Taxation Laws Amendment Act (No. 4) 1995 (Cth)
This compilation was prepared on 8 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
CONTENTS
Section
Short title [
Commencement [
Schedules
SCHEDULE 1
AMENDMENTS OF THE
PART 1 - AMENDMENTS RELATING TO DIVISION 19A OF PART IIIA
PART 2 - OTHER AMENDMENTS RELATING TO CAPITAL GAINS TAX
SCHEDULE 2
AMENDMENTS OF THE
DIVIDEND IMPUTATION
SCHEDULE 3
AMENDMENTS OF THE
DEMUTUALISATION OF INSURANCE COMPANIES AND AFFILIATES
SCHEDULE 4
VARIOUS AMENDMENTS OF THE
PART 1 - ESTABLISHMENT COSTS OF HORTICULTURAL PLANTS
PART 2 - FORESTRY
PART 3 - REGISTER OF APPROVED OCCUPATIONAL CLOTHING
PART 4 - RESEARCH AND DEVELOPMENT
SCHEDULE 5
AMENDMENTS OF THE
SCHEDULE 6
AMENDMENT OF THE
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995 - LONG TITLE
An Act to amend the law relating to taxation
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995
- SECT 1
Short title [
1. This Act may be cited as the Taxation Laws Amendment Act (No. 4) 1995.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995
- SECT 2
Commencement [
2.(1) Subject to this section, this Act commences on the day on which it
receives the Royal Assent.
(2) Subject to subsection (3), the amendments made by Schedule 2 are taken
to have commenced on 1 July 1995.
(3) Items 1, 2 and 86 of Schedule 2 commence on the later of the following
days:
the day on which this Act receives the Royal Assent; or
the day on which the Taxation Laws Amendment Act (No. 3) 1995 receives
the Royal Assent.
(4) Part 3 of Schedule 4 commences on 1 March 1996.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995
- SECT 3
Schedules
3. The Acts specified in the Schedules to this Act are amended in accordance
with the applicable items in the Schedules, and the other items in the
Schedules have effect according to their terms.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995 - SCHEDULE 1
Section 3
AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 RELATING TO
CAPITAL GAINS TAX
PART 1-AMENDMENTS RELATING TO DIVISION 19A OF PART IIIA
1. Subsection 160Z(5):
Omit "subsection 160ZZRE(3)", substitute "subsection 160ZZRDJ(3) or
(4), 160ZZRDM(2) or (5), or 160ZZRE(3)".
2. Before section 160ZZRA:
Insert in Division 19A:
"Subdivision A-Outline and interpretation
Outline of Division
"160ZZRAAA.(1)
This Division adjusts the cost bases of shares and loans in certain
cases where assets are transferred between companies under common
ownership and the transfer is likely to reduce the value of the share
or loan.
. There are detailed rules for the circumstances in which adjustments
are made and the amount of those adjustments.
. The rules that apply to most depreciable assets are different from
the rules that apply to transfers of other assets.
. Taxpayers are able to group certain assets before applying this
Division. In some cases, this will result in no adjustment being
required and in some other cases it will result in a lesser reduction
being required. Taxpayers may also choose to group certain assets for
administrative convenience.
"(2) The following chart shows the operative provisions that will
apply to particular assets:
(CHART OMITTED)
3. Section 160ZZRA (definition of indexed threshold amount):
Omit "section 160ZZRD", substitute "subsection 160ZZRE(1B).".
4. Section 160ZZRA:
Insert:
"original cost, of an asset to a taxpayer, means the consideration
for the last acquisition of the asset by the taxpayer.
written down value, for an asset of a taxpayer at a particular time,
means the greater of:
the depreciated value of that asset at that time as recorded
in the books of the taxpayer; and
the depreciated value of the asset, within the meaning of
section 62, at that time.".
5. After section 160ZZRB:
Insert:
Cost base etc. of certain assets
"160ZZRBA. For the purpose of this Division, the cost base, the
indexed cost base and the reduced cost base, at a particular time, of
an asset to which subsection 160M(6) applies are taken to be equal to
the market value of the asset at that time.
Meaning of indexed common ownership market value
"160ZZRBB.(1) The indexed common ownership market value of an asset
is worked out by multiplying the market value of the asset at the
common ownership time by the following indexation factor:
Index number for the CPI quarter in which the first asset disposal
time occurred
Index number for the CPI quarter in which the common ownership
time occurred
"(2) The indexation factor is to be worked out to 3 decimal places,
but increased by 0.001 if the 4th decimal place is 5 or more.
"(3) Calculations under subsection (1):
are to be made using only the index numbers published in terms
of the most recently published reference base for the Consumer Price
Index; and
are to disregard indexation numbers that are published in
substitution for previously published index numbers (except where the
substituted numbers are published to take account of changes in the
reference base).
"(4) In this section:
CPI quarter means a period of 3 months ending on 31 March, 30 June, 30
September or 31 December.
index number means the All Groups Consumer Price Index Number (being
the weighted average of the 8 capital cities) published by the
Australian Statistician.".
6. After section 160ZZRC:
Insert:
"Subdivision B-Application of Division".
7. Subsection 160ZZRD(2):
Omit the subsection.
8. After section 160ZZRD:
Insert:
How Division applies to grouped assets
"160ZZRDA.(1) Subdivision C sets out how this Division applies to
groups of assets and to assets that are in a group of assets.
"(2) Subdivision C applies Subdivisions D and E to the assets as a
group. Those Subdivisions do not have any other operation in relation
to an asset included in a group of assets.
How Division applies to depreciable assets
"160ZZRDB.(1) Subdivision D only applies to the disposal of the
first asset if:
(a) the asset is a depreciable asset; and
(b) the consideration for the disposal of the asset is less than the
written down value of the asset at the time of the disposal; and
(c) the market value of the asset is not more than 10% greater than
the written down value of the asset at the time of the disposal; and
(d) the original cost of the asset to the transferor was less than
$1 million; and
(e) the asset is not a building.
Written down value and original cost are defined in section
160ZZRA.
Subdivision D also applies to some depreciable assets as part
of depreciable asset groups as a result of Subdivision C.
"(2) Subdivision E does not have any operation in relation to an
asset to which Subdivision D applies.
Application of Subdivision E
"160ZZRDC. Subdivision E applies in relation to assets that are
covered by this Division but not by Subdivision C or D.
Subdivision E also applies to some assets as part of pre-common
ownership groups or post-common ownership groups as a result of
Subdivision C.
Application of Subdivision F
"160ZZRDD. Subdivision F only applies to the disposal of an asset if
Subdivision C, D or E applied in relation to that disposal.
"Subdivision C-Grouped assets
Transferor may elect to group assets
Reason for grouping
"160ZZRDE.(1) Grouping provides taxpayers with a simplified method
of applying this Division to 2 or more assets that are transferred
from the transferor to the transferee. It may also reduce the cases in
which adjustments have to be made to cost bases of shares or loans
under this Division and may reduce the amount of those adjustments.
The 3 kinds of groups
"(2) There are 3 kinds of groups:
(a) a depreciable property group (see section 160ZZRDF); and
(b) a pre-common ownership group (see section 160ZZRDG); and
(c) a post-common ownership group (see section 160ZZRDH).
The groups are mutually exclusive. An asset that could be included in
the depreciable property group can not be included in either of the
other groups.
"(3) The transferor may elect to allocate assets to which this
Division applies that are transferred to a transferee to groups of
assets. All of the assets in a group must be disposed of to the same
transferee in the same year of income of the transferor.
"(4) An election under subsection (3) must be made in writing on or
before the lodgment of the transferor's return for the year of income
in which the relevant disposals occurred. The Commissioner may allow
the election to be made at a later time.
Depreciable property groups
Assets that may be in depreciable property group
"160ZZRDF.(1) An asset can be allocated to a depreciable property
group if:
(a) the asset is a depreciable asset; and
(b) the asset is the first asset to be allocated to the group or is
disposed of to the transferee in the same year of income of the
transferor as the year in which other assets in the group are disposed
of; and
(c) the original cost of the asset to the transferor was less than
$1 million; and
(d) the asset is not a building.
How and when Subdivision D applies to depreciable property groups
"(2) Subdivision D applies in a way specified in subsection (3) to
all of the assets in a depreciable property group if:
(a) the sum of the consideration for the disposal of the assets in
the group is less than the sum of the written down values of the
assets in the group; and
(b) the sum of the market values of the assets in the group is not
more than 10% greater than the sum of the written down values of the
assets in the group.
The written down value and the market value of each asset is to be
worked out when that asset is disposed of by the transferor.
"(3) Subdivision D applies to all of the assets in a depreciable
property group as if all of the grouped assets were one asset that:
(a) was disposed of at the earliest first asset disposal time for
any asset in the group; and
(b) was disposed of for consideration equal to the sum of the
consideration for the disposal of each of the assets; and
(c) had a written down value equal to the sum of the written down
values of each of the assets.
In calculating the sums of written down values, the written down value
of each asset at the first asset disposal time for that asset is to be
used.
Pre-common ownership groups
Assets that may be in pre-common ownership group
"160ZZRDG.(1) An asset can be allocated to a pre-common ownership
group if:
(a) the asset was acquired by the transferor before the time at
which the transferor and the transferee last came under common
ownership; and
(b) the asset is the first asset to be allocated to the group or is
disposed of to the transferee in the same year of income of the
transferor as the year in which that asset is disposed of; and
(c) the original cost of the asset to the transferor was less than
$1 million; and
(d) the asset is not land or a building.
How and when section 160ZZRF applies to pre-common ownership groups
"(2) Section 160ZZRF applies to all of the assets in a pre-common
ownership group in the way specified in subsection (3) if the sum of
the consideration for the disposal of the assets in the group is less
than the sum of the indexed common ownership market values of the
assets in the group.
"(3) Section 160ZZRF applies as if all of the grouped assets were
one asset that:
(a) was acquired on or after 20 September 1985; and
(b) was disposed of at the earliest first asset disposal time for
any asset in the group; and
(c) was disposed of for consideration equal to the sum of the
consideration for the disposal of each of the assets; and
(d) had a market value at the common ownership time equal to the sum
of the market values of the assets at that time.
In applying section 160ZZRF to the grouped assets the matters in
subsection (6) of that section must be used to determine what amount
is reasonable.
Post-common ownership groups
Assets that may be in post-common ownership group
"160ZZRDH.(1) An asset can be allocated to a post-common ownership
group if:
(a) the asset was acquired by the transferor at or after the time at
which the transferor and the transferee last came under common
ownership; and
(b) the asset was last acquired by the transferor on or after 20
September 1985; and
(c) the asset is the first asset to be allocated to the group or is
disposed of to the transferee in the same year of income of the
transferor as the year in which the first asset is disposed of; and
(d) the original cost of the asset to the transferor was less than
$1 million; and
(e) the asset is not land or a building.
How and when section 160ZZRE applies to post-common ownership groups
"(2) Section 160ZZRE applies to all of the assets in a post-common
ownership group in the way specified in subsection (3) if the sum of
the consideration for the disposal of the assets in the group is less
than the sum of the indexed threshold amount of each asset in the
group. The indexed threshold amount of each asset is to be worked out
when that asset is disposed of by the transferor.
"(3) Section 160ZZRE applies as if all of the grouped assets were
one asset that:
(a) was acquired by the transferor on or after 20 September 1985;
and
(b) was disposed of at the earliest first asset disposal time for
any asset in the group; and
(c) was disposed of for consideration equal to the sum of the
consideration for the disposal of each of the assets; and
(d) had an indexed threshold amount equal to the sum of the indexed
threshold amount for each of the assets; and
(e) had a reduced threshold amount equal to the sum of the reduced
threshold amounts for each of the assets.
In calculating the sums of reduced threshold amounts, or indexed
threshold amounts, the reduced threshold amount, or indexed threshold
amount, of each asset at the first asset disposal time for that asset
is to be used.
Shares or loans created after first asset in group is disposed of
"160ZZRDI.(1) This section applies if a share in the transferor, or
a loan to the transferor, comes into existence after the first time
(the adjustment time) in a year of income at which an asset in the
group is disposed of by the transferor but before the last time in the
year of income at which such an asset is actually disposed of.
"(2) This section does not apply to a share that is issued to
replace a share that is, or is to be, cancelled.
"(3) This Division applies as if:
(a) the share or loan had been in existence immediately before the
adjustment time; and
(b) the share or loan had all the same attributes at that time as it
had immediately after it came into existence.
"Subdivision D-Depreciable assets
Shares in, and loans to, transferor-depreciable assets-deemed disposal
"160ZZRDJ.(1) This section applies to each share in the transferor
acquired by a taxpayer (the second taxpayer) on or after 20 September
1985 that is held by the second taxpayer at the first asset disposal
time.
"(2) For each share to which this section applies, the second
taxpayer is taken to have disposed of the share at the first asset
disposal time for a consideration equal to the indexed cost base to
the second taxpayer of the share.
"(3) For the purpose of ascertaining whether a capital gain accrued
to the second taxpayer in the event of a subsequent disposal of the
share by the second taxpayer, the second taxpayer is taken to have
immediately re-acquired the share for a consideration equal to the
indexed cost base to the second taxpayer of the share, reduced by the
share reduction amount (see subsection (5)).
"(4) For the purpose of ascertaining whether the second taxpayer
incurred a capital loss in the event of a subsequent disposal of the
share by the second taxpayer, the second taxpayer is taken to have
immediately re-acquired the share for a consideration equal to the
reduced cost base to the second taxpayer of the share, reduced by the
share reduction amount (see subsection (5)).
"(5) The share reduction amount is worked out, immediately before
the first asset disposal time, using the formula:
Market value of share
x Written down value
of the first asset
Consideration for
disposal of first asset
"(6) If the second taxpayer or another taxpayer disposed of a share
(otherwise than because of the application of this section) within 12
months after the taxpayer acquired the share (otherwise than because
of the application of this section), subsections (2) and (3) have
effect as if the references to the indexed cost base to the taxpayer
in respect of the share were a reference to the cost base to the
taxpayer in respect of the share.
Shares of different classes
"160ZZRDK. If:
(a) at the first asset disposal time, a taxpayer (the second
taxpayer) held a share of a particular class in the transferor that
was acquired by the second taxpayer on or after 20 September 1985 (the
post-CGT share); and
(b) at the first asset disposal time, the second taxpayer or another
taxpayer held a share of another class in the transferor; and
(c) the application of section 160ZZRDJ to the post-CGT share would
be unreasonable;
then, that section does not apply to the post-CGT share and the cost
base, the indexed cost base or the reduced cost base of the post-CGT
share to the second taxpayer is instead reduced by such amount (if
any) as is reasonable having regard to:
(d) the circumstances in which the post-CGT share was acquired by
the second taxpayer; and
(e) the extent (if any) to which the market value of the post-CGT
share was reduced as a result of the disposal of the first asset at
the first asset disposal time.
Loans to transferor-depreciable assets
"160ZZRDL.(1) Section 160ZZRDM applies to a loan to the transferor
acquired by a taxpayer (the second taxpayer) if the 3 conditions below
are satisfied.
"(2) The first condition is that the loan was acquired by the second
taxpayer on or after 20 September 1985 and is held by the second
taxpayer at the first asset disposal time.
"(3) The second condition is that:
(a) the parties to the loan were not dealing with each other at
arm's length in relation to the loan; or
(b) the value of the loan was reduced as a result of the disposal of
the first asset.
"(4) The third condition is that:
(a) one or more shares in the transferor (the excess shares) are
taken, because of section 160ZZRDJ or 160ZZRDK, to have a cost base,
indexed cost base or reduced cost base of nil immediately after the
first asset disposal time; or
(b) at the first asset disposal time, there were no shares in the
transferor that were acquired (by the second taxpayer or otherwise) on
or after 20 September 1985.
Loans to transferor-depreciable assets-deemed disposal
"160ZZRDM.(1) If this section applies (see section 160ZZRDL), the
second taxpayer is taken to have disposed of the loan at the first
asset disposal time for a consideration equal to the indexed cost base
to the second taxpayer of the loan.
"(2) For the purpose of ascertaining whether a capital gain accrued
to the second taxpayer in the event of a subsequent disposal of the
loan by the second taxpayer, the second taxpayer is taken to have
immediately re-acquired the loan for a consideration equal to the
indexed cost base to the second taxpayer of the loan, reduced by the
reduction (capital gain) amount.
"(3) The reduction (capital gain) amount is worked out, immediately
before the first asset disposal time, using the formula:
x Total excess share
reduction (capital gain) amount
all loans to transferor
"(4) The total excess share reduction (capital gain) amount is:
(a) if paragraph 160ZZRDL(4)(a) applies-so much of the total share
reduction amounts for the excess shares as was not applied in making
reductions to the indexed cost bases of the excess shares in
accordance with subsection 160ZZRDJ(3) or section 160ZZRDK; or
(b) if paragraph 160ZZRDL(4)(b) applies-the amount worked out using
the formula:
- Consideration for
disposal of first asset
"(5) For the purpose of ascertaining whether a capital loss accrued
to the second taxpayer in the event of a subsequent disposal of the
loan by the second taxpayer, the second taxpayer is taken to have
immediately re-acquired the loan for a consideration equal to the
reduced cost base to the second taxpayer of the loan, reduced by the
reduction (capital loss) amount.
"(6) The reduction (capital loss) amount is worked out, immediately
before the first asset disposal time, using the formula:
x Total excess share reduction
(capital loss) amount
all loans to transferor
"(7) The total excess share reduction (capital loss) amount is:
(a) if paragraph 160ZZRDL(4)(a) applies-so much of the total share
reduction amounts for the excess shares as was not applied in making
reductions to the reduced cost bases of the excess shares in
accordance with subsection 160ZZRDJ(4) or section 160ZZRDK; or
(b) if paragraph 160ZZRDL(4)(b) applies and the written down value
of the first asset exceeds the consideration in respect of the
disposal of the first asset-the amount of the excess; or
(c) in any other case-0.
"(8) If the second taxpayer or another taxpayer disposed of a loan
(otherwise than because of the application of this section) within 12
months after the taxpayer acquired the loan (otherwise than because of
the application of this section), subsections (1) and (2) have effect
as if the references to the indexed cost base to the taxpayer in
respect of the loan were a reference to the cost base to the taxpayer
in respect of the loan.
More than one loan
"160ZZRDN. If:
(a) at the first asset disposal time, a taxpayer (the second
taxpayer) held a loan to the transferor that was acquired by the
second taxpayer on or after 20 September 1985 (the post-CGT loan); and
(i) a share in the transferor that was acquired by that taxpayer
before 20 September 1985; or
another loan to the transferor; and
(c) the application of section 160ZZRDM to the post-CGT loan would
be unreasonable;
then, that section does not apply to the post-CGT loan and the cost
base, the indexed cost base or the reduced cost base of the post-CGT
loan to the second taxpayer is instead reduced by such amount (if any)
as is reasonable having regard to:
(d) the circumstances in which the post-CGT loan was acquired by the
second taxpayer; and
(e) the extent (if any) to which the market value of the post-CGT
loan was reduced as a result of the disposal of the first asset at the
first asset disposal time.
"Subdivision E-Other assets".
9. After subsection 160ZZRE(1A):
Insert:
"(1B) This section only applies if the consideration for the
disposal of the first asset is less than the indexed threshold amount
being the lesser of:
(a) the indexed cost base to the transferor of the first asset, or
the amount that would have been the indexed cost base if this Part had
applied in respect of the disposal of the first asset; and
(b) the market value of the first asset immediately before the first
asset disposal time.".
10. Subparagraph 160ZZRE(6)(b)(i):
Before "held" insert "or another taxpayer".
11. Subparagraph 160ZZRE(6)(b)(i):
Omit "by the second taxpayer", substitute "by that taxpayer".
12. Sub-subparagraph 160ZZRE(6)(b)(ii)(A):
Omit all of the words after "disposal time,", substitute "shares in
the transferor belonging to 2 or more classes were in existence;".
13. Sub-subparagraph 160ZZRE(6)(b)(ii)(B):
Omit all of the words after "disposal time,", substitute "at least one
other loan to the transferor was held by the second taxpayer, a
company related to the transferor, or a person mentioned in paragraph
160ZZRB(b) in relation to the transferor; and".
14. Subsections 160ZZRF(2) and (3):
Omit all of the words and paragraphs after "as is reasonable".
15. Section 160ZZRF:
Add at the end:
"(4) The second taxpayer must choose whether to use the matters set
out in subsection (5) or the matters set out in subsection (6) to
determine what amount is reasonable.
"(5) The matters in this subsection are:
(a) the circumstances in which the share or the loan was acquired by
the second taxpayer; and
(b) the extent (if any) to which the market value of the share or
the loan was reduced as a result of the disposal of the first asset at
the first asset disposal time; and
(c) the extent (if any) to which any consideration paid or given by
the second taxpayer for the acquisition of the share or the loan was
attributable to the first asset.
"(6) The matters in this subsection are:
(a) the indexed common ownership market value of the first asset
(see section 160ZZRBB); and
(b) the amount of the consideration for the disposal of the first
asset to the transferee.".
16. After section 160ZZRFA:
Insert:
"Subdivision F-Other adjustments".
17. Paragraph 160ZZRH(d):
Omit all of the words after "under", substitute "Subdivision C, D or
E; and".
18. Section 160ZZRH:
Add at the end:
"(2) The total of increases made under subsection (1) in relation to
the first asset is not to exceed the total of adjustments made in
relation to that asset under Subdivisions C, D and E.".
19. Application of amendments
The amendments made by this Part apply to disposals after 7.30 p.m.,
by legal time in the Australian Capital Territory, on 9 May 1995.
PART 2-OTHER AMENDMENTS RELATING TO CAPITAL GAINS TAX
20. Section 160AZA (Sub Index-Roll-overs):
After the entry for "Strata title conversion" insert:
"Trusts-change in trust deed
160ZZPJ".
21. After subsection 160B(1):
Insert:
"(1A) Subsections (2) and (2A) define listed personal-use asset for
the purposes of this Part.".
22. Subsection 160B(2):
Omit "$100", substitute "$500".
23. After subsection 160B(2):
Insert:
"(2A) An interest in an asset is also a listed personal-use asset if
the interest is covered by subparagraph (2)(a)(vii) and the market
value of the asset at the time when the interest is acquired is more
than $500.".
24. Subsection 160B(4):
Omit "non-listed" (wherever occurring).
25. Subsection 160Z(10):
Omit "or paragraph 99B(2)(d) or (e)", substitute ", paragraph
99B(2)(d) or (e) or section 128D".
26. Subsection 160ZA(7):
Add at the end "This subsection is subject to subsection (7A).".
27. After subsection 160ZA(7):
Insert:
"(7A) Subsection (7) does not apply in relation to a dividend that
is exempt from tax under section 23AJ to the extent that the dividend
is:
(a) debited against a share capital account; or
(b) debited against a share premium account; or
(c) debited against a reserve to the extent that it consists of
profits from the revaluation of assets of a company that have not been
disposed of by the company; or
(d) attributable, either directly or indirectly, to amounts that
were transferred from an account or reserve of the company paying the
dividend where the account or reserve is covered by one of the above
paragraphs.
An account continues to be a share premium account for the purposes of
this subsection even if, because the thing mentioned in paragraph (a)
or (b) of the definition of share premium account in subsection 6(1)
happens, it ceases to be a share premium account for other purposes of
this Act.".
28. Subsection 160ZA(8):
Omit the subsection, substitute:
"(8) For the purposes of subsection (4), if an eligible termination
payment (within the meaning of Subdivision AA of Division 2 of Part
III) is to be included in part in the assessable income of a taxpayer,
then the whole of the payment is taken to be so included.".
29. Section 160ZE:
Omit "5,000" (wherever occurring), substitute "10,000".
30. Section 160ZG:
Omit "5,000" (wherever occurring), substitute "10,000".
31. Paragraph 160ZZO(1)(d):
Omit the paragraph, substitute:
either:
(i) subsection (1AA) (disposals giving rise to capital losses)
applies to the disposal; or
the transferor and the transferee have elected that this
section is to apply in relation to the disposal;".
32. After subsection 160ZZO(1):
Insert:
"(1AA) This subsection applies to a disposal if:
(a) assuming this Part applied to the disposal, the disposal would
give rise to a capital loss; and
(b) the disposal is not covered by an election under subsection
(1AB).
"(1AB) The transferor and the transferee may make an election under
this subsection in relation to a disposal if the transferor and the
transferee intend that, before the end of the year of income of the
transferor after the year in which the disposal takes place, they will
cease to be related and that the transferor, together with related
companies of the transferor, will cease to hold 50% or more of the
shares in the transferee.
"(1AC) If a transferor and a transferee make an election under
subsection (1AB) and the transferor, together with related companies
of the transferor, does not cease to hold 50% or more of shares in the
transferee before the end of the year of income of the transferor
after the year in which the disposal occurs, no capital loss is taken
to have arisen in relation to the disposal of the asset by the
transferor.
"(1AD) No capital loss is taken to have arisen in relation to the
disposal of the asset by the transferor if:
(a) the transferor and transferee make an election under subsection
(1AB); and
(b) at any time in the 4 year period after the disposal of the
asset, the asset is held by the transferor or a company that is
related to the transferor or a company where, at that time, the
transferor, together with other companies related to the transferor,
holds 50% or more of the shares in the company.
Paragraph (b) does not apply in relation to the asset being held by
the transferee in the period between the time when the asset is
disposed of by the transferor and the time when the transferor,
together with related companies of the transferor, ceases to hold 50%
or more of the shares in the transferee.".
33. After subsection 160ZZO(2D):
Insert:
"(3) An election under this section must be made in writing on or
before the date of lodgment of the transferor's return for the year of
income in which the disposal took place. The Commissioner may allow
the election to be made at a later time.
"(4) If:
(a) subsection (1AA) applies to a disposal (the first disposal) of
an asset; and
(b) the asset is an interest in a CFC or a FIF; and
(c) the consideration in respect of the first disposal is reduced
under section 461 or 613;
then:
(d) for the purpose of determining if a capital gain arises in
respect of the subsequent disposal of the asset by the transferee, the
indexed cost base of the asset to the transferee is to be increased,
at the time of the subsequent disposal, by so much of the attribution
surplus as was taken into account under paragraph 461(1)(c) or
613(1)(c) in relation to the first disposal; and
(e) for the purpose of determining if a capital loss arises in
respect of the subsequent disposal of the asset by the transferee, the
reduced cost base of the asset to the transferee is to be increased,
at the time of the subsequent disposal, by so much of the attribution
surplus as was taken into account under paragraph 461(1)(c) or
613(1)(c) in relation to the first disposal.
"(5) In subsection (4):
attribution surplus means an attribution surplus under Part X or Part
XI.
CFC has the same meaning as in Part X.
FIF has the same meaning as in Part XI.".
34. Subsection 160ZZO(9A):
After "paragraph (1)(bb)" insert "or subsection (1AC) or (1AD)".
35. Before section 160ZZQ:
Insert in Division 17:
Changes in trust deeds
When section applies
"160ZZPJ.(1) This section applies to an asset that is disposed of as
a result of the trust deed of a trust (the first trust) being amended
or replaced where:
(a) immediately before the disposal the asset is held by the first
trust; and
(b) immediately after the disposal the asset is held by a trust (the
second trust) (which may or may not be the first trust); and
(c) the assets held by, and the members of, the first trust
immediately before the disposal are identical to the assets held by,
and the members of, the second trust immediately after the disposal;
and
(d) either:
(i) the first trust is a complying ADF or a complying
superannuation fund and the deed was amended or replaced to comply
with the Superannuation Industry (Supervision) Act 1993; or
the first trust is a complying ADF and the deed was amended
or replaced so that it became a complying superannuation fund.
Part does not apply to disposal
"(2) This Part (other than this section) does not apply in respect
of the disposal of the asset.
Asset last acquired before 20 September 1985
"(3) If the day (the last acquisition day) on which the last
acquisition of the asset by the first trust before the disposal
occurred was before 20 September 1985, the acquisition of the asset by
the second trust is taken to have occurred before that day.
Asset last acquired on or after 20 September 1985
"(4) Subsections (5) to (8) apply if the last acquisition day was on
or after 20 September 1985.
Trust to have acquired asset
"(5) The second trust is taken to have acquired the asset at the
time of the disposal.
Calculating future capital gains
"(6) For the purpose of ascertaining if a capital gain accrued to
the second trust in the event of a subsequent disposal of the asset by
the second trust, the second trust is taken to have paid, as
consideration for the acquisition of the asset, the amount that would
have been the indexed cost base to the first trust of the asset for
the purposes of this Part if this Part had applied to the disposal of
the asset by the first trust.
Calculating future capital losses
"(7) For the purpose of ascertaining if the second trust incurred a
capital loss in the event of a subsequent disposal of the asset by the
second trust, the second trust is taken to have paid, as consideration
for the acquisition of the asset, the amount that would have been the
reduced cost base to the first trust of the asset for the purposes of
this Part if this Part had applied to the disposal of the asset by the
first trust.
Disposals within 12 months
"(8) If the asset is disposed of by the second trust within 12
months after the last acquisition day, the reference in subsection (6)
to the indexed cost base to the second trust of the asset is to be
read as a reference to the cost base to the second trust of the asset.
Interpretation
"(9) In this section, complying ADF and complying superannuation
fund have the same meaning as in subsection 267(1).".
36. Application of amendments to sections 160B, 160ZE and 160ZG
(1) The amendments made by items 22, 29 and 30 apply to disposals of
assets on or after 1 July 1995.
(2) The amendment made by item 23 applies to interests acquired after
the commencement of this item.
(3) The amendment made by item 24 applies to articles acquired after
the commencement of this item.
37. Application of amendment to subsection 160Z(10)
(1) Subject to subitem (2), the amendments made by item 25 apply to
disposals of assets after 7.30 p.m. on 9 May 1995.
(2) The amendments made by item 25 and subitem (1) of this item are
to be disregarded in determining the application of Part IIIA of the
Income Tax Assessment Act 1936 in relation to disposals of assets at
or before 7.30 p.m. on 9 May 1995.
(3) A reference in this item to 7.30 p.m. is a reference to 7.30
p.m. by legal time in the Australian Capital Territory.
38. Application of amendments to section 160ZA
The amendments made by items 26, 27, 33 and 28 apply to disposals
occurring after 7.30 p.m., by legal time in the Australian Capital
Territory, on 9 May 1995.
39. Application of amendments to section 160ZZO
The amendments made by items 31, 32 and 34 apply to disposals
occurring after 7.30 p.m., by legal time in the Australian Capital
Territory, on 9 May 1995.
40. Application of new section 160ZZPJ
The amendments made by items 20 and 35 apply to disposals of assets
occurring on or after 12 January 1994.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995 - SCHEDULE 2
Section 3
AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 RELATING TO
DIVIDEND IMPUTATION
1. Paragraph 46M(3)(b):
Omit "paragraph 160AQF(1)(c) or (1AA)(c)", substitute "paragraph
160AQF(1)(c), (1AA)(c) or (1AAA)(c)".
2. Subparagraph 46M(4)(a)(ii):
Omit "paragraph 160AQF(1)(c) or (1AA)(c)", substitute "paragraph
160AQF(1)(c), (1AA)(c) or (1AAA)(c)".
3. Section 160APA (after paragraph (ba) of the definition of
applicable general company tax rate):
Insert:
"(baa) in relation to the liability of a company to pay class C
franking deficit tax or a class C deficit deferral tax-36%;".
tax
rate):
Add at the end:
"or (cb) in relation to:
(i) the payment of a class C franked dividend to a shareholder in
a company; or
a trust amount or partnership amount that relates, directly
or indirectly, to the payment of a class C franked dividend to a
shareholder in a company;
36%.".
5. Section 160APA (definition of deficit deferral amount):
Omit all the words after "(see subsection 160AQJA(2))", substitute ",
a class B deficit deferral amount (see subsection 160AQJB(2)) or a
class C deficit deferral amount (see subsection 160AQJC(2)).".
6. Section 160APA (definition of deficit deferral tax):
Omit "or class B deficit deferral tax;", substitute ", class B deficit
deferral tax or class C deficit deferral tax.".
7. Section 160APA (definition of estimated debit):
Omit "or an estimated class B debit;", substitute ", an estimated
class B debit or an estimated class C debit.".
8. Section 160APA (definition of estimated debit determination):
Omit "or an estimated class B debit determination;", substitute ", an
estimated class B debit determination or an estimated class C debit
determination.".
9. Section 160APA (definition of franking account assessment):
Omit "or a class B franking account assessment;", substitute ", a
class B franking account assessment or a class C franking account
assessment.".
10. Section 160APA (definition of franking credit):
Omit "or a class B franking credit;", substitute ", a class B franking
credit or a class C franking credit.".
11. Section 160APA (definition of franking debit):
Omit "or a class B franking debit;", substitute ", a class B franking
debit or a class C franking debit.".
12. Section 160APA (definition of franking deficit tax):
Omit "or class B franking deficit tax;", substitute ", class B
franking deficit tax or class C franking deficit tax.".
13. Section 160APA (definition of franking percentage):
Omit the definition, substitute:
"franking percentage means:
(a) in relation to a franked dividend-the sum of:
(i) the class A franking percentage of the dividend; and
the class B franking percentage of the dividend; and
the class C franking percentage of the dividend; or
(b) in relation to an unfranked dividend-0%.".
14. Section 160APA:
Insert the following definitions:
"class C deficit deferral tax means tax payable in accordance with
section 160AQJC.
class C flow-on franking amount means an amount that would be a flow-on
franking amount if:
(a) a reference in the definition of flow-on franking amount to a
franked dividend were, by express provision, confined to a class C
franked dividend; and
(b) a reference in that definition to the flow-on franking amount
were, by express provision, confined to a class C flow-on franking
amount.
class C franked amount, in relation to a dividend, means so much of
the dividend as has been franked in accordance with subsection
160AQF(1AAA).
class C franked dividend means a dividend the whole or a part of which
has been franked in accordance with subsection 160AQF(1AAA).
class C franking account assessment means the ascertainment of the
class C franking account balance and of any class C franking deficit
tax payable.
class C franking account balance, in relation to a company, means:
(a) if the company has a class C franking surplus-the amount of that
surplus; or
(b) if the company has a class C franking deficit-the amount of that
deficit; or
(c) in any other case-nil.
class C franking deficit means a deficit calculated under subsection
160APJ(4).
class C franking deficit tax means tax payable in accordance with
subsection 160AQJ(1B).
class C franking percentage means:
(a) in relation to a class C franked dividend-the percentage
specified in the declaration made under subsection 160AQF(1AAA) in
relation to the dividend; or
(b) in relation to a dividend (including a dividend that is not a
frankable dividend) no part of which has been franked in accordance
with subsection 160AQF(1AAA)-0%.
class C franking surplus means a surplus calculated under subsection
160APJ(1B).
class C potential rebate amount means an amount that would be a
potential rebate amount if:
(a) each reference in the definition of potential rebate amount to a
franked dividend were, by express provision, confined to a class C
franked dividend; and
(b) each reference in that definition to a flow-on franking amount
were, by express provision, confined to a class C flow-on franking
amount; and
(c) each reference in that definition to a potential rebate amount
were, by express provision, confined to a class C potential rebate
amount.
class C conversion time has the meaning given by section 160ASF.
estimated class C debit means an estimated class C debit specified in
an estimated class C debit determination.
estimated class C debit determination means a determination made by
the Commissioner under subsection 160AQDAA(1).".
15. After section 160APA:
Insert:
Reduction of adjusted amount
"160APAAA.(1) In working out the adjusted amount of an amount (the
basic amount), the basic amount is reduced by any reduction amount
that arises in relation to the basic amount.
"(2) The reduction amount in relation to a basic amount that is
attributable to a payment of tax is the whole, or any part, of the
payment that arises as a result of the application or operation of:
(a) subsection 136AD(1), (2) or (3) or 136AE(1), (2) or (3); or
(b) paragraph 1 or 2 of Article 9 of the Vietnamese agreement or a
provision of any other double taxation agreement that corresponds to
either of those paragraphs.
"(3) The reduction amount in relation to a basic amount that is
attributable to:
(a) an amount received as a refund of a payment of tax; or
(b) an amount credited under paragraph 221AZM(1)(a) or (c) against a
liability of the company; or
(c) an amount applied by the Commissioner against a liability of the
company; or
(d) a reduction mentioned in section 160APZ;
is the whole, or any part, of the amount or reduction that is
attributable to a payment, or a part of a payment, of tax in relation
to which subsection (2) gave rise to a reduction amount.
"(4) In this section:
double taxation agreement means an agreement within the meaning of the
International Tax Agreements Act 1953.
the Vietnamese agreement has the same meaning as in the International
Tax Agreements Act 1953.".
16. After section 160APB:
Insert:
References to franking year
"160APBA. A reference in this Part to a franking year preceded by a
figure referring to 2 years (for example 1995-96 franking year) is a
reference to the franking year of the company:
(a) if the franking year of the company is covered by paragraph (a)
or (b) of the definition of franking year-that begins on or after 1
January in the first year referred to in the figure but before 1
January in the second year referred to in that figure; or
(b) if the franking year of the company is covered by paragraph (c)
of that definition-that begins on 1 July of the first year referred to
in the figure.".
17. After subsection 160APJ(1A):
Insert:
"(1B) The class C franking surplus of a company at a particular time
in a franking year is the amount by which the total of the class C
franking credits of the company arising in the franking year and
before that time exceeds the total of the class C franking debits of
the company arising in the franking year and before that time.".
18. Section 160APJ:
Add at the end:
"(4) The class C franking deficit of a company at a particular time
in a franking year is the amount by which the total of the class C
franking debits of the company arising in the franking year and before
that time exceeds the total of the class C franking credits of the
company arising in the franking year and before that time.".
19. Section 160APL:
Add at the end:
"(3) If a company has a class C franking surplus at the end of a
franking year, there arises at the beginning of the next franking year
a class C franking credit of the company equal to that class C
franking surplus.".
20. Section 160APM:
Repeal the section, substitute:
Payment of company tax instalment
"160APM. If, on a particular day, a company tax instalment payable
under section 221AZK is paid in respect of a year of income, there
arises on that day whichever of the following is applicable:
(a) if the year of income is the 1994-95 year of income-a class B
franking credit of the company equal to the adjusted amount in
relation to the amount paid;
(b) if the year of income is the 1995-96 year of income or a later
year of income-a class C franking credit of the company equal to the
adjusted amount in relation to the amount paid.".
21. Section 160APMAA:
Repeal the section, substitute:
Payment of additional amount on upwards estimate
"160APMAA. If, on a particular day, an amount payable under
subsection 221AZR(1) is paid in respect of a year of income, there
arises on that day whichever of the following is applicable:
(a) if the year of income is the 1994-95 year of income-a class B
franking credit of the company equal to the adjusted amount in
relation to the amount paid;
(b) if the year of income is the 1995-96 year of income or a later
year of income-a class C franking credit of the company equal to the
adjusted amount in relation to the amount paid.".
22. Section 160APMAB:
Add at the end:
"(3) If a company receives a refund in relation to which a class C
deficit deferral amount arises (see subsection 160AQJC(2)) on a
particular day, a class C franking credit of the company equal to the
adjusted amount in relation to the class C deficit deferral tax
payable in relation to the refund (see subsection 160AQJC(3)) arises
on that day.".
23. Paragraph 160APMD(d):
Omit "a later year of income", substitute "the 1994-95 year of
income".
24. Section 160APMD:
Add at the end:
"; (e) if the year of income is the 1995-96 year of income
or a later year of income-a class C franking credit of the company
equal to the adjusted amount in relation to the amount of that
payment.".
25. After subsection 160APP(1A):
Insert:
"(1B) Subject to this section, if:
(a) on a particular day, a class C franked dividend is paid to a
shareholder being a company; and
(b) the company is a resident at the time the dividend is paid;
there arises on that day a class C franking credit of the company
equal to the class C franked amount of the dividend.".
26. Subsection 160APP(3):
Omit "subsection (1) or (1A)", substitute "subsection (1), (1A) or
(1B)".
27. Subsection 160APP(3) (definition of FC):
Omit "subsections (1) and (1A)", substitute "subsections (1), (1A) and
(1B)".
28. Subsection 160APP(5):
Omit "subsection (1) or (1A)", substitute "subsection (1), (1A) or
(1B)".
29. After subsection 160APQ(1A):
Insert:
"(2) Subject to this section, if:
(a) a trust amount or partnership amount is included in, or a
partnership amount is allowed as a deduction from, the assessable
income of a company; and
(b) there is a class C flow-on franking amount in relation to the
trust amount or the partnership amount;
there arises, at the end of the year of income of the trustee or
partnership to which the trust amount or partnership amount relates, a
class C franking credit of the company equal to the amount worked out
using the formula:
x 1-Company tax rate
Company tax rate
where:
Potential rebate amount means the class C potential rebate amount in
relation to the trust amount or partnership amount.
Company tax rate means the applicable general company tax rate.".
30. Subsection 160APQ(3):
Omit "subsection (1) or (1A)", substitute "subsection (1), (1A) or
(2)".
31. Paragraph 160APQA(d):
Omit "a later year of income", substitute "the 1994-95 year of
income".
32. Section 160APQA:
Add at the end:
"; (e) if the offset relates to company tax for the
1995-96 year of income or a later year of income-a class C franking
credit of the company equal to the adjusted amount in relation to the
amount of the payment.".
33. Paragraph 160APQB(d):
Omit "a later year of income", substitute "the 1994-95 year of
income".
34. Section 160APQB:
Add at the end:
"; (e) if the year of income is the 1995-96 year of income or a
later year of income-a class C franking credit of the company equal to
the adjusted amount in relation to the amount of that payment.".
35. Section 160APU:
Add at the end:
"(3) On the day on which the termination time in relation to an
estimated class C debit of a company occurs, there arises a class C
franking credit of the company equal to the estimated class C debit.".
36. Section 160APV:
Add at the end:
"(3) If, on a particular day, the Commissioner serves on a company a
notice of an estimated class C debit determination that is in
substitution for an earlier determination, there arises on that day a
class C franking credit of the company equal to the amount of the
class C franking debit that arose because of the earlier
determination.".
37. After subsection 160APVA(1):
Insert:
"(1A) If:
(a) on a particular day, a class C franking debit of a life
assurance company arises under section 160APY in relation to a refund
received by the company in respect of an instalment for a year of
income (the current year of income); and
(b) a notice of an original company tax assessment for the current
year of income has not been served, or been taken to have been served,
on the company on or before that day;
then a class C franking credit of the company worked out under
subsection (2) of this section arises on that day.".
38. After subsection 160APVA(3):
Insert:
"(3A) If:
(a) on a particular day a class C franking debit of a life assurance
company arises:
(i) under section 160APY in relation to a refund received by the
company in respect of an instalment for a year of income (the current
year of income); or
under section 160APYA in relation to a refund received by
the company, or an amount credited against a liability of the company,
in respect of an instalment for a year of income (also the current
year of income); and
(b) either:
(i) before that day, a notice of an original company tax
assessment for the current year of income has been served, or is taken
to have been served, on the company; or
on or after that day, a notice of an original company tax
assessment for the current year of income is served, or taken to be
served, on the company;
then a class C franking credit of the company worked out under
subsection (4) of this section arises on the later of the particular
day and the day on which the notice is served or taken to be served.".
39. Section 160APVB:
Add at the end:
"(2) If:
(a) on a particular day, a class C franking debit of a life
assurance company arises under subsection 160AQCCA(1A) in relation to:
(i) an instalment that the company is required to pay under
section 221AZK in respect of a year of income (the current year of
income); or
an amount that the company is required to pay under
subsection 221AZR(1) in respect of a year of income (also the current
year of income); and
(b) on or after that day, a notice of an original company tax
assessment for the current year of income is served, or taken to be
served, on the company;
then a class C franking credit of the company equal to the amount of
the class C franking debit arises on the day on which the notice is
served, or taken to be served.".
The heading to section 160APVB is altered by inserting "or
160AQCCA(1A)" after "subsection 160AQCCA(1)".
40. Paragraph 160APVBA(1)(b):
Omit "a later year of income", substitute "the 1994-95 year of
income".
41. Subsection 160APVBA(1):
Add at the end:
"; (c) if the year of income is the 1995-96 year of income
or a later year of income-a class C franking credit of the company
worked out under subsection (2) of this section.".
42. Subsection 160APVBA(2) (paragraph (b) of the definition of
Statutory factor):
After "class B franking credit" insert "or a class C franking credit".
43. Paragraph 160APVBB(1)(b):
Omit "a later year of income", substitute "the 1994-95 year of
income".
44. Subsection 160APVBB(1):
Add at the end:
"; (c) if the year of income is the 1995-96 year of income or a
later year of income-a class C franking credit of the company worked
out under subsection (2) of this section.".
45. Subsection 160APVBB(2) (paragraph (b) of the definition of
Statutory factor):
After "class B franking credit" insert "or a class C franking credit".
46. Section 160APVD:
Add at the end:
"(3) If, on a particular day, a class C franking debit of a life
assurance company arises under section 160APZ in relation to a
reduction in the company tax of the company for a year of income,
there arises on that day a class C franking credit of the company
equal to the adjusted amount in relation to the amount worked out
using the formula:
x Overall reduction - Non-fund component
of reduction
where:
Statutory factor means 1.0.
Overall reduction means the amount of the reduction.
Non-fund component of reduction means so much of the amount of the
reduction as is attributable to the non-fund component.".
47. Paragraph 160APVH(3)(a):
After "of that subsection" insert ", or under subsection 160AQCN(2AA)
because of paragraph (a) of that subsection,".
48. Section 160APVH:
Add at the end:
"(4) If, on a particular day, a class C franking debit of a life
assurance company arises under any of the following provisions:
(a) subsection 160AQCCA(1A);
(b) subsection 160AQCCA(3A);
(c) section 160AQCK;
(d) section 160AQCL;
there arises on that day a class A franking credit of the company
equal to the amount that would have been the amount of that class C
franking debit if the assumptions set out in subsection (5) were made.
"(5) The assumptions are as follows:
(a) the assumption that the class C franking debit had been
calculated using a statutory factor of 0.2 instead of 1.0;
(b) the assumption that the class C franking debit had been
calculated by reference to the special life company tax rate for the
year of tax concerned instead of by reference to the general company
tax rate for the year of tax concerned.".
49. After subsection 160APX(1A):
Insert:
"(1B) If:
(a) the class C required franking amount for a frankable dividend
paid by a company on a particular day is not less than 10% of the
amount of the dividend; and
(b) that class C required franking amount exceeds the class C
franked amount of the dividend;
there arises on that day a class C franking debit of the company equal
to the excess referred to in paragraph (b).".
50. Section 160APY:
Repeal the section, substitute:
Refunds of company tax instalment
"160APY. If a company receives an amount as a refund under
subsection 221AZL(2) or 221AZQ(1):
(a) if the refund is in respect of the 1994-95 year of income-a
class B franking debit of the company equal to the adjusted amount in
relation to the amount received arises on the day on which the company
receives the amount; or
(b) if the refund is in respect of the 1995-96 year of income or a
later year of income-a class C franking debit of the company equal to
the adjusted amount in relation to the amount received arises on the
day on which the company receives the amount.".
51. Section 160APYA:
Repeal the section, substitute:
Refunds of company tax
"160APYA. If:
(a) a company makes a payment covered by section 160APM or 160APMAA
in respect of a year of income; and
(b) either:
(i) the company receives an amount as a refund of that payment
(not being a refund covered by section 160APY); or
the Commissioner credits the payment under paragraph
221AZM(1)(b) or (c) against a liability of the company; and
(c) the amount refunded or credited, as the case may be, is not
attributable to a reduction of company tax covered by section 160APZ;
then:
(d) if the payment is in respect of the 1994-95 year of income-a
class B franking debit of the company equal to the adjusted amount in
relation to the amount received or credited arises on the day on which
the company receives the refund or on the day on which that payment is
credited; or
(e) if the payment is in respect of the 1995-96 year of income or a
later year of income-a class C franking debit of the company equal to
the adjusted amount in relation to the amount received or credited
arises on the day on which the company receives the refund or on the
day on which that payment is credited.".
52. Paragraph 160APYBA(e):
Omit "a later year of income", substitute "the 1994-95 year of
income".
53. Section 160APYBA:
Add at the end:
"; (f) if the payment mentioned in paragraph (a) is in respect
of the 1995-96 year of income or a later year of income-a class C
franking debit of the company equal to the adjusted amount in relation
to the amount received or applied, as the case requires.".
54. Paragraph 160APYBB(d):
Omit "a later year of income", substitute "the 1994-95 year of
income".
55. Section 160APYBB:
Add at the end:
"; (e) if the foreign tax credit was allowable in respect of tax
paid or payable by the company in respect of income derived in the
1995-96 year of income or a later year of income-the class C franking
debit of the company equal to the adjusted amount in relation to the
amount paid or applied, as the case requires.".
56. Paragraph 160APZ(d):
Omit "a later year of income", substitute "the 1994-95 year of
income".
57. Section 160APZ:
Add at the end:
"; (e) if the year of income is the 1995-96 year of income or a
later year of income-a class C franking debit of the company equal to
the adjusted amount in relation to the amount of the reduction.".
58. Section 160AQB:
Add at the end:
"(3) If, on a particular day, a company pays a class C franked
dividend, there arises on that day a class C franking debit of the
company equal to the class C franked amount of the dividend.".
59. Section 160AQC:
Add at the end:
"(3) If, on a particular day, the Commissioner serves on a company
notice of an estimated class C debit determination, there arises on
that day a class C franking debit of the company equal to the
estimated class C debit specified in the notice.".
60. Section 160AQCA:
Add at the end:
"(3) If:
(a) a class C franking credit of a life assurance company arose
under section 160APP or 160APQ at a particular time during a year of
income of the company; and
(b) after that time and during the year of income:
(i) if section 160APP applied-the asset of the company from which
the dividend referred to in subsection (1B) of that section was
derived; or
if section 160APQ applied-the asset of the company to which
the trust amount or partnership amount referred to in subsection (2)
of that section is attributable;
becomes part of the insurance funds of the company;
there arises, on the day on which the asset becomes part of the
insurance funds, a class C franking debit of the company equal to the
class C franking credit.".
61. Subsection 160AQCB(1):
Add at the end:
"; and (e) a class C franking debit of the debit company equal to
the amount worked out using the following formula, as reduced by the
amount (if any) of the class C franking debit of the company arising
under section 160AQB in respect of the payment of the scheme dividend:
x Substituted class C franking percentage
where:
Scheme dividend means the amount of the scheme dividend.
Substituted class C franking percentage means the actual or proposed
class C franking percentage, or the greatest actual or proposed class
C franking percentage, of the substituted dividends.".
62. Subsection 160AQCB(2):
Add at the end:
"; and (e) a class C franking debit of the debit company equal to
the actual or proposed class C franked amount, or the sum of the
actual or proposed class C franked amounts, of the substituted
dividends.".
63. Subsection 160AQCB(3):
Add at the end:
"; and (e) a class C franking debit of the debit company equal to
the amount worked out using the formula:
x Substituted class C franking percentage
where:
Linked dividend means the amount of the linked dividend.
Substituted class C franking percentage means the actual or proposed
class C franking percentage, or the greatest actual or proposed class
C franking percentage, of the substituted dividends.".
64. Paragraph 160AQCB(4)(a):
Omit "on a particular day after 30 June 1990, a company (in this
subsection called the "debit company") pays", substitute "a company
(the debit company) pays, on a particular day after 30 June 1990 and
before the day on which the class C conversion time of the company
occurs,".
65. After subsection 160AQCB(4):
Insert:
"(4A) If:
(a) a company (the debit company) pays, on a particular day on or
after the day on which the class C conversion time of the company
occurs, one or more franked dividends (the scheme dividends) to one or
more shareholders in the debit company; and
(b) the scheme dividends were paid:
(i) under a dividend streaming arrangement in relation to the
debit company; and
in substitution, in whole or in part, for the payment, or
proposed payment, by another company of one or more unfranked
dividends (the substituted dividends) to one or more shareholders in
that other company;
there arises on that day a class C franking debit of the debit company
equal to the sum of the following amounts:
(c) to the extent that the substituted dividends comprise the whole
or a part of a common issue of shares covered by paragraph (c) of the
definition of dividend in subsection 6(1)-the sum of the actual or
proposed amounts of the dividends to which that common issue relates;
(d) to the extent that the substituted dividends:
(i) do not consist of shares issued by the other company; and
comprise the whole or a part of a common series of
distributions covered by paragraph (a) of the definition of dividend
in subsection 6(1);
the sum of the actual or proposed amounts of the dividends to which
those distributions relate;
(e) to the extent that paragraph (d) of this subsection does not
apply and the substituted dividends comprise the whole or a part of a
common series of credits covered by paragraph (b) of the definition of
dividend in subsection 6(1)-the sum of the actual or proposed amounts
of the dividends to which those credits relate.".
66. Subsection 160AQCC(4):
Omit "subsection 160AQDB(2)", substitute "subsection 160AQDB(2) or
160AQDB(3)".
67. Section 160AQCC:
Add at the end:
"(5) There arises on the day of an on-market purchase by a company
of a share a class C franking debit of the company equal to the amount
calculated under subsection (6).
"(6) The amount is the amount that would be calculated under
subsection 160AQDB(4) or 160AQDB(5) (whichever is applicable) as the
class C required franking amount for a dividend paid on that day to a
shareholder in the company if that and any other on-market purchase by
the company had been an off-market purchase.".
68. After subsection 160AQCCA(1):
Insert:
"(1A) If:
(a) on a particular day, a class C franking credit of a life
assurance company arises:
(i) under section 160APM in relation to an instalment that the
company is required to pay under section 221AZK in respect of a year
of income (the current year of income); or
under section 160APMAA in relation to an amount that the
company is required to pay under subsection 221AZR(1) in respect of a
year of income (also the current year of income); and
(b) a notice of an original company tax assessment for the current
year of income has not been served, or been taken to have been served,
on the company on or before that day;
then a class C franking debit of the company worked out under
subsection (2) of this section arises on that day.".
69. After subsection 160AQCCA(3):
Insert:
"(3A) If:
(a) on a particular day, a class C franking credit of a life
assurance company arises under:
(i) section 160APM in relation to an instalment that the company
is required to pay under section 221AZK in respect of a year of income
(the current year of income); or
under section 160APMAA in relation to an amount that the
company is required to pay under subsection 221AZR(1) in respect of a
year of income (also the current year of income); and
(b) either:
(i) before that day, a notice of an original company tax
assessment for the current year of income has been served, or is taken
to have been served, on the company; or
on or after that day, a notice of an original company tax
assessment for the current year of income is served, or taken to be
served, on the company;
then a class C franking debit of the company worked out under
subsection (4) of this section arises on the later of the particular
day and the day on which the notice is served or taken to be served.".
70. Section 160AQCCB:
Add at the end:
"(2) If:
(a) on a particular day, a class C franking credit of a life
assurance company arises under subsection 160APVA(1A) in relation to a
refund received by the company in respect of an instalment for a year
of income (the current year of income); and
(b) on or after that day, a notice of an original company tax
assessment for the current year of income is served, or taken to be
served, on the company;
then a class C franking debit of the company equal to the amount of
the class C franking credit arises on the day on which the notice is
served, or taken to be served.".
The heading to section 160AQCCB is altered by inserting "or
160APVA(1A)" after "subsection 160APVA(1)".
71. Paragraph 160AQCK(1)(b):
Omit "a later year of income", substitute "the 1994-95 year of
income".
72. Subsection 160AQCK(1):
Add at the end:
"; (c) if the year of income is the 1995-96 year of income or a
later year of income-a class C franking debit of the company worked
out under subsection (2) of this section.".
73. Subsection 160AQCK(2) (paragraph (b) of the definition of
Statutory factor):
After "class B franking debit" insert "or a class C franking debit".
74. Paragraph 160AQCL(1)(b):
Omit "a later year of income", substitute "the 1994-95 year of
income".
75. Subsection 160AQCL(1):
Add at the end:
"; (c) if the year of income is the 1995-96 year of income or a
later year of income-a class C franking debit of the company worked
out under subsection (2) of this section.".
76. Subsection 160AQCL(2) (paragraph (b) of the definition of
Statutory factor):
After "class B franking debit" insert "or a class C franking debit".
77. After subsection 160AQCN(2):
Insert:
Life assurance companies-statutory fund component
"(2AA) If, on a particular day, a class C franking credit of a
company arises under any of the following provisions:
(a) subsection 160APVA(1A);
(b) subsection 160APVA(3A);
(c) section 160APVBA;
(d) section 160APVBB;
(e) subsection 160APVD(3);
there arises on that day a class A franking debit of the company equal
to the amount that would have been the amount of that class C franking
credit if the assumptions set out in subsection (2AB) were made.
"(2AB) The assumptions are as follows:
(a) the assumption that the class C franking credit had been
calculated using a statutory factor of 0.2 instead of 1.0;
(b) the assumption that the class C franking credit had been
calculated by reference to the special life company tax rate for the
year of tax concerned instead of by reference to the general company
tax rate for the year of tax concerned.".
78. Paragraph 160AQCN(2A)(a):
After "of that subsection" insert ", or under subsection 160APVH(4)
because of paragraph (a) of that subsection,".
79. After section 160AQDA:
Insert:
Determination of estimated class C debit
"160AQDAA.(1) If a company:
(a) has taken liability reduction action; or
(b) has paid a company tax instalment;
the company may lodge an application with the Commissioner for:
(c) the determination of an estimated class C debit in relation to
the liability reduction action or the company tax instalment; or
(d) the determination of such an estimated class C debit in
substitution for an earlier determination.
"(2) An estimated class C debit in relation to a company tax
instalment must relate to the refund of that instalment under section
221AZL or 221AZQ.
"(3) The application must:
(a) be made before the termination time; and
(b) be in the approved form; and
(c) specify the amount of the estimated class C debit applied for.
"(4) The Commissioner:
(a) may determine an estimated class C debit not greater than the
amount specified in the application; and
(b) must serve notice of any such determination on the company.
"(5) If:
(a) a company lodges an application with the Commissioner on a
particular day (the application day); and
(b) at the end of the 21st day after the application day, the
Commissioner has neither:
(i) served notice of an estimated class C debit determination on
the company; nor
refused to make an estimated class C debit determination;
the Commissioner is taken, on the 22nd day after the application day,
to have:
(c) determined an estimated class C debit in accordance with the
application; and
(d) served notice of the determination on the company.
"(6) A notice of an estimated class C debit determination has no
effect if it is served after the termination time.".
80. Subsection 160AQDB(2):
After "For the purposes of this Part," insert "if the beginning of the
reckoning day is before the company's class C conversion time,".
81. Subsection 160AQDB(2):
Omit "a company", substitute "the company".
82. Section 160AQDB:
Add at the end:
"(3) For the purposes of this Part, if the beginning of the
reckoning day is after the company's class C conversion time, the
class B required franking amount for a dividend paid to a shareholder
in the company is nil.
"(4) For the purposes of this Part, if the beginning of the
reckoning day is after the company's class C conversion time, the
class C required franking amount for a dividend paid to a shareholder
in the company is worked out using the formula:
- Class A required franking amount
where:
Gross required franking amount means the required franking amount for
the dividend.
Class A required franking amount means the class A required franking
amount for the dividend.
"(5) For the purposes of this Part, if the beginning of the
reckoning day is before the company's class C conversion time, the
class C required franking amount for a dividend paid to a shareholder
in the company is nil.".
83. Subsection 160AQE(2) (sub-subparagraph (a)(i)(A) of the
definition of SD):
Omit "subsection 160ACQB(4) (which deals", substitute "subsection
160AQCB(4) or (4A) (which deal".
84. Subsection 160AQE(6):
Add at the end:
"; and (c) the class C franking surplus (if any) of the company as
at that time.".
85. After subsection 160AQF(1AA):
Insert:
"(1AAA) If:
(a) a frankable dividend (the current dividend) is paid to a
shareholder in a company; and
(b) the company is a resident at the time of payment; and
(c) if the current dividend is paid under a resolution:
(i) before the reckoning day for the current dividend, the company
makes a declaration that each dividend to which the resolution relates
is a class C franked dividend to the extent of a percentage (not
exceeding 100%) specified in the declaration in relation to the
dividend; and
the percentage so specified is the same for each of the
dividends to which the resolution relates; and
(d) if the current dividend is not paid under a resolution-the
company makes a declaration before the reckoning day for the current
dividend that the current dividend is a class C franked dividend to
the extent of a percentage (not exceeding 100%) specified in the
declaration;
the current dividend is taken to have been class C franked to the
extent of the amount worked out using the formula:
x Specified percentage
where:
Current dividend means the amount of the current dividend.
Specified percentage means the percentage specified in the declaration
in relation to the dividend.".
86. Subsection 160AQF(1AAA):
Add at the end:
Because of subsection 46L(3) and paragraph 46L(4)(a),
paragraph (c) of this subsection does not apply to dividends that are
taken by subsection 46L(3) or paragraph 46L(4)(a) not to be frankable
dividends.".
87. After subsection 160AQF(1AB):
Insert:
"(1AC) Despite subsections (1) and (1AAA), a dividend is taken not
to have been class A franked or class C franked if the sum of:
(a) the class A franked amount of the dividend; and
(b) the class C franked amount of the dividend;
exceeds the amount of the dividend.".
88. Subparagraph 160AQH(b)(i):
Omit the subparagraph, substitute:
the class A franked amount of the dividend (if any), the
class B franked amount of the dividend (if any) and the class C
franked amount of the dividend (if any); and".
89. Subparagraph 160AQH(b)(ii):
Omit "and the class B franked amount of the dividend", substitute "(if
any), the class B franked amount of the dividend (if any) and the
class C franked amount of the dividend (if any)".
90. After subparagraph 160AQH(b)(iv):
Insert:
"(iva) if the dividend is a class C franked dividend-the amount
worked out in relation to the dividend using the formula in subsection
160AQT(1AB) (whether or not that subsection applies to the dividend);
and".
91. Subparagraph 160AQH(b)(v):
Omit "subparagraphs (iii) and (iv)", substitute "subparagraphs (iii),
(iv) and (iva)".
92. After subsection 160AQJ(1A):
Insert:
"(1B) If a company has a class C franking deficit at the end of a
franking year, the company is liable to pay tax equal to the amount
worked out using the formula:
x Company tax rate
1-Company tax rate
where:
Franking deficit means the amount of the class C franking deficit.
Company tax rate means the applicable general company tax rate.".
93. Paragraph 160AQJB(1)(a):
Omit "a year of income", substitute "the 1994-95 year of income".
94. After section 160AQJB:
Insert in Subdivision BA of Division 5 of Part IIIAA:
Class C deficit deferral tax
"160AQJC.(1) If:
(a) during a franking year (the first franking year) a company pays
one or more instalments under section 221AZK for the 1995-96 year of
income or a later year of income; and
(b) at a particular time during the next franking year (the second
franking year) the company receives a refund of the whole or a part of
the instalment, or one or more of the instalments, under section
221AZL or 221AZQ; and
(c) assuming that the refund, together with any previous refund of
one or more instalments for the year of income, had been received by
the company on the last day of the first franking year, the company
would have had a class C franking deficit, or an increased class C
franking deficit, at the end of the first franking year;
a class C deficit deferral amount (defined in subsection (2)) arises
in relation to the company and the refund.
"(2) The class C deficit deferral amount is the amount of the class
C franking deficit, or the amount of the increase in the class C
franking deficit, referred to in paragraph (1)(c).
"(3) If a class C deficit deferral amount arises in relation to a
company and a refund, the company is liable to pay class C deficit
deferral tax in relation to the refund. The amount of the tax is the
gross class C deficit deferral amount (see subsection (4)) reduced by
any class C deficit deferral tax already payable by the company in
relation to refunds received in the second franking year.
"(4) The gross class C deficit deferral amount is worked out using
the formula:
x 36/64
"(5) If an amount is paid under subsection 221AZR(1) in the same
year as the instalment mentioned in that subsection, then, for the
purposes of this section, the amount is to be treated as being part of
the instalment.".
95. After subparagraph 160AQK(1)(a)(ii):
Insert:
"(iia) class C franking deficit tax for a franking year; or".
96. After subparagraph 160AQK(1)(a)(iv):
Insert:
"or (v) class C deficit deferral tax in relation to the refund of
one or more instalments paid during a franking year;".
97. Paragraph 160AQK(1)(c):
After "the class B franking deficit tax," insert "the class C franking
deficit tax,".
98. Paragraph 160AQK(1)(c):
Omit "and the class B deficit deferral tax", substitute ", the class B
deficit deferral tax and the class C deficit deferral tax".
99. After subsection 160AQT(1AA):
Insert:
"(1AB) If:
(a) a class C franked dividend is paid in a year of income to a
shareholder in a company; and
(b) the shareholder is:
(i) a natural person who is a resident at the time of payment of
the dividend; or
a trustee; or
a partnership; or
a registered organisation; and
(c) the dividend is not exempt income of the shareholder; and
(d) the dividend was not paid as part of a dividend stripping
operation;
the assessable income of the shareholder of the year of income
includes the amount worked out using the formula:
x Company tax rate
1-Company tax rate
where:
Franked amount means the class C franked amount of the dividend.
Company tax rate means the applicable general company tax rate.".
100. After subsection 160AQT(1B):
Insert:
"(1C) If:
(a) a class C franked dividend is paid in a year of income to a
shareholder in a company; and
(b) the shareholder is a life assurance company; and
(c) the dividend is not exempt income of the shareholder; and
(d) the dividend was not paid as part of a dividend stripping
operation; and
(e) the assets of the shareholder from which the dividend was
derived were included in insurance funds of the shareholder at any
time during the period:
(i) starting at the beginning of the year of income of the
shareholder in which the dividend was paid; and
ending at the time the dividend was paid;
the assessable income of the shareholder of the year of income
includes the amount worked out using the formula:
x Company tax rate
1-Company tax rate
where:
Franked amount means the class C franked amount of the dividend.
Company tax rate means the applicable general company tax rate.".
101. Paragraph 160AQX(c):
Omit "is either or both", substitute "are one or more".
102. Paragraph 160AQX(c):
Add at the end:
"(iii) a class C flow-on franking amount in relation to the
trust amount;".
103. After paragraph 160AQX(e):
Insert:
if only subparagraph (c)(iii) applies-the class C potential
rebate amount in relation to the trust amount;".
104. Paragraph 160AQX(f):
Omit "both".
105. Section 160AQX:
Add at the end:
"; (g) if subparagraphs (c)(i) and (iii) apply-the sum of:
(i) the class A potential rebate amount in relation to the trust
amount; and
the class C potential rebate amount in relation to the trust
amount;
(h) if subparagraphs (c)(ii) and (iii) apply-the sum of:
(i) the class B potential rebate amount in relation to the trust
amount; and
the class C potential rebate amount in relation to the trust
amount;
(i) if subparagraphs (c)(i), (ii) and (iii) apply-the sum of:
(i) the class A potential rebate amount in relation to the trust
amount; and
the class B potential rebate amount in relation to the trust
amount; and
(iii) the class C potential rebate amount in relation to the trust
amount.".
106. Paragraph 160AQY(b):
Omit "is either or both", substitute "are one or more".
107. Paragraph 160AQY(b):
Add at the end:
"(iii) a class C flow-on franking amount in relation to the trust
amount;".
108. After paragraph 160AQY(d):
Insert:
"(da) if only subparagraph (b)(iii) applies-the class C potential
rebate amount in relation to the trust amount;".
109. Paragraph 160AQY(e):
Omit "both".
110. Section 160AQY:
Add at the end:
"; (f) if subparagraphs (b)(i) and (iii) apply-the sum of:
(i) the class A potential rebate amount in relation to the trust
amount; and
the class C potential rebate amount in relation to the trust
amount;
(g) if subparagraphs (b)(ii) and (iii) apply-the sum of:
(i) the class B potential rebate amount in relation to the trust
amount; and
the class C potential rebate amount in relation to the trust
amount;
(h) if subparagraphs (b)(i), (ii) and (iii) apply-the sum of:
(i) the class A potential rebate amount in relation to the trust
amount; and
the class B potential rebate amount in relation to the trust
amount; and
(iii) the class C potential rebate amount in relation to the trust
amount.".
111. Paragraph 160AQYA(1)(c):
Omit "is either or both", substitute "are one or more".
plant first became capable of being used:
(a) for the purpose of producing assessable income; and
(b) in a business of horticulture.
Under section 124ZZL, the Commissioner may make a determination
specifying periods that taxpayers may elect to adopt as the effective
lives of horticultural plants owned by them.
Original taxpayer may elect to adopt the period specified in the
Commissioner's determination
"(2) If:
(a) there is in force a determination by the Commissioner under
section 124ZZL which specifies a period that a taxpayer may elect to
adopt as the effective life of the plant; and
(b) the original taxpayer makes a written election to adopt that
period;
the effective life of the plant is that period.
Effective life if original taxpayer does not elect to adopt the period
specified in the Commissioner's determination
"(3) If the original taxpayer does not elect to adopt the period
specified in the Commissioner's determination, the effective life of
the plant is the period, worked out as at the time when the plant
first became capable of being used:
(a) for the purpose of producing assessable income; and
(b) in a business of horticulture;
during which it would be reasonable to expect that the plant would be
capable of being used:
(c) for the purpose of producing assessable income; and
(d) in a business of horticulture.
Election is irrevocable
"(4) An election under this section is irrevocable.
of
plants
Commissioner's determination
"124ZZL.(1) The Commissioner may, by writing:
(a) make a determination specifying periods that taxpayers may elect
to adopt as the effective lives of horticultural plants owned by them;
and
(b) revoke or vary such a determination.
Period may be specified unconditionally
"(2) A period may be specified unconditionally.
Specification of period may be conditional
"(3) A period, or 2 or more different periods, may be specified in
relation to particular kinds of plants subject to one or more
specified conditions being satisfied as at the time when the plant
first became capable of being used:
(a) for the purpose of producing assessable income; and
(b) in a business of horticulture.
Determination to be available for sale to the public
"(4) A determination, or a variation or a revocation of a
determination, must be made available for sale to the public.
When determination may be retrospective
"(5) A determination, or a variation or a revocation of a
determination, may be expressed to apply in relation to a plant that
first became capable of being used:
(a) for the purpose of producing assessable income; and
(b) in a business of horticulture;
before the determination, variation or revocation, as the case may be,
was made if, and only if:
(c) in the case of a determination or a variation of a
determination-the specified period is the first period applicable to
plants of that kind; or
(d) in any case-the retrospectivity works to the advantage of
taxpayers in calculating the effective lives of plants of that kind.
"Subdivision F-Special deduction for destruction of plants
Special deduction for destruction of plants
"124ZZM.(1) This section applies if:
(a) there is an amount of establishment expenditure for a
horticultural plant; and
(b) during a year of income, the plant is destroyed; and
(c) immediately before the destruction, a taxpayer owned the plant
and used it in a business of horticulture for the purpose of producing
assessable income; and
(d) the number of years in the effective life of the plant is 3 or
more.
Effective life is defined by section 124ZZK.
Deduction if taxpayer receives an amount in respect of the destruction
"(2) If:
(a) an amount (the recoverable amount) was or is received or
receivable by the taxpayer (under a policy of insurance or otherwise)
in respect of the destruction; and
(b) the amount worked out using the formula set out in subsection
(4) exceeds the recoverable amount;
the excess is allowable as a deduction to the taxpayer for the year of
income.
Deduction if taxpayer does not receive an amount in respect of the
destruction
"(3) If no amount was or is received or receivable by the taxpayer
(under a policy of insurance or otherwise) in respect of the
destruction, the amount worked out using the formula set out in
subsection (4) is allowable as a deduction to the taxpayer for the
year of income.
Formula
"(4) The formula mentioned in subsections (2) and (3) is:
- Notional deductions
where:
Establishment expenditure means the amount of the establishment
expenditure for the plant.
Notional deductions means the deduction, or the total of the
deductions, that would have been allowable to the taxpayer under
section 124ZZG for the establishment expenditure if it were assumed
that, at all times during the period:
(a) beginning when the plant first became capable of being used:
(i) for the purpose of producing assessable income; and
in a business of horticulture; and
(b) ending when the plant was destroyed;
the taxpayer had owned the plant and had used it:
(c) for the purpose of producing assessable income; and
(d) in a business of horticulture.
"Subdivision G-No deduction if expenditure recouped
No deduction if expenditure recouped
"124ZZN.(1) This Division does not apply, and is taken never to have
applied, to expenditure incurred by an entity if:
(a) the entity, whether before or after the commencement of this
section, receives, or becomes entitled to receive, a recoupment of, or
grant in respect of, the expenditure; and
(b) the amount of the recoupment or the grant is not, and will not
be, included in the entity's assessable income of any year of income.
Dissection of amounts
"(2) For the purposes of subsection (1), if a person receives, or
becomes entitled to receive, an amount that constitutes to an
unspecified extent a recoupment of, or a grant in respect of,
expenditure, then so much of that amount as is reasonable is taken to
be a recoupment of, or grant in respect of, that expenditure, as the
case requires.
Amendment of assessments
"(3) Section 170 does not prevent the amendment of an assessment at
any time for the purpose of giving effect to this section.
"Subdivision H-Transfer of ownership of plants-transferor to
give tax information to transferee
Transfer of ownership of plants-transferor to give tax information to
transferee
"124ZZO.(1) This section applies if:
(a) the ownership of one or more horticultural plants is or was
transferred from an entity (the transferor) to another entity (the
transferee); and
(b) there is an amount of establishment expenditure for each of the
plants.
Transferee may ask transferor for tax information
"(2) The transferee may, by written notice given to the transferor,
require the transferor to give to the transferee, within the period
specified in the notice, any or all of the following information:
(a) the amount of the establishment expenditure for each of the
plants;
(b) the effective lives of each of the plants;
(c) whether the transferor made an election under section 124ZZK in
relation to any of the plants;
(d) the beginning of the maximum write-off periods for each of the
plants.
The period specified in the notice must be at least 60 days. The
notice must be given within 60 days after the transfer, or within 60
days after the commencement of this section, whichever comes last.
Transferee may only give one notice
"(3) The transferee must not give more than one notice under
subsection (2) in relation to a particular transfer.
Offence
"(4) An entity must not, without reasonable excuse, intentionally or
recklessly refuse or fail to comply with a notice under subsection
(2).
10 penalty units.
Notice to set out the effect of subsection (4)
"(5) A notice under subsection (2) must set out the effect of
subsection (4).
Application
"(6) This section applies to a transfer that occurs on or after 10
May 1995.
Section 124ZZO obligations-treatment of partnerships
Obligations
"124ZZP.(1) Section 124ZZO applies to a partnership as if the
partnership were a person, but it applies with the following changes:
(a) obligations that would be imposed on the partnership are imposed
instead on each partner, but may be discharged by any of the partners;
(b) any offence against that section that would otherwise be
committed by the partnership is taken to have been committed by each
partner who:
(i) aided, abetted, counselled or procured the relevant act or
omission; or
was in any way knowingly concerned in, or party to, the
relevant act or omission (whether directly or indirectly and whether
by any act or omission of the partner).
Giving of notices
"(2) For the purposes of section 124ZZO, if a document is given to a
partner of a partnership, the document is taken to have been given to
the partnership.
"Subdivision I-Interpretation
Owner includes lessee or licensee
Crown lease
"124ZZQ.(1) For the purposes of this Division, if:
(a) a taxpayer is the lessee of land under a Crown lease (within the
meaning of section 54AA); and
(b) a plant is affixed to the land; and
(c) the taxpayer or another entity planted the plant; and
(d) apart from this section, the taxpayer is not the owner of the
plant; and
(e) the Crown lease enables the taxpayer to carry on a business of
horticulture on the land; and
(f) if there is a holder of a lesser interest or licence in relation
to the land-the holder does not carry on a business of horticulture on
the land;
the taxpayer is taken to be the owner of the plant instead of any
other entity.
Ordinary lease
"(2) For the purposes of this Division, if:
(a) a taxpayer is the lessee of land under a lease other than a
Crown lease (within the meaning of section 54AA); and
(b) a plant is affixed to the land; and
(c) the taxpayer or another entity planted the plant; and
(d) apart from this section, the taxpayer is not the owner of the
plant; and
(e) the lease enables the taxpayer to carry on a business of
horticulture on the land; and
(f) if there is a holder of a lesser interest or licence in relation
to the land-the holder does not carry on a business of horticulture on
the land;
the taxpayer is taken to be the owner of the plant instead of any
other entity.
Licence
"(3) For the purposes of this Division, if:
(a) a taxpayer holds a licence in relation to land; and
(b) a plant is affixed to the land; and
(c) the taxpayer or another entity planted the plant; and
(d) apart from this section, the taxpayer is not the owner of the
plant; and
(e) the licence enables the taxpayer to carry on a business of
horticulture on the land;
the taxpayer is taken to be the owner of the plant instead of any
other entity.
Definition
"(4) In this section:
lease includes sublease.
Definitions
"124ZZR. In this Division:
annual write-off rate has the meaning given by section 124ZZI.
effective life has the meaning given by section 124ZZK.
entity means any of the following:
(a) a company;
(b) a partnership;
(c) a person in a capacity of trustee;
(d) any other person.
establishment expenditure has the meaning given by section 124ZZJ.
maximum write-off period has the meaning given by section 124ZZI.
owner has a meaning affected by section 124ZZQ.
plant means any live member of the plant kingdom, and includes fungi.
producing assessable income includes gaining assessable income.".
PART 2-FORESTRY
2. After subsection 36(7):
Insert:
"(7A) If:
(a) a taxpayer has acquired land carrying trees; and
(b) part of the price paid for the land was attributable to the
trees; and
(c) the taxpayer tended the trees for the purposes of sale; and
(d) the trees were held by the taxpayer in connection with timber
operations (within the meaning of Division 10A) for the purpose of
gaining or producing assessable income; and
(e) after 9 May 1995, the taxpayer disposed of the trees (by sale,
gift or otherwise); and
(f) the trees were assets of a business which is or was carried on
by the taxpayer; and
(g) the disposal was not in the ordinary course of carrying on that
business;
the sum of the following amounts is allowable as a deduction to the
taxpayer for the year of income in which the disposal occurred:
(h) so much of the price paid by the taxpayer for the land as is
attributable to the trees;
(i) so much of any other expenditure of a capital nature incurred
by the taxpayer as is attributable to the acquisition of the trees.
"(7B) Paragraph (7A)(i) does not apply to an amount that has been
allowed, or is allowable, as a deduction to the taxpayer for any year
of income under a provision of this Act other than subsection (7A).
"(7C) For the purposes of subsection (7A), if:
(a) the taxpayer acquired the land in a transaction where the
parties did not deal with each other at arm's length in relation to
the transaction; and
(b) the price paid by the taxpayer for the land was greater than was
reasonable;
the price paid by the taxpayer for the land is taken to be the amount
that would have been reasonable if the parties had dealt with each
other at arm's length.
"(7D) For the purposes of subsection (7A), if:
(a) the taxpayer has incurred expenditure covered by paragraph
(7A)(i) in connection with a transaction where the parties did not
deal with each other at arm's length in relation to the transaction;
and
(b) the amount of the expenditure was greater than was reasonable;
the amount of the expenditure is taken to be the amount that would
have been reasonable if the parties had dealt with each other at arm's
length.".
3. Section 124J:
Add at the end:
"(2) For the purposes of subsection (1), if:
(a) the taxpayer acquired the land or the right, as the case may be,
in a transaction where the parties did not deal with each other at
arm's length in relation to the transaction; and
(b) the price paid by the taxpayer for the land or the right, as the
case may be, was greater than was reasonable;
the price paid by the taxpayer for the land or the right, as the case
may be, is taken to be the amount that would have been reasonable if
the parties had dealt with each other at arm's length.".
4. Application-section 124J
The amendment of section 124J of the Income Tax Assessment Act 1936
made by this Part applies in relation to timber felled after 28
September 1995.
PART 3-REGISTER OF APPROVED OCCUPATIONAL CLOTHING
5. Subsections 51AL(5) to (22) (inclusive):
Omit "TCFDA" (wherever occurring), substitute "Industry Secretary".
The heading to subsection 51AL(13) of the Income Tax
Assessment Act 1936 is altered by omitting "TCFDA's" and substituting
"Industry Secretary's".
The heading to subsection 51AL(14) of the Income Tax
Assessment Act 1936 is altered by omitting "TCFDA" and substituting
"Industry Secretary".
6. Subsection 51AL(23):
Omit the subsection, substitute:
Delegation by Industry Secretary
"(23) The Industry Secretary may, by writing, delegate any or all of
his or her functions and powers under this section to a person who
holds or performs the duties of:
(a) a Senior Executive Service office in the Industry Department; or
(b) a Senior Officer Grade A, B or C office in the Industry
Department.".
7. Subsection 51AL(24):
Omit "TCFDA", substitute "Industry Secretary".
The heading to subsection 51AL(24) of the Income Tax Assessment
Act 1936 is altered by omitting "TCFDA" and substituting "Industry
Secretary".
8. Subsection 51AL(26) (definition of TCFDA):
Omit the definition.
9. Subsection 51AL(26):
Insert:
"Industry Department means the Department of Industry, Science and
Technology.
Industry Secretary means the Secretary to the Industry Department.
Senior Executive Service office has the same meaning as in the Public
Service Act 1922.".
10. Transitional-acts of the Textiles, Clothing and Footwear
Development Authority etc.
(1) This item applies to any thing done by or in relation to the
Textiles, Clothing and Footwear Development Authority before the
commencement of this item under or in connection with section 51AL of
the Income Tax Assessment Act 1936.
(2) The following Acts have effect as if the thing had been done by
or in relation to the Industry Secretary under or in connection with
that section:
(a) the Income Tax Assessment Act 1936;
(b) the Administrative Decisions (Judicial Review) Act 1977;
(c) the Administrative Appeals Tribunal Act 1975.
11. Transitional-pending proceedings
(1) This item applies to proceedings to which the Textiles, Clothing
and Footwear Development Authority was a party and that:
(a) arose out of section 51AL of the Income Tax Assessment Act 1936;
and
(b) were pending in any court or tribunal immediately before the
commencement of this item.
(2) The Industry Secretary is, by force of this item, substituted
for the Authority as a party to the proceedings.
12. Transitional-records of the Textiles, Clothing and Footwear
Development Authority
(1) This item applies to any records or documents that:
(a) were in the possession of the Textiles, Clothing and Footwear
Development Authority immediately before the commencement of this
item; and
(b) relate to section 51AL of the Income Tax Assessment Act 1936.
(2) The records and documents are to be transferred to the Industry
Secretary.
PART 4-RESEARCH AND DEVELOPMENT
13. Section 73CB:
Repeal the section, substitute:
Expenditure incurred to tax-exempt bodies
"73CB.(1) In this section:
agreement means any agreement, arrangement, understanding or scheme,
whether formal or informal, whether express or implied, and whether or
not intended to be enforceable by legal proceedings.
Australian government means the Commonwealth, a State or a Territory.
Australian governmental authority means an authority of the
Commonwealth, of a State or of a Territory.
tax-exempt entity means a person, a body or association of persons
(whether incorporated or unincorporated), or a fund, that is not
liable to income tax and, without limiting the generality of the
above, includes an Australian government and an Australian
governmental authority that is not liable to income tax.
"(2) For the purposes of this section:
(a) a body is taken to be an authority of the Commonwealth if:
(i) the Commonwealth has a controlling interest in the body; or
the Commonwealth has an interest in the body and the only
other persons having an interest in the body are Australian
governments or Australian governmental authorities; and
(b) a body is taken to be an authority of a State if:
(i) the State has a controlling interest in the body; or
the State has an interest in the body and the only other
persons having an interest in the body are Australian governments or
Australian governmental authorities; and
(c) a body is taken to be an authority of a Territory if:
(i) the Territory has a controlling interest in the body; or
the Territory has an interest in the body and the only other
persons having an interest in the body are Australian governments or
Australian governmental authorities.
"(3) For the purposes of this section, but without limiting the
meaning of the expression associate:
(a) the Commonwealth is taken to be an associate of each authority
of the Commonwealth; and
(b) an authority of the Commonwealth is taken to be an associate of
each other authority of the Commonwealth; and
(c) a State is taken to be an associate of each authority of the
State; and
(d) an authority of a State is taken to be an associate of each
other authority of the State; and
(e) a Territory is taken to be an associate of each authority of the
Territory; and
(f) an authority of a Territory is taken to be an associate of each
other authority of the Territory.
"(4) For the purposes of interpretation, this section is to be
construed as if it were part of section 73B.
"(5) If:
(a) an eligible company incurs expenditure to a tax-exempt entity,
or an associate of a tax-exempt entity, in connection with research
and development activities carried out on behalf of the company; and
(b) when the expenditure was incurred, the company was not at risk
in respect of the whole of the expenditure or was not at risk in
respect of a part of the expenditure; and
(c) at the time when the expenditure was incurred, the tax-exempt
entity or associate, as the case requires, was not entered on the
Register of Commercial Government Bodies kept under section 39HA of
the Industry Research and Development Act 1986;
a deduction is not allowable to the company under section 73B for any
part of the expenditure.
"(6) For the purposes of the application of this section in relation
to any expenditure incurred by a company, the company is taken to have
not been at risk in respect of the expenditure at the time when the
expenditure was incurred if, in the Commissioner's opinion, the
company or any associate of the company could reasonably have expected
at that time to receive, as the direct or indirect result of the
incurring of the expenditure or any part of the expenditure, any
consideration because of:
(a) any act that occurred, transaction or agreement that was entered
into, or circumstance that existed, before or at that time; or
(b) any act that was likely to occur, any transaction or agreement
that was likely to be entered into, or any circumstance that was
likely to exist, after that time.".
14. Application
(1) Subject to subitem (2), the section inserted by item 13 applies
to expenditure incurred at or after 7.30 p.m. by legal time in the
Australian Capital Territory on 9 May 1995.
(2) The section inserted by item 13 does not apply, and the section
repealed by that item continues to apply despite its repeal, to
expenditure incurred before 7.30 p.m. by legal time in the Australian
Capital Territory on 9 May 1995.
(3) The section inserted by item 13 does not apply, and the section
repealed by that item applies despite its repeal, to expenditure
incurred at or after 7.30 p.m. (the start time) by legal time in the
Australian Capital Territory on 9 May 1995:
(a) that was or is incurred in accordance with the terms of a
finance scheme, where:
(i) the scheme was approved by the Industry Research and
Development Board before the start time; or
the scheme was considered by the Board before the start
time, and its decision on the scheme was deferred until after that
time; or
(iii) the Board decided before the start time not to approve the
scheme and either:
(A) the time for applying to the Administrative Appeals Tribunal
for a review of that decision had not expired before the start time;
or
(B) an application for review of the decision by the Tribunal
had been made before the start time, but the Tribunal had not made its
decision on the application before that time; and
(b) that was or is incurred under a contract evidenced in writing
that was entered into on or before 30 June 1996; and
(c) in respect of which the eligible company that incurred the
expenditure had been jointly registered with one or more eligible
companies by the Industry Research and Development Board on or before
30 June 1996.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995 - SCHEDULE 5
Section 3
AMENDMENTS OF THE SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1992
1. Object
The object of the amendments made by this Schedule is to provide a
sales tax exemption for certain beverages consisting principally of
rice milk.
2. Schedule 1, Table of Contents, Item 71:
Add at the end "and rice milk".
3. Item 71 of Schedule 1:
Omit the Item, substitute:
"Item 71: (Soy milk and rice milk)
Beverages consisting principally of:
(a) soy milk; or
(b) rice milk;
but not including goods covered by Item 12 in Schedule 2.".
4. Subitem 12(2) of Schedule 2:
Add at the end "or rice milk".
5. Application of amendments
The amendments made by this Schedule apply to dealings with goods that
occur on or after 28 September 1995.
TAXATION LAWS AMENDMENT ACT (No. 4) 1995 No. 171 of 1995 - SCHEDULE 6
Section 3
AMENDMENT OF THE TAXATION LAWS AMENDMENT ACT 1993
1. Section 47:
Omit "created after 25 June 1992", substitute "by a taxpayer in the
taxpayer's 1990-91 income year or a later year of income.".
The
Act No. 171, 1995 amended as indicated in the Tables below.
Act | Number and year | Date of Assent | Date of commencement | Application, saving or transitional provisions |
171, 1995 | 16 Dec 1995 | |||
76, 1996 | 18 Dec 1996 | Schedule 6: | — | |
122, 1997 | 8 July 1997 | Schedule 2: | — | |
147, 1997 | 14 Oct 1997 | Schedule 16 (item 4): Schedule 16 (items 5, 6): | — | |
41, 1998 | 4 June 1998 | Schedule 6 (items 20, 21): | — | |
75, 2010 | 28 June 2010 | Schedule 6 (item 76): 29 June 2010 | — |
(a) Subsections 2(5) and (6) of theTaxation Laws Amendment Act (No. 2) 1996 provide as follows:
(5) Items 1, 2 and 3 of Schedule 6 are taken to have commenced immediately after the
commencement of Schedule 1 to the
Taxation Laws Amendment Act (No. 4) 1995 .(6) Items 4 and 5 of Schedule 6 are taken to have commenced immediately after the
commencement of items 1 and 2 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995. Schedule 1 and items 1 and 2 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 commencedon 16 December 1995.
(b) Subsection 2(5) of theTaxation Laws Amendment Act (No. 1) 1997 provides as follows:
(5) Schedule 2 is taken to have commenced immediately after the commencement of item 159 of
Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 .Item 159 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 commenced on 1 July 1995.
(c) Subsections 2(12) and (13) of theTaxation Laws Amendment Act (No. 3) 1997 provide as follows:
(12) Item 4 of Schedule 16 is taken to have commenced immediately after the commencement of item 1 of
Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 .Item 1 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 commenced on 16 December 1995.
(13) Items 5 and 6 of Schedule 16 are taken to have commenced immediately after the commencement of
item 134 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 .Item 134 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 commenced on 1 July 1995.
(d) Subsections 2(11) and (12) of theTaxation Laws (Technical Amendments) Act 1998 provide as follows:
(11) Item 20 of Schedule 6 is taken to have commenced immediately after the commencement of item 12 of
Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 .(12) Item 21 of Schedule 6 is taken to have commenced immediately after the commencement of item 134 of
Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 .Items 12 and 134 of Schedule 2 to the
Taxation Laws Amendment Act (No. 4) 1995 commenced on 1 July 1995.
| |
Provision affected | How affected |
S. 4........................................... | rep. No. 75, 2010 |
Items 36, 37............................. | am. No. 76, 1996 |
Heading to item 1..................... | am. No. 76, 1996 |
Heading to item 2..................... | am. No. 76, 1996 |
Item 12..................................... | am. No. 41, 1998 |
Item 134................................... | am. No. 147, 1997 |
Item 136................................... | am. No. 147, 1997 |
Item 159................................... | am. No. 122, 1997 |
Item 159A................................. | ad. No. 122, 1997 |
0
0
0