No. 100 of 1991

TABLE OF PROVISIONS

PART 1—PRELIMINARY

Section

1.              Short title
2.              Commencement

3.                Principal Act

4.                Indexation factor for valuation purposes—non-remote housing

5.                Repeal of sections 65b and 65c

6.                Insertion of new section:

7.                Assessment on assumption

8.                Remote area holiday transport

9.                Christmas Island and Cocos (Keeling) Islands

11.              Consequential amendments—Cocos (Keeling) Islands

12.              Application of amendments

13.              Amendment of assessments

14.              Principal Act

15.              Interpretation

16.              Exemptions

TABLE OF PROVISIONS—continued

Section

17.               Repeal of section 23ad

18.               Exemption of certain income derived in respect of approved overseas projects

19.               Exemption of income earned in overseas employment

20.               Insertion of new Division:

Division 1aa—Exemption from income tax—payments under the

Social Security Act 1991 and the Veterans’ Entitlements Act 1986, and similar payments

Subdivision A—Preliminary

24a. Interpretation—meaning of ‘exempt’ and ‘not exempt’

24aa. Interpretation—payments derived when due

24aaa. Index of payments covered by Division

24ab. Index of payments covered by Subdivision

24aba. Interpretation—supplementary amounts

24abb. Interpretation—expressions used in the Social Security Act 1991

24abc. Age pension

24abd. Invalid pension

24abe. Wife pension

24abf. Carer pension

24abg. Sole parent pension

24abh. Widowed person allowance

24abi. Widow B pension

24abj. Sheltered employment allowance

24abk. Rehabilitation allowance

24abl. Unemployment benefit

24abm. Job search allowance

24abn. Employment entry payment

24abo. Sickness benefit

24abp. Special benefit

24abq. Special needs age pension

24abr. Special needs invalid pension

24abs. Special needs wife pension

24abt. Special needs sole parent pension

24abu. Special needs widow B pension

24abv. Bereavement payments—special needs pensions

24abw. Family allowance

24abx. Family allowance supplement

24aby. Child disability allowance

24abz. Double orphan pension

24abza. Mobility allowance

24abzb. Exempt bereavement payment calculator A

24ac. Index of payments covered by Subdivision

24aca. Interpretation—supplementary amounts

24acc. Interpretation—meaning of ‘pension age’

24acd. Section 13 pension

24ace. Age service pension

24acf. Invalidity service pension

24acg. Wife service pension

24ach. Carer service pension

24aci. Section 70 pension

TABLE OF PROVISIONS—continued

Section

24acj. Clothing allowance

24ack. Attendant allowance

24acl. Section 98a bereavement payment

24acm. Section 99 funeral benefit

24acn. Section 100 funeral benefit

24aco. Decoration allowance

24acp. Victoria Cross allowance

24acq. Recreation transport allowance

24acr. Vehicle Assistance Scheme

24acs. Special assistance

24act. Temporary incapacity allowance

24acu. Loss of earnings allowance

24acv. Travelling expenses

24acw. Pharmaceutical supplement

24acx. Exempt bereavement payment calculator B

24ad. Seamen’s war pensions and allowances

24ada. Bereavement payments

24af. Allowances under Part III

Subdivision G—Exemption from income tax—payments of

domiciliary nursing care benefit under Part Vb of the National Health Act 1953

24ag. Domiciliary nursing care benefit

24ah. Similar Australian and United Kingdom veterans’ payments

24ai. Wounds and disability pensions

21.               Application of Division—1985-86 to 1990-91

22.               Insertion of new section:

24bb. Application of Division—1991-92 and subsequent years

23. Insertion of new section:

TABLE OF PROVISIONS—continued

Section

25.               Securities lending arrangements

26.               Interpretation

27.               Insertion of new section:

28.               Distribution benefits—CFCs

30.               Deduction of expenditure on prevention of land degradation

31.               Gifts, pensions etc.

32.               Rebates for residents of isolated areas

33.               Interpretation

35.               Persons to whom Division applies

36.               Disposal, loss, destruction or termination of use of property

37.               Insertion of new section:

38.               Disposal, loss, destruction or termination of use of property

39.               Insertion of new section:

40. Insertion of new Division:

124b. Interpretation

124ba. Deduction of expenditure on rehabilitation-related activities

124bb. Rehabilitation-related activity

124bc. No deduction for certain expenditure

124bd. No deduction where expenditure is recouped

124be. Transactions between persons not at arm’s length

41.               Foreign debt

42.               Foreign equity

43.               Section 128f debenture amounts

45.               Insertion of new section:

46.               Rebates for dependents

47.               Housekeeper

48.               Interpretation

49.               Rebate in respect of certain pensions, benefits etc.

50.               Insertion of new section:

51.               Credits in respect of foreign tax

52.               Interpretation

53.              Insertion of new Division:

Division 6a—Transfer of Shareholder Status for Tax Purposes

TABLE OF PROVISIONS—continued

Section

54.               General application of Part in relation to corporate trust estates

55.               Penalty for setting out incorrect amounts in dividend statements

56.               Deemed assessment

57.               Quotation of tax file number in employment declaration

58.               Effect of incorrect quotation of tax file number

59.               Explanation of terms: investment, investor, investment body

60.               Insertion of new sections:

61.               Investments held jointly

62.               Persons receiving certain pensions etc.—employment

63.               Persons receiving certain pensions etc.—investments

64.               Non-residents

65.               When income tax becomes due and payable

66.               Interpretation

67.               Certain employees to be subject to provisional tax

68.               Uplifted provisional tax amount

69.               Provisional tax on estimated income

70.               Interpretation

71.               Duty of payer to pay deducted amount to Commissioner

72.               Credits in respect of deducted amounts

73.               Interpretation

74.               Medicare levy

75.               Prescribed persons

76.               Insertion of new section:

399a. Modified application of bad debt provisions

77.               Reduction of section 456 assessability where item subject to foreign accruals tax

78.               Assessability in respect of certain dividends paid by a CFC

79.               Insertion of new section:

462a. Keeping of records—section 457

80. Insertion of new section:

464a. Keeping of records—section 459a

81.               Offence of failing to keep records

82.               Circumstances where records not required to be kept—reasonable excuse etc.

83.               Application of amendments

84.               Amendment of assessments

PART 4—AMENDMENT OF THE INCOME TAX RATES ACT 1986

85.               Principal Act

86.               Interpretation

87.               Interpretation

88.               Application of amendments

PART 5—AMENDMENT OF THE MEDICARE LEVY ACT 1986

89.               Principal Act

90.               Amount of levy—person who has spouse or dependants

91.               Application of amendments

TABLE OF PROVISIONS—continued

Section

PART 6—AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953

92.               Principal Act

93.               Interpretation

SCHEDULE 1

AMENDMENTS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986 CONSEQUENTIAL ON THE REPEAL OF SECTIONS 65b AND 65c OF THAT ACT

SCHEDULE 2

No. 100 of 1991

An Act to amend the law relating to taxation

[Assented to 27 June 1991]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title

1. This Act may be cited as the Taxation Laws Amendment Act (No. 2) 1991.

Commencement

2. (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

(2) Sections 4, 6, 8, 9 and 11 commence on the day after the day on which this Act receives the Royal Assent.

(3)     Section 29 commences, or is taken to have commenced, immediately after the commencement of section 14 of the Taxation Laws Amendment Act 1991.

(4)     Paragraph 33 (a) is taken to have commenced at the same time as section 59 of the Taxation Laws Amendment Act (No. 2) 1990.

(5)     Paragraphs 33 (c) and (d) are taken to have commenced at the same time as section 31 of the Taxation Laws Amendment Act (No. 3) 1989.

(6)     Section 77 commences, or is taken to have commenced, immediately after the commencement of section 76 of the Taxation Laws Amendment Act 1991.

(7)     Section 78 is taken to have commenced immediately after the commencement of the Taxation Laws Amendment (Foreign Income) Act 1990.

PART 2—AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

Principal Act

3. In this Part, “Principal Act” means the Fringe Benefits Tax Assessment Act 19861.

Indexation factor for valuation purposes—non-remote housing

4. Section 28 of the Principal Act is amended by inserting in paragraph (5) (b) “and the Territory of Cocos (Keeling) Islands” after “Christmas Island”.

Repeal of sections 65b and 65c

5.     Sections 65b and 65c of the Principal Act are repealed.

6.     Before section 65ca of the Principal Act the following section is inserted in Division 14 of Part III:

Reduction of taxable value of fringe benefits in relation to 1991-92 year of tax—Cocos (Keeling) Islands

“65caa. (1) Where:

the amount that, but for this subsection and sections 62, 64 and 65, would be the taxable value or, if paragraph (e) applies, the reducible portion of taxable value, of that fringe benefit in relation to the year of tax is to be reduced by 50%.

“(2) Where:

the amount that, but for this subsection and sections 62, 64 and 65, would be the taxable value, or the sum of the taxable values, as the case requires, of the car fringe benefits in relation to the employer in relation to the year of tax that relate to the car is to be reduced by the amount calculated using the formula:

where:

‘Taxable value’ means so much of the taxable value or the sum of the taxable values as is attributable to the eligible car fringe benefits.

“(3) A reference in this section to Cocos (Keeling) Islands service is a reference to service as an employee where:

(a)     salary or wages are payable in respect of the service; and

(b)     if:

the salary or wages would have been exempt income under section 24g of that Act.”.

Assessment on assumption

7. Section 124a of the Principal Act is amended by omitting from paragraph (1) (b) “the whole or a part of.

Remote area holiday transport

8. Section 143 of the Principal Act is amended by adding at the end of paragraph (4) (d) “and the Territory of Cocos (Keeling) Islands”.

Christmas Island and Cocos (Keeling) Islands

9. Section 157 of the Principal Act is amended:

Consequential amendments—repeal of sections 65b and 65c of the Principal Act

10. The Principal Act is amended as set out in Schedule 1.

Consequential amendments—Cocos (Keeling) Islands

11. The Principal Act is amended as set out in Schedule 2.

Application of amendments

12. (1) In this section:

“amended Act” means the Principal Act as amended by this Act.

(2) The repeal of sections 65b and 65c of the Principal Act effected by this Part and the amendments made by sections 7 and 10 apply in relation to eligible foreign remuneration, or foreign earnings, derived on or after 1 July 1990 and:

(3)     Subject to this section, the amendments made by sections 4, 6, 8, 9 and 11 apply to assessments of the fringe benefits taxable amount of an employer of the year of tax commencing on 1 April 1991 and of each subsequent year of tax.

(4)     In spite of anything in the amended Act, the amended Act applies in relation to the Territory of Cocos (Keeling) Islands as if that Territory had become an internal Territory on 1 July 1991.

Amendment of assessments

13. Section 74 of the Principal Act does not prevent the amendment of an assessment made before the commencement of this section for the purpose of giving effect to this Act.

PART 3—AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Principal Act

14. In this Part, “Principal Act” means the Income Tax Assessment Act 19362.

Interpretation

15. Section 6 of the Principal Act is amended by inserting in subsection (1) the following definition:

“ ‘Timor Gap treaty’ means the Treaty defined by subsection 5 (1) of the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990;”.

Exemptions

16. Section 23 of the Principal Act is amended by omitting paragraph (jca).

Repeal of section 23ad

17. Section 23ad of the Principal Act is repealed.

Exemption of certain income derived in respect of approved overseas projects

18. Section 23af of the Principal Act is amended:

(a)     by omitting from subsection (1) “365” and substituting “91”;

(b)    by omitting subsection (2);

 “(17a) If the income of a taxpayer of a year of income consists of an amount that is exempt from tax under this section (in this section called the ‘exempt amount’) and other income, the amount of tax (if any) payable in respect of the other income is calculated using the formula:

where:

‘Notional gross tax’ means the number of whole dollars in the

amount of income tax that would be assessed under this Act in respect of the taxpayer’s taxable income of the year of income if:

(a)     the exempt amount were not exempt income; and

(b)     the taxpayer were not entitled to any rebate of tax;

Notional gross taxable income’ means the number of whole dollars in the amount that would have been the taxpayer’s taxable income of the year of income if the exempt amount were not exempt income;

‘Other taxable income’ means the amount (if any) remaining after deducting from so much of the other income as is assessable income:

“(17b) The formula referred to in paragraph (17a) (f) is:

where:

‘Apportionable deductions’ means the number of whole dollars in the apportionable deductions allowable to the taxpayer in relation to the year of income;

‘Other taxable income’ means the amount that, apart from paragraph (17a) (f), would be represented by the component ‘Other taxable income’ in subsection (17a);

‘Notional gross taxable income’ means the number of whole dollars in the amount that would have been the taxpayer’s taxable income of the year of income if the exempt amount were not exempt income.”.

Exemption of income earned in overseas employment

19. Section 23ag of the Principal Act is amended:

(a)     by omitting from subsection (1) “365” and substituting “91”;

“(2) An amount of foreign earnings derived in a foreign country is not exempt from tax under this section if the amount is exempt from income tax in the foreign country only because of any of the following:

(b)    a double tax agreement;

(i) income derived in the capacity of an employee;

(ii) income from personal services;

(iii) similar income;

(i) diplomatic or consular privileges and immunities;

or

“(3) If the income of a taxpayer of a year of income consists of an amount that is exempt from tax under this section (in this section called the ‘exempt amount’) and other income, the amount of tax (if any) payable in respect of the other income is calculated using the formula:

where:

‘Notional gross tax’ means the number of whole dollars in the amount of income tax that would be assessed under this Act in respect of the taxpayer’s taxable income of the year of income if:

(a)     the exempt amount were not exempt income; and

(b)     the taxpayer were not entitled to any rebate of tax;

‘Notional gross taxable income’ means the number of whole

dollars in the amount that would have been the taxpayer’s taxable income of the year of income if the exempt amount were not exempt income;

‘Other taxable income’ means the amount (if any) remaining after deducting from so much of the other income as is assessable income:

“(4) The formula referred to in paragraph (3) (f) is:

where:

‘Apportionable deductions’ means the number of whole dollars in the apportionable deductions allowable to the taxpayer in relation to the year of income;

‘Other taxable income’ means the amount that, apart from paragraph (3) (f), would be represented by the component ‘Other taxable income’ in subsection (3);

‘Notional gross taxable income’ means the number of whole dollars in the amount that would have been the taxpayer’s taxable income of the year of income if the exempt amount were not exempt income.”;

(c)     by omitting subsection (6h);

(d)    by inserting in subsection (7) the following definitions:

“ ‘double tax agreement’ means:

(a)     double tax agreement within the meaning of Part X; or

(b)     the Timor Gap treaty;

‘income tax’, in relation to a foreign country:

20. After section 24 of the Principal Act the following Division is inserted:

“Division 1AA—Exemption from income tax—payments under the Social Security Act 1991 and the Veterans’ Entitlements Act 1986, and similar payments

“Subdivision A—Preliminary

Interpretation—meaning of ‘exempt’ and ‘not exempt’

24a. In this Division:

‘exempt’ means exempt from income tax;

‘not exempt’ means not exempt from income tax under this Division.

Interpretation—payments derived when due

“24aa. (1) For the purposes of the application of this Division to a payment derived by a taxpayer, the payment is taken to have been derived on the day on which the payment became due.

“(2) For the purposes of the application of this Division to a payment that would have been derived by a taxpayer in particular circumstances, the payment is taken to have been derived on the day on which the payment would have become due in those circumstances.

Index of payments covered by Division

“24aaa. The following is an index of payments covered by this Division:

Index of payments covered by Subdivision

“24ab. The following is an index of payments under the Social Security Act 1991 covered by this Subdivision:

Interpretation—supplementary amounts

“24aba. (1) For the purpose of applying this Subdivision to a payment derived by a taxpayer, the supplementary amounts are as follows:

“(2) A reference in subsection (1) to a partner, child or other person includes a reference to a deceased partner, deceased child or deceased other person.

“(3) For the purposes of this section, a payment under section 186 of the Social Security Act 1991 is taken to be a payment of a wife pension.

Interpretation—expressions used in the Social Security Act 1991

“24abb. (1) Expressions used in this Subdivision that are also used in the Social Security Act 1991 have the same respective meanings as in that Act.

“(2) Expressions used in a section in this Subdivision that relates to payments under a particular provision of the Social Security Act

1991 that are also used in that provision have the same respective meanings as in that provision.

Age pension

“24abc. (1) The treatment of payments of age pension under Part 2.2 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)    the balance is not exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 84 of the Social Security Act 1991).

“(3) Payments under sections 83, 86, 90 and 91 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 84 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

Invalid pension

“24abd. (1) Payments of invalid pension under Part 2.3 of the Social Security Act 1991 are exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 137 of the Social Security Act 1991).

“(3) Payments under sections 136, 139, 143 and 144 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 137 of the Social Security Act 1991:

(b) the balance of the sum is not exempt.

Wife pension

“24abe. (1) The treatment of payments of wife pension under Part 2.4 of the Social Security Act 1991 is as follows:

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 190 of the Social Security Act 1991).

“(3) Payments under sections 189, 191 and 195 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 190 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

“(5) For the purposes of this section, a payment under section 186 of the Social Security Act 1991 is taken to be a payment of a wife pension.

Carer pension

“24abf. (1) The treatment of payments of carer pension under Part 2.5 of the Social Security Act 1991 is as follows:

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 239 of the Social Security Act 1991).

“(3) Payments under sections 238, 241, 245 and 246 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 239 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

Sole parent pension

“24abg. (1) The treatment of payments of sole parent pension under Part 2.6 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 305 of the Social Security Act 1991).

“(3) Payments under sections 304, 307, 311 and 312 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 305 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

Widowed person allowance

“24abh. (1) The treatment of payments of widowed person allowance under Part 2.7 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under sections 358 and 359 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

Widow B pension

“24abi. (1) The treatment of payments of widow B pension under Part 2.8 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under sections 406 and 407 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

Sheltered employment allowance

“24abj. (1) Payments of sheltered employment allowance under Part 2.9 of the Social Security Act 1991 are exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 451 of the Social Security Act 1991).

“(3) Payments under sections 450, 453, 457 and 458 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 451 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

Rehabilitation allowance

“24abk. (1) Payments of rehabilitation allowance under Part 2.10 of the Social Security Act 1991 are exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 503 of the Social Security Act 1991).

“(3) Payments under sections 502, 505, 509 and 510 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 503 of the Social Security Act. 1991:

(b)     the balance of the sum is not exempt.

Unemployment benefit

“24abl. (1) The treatment of payments of unemployment benefit under Part 2.11 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under section 588 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Job search allowance

“24abm. (1) The treatment of payments of job search allowance under Part 2.12 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under section 660 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Employment entry payment

“24abn. Payments of employment entry payment under Part 2.13 of the Social Security Act 1991 are exempt.

Sickness benefit

“24abo. (1) The treatment of payments of sickness benefit under Part 2.14 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under section 728 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Special benefit

“24abp. (1) The treatment of payments of special benefit under Part 2.15 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Payments under section 771 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Special needs age pension

“24abq. (1) The treatment of payments of special needs age pension under section 772 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

“(2) Subsection (1) has effect subject to section 24abv (which deals with bereavement payments).

Special needs invalid pension

“24abr. (1) Payments of special needs invalid pension under section 773 of the Social Security Act 1991 are exempt.

“(2) Subsection (1) has effect subject to section 24abv (which deals with bereavement payments).

Special needs wife pension

“24abs. (1) The treatment of payments of special needs wife pension under section 774 of the Social Security Act 1991 is as follows:

“(2) Subsection (1) has effect subject to section 24abv (which deals with bereavement payments).

Special needs sole parent pension

“24abt. The treatment of payments of special needs sole parent pension under section 775 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

Special needs widow B pension

“24abu. The treatment of payments of special needs widow B pension under section 778 of the Social Security Act 1991 is as follows:

(a)     the supplementary amount is exempt;

(b)     the balance is not exempt.

Bereavement payments—special needs pensions

“24abv. (1) Payments under sections 823, 826 and 830 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

“(2) If a taxpayer derives a payment under section 824 of the Social Security Act 1991:

(b)     the balance of the sum is not exempt.

Family allowance

“24abw. (1) Payments of family allowance under Part 2.17 of the Social Security Act 1991 are exempt.

“(2) Payments under sections 889 and 890 of the Social Security Act 1991 (which deal with bereavement payments) are exempt.

Family allowance supplement

“24abx. (1) Payments of family allowance supplement under Part 2.18 of the Social Security Act 1991 are exempt.

“(2) Payments under section 951 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Child disability allowance

“24aby. (1) Payments of child disability allowance under Part 2.19 of the Social Security Act 1991 are exempt.

“(2) Payments under section 992 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Double orphan pension

“24abz. (1) Payments of double orphan pension under Part 2.20 of the Social Security Act 1991 are exempt.

“(2) Payments under section 1034 of the Social Security Act 1991 (which deals with bereavement payments) are exempt.

Mobility allowance

“24abza. Payments of mobility allowance under Part 2.21 of the Social Security Act 1991 are exempt.

Exempt bereavement payment calculator A

“24abzb. The exempt bereavement payment calculator A is as follows:

Index of payments covered by Subdivision

“24ac. The following is an index of payments under the Veterans’ Entitlements Act 1986 covered by this Subdivision:

Interpretation—supplementary amounts

“24aca. (1) For the purpose of applying this Subdivision to a payment derived by a taxpayer, the supplementary amounts are as follows:

“(2) A reference in subsection (1) to a partner or other person includes a reference to a deceased partner or deceased other person.

Interpretation—expressions used in the Veterans’ Entitlements Act 1986

“24acb. (1) Expressions (other than ‘pension age’) used in this Subdivision that are also used in the Veterans’ Entitlements Act 1986 have the same respective meanings as in that Act.

“(2) Expressions (other than ‘pension age’) used in a section in this Subdivision that relates to payments under a particular provision of the Veterans’ Entitlements Act 1986 that are also used in that provision have the same respective meanings as in that provision.

Interpretation—meaning of ‘pension age’

“24acc. A reference in this Subdivision to pension age is a reference to:

(a)     in the case of a woman—the age of 60 years; or

(b)     in the case of a man—the age of 65 years.

Section 13 pension

“24acd. Payments of pension under section 13 of the Veterans’ Entitlements Act 1986 are exempt.

Age service pension

“24ace. (1) The treatment of payments of age service pension under Division 3 of Part III of the Veterans’ Entitlements Act 1986 is as follows:

(a)     the supplementary amount is exempt;

(b)    the balance is not exempt.

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 36r of the Veterans’ Entitlements Act 1986).

“(3) Payments under sections 36Q, 36T, 36x and 36y of the Veterans’ Entitlements Act 1986 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 36r of the Veterans’ Entitlements Act 1986:

(b)     the balance of the sum is not exempt.

Invalidity service pension

“24acf. (1) The treatment of payments of invalidity service pension under Division 4 of Part III of the Veterans’ Entitlements Act 1986 is as follows:

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 37r of the Veterans’ Entitlements Act 1986).

“(3) Payments under sections 37q, 37t, 37x and 37y of the Veterans’ Entitlements Act 1986 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 37r of the Veterans’ Entitlements Act 1986:

(b)    the balance of the sum is not exempt.

Wife service pension

“24acg. (1) The treatment of payments of wife service pension under Division 5 of Part III of the Veterans’ Entitlements Act 1986 is as follows:

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 38r of the Veterans’ Entitlements Act 1986).

“(3) Payments under sections 38q, 38s, 38w and 38x of the Veterans’ Entitlements Act 1986 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 38r of the Veterans’ Entitlements Act 1986:

amount calculated using the exempt bereavement payment calculator B in section 24acx is exempt; and

(b) the balance of the sum is not exempt.

Carer service pension

“24ach. (1) The treatment of payments of carer service pension under Division 6 of Part III of the Veterans’ Entitlements Act 1986 is as follows:

“(2) Subsection (1) has effect subject to subsection (4) (which deals with taxpayers who derive bereavement lump sum payments under section 39t of the Veterans’ Entitlements Act 1986).

“(3) Payments under sections 39s, 39v, 39z and 39za of the Veterans’ Entitlements Act 1986 (which deal with bereavement payments) are exempt.

“(4) If a taxpayer derives a payment under section 39t of the Veterans’ Entitlements Act 1986:

(b)    the balance of the sum is not exempt.

Section 70 pension

“24aci. Payments of pension under section 70 of the Veterans’ Entitlements Act 1986 are exempt.

Clothing allowance

“24acj. Payments of clothing allowance under section 97 of the Veterans’ Entitlements Act 1986 are exempt.

Attendant allowance

“24ack. Payments of attendant allowance under section 98 of the Veterans’ Entitlements Act 1986 are exempt.

Section 98a bereavement payment

“24acl. Payments under section 98a of the Veterans’ Entitlements Act 1986 are exempt.

Section 99 funeral benefit

“24acm. Payments under section 99 of the Veterans’ Entitlements Act 1986 are exempt.

Section 100 funeral benefit

“24acn. Payments under section 100 of the Veterans’ Entitlements Act 1986 are exempt.

Decoration allowance

“24aco. Payments of decoration allowance under section 102 of the Veterans’ Entitlements Act 1986 are exempt.

Victoria Cross allowance

“24acp. Payments of Victoria Cross allowance under section 103 of the Veterans’ Entitlements Act 1986 are exempt.

Recreation transport allowance

“24acq. Payments of recreation transport allowance under section 104 of the Veterans’ Entitlements Act 1986 are exempt.

Vehicle Assistance Scheme

“24acr. Payments under the Vehicle Assistance Scheme established under section 105 of the Veterans’ Entitlements Act 1986 are exempt.

Special assistance

“24acs. Payments of special assistance under section 106 of the Veterans’ Entitlements Act 1986 are exempt.

Temporary incapacity allowance

“24act. Payments of temporary incapacity allowance under section 107 of the Veterans’ Entitlements Act 1986 are exempt.

Loss of earnings allowance

“24acu. Payments of loss of earnings allowance under section 108 of the Veterans’ Entitlements Act 1986 are exempt.

Travelling expenses

“24acv. Payments of travelling expenses under section 110 of the Veterans’ Entitlements Act 1986 are exempt.

Pharmaceutical supplement

“24acw. Payments under Part VIIa of the Veterans’ Entitlements Act 1986 are exempt.

Exempt bereavement payment calculator B

“24acx. The exempt bereavement payment calculator B is as follows:

Seamen’s war pensions and allowances

“24ad. Payments of amounts under the Seamen’s War Pensions and Allowances Act 1940 are exempt if the payments are of a like nature to payments under the Veterans’ Entitlements Act 1986 that are exempt under Subdivision C.

Bereavement payments

“24aca. Payments under section 24b of the Seamen’s War Pensions and Allowances Act 1940 are exempt.

“Subdivision E—Exemption from income tax—payments by virtue of the

Veterans’ Entitlements (Transitional Provisions and Consequential
Amendments) Act 1986

Payments by virtue of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986

“24ae. (1) The treatment of a payment made in accordance with Table A in Schedule 3 to the Repatriation Act 1920 (including that Table as applying by virtue of the Repatriation (Far East Strategic Reserve) Act 1956, the Repatriation (Special Overseas Service) Act 1962 or the Interim Forces Benefits Act 1947), as in force by virtue of subsection 4 (6) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986, to the extent that the payment:

(a) is payable because the taxpayer is either:

is as follows:

(g)     the balance of the payment is not exempt.

“(2) Other payments payable by virtue of subsection 4 (6) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 are exempt.

Allowances under Part III

“24af. Payments of allowances under Part III of the Disability Services Act 1986 are exempt.

Domiciliary nursing care benefit

“24ag. Payments of domiciliary nursing care benefit under Part Vb of the National Health Act 1953 are exempt.

Similar Australian and United Kingdom veterans’ payments

“24ah. Payments of pensions and allowances, and other payments, made by the Government of Australia or the Government of the United Kingdom, are exempt if they are of a similar nature to payments that are exempt under Subdivision C, D or E.

Wounds and disability pensions

“24ai. Payments are exempt if:

Occupational superannuation payments not covered by this Division

“24aj. (1) The following payments are not covered by this Division:

(a)     any payment made under the Superannuation Act 1922;

(e)     any payment made under the Superannuation Act 1976;

“(2) Subsection (1) has effect in spite of anything contained in any other provision of this Division.”.

Application of Division—1985-86 to 1990-91

21.     Section 24ba of the Principal Act is amended by inserting “preceding the year of income commencing on 1 July 1991” after “all subsequent years of income”.

22.     After section 24ba of the Principal Act the following section is inserted:

Application of Division—1991-92 and subsequent years

“24bb. This Division applies to assessments in respect of income of the 1991-92 year of income and of all subsequent years of income as if:

‘ “prescribed Territory” means Norfolk Island.’; and

‘(5) In subsections (1), (3), (4), (4a), (4b) and (4c), “Australia”, “resident” and “non-resident” have the meanings that those expressions would have if subsection 7a (2) did not refer to Norfolk Island.’.”.

23. After section 24n of the Principal Act the following section is inserted:

Transitional capital gains tax provisions for certain Cocos (Keeling) Islands assets

“24P. (1) Subject to an election under subsection (5), this section applies to an asset held by a taxpayer where all of the following conditions are satisfied:

(iii) section 24bb had not been enacted; and

the profits or gains would have been exempt income under this Division.

“(2) For the purposes of Part IIIa:

“(3) Paragraphs 160zzu(l) (a) and (b) do not apply in relation to the taxpayer in relation to the asset.

“(4) If a provision of Part IIIa provides that, if a disposal of an asset occurs within 12 months after the day (in this subsection called the ‘acquisition day’) on which the asset was acquired by a taxpayer, a reference in another provision of that Part to the indexed cost base to the taxpayer in respect of the asset is to be construed as a reference to the cost base to the taxpayer in respect of the asset, paragraph (2) (a) of this section does not apply for the purposes of determining the acquisition day for the purposes of the first-mentioned provision.

“(5) If, as at the date on which a taxpayer disposes of an asset, the taxpayer has complied with section 160zzu in relation to the asset, the

taxpayer may elect that this section does not apply in relation to the asset.

“(6) An election for the purposes of subsection (5) must be lodged with the Commissioner on or before the date of lodgment of the taxpayer’s return of income for the year of income in which the disposal occurred or within such further period as the Commissioner allows.

“(7) An expression used in this section and in Part IIIa has the same meaning in this section as it has in that Part.”.

Amounts received on retirement or termination of employment in lieu of long service leave

24. Section 26ad of the Principal Act is amended by adding at the end the following subsection:

“(13) Where:

this section has effect in relation to the lump sum amount as if:

(d)     subsection (5) were omitted.”.

Securities lending arrangements

25. Section 26bc of the Principal Act is amended:

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

“ ‘distribution’ includes:

(a)     interest; or

(b)     a dividend; or

(i) as a bonus share; or

(e)     a unit issued by the trustee of a unit trust in the

circumstances that would be covered by section 160zyc if paragraph (d) of that section had not been enacted;

‘public company’ means:

(a)     a listed company; or

‘subsidiary’ has the same meaning as in section 160zzo.”;

(iii) if the borrowed security is a right or option:

then (even if the event occurred after. the borrowed security was disposed of by the borrower to a third party), the lender receives from the borrower, under the agreement:

(iv) if subparagraph (i) applies:

(a) the distribution; or

(v) if subparagraph (ii) applies:

(a) the right or option; or

(b) an identical right or option; or

(vi) if subparagraph (iii) applies:

(e) by inserting after subsection (3) the following subsection:

“(3a) For the purposes of paragraph (3) (c), if, apart from this subsection, either of the following events occurred after the commencement of the borrowing period:

(even if the event occurred after the borrowed security was disposed of by the borrower to a third party), the event is taken to have occurred during the borrowing period if, and only if, (assuming that the borrower had held the borrowed security at all times during the borrowing period) the entitlement to the distribution or issue would have been attributable to the borrower’s holding of the borrowed security at a particular time during the borrowing period.”;

(f) by inserting after subsection (4) the following subsections:

“(4a) If the lender receives a compensatory payment covered by sub-subparagraph (3) (c) (v) (c), then, in determining whether an amount is included in the assessable income of the lender under a provision of this Act other than Part IIIa, the lender is to be treated as if:

“(4b) If the lender receives a compensatory payment covered by sub-subparagraph (3) (c) (vi) (c), then, in determining whether an amount is included in the assessable income of the lender under a provision of this Act other than Part IIIA, the lender is to be treated as if:

(b)     the lender had exercised the right or option; and

“if:

“(7) If, in the case of a borrowed security to which paragraph (6) (b) applies, the replacement security was disposed of by the lender (otherwise than under a transaction covered by subsection (3)):

160z (3) does not apply to the disposal of the replacement security.”;

(i) by inserting after subsection (9) the following subsections:

“(9a) Subject to subsection 160zh (6), a reference in subsection 160zh (1), (2) or (3) to the incidental costs to the borrower of the acquisition of an eligible security covered by sub-subparagraph (3) (a) (ii) (b) includes a reference to a compensatory payment incurred by the borrower.

“(9b) For the purposes of the application of Part IIIa to a right or option received by the lender as mentioned in subparagraph (3) (c) (v), the borrower and lender are to be treated as if the eligible security in respect of which the right or option was issued had been held by the lender at the time of the acquisition of the right or option.

“(9c) For the purposes of the application of Part IIIa to a share, unit, bond, debenture or financial instrument received by the lender as mentioned in subparagraph (3) (c) (vi), the borrower and the lender are to be treated as if:

(c)     the lender had exercised the borrowed security; and

“(9d) If a distribution covered by subparagraph (3) (c) (i) consists of one or more shares issued by a company to the borrower or to a third party in the circumstances mentioned in subsection 6ba (1), then, for the purposes of the application of Part IIIA to a share (in this subsection called the ‘notional bonus share’) received by the lender in relation to the distribution in the circumstances mentioned in sub-subparagraph (3) (c) (iv) (a) or (b), the borrower and the lender are to be treated as if:

“(9e) If a distribution covered by subparagraph (3) (c) (i) consists of one or more units issued by the trustee of a unit trust to the borrower or to a third party in the circumstances covered by section 160zyc, then, for .the purposes of the application of Part IIIa to a unit (in this subsection called the ‘notional bonus unit’) received by the lender in relation to the distribution in the circumstances mentioned in sub-subparagraph (3) (c) (iv) (a) or (b), the borrower and the lender are to be treated as if:

“(9f) If the lender receives a compensatory payment covered by sub-subparagraph (3) (c) (v) (c), then, for the purposes of the application of Part IIIa to the lender, the lender is to be treated as if:

“(9g) If the lender receives a compensatory payment covered by sub-subparagraph (3) (c) (vi) (c), then, for the purposes of the application of Part IIIa to the lender, the lender is to be treated as if:

(b)     the lender had exercised the right or option; and

(l) by inserting after subsection (11) the following subsections:

“(11a) If:

the lender’s assessable income of the year of income includes an amount equal to the otherwise assessable amount.

“(11b) If:

the lender’s assessable income of the year of income includes an amount equal to the otherwise assessable amount.”.

Interpretation

26. Section 27a of the Principal Act is amended by inserting after subsection (14) the following subsection:

“(14a) Where an amount paid to a taxpayer (in this subsection called the ‘received amount’), being an ETP, an annuity or a payment made as a supplement to an annuity, would, apart from section 24bb and assuming that:

be wholly or partly exempt from tax because of Division 1a, the following provisions have effect:

27. Before section 44 of the Principal Act the following section is inserted:

Subdivision has effect subject to section 160aqua (transfer of shareholder status for tax purposes)

“43a. This Subdivision has effect subject to section 160aqua (which deals with transfer of shareholder status for tax purposes in cases involving a cum-dividend stock exchange sale or a securities lending arrangement).”.

Distribution benefits—CFCs

28. Section 47a of the Principal Act is amended:

“ ‘Total Excess’ means so much of the total amount or market value of all the arrangement transfers as is attributable to the provision of the eligible benefit;”.

Bad debts of money-lenders not allowable deductions where attributable to listed country branches

29. Section 63d of the Principal Act is amended by omitting from subsection (1) “so much of the deduction is allowable as equals the amount calculated” and substituting “a proportion of the deduction is allowable, being the proportion calculated”.

Deduction of expenditure on prevention of land degradation

30. Section 75d of the Principal Act is amended:

“(1) Subject to this section, this section applies to expenditure of a capital nature that meets the requirements set out in subsections (1a) and (1b).

“(1a) The expenditure must be incurred by a taxpayer:

“(1b) The expenditure must also be incurred in, or in an extension of, any of the following operations:

(c)     by omitting from paragraph (6) (b) “referred to in subsection

(1) or an extension of such an operation” and substituting “or extension referred to in subsection (1b)”;

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

“(14) In this section, a reference to an approved land management plan, in relation to land, is a reference to a land management plan in relation to the land that:

(a) has been prepared by:

(ii) an approved farm consultant; or

(b) has been approved in writing by:

(ii) an approved farm consultant;

as being a suitable land management plan for the land.

“(15) For the purposes of subsection (14), a person is an approved farm consultant only if an approval under this section of the person as a farm consultant is in force.

“(16) The following persons may, in writing, approve a person as a farm consultant for the purposes of this section:

“(17) In deciding whether to approve a person as a farm consultant, the following matters are to be taken into account:

(b)     the standing of the person in the professional community;

(c)     any other relevant matters.

“(18) Subject to the Administrative Appeals Tribunal Act 1975, applications may be made to the Tribunal by a person for review of a decision under subsection (16):

(a) to refuse approval of the person as a farm consultant; or

(b) to revoke the approval of the person as a farm consultant.

“(19) In this section:

‘decision’ has the same meaning as in the Administrative Appeals Tribunal Act 1975;

‘land conservation agency’ means a State or Territory Government department, or authority, that has responsibility for land conservation;

‘land management plan’ means a plan for an area of land indicating:

(a)     different land classes comprising the land; and

together with, or including, a description of the kind of fencing and how it would prevent land degradation.”.

Gifts, pensions etc.

31. Section 78 of the Principal Act is amended by inserting in subparagraph (1) (a) (xxiv) “Royal” before “College”.

Rebates for residents of isolated areas

32. Section 79a of the Principal Act is amended by omitting the definition of “prescribed allowance” in subsection (4) and substituting the following definition:

“ ‘prescribed allowance’ means so much of a payment under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986 as was included in the payment by way of remote area allowance;”.

Interpretation

33. Section 82kh of the Principal Act is amended:

(b)    by omitting from paragraph (1g) (s) “or (t)”;

(c)     by adding at the end of paragraph (1g) (s) “and”;

(d)    by omitting paragraph (1g) (t);

(e)     by omitting from paragraph (1je) (b) “or (t)”;

(f)      by omitting paragraph (1l) (t).

Payment of interest by taxpayer on distributions from certain non-resident trust estates

34. Section 102aam of the Principal Act is amended by omitting from paragraph (1) (c) “the distributed amount is” and substituting “so much of the distributed amount as is not a rebatable section 99b amount for the purposes of section 102aan is”.

Persons to whom Division applies

35. Section 102AC of the Principal Act is amended:

Disposal, loss, destruction or termination of use of property

36. Section 122k of the Principal Act is amended:

(a) by inserting in subsection (4) the following definition:

“ ‘rehabilitation-related activities’ has the same meaning as in Division 10ab;”;

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

“(5) For the purposes of subsection (1), use of property by a taxpayer is taken to be use for prescribed purposes if:

(a)     the use is on or after 1 July 1991; and

allowable, or has been allowed, under section 122j; and

(c) either of the following conditions is satisfied:

“(6) For the purposes of subsection (1), use of property by a taxpayer is taken to be use for eligible purposes if:

(a)     the use is on or after 1 July 1991; and

“(7) A reference in subsection (5) or (6) to use of property by a taxpayer for a particular purpose includes a reference to the holding in reserve of property owned by the taxpayer which has been installed ready for use for that purpose.”.

37. After section 122k of the Principal Act the following section is inserted:

Application of section 122k before 1 July 1991—subsequent use of property for rehabilitation

“122ka. (1) This section applies to property if:

(a) either of the following conditions is satisfied:

“(2) For the purposes of this section, the estimated eligible rehabilitation period is the period:

(a)     commencing on 1 July 1991; and

“(3) If, having regard to information in the Commissioner’s possession, the Commissioner is not satisfied that the estimate is a reasonable estimate, the estimated eligible rehabilitation period is taken to end on such day as the Commissioner considers reasonable.

“(4) For the purposes of this section, the estimated total rehabilitation period is the period:

(b)     ending at the end of the estimated eligible rehabilitation period.

“(5) For the purposes of this section, the actual eligible rehabilitation period is the period:

(a)     commencing on 1 July 1991; and

“(6) For the purposes of this section, the actual total rehabilitation period is the period:

(b)     ending at the end of the actual eligible rehabilitation period.

“(7) An amount calculated using the following formula is allowable as a deduction to the taxpayer for each year of income any part of which occurs during both the actual eligible rehabilitation period and the estimated eligible rehabilitation period:

where:

‘Capital amount’ means the capital amount in relation to the property;

‘Eligible rehabilitation days in year’ means the number of days in so much of the year of income as occurs during both of the actual eligible rehabilitation period and the estimated eligible rehabilitation period;

‘Days in estimated total rehabilitation period’ means the number of days in the estimated total rehabilitation period.

“(8) Subsections (9) and (10) apply in relation to a year of income if:

“(9) The amount (if any) calculated using the following formula is an allowable deduction to the taxpayer for the year of income:

where:

‘Capital amount’ means the capital amount in relation to the property;

‘Actual eligible rehabilitation days’ means the number of days in the actual eligible rehabilitation period;

‘Days in actual total rehabilitation period’ means the number of days in the actual total rehabilitation period;

‘Deductions previously allowed’ means the total deductions that are allowable, or have been allowed, under subsection (7) in respect of the property.

“(10) The amount (if any) calculated using the following formula is included in the assessable income of the taxpayer of the year of income:

where:

‘Final value’ means whichever of the following amounts is applicable in relation to the property:

‘Actual eligible rehabilitation days’ means the number of days in the actual eligible rehabilitation period;

‘Days in actual total rehabilitation period’ means the number of days in the actual total rehabilitation period.

“(11) A reference in this section to use of property by a taxpayer for a particular purpose includes a reference to the holding in reserve

of property owned by the taxpayer which has been installed ready for use for that purpose.

“(12) In this section:

‘actual eligible rehabilitation period’ has the meaning given by subsection (5);

‘actual total rehabilitation period’ has the meaning given by subsection (6);

‘capital amount’, in relation to property, means the lesser of:

‘estimated eligible rehabilitation period’ has the meaning given by subsection (2);

‘estimated total rehabilitation period’ has the meaning given by subsection (4);

‘rehabilitation-related activities’ has the same meaning as in Division 10ab;

‘section 122K termination date’ has the meaning given by subsection (1).”.

Disposal, loss, destruction or termination of use of property

38. Section 124am of the Principal Act is amended by adding at the end the following subsections:

“(8) For the purposes of subsection (1), use of property by a taxpayer is taken to be use for purposes of carrying on prescribed petroleum operations or of exploring or prospecting for petroleum if:

(a)     the use is on or after 1 July 1991; and

(c) either of the following conditions is satisfied:

“(9) A reference in subsection (8) to use of property by a taxpayer for a particular purpose includes a reference to the holding in reserve of property owned by the taxpayer which has been installed ready for use for that purpose.

“(10) In this section:

‘rehabilitation-related activities’ has the same meaning as in Division 10ab.”.

39. After section 124am of the Principal Act the following section is inserted:

Application of section 124am before 1 July 1991—subsequent use of property for rehabilitation

“124ama. (1) This section applies to property if:

(a) either of the following conditions is satisfied:

“(2) For the purposes of this section, the estimated eligible rehabilitation period is the period:

(a)     commencing on 1 July 1991; and

“(3) If, having regard to information in the Commissioner’s possession, the Commissioner is not satisfied that the estimate is a reasonable estimate, the estimated eligible rehabilitation period is taken to end on such day as the Commissioner considers reasonable.

“(4) For the purposes of this section, the estimated total rehabilitation period is the period:

(b)     ending at the end of the estimated eligible rehabilitation period.

“(5) For the purposes of this section, the actual eligible rehabilitation period is the period:

(a)     commencing on 1 July 1991; and

“(6) For the purposes of this section, the actual total rehabilitation period is the period:

(b)     ending at the end of the actual eligible rehabilitation period.

“(7) An amount calculated using the following formula is allowable as a deduction to the taxpayer for each year of income any part of which occurs during both the actual eligible rehabilitation period and the estimated eligible rehabilitation period:

where:

‘Capital amount’ means the capital amount in relation to the property;

‘Eligible rehabilitation days in year’ means the number of days in so much of the year of income as occurs during both of the actual eligible rehabilitation period and the estimated eligible rehabilitation period;

‘Days in estimated total rehabilitation period’ means the number of days in the estimated total rehabilitation period.

“(8) Subsections (9) and (10) apply in relation to a year of income if:

“(9) The amount (if any) calculated using the following formula is an allowable deduction to the taxpayer for the year of income:

where:

‘Capital amount’ means the capital amount in relation to the property;

‘Actual eligible rehabilitation days’ means the number of days in the actual eligible rehabilitation period;

‘Days in actual total rehabilitation period’ means the number of days in the actual total rehabilitation period;

‘Deductions previously allowed’ means the total deductions that are allowable, or have been allowed, under subsection (7) in respect of the property.

“(10) The amount (if any) calculated using the following formula is included in the assessable income of the taxpayer of the year of income:

where:

‘Final value’ means whichever of the following amounts is applicable in relation to the property:

‘Actual eligible rehabilitation days’ means the number of days in the actual eligible rehabilitation period;

‘Days in actual total rehabilitation period’ means the number of days in the actual total rehabilitation period.

“(11) A reference in this section to use of property by a taxpayer for a particular purpose includes a reference to the holding in reserve of property owned by the taxpayer which has been installed ready for use for that purpose.

“(12) Where an amount is included in the assessable income of a taxpayer under subsection (10), the amount is taken to be assessable income from petroleum.

“(13) In this section:

‘actual eligible rehabilitation period’ has the meaning given by subsection (5);

‘actual total rehabilitation period’ has the meaning given by subsection (6);

‘capital amount’, in relation to property, means the lesser of:

‘estimated eligible rehabilitation period’ has the meaning given by subsection (2);

‘estimated total rehabilitation period’ has the meaning given by subsection (4);

‘rehabilitation-related activities’ has the same meaning as in Division 10ab;

‘section 124am termination date’ has the meaning given by subsection (1).”.

40. After section 124aq of the Principal Act the following Division is inserted:

Interpretation

“124b. In this Division:

‘extractive activities’ means:

(a)     eligible exploration or prospecting activities; or

‘eligible exploration or prospecting activities’ means activities in respect of which a deduction is allowable, or has been allowed, under section 122j, 122jf or 124ah;

‘housing and welfare’ means:

(a)     residential accommodation; or

(b)     health, educational, recreational or other similar facilities; or

(c)     facilities for the provision of meals;

and includes works carried out directly in connection with such accommodation or facilities (including works for the provision of water, light, power, access or communications);