Income Tax Regulations (Amendment) 1998 No. 92
EXPLANATORY STATEMENT
STATUTORY RULES 1997 NO. 92
Issued By Authority Of The Assistant Treasurer
Income Tax Assessment Act 1936
Income Tax Regulations (Amendment)
Section 266 of the Income Tax Assessment Act 1936 (the Act) provides that the GovernorGeneral may make regulations prescribing matters required to give effect to the Act.
These regulations amend the Income Tax Regulations by inserting new regulation 14E, which prescribes Government schemes for the purposes of subsection 160L(6A) of the capital gains tax (CGT) provisions of the Act.
Subsection 160L(6A) provides that in certain circumstances, CGT will not apply to payments and reimbursements made under government schemes prescribed in the regulations. A scheme covered by subsection 160L(6A) must be established by the Commonwealth, a State or a Territory or by an authority of the Commonwealth, a State or a Territory.
New regulation 14E, proposed by regulation 3, replaces the present regulation 14E. It will add provisions that:
* the M4/M5 Cashback Scheme, administered by the New South Wales State Government Roads and Traffic Authority, is prescribed as a scheme to which subsection 160L(6A) applies (item 3). The scheme provides a reimbursement of tolls paid on the M4 and M5 toll roads. The reimbursement is limited to motorists driving motor vehicles and motor cycles privately registered in New South Wales. The scheme is prescribed in relation to reimbursements made on or after 1 January 1997.
* the Sydney Aircraft Noise Insulation Project is now administered by the Department of Transport and Regional Development (item 2). Previously, this scheme was administered by the Commonwealth Department of Administrative Services and the Department of Transport and Regional Development. The scheme provides acoustic insulation treatment for residences in areas most affected by aircraft noise. Under this scheme, a home owner has the right to have their expenses paid by the relevant Department. The scheme is prescribed in relation to payments made on or after 8 December 1994.
These regulations have retrospective effect, and will not impose liabilities on a person or disadvantage the rights of a person (other than the Commonwealth or an authority of the Commonwealth). Accordingly, subsection 48(2) of the Act Interpretation Act 1901 will not be contravened.
Overview
The Income Tax Regulations (Amendment) 1998 No. 92, issued under the authority of the Assistant Treasurer, is an amendment to the Income Tax Assessment Act 1936. The amendment introduces new regulation 14E to address a specific issue concerning the application of capital gains tax (CGT) under certain government schemes. The regulation specifies schemes that are exempt from CGT, as outlined in subsection 160L(6A) of the Act. The primary objective of this amendment is to ensure that reimbursements made under the M4/M5 Cashback Scheme, administered by the New South Wales State Government Roads and Traffic Authority, and payments made under the Sydney Aircraft Noise Insulation Project, administered by the Department of Transport and Regional Development, are exempt from CGT. The regulation has retrospective effect, ensuring that it will not impose new liabilities or disadvantage individuals, except where it pertains to the Commonwealth or its authorities.
Scope and Application
The Income Tax Regulations (Amendment) 1998 No. 92 applies to the amendments of the Income Tax Regulations under the Income Tax Assessment Act 1936. The Act concerns itself with the taxation laws of Australia and is applicable to individuals, entities, and authorities within the Commonwealth, states, and territories. The regulations specifically pertain to capital gains tax (CGT) provisions, aiming to exempt certain payments and reimbursements made under prescribed government schemes from CGT. The new regulation 14E includes the M4/M5 Cashback Scheme by the New South Wales State Government Roads and Traffic Authority and the Sydney Aircraft Noise Insulation Project, now administered by the Department of Transport and Regional Development. These schemes are applicable to reimbursements and payments made on or after specified dates, with the changes having retrospective effect but ensuring no imposition of liabilities or disadvantage to persons other than the Commonwealth or its authorities. The scope of the Act extends to modifying existing regulations to better define and include particular schemes, thereby clarifying their exemption status under CGT.
Key Provisions
The main operative sections of these regulations, specifically section 266 of the Income Tax Assessment Act 1936, empower the Governor-General to make regulations that give effect to the Act. These regulations amend the Income Tax Regulations by inserting new regulation 14E, which specifies government schemes that are exempt from capital gains tax (CGT) under subsection 160L(6A) of the Act. Regulation 14E, as proposed by regulation 3, replaces the existing regulation 14E to include two new schemes: the M4/M5 Cashback Scheme administered by the New South Wales State Government Roads and Traffic Authority, and the Sydney Aircraft Noise Insulation Project administered by the Department of Transport and Regional Development. These schemes are now prescribed in relation to reimbursements and payments made after certain dates.
The regulations impose obligations on the relevant authorities administering the schemes to ensure that the specified reimbursements and payments are not subject to CGT. This includes ensuring that the schemes are established by the Commonwealth, a State or a Territory, or an authority of the Commonwealth, a State or a Territory. The M4/M5 Cashback Scheme, for instance, must be administered by the New South Wales State Government Roads and Traffic Authority, and the Sydney Aircraft Noise Insulation Project must be administered by the Department of Transport and Regional Development. Both schemes must adhere to the specific criteria outlined in the regulations, such as the types of reimbursements and payments that qualify for the exemption.
Failure to comply with these regulations could lead to consequences, although the explanatory statement clarifies that these regulations do not impose any new liabilities or disadvantages to persons other than the Commonwealth or its authorities. The regulations have retrospective effect, meaning they apply to reimbursements and payments made on or after the specified dates, but they are designed not to contravene subsection 48(2) of the Act Interpretation Act 1901. As such, there are no explicit penalties or civil/criminal consequences outlined for non-compliance within the provided text, but the integrity and proper administration of these schemes are crucial to ensure that the tax benefits are correctly applied and no undue advantages are gained.