TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985 - LONG TITLE

An Act to amend the law relating to income tax

PART I - PRELIMINARY

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 1

Short title [see Note 1]

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

1985.

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 2

Commencement [see Note 1]

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

day on which it receives the Royal Assent.

(2) Sub-section 5 (1) shall be deemed to have come into operation on 6 June

1985.

(3) Sub-section 5 (2) shall be deemed to have come into operation on 1

November 1985.

(4) Section 4, sub-section 5 (3) and sections 17, 20, 21 and 22 shall come

into operation on the day on which the Veterans' Entitlements Act 1986 comes

into operation.

PART II - AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 3

Principal Act

3. The Income Tax Assessment Act 1936*1* is in this Part referred to as the

Principal Act.

*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, 60, 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); and Nos. 47, 49, 104 and 123,

1985.

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 4

Income of certain persons serving with an armed force under the control

of the United Nations

4. Section 23AB of the Principal Act is amended by omitting from paragraphs

(5) (c) and (10) (c) "serving on special service within the meaning of the

Repatriation (Special Overseas Service) Act 1962" and substituting "rendering

continuous full-time service outside Australia while the taxpayer was allotted

for duty in an operational area described in item 4, 5, 6, 7 or 8 of Column 1

of Schedule 2 to the Veterans' Entitlements Act 1986".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 5

Exemption of certain pensions

5. (1) Section 23AD of the Principal Act is amended -

(a) by inserting ", as in force by virtue of sub-section 66 (2) of the

Repatriation Legislation Amendment Act 1985," after "Interim Forces Benefits

Act 1947-1974)" in sub-paragraph (b) (iii) of the definition of "excepted

payment" in sub-section (1);

(b) by inserting ", as in force by virtue of sub-section 66 (2) of the

Repatriation Legislation Amendment Act 1985," after "Interim Forces Benefits

Act 1947-1974)" in paragraph (d) of the definition of "excepted pension" in

sub-section (1); and

payable by virtue of sub-section 66 (2) of the Repatriation Legislation

Amendment Act 1985)" after "Seamen's War Pensions and Allowances Act

1940-1973".

(2) Section 23AD of the Principal Act is amended -

(a) by inserting before the definition of "commencing day" in subsection (1)

the following definition:

"'carer's pension' means -

(a) a pension payable under Division 6 of Part III of the

Social Security Act 1947 to or in respect of a person, where the relative for

whom the person is providing constant care and attention in accordance with

Division 6 of Part III of that Act, being a man, has attained

the age of 65 years or, being a woman, has attained the age of 60 years; or

(b) a pension payable under section 85AA of the

Repatriation Act 1920 (including that section as applying by virtue of

Division 5A, 6, 7, 8 or 9 of Part III of that Act or by virtue of the

Repatriation (Special Overseas Service) Act 1962) to or in respect of a

person, where the relative for whom the person is providing constant care and

attention in accordance with section 85AA of the Repatriation Act 1920, being

a man, has attained the age of 65 years or, being a woman, has attained the

age of 60 years;";

(b) by inserting after the definition of "commencing day" in sub-section

(1) the following definition:

"'dependent child', in relation to a person, has the same meaning

as in section 6 of the Social Security Act 1947;";

subparagraph

(a) (i) of the definition of "excepted payment" in

subsection

(1);

(d) by omitting "the spouse" from sub-paragraph (b) (ii) of the definition

of "excepted payment" in sub-section (1) and substituting "a

relative";

(e) by omitting "Director-General of Social Security" from sub-paragraph

and substituting "Secretary to the Department of Social Security";

(f) by omitting ", lodging or board and lodging" from paragraph (d) of

the definition of "excepted payment" in sub-section (1);

(g) by omitting "the custody, care and control of a" from paragraph

(e) of the definition of "excepted payment" in sub-section (1) and

substituting "a dependent";

(h) by omitting "the custody, care and control of a" from paragraph

(f) of the definition of "excepted payment" in sub-section (1) and

substituting "a dependent";

(j) by omitting "the spouse" from paragraph (c) of the definition of

"excepted pension" in sub-section (1) and substituting "a relative";

(k) by omitting paragraph (d) of the definition of "prescribed person"

in sub-section (1) and substituting the following paragraph:

"(d) a person to or in respect of whom a carer's pension is

payable;";

(m) by omitting from sub-section (1) the definition of "spouse carer's

pension" and substituting the following definition:

"'rent' has the same meaning as in section 6 of the Social

Security Act 1947;";

(n) by omitting from sub-section (2) "spouse"; and

(o) by omitting from paragraph (4) (h) "Parliamentary Retiring

Allowances Act 1948" and substituting "Parliamentary

Contributory Superannuation Act 1948".

(3) Section 23AD of the Principal Act is amended -

(a) by omitting "section 85AA of the Repatriation Act 1920 (including

that section as applying by virtue of Division 5A, 6, 7, 8 OR 9 of

Part III of that Act or by virtue of the Repatriation (Special

Overseas Service) Act 1962)" from paragraph (b) of the definition

of "carer's pension" in sub-section (1) and substituting "section 41

of the Veterans' Entitlements Act 1986";

(b) by omitting "section 85AA of the Repatriation Act 1920" (last

occurring) from paragraph (b) of the definition of "carer's pension"

in sub-section (1) and substituting "section 41 of that Act";

payment" in sub-section (1) and substituting the following

subparagraph:

"(ii) Part III (other than section 57) of the Veterans' Entitlements Act 1986

to the extent to which that Part applies to or in respect of the person or a

relative of the person otherwise than by virtue of section 39 of that Act; or";

(d) by omitting "sub-section 66 (2) of the Repatriation Legislation

Amendment Act 1985" from sub-paragraph (b) (iii) of the definition

of "excepted payment" in sub-section (1) and substituting

"subsection 4 (6) of the Veterans' Entitlements (Transitional Provisions and

Consequential Amendments) Act 1986";

(e) by omitting paragraph (e) of the definition of "excepted payment" in

sub-section (1) and substituting the following paragraph:

"(e) so much of a payment of a pension, allowance or benefit

referred to in paragraph (a) or (b) made to or in respect of a person as, in

the opinion of the Commissioner, represents an increase in the rate of that

pension, allowance or benefit that is calculated by reference to another

person or other persons; or";

(f) by omitting paragraph (c) of the definition of "excepted pension"

in sub-section (1) and substituting the following paragraph:

"(c) Part III of the Veterans' Entitlements Act 1986 to the extent

to which that Part applies to or in respect of a person or a

relative of a person by virtue of section 39 of that Act; or";

(g) by omitting "sub-section 66 (2) of the Repatriation Legislation

Amendment Act 1985" from paragraph (d) of the definition of "excepted pension"

in sub-section (1) and substituting "sub-section 4 (6) of the Veterans'

Entitlements (Transitional Provisions and Consequential Amendments) Act 1986";

(h) by omitting paragraph (b) of the definition of "wife's pension" in

sub-section (1) and substituting the following paragraph:

"(b) a wife's service pension payable under Part III of the

Veterans' Entitlements Act 1986 to the wife of a veteran (within the meaning

of that Part), being a veteran who has attained the age of 65 years; or"; and

(j) by omitting paragraph (3) (a) and substituting the following paragraph:

"(a) payments (other than excepted payments) of pensions and

attendant allowances under the Veterans' Entitlements Act 1986 and payments

(other than excepted payments) of pensions and attendant allowances of a like

nature under the Seamen's War Pensions and Allowances Act 1940 (including

payments (other than excepted payments) payable by virtue of sub-section 4 (6)

of the Veterans' Entitlements (Transitional Provisions and Consequential

Amendments) Act 1986);".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 6

6. After section 26AAAB of the Principal Act the following section is

inserted:

Meals provided to clients, &c., in in-house dining facilities

"26AAAC. (1) Where -

(a) the taxpayer incurs a loss or outgoing in a year of income in respect of

the provision of entertainment, being a loss or outgoing in respect of the

provision of a meal (not being a meal provided at a party, reception or other

social function) on a working day to a person other than -

(i) in any case - an employee of the taxpayer; or

(ii) if the taxpayer is a company - an employee of the taxpayer

or of a company that is related to the taxpayer,

in an in-house dining facility of the taxpayer;

(b) the loss or outgoing is deductible under section 51; and

be deductible under section 51,

the assessable income of the taxpayer of the year of income shall include, in

respect of the meal, $30.

"(2) An expression used in this section and in section 51AE has the same

meaning in this section as in that section.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 7

Interpretation

7. Section 27A of the Principal Act is amended -

(a) by inserting after the definition of "immediate annuity" in subsection

(1) the following definitions:

"'immediate annuity eligible termination payment' means a

payment that is an eligible termination payment by virtue of

the application of paragraph (g), (h) or (j) of the definition of 'eligible

termination payment' in relation to an immediate annuity other than an

immediate annuity the whole of the purchase price of which consists of a

rolled-over amount or rolled-over amounts;

'income component', in relation to an eligible termination

payment that is an immediate annuity eligible termination payment by virtue of

the application of paragraph (g), (h) or (j) of the definition of 'eligible

termination payment' in relation to a payment (in this definition referred to

as the 'capital annuity payment') made in respect of a taxpayer, means -

(a) in a case where any amount of the annuity to which

the eligible termination payment relates has been derived by the taxpayer -

the amount ascertained in accordance with the formula A - (B - C), where -

A is the amount of the capital annuity payment;

B is the purchase price of the annuity; and

C is the aggregate of all amounts that would have

been deductible amounts for the purposes of subsection 27H (1) in relation to

amounts of the annuity derived by the taxpayer if the component B in the

formula in sub-section 27H (2) were replaced by a component being the purchase

price of the annuity; or

(b) in any other case - the amount of the capital annuity

payment reduced by the purchase price of the annuity to which the eligible

termination payment relates;";

(b) by inserting after the definition of "life assurance company" in

subsection (1) the following definition:

"'non-qualifying component', in relation to an immediate annuity

eligible termination payment, means -

(a) in a case where the purchase price of the annuity to

which the eligible termination payment relates consists partly of a

rolled-over amount or rolled-over amounts - the amount ascertained in

accordance with

the formula __, where -

A is the income component in relation to the eligible

termination payment;

B is so much of the purchase price of the annuity

as does not consist of a rolled-over amount or rolled-over amounts; and

C is the purchase price of the annuity; or

(b) in any other case - the income component in relation

to the eligible termination payment;"; and

"(12A) Notwithstanding sub-section (12), an eligible termination

payment shall not be taken to be a qualifying eligible termination payment to

the extent to which it consists of a non-qualifying component.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 8

Assessable income to include certain superannuation and kindred

payments

8. Section 27B of the Principal Act is amended -

(a) by omitting from sub-section (1) the definition of component A and

substituting the following definition:

"A is the amount or value of the eligible termination payment -

(a) reduced by the amount of the concessional component

in relation to the eligible termination payment; and

(b) if the eligible termination payment is an immediate

annuity eligible termination payment, reduced also by the non-qualifying

component in relation to the eligible termination payment;"; and

(b) by adding at the end the following sub-section:

"(3) Where in a year of income an immediate annuity eligible

termination payment is made in relation to a taxpayer, the assessable income

of the taxpayer of the year of income shall include the non-qualifying

component (if any) in relation to that eligible termination payment.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 9

9. After section 51AD of the Principal Act the following sections are

inserted:

Deductions not allowable for entertainment expenses

"51AE. (1) In this section, unless the contrary intention appears -

'agreement' means any agreement, arrangement or understanding, whether formal

or informal, whether express or implied and whether or not enforceable, or

intended to be enforceable, by legal proceedings;

'business' includes a prospective business;

'eligible dining facility', in relation to a taxpayer, means -

(a) a canteen, dining room or similar facility; or

(b) a cafe, restaurant or similar facility,

that is located on premises of the taxpayer or, if the taxpayer is a company,

of the taxpayer or of a company that is related to the taxpayer;

'eligible relative', in relation to a person, means a relative of the person

and includes another person who, although not legally married to the person,

lives with the person as the husband or wife of the person on a bona fide

domestic basis;

'eligible seminar' means a seminar that has a continuous duration of not less

than 4 hours, but does not include -

(a) a seminar (other than an exempt training seminar) where it

would be concluded that the sole or dominant purpose of the seminar was to

enable participants, or prospective participants, in a particular business to

(i) give information relating to the business to;

(ii) receive information relating to the business from; or

(iii) discuss matters relating to the business with,

other participants, or prospective participants, in the business or other

persons;

(b) a seminar where it would be concluded that the sole or

dominant purpose of the seminar was the promotion or advertising of a business

or of goods or services provided by a business; or

(i) the content and location of the seminar; and

(ii) any food, drink, accommodation, travel or

opportunities for recreation connected with the

seminar,

it would be concluded that the sole or dominant purpose of the seminar was the

provision of entertainment at, or in connection with, the seminar;

'employee', in relation to a company, includes a director of the company;

'exempt training seminar' means a seminar that -

(a) is organised by, or on behalf of, an employer solely for either

or both of the following purposes:

(i) training -

(A) the employer and employees of the employer; or

(B) employees of the employer, in matters relevant to the employer's

business;

(ii) enabling -

(A) the employer and employees of the employer;

(B) employees of the employer,

to discuss general policy issues relevant to the internal management of the

employer's business; and

(b) is conducted on premises that -

(i) are not premises of the employer or, if the employer

is a company, of the employer or of a company that is related to the employer;

and

(ii) are premises of a person whose business consists of or

includes organising seminars or making available premises for the purposes of

the conduct of seminars;

'industrial instrument' means a law of the Commonwealth or of a State or

Territory or an award, order, determination or industrial agreement in force

under any such law;

'in-house dining facility', in relation to a taxpayer, means a canteen, dining

room or similar facility that is -

(a) located on premises of the taxpayer or, if the taxpayer is a

company, of the taxpayer or of a company that is related to the taxpayer;

(b) operated wholly or principally for providing food and drink

on working days -

(i) in any case - to employees of the taxpayer; or

(ii) if the taxpayer is a company - to employees of the

taxpayer or of a company that is related to the taxpayer; and

'in-house recreational facility', in relation to a taxpayer, means a

recreational facility that is -

(a) located on premises of the taxpayer or, if the taxpayer is a

company, of the taxpayer or of a company that is related to the taxpayer; and

(b) operated wholly or principally for use on working days by -

(i) in any case - employees of the taxpayer; or

(ii) if the taxpayer is a company - employees of the

taxpayer or of a company that is related to the taxpayer;

'participant', in relation to a business, means a person involved in, or

associated with, the carrying on of the business, whether as an agent,

employee, partner, shareholder, provider of finance, adviser or otherwise;

'premises' includes a vessel or floating structure;

'recreation' includes -

(a) amusement;

(b) sport or similar leisure-time pursuits; and

vehicle, vessel or aircraft;

'recreational facility' means a facility for recreation, but does not include

a facility for accommodation or a facility (other than a food or drink vending

machine) for drinking or dining;

'seminar' includes a conference, convention, lecture, meeting (including a

meeting for the presentation of awards), speech, 'question and answer

session', training session or educational course.

"(2) For the purposes of the definition of 'eligible seminar' in subsection

(1), any part of a seminar that occurs during a meal, and any break during a

seminar for the purpose of a meal, rest or recreation -

(a) shall not be taken to affect the continuity of the seminar; and

(b) shall not be taken to form part of the seminar.

"(3) A reference in this section to the provision of entertainment is a

reference to the provision (whether to the taxpayer or to another person and

whether gratuitously, pursuant to an agreement or otherwise) of -

(a) entertainment by way of food, drink or recreation; or

(b) accommodation or travel in connection with, or for the purpose of

facilitating, entertainment to which paragraph (a) applies (whether or not the

accommodation or travel is also in connection with something else or for

another purpose),

whether or not -

(d) in connection with the working of overtime or otherwise in

connection with the performance of the duties of any office or

employment;

(e) for the purposes of promotion or advertising; or

(f) at or in connection with a seminar.

"(4) A deduction is not allowable under section 51 in respect of losses or

outgoings incurred after 19 September 1985 to the extent to which they are in

respect of the provision of entertainment.

"(5) Sub-section (4) does not apply to a loss or outgoing incurred by the

taxpayer in a year of income to the extent to which -

(a) in a case where the taxpayer carries on a business that consists of,

or includes, the provision for payment of entertainment to clients

or customers of that business - the loss or outgoing is in respect of

the provision of that entertainment by the taxpayer for payment in

the ordinary course of that business;

(b) the loss or outgoing is incurred by the taxpayer -

(i) in respect of the provision of entertainment to another person

under a contract between the taxpayer and that other person

for the supply of goods or services to that other person in

the ordinary course of a business carried on by the taxpayer;

and

(ii) for the purpose of promoting or advertising to the public -

(A) a business carried on by the taxpayer; or

(B) goods or services provided by a business carried on by the

taxpayer;

promoting or advertising to the public goods or services provided by a

business carried on by the taxpayer, being a loss or outgoing

incurred in providing or exhibiting those goods or services;

(d) the loss or outgoing is in respect of entertainment provided by the

taxpayer -

(i) for the purpose of promoting or advertising to the public -

(A) a business carried on by the taxpayer or another

person; or

(B) goods or services provided by a business carried on by

the taxpayer or another person; and

(ii) on the basis that the opportunities available to any of the

following:

(A) clients, customers or suppliers of the taxpayer or the

other person;

(B) employees of the taxpayer or the other person;

person;

(D) journalists;

(E) dignitaries;

(F) any other special class of persons,

to obtain the benefits of the entertainment are not greater than those of

ordinary members of the public;

(e) the loss or outgoing is incurred by the taxpayer by way of an

allowance to an employee of the taxpayer, being an allowance that

is included in the assessable income of the employee;

(f) the loss or outgoing is incurred by the taxpayer in respect of -

(i) the provision of food and drink (not being food or drink

provided at a party, reception or other social function) on

working days to persons in an in-house dining facility of the

taxpayer in respect of which the taxpayer has not made an

election under sub-paragraph (ii) in relation to the year of

income;

(ii) in a case where the taxpayer elects that this sub-paragraph

shall apply to the taxpayer in relation to an in-house dining

facility of the taxpayer in relation to the year of income, the

provision of food and drink (not being food or drink provided

at a party, reception or other social function) on working

days -

(A) in any case - to employees of the taxpayer; or

(B) if the taxpayer is a company - to employees of the

taxpayer or of a company that is related to the

taxpayer,

in that in-house dining facility of the taxpayer;

(iii) the provision, in an eligible dining facility of the taxpayer, of

food and drink (not being food or drink provided at a party,

reception or other social function) on working days -

(A) in any case - to employees of the taxpayer; or

(B) if the taxpayer is a company - to employees of the

taxpayer or of a company that is related to the

taxpayer,

being employees the duties of whose employment consist of, or consist

principally of, duties to be performed in, or in connection with -

(D) a facility for the provision of accommodation,

recreation or travel of which the eligible dining facility

forms part;

(iv) the provision of entertainment to a person (including the

taxpayer) that -

(A) is reasonably incidental to the person's attendance at

an eligible seminar; and

(B) is not by way of, or in connection with, the recreation

of the person;

(v) the provision of an in-house recreational facility of the

taxpayer; or

(vi) the provision of food or drink to an employee of the taxpayer

pursuant to the provisions of an industrial instrument relating to overtime;

(g) the loss or outgoing is incurred by the taxpayer in respect of the

provision of entertainment to a person (in this paragraph referred to as the

'recipient') being -

(i) the taxpayer;

(ii) an employee of the taxpayer; or

(iii) a person who, although not employed by the taxpayer, is

performing services for the taxpayer,

where -

(iv) in a case to which sub-paragraph (ii) or (iii) applies - a

deduction would, but for this section, be allowable to the

recipient under section 51 in respect of the loss or outgoing

if it were incurred by the recipient; and

(v) in any case - it would not be concluded that a purpose of

the taxpayer or, in a case to which sub-paragraph (ii) or (iii) applies, of

the taxpayer or the recipient, in relation to the provision of the

entertainment, is to enable or facilitate the provision of entertainment to a

person other than the recipient;

(h) in a case where -

(i) the taxpayer is an employee and the duties of the taxpayer's

employment consist of, or include, the provision of entertainment; and

(ii) the employer of the taxpayer carries on a business that

consists of, or includes, the provision for payment of that entertainment to

clients or customers of that business,

the loss or outgoing is incurred by the taxpayer in respect of the provision

of that entertainment in the performance of those duties;

(j) in a case where the taxpayer is an employee and receives an

allowance pursuant to the provisions of an industrial instrument for

the purpose of enabling the taxpayer to purchase food and drink in

connection with overtime worked by the taxpayer - the loss or

outgoing is incurred by the taxpayer in respect of the purchase of

food or drink in connection with that overtime; or

(k) the loss or outgoing is incurred by the taxpayer in providing

gratuitous

entertainment to members of the public who are sick, disabled, poor

or otherwise disadvantaged.

"(6) Paragraph (5) (a) or (b) does not apply in relation to a loss or

outgoing incurred by a taxpayer in respect of the provision of entertainment

to another person for payment or under a contract, as the case may be, if the

Commissioner is satisfied that the entertainment was provided instead of

entertainment that the taxpayer could reasonably be expected to have provided

to that other person, otherwise than for payment or otherwise than under a

contract, as the case may be, if this section had not been enacted.

"(7) Where -

(a) an eligible relative of an employee of an employer provides or

facilitates the provision of, or is expected by the employer to provide

or facilitate the provision of, entertainment in connection with the

employee's employment;

(b) the employer provides an allowance to the eligible relative in respect

of the provision or facilitation of the provision of that entertainment;

and

the capacity of an employee of the employer,

the allowance shall not be taken, for the purposes of paragraph (5) (e), to be

an allowance provided to an employee of the employer.

"(8) For the purposes of calculating, in accordance with section 90, the net

income, or partnership loss, of a partnership, sub-section (7) and the

definition of 'exempt training seminar' in sub-section (1) apply as if each

partner in the partnership were an employee of the partnership.

"(9) An election for the purposes of sub-paragraph (5) (f) (ii) in respect

of an in-house dining facility in relation to a year of income -

(a) shall be exercised 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 taxpayer for the year of income, or before such

later date as the Commissioner allows.

"(10) Paragraphs (5) (g) and (h) do not apply in relation to -

(a) a loss or outgoing incurred by the taxpayer to the extent to which the

loss or outgoing is -

(i) in respect of the provision of entertainment to a person

(including the taxpayer) that is in respect of, or incidental to, the person's

attendance, while undertaking deductible travel, at a seminar other than -

(A) an exempt training seminar; or

(B) a seminar to which paragraph (a) of the definition of

'eligible seminar' in sub-section (1) applies (whether or not the seminar has

a continuous duration of not less than 4 hours),

not being the provision of entertainment consisting of -

(D) entertainment by way of food or drink otherwise than

at a meal during which, or during part of which, the whole or a part of the

seminar occurs; or

(ii) in respect of the provision of entertainment to a person

(including the taxpayer) that is in respect of, or incidental to, the person's

attendance, otherwise than while undertaking deductible travel, at a seminar;

(b) a loss or outgoing incurred by the taxpayer to the extent to which the

loss or outgoing is in respect of the purchase of food or drink in connection

with overtime worked by the taxpayer as an employee.

"(11) A reference in sub-section (10) to deductible travel is a reference to

travel undertaken by a person in circumstances where, if the person incurred

expenditure in taking meals by himself or herself in the course of undertaking

that travel, a deduction would, but for this section, be allowable to the

person under section 51 in respect of that expenditure.

"(12) Nothing in sub-section (5) shall be taken, by implication, to extend

the class of losses or outgoings that are deductible under section 51.

"(13) Where, under an agreement -

(a) a taxpayer incurs a loss or outgoing; and

(b) non-deductible entertainment is provided to the taxpayer or another

person,

the Commissioner may, for the purposes of this section, treat the loss or

outgoing as having been incurred by the taxpayer in respect of the provision

of that entertainment to such extent as the Commissioner considers reasonable.

"(14) Where property is used by the taxpayer after 19 September 1985 for the

purpose of providing, or in connection with the provision of, nondeductible

entertainment (whether or not the property is also used for another purpose),

that use of the property by the taxpayer shall be taken, for the purposes of

this Act (other than Subdivision B of this Division), not to be for the

purpose of producing assessable income or in carrying on a business for that

purpose.

"(15) For the purposes of sub-sections (13) and (14), the provision of

entertainment shall be taken to be the provision of non-deductible

entertainment if, by virtue of sub-section (4), had a loss or outgoing been

incurred by the taxpayer after 19 September 1985 in respect of the provision

of the entertainment, the loss or outgoing would not be deductible.

"(16) For the purposes of this section, a company shall be taken to be

related to another company if -

(a) one of the companies is a subsidiary of the other company; or

(b) each of the companies is a subsidiary of the same company.

"(17) For the purposes of this section, a company (in this sub-section

referred to as the 'subsidiary company') shall be taken to be the subsidiary

of another company (in this sub-section referred to as the 'holding company')

if -

(a) all the shares in the subsidiary company are beneficially owned by -

(i) the holding company;

(ii) a company that is, or 2 or more companies each of which

is, a subsidiary of the holding company; or

(iii) the holding company and a company that is, or 2 or more

companies each of which is, a subsidiary of the holding company; and

(b) there is no agreement in force by virtue of which any person is in a

position to affect rights of the holding company or of a subsidiary of the

holding company in relation to the subsidiary company.

"(18) For the purposes of this section, where a company is a subsidiary of

another company (including a company that is such a subsidiary by virtue of

another application or other applications of this sub-section), every company

that is a subsidiary of the first-mentioned company shall be taken to be a

subsidiary of that other company.

"(19) For the purposes of sub-section (17), a person shall be taken to be in

a position to affect any rights of a company in relation to another company if

that person has a right, power or option (whether by virtue of any provision

in the constituent document of either of those companies or by virtue of any

agreement or instrument or otherwise) to acquire those rights or do an act or

thing that would prevent the first-mentioned company from exercising those

rights for its own benefit or receiving any benefits accruing by reason of

those rights.

Car expenses incurred by employee

"51AF. (1) Where -

(a) during a particular period, an employer provides a car for the exclusive

use of a person who is, or of persons any of whom is, an employee of the

employer or an eligible relative of such an employee; and

(b) at any time during that period, the employee or an eligible relative of

the employee is entitled to use the car for private purposes,

a deduction is not allowable under this Act in respect of a car expense that

relates to the car and -

(d) is incurred by the employee and is wholly or partly attributable to

that period.

"(2) Expressions used in this section and in Subdivision F have the same

respective meanings in this section as they have in that Subdivision.

Deductions for travel expenses where person accompanied by eligible

relative

"51AG. (1) Where a person, while undertaking travel in the course of -

(a) performing duties as an employee of an employer; or

(b) a business carried on by the person for the purpose of gaining or

producing assessable income,

is accompanied during a particular period by an eligible relative of the

person in circumstances where -

person, or is not an employee of the person, as the case may be;

(d) the eligible relative is an employee of the employer of the person,

or is an employee of the person, as the case may be, and during

that period performs no substantial duties as such an employee; or

(e) the eligible relative is an employee of the employer of the person,

or is an employee of the person, as the case may be, and -

(i) the duties performed during that period by the eligible relative

as such an employee are incidental to the duties, or business,

as the case may be, of the person; and

(ii) it is reasonable to conclude that, but for the personal

relationship between the person and the eligible relative, the

eligible relative would not have accompanied the person during that period,

a deduction is not allowable to the person, and, in a case where paragraph (a)

applies, is not allowable to the employer of the person, under section 51 in

respect of a loss or outgoing incurred in respect of the travel, to the extent

to which the loss or outgoing is attributable to the eligible relative.

"(2) In this section, 'eligible relative', 'employee' and 'employer' have

the same respective meanings as those expressions have in Subdivision F.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 10

10. After section 74A of the Principal Act the following section is

inserted:

Certain election expenses not deductible

"74B. (1) Expenditure incurred by a taxpayer after 19 September 1985 is not

an allowable deduction under section 74 or 74A to the extent to which the

expenditure is in respect of the provision of entertainment other than

entertainment that is available to the public generally.

"(2) Sub-section (1) does not prevent a deduction being allowable to the

taxpayer in respect of expenditure incurred by the taxpayer in respect of the

provision of entertainment to the taxpayer by way of the provision of food or

drink to the taxpayer if it would not be concluded that a purpose of the

taxpayer in relation to the provision of the food or drink was to enable or

facilitate the provision of entertainment to another person.

"(3) A reference in this section to the provision of entertainment has the

same meaning as in section 51AE.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 11

Deduction of expenditure on conserving or conveying water

11. Section 75B of the Principal Act is amended -

(a) by omitting sub-section (2) and substituting the following subsection:

"(2) Subject to this section, this section applies to expenditure of a

capital nature incurred on or after 14 April 1980 and before 20 September 1985

by a taxpayer who carries on a business of primary production on land in

Australia, being expenditure incurred -

(a) on the construction, acquisition or installation of plant or a

structural improvement for the purpose of conserving or conveying water for

use in carrying on that business on that land; or

(b) on the construction, acquisition or installation of an extension to

plant or to a structural improvement for the purpose of conserving or

conveying water for use in carrying on that business on that land.";

(b) by inserting in sub-section (3) "by virtue of sub-section (2)" after

"applies";

"(3A) Subject to this section, this section also applies to

expenditure of a capital nature incurred on or after 20 September 1985 by a

taxpayer who carries on a business of primary production on land in Australia,

being expenditure incurred -

(a) on the construction, acquistion or installation of plant or a

structural improvement primarily and principally for the purpose of conserving

or conveying water for use in carrying on that business on that land; or

(b) on the construction, acquisition or installation of an extension

to plant or to a structural improvement primarily and principally for the

purpose of conserving or conveying water for use in carrying on that business

on that land.

"(3B) Subject to the succeeding provisions of this section, where

a taxpayer incurs expenditure to which this section applies by virtue of

sub-section (3A), an amount equal to one-fifth of that expenditure is an

allowable deduction to the taxpayer in respect of the year of income in which

the expenditure is incurred and in respect of each of the 4 succeeding years

of income.

"(3C) For the purposes of this section -

(a) expenditure incurred on or after 20 September 1985 in

pursuance of a contract entered into by a taxpayer on or after 14 April 1980

and before 20 September 1985; or

(b) expenditure incurred on or after 20 September 1985 on the

construction or installation by a taxpayer of plant or a structural

improvement or of an extension to plant or to a structural improvement where

that construction or installation by the taxpayer commenced on or after 14

April 1980 and before 20 September 1985,

shall be deemed to have been incurred on or after 14 April 1980 and before 20

September 1985."; and

(d) by inserting in sub-section (10) "or (3B)" after "sub-section (3)".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 12

Deduction of expenditure on prevention of land degradation

12. Section 75D of the Principal Act is amended -

(a) by inserting in paragraphs (1) (a), (b) and (c) "primarily and

principally" after "an operation";

(b) by omitting from paragraph (1) (c) "soil erosion" and substituting "land

degradation";

the land";

(d) by omitting from paragraph (1) (d) "soil erosion or excessive salinity"

and substituting "land degradation";

(e) by omitting from paragraph (1) (d) "soil erosion or salinity" and

substituting "land degradation"; and

(f) by inserting in paragraph (1) (f) "primarily and principally" after "on

the land,".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 14

14. After section 82KS of the Principal Act the following Subdivision is

inserted in Division 3 of Part III:

"Subdivision F - Substantiation of Certain Expenses

Interpretation

"82KT. (1) In this Subdivision, unless the contrary intention appears -

'car' means a motor vehicle (including a vehicle known as a four wheel drive

vehicle), being -

(a) a motor car, station wagon, panel van, utility truck or similar

vehicle; or

(b) any other road vehicle designed to carry a load of less than

1 tonne or fewer than 9 passengers,

but does not include a motor cycle or similar vehicle; 'car expense' means an

outgoing incurred in connection with a car and, without limiting the

generality of the foregoing, includes -

(a) an outgoing incurred in connection with the operation of a

car;

(b) expenditure incurred in connection with borrowing money

for the purpose of acquiring a car;

incurred in connection with the discharge of a mortgage given

as security for -

(i) the repayment of money borrowed for the purpose of

acquiring a car; or

(ii) the payment of the whole or a part of the cost of

acquiring a car;

(d) in a case where a car is leased -

(i) expenditure incurred by the lessee in connection with

the lease; and

(ii) without limiting the generality of sub-paragraph (i),

expenditure incurred by the lessee for the preparation,

registration and stamping of the lease, or of an

assignment or surrender of the lease;

(e) a payment of interest on money borrowed for the purpose

of acquiring a car or on the outstanding balance of the cost

of acquiring a car;

(f) expenditure incurred for repairs to a car; and

(g) depreciation in respect of a car,

but does not include -

(h) such an outgoing incurred, such expenditure incurred, or

such a payment made, in respect of travel outside Australia;

(j) a taxi fare or similar expense;

'depreciation' means depreciation that is, or would but for this Subdivision

be, allowable under this Act;

'elect' means elect in accordance with this Subdivision;

'eligible expense' means -

(a) in relation to a meal allowance - an outgoing incurred, by a

taxpayer to whom the allowance was paid or is payable, in respect of the

purchase of food or drink to which the allowance relates; or

(b) in relation to a travel allowance - an outgoing incurred, by a

taxpayer to whom the allowance was paid or is payable, in respect of the

travel to which the allowance relates, being an outgoing in respect of

accommodation, in respect of the purchase of food or drink, or in respect of

expenditure incidental to the travel;

'eligible relative', in relation to a person, means a relative of the person

and includes another person who, although not legally married to the person,

lives with the person as the husband or wife of the person on a bona fide

domestic basis;

'employee' means an employee as defined in section 221A and, whether or not

the Governor-General has entered into an arrangement in accordance with

section 221B with the Governor in Council of the State concerned, includes a

member of the Parliament of a State and a person employed by a State or by an

authority of a State;

'employer' means an employer as defined in section 221A and, whether or not

the Governor-General has entered into an arrangement in accordance with

section 221B with the Governor in Council of the State concerned, includes a

State and an authority of a State;

'employment-related expense' means an outgoing incurred by a taxpayer in

producing salary or wages of the taxpayer, and, without limiting the

generality of the foregoing, includes -

(a) in a case where, during a year of income, a taxpayer -

(i) incurred an outgoing by way of a periodical

subscription to a trade, business or professional association; and

(ii) derived salary or wages,

that outgoing;

(b) expenditure incurred by a taxpayer in connection with

borrowing money used by the taxpayer wholly or partly for the purpose of

producing salary or wages of the taxpayer;

incurred by a taxpayer in connection with the discharge of a mortgage given by

the taxpayer as security for -

(i) the repayment of money borrowed by the taxpayer;

(ii) the payment by the taxpayer of the whole or a part

of the purchase price of property purchased by the taxpayer,

where that money or property was used by the taxpayer wholly or partly for the

purpose of producing salary or wages of the taxpayer;

(d) in a case where property leased to a taxpayer was used by

the taxpayer wholly or partly for the purpose of producing salary or wages of

the taxpayer -

(i) expenditure incurred by the taxpayer in connection

with the lease; and

(ii) without limiting the generality of sub-paragraph (i),

expenditure incurred by the taxpayer for the preparation, registration and

stamping of the lease, or of an assignment or surrender of the lease;

(e) a payment of interest on money borrowed by a taxpayer

where that money was used by the taxpayer wholly or partly

for the purpose of producing salary or wages of the taxpayer;

(f) expenditure incurred by a taxpayer for repairs to any premises,

or part of premises, plant, machinery, implements, utensils,

or articles held, occupied or used by the taxpayer wholly or

partly for the purpose of producing salary or wages of the

taxpayer;

(g) depreciation in respect of property owned by a taxpayer

and -

(i) used by the taxpayer; or

(ii) installed ready for use,

wholly or partly for the purpose of producing salary or wages

of the taxpayer; and

(h) expenditure incurred by a taxpayer in respect of which a

deduction is, or would but for this Subdivision be, allowable

under section 74 or 74A,

but does not include a car expense, a travel expense or an eligible expense in

relation to a meal allowance or in relation to a travel allowance;

'expense' means -

(a) a car expense, an employment-related expense, or a travel

expense, incurred by a taxpayer; or

(b) an eligible expense incurred by a taxpayer in relation to a

meal allowance or in relation to a travel allowance;

'industrial instrument' means a law of the Commonwealth or of a State or

Territory or an award, order, determination or industrial agreement in force

under any such law;

'meal allowance' means an allowance paid or payable to an employee for the

purpose of enabling the employee to purchase food and drink, but does not

include any part of a travel allowance;

'outgoing' includes a loss;

'overtime meal allowance' means a meal allowance paid or payable to an

employee, pursuant to the provisions of an industrial instrument, for the

purpose of enabling the employee to purchase food and drink in connection with

overtime worked by the employee;

'person' includes a partnership;

'relevant car documents', in relation to a car expense that relates to a car

and is incurred by a taxpayer during a year of income, means the following

documents:

(a) a daily log book or similar document in which, in respect of

each journey undertaken in the car during the year of income in the course of

producing assessable income of the taxpayer, an entry setting out particulars

of -

(i) the date on which the journey began and the date on

which it ended;

(ii) the respective odometer readings of the car at the

beginning and end of the journey;

(iii) the number of kilometres travelled by the car in the

course of the journey;

(iv) the purpose or purposes of the journey;

(v) the name of the person, or the names of the persons,

driving the car on that journey;

(vi) the date on which the entry is made; and

(vii) the name of the person by whom the entry is made,

is made in the English language at, or as soon as reasonably practicable

after, the end of the journey, and that, in relation to each such entry so

made, is signed, at the time when the entry is made, by the person who made

the entry;

(b) a document in which particulars of -

(i) the odometer reading of the car at the commencement

of the year of income or, if the first use of the car in

the course of producing assessable income of the

taxpayer occurred during the year of income, at the

commencement of that use;

(ii) the odometer reading of the car at the end of the

year of income or, if the last use of the car by the

taxpayer occurred during the year of income, at the

end of that use;

(iii) the respective dates on which the entries are made;

and

(iv) the name of the person, or the names of the respective

persons, by whom the entries are made,

are entered in the English language, and that is signed by the person or

persons referred to in sub-paragraph (iv), at, or as soon as reasonably

practicable after, the respective times to which those odometer readings

relate;

'retention period', in relation to an expense incurred by a taxpayer during a

year of income, means the period commencing on the day on which documentary

evidence of the expense was obtained by or on behalf of the taxpayer and

ending at the end of the period of -

(a) in a case where the expense is a car expense and, at any

time during the year of income, the car to which the expense

relates is used in the course of producing assessable income

of the taxpayer, not being salary or wages - 7 years;

(b) in a case where the expense is a travel expense and, while

undertaking the travel to which the expense relates, the

taxpayer engages in an activity in the course of producing

assessable income of the taxpayer, not being salary or wages -

7 years; or

that commences on the day on which the taxpayer lodges a return of income of

the taxpayer of the year of income, or, if at the end of that period of 7

years, or 3 years and 6 months, as the case may be, an objection, or a request

for amendment of an assessment (not being an objection), relating to the

expense or to matters including the expense, or a review or appeal arising out

of such an objection, has not been determined or otherwise finally disposed

of, ending on the day on which the objection (and any review or appeal arising

out of it), the request, or the review or appeal (and any appeal or further

appeal arising out of it), as the case may be, has or have been determined or

so disposed of;

'salary or wages' means assessable income, being salary or wages as defined by

section 221A;

'taxpayer' does not include a company or a person in the capacity of a

trustee;

'travel allowance' means an allowance paid by an employer to an employee for

the purpose of enabling the employee to incur, in respect of travel away from

the employee's ordinary place of residence undertaken in the course of

performing duties as an employee of the employer, outgoings in respect of

accommodation, in respect of the purchase of food and drink, and in respect of

expenditure incidental to the travel;

'travel diary', in relation to particular travel undertaken by a taxpayer,

means a diary or similar document in which the taxpayer has made, as mentioned

in sub-section 82KZ (2), entries relating to activities engaged in by the

taxpayer while undertaking the travel;

'travel expense' means an outgoing incurred by a person in respect of -

(a) travel by the person outside Australia; or

(b) travel by the person within Australia that involves the person being

away from the person's ordinary place of residence for a continuous period

including more than 5 nights,

but does not include a car expense or an eligible expense in relation to a

travel allowance.

"(2) For the purposes of this Subdivision, where -

(a) during a particular period during a day, 2 or more journeys are

undertaken in a car; and

(b) each of the journeys undertaken in the car during that period is

undertaken in the course of producing assessable income of a

particular taxpayer,

the journeys referred to in paragraph (b) shall be deemed to constitute a

single journey.

"(3) For the purposes of this Subdivision, where a car expense or an

employment-related expense is constituted by depreciation of property, being

depreciation that is, or would but for this Subdivision be, an allowable

deduction to a taxpayer in respect of a particular year of income, the expense

shall be taken to be incurred by the taxpayer on the last day of the year of

income.

"(4) Except so far as the contrary intention appears, a reference in this

Subdivision to producing assessable income, or assessable income of a

particular kind, includes a reference to -

(a) gaining assessable income, or assessable income of that kind, as the

case may be; or

(b) except in the case of salary or wages - carrying on a business for

the purpose of gaining or producing assessable income, or assessable

income of that kind, as the case may be.

"(5) A reference in this Subdivision to a business of a particular kind that

is carried on by a person includes a reference to a business of that kind that

is carried on by the person as part of, or in conjunction with, any other

business.

"(6) For the avoidance of doubt, it is declared that -

(a) nothing in this Subdivision shall be taken by implication to affect

the interpretation or application of this Act as in force at any time

before the commencement of this Subdivision; and

(b) nothing in this Subdivision (other than paragraphs 82KW (2) (a)

and (3) (a) and (b) and 82KX (1) (a)) entitles a taxpayer to a

deduction to which the taxpayer would not have been entitled if

this Subdivision had not been enacted.

Documentary evidence

"82KU. (1) A reference in this Subdivision to documentary evidence of an

expense incurred by a taxpayer is, except in the case of depreciation, a

reference to a document, being a receipt, invoice or similar document, that -

(a) sets out -

(i) in any case - in the English language; or

(ii) in a case where the expense was incurred outside Australia -

in a language of the country where the expense was incurred,

particulars of -

(iii) the date on which the expense was incurred;

(iv) unless sub-paragraph (v) applies - the name of the person

who supplied the goods or services to which the expense

relates;

(v) if the goods or services to which the expense relates were

supplied in the course of a business carried on by a person -

the name of the person or the business name under which

the person carries on the business;

(vi) the amount of the expense expressed in the currency in

which the expense was incurred;

(vii) the nature of those goods or services; and

(viii) the date on which the document was made out;

(b) is signed, and supplied, by or on behalf of the person referred to in

sub-paragraph (a) (iv) or (v), as the case may be; and

reasonably practicable after, the time when the expense is incurred.

"(2) A reference in this Subdivision to documentary evidence of an expense

incurred by a taxpayer is, in the case of depreciation in respect of property,

a reference to a document, being a receipt, invoice or similar document, that

(a) sets out -

(i) in any case - in the English language; or

(ii) in a case where the property was imported into Australia by

or on behalf of the taxpayer - in a language of the country

from which the property was originally exported,

particulars of -

(iii) the date on which the property was acquired by the taxpayer;

(iv) unless sub-paragraph (v) applies - the name of the person

from whom the property was acquired by the taxpayer;

(v) if the property was supplied in the course of a business

carried on by a person - the name of the person or the

business name under which the person carries on the business;

(vi) the cost of the property to the taxpayer; and

(vii) the date on which the document was made out;

(b) is signed, and supplied, by or on behalf of the person referred to in

sub-paragraph (a) (iv) or (v), as the case may be; and

reasonably practicable after, the time when the property is first used, or is

installed ready for use, for the purpose of producing -

(i) in a case where the property is a car - assessable income of

the taxpayer; or

(ii) in any other case - salary or wages of the taxpayer.

"(3) Where the person carrying on a business does not, in the ordinary

course of the business, supply a receipt, invoice or similar document

constituting documentary evidence of -

(a) an expense (other than depreciation) that was incurred by a taxpayer and

relates to goods or services that were supplied in the course of the business;

(b) an expense constituted by depreciation in respect of property that was

supplied to a taxpayer in the course of the business,

sub-section (1) or (2), as the case requires, applies in relation to such an

expense as if a reference in that sub-section to a receipt or invoice included

a reference to a statement or certificate.

"(4) Where a person supplies, otherwise than in the course of a business -

(a) goods or services to which an expense incurred by a taxpayer relates;

(b) property depreciation in respect of which constitutes an expense

incurred by a taxpayer,

sub-section (1) or (2), as the case requires, applies in relation to the

expense as if a reference in that sub-section to a receipt or invoice included

a reference to a statement or certificate.

"(5) For the purposes of this Subdivision, where a document, being a

statement, certificate or similar document -

(a) sets out in the English language, in relation to each of 2 or more

payments -

(i) that are expenses incurred by a particular taxpayer during a

period during a year of income;

(ii) each of which is expenditure, or a payment, of a kind

referred to in paragraph (d) or (e) of the definition of 'car

expense', or in paragraph (d) or (e) of the definition of

'employment-related expense', in sub-section 82KT (1); and

(iii) that were made to a particular person,

particulars of -

(iv) the date on which the payment was made;

(v) the amount of the payment; and

(vi) the nature of the payment;

(b) sets out in the English language particulars of -

(i) unless sub-paragraph (ii) applies - the name of the person;

(ii) if the payments were received by the person in the course of

a business carried on by the person - the name of the person or the business

name under which the person carries on the business; and

(iii) the date on which the document was made out;

(d) is obtained by or on behalf of the taxpayer at, or as soon as reasonably

practicable after, the day on which the later or last of the payments was

made,

then, in relation to each of the payments -

(e) the taxpayer shall be deemed to have obtained documentary evidence of

the payment; and

(f) so much of the document as relates to the payment shall be deemed to be

documentary evidence of the payment.

"(6) Where, at, or as soon as reasonably practicable after, the time when a

taxpayer incurs an expense that, by virtue of sub-section (7) or (8), is an

undocumentable expense -

(a) an entry setting out -

(i) except in the case of depreciation of the kind referred to in

sub-paragraph (ii) - the particulars that would be set out in documentary

evidence of the expense (other than particulars of the date on which the

documentary evidence was made out);

(ii) in the case of depreciation in respect of property, being

depreciation that, by virtue of sub-section (7), is an undocumentable expense

- particulars of the property and of the amount of the depreciation; and

(iii) particulars of the date on which the entry is made and the

name of the person making the entry,

is made in the English language, by or on behalf of the taxpayer, in a diary

or similar document; and

(b) the diary or similar document is signed, in relation to the entry, by

the person making the entry,

then, for the purposes of this Subdivision -

the expense; and

(d) so much of the diary or similar document as sets out those particulars

shall be deemed to be documentary evidence of the expense.

"(7) For the purposes of sub-section (6), where -

(a) a taxpayer claims as a deduction in respect of a year of income an

expense (in this sub-section referred to as a 'relevant expense') -

(i) that was incurred by the taxpayer during the year of income;

and

(ii) the amount of which does not exceed $10 or such higher

amount as is prescribed for the purposes of this sub-paragraph; and

(b) the total of the amounts of the relevant expenses claimed by the

taxpayer as deductions in respect of that year of income does not exceed $200

or such higher amount as is prescribed for the purposes of this paragraph,

the expense referred to in paragraph (a) shall be deemed to be, and always to

have been, an undocumentable expense.

"(8) For the purposes of sub-section (6), where the Commissioner is

satisfied, having regard to the nature of an expense incurred by a taxpayer,

that it would be unreasonable to expect the taxpayer to have obtained

documentary evidence of the expense, the expense shall be deemed to be, and

always to have been, an undocumentable expense.

"(9) Where a taxpayer incurs an expense constituted by depreciation in

respect of property and the Commissioner is satisfied that -

(a) at the time (in this sub-section and sub-section (10) referred to as the

'relevant time') when the property was first used, or was installed ready for

use, for the purpose of producing -

(i) in the case of a car - assessable income of the taxpayer; or

(ii) in any other case - salary or wages of the taxpayer,

the taxpayer did not have documentary evidence of the expense;

(b) in a case where the taxpayer did not obtain documentary evidence of the

expense before the relevant time - the taxpayer did not, at the time when the

taxpayer acquired the property, intend to use the property at any time for the

purpose of producing assessable income, or salary or wages, as the case may

be, of the taxpayer; and

documentary evidence of the expense - the taxpayer did not, at the time when

the taxpayer ceased to retain the documentary evidence, intend to use the

property at any time for the purpose of producing assessable income, or salary

or wages, as the case may be, of the taxpayer,

sub-section (2) applies, and shall be deemed always to have applied, in

relation to the expense as if a reference in that sub-section to a receipt or

invoice included a reference to a statement or certificate.

"(10) Where, in a case where sub-section (9) applies, the Commissioner is

further satisfied that -

(a) because of circumstances beyond the control of the taxpayer, it has at

no time since the relevant time been reasonably practicable for the taxpayer

to obtain documentary evidence of the expense; and

(b) the particulars set out in a document furnished by the taxpayer to the

Commissioner, being the particulars that would have been set out in

documentary evidence of the expense (other than particulars of the date on

which the documentary evidence was made out), are true and correct,

paragraph 82KV (1) (a) or 82KW (2) (b), or sub-section 82KZ (1), as the case

requires, and paragraphs 82KZA (1) (a) and (3) (c) and (d), do not apply, and

shall be deemed never to have applied, in relation to the expense.

Car expenses

"82KV. (1) Subject to this Subdivision, a deduction is not allowable under

this Act in respect of a car expense incurred by a taxpayer unless -

(a) documentary evidence of the expense is obtained; and

(b) relevant car documents in relation to the expense are maintained, by or

on behalf of the taxpayer.

"(2) Subject to this Subdivision, where a journey is undertaken in a car

during a year of income in the course of producing assessable income of a

taxpayer and -

(a) an entry relating to the journey, being an entry of the kind referred to

in paragraph (a) of the definition of 'relevant car documents' in sub-section

82KT (1), is not made as mentioned in that paragraph in a daily log book or

similar document relating to journeys so undertaken; or

(b) such an entry is so made but the daily log book or similar document is

not signed in relation to the entry as mentioned in that paragraph,

then, for the purposes of determining -

respect of a car expense that relates to the car and was incurred by the

taxpayer during the year of income; and

(d) if a deduction is so allowable, the amount of the deduction,

the first-mentioned journey shall be deemed not to have been undertaken in the

course of producing assessable income of the taxpayer.

"(3) Sub-sections (1) and (2) do not apply in relation to a car expense that

relates to a car and is incurred by a taxpayer during a year of income if -

(a) the taxpayer -

(i) uses the car at any time during the year of income; and

(ii) does not use the car at any time during the year of income

otherwise than in an exempt manner;

(b) the car is included at any time during the year of income in the trading

stock of a business of selling cars that is carried on by the taxpayer and the

taxpayer does not use the car at any time during the year of income; or

the car done in the course of a business of doing repairs to, or other work

on, cars that is carried on by the taxpayer.

"(4) For the purposes of sub-section (3), where -

(a) a car is -

(i) a taxi, panel van or utility truck; or

(ii) any other road vehicle designed to carry a load of less than

1 tonne (other than a vehicle designed for the principal purpose of carrying

passengers); and

(b) a taxpayer uses the car -

(i) in any case - in the course of producing assessable income of

the taxpayer;

(ii) in a case where the taxpayer drives the car in the course of

using the car as mentioned in sub-paragraph (i) - for the

purpose of travelling between a place where the car is so

used and the place of residence of the taxpayer;

(iii) in a case where a person other than the taxpayer drives the

car in the course of use of the car as mentioned in

subparagraph

(i) - by providing the car to the person for the

purpose of travelling between a place where the car is used

as mentioned in sub-paragraph (i) and the place of residence

of the person; or

(iv) in any case - for the purpose of travel that is incidental to

use of the car as mentioned in sub-paragraph (i),

the taxpayer shall be taken to use the car in an exempt manner.

"(5) For the purposes of sub-section (3), where a taxpayer -

(a) uses, in the course of a business of selling cars that is carried on by

the taxpayer, a car that is included in the trading stock of the

business;

(b) uses a car by letting it on lease or hire in the course of a business

of letting cars on lease or hire that is carried on by the taxpayer; or

use of a person who is, or of persons each of whom is, an employee

of the taxpayer or an eligible relative of such an employee, in

circumstances where the person, or any of the persons, is entitled

to use the car for private purposes,

the taxpayer shall be taken to use the car in an exempt manner.

Car expenses where income-producing use exceeds 5,000 kilometres

"82KW. (1) Subject to this Subdivision, where a car was owned by, or leased

to, a taxpayer during a period during a year of income and -

(a) the number of kilometres travelled by the car during the year of income

in the course of producing assessable income of the taxpayer was more than

5,000; or

(b) the taxpayer -

(i) first used the car on a day during the year of income other

than the first day of the year of income; or

(ii) ceased during the year of income to use the car,

and in all the circumstances it is reasonable to conclude that, had the car

been used by the taxpayer during the whole year of income, the number of

kilometres travelled by the car during the year of income in the course of

producing assessable income of the taxpayer would have been more than 5,000,

the taxpayer may elect that sub-section (2) or (3) apply in relation to the

car in relation to the year of income.

"(2) Subject to this Subdivision, where a taxpayer elects that this

subsection apply in relation to a car in relation to a year of income -

(a) subject to paragraph (b), the amount of a deduction allowable to the

taxpayer under this Act in respect of a car expense that relates to the car

and was incurred by the taxpayer during the year of income shall be 33 1/3% of

the amount of the deduction that, but for this Subdivision, would have been so

allowable in respect of the expense if the car had, throughout the year of

income, been used by the taxpayer exclusively in the course of producing

assessable income of the taxpayer;

(b) a deduction is not so allowable in respect of such an expense unless

documentary evidence of the expense is obtained by or on behalf of the

taxpayer; and

shall be deemed never to have applied, in relation to the taxpayer in relation

to such an expense.

"(3) Subject to this Subdivision, where a taxpayer elects that this

subsection apply in relation to a car in relation to a year of income -

(a) unless paragraph (b) applies - the taxpayer is entitled in respect of

the year of income to a deduction of an amount equal to 12% of -

(i) in the case of a car owned by the taxpayer - the cost of the

car to the taxpayer; or

(ii) in the case of a car leased to the taxpayer - the market value

of the car at the time when the lease was entered into by the taxpayer;

(b) if, throughout a particular period, or particular periods, during that

year of income, the car was neither owned nor leased by the taxpayer - the

taxpayer is entitled in respect of the year of income to a deduction of the

amount ascertained in accordance with the

A(365 - B)

formula __________ , where -

365

A is the amount of the deduction to which, if this paragraph did

not apply, the taxpayer would, by virtue of paragraph (a), have been entitled

in relation to the car in respect of the year of income; and

B is the number of days in that period, or the total number of

days in those periods, as the case may be;

allowable, to the taxpayer under this Act in respect of a car expense that

relates to the car and was incurred by the taxpayer during the year of income;

and

(d) sub-section 82KV (2) does not apply, and shall be deemed never to have

applied, in relation to the taxpayer in relation to such an expense.

"(4) For the purposes of the application of sub-section (3) in relation to a

car in relation to a year of income -

(a) where section 57AF would, but for sub-section (3), apply in relation to

the car to deem the cost of the car to be the amount of the motor vehicle

depreciation limit in relation to the year of first use - the reference in

sub-paragraph (3) (a) (i) to the cost of the car shall be deemed to be a

reference to the amount that would be the amount of the motor vehicle

depreciation limit if that section applied in relation to the car in relation

to the year of income; and

(b) the amount determined to be the market value of the car for the purposes

of sub-paragraph (3) (a) (ii) shall not exceed the amount that would be the

motor vehicle depreciation limit in relation to the car had the car been

acquired by the taxpayer at its market value and been put to first use in the

income year in which the lease was entered into.

"(5) In sub-sections (1), (3) and (4), 'leased' means leased under a lease

for a term of not less than 12 months.

Car expenses where income-producing use does not exceed 5,000 kilometres

"82KX. (1) Subject to this Subdivision, where a car was owned by, or leased

to, a taxpayer during a period during a year of income and the number of

kilometres travelled by the car during the year of income in the course of

producing assessable income of the taxpayer was not more than 5,000, the

taxpayer may elect that this sub-section apply in relation to the car in

relation to the year of income and, if the taxpayer so elects -

(a) the taxpayer is entitled to a deduction in respect of that year of

income of the amount ascertained by multiplying the number of kilometres so

travelled by the prescribed rate applicable to the engine capacity, expressed

in cubic centimetres, of the car;

(b) a deduction is not allowable, and shall be deemed never to have been

allowable, under this Act to the taxpayer in respect of a car expense that

relates to the car and was incurred during the year of income; and

applied, in relation to such an expense.

"(2) In sub-section (1), 'leased' means leased under a lease for a term of

not less than 12 months.

Elections

"82KY. (1) An election by a taxpayer under this Subdivision -

(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 taxpayer for the year of income to which the

election relates, or before such later date as the Commissioner allows.

"(2) A taxpayer who -

(a) incurs during a year of income a car expense that relates to a car and

in respect of which a deduction is, or would but for this Subdivision be,

allowable to the taxpayer in respect of the year of income; and

(b) is entitled to elect, and does not elect, that a provision of this

Subdivision apply in relation to the car in relation to the year of income,

is not entitled to elect that a provision of this Subdivision apply in

relation to the car in relation to a later year of income.

"(3) Where a taxpayer -

(a) elects that a particular provision of this Subdivision apply in relation

to a car in relation to a year of income; and

(b) is entitled to elect that the provision apply in relation to the car in

relation to the next succeeding year of income,

the taxpayer -

provision apply as mentioned in paragraph (b); and

(d) is not entitled to elect that another provision of this Subdivision

apply as mentioned in that paragraph.

"(4) A taxpayer is not entitled to elect that sub-section 82KW (3) or 82KX

(1) apply in relation to a car in relation to a year of income unless the

taxpayer has incurred so much of each car expense that relates to the car and

is incurred during the year of income (other than an expense that it would be

unreasonable to expect the taxpayer to have incurred) as is attributable to a

period during which the car was used by the taxpayer.

"(5) Where -

(a) a taxpayer elects that sub-section 82KW (3) or 82KX (1) apply in

relation to a car in relation to a year of income; and

(b) in the opinion of the Commissioner, it is reasonable to conclude that a

car expense that relates to the car and was incurred by the taxpayer during a

year of income commencing before 1 July 1986 would, if this Subdivision had

not been enacted, have been incurred by the taxpayer during the year of income

referred to in paragraph (a),

a deduction is not allowable, and shall be deemed never to have been

allowable, to the taxpayer under this Act in respect of the car expense.

"(6) Where -

(a) depreciation in respect of a car has been allowed, or is allowable, as a

deduction to a taxpayer in respect of a period, or in respect of each of 2 or

more periods;

(b) the taxpayer has elected in a relevant manner in relation to the car in

relation to a year of income or in relation to each of 2 or more years of

income; and

time'), the car is disposed of, lost or destroyed,

then -

(d) for the purposes of section 59, the depreciated value of the car at the

relevant time shall be deemed to be the amount (in this subsection referred to

as the 'notional amount') that, in the opinion of the Commissioner, would have

been the amount of the depreciated value of the car at the relevant time if

the taxpayer had not elected in a relevant manner in relation to the car in

relation to, and this Subdivision did not apply, and had never applied, in

relation to depreciation in respect of the car in respect of, the year of

income, or any of the years of income, referred to in paragraph (b);

(e) in applying section 56 for the purpose of ascertaining the notional

amount, the use of the car by the taxpayer during the year of income, or

during any of the years of income, referred to in paragraph (b) shall be

deemed to have been for the purpose of producing assessable income of the

taxpayer;

(f) in applying section 61 for the purpose of ascertaining the notional

amount, the use of the car by the taxpayer during the year of income, or

during any of the years of income, referred to in paragraph (b) shall be

deemed to have been -

(i) if the taxpayer elected that sub-section 82KW (3) apply in

relation to the car in relation to the year of income concerned - to the

extent of 33 1/3%; or

(ii) if the taxpayer elected that sub-section 82KX (1) apply in

relation to the car in relation to the year of income concerned - to the

extent of 20%,

for the purpose of producing assessable income of the taxpayer; and

(g) the amount of the deduction allowable to, or the amount to be included

in the assessable income of, the taxpayer under sub-section 59 (1) or (2) by

reason of the disposal, loss or destruction of the car shall be such

proportion (if any) of the amount that, but for this paragraph, would be the

amount of the deduction so allowable or the amount to be so included as the

Commissioner considers reasonable having regard to the proportion that the

period, or the aggregate of the periods, referred to in paragraph (a) bears to

the aggregate of -

(i) the period or periods referred to in paragraph (a); and

(ii) the year of income or years of income referred to in paragraph

(b).

"(7) For the purposes of sub-section (6), a taxpayer who elects that

sub-section 82KW (3) or 82KX (1) apply in relation to a car in relation to a

year of income shall be taken to elect in a relevant manner in relation to the

car in relation to the year of income.

Other expenses

"82KZ. (1) Subject to this Subdivision, a deduction is not allowable under

this Act in respect of an expense incurred by a taxpayer, being -

(a) an eligible expense in relation to a meal allowance or in relation to a

travel allowance; or

(b) an employment-related expense or a travel expense, unless documentary

evidence of the expense is obtained by or on behalf of the taxpayer.

"(2) Subject to this Subdivision, a deduction is not allowable under this

Act in respect of an expense incurred by a taxpayer, being -

(a) an eligible expense in relation to a travel allowance; or

(b) a travel expense,

unless, in relation to each activity engaged in by the taxpayer -

(d) in the course of producing assessable income of the taxpayer, the

taxpayer makes in the English language in a diary or similar document, before,

at the time of, or as soon as reasonably practicable after, the conclusion of

the activity, an entry setting out particulars of -

(e) the date on which the entry was made;

(f) the place where the activity was undertaken;

(g) the date and approximate time when the activity commenced;

(h) the duration of the activity; and

(j) the nature of the activity.

"(3) Where a taxpayer -

(a) while undertaking travel, engages in an activity in the course of

producing assessable income of the taxpayer; and

(b) does not make as mentioned in sub-section (2) an entry relating to

the activity, being an entry of the kind referred to in that

subsection,

then, for the purpose of determining -

respect of a travel expense, or an eligible expense in relation to a travel

allowance, being an expense that relates to the travel; and

(d) if a deduction is so allowable, the amount of the deduction, the

activity referred to in paragraph (a) shall be deemed not to have been engaged

in by the taxpayer in the course of producing assessable income of the

taxpayer.

"(4) Where -

(a) the amount of -

(i) an overtime meal allowance paid or payable to a taxpayer

(in this sub-section referred to as the 'relevant taxpayer'); or

(ii) a travel allowance that was paid or is payable to a taxpayer

(in this sub-section also referred to as the 'relevant taxpayer') and relates

solely to travel by the taxpayer within Australia,

(whether or not the allowance was paid or is payable under an industrial

instrument) is, in the opinion of the Commissioner, reasonable having regard

to the total of the amounts of the outgoings that it would be reasonable for a

taxpayer to whom the allowance was paid or is payable to incur -

(iii) if sub-paragraph (i) applies - in respect of the food and drink

to which the allowance relates; or

(iv) if sub-paragraph (ii) applies - in respect of the travel to

which the allowance relates, in respect of accommodation, the purchase of food

and drink, and expenditure incidental to the travel; and

(b) the total of the amounts of the eligible expenses in relation to the

allowance incurred by the relevant taxpayer and claimed by the relevant

taxpayer as deductions in respect of the year of income in which the expenses

were incurred does not exceed the amount of the allowance,

this section and section 82KZA do not apply, and shall be deemed never to have

applied, in relation to the relevant taxpayer in relation to any of the

expenses referred to in paragraph (b).

Retention, and production, of documents

"82KZA. (1) Where a taxpayer fails to retain for the retention period in

relation to an expense incurred by the taxpayer -

(a) in any case - documentary evidence of the expense;

(b) in the case of a car expense - the relevant car documents in relation to

the expense; or

a travel allowance - the travel diary relating to the travel to which the

expense relates,

a deduction is not allowable, and shall be deemed never to have been

allowable, under this Act in respect of the expense.

"(2) The Commissioner may, by notice in writing served on a taxpayer,

require the taxpayer to produce to the Commissioner, within a specified period

of not less than 28 days, documentary evidence relating to expenses incurred

by the taxpayer and, if the Commissioner does so, sub-section (3) applies, in

relation to the notice, in relation to each of those expenses.

"(3) Where -

(a) this sub-section applies, in relation to a notice served on a taxpayer

under sub-section (2), in relation to an expense incurred by the taxpayer;

and

(b) at the time when the notice is so served, the retention period in

relation to the expense has not ended,

then, unless the taxpayer -

or such longer period as the Commissioner allows, documentary evidence of the

expense;

(d) includes in a schedule that is in the English language and in a form

approved by the Commissioner and that is produced to the Commissioner within

the period specified in the notice or such longer period as the Commissioner

allows -

(i) a cross-reference to the documentary evidence of the expense;

and

(ii) in relation to the cross-reference, a summary of the particulars

set out in the documentary evidence together with, in a case where the expense

was incurred in a foreign currency, particulars of the amount of the expense

expressed in Australian currency;

(e) in the case of a car expense - produces to the Commissioner, within the

period specified in the notice or such longer period as the Commissioner

allows, the relevant car documents in relation to the expense; and

(f) in the case of a travel expense or of an eligible expense in relation to

a travel allowance - produces to the Commissioner, within the period specified

in the notice or such longer period as the Commissioner allows, the travel

diary relating to the travel to which the expense relates,

a deduction is not allowable, and shall be deemed never to have been

allowable, under this Act in respect of the expense.

"(4) Notwithstanding section 8C of the Taxation Administration Act 1953, a

person is not guilty of an offence by reason only of failing to comply with a

notice under sub-section (2) of this section.

"(5) Where a document (in this sub-section referred to as the 'original

document'), being -

(a) documentary evidence of an expense incurred by a taxpayer;

(b) one of the relevant car documents in relation to a car expense incurred

by a taxpayer; or

by the taxpayer, being a travel expense or an eligible expense in relation to

a travel allowance,

is lost or destroyed and the Commissioner is satisfied that -

(d) the taxpayer took all reasonable precautions to prevent loss or

destruction of the original document;

(e) the original document was lost or destroyed because of circumstances

beyond the control of the taxpayer; and

(f) the taxpayer has a document (in this sub-section referred to as the

'substitute document') that -

(i) is a copy of the original document; or

(ii) properly records all of the matters set out in the original

document and was in existence when the original document was lost or

destroyed,

the substitute document shall be deemed for the purposes of this Subdivision

to be, and to have been at all times after the original document was lost or

destroyed, the original document.

"(6) Where a document, being documentary evidence of an expense incurred by

a taxpayer, is lost or destroyed and the Commissioner is satisfied that -

(a) the taxpayer took all reasonable precautions to prevent loss or

destruction of the document;

(b) the document was lost or destroyed because of circumstances beyond the

control of the taxpayer;

(d) either -

(i) the taxpayer has obtained a document (in this sub-section

referred to as a 'substitute document') that would, if it were a receipt,

invoice or similar document obtained by the taxpayer at the time when the

first-mentioned document was obtained by the taxpayer, be documentary evidence

of the expense; or

(ii) it is not reasonably practicable for the taxpayer to obtain a

substitute document,

then -

(e) in a case where sub-paragraph (d) (i) of this sub-section applies -

(i) paragraphs (1) (a) and (3) (c) and (d) shall be deemed not

to have applied, in relation to the expense, at any time after the

first-mentioned document was lost or destroyed and before a substitute

document was obtained by the taxpayer; and

(ii) as from the time when a substitute document was obtained

by the taxpayer, the substitute document shall be deemed to be documentary

evidence of the expense; or

(f) in any other case - paragraphs (1) (a) and (3) (c) and (d) do not apply

in relation to the expense and shall be deemed not to have so applied at any

time after the first-mentioned document was lost or destroyed.

"(7) Where a document, being -

(a) one of the relevant car documents in relation to a car expense incurred

by a taxpayer; or

(b) a travel diary relating to travel to which relates an expense incurred

by a taxpayer, being a travel expense or an eligible expense in relation to a

travel allowance,

is lost or destroyed and the Commissioner is satisfied that -

destruction of the document;

(d) the document was lost or destroyed because of circumstances beyond the

control of the taxpayer; and

(e) sub-section (5) does not apply in relation to the document,

then -

(f) in a case where paragraph (a) of this sub-section applies - paragraphs

(1) (b) and (3) (e); or

(g) in a case where paragraph (b) of this sub-section applies - paragraphs

(1) (c) and (3) (f),

do not apply, and shall be deemed not to have applied at any time after the

document was lost or destroyed, in relation to the expense.

"(8) This section has effect subject to this Subdivision.

Aggregate claims not exceeding a certain amount

"82KZB. (1) In this section, 'relevant expense' means -

(a) an employment-related expense; or

(b) a car expense, or a travel expense, incurred by a taxpayer in producing

salary or wages of the taxpayer.

"(2) Where the total of the amounts of the relevant expenses incurred by a

taxpayer during a year of income and claimed by the taxpayer as deductions in

respect of the year of income does not exceed $300 or such higher amount as is

prescribed for the purposes of this sub-section, sections 82KV, 82KW, 82KX,

82KZ and 82KZA do not apply in relation to the taxpayer in relation to any of

those expenses.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 15

Modified application of Act in relation to certain unit trusts

15. Section 102L of the Principal Act is amended by inserting after

subsection (3) the following sub-section:

"(3A) For the purposes of sub-sections (2) and (3) -

(a) the reference in paragraph (2) (a) to a prescribed trust estate includes

a reference to a trust estate that is a prescribed trust estate for the

purposes of Division 6C;

(b) the reference in paragraph (2) (b) to a corporate unit trust includes a

reference to a unit trust that is a public trading trust for the purposes of

Division 6C; and

references to a unit trust dividend within the meaning of Division 6C.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 16

16. After section 102L of the Principal Act the following Division is

inserted:

"Division 6C - Income of Certain Public Trading Trusts

Interpretation

"102M. In this Division, unless the contrary intention appears - 'eligible

investment business' means either or both of -

(a) investing in land for the purpose, or primarily for the purpose,

of deriving rent; or

(b) investing or trading in any or all of the following:

(i) unsecured loans (including deposits with a bank,

building society or other financial institution);

(ii) bonds, debentures, stock or other securities;

(iii) shares in a company;

(iv) units in a unit trust;

(v) a right or option in respect of such a loan, security,

share or unit;

'eligible policy' has the same meaning as in section 110;

'exempt entity', means -

(a) a body or association to which paragraph 23 (d), (e), (ea),

(eb), (ec), (f), (g), (h), (i) or (x) applies;

(b) the trustee of an exempt life assurance fund or of a fund to

which paragraph 23 (j), (jaa) or (ja) or section 23F, 23FA

or 23FB applies;

other than this Act, is not liable to income tax; or

(d) a government, or an authority of a government, that is not

liable to income tax;

'exempt life assurance fund' means a fund maintained by a life assurance

company solely in respect of a class of life assurance business that consists

of business of, or in relation to, the issuing of, or the undertaking of

liability under, eligible policies;

'land' includes an interest in land;

'life assurance business' has the same meaning as in section 110;

'life assurance company' has the same meaning as in section 110;

'net income', in relation to a public trading trust, means the total

assessable income of the trust calculated under this Act as if the trustee

were a taxpayer in respect of that income and were a resident, less all

allowable deductions;

'prescribed trust estate' means a trust estate that is, or has been, a public

trading trust in relation to any year of income;

'property' includes a chose in action and also includes any estate, interest,

right or power, whether at law or in equity, in or over property;

'relevant year of income' means the year of income that commenced on 1 July

1985 or a subsequent year of income;

'trading business' means a business that does not consist wholly of eligible

investment business;

'trustee', in relation to a fund referred to in paragraph (b) of the

definition of 'exempt entity', means the person in whom the assets of the fund

are vested, whether or not as trustee;

'unit', in relation to a prescribed trust estate, includes a beneficial

interest, however described, in any of the income or property of the trust

estate;

'unitholder', in relation to a prescribed trust estate, means the holder of a

unit or units in the prescribed trust estate;

'unit trust dividend' means -

(a) any distribution made by the trustee of a prescribed trust

estate, whether in money or in other property, to a unitholder;

and

(b) any amount credited by the trustee of a prescribed trust

estate to a unitholder as a unitholder,

but does not include -

trustee of a prescribed trust estate to the extent to which the

money or property is attributable to profits arising during a

year of income in relation to which the prescribed trust estate

was not a public trading trust; or

(d) money paid or credited, or property distributed, by the

trustee of a prescribed trust estate in respect of the

cancellation, extinguishment or redemption of a unit to the extent to which -

(i) the money paid or credited or the property distributed

represents money paid to, or property transferred to,

the trustee for the purpose of the creation or issue of

that unit; and

(ii) the amount of the money paid or credited or the

value of the property distributed, as the case may be,

does not exceed the amount of the money paid to the trustee, or the value, at

the time of transfer, of the property transferred to the trustee, for the

purpose of the creation or issue of that unit.

Trading trusts

"102N. For the purposes of this Division, a unit trust is a trading trust in

relation to a year of income if, at any time during the year of income, the

trustee -

(a) carried on a trading business; or

(b) controlled, or was able to control, directly or indirectly, the affairs

or operations of another person in respect of the carrying on by that other

person of a trading business.

Public unit trusts

"102P. (1) For the purposes of this Division, but subject to the succeeding

provisions of this section, a unit trust is a public unit trust in relation to

a year of income if, at any time during the year of income -

(a) any of the units in the unit trust were listed for quotation in the

official list of a stock exchange in Australia or elsewhere;

(b) any of the units in the unit trust were offered to the public; or

"(2) For the purposes of this Division, but subject to the succeeding

provisions of this section, a unit trust is also a public unit trust in

relation to a year of income if -

(a) at any time during the year of income, an exempt entity or exempt

entities held, or had the right to acquire or become the holder or holders of,

a unit or units in the unit trust that entitled the holder or holders to not

less than 20% of -

(i) the beneficial interests in the income of the unit trust; or

(ii) the beneficial interests in the property of the unit trust;

(b) not less than 20% of the total of money paid or credited by the trustee

of the unit trust during the year of income to unitholders as unitholders was

paid or credited to an exempt entity or exempt entities; or

(i) any provision in the instrument by which the trust was

created, or any contract, agreement or instrument authorising

the variation or abrogation of the rights attaching to any of

the units in the unit trust or relating to the conversion,

cancellation, extinguishment or redemption of any such units;

(ii) any contract, agreement, option or instrument under which

a person has power to acquire a unit or units in the unit

trust; or

(iii) any power, authority or discretion in a person in relation to

the rights attaching to any of the units in the unit trust,

the rights attaching to any of the units in the unit trust were, at any time

during the year of income, capable of being varied or abrogated in such a

manner (notwithstanding that they were not in fact varied or abrogated in that

manner) that -

(iv) units in the unit trust that entitled the holder or holders to

not less than 20% of -

(A) the beneficial interests in the income of the unit trust;

(B) the beneficial interests in the property of the unit

trust,

would have been held by an exempt entity or exempt entities;

(v) not less than 20% of the total of money paid or credited by

the trustee of the unit trust during the year of income to

unitholders as unitholders would have been paid or credited

to an exempt entity or exempt entities; or

(vi) in the case where no money was paid or credited by the

trustee of the unit trust during the year of income to

unitholders as unitholders - if money had been so paid or credited by the

trustee of the unit trust during the year of income, not less than 20% of the

amount of that money would have been paid or credited to an exempt entity or

exempt entities.

"(3) A unit trust shall not be taken to be a public unit trust in relation

to a year of income by reason that units in the unit trust were offered to the

public at any time during the year of income if the Commissioner is of the

opinion that any of those units were offered to the public for the purpose, or

for purposes that included the purpose, of enabling the unit trust to be

treated as a public unit trust for the purposes of this Division in relation

to the year of income.

"(4) Subject to sub-section (5), a unit trust that, but for this sub-section

and sub-section (7), would be a public unit trust in relation to a year of

income by virtue only of sub-section (1) shall be deemed not to be a public

unit trust in relation to the year of income if, at any time during the year

of income, one person or persons not more than 20 in number held, or had the

right to acquire or become the holder or holders of, a unit or units in the

unit trust that entitled the holder or holders thereof to not less than 75% of

(a) the beneficial interests in the income of the unit trust; or

(b) the beneficial interests in the property of the unit trust.

"(5) Subject to sub-section (7), where by virtue of sub-section (4), a unit

trust would, but for this sub-section, be deemed not to be a public unit trust

in relation to a year of income by reason that, at any time during the year of

income, one person or persons not more than 20 in number held, or had the

right to acquire or become the holder or holders of, the unit or units

referred to in sub-section (4) and the Commissioner is of the opinion that,

having regard to -

(a) the length of the period or the aggregate of the lengths of the periods

in the year of income during which one person or persons not more than 20 in

number held, or had the right to acquire or become the holder or holders of,

the unit or units referred to in sub-section (4); and

(b) any other matters that the Commissioner considers relevant,

it is reasonable that the unit trust should be treated as a public unit trust

in relation to the year of income, the unit trust shall be deemed to be a

public unit trust in relation to the year of income.

"(6) For the purposes of sub-sections (4) and (5), a person (in this

subsection referred to as the 'transferee') to whom a right to acquire or

become the holder of a unit in a unit trust is granted or transferred shall be

deemed not to have such a right if the Commissioner is of the opinion, having

regard to the financial circumstances of the transferee and to any other

matters that the Commissioner considers relevant, that it was not intended by

the person who granted or transferred the right to the transferee that the

right would be exercised by the transferee.

"(7) Subject to sub-section (8), a unit trust that, but for this

sub-section, would be a public unit trust in relation to a year of income by

virtue only of sub-section (1), shall be deemed not to be a public unit trust

in relation to that year of income if -

(a) not less than 75% of the total of money paid or credited by the trustee

of the unit trust during the year of income to unitholders as unitholders was

paid or credited to one person or persons not more than 20 in number; or

(b) by reason of -

(i) any provision in the instrument by which the trust was

created, or any contract, agreement or instrument authorising

the variation or abrogation of the rights attaching to any of

the units in the unit trust or relating to the conversion,

cancellation, extinguishment or redemption of any such units;

(ii) any contract, agreement, option or instrument under which

a person has power to acquire a unit or units in the unit

trust; or

(iii) any power, authority or discretion in a person in relation to

the rights attaching to any of the units in the unit trust,

the rights attaching to any of the units in the unit trust were, at any time

during the year of income, capable of being varied or abrogated in such a

manner (notwithstanding that they were not in fact varied or abrogated in that

manner) that -

(iv) units in the unit trust that entitled the holder or holders

thereof to not less than 75% of -

(A) the beneficial interests in the income of the unit trust;

(B) the beneficial interests in the property of the unit

trust,

would have been held by one person or persons not more than 20 in number;

(v) not less than 75% of the total of money paid or credited by

the trustee of the unit trust during the year of income to

unitholders as unitholders would have been paid or credited

to one person or persons not more than 20 in number; or

(vi) in the case where no money was paid or credited by the

trustee of the unit trust during the year of income to

unitholders as unitholders - if money had been so paid or

credited by the trustee of the unit trust during the year of income, not less

than 75% of the amount of that money would have been paid or credited to one

person or persons not more than 20 in number.

"(8) A unit trust shall not be deemed by sub-section (7) not to be a public

unit trust in relation to a year of income by reason that rights attaching to

any of the units in the unit trust were, at any time during the year of

income, capable of being varied in the manner mentioned in paragraph (7) (b)

if the Commissioner is of the opinion that the person or persons who were able

to vary the rights in that manner intended not to vary the rights in that

manner during the year of income.

"(9) For the purposes of sub-sections (1) and (3), units in a unit trust

shall be taken to be offered to the public if and only if -

(a) an offer is made to the public or to a section of the public to

subscribe for or purchase the units; or

(b) an invitation is issued to the public or to a section of the public to

make offers to subscribe for or purchase the units.

"(10) For the purposes of this section, where any units in a unit trust are

held by the trustee of another trust estate, a person who has a beneficial

interest in property of that other trust estate that consists of those units

(whether or not that beneficial interest is deemed to be held by virtue of the

application of this sub-section) shall be deemed to hold those units.

"(11) For the purposes of this section, a distribution of property of a unit

trust to a unitholder shall be taken to be a payment of money to the

unitholder of an amount equal to the value of the property.

"(12) For the purposes of this section -

(a) a person, whether or not he or she holds units in the unit trust

concerned;

(b) his or her relatives; and

his or her nominees and the nominees of any of his or her relatives, shall

be deemed to be one person.

Resident unit trusts

"102Q. For the purposes of this Division, a unit trust is a resident unit

trust in relation to a year of income if, at any time during the year of

income -

(a) either of the following conditions was satisfied:

(i) any property of the unit trust was situated in Australia;

(ii) the trustee of the unit trust carried on business in Australia;

and

(b) either of the following conditions was satisfied:

(i) the central management and control of the unit trust was in

Australia;

(ii) a person who was a resident or persons who were residents

held more than 50% of -

(A) the beneficial interests in the income of the unit trust;

(B) the beneficial interests in the property of the unit

trust.

Public trading trusts

"102R. (1) A unit trust is a public trading trust in relation to a relevant

year of income if -

(a) where the relevant year of income is the year of income that commenced

on 1 July 1985, the year of income commencing on 1 July 1986 or the year of

income commencing on 1 July 1987 -

(i) the unit trust was established after 19 September 1985;

(ii) the unit trust is a public unit trust in relation to the relevant

year of income;

(iii) the unit trust is a trading trust in relation to the relevant

year of income;

(iv) either of the following conditions is satisfied:

(A) the unit trust is a resident unit trust in relation to the

relevant year of income;

(B) the unit trust was a public trading trust in relation to

a year of income preceding the relevant year of income;

and

(v) the unit trust is not a corporate unit trust within the meaning

of Division 6B in relation to the relevant year of income; or

(b) where the relevant year of income is the year of income commencing on 1

July 1988 or a subsequent year of income -

(i) the unit trust is a public unit trust in relation to the relevant

year of income;

(ii) the unit trust is a trading trust in relation to the relevant

year of income;

(iii) either of the following conditions is satisfied:

(A) the unit trust is a resident unit trust in relation to the

relevant year of income;

(B) the unit trust was a public trading trust in relation to

a year of income preceding the relevant year of income; and

(iv) the unit trust is not a corporate unit trust within the meaning

of Division 6B in relation to the relevant year of income.

"(2) Where -

(a) a unit trust would, but for this sub-section, be a unit trust

established

on or before 19 September 1985;

(b) the unit trust was not a trading trust on 19 September 1985; and

the unit trust shall be taken, for the purposes of this section, to have been

established after 19 September 1985.

"(3) For the purposes of sub-section (2), a unit trust is a trading trust on

a particular day if, on that day, the trustee -

(a) carries on a trading business; or

(b) controls or is able to control, directly or indirectly, the affairs or

operations of another person in respect of the carrying on by that

other person of a trading business.

"(4) Where -

(a) a unit trust would, but for this sub-section, be a unit trust

established

on or before 19 September 1985;

(b) if the year of income in which 19 September 1985 occurred had

ended on that date, the unit trust would not have been a public

unit trust in relation to that year of income; and

date, was it the intention of the trustee of the unit trust that the

unit trust would become a public unit trust in relation to a year of

income,

the unit trust shall be taken, for the purposes of this section, to have been

established after 19 September 1985.

Taxation of net income of public trading trust

"102S. The trustee of a unit trust that is a public trading trust in

relation to a relevant year of income shall be assessed and is liable to pay

tax on the net income of the public trading trust of the relevant year of

income at the rate declared by the Parliament for the purposes of this

section.

Modified application of Act in relation to certain unit trusts

"102T. (1) For the purpose of the application of this Act in relation to the

imposition, assessment and collection of tax in respect of -

(a) the net income of a public trading trust; and

(b) the income or assessable income of a unitholder in a prescribed trust

estate,

the following provisions of this section have effect.

"(2) Subject to the succeeding provisions of this section, sections 46, 46A

and 46B apply, mutatis mutandis, in relation to trustees of public trading

trusts and in relation to unit trust dividends so that -

(a) the trustee of a public trading trust, being a shareholder in a company

or a unitholder in a prescribed trust estate, will be entitled to a rebate of

tax under section 46 or 46A in respect of dividends or unit trust dividends

included in the net income of the public trading trust in like manner as a

shareholder, being a company that is a resident but not being a private

company, is entitled to a rebate of tax in respect of dividends included in

its taxable income; and

(b) a unitholder in a prescribed trust estate, being a company that is a

resident but not being the trustee of a public trading trust, will be entitled

to a rebate of tax under section 46 or 46A in respect of unit trust dividends

included in its taxable income in like manner as a shareholder, being a

company that is a resident but not being a private company, is entitled to a

rebate of tax in respect of dividends included in its taxable income.

"(3) For the purposes of the application of sections 46A and 46B in

accordance with sub-section (2), the Commissioner may be satisfied, in

relation to a unit trust dividend, that a transaction, operation, undertaking,

scheme or arrangement was by way of dividend stripping or similar to a

transaction, operation, undertaking, scheme or arrangement by way of dividend

stripping if the Commissioner would have been satisfied, had the unit trust

dividend been a dividend paid by a company, that the transaction, operation,

undertaking, scheme or arrangement would have been a transaction, operation,

undertaking, scheme or arrangement by way of dividend stripping or, as the

case requires, would have been similar to a transaction, operation,

undertaking, scheme or arrangement by way of dividend stripping.

"(4) For the purposes of sub-sections (2) and (3) -

(a) the reference in paragraph (2)(a) to a prescribed trust estate

includes a reference to a trust estate that is a prescribed trust estate

for the purposes of Division 6B;

(b) the reference in paragraph (2) (b) to a public trading trust includes

a reference to a unit trust that is a corporate unit trust for the purposes

of Division 6B; and

references to a unit trust dividend within the meaning of Division 6B.

"(5) Section 221AC shall have effect as if there were inserted after

subsection (1) of that section the following sub-section:

'(1A) Subject to sub-section (2), for the purpose of securing generally the

more expeditious collection of income tax payable by trustees of public

trading trusts, a trustee of a public trading trust is liable to pay, during

the relevant year of tax and in accordance with this Division, 3 instalments

of tax in respect of income of the year of income that commenced on 1 July

1985 and in respect of income of each subsequent year of income.'.

"(6) For the purposes of the application of the definition of 'year of

income' in sub-section 6 (1), the reference in that definition to a company

(except a company in the capacity of a trustee) shall be read as including a

reference to a public trading trust or, as the context requires, to the

trustee of a public trading trust.

"(7) A reference in the definition of 'person' in sub-section 6 (1) or in

section 160AF or Division 1A of Part VI (other than sub-section 221AA (1) or

section 221AC) to a company shall be read as including a reference to a public

trading trust or, as the context requires, to the trustee of a public trading

trust.

"(8) The reference in section 158 to the taxable income of a company except

income in respect of which it is assessable as trustee shall be read as

including a reference to the net income of a public trading trust.

"(9) The reference in sub-section 221AA (1) to income tax that a company is

liable to pay in the capacity of a trustee shall be read as not including a

reference to income tax that a company, being the trustee of a public trading

trust, is liable to pay in respect of the net income of the public trading

trust.

"(10) For the purposes of sub-section 221YB (1), the trustee of a public

trading trust shall be taken to be a company not being a company in the

capacity of a trustee.

"(11) A reference in paragraph 23 (jb), sub-section 44 (1), section 128B or

Division 4 of Part VI (other than sub-section 221YK (2)) to a company or to a

company that is a resident shall be read as including a reference to a

prescribed trust estate or, as the context requires, to the trustee of a

prescribed trust estate.

"(12) A reference in the definition of 'paid' in sub-section 6 (1) or in

paragraph 23 (jb), sub-section 44 (1), section 116AA, 128A or 128B or Division

4 of Part VI (other than sub-section 221YK (2)) to a dividend shall be read as

including a reference to a unit trust dividend.

"(13) A reference in sections 116AA and 221YL to a share in relation to a

company shall be read as including a reference to a unit in a prescribed trust

estate.

"(14) A reference in sub-section 44 (1) to a shareholder in relation to a

company shall be read as including a reference to a unitholder in a prescribed

trust estate.

"(15) A reference in Division 1A of Part VI (other than section 221AC) to

taxable income in relation to a company shall be read as including a reference

to the net income of a public trading trust.

"(16) A reference in section 6B, Division 6 or sub-section 128A (3) or 157

(3) to a trust estate or to a trustee shall be read as not including a

reference to a trust estate that is a public trading trust or to the trustee

of a public trading trust, as the case may be.

"(17) A reference in paragraph 26 (b) to beneficial interests in income

derived under an instrument of trust shall be read as not including a

reference to beneficial interests in income of a public trading trust.

"(18) The reference in sub-section 221YL (1) to the register of members in

relation to a company shall be read as including a reference to any book,

document or record in the possession of, or kept or maintained by or on behalf

of, the trustee of a prescribed trust estate, being a book, document or record

containing, or containing information relating to, the names or addresses of

unitholders in the prescribed trust estate.

"(19) For the purposes of sub-section 44 (1), a unit trust dividend paid by

the trustee of a prescribed trust estate out of corpus of the trust estate

shall, to the extent to which the unit trust dividend is attributable to

profits derived by the trustee, be taken to be paid out of those profits.

"(20) For the purposes of section 128B, a unit trust dividend paid to a

unitholder in a prescribed trust estate shall be deemed to be income derived

by the unitholder at the time at which the unit trust dividend is paid.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 17

Rebate in respect of certain pensions

17. Section 160AAA of the Principal Act is amended by omitting paragraphs

(1) (a), (b), (c) and (d) and substituting the following paragraph:

"(a) the Veterans' Entitlements Act 1986;".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 18

Rebate in respect of amounts assessable under section 26AH

18. Section 160AAB of the Principal Act is amended -

(a) by omitting from paragraph (1) (a) "or";

(b) by adding at the end of sub-section (1) the following paragraphs:

"(c) the Government Insurance Office of New South Wales;

(d) the State Government Insurance Office (Queensland); or

(e) the State Government Insurance Commission established by

a law of South Australia."; and

"(5A) A taxpayer being the trustee of a superannuation fund, or

of an ineligible approved deposit fund, within the meaning of Division 9B who

is liable to be assessed and to pay tax in pursuance of that Division in

respect of income of the superannuation fund or ineligible approved deposit

fund of a year of income is entitled in that assessment to a rebate of tax of

an amount equal to 30% of any eligible 26AH amount included in the assessable

income of the year of income of the superannuation fund or ineligible approved

deposit fund.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 19

Amendment of assessments

19. Section 170 of the Principal Act is amended by inserting in subsection

(10) "or F" after "Subdivision E".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 20

Interpretation

20. Section 251R of the Principal Act is amended by omitting subsection (1)

and substituting the following sub-section:

"(1) In this Part, 'Medicare levy' or 'levy' means Medicare levy imposed as

such by any Act as assessed under this Act.".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 21

Prescribed persons

21. Section 251U of the Principal Act is amended by omitting from paragraph

(1) (b) "any of the Repatriation Acts" and substituting "the Veterans'

Entitlements Act 1986 or the Seamen's War Pensions and Allowances Act 1940".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 22

Release of liability of members of the Defence Force on death

22. Section 265A of the Principal Act is amended -

(a) by omitting from sub-section (3) "the Repatriation Act 1920-1962,

the Repatriation (Far East Strategic Reserve) Act 1956-1962 or the

Repatriation (Special Overseas Service) Act 1962" and substituting

"Part II or IV of the Veterans' Entitlements Act 1986";

(b) by inserting in sub-section (3) "or veterans" after "members of the

Forces"; and

substituting ", or any decision of an authority constituted under the

Veterans' Entitlements Act 1986 on a question affecting the right of a

dependant of a deceased veteran to a pension under Part II or IV of that Act,

in respect of his or her death".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 23

Application of amendments

23. (1) In this section, "amended Act" means the Principal Act as amended by

this Part.

(2) The amendments made by sections 7 and 8 apply in relation to the

commutation, or payment of the residual capital value, after 22 August 1985 of

any eligible annuity purchased on or after 1 July 1983.

(3) Neither section 26AAAC nor section 51AE of the amended Act applies in

relation to a loss or outgoing to the extent to which it is incurred by a

taxpayer before 15 November 1985 in respect of the provision of food and drink

on working days to persons in an in-house dining facility of the taxpayer, not

being food or drink provided at a party, reception or other social function.

(4) Section 51AF of the amended Act applies in relation to a car expense, as

defined in sub-section 82KT (1) of the amended Act, incurred on or after 1

July 1986.

(5) Section 51AG of the amended Act applies in relation to a loss or

outgoing incurred on or after 1 July 1986.

(6) The amendments made by sections 11 and 12 apply to expenditure incurred

on or after 20 September 1985.

(7) Subdivision F of Division 3 of Part III of the amended Act (other than

sub-section 82KY (5) of the amended Act) applies in relation to an expense, as

defined in sub-section 82KT (1) of the amended Act, incurred by a taxpayer

during a year of income commencing on or after 1 July 1986.

(8) The amendments made by section 18 apply to assessments in respect of

income of the year of income in which 28 August 1982 occurred and of all

subsequent years of income.

PART III - AMENDMENTS OF THE INCOME TAX (INDIVIDUALS) ACT 1985

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 25

Principal Act

25. The Income Tax (Individuals) Act 1985*2* is in this Part referred to as

the Principal Act.

*2*No. 124, 1985.

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 26

Title

26. The title of the Principal Act is amended by omitting "corporate" and

substituting "prescribed".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 27

Interpretation

27. Section 3 of the Principal Act is amended -

(a) by omitting from sub-section (1) the definition of "corporate unit

trust"; and

(b) by inserting after the definition of "ineligible approved deposit fund"

the following definition:

"'prescribed unit trust' means a trust estate that -

(a) is a corporate unit trust within the meaning of Division

6B of Part III of the Assessment Act; or

(b) is a public trading trust within the meaning of Division

6C of Part III of the Assessment Act;".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 28

Imposition of income tax

28. Section 5 of the Principal Act is amended by omitting from paragraph (2) (c)

"corporate" and substituting "prescribed".

PART IV - AMENDMENTS OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT 1953

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 29

Principal Act

29. The Income Tax (International Agreements) Act 1953*3* is in this Part

referred to as the Principal Act.

*3*No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No.

88, 1959; Nos, 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965;

No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972;

Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143,

1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143

and 154, 1981; Nos. 51 and 57, 1983; Nos. 123 and 125, 1984.

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 30

Interpretation

30. Section 3 of the Principal Act is amended -

(a) by inserting after the definition of "foreign tax" in sub-section (1)

the following definition:

"'prescribed trust estate', in relation to a year of income, means

a trust estate that -

(a) is a corporate unit trust, within the meaning of Division

6B of Part III of the Assessment Act, in relation to the year of income; or

(b) is a public trading trust, within the meaning of Division

6C of Part III of the Assessment Act, in relation to the year of income;";

(b) by omitting from sub-section (4) "corporate unit trust, within the

meaning of Division 6B of Part III of the Assessment Act," and substituting

"prescribed trust estate";

substituting "prescribed trust estate"; and

(d) by omitting from sub-section (12) the definition of "corporate unit

trust".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 31

Ascertainment of Australian tax

31. Section 15 of the Principal Act is amended by omitting from sub-section

(5A) "corporate unit trust, within the meaning of Division 6B of Part III of

the Assessment Act," and substituting "prescribed trust estate".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 32

Withholding tax

32. Section 17A of the Principal Act is amended by omitting sub-section (3)

and substituting the following sub-section:

"(3) In sub-section (2), 'unit trust dividend' means a unit trust dividend

within the meaning of Division 6B or 6C of Part III of the Assessment Act.".

PART V - AMENDMENTS OF THE INCOME TAX (RATES) ACT 1982

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 33

Principal Act

33. The Income Tax (Rates) Act 1982*4* is in this Part referred to as the

Principal Act.

*4*No. 105, 1982, as amended. For previous amendments, see Nos. 15 and 104,

1983; and No. 98, 1984.

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 34

Title

34. The title of the Principal Act is amended by omitting "corporate" and

substituting "prescribed".

TAXATION LAWS AMENDMENT ACT (No. 4) 1985 No. 173 of 1985

- SECT 35

Interpretation

35. Section 3 of the Principal Act is amended -

(a) by inserting after the definition of "prescribed non-resident" in

subsection (1) the following definition:

"'prescribed unit trust', in relation to a year of income, means a

trust estate that -

(a) is a corporate unit trust, within the meaning of Division

6B of Part III of the Assessment Act, in relation to the year of income; or

(b) is a public trading trust, within the meaning of Division

6C of Part III of the Assessment Act, in relation to the year of income;";

and

(b) by omitting "corporate unit trust, within the meaning of Division 6B of

Part III of the Assessment Act," from paragraph (b) of the definition of "tax"

in sub-section (1) and substituting "prescribed unit trust".

Notes to the Taxation Laws Amendment Act (No. 4) 1985

Note 1

The Taxation Laws Amendment Act (No. 4) 1985 as shown in this compilation comprises
Act No. 173, 1985 amended as indicated in the Tables below.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Taxation Laws Amendment Act (No. 4) 1985	173, 1985	16 Dec 1985	See s. 2
Taxation Laws Amendment Act (No. 2) 1986	49, 1986	24 June 1986	Ss. 33 and 36: (a) Ss. 34, 35 and 37–39: (a)	—
Tax Laws Amendment (2010 Measures No. 2) Act 2010	75, 2010	28 June 2010	Schedule 6 (item 68): 29 June 2010	—

(a) Subsections 2(2) and (3) of the Taxation Laws Amendment Act (No. 2) 1986 provide as follows:

(2) Sections 33 and 36 shall be deemed to have come into operation immediately after the commencement
of section 1 of the Taxation Laws Amendment Act (No. 4) 1985.

Section 1 of the Taxation Laws Amendment Act (No. 4) 1985 commenced on 16 December 1985.

(3) Sections 34, 35, 37, 38 and 39 shall be deemed to have come into operation immediately after the
commencement of the Veterans' Entitlements Act 1986.

The Veterans' Entitlements Act 1986 commenced on 22 May 1986.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
S. 2....................	am. No. 49, 1986
Ss. 4, 5.................	am. No. 49, 1986
S. 13...................	rep. No. 49, 1986
S. 17...................	am. No. 49, 1986
Ss. 21, 22................	am. No. 49, 1986
S. 24...................	rep. No. 75, 2010