Taxation Laws Amendment (Superannuation) Act 1989

Act No. 105 of 1989 as amended

This compilation was prepared on 6 October 2010
taking into account amendments up to Act No. 75 of 2010

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra

TABLE OF PROVISIONS

PART I - PRELIMINARY

Section

1. Short title [see Note 1]

2. Commencement [see Note 1]

PART II - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

3. Principal Act

4. Interpretation

5. Interpretation

6. Repeal of sections 27B and 27C and substitution of new sections:

27AA. Components of an ETP

27AB. Taxed and untaxed elements of post-June 83 component

27B. Assessable income to include certain superannuation and

kindred payments

27C. Assessable income to include 5% of certain amounts

27CA. Anti-detriment provision for service mismatch cases

7. Roll-over of eligible termination payments

8. Assessable income to include annuities and superannuation pensions

9. Rebate on dividends

10. Rebate on dividends paid as part of dividend stripping operation

11. Deductions for superannuation contributions by eligible persons

12. Interpretation

13. Interpretation

14. Insertion of new sections:

110B. Exemption of CS/RA income that accrued before 1 July 1988

110C. Current pension liabilities exemption

15. Premiums not assessable income

16. Insertion of new sections:

111A. Deductions to be allowable for expenditure incurred in

gaining superannuation premiums

111B. Disposal of units in PSTs by life assurance companies

111C. Reduction in deductions that are not exclusively related to

producing assessable income

111D. Division has effect subject to the Constitution

111E. Application of Act to SGIOs

17. Repeal of section 112 and substitution of new section:

112. Deductions not allowable for expenditure incurred in

gaining certain premium income

18. Exemption of income attributable to certain policies etc.

19. Expenses of general management

20. Insertion of new sections:

116CA. Classes of assessable income and policies

116CB. Notional Part IIIA disposals of fund assets

116CC. Notional Part IIIA disposals of non-fund assets

116CD. Assessable income etc. in relation to 160Z gain amounts

116CE. Amount of assessable income in particular class

116CF. Apportionment of current year deductions between classes

116CG. Application of deficit arising for a particular class

116CH. Deduction of prior year losses

116CJ. Components of taxable income

21. Interpretation

22. Insertion of new sections:

116FA. Exemption of CS/RA income that accrued before 1 July 1988

116FB. Current pension liabilities exemption

23. Repeal of section 116G and substitution of new sections:

116G. Assessable income of registered organizations

116GA. Notional Part IIIA disposals of assets

116GB. Assessable income etc. in relation to 160Z gain amounts

116GC. Disposal of units in PSTs by registered organizations

116GD. Amount of assessable income in particular class

24. Insertion of new sections:

116HA. Deductions to be allowable for expenditure incurred in

gaining superannuation premiums

116HB. Apportionment of current year deductions between classes

116HC. Application of deficit arising for a particular class

116HD. Deduction of prior year losses

116HE. Components of taxable income

25. Liability to withholding tax

26. Insertion of new Subdivisions:

Subdivision AAA - Rebate for Annual Leave, Long Service Leave and

Eligible Termination Payments

159S. Interpretation

159SA. Entitlement to rebate

159SB. Tables of rebatable amounts

159SC. Classes of eligible assessable income

159SD. s.27B (1) (a) amounts attributable to fund membership

159SE. Rebatable amounts

159SF. Residual amount

159SG. Upper limit for purpose of determining residual amount

159SH. Treatment of s.27B (1) amounts assessed under section 101A

Subdivision AAB - Rebate for Certain Superannuation Pensions and

Qualifying Annuities

159SJ. Interpretation

159SK. Purchase price or notional purchase price attributable to

ETP etc.

159SL. Accrual period for an ETP or superannuation pension

159SM. Entitlement to rebate - superannuation pension

159SN. Components in respect of superannuation pensions

159SP. Final percentage for superannuation pension

159SQ. Intermediate percentages for components in respect of

superannuation pensions

159SR. Base percentages for ordinary component in respect of

superannuation pensions

159SS. Non-rebatable amount for superannuation pension

159ST. Certain superannuation pensions to be regarded as being

payable from funds

159SU. Entitlement to rebate - rebatable ETP annuity

159SV. Components in respect of rebatable ETP annuities

159SW. Final percentage for rebatable ETP annuity

159SX. Intermediate percentages for components in respect of

rebatable ETP annuities

159SY. Base percentages for ordinary component in respect of

rebatable ETP annuities

27. Rebate in respect of amounts assessable under section 26AH

28. Repeal of section 160AA

29. Interpretation

30. Receipt of franked dividends

31. Receipt of franked dividends through trusts and partnerships

32. Extra amount to be included in assessable income where franked

dividend paid

33. Franking rebate

34. Franking rebate for certain beneficiaries

35. Franking rebate for certain partners

36. Insertion of new section:

160AQZA. Franking rebates for certain life assurance companies

37. Other interpretative provisions

38. Asset bequeathed to tax-advantaged person

39. Insertion of new Division:

Division 7A - Units in Pooled Superannuation Trusts

160ZYEB. Disposal of units in PSTs by complying superannuation funds

and other tax-advantaged entities

40. Superannuation and approved deposit funds

41. Application of deductions in payment of tax

42. Medicare levy

43. Interpretation

44. Issue, revocation etc. of OSS notices

45. Insertion of new sections:

269A. Exempting laws ineffective

269B. Certain exempting provisions ineffective

46. Assumption to be made in calculating taxable income

47. Insertion of new sections:

273A. Segregated current pension assets

273B. Segregated non-current pension assets

48. Taxable contributions

49. Repeal of section 275 and substitution of new sections:

275. Transfer of taxable contributions

275A. Pre-1 July 88 funding credit balance

275B. Application of pre-1 July 88 funding credits

50. Contribution notices or eligible person notices given after return

lodgment date

51. Deduction for premiums for death or disability cover

52. Insertion of new sections:

279A. Clawback of rebates or refunds of deductible premiums

279B. Deduction for future service element of death or disability

benefits

279C. Deduction for section 82AAQ assessable amounts

279D. Deduction for certain potential detriment payments made

after the death of fund member

53. No deduction in respect of benefits

54. Repeal of section 283 and substitution of new sections:

282A. Exclusion from assessable income of non-reversionary

bonuses on policies of life assurance

282B. Exemption of income derived from segregated current pension

assets

283. Exemption of proportion of income attributable to current

pension liabilities

55. Insertion of new section:

286A. Deduction for section 82AAQ assessable amounts

56. No deduction in respect of benefits

57. Insertion of new section:

290A. Fixed interest complying ADFs - exemption of income

attributable to certain 25 May 1988 deposits

58. Insertion of new section:

291A. Exclusion from assessable income of non-reversionary

bonuses on policies of life assurance

59. Liability to taxation

60. Insertion of new sections:

297A. Exclusion from assessable income of non-reversionary

bonuses on policies of life assurance

297B. Exemption of income attributable to current pension

liabilities of complying superannuation funds

61. Repeal of heading to Division 8 of Part IX and substitution of new

heading:

Division 8 - Rebates and Provisional Tax

62. Insertion of heading and new sections:

Division 9 - Assessments

300A. Assessment as if entity were a complying superannuation

fund, complying ADF or PST

300B. Assessment on basis of anticipated pre-1 July 88 funding

credit balance

63. Insertion of new Division:

Division 10 - Tax Treatment of Gains or Losses on Disposal of Assets

Owned by Complying Superannuation Funds, Complying ADFs

and PSTs

302. Division applies to trustees of complying superannuation

funds, complying ADFs and PSTs

303. Interpretation

304. Part IIIA to be primary code for taxation of gains and

losses

305. Division to be treated as a provision of Part IIIA

306. 30 June 1988 assets deemed to have been acquired on that

date

307. Disposal of taxable Australian assets

308. Cost base of 30 June 1988 asset

309. Market value of stock exchange listed assets

310. Adjustment of cost base as at 30 June 1988 - return of

capital

311. Rights to acquire shares or share options

312. Rights to acquire units or unit options

313. Company-issued options to acquire unissued shares

314. Unit trust-issued options to acquire unissued units

315. Options

64. Application of amendments

65. Transitional - life assurance companies and registered organizations

PART III - AMENDMENT OF THE OCCUPATIONAL SUPERANNUATION STANDARDS ACT

1987

67. Principal Act

68. Interpretation

69. Operating standards for superannuation funds

70. Operating standards for approved deposit funds

71. Operating standards for pooled superannuation trusts

72. Insertion of new section:

15D. Pre-1 July 88 funding credits and debits

73. Review of certain decisions

PART IV - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953

74. Principal Act

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

PART V - AMENDMENT OF THE TAXATION LAWS AMENDMENT ACT (No. 2) 1989

76. Principal Act

77. Application of superannuation and related amendments

78. Transitional - superannuation and related amendments

79. Repeal of section 18

80. Schedule 1

81. Schedule 2

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989 - LONG

TITLE

An Act to amend the law relating to taxation

PART I – PRELIMINARY

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 1

Short title [see Note 1]

1. This Act may be cited as the Taxation Laws Amendment (Superannuation) Act

1989.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 2

Commencement [see Note 1]

2. (1) Subject to this section, this Act commences, or shall be taken to

have commenced, as the case requires, immediately after the commencement of

the Taxation Laws Amendment Act (No. 2) 1989.

(2) Paragraph 5 (o) shall be taken to have commenced on 18 December 1987.

PART II - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 3

Principal Act

3. In this Part, "Principal Act" means the Income Tax Assessment Act

1936.*1*

*1*No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No. 5,

1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69, 1941;

Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37, 1945;

No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48, 1950;

No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No. 43,

1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65, 1957;

No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960; Nos.

17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46, 68,

110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos. 19,

38, 76 and 85, 1967; Nos. 4, 70, 87 and 148, 1968; Nos. 18, 93 and 101, 1969;

No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972; Nos.

51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20, 1974);

Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143, 165

and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171 and

172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24, 57,

58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and 175,

1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49, 51, 54

and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984; No. 123,

1984 (as amended by No. 65, 1985); Nos. 47, 49, 104, 123, 168 and 174, 1985;

No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 51, 109, 112 and

154, 1986; No. 49, 1986 (as amended by No. 141, 1987); No. 52, 1986 (as

amended by No. 141, 1987); No. 90, 1986 (as amended by No. 141, 1987); Nos.

23, 58, 61, 120, 145 and 163, 1987; No. 62, 1987 (as amended by No. 108,

1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as amended

by No. 11, 1988); No. 139, 1987 (as amended by Nos. 11 and 78, 1988); and Nos.

8, 11, 59, 75, 78, 80, 87, 95, 97, 127 and 153, 1988; and Nos. 2, 11 and 56,

1989.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 4

Interpretation

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

the following definition:

"'SGIO' means a public authority:

(a) that is constituted by a law of a State or Territory; and

(b) that carries on life insurance business within the meaning of

that expression in subsection 4 (1) of the Life Insurance Act 1945;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 5

Interpretation

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

(a) by omitting subparagraph (a) (i) of the definition of "eligible

termination payment" in subsection (1) and substituting the following

subparagraph:

"(i) made from a superannuation fund in respect of the taxpayer by reason

that the taxpayer is or was a member of the fund;";

(b) by omitting ", within the meaning of Part IX," from subparagraph (a)

(iiia) of the definition of "eligible termination payment" in subsection (1);

"eligible termination payment" in subsection (1) and substituting the

following sub-subparagraph:

"(A) made to the taxpayer from a superannuation fund by reason that another

person was a member of the fund;";

(d) by omitting ", within the meaning of Part IX," from sub-subparagraph

(aa) (iv) (D) of the definition of "eligible termination payment" in

subsection (1);

(e) by omitting "to a natural person" from the definition of "immediate

annuity" in subsection (1);

(f) by omitting paragraph (b) of the definition of "life assurance company"

in subsection (1) and substituting the following paragraph:

"(b) an SGIO;";

(g) by omitting ", within the meaning of Part IX," from subparagraph (a)

(iaa) of the definition of "superannuation fund" in subsection (1);

(h) by inserting "or (B)" after "27D (1) (b) (iii) (A)" in paragraph (b) of

the definition of "undeducted purchase price" in subsection (1);

(j) by inserting in subsection (1) the following definitions:

"'actual net benefit' in relation to an amount that is an ETP in

relation to a taxpayer, means the amount of the ETP reduced by any tax payable

by the taxpayer that is attributable to the ETP;

'complying ADF' has the same meaning as in Part IX;

'complying superannuation fund' has the same meaning as in Part

IX;

'continuously complying ADF' has the same meaning as in Part

IX;

'continuously complying superannuation fund' has the same

meaning as in Part IX;

'eligible superannuation fund' has the same meaning as in Part

IX;

'equivalent old system ETP', in relation to an amount that is an

ETP in relation to a taxpayer, means the amount that would have been the

amount of the ETP if taxable contributions were exempt income;

'ETP' means an eligible termination payment;

'non-complying superannuation fund' has the same meaning as in

Part IX;

'old system net benefit', in relation to an equivalent old system

ETP in relation to a taxpayer, means the amount of that ETP reduced by any tax

that would have been payable by the taxpayer and attributable to that ETP if:

(a) the whole of any amount that would have been included in the

assessable income of the taxpayer under subsection 27B (1) in respect of the

ETP were treated as having been included under paragraph 27B (1) (b); and

(b) the rebate under Subdivision AAA of Division 17,

insofar as the rebate would be attributable to the ETP, were calculated by

reference to an upper limit (within the meaning of that Subdivision) of

$55,000;

'post-June 83 component', in relation to an ETP, has the meaning

given by section 27AA;

'pre-July 83 component', in relation to an ETP, has the meaning

given by section 27AA;

'rolled-over' has the meaning given by paragraph (13) (a);

'roll-over' means an application of section 27D in relation to an

ETP;

'taxable contribution' has the same meaning as in Part IX;

'taxed element', in relation to the post-June 83 component of an

ETP, has the meaning given by section 27AB;

'taxed superannuation fund', in relation to an ETP, means a

superannuation fund that:

(a) is or has been an eligible superannuation fund in

relation to any year of income; and

(b) is not a constitutionally protected fund, within the

meaning of Part IX, in relation to the year of income in which the ETP was

made;

'untaxed element', in relation to the post-June 83 component of

an ETP, has the meaning given by section 27AB;";

(k) by omitting subsection (10) and substituting the following subsection:

"(10) Where:

(a) a part of an ETP (in this subsection called the 'original

ETP') has been rolled-over; and

(b) the eligible service period (in this subsection called the

'original eligible service period') in relation to the original ETP commenced

before 1 July 1983;

then, for the purposes of the application of this Act in relation to any

subsequent ETP that is made in relation to the taxpayer and is attributable to

the original ETP, there shall be deducted from the beginning of the original

eligible service period the number of whole days included in the original

eligible service period that is calculated using the formula:

Reduced pre-July 83 component

Pre-July 83 days x -----------------------------

Pre-July 83 component

where:

Pre-July 83 days is the number of whole days in the original

eligible service period that occurred before 1 July 1983;

Reduced pre-July 83 component is the number of whole dollars

in so much of the pre-July 83 component for the original ETP as has not been

rolled-over; and

Pre-July 83 component is the number of whole dollars in the

pre-July 83 component for the original ETP.";

(m) by omitting subsection (13) and substituting the following subsection:

"(13) For the purposes of this Subdivision:

(a) an amount is rolled over if section 27D requires the amount

to be taken to have been expended in making a payment as mentioned in

paragraph (12) (a), (b) or (c) of this section; and

(b) an ETP or a particular part of an ETP is attributable to an

earlier ETP or a particular part of an earlier ETP if and only if the later

ETP or part is attributable to the earlier ETP or part, directly or

indirectly, through one or more rollovers.";

(n) by omitting from paragraph (14) (a) "paragraph 27C (1) (d)" and

substituting "subsection 27C (1A)";

(o) by omitting from subparagraph (14) (c) (ii) "(a) (ii)" and substituting

"(a) (iii)";

(p) by adding at the end the following subsections:

"(17) For the purposes of this Subdivision, where the

Commissioner is of the opinion that the whole or a part of a particular ETP:

(a) is not, apart from this subsection, paid from an eligible

superannuation fund; and

(b) is, in effect, funded from an eligible superannuation fund;

the ETP, or the part of the ETP, as the case may be, shall be treated as if it

were paid from that eligible superannuation fund.

"(18) For the purposes of this Subdivision, where the Commissioner is of the

opinion that a particular superannuation pension:

(a) is not, apart from this subsection, payable from an eligible

superannuation fund; and

(b) is, in effect, funded from an eligible superannuation fund;

the superannuation pension shall be treated as if it were payable from that

eligible superannuation fund.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 6

6. Sections 27B and 27C of the Principal Act are repealed and the following

sections are substituted:

Components of an ETP

"27AA. (1) An ETP consists of one or more of the following components:

(a) the concessional component;

(b) the undeducted contributions;

non-qualifying component;

(d) the pre-July 83 component, which is the lesser of the following

amounts:

(i) the amount calculated using the formula:

Pre-July 83

(ETP - C - NQ) x -----------

Total period

where:

ETP is the amount of the ETP;

C is the concessional component;

NQ is the non-qualifying component;

Pre-July 83 is the number of whole days (if any) in the

eligible service period that occurred before 1 July 1983; and

Total period is the number of whole days in the eligible

service period;

(ii) the amount represented by the component (ETP-C-NQ)

in subparagraph (i), reduced by the undeducted contributions;

(e) the post-June 83 component, which is the ETP reduced by the other

components.

"(2) The Commissioner may increase the amount calculated under subparagraph

(1) (d) (i) if the Commissioner considers it appropriate to do so having

regard to the following matters:

(a) if the ETP relates to employment in which the taxpayer was engaged on 30

June 1983 - the amount of an ETP that could, in the opinion of the

Commissioner, reasonably be expected to have been made in relation to the

taxpayer in consequence of the termination of that employment if that

employment had been terminated on that date;

(b) if the ETP relates to membership of the taxpayer of a superannuation

fund on 30 June 1983 - the amount of an ETP that could, in the opinion of the

Commissioner, reasonably be expected to have been made in relation to the

taxpayer from the fund in consequence of the termination of the taxpayer's

membership of the fund if that membership had terminated on that date;

or of subsection 27B (2) as in force at any time before the commencement of

section 1 of the Taxation Laws Amendment (Superannuation) Act 1989;

(d) such other matters as the Commissioner considers relevant.

Taxed and untaxed elements of post-June 83 component

"27AB. (1) Subject to this section, the extent to which the post-June 83

component of an ETP consists of taxed and untaxed elements is determined as

follows:

(a) the extent to which it consists of a taxed element is determined in

accordance with the table below;

(b) to the extent to which it does not consist of a taxed element, it

consists of an untaxed element.

TABLE OF TAXED ELEMENTS

------------------------------------------------------------------------------

-- Taxed

Item ETP type element

------------------------------------------------------------------------------

-- 1 (a) or (aa) . . . . . . . . . . . . . . . . . . . . . none

2 (b), if paid from taxed superannuation fund during the whole

life of the taxpayer

3 (b), if paid from taxed superannuation fund after the amount

death of the taxpayer calculated

under subsection (3)

4 (ba), if paid from taxed superannuation fund . . . . . amount

calculated

under subsection (3)

5 (c), (ca), (g), (h) or (j) . . . . . . . . . . . . . . whole

6 (d), (e) or (f), if pension concerned payable from amount

taxed superannuation fund and entitlement to pension calculated

under arose because of the death of a member of the fund subsection (3)

7 (d), (e) or (f), if pension concerned paid from taxed whole

superannuation fund and ETP not covered by item 6

8 (da), (db), (ga) or (gb), if paid from taxed amount

superannuation fund calculated

under subsection (3)

9 ETP not covered by items 1 to 8, where no part is none

attributable to taxed element of earlier ETP

10 ETP not covered by items 1 to 8, but to some extent so much of

that

attributable to taxed element of earlier ETP component as

attributable

the taxed

element of

the

post-June 83

component of

the earlier ETP

"(2) For the purposes of the table above:

(a) paragraph references indicate an ETP that is covered by the paragraph

concerned of the definition of 'eligible termination payment' in subsection

27A (1); and

(b) an ETP is attributable to a taxed element if, and only if, the ETP is

(in whole or in part) attributable to the taxed element of the post-June 1983

component of an earlier ETP.

"(3) The taxed element of the post-June 83 component of an ETP covered by

item 3, 4, 6 or 8 in the table in subsection (1) is determined as follows:

(a) if both of the following subparagraphs apply in relation to the

post-June 83 component:

(i) no deduction is or was allowable under section 279 to the

trustee of the taxed superannuation fund concerned in any year of income in

relation to a current or contingent liability to provide death or disability

benefits (within the meaning of Part IX) for the deceased person concerned;

(ii) no deduction is or was allowable under section 279B to the

trustee of the taxed superannuation fund concerned in any year of income in

relation to a death or disability ETP (within the meaning of that section)

paid in relation to the deceased person concerned;

the taxed element is the whole of the component;

(b) if paragraph (a) does not apply:

(i) in the case of an ETP covered by item 6 or 8 in the table

in subsection (1) that was calculated by taking into account the amount, or

the amount that would have been the amount, of the unused undeducted purchase

price in relation to a pension or annuity (which amount is in this subsection

called the 'UUPP amount'), the taxed element of the post-June 83 component of

the ETP is the amount that would have been the amount of the post-June 83

component if the ETP had been equal to the amount calculated using the

following formula and had been reduced by the UUPP amount:

Days in eligible service period

Grossed-up ETP x -------------------------------

Days in total service period

where:

Grossed-up ETP is the amount of the ETP increased by

Days in eligible service period is the number of whole

Days in total service period is the sum of:

the UUPP amount;

days in the eligible service period in relation to the ETP;

(A) Days in eligible service period; and

(B) the number of whole days in the period commencing on the

date of the death of the member of the fund and ending on the last retirement

date; or

(ii) in any other case - the amount that would have been the

amount of the post-June 83 component if the ETP had been equal to the amount

calculated using the following formula:

Days in eligible service period

ETP x -------------------------------

Days in total service period

where:

ETP is the amount of the ETP;

Days in eligible service period has the same meaning as in

subparagraph (i);

Days in total service period has the same meaning as in

subparagraph (i).

"(4) In spite of anything in subsection (1), where:

(a) an ETP is paid from a taxed superannuation fund;

(b) apart from this subsection, the post-June 83 component of the ETP

consists wholly or partly of a taxed element (which taxed element is in this

subsection called the 'otherwise taxed element'); and

within the time and in the manner approved by the Commissioner in writing, a

written notice nominating the whole or a specified part of the otherwise taxed

element as an untaxed element of the post-June 83 component of the ETP;

so much of the otherwise taxed element of the post-June 83 component of the

ETP as is covered by the notice shall be treated as, or as an additional part

of, the untaxed element of the post-June 83 component of the ETP.

"(5) The trustee of the fund is not allowed to give more than one notice

under subsection (4) in relation to a particular ETP.

"(6) Where, because of subsection 27A (17):

(a) a particular part of an ETP is taken to have been paid from a taxed

superannuation fund; and

(b) the remaining part of the ETP is not taken to have been paid from a

taxed superannuation fund;

the following provisions have effect:

obtained by:

(i) treating each of the parts referred to in paragraph (a) and

(b) of this subsection as separate ETPs;

(ii) calculating the taxed element of the post-June 83 component

of each of those separate ETPs in accordance with the preceding provisions of

this section; and

(iii) adding together those taxed elements;

(d) to the extent to which the post-June 83 component of the ETP does not

consist of a taxed element, it consists of an untaxed element.

Assessable income to include certain superannuation and kindred

payments

"27B. (1) Where an ETP is made in relation to a taxpayer in a year of

income, the assessable income of the taxpayer of the year of income includes:

(a) the taxed element of the post-June 83 component reduced by so much of

that element as has been rolled-over; and

(b) the untaxed element of the post-June 83 component reduced by so much of

that element as has been rolled-over.

"(2) Where an ETP is made in relation to a taxpayer in a year of income, the

assessable income of the taxpayer of the year of income includes the

non-qualifying component.

Assessable income to include 5% of certain amounts

"27C. (1) Subject to subsection (2), if an ETP made in relation to a

taxpayer in a year of income includes a pre-July 83 component, the assessable

income of the taxpayer of the year of income shall include 5% of so much of

that component as has not been rolled-over.

"(1A) If the Commissioner, having regard to the extent to which the ETP

would have been included in the assessable income of the taxpayer if the

amendments made by the Income Tax Assessment Amendment Act (No. 3) 1984 had

not been made, considers that it is appropriate that a lesser amount be

included instead in the taxpayer's assessable income, that lesser amount shall

be included.

"(2) If an ETP made in relation to a taxpayer in a year of income includes a

concessional component, the assessable income of the taxpayer of the year of

income shall include 5% of so much of that component as has not been

rolled-over.

Anti-detriment provision for service mismatch cases

"27CA. (1) This section applies to an ETP (in this section called the

'actual ETP') if:

(a) the ETP is made in relation to the taxpayer on or after the taxpayer's

55th birthday; and

(b) the ETP:

(i) is paid by a continuously complying superannuation fund or

continuously complying ADF; or

(ii) is made in relation to the commutation of, or is the residual

capital value of, a rebatable ETP annuity (within the meaning of Subdivision

AAB of Division 17).

"(2) If the Commissioner is satisfied in respect of the actual ETP that:

(a) the old system net benefit for the equivalent old system ETP would have

exceeded the actual net benefit for the actual ETP; and

(b) the whole or part (which whole or part is in this section called the

'detriment amount') of the excess referred to in paragraph (a) is attributable

to the fact that an amount or amounts were included in the assessable income

of any taxpayer in relation to taxable contributions made to a complying

superannuation fund;

the Commissioner shall take such steps as are necessary to compensate the

taxpayer for the detriment amount.

"(3) The steps that the Commissioner may take include:

(a) reducing the amount of tax payable by the taxpayer in respect of the

year of income in which the actual ETP was received (including a reduction by

way of a rebate of tax or increased rebate of tax); or

(b) granting to the taxpayer an entitlement to a credit of tax.

"(4) Sections 160AI to 160AL (inclusive) apply in relation to a decision of

the Commissioner granting an entitlement to a credit under this section in

like manner as those sections apply to a determination of a credit within the

meaning of those sections.

"(5) The Commissioner shall apply a credit of tax to which the taxpayer is

entitled under this section in payment successively of:

(a) any tax payable by the taxpayer in respect of the year of income in

which the ETP is made (whether or not that tax is due for payment); and

(b) any other liability of the taxpayer to the Commonwealth arising under,

or by virtue of, this Act or any other Act of which the Commissioner has the

general administration;

and shall refund to the taxpayer so much of the credit as is not so applied.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 7

Roll-over of eligible termination payments

7. Section 27D of the Principal Act is amended by omitting sub-subparagraphs

(1) (b) (iii) (A) and (B) and substituting the following sub-subparagraphs:

"(A) the taxed element of the post-June 83 component;

(B) the untaxed element of the post-June 83 component;

(BA) the pre-July 83 component;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 8

Assessable income to include annuities and superannuation pensions

8. Section 27H of the Principal Act is amended by omitting from paragraph

(3A) (b) "the amount referred to in subsection 27B (1) as the relevant amount"

and substituting "the post-June 83 component".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 9

Rebate on dividends

9. Section 46 of the Principal Act is amended by adding at the end the

following subsections:

"(10) A shareholder in a company is not entitled to a rebate under this

section in its assessment in respect of a dividend paid to it by the company

if:

(a) the shareholder is a life assurance company; and

(b) 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

commencing 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.

"(11) In subsection (10), 'insurance funds' and 'life assurance company'

have the same respective meanings as in Division 8.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 10

Rebate on dividends paid as part of dividend stripping operation

10. Section 46A of the Principal Act is amended by adding at the end the

following subsections:

"(17) A shareholder in a company is not entitled to a rebate under this

section in its assessment in respect of a dividend paid to it by the company

if:

(a) the shareholder is a life assurance company; and

(b) 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

commencing 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.

"(18) In subsection (17), 'insurance funds' and 'life assurance company'

have the same respective meanings as in Division 8.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 11

Deductions for superannuation contributions by eligible persons

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

(a) by omitting from paragraph (1C) (a) "prescribed form" and substituting

"form approved by the Commissioner in writing for the purposes of this

paragraph";

(b) by omitting from paragraph (1C) (b) "prescribed manner" and substituting

"manner approved by the Commissioner in writing for the purposes of this

paragraph".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 12

Interpretation

12. Section 102M of the Principal Act is amended by omitting the definition

of "eligible policy" and substituting the following definition:

"'eligible policy' means:

(a) an eligible policy within the meaning of Division 8;

(b) a CS policy within the meaning of Division 8; or

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 13

Interpretation

13. Section 110 of the Principal Act is amended:

(a) by omitting "to a natural person" from the definition of "immediate

annuity" in subsection (1);

(b) by omitting from subsection (1) the definitions of "exempt

superannuation fund" and "exempt superannuation scheme";

"life assurance company" and "superannuation policy" and substituting the

following definitions:

"'eligible policy' means:

(a) a life assurance policy in relation to an immediate

annuity, being an immediate annuity that satisfies the following conditions:

(i) the annuity was purchased on or before 9

December 1987;

(ii) none of the purchase price consists of a rolled over

amount or rolled-over amounts;

(b) a life assurance policy in relation to an immediate

annuity, being an immediate annuity that satisfies the following conditions:

(i) the annuity was purchased on or before 9

December 1987;

(ii) the purchase price consists wholly or partly of

a rolled-over amount or rolled-over amounts;

(iii) the approved annuity conditions are satisfied;

annuity, being an immediate annuity that satisfies the following conditions:

(i) the annuity was purchased after 9 December

1987;

(ii) the approved annuity conditions are satisfied;

'life assurance company' means:

(a) an ordinary life assurance company; or

(b) an SGIO;

'superannuation policy' means:

(a) a CS policy; or

(b) an NCS policy;";

(d) by inserting in subsection (1) the following definitions:

"'AD/RLA component' means the component of the taxable

income determined under section 116CJ for the AD/RLA class;

'AD/RLA policy' means:

(a) an AD policy; or

(b) a life assurance policy other than:

(i) an eligible policy;

(ii) a superannuation policy; or

(iii) an RA policy;

'AD policy' means:

(a) an accident policy; or

(b) a disability policy;

'AD premiums' means premiums received in respect of AD

policies;

'approved annuity conditions', in relation to an annuity, means

the conditions that:

(a) if the annuity contract permits a residual capital,

value to be payable - the contract does not permit the residual capital value

to exceed the purchase price of the annuity;

(b) if the annuity is payable for a term of years certain -

the annuity contract does not permit the total of any commutation payments to

exceed the reduced purchase price of the annuity;

(i) the death of a particular person or of the last

to die of 2 or more persons; or

(ii) the end of a term of years certain;

whichever last occurs, and the annuity contract permits a commutation payment

or payments to become payable before the end of that term of years certain -

the contract does not permit the total of such payments to exceed the reduced

purchase price of the annuity; and

(d) the Commissioner is satisfied there will not be any

unreasonable deferral of the derivation of any annuity income, having regard

to the following matters:

(i) to the extent to which the amounts of that annuity income

will depend on the amount of income that may be derived by the person paying

the annuity - the respective times of derivation of those amounts of annuity

income and of the income of the person paying the annuity;

(ii) to the extent to which the amounts of that

annuity income are not dependent on the amount that may be derived by the

person paying the annuity - the relative sizes of the annual entitlements to

that annuity income;

(iii) such other matters as the Commissioner

considers relevant;

'class', in relation to assessable income or policies, means a class

specified in section 116CA;

'complying ADF' has the same meaning as in Part IX;

'complying superannuation fund' has the same meaning as in

Part IX;

'complying superannuation scheme' means a provident, benefit,

superannuation or retirement scheme:

(a) in respect of which there is a complying superannuation

fund; or

(b) in respect of which there is no such fund but in

respect of which the Commissioner is of the opinion that, if there were a fund

in respect of the scheme, it would, having regard to the terms and conditions

of the scheme, be a complying superannuation fund;

'CS policy' means a life assurance policy (other than an eligible

policy):

(a) that is vested in the trustee of:

(i) a complying superannuation fund;

(ii) a complying ADF; or

(iii) a pooled superannuation trust; or

(b) that was:

(i) effected for the purposes of a complying

superannuation scheme; or

(ii) accepted by the person maintaining such a

scheme for the purposes of the scheme;

not being a policy that has ceased to be a policy for the purposes of such a

fund, trust or scheme;

'CS/RA component' means the component of the taxable income

determined under section 116CJ for the CS/RA class;

'current surplus', in relation to a class of assessable income,

means:

(a) the amount by which the assessable income of that

class exceeds the deductions allocated to that class under section 116CF; or

(b) if an amount has been applied under section 116CG

in reduction of a current surplus previously calculated under this definition

- the amount by which that previous surplus exceeds the amount so applied

under section 116CG;

'current year deduction' means an allowable deduction other

than:

(a) a notional Part IIIA disposals deduction; or

(b) a prior year loss deduction;

'deficit', in relation to a class of assessable income, means the

amount by which the assessable income of that class is less than the

deductions allocated to that class under section 116CF;

'eligible termination payment' has the same meaning as in

Subdivision AA of Division 2;

'exempt policy':

(a) in relation to an ordinary life assurance company -

means an eligible policy; or

(b) in relation to an SGIO - means any life assurance

policy other than:

(i) a CS policy;

(ii) an NCS policy; or

(iii) an RA policy;

'fund assessable income' means assessable income derived from

the assets included in the insurance funds;

'fund asset', in relation to a disposal, means an asset that was

included in any of the insurance funds immediately before the disposal;

'modified 25/25A amount', in relation to a disposal of an asset,

means any amount that would (apart from sections 116CB and 116CC) be included

in assessable income under section 25 or 25A in respect of the disposal if

Division 10 of Part IX applied in respect of the disposal;

'modified 51/52 amount', in relation to a disposal of an asset,

means any amount that would (apart from sections 116CB and 116CC) be allowable

as a deduction under section 51 or 52 in respect of the disposal if Division

10 of Part IX applied in respect of the disposal;

'modified 160Z gain amount', in relation to a disposal of an

asset, means any capital gain that would (apart from this Division) be deemed

for the purposes of Part IIIA to have accrued in respect of the disposal of

the asset if Division 10 of Part IX applied in respect of the disposal,

reduced by the proportion of that gain that would be calculated using the

formula in section 112A;

'modified 160Z loss amount', in relation to a disposal of an

asset, means any capital loss that would (apart from this Division) be deemed

for the purposes of Part IIIA to have been incurred in respect of the disposal

of the asset if Division 10 of Part IX applied in respect of the disposal;

'NCS component' means the component of the taxable income

determined under section 116CJ for the NCS class;

'NCS policy' means a life assurance policy (other than an

eligible policy):

(a) that is vested in the trustee of:

(i) a non-complying superannuation fund; or

(ii) a non-complying ADF; or

(b) that was:

(i) effected for the purposes of a non-complying

superannuation scheme; or

(ii) accepted by the person maintaining such a

scheme for the purposes of the scheme;

not being a policy that has ceased to be a policy for the purposes of such a

fund or scheme;

'non-complying ADF' has the same meaning as in Part IX;

'non-complying superannuation fund' has the same meaning as

in Part IX;

'non-complying superannuation scheme' means a provident,

benefit, superannuation or retirement scheme:

(a) in respect of which there is a non-complying

superannuation fund; or

(b) in respect of which there is no such fund but in

respect of which the Commissioner is of the opinion that, if there were a fund

in respect of the scheme, it would, having regard to the terms and conditions

of the scheme, be a non-complying superannuation fund;

'non-fund assessable income' means assessable income other than

fund assessable income, but does not include:

(a) AD premiums;

(b) specified roll-over amounts; or

275;

'non-fund asset', in relation to a disposal, means an asset that

was not included in any of the insurance funds immediately before the

disposal;

'non-fund component' means the component of the taxable

income determined under section 116CJ for the non-fund class;

'notional Part IIIA disposal' means a disposal (within the meaning

of Part IIIA) of an asset (within the meaning of that Part), being:

(a) a disposal to which that Part applies; or

(b) a disposal to which that Part would apply if:

(i) section 160ZZF and Divisions 5A and 17 of

that Part were disregarded; and

(ii) subsection 306 (1) applied to the asset

concerned;

'notional Part IIIA disposals deduction' means so much of an

ordinary 51/52 amount or modified 51/52 amount as is allowable as a

deduction;

'notional Part IIIA disposals income' means:

(a) so much of any ordinary 25/25A amount or modified

25/25A amount as is included in assessable income; or

(b) any amount included in assessable income under

section 116CD;

'ordinary life assurance company' means a company the sole or

principal business of which is life assurance and includes a company that is

registered under the Life Insurance Act 1945 and is carrying on life assurance

business, but does not include an SGIO;

'ordinary 25/25A amount' means any amount that would (apart

from sections 116CB and 116CC) be included in assessable income under section

25 or 25A in respect of a notional Part IIIA disposal;

'ordinary 51/52 amount' means any amount that would (apart

from sections 116CB and 116CC) be allowable as a deduction under section 51 or

52 in respect of a notional Part IIIA disposal;

'ordinary 160Z gain amount', in relation to the disposal of an

asset, means any capital gain that would (apart from this Division) be deemed

for the purposes of Part IIIA to have accrued in respect of the disposal of

the asset, reduced by the proportion of that gain that would be calculated

using the formula in section 112A;

'ordinary 160Z loss amount', in relation to a disposal of an asset,

means any capital loss that would (apart from this Division) be deemed for the

purposes of Part IIIA to have been incurred in respect of the disposal of the

asset;

'overall 160Z gain' means:

(a) for the non-fund class - the amount by which the sum

of the ordinary 160Z gain amounts for that class exceeds the sum of the

ordinary 160Z loss amounts for that class;

(b) for the CS/RA class - the amount by which the total

modified 160Z gain amount for that class exceeds the total modified 160Z loss

amount for that class; or

ordinary 160Z gain amount for that class exceeds the total ordinary 160Z loss

amount for that class;

or, if an amount has been applied under subsection 116CD (3) in reduction of

an overall 160Z gain previously calculated under this definition - the amount

by which that previous overall 160Z gain exceeds the amount so applied under

that subsection;

'overall 160Z loss' means:

(a) for the non-fund class - the amount by which the sum

of the ordinary 160Z gain amounts for that class is less than the sum of the

160Z ordinary loss amounts for that class;

(b) for the CS/RA class - the amount by which the total

modified 160Z gain amount for that class is less than the total modified 160Z

loss amount for that class; or

ordinary 160Z gain amount for that class is less than the total ordinary 160Z

loss amount for that class;

'pooled superannuation trust' has the same meaning as in Part

IX;

'prior year loss deduction' means a deduction allowable under

section 80, 80AAA or 80AA;

'prior year Part IIIA loss', in relation to a year of income (in

this definition called the 'loss year'), means the amount (if any) by which

the sum of:

(a) the sum of the overall 160Z losses for all the classes

of assessable income for the loss year; and

(b) any prior year Part IIIA loss calculated under this

definition for the year of income immediately preceding the loss year;

exceeds the sum of the overall 160Z gains (before any application of section

116CD) for all the classes of assessable income;

'RA policy' means:

(a) a life assurance policy in relation to a roll-over annuity;

(b) a life assurance policy (other than an eligible policy)

in relation to an immediate annuity:

(i) that is an eligible annuity within the meaning

of Subdivision AA of Division 2; and

(ii) whose purchase price consists wholly or partly

of a rolled-over amount or rolled-over amounts;

'residual current surplus', means:

(a) so much of a current surplus as remains after the

application of section 116CG; or

(b) if an amount has been applied under section 116CH

in reduction of a residual current surplus previously calculated under this

definition - the amount by which that previous residual current surplus

exceeds the amount so applied under section 116CH;

'residual overall 160Z gain' means so much of an overall 160Z

gain as remains after the application of subsection 116CD (3);

'rolled-over amount' has the same meaning as in Subdivision AA

of Division 2;

'roll-over annuity' has the same meaning as in Subdivision AA

of Division 2;

'specified roll-over amount', in relation to a life insurance

company, means so much of an amount paid to the company on or after 1 July

1988 as constitutes a roll-over of some or all of the untaxed element of the

post-June 83 component (within the meaning of Subdivision AA of Division 2) of

an eligible termination payment;

'superannuation premiums' means premiums received in respect

of superannuation policies;

'total modified 160Z gain amount', in relation to the CS/RA

class of assessable income, means the total of so much of any modified 160Z

gain amounts as has been allocated to that class under section 116CB;

'total modified 160Z loss amount', in relation to the CS/RA

class of assessable income, means the total of so much of any modified 160Z

loss amounts as has been allocated to that class under section 116CB;

'total ordinary 160Z gain amount', in relation to a class of

assessable income, means the total of so much of any ordinary 160Z gain

amounts as has been allocated to that class under section 116CB;

'total ordinary 160Z loss amount', in relation to a class of

assessable income, means the total of so much of any ordinary 160Z loss

amounts as has been allocated to that class under section 116CB;";

(e) by adding at the end the following subsections:

"(3) For the purposes of this Division, a life assurance policy or

an AD policy shall be taken to be included in a fund if, in the opinion of the

Commissioner, liabilities under that policy would be payable from that fund.

"(4) A reference in this Division to an amount of income or

assessable income derived from assets included in the insurance funds includes

a reference to an amount derived, or included in assessable income, in respect

of assets included in the insurance funds.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 14

14. After section 110 of the Principal Act the following sections are

inserted:

Exemption of CS/RA income that accrued before 1 July 1988

"110B. Of each amount derived by a life assurance company in the year of

income that would, apart from this section and section 110C, be included in

the CS/RA class of assessable income, so much of the amount as accrued to the

company before 1 July 1988 is exempt from tax.

Current pension liabilities exemption

"110C. (1) If the Commissioner is satisfied that a percentage of the

notional CS/RA amount of a life assurance company would have been exempt from

tax under section 282B or 283 if the notional CS/RA amount had been derived

instead by the holders of CS policies issued by the company, that percentage

of the notional CS/RA amount is exempt from tax.

"(2) In this section:

'notional CS/RA amount' means the amount that, apart from this section,

would be the CS/RA class of assessable income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 15

Premiums not assessable income

15. Section 111 of the Principal Act is amended by inserting after

subsection (1) the following subsection:

"(1A) Subsection (1) does not apply to specified roll-over amounts.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 16

16. After section 111 of the Principal Act the following sections are

inserted:

Deductions to be allowable for expenditure incurred in gaining

superannuation premiums

"111A. For the purpose of determining the deductions allowable to a life

assurance company, superannuation premiums shall be treated as assessable

income.

Disposal of units in PSTs by life assurance companies

"111B. (1) If:

(a) a life assurance company disposes of a unit in a unit trust;

(b) the unit trust is a pooled superannuation trust in relation to the year

of income of the unit trust in which the disposal occurred; and

tax-advantaged insurance fund of the company;

the following provisions have effect:

(d) an amount shall not be included in the assessable income of the company

under section 25 in respect of the disposal;

(e) sections 25A and 52 do not apply in respect of the disposal of the

unit;

(f) an amount shall not be allowed as a deduction under section 51 to the

company in respect of the disposal.

"(2) The reference in subsection (1) to a tax-advantaged insurance fund of a

life assurance company is a reference to a particular one of the insurance

funds where, at the end of the year of income in which the disposal of the

unit occurred, the life assurance policies included in the insurance fund

consisted wholly of any or all of the following:

(a) CS policies;

(b) RA policies;

Reduction in deductions that are not exclusively related to producing

assessable income

"111C. (1) This section applies to any deduction that:

(a) apart from this section, would be allowable to a life assurance company

otherwise than under section 51 or 113; and

(b) does not relate exclusively to the assessable income of the company.

"(2) A deduction to which this section applies is allowable only to the

extent calculated using the formula:

Assessable income

Deduction X -----------------

Total income

where:

Deduction is the amount of the deduction concerned;

Assessable income is the number of dollars in the assessable income of the

company;

Total income is the number of dollars in the total of all the amounts that

would be assessable income of the company apart from any exempting provision.

Division has effect subject to the Constitution

"111D. It is the intention of the Parliament that if, but for this section,

this Division would have the effect that a law imposing taxation would impose

tax on property of any kind belonging to a State within the meaning of section

114 of the Constitution, this Division shall not have that effect.

Application of Act to SGIOs

"111E. Paragraph 23 (d) does not apply to an SGIO.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 17

17. Section 112 of the Principal Act is repealed and the following section

is substituted:

Deductions not allowable for expenditure incurred in gaining certain

premium income

"112. (1) A deduction is not allowable to a life assurance company in

respect of expenditure incurred exclusively in gaining premiums that are

excluded from assessable income by section 111.

"(2) This section does not apply to superannuation premiums to which section

111A applies.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 18

Exemption of income attributable to certain policies etc.

18. Section 112A of the Principal Act is amended:

(a) by omitting from subsection (1) "eligible policies" and substituting

"exempt policies";

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

"(1A) The assessable income of an SGIO shall not include any

amounts other than:

(a) income derived from assets included in the insurance funds;

(b) specified roll-over amounts; and

(d) by omitting subsection (4).

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 19

Expenses of general management

19. Section 113 of the Principal Act is amended by adding at the end the

following subsection:

"(4) A provision of this Act (including a provision of section 51) that

expressly prevents or restricts the operation of section 51 applies in the

same way to this section.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 20

20. Before section 116D of the Principal Act the following sections are

inserted:

Classes of assessable income and policies

"116CA. (1) The following table sets out the classes of assessable income

for ordinary life assurance companies (working from the highest to the lowest)

and (where applicable) the corresponding classes of policy:

------------------------------------------------------------------------------

-- ORDINARY LIFE ASSURANCE COMPANIES - ASSESSABLE INCOME CLASSES

Item Assessable income class Policy class

------------------------------------------------------------------------------

-- 1 NCS (Non-Complying Superannuation) NCS policy

2 CS/RA (Complying Superannuation/Roll-over Annuity) CS policy or

policy

3 Non-fund

4 AD/RLA (Accident, Disability/Residual Life Assurance) AD/RLA policy

"(2) The following table sets out the classes of assessable income for

SGIOs (with the higher class first) and the corresponding classes of policy:

SGIOs - ASSESSABLE INCOME CLASSES

------------------------------------------------------------------------------

-- Item Assessable income class Policy

class

------------------------------------------------------------------------------

-- 1 NCS (Non-Complying Superannuation) NCS policy

2 CS/RA (Complying Superannuation/Roll-over Annuity) CS policy or

policy

Notional Part IIIA disposals of fund assets

"116CB. (1) The core amounts for a notional Part IIIA disposal of a fund

asset are as follows:

(a) any ordinary 25/25A amount;

(b) any ordinary 51/52 amount;

(d) any modified 51/52 amount;

(e) any ordinary 160Z gain amount;

(f) any ordinary 160Z loss amount;

(g) any modified 160Z gain amount;

(h) any modified 160Z loss amount.

"(2) For the purposes of subsection (3), the core amounts for a notional

Part IIIA disposal of a fund asset shall be distributed between the classes of

fund assessable income using the formula:

Liabilities for class

Core amount X ---------------------

Total liabilities

where:

Core amount is the core amount;

Liabilities for class is so much of the calculated liabilities of the

company at the end of the year of income as, in the opinion of the

Commissioner, is referable to policies of the class concerned that are

included in the fund in which the asset was included immediately before

disposal;

Total liabilities is so much of the calculated liabilities of the company at

the end of the year of income as, in the opinion of the Commissioner, is

referable to all policies included in that fund (other than exempt policies).

"(3) The following provisions apply to the core amounts for a notional Part

IIIA disposal of a fund asset:

(a) for an ordinary 25/25A amount:

(i) so much as is distributed to the CS/RA class shall not be

included in assessable income; and

(ii) so much as is distributed to any other class continues to be

included in assessable income and is allocated to that class;

(b) for an ordinary 51/52 amount:

(i) so much as is allocated to the CS/RA class is not allowable

as a deduction; and

(ii) so much as is allocated to any other class continues to be

allowable as a deduction and shall be taken for the purposes of section 116CF

to relate exclusively to assessable income of the class concerned;

(i) so much as is distributed to the CS/RA class shall be

included in assessable income and is allocated to that class; and

(ii) so much as is distributed to any other class shall not be

included in assessable income;

(d) for a modified 51/52 amount:

(i) so much as is distributed to the CS/RA class is allowable as

a deduction and shall be taken for the purposes of section 116CF to relate

exclusively to that class; and

(ii) so much as is distributed to any other class is not allowable

as a deduction;

(e) so much of any ordinary 160Z gain amount or ordinary 160Z loss amount as

is distributed to a class other than the CS/RA class is taken into account in

determining the overall 160Z gain or overall 160Z loss for the class

concerned;

(f) so much of any modified 160Z gain amount or modified 160Z loss amount as

is distributed to the CS/RA class is taken into account in determining the

overall 160Z gain or overall 160Z loss for that class.

"(4) In this section:

'policy' means:

(a) a life assurance policy; or

(b) an AD policy.

Notional Part IIIA disposals of non-fund assets

"116CC. (1) The core amounts for a notional Part IIIA disposal of a non-fund

asset are as follows:

(a) any ordinary 25/25A amount;

(b) any ordinary 51/52 amount;

(d) any ordinary 160Z loss amount.

"(2) The following provisions apply to the core amounts for a notional Part

IIIA disposal of a non-fund asset:

(a) the whole of any ordinary 25/25A amount continues to be included in

assessable income and is allocated to the non-fund class;

(b) the whole of any ordinary 51/52 amount continues to be allowable as a

deduction and shall be taken for the purposes of section 116CF to relate

exclusively to the non-fund class;

is taken into account in determining the overall 160Z gain or overall 160Z

loss for the non-fund class.

Assessable income etc. in relation to 160Z gain amounts

"116CD. (1) Nothing shall be included in the assessable income of a life

assurance company under section 160ZO.

"(2) The assessable income of each class shall include the amount (if any)

that is left over after the overall 160Z gain for that class has been reduced

in accordance with this section.

"(3) If there is an overall 160Z loss for a particular class of assessable

income, the loss shall be applied successively in reduction of overall 160Z

gains for the remaining classes, working from the lowest remaining class with

an overall 160Z gain to the highest remaining class with an overall 160Z gain.

"(4) If there are overall 160Z losses for 2 or more classes, subsection (3)

applies successively to those classes, working from the lowest class to the

highest class.

"(5) In the case of an ordinary life assurance company, any prior year Part

IIIA loss for the immediately preceding year of income shall be applied in

reduction of residual overall 160Z gains for the classes of assessable income

in the following order:

(a) non-fund;

(b) AD/RLA;

(d) NCS.

"(6) In the case of an SGIO, any prior year Part IIIA loss for the

immediately preceding year of income shall be applied in reduction of residual

overall 160Z gains for the classes of assessable income in the following

order:

(a) CS/RA;

(b) NCS.

"(7) A reference in section 51AAA to an amount included in assessable income

under section 160ZO includes a reference to an amount included in assessable

income under subsection (2) of this section.

"(8) For the purposes of Part IIIA, a life assurance company shall not be

taken to have incurred any net capital loss in respect of the year of income

under section 160ZC.

Amount of assessable income in particular class

"116CE. (1) The NCS class of assessable income consists of:

(a) any assessable income allocated to that class under subsection 116CB (3)

or section 116CD; and

(b) any assessable income allocated to that class under subsection (5) of

this section.

"(2) The non-fund class of assessable income consists of:

(a) any assessable income allocated to that class under subsection 116CC (2)

or section 116CD; and

(b) any other non-fund assessable income.

"(3) The AD/RLA class of assessable income consists of:

(a) any assessable income allocated to that class under subsection 116CB (3)

or section 116CD;

(b) any assessable income allocated to that class under subsection (5) of

this section; and

"(4) The CS/RA class of assessable income consists of:

(a) any assessable income allocated to that class under subsection 116CB (3)

or section 116CD;

(b) any assessable income allocated to that class under subsection (5) of

this section;

(d) specified roll-over amounts paid to the company in the year of income.

"(5) Each amount of assessable income derived from assets included in a

particular one of the insurance funds (other than notional Part IIIA disposals

income) shall be allocated between the classes of fund assessable income using

the formula:

Liabilities for class

Income x ---------------------

Total liabilities

where:

Income is the amount of the assessable income to be allocated;

Liabilities for class is so much of the calculated liabilities of the

company at the end of the year of income as, in the opinion of the

Commissioner, is referable to policies of the class concerned that are

included in the fund;

Total liabilities is so much of the calculated liabilities of the company at

the end of the year of income as, in the opinion of the Commissioner, is

referable to all policies included in the fund (other than exempt policies).

"(6) In this section, 'policy' means:

(a) a life assurance policy; or

(b) an AD policy.

Apportionment of current year deductions between classes

"116CF. (1) Current year deductions or notional Part IIIA disposals

deductions that relate exclusively to a particular class of assessable income

shall be allocated to that class of assessable income.

"(2) To each class of assessable income there shall be allocated an amount

of deductions calculated using the formula:

Income of class

Residual current deductions x ---------------

Total income

where:

Residual current deductions is the total of the current year deductions,

other than those to which subsection (1) applies;

Income of class is the number of dollars in the assessable income of the

class concerned (other than amounts included in assessable income under

section 116CD);

Total income is the number of dollars in the total assessable income (other

than amounts included in assessable income under section 116CD). Application

of deficit arising for a particular class

"116CG. (1) If there is a deficit for a particular class of assessable

income, the deficit shall be applied successively in reduction of current

surpluses for the remaining classes, working from the lowest remaining class

with a current surplus to the highest remaining class with a current surplus.

"(2) If there are deficits for 2 or more classes, subsection (1) applies

successively to those classes, working from the lowest class to the highest

class.

Deduction of prior year losses

"116CH. (1) In the case of an ordinary life assurance company, prior year

loss deductions shall be applied in reduction of residual current surpluses

for the classes of assessable income in the following order:

(a) non-fund;

(b) AD/RLA;

(d) NCS.

"(2) In the case of an SGIO, prior year loss deductions shall be applied in

reduction of residual current surpluses for the classes of assessable income

in the following order:

(a) CS/RA;

(b) NCS.

"(3) If there are prior year loss deductions of 2 or more of the kinds

specified in section 80AB, those deductions shall be taken into account under

this section in the order determined by section 80AB.

Components of taxable income

"116CJ. The component of taxable income for a particular class of assessable

income is the amount (if any) that is left over after the assessable income of

that class has been reduced in accordance with sections 116CF, 116CG and

116CH.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 21

Interpretation

21. Section 116E of the Principal Act is amended:

(a) by inserting "an RA policy, a superannuation policy," before "a sickness

policy" in the definition of "eligible insurance policy" in subsection (1);

(b) by omitting "to a natural person" from the definition of "immediate

annuity" in subsection (1);

substituting the following definition:

"'eligible policy' has the same meaning as in Division 8;";

(d) by inserting in subsection (1) the following definition:

"'class', in relation to assessable income, means a class specified

in section 116G;

'CS policy' has the same meaning as in Division 8;

'CS/RA assessable income', in relation to a registered

organization in relation to a year of income, means so much of the total

income (other than exempt premiums) of the organization of the year of income

as is derived from CS/RA business of the organization;

'CS/RA asset' means an asset that relates to the CS/RA business;

'CS/RA business' means business of, or in relation to, the issuing

of, or the undertaking of liability under:

(a) CS policies; or

(b) RA policies;

'CS/RA component' means the component of the taxable income

determined under section 116HE for the CS/RA class;

'current surplus', in relation to a class of assessable income,

means:

(a) the amount by which the assessable income of that

class exceeds the deductions allocated to that class under section 116HB; or

(b) if an amount has been applied under section 116HC

in reduction of a current surplus previously calculated under this definition

- the amount by which that previous surplus exceeds the amount so applied

under section 116HC;

'current year deduction' means an allowable deduction other

than:

(a) a notional Part IIIA disposals deduction; or

(b) a prior year loss deduction;

'deficit', in relation to a class of assessable income, means the

amount by which the assessable income of that class is less than the

deductions allocated to that class under section 116HB;

'EIB assessable income', in relation to a registered organization

in relation to a year of income, means so much of the total income (other than

premiums) of the organization of the year of income as is derived from

eligible insurance business of the organization;

'EIB asset' means an asset that relates to the eligible insurance

business;

'EIB component' means the component of the taxable income

determined under section 116HE for the EIB class;

'eligible termination payment' has the same meaning as in

Subdivision AA of Division 2;

'exempt premium' means a premium other than a specified

rollover amount;

'modified 25/25A amount', in relation to a disposal of an asset,

means any amount that would (apart from section 116GA) be included in

assessable income under section 25 or 25A in respect of the disposal if

Division 10 of Part IX applied in respect of the disposal;

'modified 51/52 amount', in relation to a disposal of an asset,

means any amount that would (apart from section 116GA) be allowable as a

deduction under section 51 or 52 in respect of the disposal if Division 10 of

Part IX applied in respect of the disposal;

'modified 160Z gain amount', in relation to a disposal of an

asset, means any capital gain that would (apart from this Division) be deemed

for the purposes of Part IIIA to have accrued in respect of the disposal of

the asset if Division 10 of Part IX applied in respect of the disposal;

'modified 160Z loss amount', in relation to a disposal of an

asset, means any capital loss that would (apart from this Division) be deemed

for the purposes of Part IIIA to have been incurred in respect of the disposal

of the asset if Division 10 of Part IX applied in respect of the disposal;

'NCS assessable income', in relation to a registered organization

in relation to a year of income, means so much of the total income (other than

premiums) of the organization of the year of income as is derived from NCS

business of the organization;

'NCS asset' means an asset that relates to the NCS business;

'NCS business' means business of, or in relation to, the issuing

of, or the undertaking of liability under, NCS policies;

'NCS component' means the component of the taxable income

determined under section 116HE for the NCS class;

'NCS policy' has the same meaning as in Division 8;

'notional Part IIIA disposal' means a disposal (within the meaning

of Part IIIA) of an asset (within the meaning of that Part), being:

(a) a disposal to which that Part applies; or

(b) a disposal to which that Part would apply if:

(i) section 160ZZF and Divisions 5A and 17 of that

Part were disregarded; and

(ii) subsection 306 (1) applied to the asset concerned;

'notional Part IIIA disposals deduction' means so much of an

ordinary 51/52 amount or modified 51/52 amount as is allowable as a

deduction;

'ordinary 25/25A amount' means any amount that would (apart

from section 116GA) be included in assessable income under section 25 or 25A

in respect of a notional Part IIIA disposal;

'ordinary 51/52 amount' means any amount that would (apart

from section 116GA) be allowable as a deduction under section 51 or 52 in

respect of a notional Part IIIA disposal;

'ordinary 160Z gain amount', in relation to a disposal of an

asset, means any capital gain that would (apart from this Division) be deemed

for the purposes of Part IIIA to have accrued in respect of the disposal of

the asset;

'ordinary 160Z loss amount', in relation to a disposal of an asset,

means any capital loss that would (apart from this Division) be deemed for the

purposes of Part IIIA to have been incurred in respect of the disposal of the

asset;

'overall 160Z gain' means:

(a) for the CS/RA class - the amount by which the total

modified 160Z gain amount for that class exceeds the total modified 160Z loss

amount for that class;

(b) for any other class - the amount by which the total

ordinary 160Z gain amount for that class exceeds the total ordinary 160Z loss

amount for that class;

or, if an amount has been applied under subsection 116GB (3) in reduction of

an overall 160Z gain previously calculated under this definition - the amount

by which that previous overall 160Z gain exceeds the amount so applied under

that subsection;

'overall 160Z loss' means:

(a) for the CS/RA class - the amount by which the total

modified 160Z gain amount for that class is less than the total modified 160Z

loss amount for that class; or

(b) for any other class - the amount by which the total

ordinary 160Z gain amount for that class is less than the total ordinary 160Z

loss amount for that class;

'prior year loss deduction' means a deduction allowable under

section 80, 80AAA or 80AA;

'prior year Part IIIA loss', in relation to a year of income (in

this definition called the 'loss year'), means the amount (if any) by which

the sum of:

(a) the total of the overall 160Z losses for all the classes

of assessable income for the loss year; and

(b) any prior year Part IIIA loss calculated under this

definition for the year of income immediately preceding the loss year;

exceeds the total of the overall 160Z gains (before any application of section

116GB) for all the classes of assessable income;

'RA policy' has the same meaning as in Division 8;

'residual current surplus', means:

(a) so much of a current surplus as remains after the

application of section 116HC; or

(b) if an amount has been applied under section 116HD

in reduction of a residual current surplus previously calculated under this

definition - the amount by which that previous residual current surplus

exceeds the amount so applied under section 116HD;

'residual overall 160Z gain' means so much of an overall 160Z

gain as remains after the application of subsection 116GB (3);

'specified roll-over amount', in relation to a registered

organization, means so much of an amount paid to the organization on or after

1 July 1988 as constitutes a roll-over of some or all of the untaxed element

of the post-June 83 component (within the meaning of Subdivision AA of

Division 2) of an eligible termination payment;

'superannuation premiums' means premiums received in respect

of superannuation policies;

'total modified 160Z gain amount', in relation to the CS/RA

class of assessable income, means the total of so much of any modified 160Z

gain amounts as has been allocated to that class under section 116GA;

'total modified 160Z loss amount', in relation to the CS/RA

class of assessable income, means the total of so much of any modified 160Z

loss amounts as has been allocated to that class under section 116GA;

'total ordinary 160Z gain amount', in relation to a class of

assessable income, means the total of so much of any ordinary 160Z gain

amounts as has been allocated to that class under section 116GA;

'total ordinary 160Z loss amount', in relation to a class of

assessable income, means the total of so much of any ordinary 160Z loss

amounts as has been allocated to that class under section 116GA;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 22

22. After section 116F of the Principal Act the following sections are

inserted:

Exemption of CS/RA income that accrued before 1 July 1988

"116FA. Of each amount derived by a registered organization in the year of

income that would, apart from this section and section 116FB, be included in

the CS/RA class of assessable income, so much of the amount as accrued to the

registered organization before 1 July 1988 is exempt from tax.

Current pension liabilities exemption

"116FB. (1) If the Commissioner is satisfied that a percentage of the

notional CS/RA amount of a registered organization would have been exempt from

tax under section 282B or 283 if the notional CS/RA amount had been derived

instead by the holders of CS policies issued by the organization, that

percentage of the notional CS/RA amount is exempt from tax.

"(2) In this section:

'notional CS/RA amount' means the amount that, apart from this

section, would be the CS/RA class of assessable income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 23

23. Section 116G of the Principal Act is repealed and the following sections

are substituted:

Assessable income of registered organizations

"116G. (1) The classes of assessable income of a registered organization are

as follows (set out working from the highest class to the lowest class):

(a) NCS (Non-Complying Superannuation);

(b) CS/RA (Complying Superannuation/Roll-over Annuity);

"(2) The assessable income of the year of income of a registered

organization shall not include any assessable income that does not come within

the classes specified in subsection (1).

Notional Part IIIA disposals of assets

"116GA. (1) The core amounts for a notional Part IIIA disposal of an asset

are as follows:

(a) any ordinary 25/25A amount;

(b) any ordinary 51/52 amount;

(d) any modified 51/52 amount;

(e) any ordinary 160Z gain amount;

(f) any ordinary 160Z loss amount;

(g) any modified 160Z gain amount;

(h) any modified 160Z loss amount.

"(2) The following provisions apply to the core amounts for a disposal of a

CS/RA asset:

(a) for an ordinary 25/25A amount - the amount shall not be included in

assessable income;

(b) for an ordinary 51/52 amount - the amount is not allowable as a

deduction;

assessable income and is allocated to the CS/RA class;

(d) for a modified 51/52 amount - the amount is allowable as a deduction and

shall be taken for the purposes of section 116HB to relate exclusively to the

CS/RA class;

(e) any ordinary 160Z gain amount or ordinary 160Z loss amount shall be

disregarded;

(f) any modified 160Z gain amount or modified 160Z loss amount is taken into

account in determining the overall 160Z gain or overall 160Z loss for the

CS/RA class.

"(3) The following provisions apply to the core amounts for a disposal of an

EIB or NCS asset:

(a) for an ordinary 25/25A amount - the amount continues to be included in

assessable income and is allocated to the class concerned;

(b) for an ordinary 51/52 amount - the amount continues to be allowable as a

deduction and shall be taken for the purposes of section 116HB to relate

exclusively to assessable income of the class concerned;

assessable income;

(d) for a modified 51/52 amount - the amount is not allowable as a

deduction;

(e) any ordinary 160Z gain amount or ordinary 160Z loss amount is taken into

account in determining the overall 160Z gain or overall 160Z loss for the

class concerned;

(f) any modified 160Z gain amount or modified 160Z loss amount shall be

disregarded.

"(4) If an asset relates to the business of 2 or more classes, this section

applies to a proportionate extent to each of those classes in relation to the

disposal.

Assessable income etc. in relation to 160Z gain amounts

"116GB. (1) Nothing shall be included in the assessable income of a

registered organization under section 160ZO.

"(2) The assessable income of each class shall include the amount (if any)

that is left over after the overall 160Z gain for that class has been reduced

in accordance with this section.

"(3) If there is an overall 160Z loss for a particular class of assessable

income, the loss shall be applied successively in reduction of overall 160Z

gains for the remaining classes, working from the lowest remaining class with

an overall 160Z gain to the highest remaining class with an overall 160Z gain.

"(4) If there are overall 160Z losses for 2 or more classes, subsection (3)

applies successively to those classes, working from the lowest class to the

highest class.

"(5) Any prior year Part IIIA loss for the immediately preceding year of

income shall be applied in reduction of residual overall 160Z gains for the

classes of assessable income in the following order:

(a) EIB;

(b) CS/RA;

"(6) A reference in section 51AAA to an amount included in assessable income

under section 160ZO includes a reference to an amount included in assessable

income under subsection (2) of this section.

"(7) For the purposes of Part IIIA, a registered organization shall not be

taken to have incurred any net capital loss in respect of the year of income

under section 160ZC.

Disposal of units in PSTs by registered organizations

"116GC. (1) If:

(a) a registered organization disposes of a unit in a unit trust;

(b) the unit trust is a pooled superannuation trust in relation to the year

of income of the unit trust in which the disposal occurred; and

organization solely in respect of tax-advantaged business of the

organization;

the following provisions have effect:

(d) an amount shall not be included in the assessable income of the

organization under section 25 in respect of the disposal;

(e) sections 25A and 52 do not apply in respect of the disposal of the

unit;

(f) an amount shall not be allowed as a deduction under section 51 to the

organization in respect of the disposal.

"(2) The reference in subsection (1) to tax-advantaged business of a

registered organization is a reference to the business of, or in relation to,

the issuing of, or the undertaking of liability under, policies other than

eligible insurance policies or NCS policies.

Amount of assessable income in particular class

"116GD. (1) The NCS class of assessable income consists of:

(a) any assessable income allocated to that class under section 116GA or

116GB; and

(b) any other NCS assessable income.

"(2) The EIB class of assessable income consists of:

(a) any assessable income allocated to that class under section 116GA or

116GB; and

(b) any other EIB assessable income.

"(3) The CS/RA class of assessable income consists of:

(a) any assessable income allocated to that class under section 116GA or

116GB;

(b) amounts included in assessable income under section 275;

year of income; and

(d) any other CS/RA assessable income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 24

24. After section 116H of the Principal Act the following sections are

inserted:

Deductions to be allowable for expenditure incurred in gaining

superannuation premiums

"116HA. For the purpose of determining the deductions allowable to a

registered organization, superannuation premiums shall be treated as

assessable income.

Apportionment of current year deductions between classes

"116HB. (1) Current year deductions or notional Part IIIA disposals

deductions that relate exclusively to a particular class of assessable income

shall be allocated to that class of assessable income.

"(2) To each class of assessable income there shall be allocated an amount

of deductions calculated using the formula:

Income of class

Residual current deductions X ---------------

Total income

where:

Residual current deductions is the total of the current year deductions,

other than those to which subsection (1) applies;

Income of class is the number of dollars in the assessable income of the

class concerned (other than amounts included in assessable income under

section 116GB);

Total income is the number of dollars in the total assessable income (other

than amounts included in assessable income under section 116GB).

Application of deficit arising for a particular class

"116HC. (1) If there is a deficit for a particular class of assessable

income, the deficit shall be applied successively in reduction of current

surpluses for the remaining classes, working from the lowest remaining class

with a current surplus to the highest remaining class with a current surplus.

"(2) If there are deficits for 2 or more classes, subsection (1) applies

successively to those classes, working from the lowest class to the highest

class.

Deduction of prior year losses

"116HD. (1) Prior year loss deductions shall be applied in reduction of

residual current surpluses for the classes of assessable income in the

following order:

(a) E1B;

(b) CS/RA;

"(2) If there are prior year loss deductions of 2 or more of the kinds

specified in section 80AB, those deductions shall be taken into account under

this section in the order determined by section 80AB.

Components of taxable income

"116HE. The component of taxable income for a particular class of assessable

income is the amount (if any) that is left over after the assessable income of

that class has been reduced in accordance with sections 116HB, 116HC and

116HD.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 25

Liability to withholding tax

25. Section 128B of the Principal Act is amended:

(a) by inserting after paragraph (3) (ga) the following paragraph:

"(gb) income that consists of a dividend derived from assets

included in the insurance funds of a life assurance company (within the

meaning of Division 8) that carries on business in Australia at or through a

permanent establishment of the life assurance company in Australia;";

(b) by omitting subsection (3A).

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 26

26. After section 159P of the Principal Act the following Subdivisions are

inserted:

"Subdivision AAA - Rebate for Annual Leave, Long Service Leave and

Eligible Termination Payments

Interpretation

"159S. In this Subdivision, unless the contrary intention appears:

'age 55 ETP', in relation to a taxpayer, means an ETP made in relation

'current year' means the year of income for which the rebate under this

Subdivision is being calculated;

'eligible assessable income' means the total of the amounts included in to

the taxpayer on or after the taxpayer's 55th birthday;

the assessable income of the taxpayer of the current year under the following

provisions:

(a) section 26AC;

(b) subsections 26AD (2), (3) and (4);

'ETP' has the same meaning as in Subdivision AA of Division 2;

'golden handshake ETP' means an ETP covered by paragraph (a) or (aa) of the

definition of 'eligible termination payment' in subsection 27A (1);

'life assurance company' has the same meaning as in Subdivision AA of

Division 2;

'non-age 55 ETP' means an ETP other than an age 55 ETP;

'registered organization' has the same meaning as in Subdivision AA of

Division 2;

'resident taxpayer' means a person who is a resident taxpayer for the

current year of income within the meaning of subsection 3 (1) of the Income

Tax Rates Act 1986;

'residual amount' has the meaning given by section 159SF;

'rolled-over' has the same meaning as in Subdivision AA of Division 2;

's.27B (1) amount' means an amount included in assessable income under

subsection 27B (1);

's.27B (1) (a) amount' means an amount included in assessable income under

paragraph 27B (1) (a);

's.27B (1) (b) amount' means an amount included in assessable income under

paragraph 27B (1) (b);

'start date', in relation to an ETP or a part of an ETP, has the meaning

given by subsection 159SD (2);

'superannuation-related ETP' means an ETP covered by paragraph (b), (ba),

(d), (da), (db), (e), (f), (ga) or (gb) of the definition of 'eligible

termination payment' in subsection 27A (1);

'Table 1' means Table 1 in section 159SB;

'Table 2' means Table 2 in section 159SB;

'taxable part of the taxable income' means:

(a) if the taxpayer is a resident taxpayer in relation to the

current year and Division 16 does not apply to the income of the taxpayer of

the current year - so much of the taxable income of the taxpayer of the

current year as exceeds the tax threshold; and

(b) in any other case - the whole of the taxable income;

'tax threshold' means:

(a) $5,100; or

(b) where, because of section 20 of the Income Tax Rates Act

1986, that Act applies to the taxpayer as if the reference in the table in

Part I of Schedule 7 to that Act to $5,100 were a reference to a different

amount - that different amount;

'upper limit' has the meaning given by section 159SG.

Entitlement to rebate

"159SA. If the assessable income of the taxpayer of the current year

includes eligible assessable income, the taxpayer is entitled to a rebate of

tax in the taxpayer's assessment for the current year of such amount (if any)

as is necessary to ensure that the rate of tax on a rebatable amount specified

in Table 1 or 2 does not exceed the applicable rate of tax specified in the

table concerned.

Tables of rebatable amounts

"159SB. The following tables set out the classes of assessable income, and

the rates of tax, that are relevant for calculating the rebate under this

Subdivision:

TABLE 1

s.27B (1) (a) AMOUNTS

------------------------------------------------------------------------------

-- Rates of tax (%) for year of

income commencing on 1 July

Item Class of eligible Corresponding

------------------------------ assessable income rebatable amount 1988

1989 1990 1991 1992

later

------------------------------------------------------------------------------

-- 1 27B (1) (a)-B55-F84 derived 28 26 24 22

2 27B (1) (a)-A55-F84 low rate part 12 9 6 3 0

3 remaining part 27 24 21 18 15

4 27B (1) (a)-B55-F85 derived 27 24 20 20 20

5 27B (1) (a)-A55-F85 low rate part 10 5 0 0 0

6 remaining part 25 20 15 15 15

7 27B (1) (a)-B55-F86 derived 25 20 20 20 20

8 27B (1) (a)-A55-F86 low rate part 7 0 0 0 0

9 remaining part 22 15 15 15 15

10 27B (1) (a)-B55-F87 derived 20 20 20 20 20

11 27B (1) (a)-A55-F87 low rate part 0 0 0 0 0

12 remaining part 15 15 15 15 15

------------------------------------------------------------------------------

-- TABLE 2

OTHER AMOUNTS OF ELIGIBLE ASSESSABLE INCOME

------------------------------------------------------------------------------

-- Rates of tax (%) for year of

Item Class of eligible Corresponding income commencing on 1 July

assessable income rebatable amount 1988 and subsequent years

------------------------------------------------------------------------------

-- 1 27B (1) (b)-B55 derived 30

2 27B (1) (b)-A55 low rate part 15

3 remaining part 30

4 non-27B (1) derived 30

------------------------------------------------------------------------------

Classes of eligible assessable income

"159SC. (1) The amount of eligible assessable income that comes within a

class described in Table 1 is determined as follows:

(a) for the 27B (1) (a)-B55-F84 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of a non-age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced before 1 July 1985; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(b) for the 27B(1) (a)-A55-F84 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of an age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced before 1 July 1985; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of a non-age 55 ETP -

calculate how much of the s.27B(1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1985 and before 1 July 1986; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(d) for the 27B (1) (a)-A55-F85 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of an age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1985 and before 1 July 1986; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(e) for the 27B (1) (a)-B55-F86 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of a non-age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1986 and before 1 July 1987; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(f) for the 27B (1) (a)-A55-F86 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of an age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1986 and before 1 July 1987; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(g) for the 27B (1) (a)-B55-F87 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of a non-age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1987; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year;

(h) for the 27B (1) (a)-A55-F87 class:

(i) for each s.27B (1) (a) amount included in the assessable

income of the taxpayer of the current year in respect of an age 55 ETP -

calculate how much of the s.27B (1) (a) amount is attributable to fund

membership that commenced on or after 1 July 1987; and

(ii) add together all the amounts calculated under subparagraph

(i) for the current year.

"(2) The amount of eligible assessable income that comes within a class

described in Table 2 is as follows:

(a) the 27B (1) (b)-B55 class is the total of the s.27B (1) (b) amounts

included in the assessable income of the taxpayer of the current year in

respect of non-age 55 ETPs;

(b) the 27B (1) (b)-A55 class is the total of the s.27B (1) (b) amounts

included in the assessable income of the taxpayer of the current year in

respect of age 55 ETPs;

amounts.

s.27B (1) (a) amounts attributable to fund membership

"159SD. (1) If a s.27B (1) (a) amount (in this subsection called the 'lump

sum') is included in the assessable income of the taxpayer in respect of an

ETP (in this subsection called the 'current ETP'), the amount of the lump sum

that is attributable to fund membership that commenced during a particular

period is determined as follows:

(a) calculate how much of the lump sum is attributable to a golden handshake

ETP, or to a part of a golden handshake ETP, with a start date in that

period;

(b) calculate how much of the lump sum is attributable to a

superannuation-related ETP or a part of a superannuation-related ETP:

(i) with a start date in that period; and

(ii) that is not attributable to an earlier ETP;

that period - calculate how much of the lump sum is not attributable to an

earlier ETP;

(d) add together all the amounts calculated under the preceding paragraphs.

"(2) The start date of an ETP or of a part of an ETP is determined as

follows:

(a) for a golden handshake ETP or a part of a golden handshake ETP:

(i) if the ETP or part of the ETP was rolled-over by being paid

to a superannuation fund or an approved deposit fund:

(A) if the date of that payment was earlier than 1 July

1988 - 30 June 1985; or

(B) in any other case - the date of that payment;

(ii) if the ETP or part of the ETP was rolled-over by being paid

to a life assurance company or registered organization in respect of the

purchase of an annuity:

(A) if the date on which the contract to purchase the

annuity was entered into was earlier than 1 July 1988 - 30 June 1985; or

(B) in any other case - the date on which the contract to

purchase the annuity was entered into;

(b) for a superannuation-related ETP or a part of a superannuation-related

ETP:

(i) if the ETP is covered by paragraph (b), (ba), (da), (db),

(ga) or (gb) of the definition of 'eligible termination payment' in subsection

27A (1) and the ETP was made because a person was a member of a superannuation

fund - the date on which that person last became a member of the fund before

the ETP was paid; or

(ii) if the ETP is covered by paragraph (d), (e) or (f) of the

definition of 'eligible termination payment' in subsection 27A (1) and the

superannuation pension concerned was payable from a superannuation fund

because a person was a member of the superannuation fund - the date on which

that person last became a member of the fund before the ETP was paid.

Rebatable amounts

"159SE. (1) The rebatable amounts specified in Tables 1 and 2 are determined

as follows:

(a) the 'derived amount' is so much of the taxable part of the taxable

income as is attributable to the corresponding class of eligible assessable

income;

(b) subject to subsection (2), the 'low rate part' is so much of the derived

amount for the class of eligible assessable income concerned as does not

exceed the residual amount for the current year;

eligible assessable income concerned as is left over after deducting the low

rate part.

"(2) The total of the low rate parts for the current year shall not exceed

the residual amount for the current year.

Residual amount

"159SF. (1) The residual amount for a year of income (in this subsection

called the 'reference year') is:

(a) for the year of income in which 1 July 1983 occurred - $50,000; or

(b) for a later year of income - the sum of:

(i) the closing balance for the previous year of income; and

(ii) the amount (if any) by which the upper limit for the

reference year exceeds the upper limit for the previous year of income.

"(2) The closing balance for a year of income is the residual amount for the

year of income, reduced (but not below 0) by the total of any s.27B (1)

amounts included in the assessable income of the year of income in respect of

age 55 ETPs.

Upper limit for purpose of determining residual amount

"159SG. (1) For the purposes of this Subdivision, the upper limit is:

(a) in relation to a year of income before the year of income commencing on

1 July 1985 - $50,000;

(b) in relation to the year of income commencing on 1 July 1985, the year of

income commencing on 1 July 1986 or the year of income commencing on 1 July

1987 - $55,000;

(d) in relation to a later year of income - the amount calculated by

multiplying the upper limit for the immediately preceding year of income by

the indexation factor calculated under subsection (2) for the later year of

income.

"(2) The indexation factor for a year of income is whichever is the greater

of the following:

(a) 1;

(b) the factor (calculated to 3 decimal places) ascertained by dividing the

index number (defined in subsection (3)) for the March quarter immediately

preceding 1 July in the year of income by the index number for the March

quarter immediately preceding that first-mentioned March quarter.

"(3) The index number for a quarter is the estimate of full-time adult

average weekly ordinary time earnings for the middle month of the quarter

published by the Australian Statistician in respect of that month.

"(4) If at any time, whether before or after the commencement of this

subsection, the Australian Statistician has published or publishes an index

number in respect of a quarter in substitution for an index number previously

published by the Australian Statistician in respect of that quarter, the

publication of the later index number shall be disregarded for the purposes of

this section.

"(5) If the factor ascertained under paragraph (2) (b) in relation to a year

of income would, if it were calculated to 4 decimal places, end with a number

greater than 4, the factor ascertained under that paragraph in relation to

that year of income shall be taken to be that factor calculated to 3 decimal

places and increased by 0.001.

Treatment of s.27B (1) amounts assessed under section 101A

"159SH. The following provisions have effect if an amount (in this section

called the 'notional 27B (1) amount') is included in the assessable income of

a trust estate of the current year under subsection 101A (3) in respect of a

s.27B (1) amount that was included in the assessable income of a deceased

taxpayer:

(a) for the purposes of this Subdivision, the trustee shall be taken to be a

taxpayer who has attained the age that the deceased taxpayer had attained at

the date of death and who has had the notional 27B (1) amount included in

assessable income of the current year under subsection 27B (1);

(b) for the purposes of determining the residual amount under section 159SF,

any age 55 ETP made in respect of the deceased taxpayer during the deceased

taxpayer's lifetime:

(i) shall be taken to have been made in relation to the trustee;

and

(ii) shall be taken to have been included in the assessable income

of the estate of the deceased taxpayer of the year of income of the deceased

taxpayer in which the ETP was made.

"Subdivision AAB - Rebate for Certain Superannuation Pensions and

Qualifying Annuities

Interpretation

"159SJ. (1) In this Subdivision, unless the contrary intention appears:

'accrual period':

(a) in relation to a superannuation pension - has the meaning

given by subsection 159SL (2); or

(b) in relation to an ETP - has the meaning given by subsection

159SL (1);

'applicable fund' means:

(a) in relation to a superannuation pension that is payable under

a CS policy, or an exempt policy, that is vested in the trustee of a fund -

that fund; or

(b) in any other case - the fund from which the superannuation

pension is payable;

'approved deposit fund' has the same meaning as in the ETP Subdivision;

'base percentage':

(a) in relation to a superannuation pension - has the meaning

given by section 159SR; or

(b) in relation to a qualifying ETP annuity - has the meaning

given by section 159SY;

'commutation component':

(a) in relation to a superannuation pension - has the meaning

given by section 159SN; or

(b) in relation to a qualifying ETP annuity - has the meaning

given by section 159SV;

'commutation type ETP' means an ETP that is paid on or after 1 July 1988 and

covered by any of paragraphs (d), (da), (db), (e), (f),

(g), (ga), (gb), (h) and (j) of the section 27A ETP definition;

'complying superannuation fund' has the same meaning as in Part IX;

'component':

(a) in relation to a superannuation pension - has the meaning

given by section 159SN; or

(b) in relation to a qualifying ETP annuity - has the meaning

given by section 159SV;

'CS policy' has the same meaning as in Division 8;

'death or disability benefit', in relation to a person, means:

(a) a benefit provided to the person in the event of the death of

another person, not including:

(i) a superannuation pension payable to the person from

a fund by reason of the death of another person to whom a pension was payable

from that fund; or

(ii) an annuity payable to the person under a contract by

reason of the death of another person to whom an annuity was payable under the

same contract; or

(b) a benefit provided to the person in the event of the permanent

disability of the person;

'eligible service period' has the same meaning as in the ETP Subdivision;

'ETP' has the same meaning as in the ETP Subdivision;

'ETP Subdivision' means Subdivision AA of Division 2;

'exempt policy' has the same meaning as in Division 8;

'final percentage':

(a) in relation to a rebatable superannuation pension - has the

meaning given by section 159SP; or

(b) in relation to a rebatable ETP annuity - has the meaning

given by section 159SW;

'first payee', in relation to a pension or annuity, means the person to whom

the pension or annuity first became payable;

'first commenced to be payable' has the same meaning as in the ETP

Subdivision;

'first payment date', in relation to a pension or annuity, means:

(a) subject to paragraph (b), the date on which the pension or

annuity first commenced to be payable; or

(b) if the date applicable under paragraph (a) for a deferred

annuity would be later than the 65th birthday of the first payee - that 65th

birthday;

'intermediate percentage':

(a) in relation to a rebatable superannuation pension - has the

meaning given by section 159SQ; or

(b) in relation to a rebatable ETP annuity - has the meaning

given by section 159SX;

'last retirement date' has the same meaning as in the ETP Subdivision;

'non-commutation type ETP' means an ETP other than a commutation type ETP;

'notional purchase price', in relation to a superannuation pension, means

the net present value of the pension on the first payment date;

'ordinary component':

(a) in relation to a rebatable superannuation pension - has the

meaning given by section 159SN; or

(b) in relation to a rebatable ETP annuity - has the meaning

given by section 159SV;

'rebatable ETP annuity' means a qualifying annuity (within the meaning of

the ETP Subdivision) that satisfies all the following conditions:

(a) the purchase price of the annuity consists wholly of a

rolled-over amount or rolled-over amounts;

(b) the first payment date is on or after 1 July 1988;

(i) the first payment date was on or after the 55th

birthday of the first payee;

(ii) the annuity is a death or disability benefit for the first

payee;

(d) the annuity is not a superannuation pension;

'rebatable superannuation pension' means a superannuation pension that

satisfies all the following conditions:

(a) the applicable fund is or has been a complying superannuation

fund (within the meaning of Part IX) in relation to the year of income in

which the first payment date occurs or any earlier year of income;

(b) the first payment date is on or after 1 July 1988;

(i) the first payment date was on or after the 55th

birthday of the first payee;

(ii) the superannuation pension is a death or disability

benefit for the first payee;

(d) the first payee is not the trustee of the applicable fund;

'rebatable 27H amount' means an amount included in assessable income under

section 27H in respect of:

(a) a rebatable ETP annuity; or

(b) a rebatable superannuation pension;

'rolled-over' has the same meaning as in the ETP Subdivision;

'rolled-over amount' has the same meaning as in the ETP Subdivision;

'section 27A ETP definition' means the definition of 'eligible termination

payment' in subsection 27A (1);

'specified component':

(a) in relation to a rebatable superannuation pension - has the

meaning given by section 159SN; or

(b) in relation to a rebatable ETP annuity - has the meaning

given by section 159SV;

'specified roll-over amount' has the same meaning as in Part IX;

'superannuation pension' means:

(a) a superannuation pension within the meaning of the ETP

Subdivision; or

(b) an annuity payable under a CS policy or an exempt policy,

being in each case a policy vested in the trustee of a fund;

'taxed superannuation fund', in relation to a rebatable superannuation

pension, has the same meaning as that expression has in the ETP Subdivision in

relation to an ETP;

'underlying ETP', in relation to a component, means the ETP to which the

component relates;

'underlying pension or annuity', in relation to a component, means the

pension or annuity to which the underlying ETP for the component relates.

"(2) In this Subdivision, '1988-89' means the year of income commencing on 1

July 1988, and so on for other years of income.

Purchase price or notional purchase price attributable to ETP etc.

"159SK. For the purposes of this Subdivision:

(a) the purchase price of an annuity is attributable to an ETP to the extent

to which the purchase price consists of any part of the ETP that has been

rolled-over;

(b) the purchase price of an annuity is attributable to a specified rollover

amount to the extent to which the purchase price consists of the specified

roll-over amount;

to an ETP to the extent to which that notional purchase price may reasonably

be regarded as consisting of any part of the ETP that has been rolled-over;

and

(d) the notional purchase price of a superannuation pension is attributable

to a specified roll-over amount to the extent to which that notional purchase

price may reasonably be regarded as consisting of that specified roll-over

amount.

Accrual period for an ETP or superannuation pension

"159SL. (1) The accrual period for an ETP (in this section called the

'current ETP') is:

(a) if the current ETP is covered by paragraph (a) or (aa) of the section

27A ETP the definition - the eligible service period in relation to the

current ETP;

(b) if the current ETP is covered by paragraph (b) or (ba) of the section

27A ETP definition - the aggregate of:

(i) the period during which the taxpayer or the fund member,

as the case may be, was a member of the superannuation fund to which the

current ETP relates; and

(ii) if the current ETP is attributable in whole or in part to an

earlier ETP or earlier ETPs - the period that is the accrual period for that

earlier ETP, or the aggregate of the periods that are the accrual periods for

those earlier ETPs;

27A ETP definition - the aggregate of:

(i) the period during which the taxpayer or the depositor, as

the case may be, was a depositor with the fund to which the current ETP

relates; and

(ii) if the current ETP is attributable in whole or in part to an

earlier ETP or earlier ETPs - the period that is the accrual period for that

earlier ETP, or the aggregate of the periods that are the accrual periods for

those earlier ETPs;

(d) if the current ETP is covered by paragraph (d), (da), (db), (e) or (f)

of the section 27A ETP definition - the aggregate of:

(i) the accrual period for the pension to which the current ETP

relates; and

(ii) the period from the first payment date for that pension to

the date the current ETP was paid; or

(e) if the current ETP is covered by paragraph (g), (ga), (gb), (h) or (j)

of the section 27A ETP definition - the aggregate of:

(i) the period from the time of purchase of the annuity to which

the current ETP relates to the date the current ETP was paid; and

(ii) if the current ETP is attributable in whole or in part to an

earlier ETP or earlier ETPs - the period that is the accrual period for that

earlier ETP, or the aggregate of the periods that are the accrual periods for

those earlier ETPs.

"(2) The accrual period for a superannuation pension is the aggregate of:

(a) the period that:

(i) commences at the time when the taxpayer or the fund

member, as the case may be, first became a member of the fund from which the

pension is paid; and

(ii) ends on the first payment date; and

(b) if the notional purchase price of the superannuation pension is

attributable to one or more earlier ETPs - the period that is the accrual

period for that ETP, or the aggregate of the periods that are the accrual

periods for those ETPs.

"(3) Paragraph 27A (13) (b) applies for the purposes of this section in

determining whether an ETP is attributable to an earlier ETP.

"(4) A reference in this section to the aggregate of periods of a particular

kind or particular kinds is a reference to the period commencing at the

beginning of the first such period and ending at the end of the last such

period, excluding any period that is not a period of that kind, or of any of

those kinds, as the case may be.

Entitlement to rebate - superannuation pension

"159SM. (1) Subject to subsection (2), for each rebatable 27H amount

included in the assessable income of a taxpayer of a year of income in respect

of a rebatable superannuation pension, the taxpayer is entitled to a rebate of

tax in the taxpayer's assessment for the year of income of an amount

calculated using the formula:

Reduced 27H amount x Final percentage

where:

Reduced 27H amount is the rebatable 27H amount reduced by the total of the

amounts specified in notices under section 159SS given in relation to payments

of the pension during the year of income;

Final percentage is the final percentage for the superannuation pension.

"(2) The taxpayer is not entitled to a rebate for a rebatable 27H amount

included in the taxpayer's assessable income of a year of income in respect of

a rebatable superannuation pension if the applicable fund in relation to the

superannuation pension is not a taxed superannuation fund in relation to the

year of income of the fund that corresponds with that year of income of the

taxpayer.

Components in respect of superannuation pensions

"159SN. The following are the components in respect of a rebatable

superannuation pension:

(a) the commutation components - each of which is so much of the notional

purchase price of the pension as is attributable to a particular commutation

type ETP (not including any amount that is a specified component or part of a

specified component);

(b) the specified components - each of which is so much of the notional

purchase price of the pension as is attributable to a specified rollover

amount in respect of a particular non-commutation type ETP;

of the pension as remains after deducting the amounts applicable under

paragraphs (a) and (b).

Final percentage for superannuation pension

"159SP. (1) The final percentage for a rebatable superannuation pension that

is not a death or disability benefit is the sum of the intermediate

percentages for the components in respect of the pension.

"(2) The final percentage for a rebatable superannuation pension that is a

death or disability benefit is calculated using the formula:

Accrual days

Normal percentage x ----------------------------------

Accrual days + Future service days

where:

Normal percentage is the percentage that would apply under subsection (1);

Future service days is the number of whole days in the period commencing on

the first payment date and ending on the last retirement date in relation to

the employment to which the pension relates;

Accrual days is the number of whole days in the accrual period for the

pension.

Intermediate percentages for components in respect of superannuation

pensions

"159SQ. (1) The intermediate percentage for a commutation component in

respect of a rebatable superannuation pension (in this subsection called the

'current pension') is calculated using the formula:

Component

Underlying percentage x ----------------------

Notional purchase price

where:

Underlying percentage is:

(a) if the underlying pension or annuity is a rebatable

superannuation pension or a rebatable ETP annuity - the final percentage for

the underlying pension or annuity; or

(b) in any other case - 0%;

Component is the number of dollars in the component;

Notional purchase price is the number of dollars in the notional purchase

price of the current pension.

"(2) The intermediate percentage for the ordinary component in respect of a

rebatable superannuation pension is calculated using the formula:

Component Post-June 83 days

Base percentage x ---------------------- x -----------------

Notional purchase price Accrual days

where:

Base percentage is the base percentage for the component;

Component is the number of dollars in the component;

Notional purchase price is the number of dollars in the notional purchase

price of the superannuation pension;

Post-June 83 days is the number of days after 30 June 1983 in the accrual

period for the superannuation pension;

Accrual days is the number of days in the accrual period for the

superannuation pension.

"(3) The intermediate percentage for a specified component in respect of a

rebatable superannuation pension is calculated using the formula:

Component

15% x -----------------------

Notional purchase price

where:

Component is the number of dollars in the component;

Notional purchase price is the number of dollars in the notional purchase

price of the superannuation pension.

Base percentages for ordinary component in respect of superannuation pensions

"159SR. The base percentage for the ordinary component in respect of a

rebatable superannuation pension depends as follows on the year of income in

which the first payment date occurs:

1988-89 . . . . . . . 3%

1989-90 . . . . . . . 6%

1990-91 . . . . . . . 9%

1991-92 . . . . . . . 12%

1992-93 or later. . . 15%.

Non-rebatable amount for superannuation pension

"159SS. (1) The trustee of a fund may, in respect of a particular payment of

a rebatable superannuation pension from the fund, give to the person to whom

the payment is made a notice stating that the whole or a specified part of the

payment is a non-rebatable amount.

"(2) The notice:

(a) shall be in writing; and

(b) shall be given within the time and in the manner approved by the

Commissioner in writing.

Certain superannuation pensions to be regarded as being payable from

funds

"159ST. For the purposes of this Subdivision, where the Commissioner is of

the opinion that a particular superannuation pension:

(a) is not, apart from this subsection, payable from a fund; and

(b) is, in effect, funded from a fund;

the superannuation pension shall be treated as if it were payable from that

fund.

Entitlement to rebate - rebatable ETP annuity

"159SU. For each rebatable 27H amount included in the assessable income of a

taxpayer of a year of income in respect of a rebatable ETP annuity, the

taxpayer is entitled to a rebate of tax in the taxpayer's assessment for the

year of income of an amount calculated by multiplying the rebatable 27H amount

by the final percentage for the annuity.

Components in respect of rebatable ETP annuities

"159SV. The following are the components in respect of a rebatable ETP

annuity:

(a) the commutation components - each of which is so much of the purchase

price of the annuity as is attributable to a particular commutation type ETP

(not including any amount that is a specified component or part of a specified

component);

(b) the specified components - each of which is so much of the purchase

price of the annuity as is attributable to a specified roll-over amount in

respect of a particular non-commutation type ETP;

of the annuity as is attributable to a non-commutation type ETP but is not

attributable to a specified roll-over amount.

Final percentage for rebatable ETP annuity

"159SW. The final percentage for a rebatable ETP annuity is the sum of the

intermediate percentages for the components in respect of the annuity.

Intermediate percentages for components in respect of rebatable ETP

annuities

"159SX. (1) The intermediate percentage for a commutation component in

respect of a rebatable ETP annuity (in this subsection called the 'current

annuity') is calculated using the formula:

Component

Underlying percentage x --------------

Purchase price

where:

Underlying percentage is:

(a) if the underlying pension or annuity is a rebatable

superannuation pension or a rebatable ETP annuity - the final percentage for

the underlying pension or annuity; or

(b) in any other case - 0%;

Component is the number of dollars in the component;

Purchase price is the number of dollars in the purchase price of the current

annuity.

"(2) The intermediate percentage for an ordinary component in respect of a

rebatable ETP annuity is calculated using the formula:

Component Post-June 83 days

Base percentage x -------------- x -----------------

Purchase price Accrual days

where:

Base percentage is the base percentage for the component;

Component is the number of dollars in the component;

Purchase price is the number of dollars in the purchase price of the

annuity;

Post-June 83 days is so much of Accrual days as represents days after 30

June 1983;

Accrual days is the aggregate of the number of days in:

(a) the accrual period for the underlying ETP; and

(b) the period from the time the annuity was purchased to the

first payment date.

"(3) The intermediate percentage for a specified component in respect of a

rebatable ETP annuity is calculated using the formula:

Component

15% x --------------

Purchase price

where:

Component is the number of dollars in the component;

Purchase price is the number of dollars in the purchase price of the

annuity.

Base percentages for ordinary component in respect of rebatable ETP annuities

"159SY. The base percentage for an ordinary component in respect of a

rebatable ETP annuity depends as follows on the year of income in which the

first payment date occurs:

1988-89 . . . . . . . 3%

1989-90 . . . . . . . 6%

1990-91 . . . . . . . 9%

1991-92 . . . . . . . 12%

1992-93 or later . . . 15%.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 27

Rebate in respect of amounts assessable under section 26AH

27. Section 160AAB of the Principal Act is amended:

(a) by omitting from subsection (1) "In this section, 'eligible 26AH

amount'" and substituting "In this section: 'eligible 26AH amount'";

(b) by inserting in subsection (1) the following definition:

"'statutory percentage' means:

(a) if the policy concerned was issued by a friendly

society - 30%; or

(b) in any other case - 39%.";

equal to 29%" and substituting "equal to the statutory percentage";

(d) by omitting from subsection (5A) "29%" and substituting "the statutory

percentage".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 28

Repeal of section 160AA

28. Section 160AA of the Principal Act is repealed.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 29

Interpretation

29. Section 160APA of the Principal Act is amended by inserting the

following definition:

"'registered organization' has the same meaning as in Division 8A of Part

III;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 30

Receipt of franked dividends

30. Section 160APP of the Principal Act is amended by omitting from

subsection (4) "organisation within the meaning of Division 8A of Part III"

and substituting "organization".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 31

Receipt of franked dividends through trusts and partnerships

31. Section 160APQ of the Principal Act is amended by omitting from

subsection (2) "organisation within the meaning of Division 8A of Part III"

and substituting "organization".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 32

Extra amount to be included in assessable income where

franked dividend paid

32. Section 160AQT of the Principal Act is amended:

(a) by omitting "or" from the end of subparagraph (1) (b) (ii);

(b) by adding at the end of paragraph (1) (b) the following word and

subparagraph:

"or (iv) a registered organization;";

"(1A) Where:

(a) a franked dividend is paid in a year of income to a shareholder

in a company;

(b) the shareholder is a life assurance company;

(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 commencing 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 shall include

the amount calculated in accordance with the formula:

( CR )

FA X ( ---- )

( 1-CR )

where:

CR is the applicable general company tax rate; and

FA is the franked amount of the dividend.";

(d) by omitting subsection (4) and substituting the following subsection:

"(4) In determining for the purposes of this section whether a

dividend is exempt income:

(a) sections 110C, 112A, 116FB, 282B, 283 and 297B shall be

disregarded; and

(b) the definition of 'eligible insurance policy' in section 116E

shall be read as if it were amended by omitting 'an RA policy, a

superannuation policy, a sickness policy, a funeral policy or an eligible

policy' and substituting 'an RA policy or a superannuation policy'.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 33

Franking rebate

33. Section 160AQU of the Principal Act is amended by omitting subsection

(2) and substituting the following subsection:

"(2) For the purposes of subsection (1), in determining the amount included

under section 160AQT in the assessable income of a shareholder:

(a) sections 110C, 112A, 116FB, 282B, 283 and 297B shall be disregarded;

and

(b) the definition of 'eligible insurance policy' in section 116E shall be

read as if it were amended by omitting 'an RA policy, a superannuation policy,

a sickness policy, a funeral policy or an eligible policy' and substituting

'an RA policy or a superannuation policy'.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 34

Franking rebate for certain beneficiaries

34. Section 160AQX of the Principal Act is amended by omitting paragraph (b)

and substituting the following paragraph:

"(b) the taxpayer is:

(i) a natural person other than a trustee; or

(ii) a registered organization other than a trustee; and".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 35

Franking rebate for certain partners

35. Section 160AQZ of the Principal Act is amended by omitting paragraph (b)

and substituting the following paragraph:

"(b) the taxpayer is:

(i) a natural person other than a trustee; or

(ii) a registered organization other than a trustee; and".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 36

36. After section 160AQZ of the Principal Act the following section is

inserted:

Franking rebates for certain life assurance companies

"160AQZA. Where, apart from subsection 160APQ (3), a franking credit of a

taxpayer would have arisen under section 160APQ in respect of:

(a) a trust amount or partnership amount that is included in; or

(b) a partnership amount that is allowed as a deduction from;

the assessable income of the taxpayer of a year of income, the taxpayer is

entitled to a rebate of tax in the taxpayer's assessment in respect of income

of the year of income of an amount equal to the potential rebate amount in

relation to the trust amount or partnership amount.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 37

Other interpretative provisions

37. Section 160K of the Principal Act is amended:

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

exempting provision" in subsection (1);

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

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

"(bb) paragraph 23 (jaa) or section 23FC or 23FD, as in force

at any time before the commencement of section 1 of the Taxation Laws

Amendment Act (No. 2) 1989;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 38

Asset bequeathed to tax-advantaged person

38. Section 160Y of the Principal Act is amended by omitting paragraph (2)

"(c) the beneficiary is:

(i) a tax-exempt person in relation to the year of income; or

(ii) the trustee of a complying superannuation fund, a complying

ADF, or a PST, within the meaning of Part IX, in relation to the year of

income;".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 39

39. After Division 7 of Part IIIA of the Principal Act the following

Division is inserted:

"Division 7A - Units in Pooled Superannuation Trusts

Disposal of units in PSTs by complying superannuation funds and other

tax-advantaged entities

"160ZYEB. This Part does not apply in respect of the disposal by a taxpayer

of a unit in a unit trust if:

(a) the unit trust is a PST, within the meaning of Part IX, in relation to

the year of income of the unit trust in which the disposal occurred; and

(b) any of the following subparagraphs applies in relation to the taxpayer:

(i) the taxpayer is the trustee of a complying superannuation

fund, a complying ADF or a PST, within the meaning of Part IX, in relation to

the year of income of the taxpayer in which the disposal occurred;

(ii) the taxpayer is a life assurance company (within the meaning

of Division 8 of Part III) and, immediately before the disposal of the unit,

the unit was included in a tax-advantaged insurance fund (within the meaning

of section 111B) of the taxpayer;

(iii) the taxpayer is a registered organization (within the meaning

of Division 8A of Part III) and, immediately before the disposal of the unit,

the unit was held by the taxpayer solely in respect of tax-advantaged business

(within the meaning of section 116GC) of the taxpayer.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 40

Superannuation and approved deposit funds

40. Section 160ZZJ of the Principal Act is amended by omitting paragraph (a)

of the definition of "superannuation fund" in subsection (4) and substituting

the following paragraph:

"(a) an eligible superannuation fund within the meaning of Part IX; or".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 41

Application of deductions in payment of tax

41. Section 221H of the Principal Act is amended:

(a) by omitting subparagraph (5A) (b) (i) and substituting the following

subparagraph:

"(i) is taken for the purposes of Subdivision AA of Division 2

of Part III to have been rolled-over; or";

(b) by omitting "applied" from subparagraph (5A) (b) (ii) and substituting

"rolled-over".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 42

Medicare levy

42. Section 251S of the Principal Act is amended by inserting after

subsection (1) the following subsection:

"(1A) If the taxpayer is entitled to a rebate of tax under Subdivision AAA

of Division 17 of Part III in the taxpayer's assessment for a year of income

of such an amount as is necessary to ensure that the rate of tax on one or

more rebatable amounts specified in Table 1 in section 159SB is 0%, paragraph

(1) (a) of this section applies as if the taxable income of the taxpayer of

the year of income were reduced by the rebatable amount or the sum of the

rebatable amounts.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 43

Interpretation

43. Section 267 of the Principal Act is amended:

(a) by omitting "to a dependant of the member" from paragraph (a) of the

definition of "death or disability benefit" in subsection (1);

(b) by omitting paragraph (c) of the definition of "death or disability

benefit" in subsection (1) and substituting the following paragraph:

"(c) a benefit provided to the member, by way of income, during

a period (in this paragraph called the 'disability period') when the member is

unable to perform the normal duties of the member's employment, being a period

not exceeding whichever of the following periods is the longest:

(i) 2 years;

(ii) if there is in force at the beginning of the disability

period an approval given in relation to the fund for the purposes of the

definition of 'superannuation fund' in subsection 3 (1) of the OSS Act and

that approval specifies a maximum period for the provision of such benefits -

that period;

(iii) if subparagraph (ii) does not apply and the

Commissioner approves in writing a period in relation to the fund - that

period;";

amount" and substituting the following definition:

"'specified roll-over amount', in relation to an eligible entity,

means so much of an amount paid to the eligible entity as constitutes a

roll-over of some or all of the untaxed element of the post-June 83 component

(within the meaning of Subdivision AA of Division 2 of Part III) of an

eligible termination payment;";

(d) by inserting in subsection (1) the following definitions:

"'approved form' means the form approved in writing by the

Commissioner for the purposes of the provision in which the expression

appears;

'approved manner' means the manner approved in writing by

the Commissioner for the purposes of the provision in which the expression

appears;

'continuously complying ADF', in relation to a payment made

by the trustee of a fund, means a fund that is a complying ADF in relation to

each of the following years of income:

(a) the year of income in which the payment was made;

(b) the year of income in which the later of the following

times occurred:

(i) 1 July 1988;

(ii) the time when the fund came into existence;

mentioned in paragraph (b) and earlier than the year of income mentioned in

paragraph (a);

'continuously complying superannuation fund', in relation to a

payment made by the trustee of a fund, means a fund that is a complying

superannuation fund in relation to each of the following years of income:

(a) the year of income in which the payment was made;

(b) the year of income in which the later of the following

times occurred:

(i) 1 July 1988;

(ii) the time when the fund came into existence;

mentioned in paragraph (b) and earlier than the year of income mentioned in

paragraph (a);

'current pension liability', in relation to a complying

superannuation fund at a particular time, means a liability, including a

contingent liability, of the fund to make a payment in respect of a pension

payable by the fund at the particular time;

'foreign approved deposit fund' means an approved deposit

fund, within the meaning of the OSS Act, in respect of which the following

conditions are satisfied:

(a) the fund was established in a country outside Australia;

(b) the eligible termination payments referred to in

paragraph (a) of the definition of 'approved purposes' in subsection 3 (1) of

the OSS Act are only those derived from sources outside Australia by

non-residents;

carried on outside Australia by persons none of whom is a resident;

'last retirement date' has the same meaning as in Subdivision

AA of Division 2 of Part III;

'life assurance policy' has the same meaning as in Division 8 of

Part III;

'non-current pension liability', in relation to a complying

superannuation fund at a particular time, means any superannuation liability

of the fund at that time, other than a current pension liability;

'non-reversionary bonus', in relation to a policy of life assurance,

means an amount received as or by way of bonus (other than a reversionary

bonus) on the policy;

'post-June 83 component' has the same meaning as in Subdivision

AA of Division 2 of Part III;

'pre-July 83 component' has the same meaning as in Subdivision

AA of Division 2 of Part III;

'segregated current pension assets' has the meaning given by

section 273A;

'segregated non-current pension assets' has the meaning given

by section 273B;

'superannuation agreement contribution' has the same meaning

as in Subdivision AB of Division 3 of Part III;

'superannuation liability', in relation to a complying

superannuation fund at a particular time, means a liability, including a

contingent liability, of the fund to make a payment in respect of a pension or

other superannuation benefit that is, or may or will become, payable by the

fund at or after the particular time, being a pension or benefit in respect of

which contributions have, before the particular time, been made or liable to

be made;

'tax-exempt entity' means an exempt entity within the meaning

of Division 6C of Part III but does not include the trustee of:

(a) an exempt life assurance fund (within the meaning of

that Division); or

(b) a complying superannuation fund, a complying ADF

or a PST;

'termination of employment' has the same meaning as in

Subdivision AA of Division 2 of Part III;";

(e) by omitting subsection (2).

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 44

Issue, revocation etc. of OSS notices

44. Section 269 of the Principal Act is amended:

(a) by inserting "(other than a notice under, or under regulations made for

the purposes of, section 15D of the OSS Act)" after "OSS notice";

(b) by adding at the end the following subsections:

"(2) For the purposes of this Part, where:

(a) a notice is given under, or under regulations made for the

purposes of, section 15D of the OSS Act; and

(b) either of the following subparagraphs applies:

(i) the notice is revoked;

(ii) the decision to give the notice is set aside;

the notice shall be deemed never to have been given.

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

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

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 45

45. After section 269 of the Principal Act the following sections are

inserted:

Exempting laws ineffective

"269A. (1) In this section:

'law' does not include this Act.

"(2) Nothing in a law passed before the commencement of this section exempts

a trustee of an eligible entity from liability to tax as provided by this

Part.

"(3) A law, or a provision of a law, passed after the commencement of this

section that purports to exempt a person from liability to pay taxes under

laws of the Commonwealth or to pay certain taxes under those laws that include

tax as provided by this Part, other than a law or a provision that expressly

exempts a person from liability to pay that tax, shall not be construed as

exempting the person from liability to pay that tax.

Certain exempting provisions ineffective

"269B. (1) Nothing in paragraphs 23 (d), (e), (ea), (eb), (ec), (f), (g),

(h), (i), (j) and (k) and section 23G exempts a trustee of an eligible entity

from liability to tax as provided by this Part.

"(2) For the purposes of this Act (other than this Part), in determining

whether a taxpayer is exempt from tax because of a provision referred to in

subsection (1), the operation of this Part shall be disregarded.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 46

Assumption to be made in calculating taxable income

46. Section 272 of the Principal Act is amended by inserting "(except in the

case of a foreign superannuation fund or a foreign approved deposit fund)"

after "taxpayer and".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 47

47. After section 273 of the Principal Act the following sections are

inserted:

Segregated current pension assets

"273A. Assets of a complying superannuation fund are segregated current

pension assets of the fund at a particular time for the purposes of this Part

if:

(a) the assets are invested, held in reserve or otherwise being dealth with

at that time by the fund for the sole purpose of enabling the fund to

discharge the whole or part of its current pension liabilities as they become

due; and

(b) the fund's return of income of the year of income in which the

particular time occurs is accompanied by a certificate in the approved form by

an actuary to the effect that the amount of the assets, if accumulated after

the particular time at the rate of the fund's earnings on those assets during

the preceding year of income, would provide the amount required to discharge

in full the whole or the part, as the case may be, of the current pension

liabilities as they fall due.

Segregated non-current pension assets

"273B. Assets of a complying superannuation fund are segregated noncurrent

pension assets of the fund at a particular time for the purposes of this Part

if:

(a) the assets are invested, held in reserve or otherwise being dealt with

at that time by the fund for the sole purpose of enabling the fund to

discharge the whole or part of its non-current pension liabilities as they

become due; and

(b) the fund's return of income of the year of income in which the

particular time occurs is accompanied by a certificate in the approved form by

an actuary to the effect that the amount of the assets, together with any

future contributions, if accumulated after the particular time at the rate of

the fund's earnings on those assets during the preceding year of income, would

provide the amount required to discharge in full the whole or the part, as the

case may be, of the non-current pension liabilities as they fall due.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 48

Taxable contributions

48. Section 274 of the Principal Act is amended:

(a) by omitting paragraphs (1) (a) and (b) and substituting the following

paragraphs:

"(a) if the eligible entity is an eligible superannuation fund:

(i) an amount in respect of which a deduction is allowable,

or would but for subsection 73B (20) be allowable, under section 82AAC to the

person making the payment;

(ii) a superannuation agreement contribution made by a

person where a deduction is allowable to the person under section 51 in

respect of the contribution;

(iii) a contribution made by a tax-exempt entity for the

purpose of making provision for superannuation benefits for, or for the

dependants of, another person;

(iv) a specified roll-over amount;

(b) if the eligible entity is a complying superannuation fund - a

contribution made by a person (in this section called the 'contributor') to

obtain superannuation benefits for the contributor or, in the event of the

death of the contributor, for dependants of the contributor, but not including

so much of such a contribution as is deemed by section 27D to have been

expended in making a payment as mentioned in paragraph 27A (12) (a);

amount.";

(b) by omitting from subsections (2) and (3) "subparagraph (1) (a) (ii)" and

substituting "paragraph (1) (b)";

substituting "approved";

(d) by adding at the end the following subsections:

"(6) Contributions to which paragraph (1) (b) applies that are

made by a particular contributor in a year of income of the contributor are

not taxable contributions to the extent to which they exceed the amount

specified in subsection 82AAT (2).

"(7) Contributions to which subparagraph (1) (a) (i), (ii) or (iii)

applies that are made to a complying superannuation fund in a year of income

are not taxable contributions if the trustee of the fund, with the consent of

the contributor, gives to the Commissioner a notice in writing that this

subsection is to apply in relation to the contributions.

"(8) The total of the contributions made to a complying

superannuation fund in a year of income that are covered by notices under

subsection (7) shall not exceed the sum of:

(a) the total of the amounts covered by notices under subsection

27AB (4) given by the trustee of the fund in relation to ETPs paid during the

year of income;

(b) the amount obtained:

(i) by calculating, for each ETP mentioned in paragraph

(a), the amount ascertained using the following formula:

Subsection 27AB (4) notice amount

Pre-July 83 component x ---------------------------------

Post-June 83 component

where:

Pre-July 83 component is the pre-July 83 component of the ETP;

Subsection 27AB (4) notice amount is the amount covered by the

notice under subsection 27AB (4) given by the trustee of the fund in relation

to the ETP;

Post-June 83 component is the post-June 83

component of the ETP; and

(ii) adding together the amounts calculated under

subparagraph (i); and

159SS given by the trustee of the fund in relation to amounts paid during the

year of income.

"(9) The notice under subsection (7):

(a) shall be in the approved form;

(b) shall be given in the approved manner;

return of income of the fund for the fund's year of income or before such

later time as the Commissioner allows; and

(d) is irrevocable.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 49

49. Section 275 of the Principal Act is repealed and the following sections

are substituted:

Transfer of taxable contributions

"275. (1) Subject to this section, the trustee of a complying superannuation

fund or complying ADF (in this section called the 'transferor') may, with the

consent of a particular life assurance company, registered organization or PST

(in this section called the 'transferee'), give a notice to the Commissioner

in relation to a year of income (in this section called the 'transferor's year

of income) stating that this section applies to the transferor and transferee

in relation to an amount specified in the notice.

"(2) Subject to subsection (3), the effect of the notice is that the amount

to which the notice relates shall be taken, for the purposes of this Act:

(a) to be included in the assessable income of the transferee of the year of

income of the transferee in which the end of the transferor's year of income

occurs; and

(b) not to be included in the assessable income of the transferor of the

transferor's year of income.

"(3) The total amount excluded from the transferor's assessable income of a

year of income under this section shall not exceed the total of the taxable

contributions paid to the transferor in that year of income.

"(4) The amount specified in the notice shall not exceed the amount

calculated using the formula:

Highest equity value

--------------------

Tax rate

where:

Highest equity value is the highest value, at any time during the

transferor's year of income, of the transferor's investment in the

transferee;

Tax rate is the rate of tax imposed on the standard component of the taxable

income of the transferor of the transferor's year of income.

"(5) A reference in subsection (4) to the transferor's investment in the

transferee is a reference to investments consisting of:

(a) if the transferee is a PST - units in the PST; or

(b) if the transferee is a life assurance company or registered

organization:

(i) life assurance policies issued by the transferee; or

(ii) an interest in an interposed trust whose assets consist wholly

of life assurance policies issued by the transferee.

"(6) The transferor is allowed to give only one notice in relation to a year

of income in relation to a particular transferee.

"(7) The notice:

(a) shall be in the approved form;

(b) shall be given in the approved manner;

of the transferor for the transferor's year of income; and

(d) is irrevocable.

Pre-1 July 88 funding credit balance

"275A. (1) For the purposes of this Division, the pre-1 July 88 funding

credit balance of a fund at a particular time in a year of income is the

amount (if any) by which the total of the pre-1 July 88 funding credits of the

fund arising in the year of income and before that time exceeds the total of

the pre-1 July 88 funding debits arising in the year of income and before that

time.

"(2) If the Insurance and Superannuation Commissioner has given a notice

under subsection 15D (2) of the OSS Act granting the trustee of a fund a pre-1

July 88 funding credit, there shall be taken to have arisen, at the beginning

of the year of income in which 1 July 1988 occurs, a pre-1 July 88 funding

credit of the fund as specified in the notice.

"(3) If the trustee of a fund makes an election under subsection 275B (1)

for a year of income in relation to a particular amount, there shall be taken

to have arisen, immediately before the end of the year of income, a pre-1 July

88 funding debit equal to that amount.

"(4) If the Insurance and Superannuation Commissioner has given a notice

under subsection 15D (4) of the OSS Act in relation to an event that has

occurred (within the meaning of that subsection) in relation to a fund, there

shall be taken to have arisen, at the end of the second-last day of the year

of income in which the event occurred, a pre-1 July 88 funding debit equal to

the pre-1 July 88 funding credit balance (if any) of the fund immediately

before the end of that day.

"(5) If the Insurance and Superannuation Commissioner has given a notice

under subsection 15D (6) of the OSS Act granting the trustee of a fund a pre-1

July 88 funding debit, in relation to an event that has occurred (within the

meaning of that subsection) in relation to a fund, there shall be taken to

have arisen, immediately after the beginning of the second-last day of the

year of income in which the event occurred, a pre-1 July 88 funding debit

equal to the amount specified in the notice.

"(6) If the Insurance and Superannuation Commissioner gives a notice under

regulations made for the purposes of subsection 15D (7) of the OSS Act

approving the transfer of a pre-1 July 88 funding credit of a fund (in this

subsection called the 'transferor') to another fund (in this subsection called

the 'transferee'):

(a) there shall be taken to have arisen, immediately after the beginning of

the second-last day of the year of income in which the time that the transfer

has effect under those regulation occurs, a pre-1 July 88 funding debit of the

transferor equal to the amount transferred; and

(b) there shall be taken to have arisen, at the beginning of the secondlast

day of the year of income in which the time the transfer has effect under

those regulations occurs, a pre-1 July 88 funding credit of the transferee

equal to the amount transferred.

"(7) If a fund has a pre-1 July 88 funding credit balance at the end of a

year of income, there shall be taken to have arisen, at the beginning of the

next year of income, a pre-1 July 88 funding credit equal to the amount

calculated by multiplying that pre-1 July 88 credit balance by the indexation

factor calculated under subsection 159SG (2) for the next year of income.

Application of pre-1 July 88 funding credits

"275B. (1) If there is a pre-1 July 88 funding credit balance of a complying

superannuation fund as at the beginning of the last day of a year of income,

the trustee of the fund may elect that this subsection shall apply for the

year of income in relation to a specified amount of taxable contributions made

to the fund.

"(2) The amount specified in the election shall not exceed whichever of the

following is the lesser:

(a) the pre-1 July 88 funding credit balance of the fund as at the beginning

of the last day of the year of income;

(b) the total of the amounts covered by subparagraph 274 (1) (a) (i), (ii)

or (iii) paid to the fund in the year of income, reduced by amounts covered by

subsection 274 (7) and by the amount calculated using the formula:

R x (Taxed ETP components + Total pension components)

where:

R is the number determined in accordance with the following table:

TABLE OF VALUES OF R

------------------------------------------------------------------------ Year

of income Value of R

------------------------------------------------------------------------

1988-89 . . . . . . . . . . . . . . . . . . . 0.2

1989-90 . . . . . . . . . . . . . . . . . . . 0.4

1990-91 . . . . . . . . . . . . . . . . . . . 0.6

1991-92 . . . . . . . . . . . . . . . . . . . 0.8

1992-93 or later . . . . . . . . . . . . . . 1.0

------------------------------------------------------------------------ Taxed

ETP components is the aggregate of the taxed elements of

post-June 83 components of ETPs paid out of the fund in the year of income;

Total pension components is the aggregate of the pension

components calculated under subsection (3) for each rebatable superannuation

pension that is payable from the fund and has a first payment date in the year

of income.

"(3) The pension component for a rebatable superannuation pension is

calculated using the formula:

Post-June 83 days

(Notional purchase price - UPP) x -----------------

Accrual days

where:

Notional purchase price is the notional purchase price of the pension for

the purposes of Subdivision AAB of Division 17 of Part III;

UPP is the amount that applies to the pension under paragraph (b) of the

definition of 'undeducted purchase price' in subsection 27A (1);

Post-June 83 days is the number of days after 30 June 1983 in the accrual

period for the pension;

Accrual days is the number of days in the accrual period for the pension.

"(4) The assessable income of the fund of the year of income shall not

include the amount specified in the election.

"(5) An election by a trustee under subsection (1):

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the date of lodgment

of the return of income of the trustee for the year of income to which the

election relates, or before such later date as the Commissioner allows.

"(6) In this section:

'1988-89' means the year of income commencing on 1 July 1988 and so on for

other years of income.

"(7) In this section:

'accrual period' has the same meaning as in Subdivision AAB of Division 17

of Part III;

'first payment date' has the same meaning as in Subdivision AAB of Division

17 of Part III;

'rebatable superannuation pension' has the same meaning as in Subdivision

AAB of Division 17 of Part III.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 50

Contribution notices or eligible person notices given after return

lodgment date

50. Section 276 of the Principal Act is amended by omitting subsections (1),

(2) and (3) and substituting the following subsections:

"(1) Subject to this section, if:

(a) a notice under subsection 82AAT (1A) in relation to a contribution made

to a fund in a year of income (in this section called the 'contribution year')

is given to the trustee of the fund in a later year of income (in this section

called the 'notice year') and on or after the date specified in subsection 274

(2); or

(b) a notice under subsection 274 (4) in relation to a year of income (in

this section also called the 'contribution year') is given to the trustee of a

fund in a later year of income (in this section also called the 'notice year')

and on or after the date specified in subsection 274 (3);

and, apart from this section and section 275, the assessable income of the

fund of the contribution year would include an amount (in this section called

the 'clawback amount') that would not have been included if the notice had

been given to the trustee before that date, the clawback amount is allowable

as a deduction from the assessable income of the fund of the notice year.

"(3) If the Commissioner is satisfied, having regard to the matters

specified in subsection (4), that it would be appropriate for the clawback

amount not to be included in the assessable income of the fund of the

contribution year:

(a) if paragraph (1) (a) applies:

(i) so much of the contribution referred to in paragraph (1) (a)

as is equal to the clawback amount shall be taken for the purposes of this

Part (other than this section) never to have been a taxable contribution; and

(ii) the clawback amount is not allowable as a deduction under

subsection (1); or

(b) if paragraph (1) (b) applies:

(i) contributions made to the fund in the contribution year by

the contributor concerned shall be taken for the purposes of this Part (other

than this section) never to have been taxable contributions; and

(ii) the clawback amount is not allowable as a deduction under

subsection (1).".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 51

Deduction for premiums for death or disability cover

51. Section 279 of the Principal Act is amended by omitting subsection (3)

and substituting the following subsections:

"(3) A deduction is not allowable:

(a) under subsection (1) in respect of a premium for an insurance policy

that is only partly in respect of a liability of the kind mentioned in that

subsection; or

(b) under subsection (2);

unless the return of the fund of the year of income is accompanied by a

certificate by an actuary, in the approved form, with respect to the operation

of this section.

"(4) A deduction is not allowable under this section in relation to a year

of income if the trustee of the fund concerned elects that this section does

not apply to the trustee in relation to that year of income.

"(5) If the trustee of a fund makes an election under subsection (4) in

relation to a year of income then, unless the Commissioner otherwise

determines, the trustee shall be taken, for the purposes of this Part, to have

made an election under subsection (4) in respect of the next succeeding year

of income.

"(6) An election by a trustee under subsection (4):

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the date of lodgment

of the return of income of the trustee for the year of income to which the

election relates, or before such later date as the Commissioner allows.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 52

52. After section 279 of the Principal Act the following sections are

inserted:

Clawback of rebates or refunds of deductible premiums

"279A. (1) Where the trustee of a complying superannuation fund receives in

a year of income a rebate or refund of a premium which has, in whole or in

part, been allowed or is allowable as a deduction under subsection 279 (1), so

much of that rebate or refund as is attributable to that deduction shall be

included in the assessable income of the trustee of the year of income.

"(2) Nothing in subsection (1) limits the circumstances in which other

rebates or refunds are included in the assessable income.

Deduction for future service element of death or disability benefits

"279B. (1) If:

(a) the trustee of a complying superannuation fund makes an election under

subsection 279 (4) in relation to a year of income; and

(b) in the year of income, the trustee pays a death or disability ETP in

relation to a member of the fund in consequence of the termination of any

employment of the member;

there is allowable as a deduction in respect of the year of income an amount

calculated using the following formula:

Days in future service period

Death or disability ETP x -----------------------------

Days in total service period

where:

Death or disability ETP is the amount of the death or disability ETP;

Days in future service period is the number of whole days in the period

commencing on the day the termination occurred and ending on the last

retirement date;

Days in total service period is the sum of:

the death or disability ETP; and

(d) Days in future service period.

"(2) For the purposes of this section, where:

(a) in a year of income, the trustee of a complying superannuation fund

commences to pay an annuity (within the meaning of section 27H);

(b) the annuity consists of a death or disability benefit in relation to a

member of the fund; and

of the member;

the following provisions have effect:

(d) the trustee shall be treated as if the trustee had paid a death or

disability ETP covered by paragraph (b) of the definition of 'eligible

termination payment' in subsection 27A (1) in lieu of that annuity;

(e) the amount of that eligible termination payment shall be taken to be the

net present value of the annuity as at the date of commencement of payment of

the annuity.

"(3) A reference in this section to a death or disability ETP is a reference

to a payment:

(a) that consists of a death or disability benefit paid in relation to a

member of a complying superannuation fund; and

(b) that is an ETP or would be an ETP if:

(i) a reference in the definition of 'eligible termination payment'

in subsection 27A (1) to a payment made in respect of a taxpayer included a

reference to a payment (within the meaning of Subdivision AA of Division 2 of

Part III) made (whether voluntarily, by agreement or by a compulsion of law)

after the death of the taxpayer to or for the benefit of a dependant of the

taxpayer; and

(ii) subsection 27A (4) had not been enacted.

"(4) For the purposes of this section, where, in a year of income, the

trustee of a complying superannuation fund pays a benefit covered by paragraph

during a period when a member of the fund was unable to perform the normal

duties of the member's employment, the following provisions have effect:

(a) the trustee shall be treated as if the trustee had paid a death or

disability ETP covered by paragraph (b) of the definition of 'eligible

termination payment' in subsection 27A (1) in lieu of that benefit;

(b) the amount of that eligible termination payment shall be taken to be the

total amount of the benefit paid in that year of income;

consequence of the termination of that employment;

(d) that employment shall be taken to have been terminated on the day on

which the member became unable to perform the normal duties of that

employment.

Deduction for section 82AAQ assessable amounts

"279C. Where, under section 82AAQ, the assessable income of a taxpayer of a

year of income includes an amount of a payment, or equal to the value of a

benefit, received from a complying superannuation fund, that amount is also

allowable as a deduction to the fund in respect of the year of income.

Deduction for certain potential detriment payments made after the death

of a fund member

"279D. (1) Where: (a) after the death of a person (in this section called

the 'deceased person'):

(i) the trustee of a continuously complying superannuation fund

or continuously complying ADF (in this section called the 'paying entity')

makes a payment to another person (in this section called the 'recipient') by

reason that the deceased person was a member of the fund; or

(ii) a life assurance company or registered organization (in this

section also called the 'paying entity') makes a payment to another person (in

this section also called the 'recipient') in relation to the commutation of,

or of the residual capital value of, an exempt policy (within the meaning of

Division 8 of Part III) or RA policy (within the meaning of Division 8 of Part

III) by reason that the deceased person would have been entitled to receive

the annuity concerned;

(b) the recipient is the trustee of the estate of the deceased person or is

a person who:

(i) was a dependant of the deceased person immediately before

the deceased person's death; or

(ii) was a dependant of the deceased person immediately before

the time of payment; and

the recipient the whole of the benefit that would accrue to the paying entity

if a deduction were allowed under this section in respect of the payment;

an amount calculated under subsection (2) is allowable as a deduction from the

assessable income of the paying entity of the year of income in which the

payment is made.

"(2) The deduction under subsection (1) in respect of a payment (in this

subsection called the 'actual payment') in respect of a year of income is

calculated using the formula:

Notional payment reduction due to contributions tax

---------------------------------------------------

Complying superannuation tax rate

where:

Notional payment reduction due to contributions tax is the difference

between:

(a) the amount that would have been the amount of the actual

payment if:

(i) no amounts were included in assessable income in

relation to taxable contributions made to a complying superannuation fund;

and

(ii) it had been expected that no deduction would be

allowable under this section in respect of the actual payment; and

(b) the amount that would have been the amount of the actual

payment if it had been expected that no deduction would be allowable under

this section in respect of the payment;

Complying superannuation tax rate is the rate of tax imposed on the standard

component of the taxable incomes of complying superannuation funds of the year

of income.

"(3) If the recipient is the trustee of the estate of the deceased person,

the deduction allowable is only so much of the amount calculated under

subsection (2) as the Commissioner considers appropriate having regard to the

extent to which the dependants of the deceased person may reasonably be

expected to benefit from the estate.

"(4) In this section:

'dependant' has the meaning given by paragraph (a) of the definition of

'dependant' in subsection 27A (1).".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 53

No deduction in respect of benefits

53. Section 280 of the Principal Act is amended by omitting "No" and

substituting "Subject to section 279C, no".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 54

54. Section 283 of the Principal Act is repealed and the following sections

are substituted:

Exclusion from assessable income of non-reversionary bonuses on policies

of life assurance

"282A. The assessable income of a complying superannuation fund of a year of

income shall not include a non-reversionary bonus on a policy of life

assurance.

Exemption of income derived from segregated current pension assets

"282B. Any amount of normal assessable income derived by a complying

superannuation fund from assets that, when the income is derived, are

segregated current pension assets, is exempt from tax.

Exemption of proportion of income attributable to current pension

liabilities

"283. (1) For each amount of normal assessable income of a complying

superannuation fund of a year of income other than:

(a) income exempt from tax under section 282B; or

(b) income derived from assets that, when the income is derived, are

segregated non-current pension assets of the fund;

the proportion (if any) calculated under subsection (2) is exempt from tax.

"(2) The proportion is calculated using the formula:

Unsegregated current pension liabilities

----------------------------------------

Unsegregated superannuation liabilities

where:

Unsegregated current pension liabilities is the average value during the

year of income of the current pension liabilities of the fund, other than

liabilities in respect of which any segregated current pension assets are

held;

Unsegregated superannuation liabilities is the average value during the year

of income of the superannuation liabilities of the fund, other than

liabilities in respect of which any segregated current pension assets or

segregated non-current pension assets are held.

"(3) Subject to subsection (4), for the purposes of subsection (2) the value

at a particular time in the year of income of the fund's liabilities of a

particular kind is the amount that, in accordance with an actuary's

certificate in the approved form that accompanies the fund's return of income

of the year of income, together with any future contributions in respect of

the superannuation benefits concerned, if accumulated after the particular

time at the rate of the fund's earnings on assets (other than segregated

current pension assets or segregated non-current pension assets) during the

preceding year of income, would provide the amount required to discharge in

full the liabilities as they fall due.

"(4) Where:

(a) the fund has neither segregated current pension assets nor segregated

non-current pension assets at any time during the year of income; and

(b) an actuary's certificate in respect of the value at the particular time

of the fund's superannuation liabilities referred to in the definition of

Unsegregated superannuation liabilities in subsection (2) does not accompany

the fund's return;

the value of those liabilities at the particular time is an amount calculated

using the formula:

Last value of liabilities

------------------------- x Current value of assets

Last value of assets

where:

Last value of liabilities is the most recent value of the liabilities before

the particular time, as shown in an actuary's certificate in the approved form

accompanying the fund's return;

Last value of assets is the value, at the time of that most recent valuation

of the liabilities, of all of the assets of the fund, as shown in an actuary's

certificate in the approved form accompanying the fund's return;

Current value of assets is the value of all of the assets of the fund at the

particular time, as shown in an actuary's certificate in the approved form

accompanying the fund's return.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 55

55. After section 286 of the Principal Act the following section is

inserted:

Deduction for section 82AAQ assessable amounts

"286A. Where, under section 82AAQ, the assessable income of a taxpayer

of a year of income includes an amount of a payment, or equal to the value

of a benefit, received from a non-complying superannuation fund, that

amount is also allowable as a deduction to the fund in respect of the year

of income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 56

56. Section 287 of the Principal Act is amended by omitting "No" and

substituting "Subject to section 286A, no".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 57

57. After section 290 of the Principal Act the following section is

inserted:

Fixed interest complying ADFs - exemption of income attributable to certain 25

May 1988 deposits

"290A (1) For each amount that, apart from this section, would be

normal assessable income of a continuously complying fixed interest ADF

of a year of income, the proportion (if any) calculated under subsection (2)

is exempt from tax.

"(2) The proportion is calculated using the formula:

Aggregate of current 25 May balances

------------------------------------

Aggregate current balance

where:

Aggregate of current 25 May balances is the aggregate of the current

25 May balances of eligible depositors, as at the reckoning time in

relation to the year of income;

Aggregate current balance is the total amount deposited with the fund

(together with accumulated earnings), as at the reckoning time in

relation to the year of income.

"(3) An election for the purposes of the definition of 'reckoning time'

in subsection (4):

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the date of

lodgment of the return of income of the ADF for the year of

income to which the election relates, or before such later date as

the Commissioner allows.

"(4) In this section, unless the contrary intention appears:

'continuously complying fixed interest ADF', in relation to a year of

income (in this definition called the 'current year of income'), means

a fund that is a fixed interest complying ADF in relation to each of

the following years of income:

(a) the current year of income;

(b) the year of income in which 1 July 1988 occurred;

in paragraph (b) and earlier than the current year of income;

'CS policy' has the same meaning as in Division 8 of Part III;

'current 25 May balance', in relation to an eligible depositor as at the

reckoning time, is the balance as at that time determined by varying

the original 25 May balance, in accordance with the following rules,

during the period from 26 May 1988 to the reckoning time:

(a) the balance from time to time is not to exceed the original

25 May balance and is not to be less than nil;

(b) subject to paragraph (a), an amount deposited with the ADF

by the depositor before 1 July 1989 is to be added to the

balance;

from the ADF is to be deducted from the balance;

'eligible depositor', in relation to an ADF, means:

(a) a depositor whose 55th birthday occurred on or before 25

May 1988; or

(b) a depositor whose 50th birthday occurred on or before 25

May 1988 and who, on or before that date, made a deposit

with the ADF that consisted wholly or partly of the roll-over

(within the meaning of Subdivision AA of Division 2 of

Part III) of an eligible termination payment, being an eligible

termination payment that included a concessional component

(within the meaning of that Subdivision);

'fixed interest complying ADF', in relation to a year of income, means a

complying ADF where both of the following conditions are satisfied:

(a) not less than 90% of the amount that, apart from this section,

would be the normal assessable income of the ADF of the

year of income consists of either or both of the following:

(i) interest or a payment in the nature of interest;

(ii) an amount included in assessable income under

Division 16E of Part III;

(b) at no time during the year of income did the assets of the

fund consist of or include any of the following:

(i) units in a PST;

(ii) CS policies issued by a life assurance company or a

registered organization;

'original 25 May balance', in relation to an eligible depositor, means the

amount of the deposits (together with accumulated earnings) standing

to the credit of the depositor as at the end of 25 May 1988;

'reckoning time', in relation to an ADF in relation to a year of income,

means the beginning of the year of income, or such other time

during the year of income as the ADF elects in accordance with

subsection (3).

"(5) This section does not apply to an ADF in relation to a year of

income unless the Commissioner is satisfied that the whole of the benefit

that would accrue to the ADF from the application of this section in

relation to the year of income has been, or will be, passed on to eligible

depositors.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 58

58. After section 291 of the Principal Act the following section is

inserted:

Exclusion from assessable income of non-reversionary bonuses on policies of

life assurance

"291A. The assessable income of a complying ADF of a year of income

shall not include a non-reversionary bonus on a policy of life assurance.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 59

59. Section 296 of the Principal Act is amended by omitting from subsection

(3) "or under Division 6 of Part III".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 60

60. After section 297 of the Principal Act the following sections are

inserted:

Exclusion from assessable income of non-reversionary bonuses on policies of

life assurance

"297A. The assessable income of a PST of a year of income shall not

include a non-reversionary bonus on a policy of life assurance.

Exemption of income attributable to current pension liabilities of complying

superannuation funds

"297B. (1) Subject to subsection (3), for each amount that, apart from

this section, would be normal assessable income of a PST of a year of

income, the proportion (if any) calculated under subsection (2) is exempt

from tax.

"(2) The proportion is calculated using the formula:

Average exempt units

--------------------

Average total units

where:

Average exempt units means the average number, during the year of

income, of units in the PST that are segregated current pension

assets of unitholders that are complying superannuation funds;

Average total units means the average number, during the year of

income, of all of the units in the PST.

"(3) Where:

(a) a PST elects in its return of income of a year of income that this

subsection, rather than subsection (1), should apply in relation to

the PST in relation to the year of income;

(b) the PST provides any information required by the Commissioner

for the purposes of this subsection; and

assessable income of the PST of the year of income would, if the

amount had been derived instead by the unitholders in the PST in

proportion to their unitholdings, have been exempt from tax under

section 282B or 283;

the following provisions have effect:

(d) that percentage of the amount of assessable income of the PST is

exempt from tax;

(e) subsection (1) does not apply in relation to the PST in relation to

the year of income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 61

61. The heading to Division 8 of Part IX of the Principal Act is repealed

and the following heading is substituted:

"Division 8 - Rebates and Provisional Tax".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 62

62. After section 300 of the Principal Act the following heading and

sections are inserted:

"Division 9 - Assessments

Assessment as if entity were a complying superannuation fund, complying ADF or

PST

"300A. (1) Where:

(a) at the time when the Commissioner is making an assessment in relation to

a fund or a unit trust for a particular year of income, no notice has been

given under any of sections 12, 13, 14, 15, 15B and 15C of the OSS Act in

relation to the fund or unit trust in respect of the year of income; and

(b) the Commissioner considers it likely that a notice will be given under

one of those sections having the effect that the fund or unit trust will be a

complying superannuation fund, complying ADF or PST in respect of the year of

income;

the Commissioner may make the assessment as if such a notice had been given.

"(2) Where:

(a) the Commissioner makes the assessment as if the notice had been given;

and

(b) either:

(i) the Insurance and Superannuation Commissioner has not

received the return, certificates and fees referred to in subsection 12 (1),

14 (1) or 15B (1) of the OSS Act in relation to the fund or unit trust in

respect of the year of income by the end of 12 months after the Commissioner

of Taxation makes the assessment; or

(ii) the Commissioner of Taxation becomes satisfied that the

notice will not be given;

then, notwithstanding section 170, of this Act, the Commissioner of Taxation

may amend the assessment for the purpose of ensuring that this Act applies as

if the application of subsection (1) in relation to the fund or unit trust for

the year of income were disregarded.

Assessment on basis of anticipated pre-1 July 88 funding credit balance

"300B. (1) Where:

(a) before the Commissioner makes an assessment in relation to a

complying superannuation fund for a particular year of income, the

trustee of the fund gives notice in writing to the Commissioner that

the trustee:

(i) anticipates that a notice or notices will be given under

subsection 15D (2) or (7), or both, of the OSS Act having

the effect that there will be a pre-1 July 88 funding credit

balance of the fund of a specified amount as at the beginning

of the last day of the year of income; and

(ii) would, if there were such a balance, elect that subsection

275B (1) apply for the year of income in relation to a

specified amount of taxable contributions made to the fund;

(b) the notice is lodged with the Commissioner on or before the date

of lodgment of the return of income of the fund for the year of

income, or before such later date as the Commissioner allows; and

anticipated notices will be given and that there will be a pre-1 July

88 funding credit balance of the fund of the specified amount as at

the beginning of the last day of the year of income;

the Commissioner may make the assessment as if:

(d) there were a pre-1 July 88 funding credit balance of the fund of

the specified amount as at the beginning of the last day of the year

of income;

(e) an election had been made by the trustee, in accordance with section

275B, that subsection 275B (1) should apply for the year of income

in relation to an amount, being the least of the following amounts:

(i) the amount referred to in subparagraph (a) (i);

(ii) the amount referred to in subparagraph (a) (ii);

(iii) the amount referred to in paragraph 275B (2) (b); and

(f) the requirements of subsection 275B (2) were satisfied.

"(2) Where:

(a) the Commissioner makes the assessment; and

(b) either:

(i) the Insurance and Superannuation Commissioner has not

received:

(A) if the anticipated notice, or any of the anticipated

notices, is a notice under subsection 15D (2) of the

OSS Act - the application, certificates, other

documents and fee referred to in subsection 15D (3)

of that Act in relation to the fund by the end of 12

months after the Commissioner of Taxation makes

the assessment, or by 31 December 1991, whichever

is the earlier; and

(B) if the anticipated notice, or any of the anticipated

notices, is a notice under subsection 15D (7) of the

OSS Act - any thing required to be given in relation

to the notice under regulations for the purposes of

that subsection by the end of 12 months after the

Commissioner of Taxation makes the assessment, or

by the time by which the thing is required by the

regulations to be given, whichever is the earlier; or

(ii) the Commissioner of Taxation becomes satisfied that the

anticipated notice or any of the anticipated notices will not

be given, or that there will not be a pre-1 July 88 funding

credit balance of the fund of the specified amount referred

to in paragraph (1) (c) as at the beginning of the last day

of the year of income;

then, notwithstanding section 170 of this Act, the Commissioner of Taxation

may amend the assessment for the purpose of ensuring that this Act has

effect as if the application of subsection (1) in relation to the fund for

the

year of income were disregarded.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 63

63. After section 301 of the Principal Act the following Division is

inserted:

"Division 10 - Tax Treatment of Gains or Losses on Disposal of Assets

Owned by Complying Superannuation Funds, Complying ADFs and PSTs

Division applies to trustees of complying superannuation funds, complying ADFs

and PSTs

"302. This Division applies to a taxpayer in relation to a year of income if

the taxpayer is the trustee of:

(a) a complying superannuation fund;

(b) a complying ADF; or

Interpretation

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

'security' means:

(a) debenture stock, a bond, debenture, certificate of entitlement,

bill of exchange, promissory note or other security;

(b) a deposit with a bank, building society or other financial

institution;

(d) any other contract, whether or not in writing, under which

a person is liable to pay an amount or amounts, whether or

not the liability is secured;

'30 June 1988 asset', in relation to a taxpayer, means an asset owned by

the taxpayer at the end of 30 June 1988.

"(2) For the purposes of the application of this Division to a taxpayer

in relation to a year of income, a reference in this Division to the

taxpayer,

in relation to a time before the beginning of the year of income, includes a

reference to the taxpayer concerned even if the fund or unit trust was not

a complying superannuation fund, a complying ADF or a PST, as the case

may be, in relation to the year of income in which that time occurred.

"(3) An expression used in this Division and in Part IIIA has the same

meaning in this Division as it has in that Part.

Part IIIA to be primary code for taxation of gains and losses

"304. Where Part IIIA applies or would, apart from section 160ZZF and

Divisions 5A, 7A and 17 of that Part, apply, in respect of the disposal of an

asset that, immediately before the disposal, was owned by a taxpayer:

(a) an amount shall not be included in the assessable income of the

taxpayer under section 25 in respect of the disposal unless:

(i) the asset is a security; or

(ii) the amount is a gain attributable to currency exchange rate

fluctuations;

(b) sections 25A and 52 do not apply in respect of the disposal of the

asset; and

the taxpayer in respect of the disposal unless:

(i) the asset is a security; or

(ii) the amount is a loss attributable to currency exchange rate

fluctuations.

Division to be treated as a provision of Part IIIA

"305. For the purposes of the application of Part IIIA to a taxpayer,

where the expression 'provision of this Part' or 'provisions of this Part' is

used in that Part, the expression shall be taken to include a reference to

any of the provisions of this Division.

30 June 1988 assets deemed to have been acquired on that date

"306. (1) Subject to this section, a 30 June 1988 asset of a taxpayer

shall be taken, for the purposes of Part IIIA, to have been acquired by the

taxpayer on 30 June 1988.

"(2) Where a provision of Part IIIA provides that, if a disposal of an

asset occurs within 12 months after the day (in this subsection called the

'acquisition day') on which the asset was acquired by a taxpayer, a reference

in another provision of that Part to the indexed cost base to the taxpayer

in respect of the asset shall be construed as a reference to the cost base to

the taxpayer in respect of the asset, subsection (1) of this section does not

apply for the purposes of determining the acquisition day for the purposes

of the first-mentioned provision.

"(3) Subsection (1) does not apply for the purposes of determining the

cost base to a taxpayer of an asset.

Disposal of taxable Australian assets

"307. Section 160T applies in relation to a taxpayer as if a reference

in that section to 19 September 1985 were a reference to 30 June 1988.

Cost base of 30 June 1988 asset

"308. (1) The taxpayer shall be taken, for the purposes of Part IIIA:

(a) to have paid or given as consideration in respect of the acquisition

of a 30 June 1988 asset of the taxpayer an amount equal to:

(i) for the purpose of ascertaining whether a capital gain accrued

to the taxpayer in respect of the disposal of the asset by the

taxpayer:

(A) the market value of the asset as at the end of 30

June 1988; or

(B) if the cost base to the taxpayer of the asset as at 30

June 1988 is greater than that market value - that

cost base; or

(ii) for the purpose of ascertaining whether the taxpayer incurred

a capital loss in respect of the disposal of the asset by the

taxpayer:

(A) the market value of the asset as at the end of 30

June 1988; or

(B) if that market value is greater than the amount of

the cost base to the taxpayer of the asset as at 30

June 1988 - that cost base; and

(b) to have paid or given that consideration on 30 June 1988.

"(2) In determining the cost base, indexed cost base or reduced cost

base to the taxpayer of an asset, no account shall be taken of any liability

that arose before 1 July 1988 or any costs or expenditure that were incurred

before 1 July 1988 unless the liability, costs or expenditure consists of

consideration that, under subsection (1), is taken to have been paid or given

on 30 June 1988.

Market value of stock exchange listed assets

"309. (1) Where:

(a) a 30 June 1988 asset of a taxpayer was listed on an Australian

stock exchange on 30 June 1988; and

(b) on that date, identical assets were:

(i) computer traded on a national market; or

(ii) traded on a State capital city market;

the market value of the asset as at the end of 30 June 1988 shall be taken,

for the purposes of this Division, to be the average of the highest and

lowest

trade prices for identical assets recorded on 30 June 1988 in whichever of

the following markets is applicable:

market - that national market;

(d) if, on that date, there was a State capital city market (other than

the Sydney market) that recorded a higher volume of trading than

the Sydney market in identical assets - that State capital city market;

(e) in any other case - the Sydney market.

"(2) For the purposes of this section, an asset shall be taken to have

been listed on an Australian stock exchange on 30 June 1988 if, and only

if, on that date the asset had the status of having been granted official

quotation by a securities exchange within the meaning of the Securities

Industry Act 1980 or the law of a State or Territory corresponding to that

Act.

Adjustment of cost base as at 30 June 1988 - return of capital

"310. (1) The following provisions have effect for the purposes of this

Division.

"(2) Where:

(a) 30 June 1988 assets of a taxpayer consist of shares in a company;

and

(b) at any time during the period commencing at the time when the

taxpayer acquired the shares and ending at the end of 30 June 1988,

the company paid an amount that was not a dividend to the

taxpayer in respect of the shares;

the cost base to the taxpayer of the shares as at 30 June 1988 shall be

reduced by that amount.

"(3) Where:

(a) a 30 June 1988 asset of a taxpayer consists of an interest or unit in

a trust; and

(b) at any time during the period commencing at the time when the

taxpayer acquired the interest or unit and ending at the end of 30

June 1988, the trustee of the trust paid an amount to the taxpayer

in respect of the interest or unit, being:

(i) in a case where the taxpayer was exempt from tax for the

year of income in which the payment was made - an amount

that, if the taxpayer had not been exempt from tax, would

not have been assessable income of the taxpayer; or

(ii) in any other case - an amount that would not have been

assessable income of the taxpayer;

the cost base to the taxpayer of the interest or unit as at 30 June 1988

shall

be reduced by so much of the amount as is not attributable to a deduction

allowed under Division 10C or 10D of Part III.

Rights to acquire shares or share options

"311. (1) Notwithstanding section 160ZYO, where a taxpayer, as a

shareholder, exercises rights as mentioned in subsection 160ZYO (2) and

those rights are 30 June 1988 assets of the taxpayer, the taxpayer shall be

taken, for the purposes of Part IIIA, to have paid or given as consideration

in respect of the acquisition of the new shares or the option concerned an

amount equal to:

(a) for the purpose of ascertaining whether a capital gain accrued to

the taxpayer in respect of the disposal by the taxpayer of the new

shares or the option or the shares to which the option relates - the

sum of the amount paid in respect of the exercise of the rights and:

(i) the market value of the rights as at the end of 30 June 1988;

(ii) if the cost base to the taxpayer of the rights as at 30 June

1988 is greater than that market value - that cost base; or

(b) for the purpose of ascertaining whether the taxpayer incurred a

capital loss in respect of the disposal by the taxpayer of the new

shares or the option or the shares to which the option relates - the

sum of the amount paid in respect of the exercise of the rights and:

(i) the market value of the rights as at the end of 30 June 1988;

(ii) if that market value is greater than the amount of the cost

base to the taxpayer of the rights as at 30 June 1988 - that

cost base.

"(2) So much of that consideration as is covered by subparagraph

(1) (a) (i) or (ii) or (b) (i) or (ii), as the case requires, shall be taken

have been paid or given on 30 June 1988.

Rights to acquire units or unit options

"312. (1) Notwithstanding section 160ZYQE, where a taxpayer, as a

unitholder, exercises rights as mentioned in subsection 160ZYQE (2) and

those rights are 30 June 1988 assets of the taxpayer, the taxpayer shall be

taken, for the purposes of Part IIIA, to have paid or given as consideration

in respect of the acquisition of the new units or the option concerned an

amount equal to:

(a) for the purpose of ascertaining whether a capital gain accrued to

the taxpayer in respect of the disposal by the taxpayer of the new

units or the option or the units to which the option relates - the

sum of the amount paid in respect of the exercise of the rights and:

(i) the market value of the rights as at the end of 30 June 1988;

(ii) if the cost base to the taxpayer of the rights as at 30 June

1988 is greater than that market value - that cost base; or

(b) for the purpose of ascertaining whether the taxpayer incurred a

capital loss in respect of the disposal by the taxpayer of the new

units or the option or the units to which the option relates - the

sum of the amount paid in respect of the exercise of the rights and:

(i) the market value of the rights as at the end of 30 June 1988;

(ii) if that market value is greater than the amount of the cost

base to the taxpayer of the rights as at 30 June 1988 - that cost base.

"(2) So much of that consideration as is covered by subparagraph

(1) (a) (i) or (ii) or (b) (i) or (ii), as the case requires, shall be taken

have been paid or given on 30 June 1988.

Company-issued options to acquire unissued shares

"313. (1) Notwithstanding section 160ZYV, where a taxpayer, as a

shareholder, exercises an option as mentioned in subsection 160ZYV (2) and

that option is a 30 June 1988 asset of the taxpayer, the taxpayer shall be

taken, for the purposes of Part IIIA, to have paid or given as consideration

in respect of the acquisition of the new shares concerned an amount equal

to:

(a) for the purpose of ascertaining whether a capital gain accrued to

the taxpayer in respect of the disposal by the taxpayer of the new

shares - the sum of the amount paid in respect of the exercise of

the option and:

(i) the market value of the option as at the end of 30 June

1988; or

(ii) if the cost base to the taxpayer of the option as at 30 June

1988 is greater than that market value - that cost base; or

(b) for the purpose of ascertaining whether the taxpayer incurred a

capital loss in respect of the disposal by the taxpayer of the new

shares - the sum of the amount paid in respect of the exercise of

the option and:

(i) the market value of the option as at the end of 30 June 1988; or

(ii) if that market value is greater than the amount of the cost

base to the taxpayer of the option as at 30 June 1988 - that cost base.

"(2) So much of that consideration as is covered by subparagraph

(1) (a) (i) or (ii) or (b) (i) or (ii), as the case requires, shall be taken

have been paid or given on 30 June 1988.

Unit trust-issued options to acquire unissued units

"314. (1) Notwithstanding section 160ZYXE, where a taxpayer, as a

unitholder, exercises an option as mentioned in subsection 160ZYXE (2) and

that option is a 30 June 1988 asset of the taxpayer, the taxpayer shall be

taken, for the purposes of Part IIIA, to have paid or given as consideration

in respect of the acquisition of the new units concerned an amount equal

to:

(a) for the purpose of ascertaining whether a capital gain accrued to

the taxpayer in respect of the disposal by the taxpayer of the new

units - the sum of the amount paid in respect of the exercise of the

option and:

(i) the market value of the option as at the end of 30 June 1988; or

1988; or

(ii) if the cost base to the taxpayer of the option as at 30 June

1988 is greater than that market value - that cost base; or

(b) for the purpose of ascertaining whether the taxpayer incurred a

capital loss in respect of the disposal by the taxpayer of the new

units - the sum of the amount paid in respect of the exercise of the

option and:

(i) the market value of the option as at the end of 30 June

1988; or

(ii) if that market value is greater than the amount of the cost

base to the taxpayer of the option as at 30 June 1988 - that

cost base.

"(2) So much of that consideration as is covered by subparagraph

(1) (a) (i) or (ii) or (b) (i) or (ii), as the case requires, shall be taken

have been paid or given on 30 June 1988.

Options

"315. (1) Subsection 160ZZC (3A) applies in relation to an option

granted by a taxpayer as if a reference in that subsection to 20 September

1985 were a reference to 1 July 1988.

"(2) Subsection 160ZZC (9) does not apply to an option granted to a

taxpayer.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 64

64. (1) In this section:

"amended Act" means the Principal Act as amended by this Act.

(2) The amendments made by section 5 (other than paragraph (o)) and sections

6, 7, 8, 26, 28 and 42 apply to assessments in respect of income of the year

of income commencing on 1 July 1988 and of all subsequent years of income.

(3) The amendments made by section 11 apply in relation to contributions

made on or after 1 July 1988.

(4) Subject to this section, the amendments made by sections 12 to 24

(inclusive) apply to assessments in respect of income of the year of income in

which 1 July 1988 occurred and of all subsequent years of income.

(5) Section 111C of the amended Act applies to assessments in respect of

income of the year of income commencing on 1 July 1988 and of all subsequent

years of income.

(6) Subsection 113 (4) of the amended Act applies in relation to expenditure

incurred after 25 May 1988.

(7) The amendments made by sections 9, 10, 25 and 29 to 36 (inclusive) apply

in relation to dividends paid on or after 1 July 1988.

(8) The amendments made by section 27 apply to amounts received (within the

meaning of section 26AH of the amended Act) on or after 1 July 1989.

(9) Sections 111B and 116GC and Division 7A of Part IIIA of the amended Act

apply to disposals of assets on or after 1 July 1988.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 65

65. (1) In this section:

"amended Act" means the Principal Act as amended by this Act;

"income" includes assessable income;

"LAC/RO amendments" means the amendments made by sections 12 to 24

(inclusive), to the extent that the amendments apply to assessments in respect

of income of the 1 July 1988 year or a subsequent year of income;

"life assurance company" has the same meaning as in Division 8 of Part III

of the amended Act;

"1 July 1988 year" means the year of income in which 1 July 1988 occurred;

"pre-1 July 1988 deductions", in relation to a taxpayer, in relation to the

1 July 1988 year, means the deductions that are allowable or would be

allowable but for paragraph (2) (c) for that year, reduced by:

(a) the deductions allowable under paragraph (2) (e); and

(b) the sum of the amounts that, under paragraph (2) (f), are

taken to be allowable deductions for the purposes of the definitions referred

to in that paragraph;

"registered organization" has the same meaning as in Division 8A of Part III

of the amended Act.

(2) Where:

(a) a taxpayer is:

(i) a life assurance company; or

(ii) a registered organization; and

(b) any part of the taxpayer's 1 July 1988 year occurred before 1 July

1988;

the following provisions have effect:

before 1 July 1988;

(d) a reference in the definition of "notional Part IIIA disposal" in

subsection 110 (1) or 116E (1) of the amended Act to the disposal of an asset

by the taxpayer does not include a reference to a disposal of an asset that

took place before 1 July 1988;

(e) where a particular amount (in this paragraph called the "deductible

amount"):

(i) is allowable, or would be allowable but for paragraph (c),

as a deduction in calculating the taxable income of the taxpayer of the 1 July

1988 year; and

(ii) if the LAC/RO amendments had not been made, would not

have been allowable as a deduction to the taxpayer in respect of the 1 July

1988 year;

only so much of the deductible amount as the Commissioner considers reasonable

is allowable as a deduction in calculating the taxable income of the taxpayer

of the 1 July 1988 year;

(f) where a particular amount (in this paragraph called the "deductible

amount"):

(i) is allowable, or would be allowable but for paragraph (c),

as a deduction in calculating the taxable income of the taxpayer of the 1 July

1988 year; and

(ii) if the LAC/RO amendments had not been made, would

have been allowable as a deduction in calculating the taxable income of the

taxpayer of the 1 July 1988 year;

only so much of the deductible amount as the Commissioner considers reasonable

shall be taken to be an allowable deduction for the purposes of the

definitions of "current year deduction" and "prior year loss deduction" in

subsection 110 (1) or 116E (1) of the amended Act, as the case requires;

(g) for the purposes of this section and the Income Tax Rates Act 1986, the

pre-1 July 1988 component of taxable income of the taxpayer's 1 July 1988 year

is the amount (if any) that is left over after the assessable income derived

by the taxpayer in that year and before 1 July 1988 has been reduced by the

pre-1 July 1988 deductions;

(h) the taxable income of the taxpayer's 1 July 1988 year is the sum of:

(i) the pre-1 July 1988 component; and

(ii) the components ascertained under section 116CJ or 116HE

of the amended Act for that year;

(j) if a net capital loss would have been incurred by a taxpayer under Part

IIIA of the amended Act in respect of the taxpayer's 1 July 1988 year if that

year had ended on 30 June 1988, the amount of that net capital loss shall be

applied by the Commissioner in reduction of the overall 160Z gain (within the

meaning of Division 8 or 8A of Part III of the amended Act) for a particular

class or classes of assessable income of the taxpayer by such amount, or by

such amounts and in such proportions, as the Commissioner considers

reasonable.

(3) In determining, for the purposes of subsection (2), whether income was

derived by a taxpayer before 1 July 1988, income that:

(a) is included in the assessable income of the taxpayer under subsection 92

(1) or Division 6 of Part III of the amended Act; or

(b) is derived by the taxpayer during, but not at a particular time during,

a year of income;

shall be taken to have been derived by the taxpayer at such time, or at such

times and in such proportions, as the Commissioner considers reasonable having

regard to:

estate - the time, or the times, when income was derived by the partnership or

by the trustee of the trust estate, as the case may be; and

(d) in any case - any relevant matters.

(4) In determining, for the purposes of subsection (2), the income derived

by a taxpayer before 1 July 1988 under Part IIIA of the amended Act, a

disposal of an asset on or after that date shall be disregarded.

(5) In the case of a life assurance company, sections 57AH and 57AL of the

Principal Act (as those sections continue to apply in spite of their repeal by

the Taxation Laws Amendment Act (No. 4) 1988) do not apply to a unit of

property that:

(a) is first used, or installed ready for use and held in reserve, by the

company before 1 July 1988; and

(b) is first used for the purpose of producing assessable income, or is

first installed ready for use for that purpose and held in reserve, by the

company on or after 1 July 1988.

(6) In the case of a life assurance company or registered organization whose

1 July 1988 year commenced on 1 July 1988, any net capital loss incurred by

the company or organization under Part IIIA of the Principal Act in respect of

the preceding year of income shall be taken to be a prior year Part IIIA loss

in relation to that preceding year for the purposes of Division 8 or 8A, as

the case requires, of Part III of the amended Act.

PART III - AMENDMENT OF THE OCCUPATIONAL SUPERANNUATION STANDARDS ACT

1987

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 67

67. In this Part, "Principal Act" means the Occupational Superannuation

Standards Act 1987.*2*

*2*No. 97, 1987, as amended. For previous amendments, see No. 138, 1987; and

No. 97, 1989.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 68

68. Section 3 of the Principal Act is amended:

(a) by omitting "or" from the end of paragraph (a) of the definition of

"reviewable decision" in subsection (1);

(b) by adding at the end of the definition of "reviewable decision" in

subsection (1) the following paragraphs:

"(c) a decision of the Commissioner refusing to give a notice

under subsection 15D (2) in relation to a fund; or

(d) a decision of the Commissioner to give a notice under

subsection 15D (6) in relation to a fund;";

"'governing rules', in relation to a fund or unit trust, means any

trust instrument, other document or legislation, or combination thereof,

governing the establishment and operation of the fund or unit trust;";

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 69

69. Section 7 of the Principal Act is amended by omitting from paragraph (2)

(n) "trust deeds" and substituting "governing rules".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 70

70. Section 8 of the Principal Act is amended by omitting from paragraph (2)

(h) "trust deeds" and substituting "governing rules".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 71

71. Section 8A of the Principal Act is amended by omitting from paragraph

(2) (h) "trust deeds" and substituting "governing rules".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 72

72. After section 15C of the Principal Act the following section is

inserted:

Pre-1 July 88 funding credits and debits

"15D. (1) The trustees of a fund may apply to the Commissioner for a

pre-1 July 88 funding credit.

"(2) If an application is made for a pre-1 July 88 funding credit, the

Commissioner shall give a notice in writing to the applicant granting a

pre-1 July 88 funding credit of a specified amount if the Commissioner

is satisfied that:

(a) the amount consists of, or is the aggregate of, amounts that, under

the regulations, are treated as pre-1 July 88 funding amounts; and

(b) paragraph 23 (jaa) or section 23FC of the Tax Act, as in force

immediately before the commencement of the Taxation Laws

Amendment Act (No. 2) 1989, would have applied to the fund in

relation to the year of income commencing on 1 July 1987, if the

amendments made by that last-mentioned Act had not been made.

"(3) An application:

(a) shall be in a form approved by the Commissioner, in writing, for

the purposes of this section;

(b) shall be made on or before 31 December 1991;

the form to be provided; and

(d) shall be accompanied by:

(i) such certificates and other documents as the form requires;

and

(ii) the prescribed application fee.

"(4) If:

(a) a prescribed event occurs or has occurred (whether before, on or

after the date of commencement of this section) in relation to a

fund, being an event that relates to:

(i) the membership of the fund; or

(ii) benefits provided by the fund; and

(b) the trustees of the fund fail to notify the Commissioner of the event

within the time and in the manner prescribed;

the Commissioner shall give notice in writing to the trustees of the fund

accordingly.

"(5) Regulations made for the purposes of paragraph (4) (b) may:

(a) require a notification to be accompanied by such information as is

prescribed; and

(b) enable the Commissioner to grant an extension of time for lodging

a notification.

"(6) If:

(a) an event prescribed for the purposes of paragraph (4) (a) occurs or

has occurred (whether before, on or after the date of commencement

of this section) in relation to a fund;

(b) the trustees of the fund notify the Commissioner of the event as

and when required by regulations made for the purposes of

paragraph (4) (b); and

a pre-1 July 88 funding debit of a particular amount should arise in

relation to the fund;

the Commissioner may give to the trustees of the fund a notice in writing

granting the trustees of the fund a pre-1 July 88 funding debit of that

amount.

"(7) The regulations may make provision for and in relation to the

transfer of pre-1 July 88 funding credits between funds.

"(8) Without limiting the generality of subsection (7), the regulations

made for the purposes of that subsection shall make provision for:

(a) the giving by the Commissioner of a notice approving the transfer

of a pre-1 July 88 funding credit of a fund to another fund;

(b) the revocation of such a notice; and

the revocation.

"(9) If:

(a) the Commissioner has, under subsection (2) or (6), given a notice

to the trustees of a fund; and

(b) the Commissioner, after considering information that was not

previously considered by the Commissioner, ceases to be satisfied as

mentioned in the subsection concerned;

the Commissioner shall give notice in writing to the trustees of the fund

revoking the notice.

"(10) Where the Commissioner refuses an application under subsection

(1), the Commissioner shall give notice in writing to the applicant of the

refusal.

"(11) A notice under subsection (9) or (10) shall set out the reasons

for the revocation or refusal, as the case requires.

"(12) The Commissioner shall advise the Commissioner of Taxation of

particulars of all notices given under this section or under regulations made

for the purposes of subsection (7).

"(13) A reference in this section to the occurrence of an event includes

a reference to the coming into existence of a state of affairs.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 73

73. Section 16 of the Principal Act is amended by inserting after subsection

(5) the following subsection:

"(5A) Where the Commissioner gives a notice to trustees under subsection (5)

informing the trustees that a decision has been revoked or varied, the

Commissioner shall advise the Commissioner of Taxation of particulars of the

notice.".

PART IV - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 74

74. In this Part, "Principal Act" means the Taxation Administration Act

1953.*3*

*3*No. 1, 1953, as amended. For previous amendments, see Nos. 28, 39, 40 and

52, 1953; No. 18, 1955; No. 39, 1957; No. 95, 1959; No. 17, 1960; No. 75,

1964; No. 155, 1965; No. 93, 1966; No. 120, 1968; No. 216, 1973; No. 133,

1974; No. 37, 1976; Nos. 19 and 59, 1979; Nos. 39 and 117, 1983; No. 123,

1984; No. 65, 1985 (as amended by No. 193, 1985); Nos. 4, 47, 104, 123 and

168, 1985; Nos. 41, 46, 48, 112, 144 and 154, 1986; No. 49, 1986 (as amended

by No. 141, 1987); Nos. 120 and 145, 1987; No. 62, 1987 (as amended by No.

108, 1987); No. 108, 1987 (as amended by No. 138, 1987); No. 138, 1987 (as

amended by No. 11, 1988); and Nos. 95 and 97, 1988.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 75

75. Section 8W of the Principal Act is amended by omitting from subsection

(1A) "or 15C" and substituting ", 15C or 15D".

PART V - AMENDMENT OF THE TAXATION LAWS AMENDMENT ACT (No. 2) 1989

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 76

76. In this Part, "Principal Act" means the Taxation Laws Amendment Act (No.

2) 1989.*4*

*4*No. 97, 1989.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 77

77. Section 12 of the Principal Act is amended:

(a) by inserting in subsection (1) the following definition:

"'amended Act' means the Principal Act as amended by this

Act;";

(b) by inserting after subsection (2) the following subsection:

"(2A) The amendments of Part IX of the amended Act made by

the Taxation Laws Amendment (Superannuation) Act 1989 apply to assessments in

respect of income of the 1 July 1988 year and of all subsequent years of

income.".

(d) by inserting in subsection (3) ", and the amendments of sections 160Y

and 160ZZJ of the Principal Act made by the Taxation Laws Amendment

(Superannuation) Act 1989," after "this Act";

(e) by inserting in subsection (3) "or a PST" after "a fund";

(f) by inserting in subsection (3) "or the PST" after "the fund".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 78

78. Section 14 of the Principal Act is amended:

(a) by adding at the end of the definition of "amended Act" in subsection

(1) "and the Taxation Laws Amendment (Superannuation) Act 1989";

(b) by inserting in subparagraph (2) (g) (i) "of the amended Act" after

"Part IX";

"(ja) notwithstanding the amendment of section 124ZA of the

Principal Act made by this Act, that section, insofar as it relates to section

23FC or 23FD of the Principal Act, continues to apply in relation to a fund to

which section 23FC or 23FD, in its application by virtue of this section,

applies in relation to the 1 July 1988 year, as if that amendment had not been

made;";

(d) by omitting paragraph (2) (m) and substituting the following paragraph:

"(m) a reference in section 121F of the amended Act to paragraph

23 (jaa) or section 23FC or 23FD of the Principal Act includes a reference to

that paragraph or that section, in its application, by virtue of this section,

in relation to the 1 July 1988 year;";

(e) by adding at the end of subsection (2) the following paragraph:

"(r) a reference in section 160K of the amended Act to paragraph

23 (jaa) or section 23FC or 23FD of the Principal Act includes a reference to

that paragraph or that section, in its application, by virtue of this section,

in relation to the 1 July 1988 year.";

(f) by adding at the end of the following subsections:

"(5) Where paragraph 23 (jaa), section 23FC or section 23FD of

the Principal Act applied to a fund in relation to the year of income in which

1 July 1987 occurred:

(a) for the purposes of ascertaining under Subdivision B of

Division 2 of Part III of the amended Act the value to be taken into account

in respect of trading stock of the fund on hand at the beginning of the 1 July

1988 year:

(i) the fund may, in accordance with subsection (6),

exercise any option, and give any notice, under section 31, paragraph 32 (5)

the trading stock at the end of the year of income in which 1 July 1987

occurred; and

(ii) if the fund does not exercise an option under

subparagraph (i) in relation to particular trading stock, the value to be

taken into account in accordance with that subparagraph in relation to that

trading stock shall be the cost price; and

(b) if the fund adopts under Subdivision B of Division 2 of Part

III of the amended Act cost price as the basis of valuation in relation to any

trading stock on hand at the end of the 1 July 1988 year that was on hand at

the end of the preceding year of income, then, for the purposes of that

Subdivision, the cost price of that trading stock shall be taken to be equal

to the value at which the trading stock was taken into account in accordance

with subparagraph (a) (i).

"(6) The option or notice referred to in subparagraph (5) (a) (i):

(a) shall be exercised or given in writing to the Commissioner;

and

(b) shall be lodged with the Commissioner on or before the date

of lodgment of the fund's return of income of the 1 July 1988 year, or before

such later date as the Commissioner allows.

"(7) Where:

(a) a fund, being a complying superannuation fund or complying

ADF within the meaning of Part IX of the amended Act, first uses a particular

unit of property of the fund for the purpose of producing assessable income,

or first installs a particular unit of property of the fund ready for use for

that purpose and holds it in reserve, in a year of income, being the 1 July

1988 year or a later year of income; and

(b) apart from this section, section 57AH, or section 57AL, of

the amended Act (as that section continues to apply in spite of its repeal by

the Taxation Laws Amendment Act (No. 4) 1988) would apply in relation to the

unit of property of the fund in relation to that year of income;

then that section of the amended Act does not apply in relation to the unit of

property of the fund in relation to that year of income or any later year of

income.".

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 79

79. Section 18 of the Principal Act is repealed.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 80

80. Schedule 1 to the Principal Act is amended by omitting the amendment of

section 110 of the Income Tax Assessment Act 1936.

TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989

- SECT 81

81. Schedule 2 to the Principal Act is amended by omitting the amendments of

the Superannuation Act 1976.

Notes to the Taxation Laws Amendment (Superannuation) Act 1989

Note 1

The Taxation Laws Amendment (Superannuation) Act 1989 as shown in this compilation
comprises Act No. 105, 1989 amended as indicated in the Tables below.

For all relevant information pertaining to application, saving or transitional provisions
see Table A.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Taxation Laws Amendment (Superannuation) Act 1989	105, 1989	30 June 1989	See s. 2
Taxation Laws Amendment Act 1994	56, 1994	7 Apr 1994	S. 112: (a)	S. 112(2) and (3)
Tax Laws Amendment (2010 Measures No. 2) Act 2010	75, 2010	28 June 2010	Schedule 6 (item 105): 29 June 2010	—

(a) Subsection 2(10) of the Taxation Laws Amendment Act 1994 provides as follows:

(10) Section 112 is taken to have commenced immediately after the commencement of
section 17 of the Taxation Laws Amendment (Superannuation) Act 1989.

Section 17 of the Taxation Laws Amendment (Superannuation) Act 1989 commenced on 30 June 1989.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
S. 17...................	am. No. 56, 1994
S. 66...................	rep. No. 75, 2010

Table A

Application, saving or transitional provisions

Taxation Laws Amendment Act 1994 (No. 56, 1994)

112 Amendment of section 17 of the Principal Act

(2) To remove any doubt, it is declared that, for all purposes (including the purposes of section 65 of the Taxation Laws Amendment (Superannuation) Act 1989), the section that was inserted in the Income Tax Assessment Act 1936 by section 17 of the Principal Act is taken to have been that section as amended by subsection (1) of this section.

(3) This section does not affect the operation of paragraph 12(b) of the Taxation Laws Amendment Act (No. 5) 1989 and, to remove any doubt, it is declared that the subsection 112(2) of the Income Tax Assessment Act 1936 that was omitted by that paragraph is taken to have been that subsection as amended by subsection (1) of this section.

Taxation Laws Amendment (Superannuation) Act 1989

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