

 

(b)

by omitting from subsection (7) "or those sections" (wherever

occurring).

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 15

Gifts, pensions etc.

 

15. Section 78 of the Principal Act is amended:

 

(a)

by inserting after subparagraph (1) (a) (1xxxix) the following

subparagraphs:

 

"(xc)

the Ninth Australian Division Memorial of Participation (Alamein)

Fund;

 

(xci)

the Korean and South East Asian and Vietnam War Memorials Anzac

Square Trust Fund;"; and

 

(b)

by inserting after subsection (6AG) the following subsection:

"(6AH) A gift to the fund specified in subparagraph (1) (a) (xc) or

(xci)

is not an allowable deduction under this section unless the gift was or is

made after 14 June 1987 and before 1 July 1989.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 16

Transfer of loss within company group

 

16. Section 80G of the Principal Act is amended:

 

(a)

by omitting from subsection (5) "For" and substituting "Subject to

subsection (5A), for"; and

 

(b)

by inserting after subsection (5) the following subsection:

"(5A) For the purposes of subsection (1), where:

 

(a)

at a time (in this subsection called the 'acquisition time') in the

year of income commencing on 1 July 1986 or in a subsequent year of income,

one or more companies acquired all the shares in another company (in this

subsection called the 'shelf company') from the shareholders in the shelf

company; and

 

(b)

the shelf company was dormant, within the meaning of Part VI of the

Companies Act 1981, throughout the period (in this subsection called the

'dormant period') commencing on the day on which the shelf company was

incorporated and ending at the acquisition time; the shelf company shall be

taken not to have been in existence during the dormant period.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 17

Interpretation

 

17. Section 82AAA of the Principal Act is amended by omitting from

subsection (1) the definition of "dependant" and substituting the following

definition:

" 'dependant' has the same meaning as in the Occupational Superannuation

Standards Act 1987;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 18

Interpretation

 

18. Section 82AAS of the Principal Act is amended:

 

(a)

by omitting from subsection (1) the definitions of "dependant" and

"eligible superannuation fund" and substituting the following definitions:

" 'dependant' has the same meaning as in the Occupational Superannuation

Standards Act 1987;

'eligible superannuation fund' means a fund to which paragraph 23

(jaa)

or section 23FC applies in relation to the year of income;"; and

 

(b)

by omitting from subsection (1) the definition of "qualifying

superannuation fund".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 19

Deductions for superannuation contributions by eligible persons

 

19. Section 82AAT of the Principal Act is amended:

 

(a)

by omitting subsection (1) and substituting the following subsection:

"(1) Subject to this section, where:

 

(a)

an eligible person makes a contribution to a fund to obtain

superannuation benefits for the eligible person or, in the event of the death

of the eligible person, for dependants of the eligible person; and

 

(b)

section 23FC applies in relation to the fund 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

eligible person in which the contribution is made."; and

 

(b)

by omitting subsection (3).

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 20

Deduction in respect of new plant installed on or after 1 January 1976

 

20. Section 82AB of the Principal Act is amended by omitting from paragraphs

(1) (d) and (1A) (d) "1 July 1987" and substituting "1 January 1988".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 21

Limitation on deductions for rental property loan interest

 

21. Section 82KZD of the Principal Act is amended by inserting before

subsection (1) the following subsection:

"(1A) This section does not apply to the year of income commencing on 1 July

1987 or any later year of income.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 22

Interpretation

 

22. Section 102M of the Principal Act is amended by omitting "paragraph 23

(j), (jaa) or (ja) or section 23F, 23FA or 23FB" from paragraph (b) of the

definition of "exempt entity" and substituting "paragraph 23 (j) or (jaa) or

section 23FC or 23FD".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 23

Interpretation

 

23. Section 110 of the Principal Act is amended by omitting the definition

of "exempt superannuation fund" and substituting the following definition:

" 'exempt superannuation fund' means a fund to which paragraph 23 (jaa) or

section 23FC applies in relation to the year of income;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 24

Interpretation

 

24. Section 121B of the Principal Act is amended:

 

(a)

by omitting "superannuation" from the definition of "losses and

outgoings" in subsection (1);

 

(b)

by omitting the definitions of "ineligible approved deposit fund" and

"investment income" and substituting the following definitions:

" 'ineligible approved deposit fund', in relation to a year of income,

means a fund in relation to which all of the following conditions are

satisfied:

 

(a)

section 23FD does not apply in relation to the fund in relation

to

the year of income;

 

(b)

if part of the year of income occurred before 1 July 1986 and

the

fund was in existence at a time during that part of the year of income:

 

(i)

the fund is an approved deposit fund within the meaning of

Subdivision AA of Division 2;

 

(ii)

on 30 June 1986, the fund was maintained by an approved

trustee or approved trustees within the meaning of that Subdivision; and

 

(iii)

the fund was an approved deposit fund within the meaning of

the Occupational Superannuation Standards Act 1987 at all times during so much

of the year of income as occurred on or after 1 July 1986 when the fund was in

existence;

 

(c)

if no part of the year of income occurred before

1 July 1986-the fund was an approved deposit fund within the meaning of the

Occupational Superannuation Standards Act 1987 at all times during the year of

income when the fund was in existence;

'investment income', in relation to a fund to which section 121CC,

121DA

or 121DAB applies in relation to a year of income, means the assessable income

of the fund of the year of income (not including:

 

(a)

if the fund is a fund to which section 121CC applies in relation

to the year of income-ineligible income of the fund; and

 

(b)

in all cases-contributions to the fund);

calculated as if the trustee of the fund were a taxpayer in respect of

that income, being a resident, less all amounts allowable as deductions (other

than concessional deductions and deductions in respect of benefits) from that

assessable income;"; and

 

(c)

by inserting the following definitions in their respective appropriate

alphabetical positions (determined on a letter-by-letter basis):

" 'approved deposit fund', in relation to a year of income, means:

 

(a)

a fund to which section 23FD applies in relation to the year of

income; or

 

(b)

a fund that is an ineligible approved deposit fund in relation

to

the year of income;

'ineligible income', in relation to a fund to which section 121CC

applies, has the meaning given by section 121BA;

'ineligible superannuation fund', in relation to a year of income, means

a fund in relation to which all of the following conditions are satisfied:

 

(a)

section 23FC does not apply in relation to the fund in relation

to

the year of income;

 

(b)

if part of the year of income occurred before 1 July 1986:

 

(i)

the fund was a superannuation fund within the meaning of

this

Division at all times during so much of the year of income as occurred before

1 July 1986 when the fund was in existence; and

 

(ii)

the fund was a superannuation fund within the meaning of the

Occupational Superannuation Standards Act 1987 at all times during so much of

the year of income as occurred on or after 1 July 1986 when the fund was in

existence;

 

(c)

if no part of the year of income occurred before

1 July 1986-the fund was a superannuation fund within the meaning of the

Occupational Superannuation Standards Act 1987 at all times during the year of

income when the fund was in existence;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 25

 

25. After section 121B of the Principal Act the following section is

inserted:

Ineligible income of section 121CC funds

"121BA. (1) This section applies to income derived in a year of income by a

fund to which section 121CC applies in relation to the year of income.

"(2) A dividend paid to a fund 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 ineligible income of the fund unless the Commissioner is of the opinion

that it would be reasonable not to treat the dividend as ineligible income of

the fund, having regard to:

 

(a)

the paid-up value of the shares in that company that are assets of the

fund;

 

(b)

the cost to the fund of the shares on which the dividend was paid by

the company;

 

(c)

the rate of the dividend paid to the fund by the company on the shares

in the company and, if so, the rate of that dividend;

 

(d)

whether any shares have been issued by the company to the fund 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

 

(f)

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 a fund indirectly from a dividend paid by a

company, being a private company in relation to the year of income of the

company and in which the dividend was paid, shall be deemed to have been a

dividend paid to the fund by the company.

"(4) Income (other than a dividend to which subsection (2) applies) derived

by a fund from a transaction is ineligible income of the fund 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 fund 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.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 26

 

26. Sections 121C, 121CA, 121CB and 121CC of the Principal Act are repealed

and the following sections are substituted:

Assessment of investment income of certain ineligible superannuation funds

"121CC. (1) This section applies in relation to a fund that is an ineligible

superannuation fund in relation to a year of income if:

 

(a)

if the proclaimed superannuation standards day occurred before the year

of income:

 

(i)

at a time during the year of income when the fund was in

existence,

there were in force regulations for the purposes of subsection 7 (1) of the

Occupational Superannuation Standards Act 1987 prescribing relevant investment

standards applicable to the fund;

 

(ii)

the Commissioner is not satisfied that, at all times during the

year

of income when the fund was in existence and there were in force regulations

for the purposes of subsection 7 (1) of the Occupational Superannuation

Standards Act 1987 prescribing relevant investment standards applicable to the

fund, the fund complied with those standards; and

 

(iii)

the Commissioner is satisfied that, at all times during the year

of

income when the fund was in existence and there were in force regulations for

the purposes of subsection 7 (1) of the Occupational Superannuation Standards

Act 1987 prescribing standards applicable to the fund, the fund complied with

all of those standards other than the relevant investment standards;

 

(b)

if the proclaimed superannuation standards day occurred during the year

of income:

 

(i)

at a time during so much of the year of income as occurred after

that day when the fund was in existence, there were in force regulations for

the purposes of subsection 7 (1) of the Occupational Superannuation Standards

Act 1987 prescribing relevant investment standards applicable to the fund;

 

(ii)

the Commissioner is not satisfied that, at all times during so

much

of the year of income as occurred after that day when the fund was in

existence and there were in force regulations for the purposes of subsection 7

(1) of the Occupational Superannuation Standards Act 1987 prescribing relevant

investment standards applicable to the fund, the fund complied with those

standards; and

 

(iii)

the Commissioner is satisfied that:

(A) at all times during so much of the year of income as occurred

after

that day when the fund was in existence and there were in force regulations

for the purposes of subsection 7 (1) of the Occupational Superannuation

Standards Act 1987 prescribing standards applicable to the fund, the fund

complied with all of those standards other than the relevant investment

standards; and

(B) if the year of income had ended on that day and sections 23F,

23FB,

121C and 121CC, as in force immediately before the commencement of this

section, had not been repealed by the Taxation Laws Amendment Act (No. 4)

1987, section 121CC, as so in force, would have applied in relation to the

fund in relation to the year of income; or

 

(c)

if the proclaimed superannuation standards day occurred after the year

of income-the Commissioner is satisfied that if sections 23F, 23FB, 121C and

121CC, as in force immediately before the commencement of this section, had

not been repealed by the Taxation Laws Amendment Act (No. 4) 1987, section

121CC, as so in force, would have applied in relation to the fund in relation

to the year of income.

"(2) The trustee of a fund to which this section applies in relation to a

year of income shall be assessed and is liable to pay tax, at the rate

declared by the Parliament for the purposes of this subsection, on the

investment income of the fund of the year of income.

"(3) The trustee of a fund to which this section applies in relation to a

year of income shall be assessed and is liable to pay tax, at the rate

declared by the Parliament for the purposes of this subsection, upon so much

of the ineligible income derived by the fund in the year of income as remains

after deducting from the ineligible income any losses and outgoings incurred

by the fund to the extent to which the

losses and outgoings are incurred in

gaining or producing that income and are not of a private or capital nature.

"(4) A reference in this section to relevant investment standards is a

reference to such of the standards prescribed by regulations in force for the

purposes of subsection 7 (1) of the Occupational Superannuation Standards Act

1987 as are prescribed for the purposes of this section by regulations made

under this Act.

Assessment of private company dividend income and non-arm's length income of

superannuation funds to which section 23FC applies

"121D. The trustee of a fund to which section 23FC applies in relation to a

year of income shall be assessed and is liable to pay tax, at the rate

declared by the Parliament for the purposes of this section, upon so much of

the income derived by the fund in the year of income (other than income that

is exempt from tax by virtue of section 23FC) as remains after deducting from

the first-mentioned income any losses and outgoings incurred by the fund to

the extent to which the losses and outgoings are incurred in gaining or

producing that income and are not of a private or capital nature.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 27

Assessment of income of other superannuation funds

 

27. Section 121DA of the Principal Act is amended:

 

(a)

by omitting "121CA, 121CB, 121CC" and substituting "121CC, 121D"; and

 

(b)

by omitting all the words after "upon" and substituting "the investment

income of the fund of the year of income".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 28

Assessment of income of ineligible approved deposit funds

 

28. Section 121DAA of the Principal Act is amended by omitting "an

ineligible approved deposit fund" and substituting "a fund that is an

ineligible approved deposit fund in relation to a year of income".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 29

 

29. After section 121DAA of the Principal Act the following section is

inserted:

Assessment of private company dividend income and non-arm's length income of

approved deposit funds to which section 23FD applies

"121DAAA. The trustee of a fund to which section 23FD applies in relation to

a year of income shall be assessed and is liable to pay tax, at the rate

declared by the Parliament for the purposes of this section, upon so much of

the income derived by the fund in the year of income (other than income that

is exempt from income tax by virtue of section 23FD) as remains after

deducting from the first-mentioned income any losses and outgoings incurred by

the fund to the extent to which the losses and outgoings are incurred in

gaining or producing that income and are not of a private or capital nature.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 30

 

30. Section 121DAB of the Principal Act is repealed and the following

section is substituted:

Assessment of income of certain other ineligible superannuation funds

"121DAB. The trustee of a fund that is an ineligible superannuation fund in

relation to a year of income shall, in relation to the year of income, be

assessed and is liable to pay tax, at the rate declared by Parliament for the

purposes of this section, upon the investment income of the fund for the year

of income if:

 

(a)

if part of the year of income occurred before 1 July 1986-at all times

during so much of the year of income as occurred before that date when the

fund was in existence, the fund was a fund to which paragraph 121DAB (a), as

in force immediately before the commencement of this section, applied; and

 

(b)

in all cases-section 121CC does not apply in relation to the fund in

relation to the year of income.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 31

Income of superannuation funds and approved deposit funds to be taxed

exclusively under this Division

 

31. Section 121DB of the Principal Act is amended by omitting "ineligible".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 32

 

32. Section 121DC of the Principal Act is repealed and the following section

is substituted:

Taxable income

"121DC. The amount upon which the trustee of a superannuation fund or

approved deposit fund is assessed and liable to pay tax as provided by

subsection 121CC (3) or section 121D, 121DA, 121DAA, 121DAAA or 121DAB shall,

for the purposes of this Act, be deemed to be taxable income of the fund.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 33

Rebates and provisional tax

 

33. Section 121DD of the Principal Act is amended by omitting "ineligible".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 34

Interpretation

 

34. Section 121F of the Principal Act is amended:

 

(a)

by omitting "(ja)," from paragraph (a) of the definition of "relevant

exempting provision" in subsection (1); and

 

(b)

by omitting paragraph (b) of the definition of "relevant exempting

provision" in subsection (1) and substituting the following paragraphs:

 

"(b)

paragraph 23 (ja) as in force at any time before the commencement

of

section 1 of the Taxation Laws Amendment Act (No. 4) 1987;

 

(ba)

section 23F, 23FA or 23FB, as in force at any time before the

commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987;

 

(bb)

section 23FC or 23FD;".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 35

Interpretation

 

35. Section 124ZA of the Principal Act is amended:

 

(a)

by omitting ", (jaa) or (ja)" from paragraph (a) of the definition of

"exempt body" in subsection (1) and substituting "or (jaa)"; and

 

(b)

by omitting "23F, 23FA or 23FB" from paragraph (b) of the definition of

"exempt body" in subsection (1) and substituting "23FC or 23FD".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 36

Deductions in respect of qualifying expenditure

 

36. Section 124ZH of the Principal Act is amended:

 

(a)

by omitting subparagraphs (1) (c) (i) and (ii) and substituting the

following subparagraphs:

 

"(i)

where the building, or the extension, alteration or improvement,

in

respect of the construction of which the qualifying expenditure was incurred:

(A) commenced to be constructed after 21 August 1984 and on or before

15 September 1987; or

(B) commenced to be constructed after 15 September 1987 under a

qualifying previous commitment; 4% of the qualifying expenditure; and

 

(ii)

in any other case-21/2% of the qualifying expenditure; and";

 

(b)

by omitting subparagraphs (2) (c) (i) and (ii) and substituting the

following subparagraphs:

 

"(i)

where the building, or the extension, alteration or improvement,

in

respect of the construction of which the qualifying expenditure was incurred:

(A) commenced to be constructed after 21 August 1984 and on or before

15 September 1987; or

(B) commenced to be constructed after 15 September 1987 under a

qualifying previous commitment; 4%; and

 

(ii)

in any other case-21/2%;";

 

(c)

by omitting paragraphs (3) (a) and (b) and substituting the following

paragraphs:

 

"(a)

where the building, or the extension, alteration or improvement, in

respect of the construction of which the qualifying expenditure was incurred:

 

(i)

commenced to be constructed after 21 August 1984 and on or

before

15 September 1987; or

 

(ii)

commenced to be constructed after 15 September 1987 under a

qualifying previous commitment; 25 years; and

 

(b)

in any other case-40 years;"; and

 

(d)

by adding at the end the following subsections:

"(4) For the purposes of this section, the construction of a building,

or

of an extension, alteration or improvement to a building, shall be taken to be

under a qualifying previous commitment if:

 

(a)

the construction was under a contract that was entered into on or

before 15 September 1987 or was under 2 or more contracts any of which was

entered into on or before 15 September 1987; or

 

(b)

the following conditions are satisfied:

 

(i)

money was borrowed and used to finance the construction;

 

(ii)

all the money that was borrowed and used to finance the

construction was borrowed under a contract that was entered into, or under

contracts each of which was entered into:

(A) on or before 15 September 1987; and

(B) for the purpose, or for purposes that included the purpose, of

financing the construction;

 

(iii)

each person who borrowed and used money to finance the

construction is a qualifying investor in relation to the construction.

"(5) For the purposes of subsection (4), a person is a qualifying

investor

in relation to the construction of a building, or the construction of an

extension, alteration or improvement to a building, if:

 

(a)

in the case of the construction of a building:

 

(i)

at the end of 15 September 1987, the person was the owner or

lessee of the land on which the building was constructed; or

 

(ii)

after 15 September 1987, the person became the owner or lessee

of

that land under a contract entered into on or before 15 September 1987; or

 

(b)

in the case of the construction of an extension, alteration or

improvement to a building:

 

(i)

at the end of 15 September 1987, the person was the owner or

lessee of:

(A) if the extension, alteration or improvement was made to only

part of the building-that part; or

(B) in any other case-the building; or

 

(ii)

after 15 September 1987, the person became the owner or lessee

of:

(A) if the extension, alteration or improvement was made to only

part of the building-that part; or

(B) in any other case-the building;

under a contract entered into on or before 15 September 1987.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 37

Capital gains and abnormal income to be disregarded

 

37. Section 149A of the Principal Act is amended by omitting subsection (1)

and substituting the following subsection:

"(1) For the purposes of this Division (including the purpose of determining

whether this Division applies to the income of a taxpayer):

 

(a)

references in this Division to the assessable income of a taxpayer

shall be read as references to the amount that would have been the assessable

income if the assessable income did not include any net capital gain within

the meaning of Part IIIA; and

 

(b)

references in this Division to the taxable income of a taxpayer shall

be read as references to the amount that would have been the taxable income

if:

 

(i)

the assessable income did not include any net capital gain within

the meaning of Part IIIA; and

 

(ii)

the taxable income were reduced by so much of the taxable income

as

consists of an abnormal income amount as specified in section 158L.".

 

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987

- SECT 38

 

38. Division 16A of Part III of the Principal Act is repealed and the

following Division is substituted:

"Division 16A-Abnormal Income of Artists, Composers, Inventors, Performers,

Production Associates, Sportspersons and Writers

Interpretation

"158B. (1) In this Division, unless the contrary intention appears:

'arrangement' means:

 

(a)

any agreement, arrangement, understanding, promise or undertaking,

whether express or implied, and whether or not enforceable, or intended to be

enforceable, by legal proceedings; and

 

(b)

any scheme, plan, proposal, action, course of action or course of

conduct, whether unilateral or otherwise;

'artist' means the author of an artistic work;

'associate' has the same meaning as in section 26AAB;

'composer' means the author of a musical work;

'eligible person' means:

 

(a)

an artist;

 

(b)

a composer;

 

(c)

an inventor;

 

(d)

a performer;

 

(e)

a production associate;

 

(f)

a sportsperson; or

 

(g)

a writer;

'inventor' means the inventor of an invention;

'performer' means a person who:

 

(a)

performs or presents any of the following activities:

 

(i)

music;

 

(ii)

a play;

 

(iii)

dance;

 

(iv)

an entertainment;

 

(v)

an address;

 

(vi)

a display;

 

(vii)

a promotional activity;

 

(viii)

an exhibition;

 

(ix)

any similar activity;

being an activity that involves the exercise by the person of intellectual,

artistic, musical, physical or other personal skills in the presence of an

audience; or

 

(b)

performs or appears in or on a film, tape or disc or in a

television

or radio broadcast;

'production associate' means a person who:

 

(a)

performs recognised associated services in connection with an

activity to which paragraph (a) of the definition of 'performer' applies; or

 

(b)

performs recognised associated services in connection with the

making

of a film, tape or disc or of a television or radio broadcast;

'recognised associated services' means any of the following services:

 

(a)

services as:

 

(i)

an art director;

 

(ii)

a choreographer;

 

(iii)

a costume designer;

 

(iv)

a director;

 

(v)

a director of photography;

 

(vi)

a film editor;

 

(vii)

a lighting designer;

 

(viii)

a musical director;

 

(ix)

a producer;

 

(x)

a production designer; or

 

(xi)

a set designer;

 

(b)

services similar to services referred to in paragraph (a);

'sport' means so much of a sporting activity as satisfies the following

conditions:

 

(a)

the sporting activity is one in which:

 

(i)

human beings compete by riding, or by exercising other skills

in

relation to, animals;

 

(ii)

human beings compete by driving, piloting or crewing motor

vehicles, boats, aircraft or other modes of transport;

 

(iii)

human beings compete with, or compete by overcoming, natural

obstacles or natural forces; or

 

(iv)

where none of the preceding subparagraphs applies to the

sporting

activity-human beings are the sole competitors;

 

(b)

the participation in the sporting activity by each such human

competitor other than:

 

(i)

a navigator in the activity of car rallying;

 

(ii)

a coxswain in the activity of rowing; or

 

(iii)

a similar competitor;

involves primarily the exercise of physical prowess, physical strength or

physical stamina;

'sportsperson' means a person who participates in sport as a competitor as

mentioned in paragraph (a) of the definition of 'sport';

'taxpayer' means a taxpayer who is a natural person other than a taxpayer in

the capacity of a trustee;

'writer' means the author of a literary or dramatic work.

"(2) For the purpose of determining whether a person is an associate of

another person within the meaning of this Division, the definition of

'relative' in subsection 6 (1) and the definition of 'associate' in subsection

26AAB (14) apply as if a reference in the definition concerned to the spouse

of the person included a reference to another person who, although not legally

married to the person, lives with the person on a bona fide domestic basis as

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted

Provision affected

How affected

S. 51.........................................

am. No. 11, 1988

S. 52.........................................

rep. No. 75, 2010

S. 62.........................................

rep. No. 75, 2010

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