TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992 - LONG TITLE

An Act to amend the law relating to taxation

PART 1 - PRELIMINARY

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 1

Short title [see Note 1]

1. This Act may be cited as the Taxation Laws Amendment Act (No. 3) 1992.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 2

Commencement [see Note 1]

2.(1) Subject to subsection (2), this Act commences on the day on which it

receives the Royal Assent.

(2) Division 6 of Part 2 commences on the day after the day on which this

Act receives the Royal Assent.

PART 2 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 1 - Principal Act

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

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Principal Act

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

1936.*1*

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

5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69,

1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37,

1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48,

1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No.

43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65,

1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960;

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

68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos.

19, 38, 76 and 85, 1967; Nos. 4, 70, 87 and 148, 1968; Nos. 18, 93 and 101,

1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972;

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

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

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

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

57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 92, 108, 109, 110, 111, 154 and

175, 1981; Nos. 29, 38, 39, 76, 80, 106 and 123, 1982; Nos. 14, 25, 39, 49,

51, 54 and 103, 1983; Nos. 14, 42, 47, 63, 76, 115, 124, 165 and 174, 1984;

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

174, 1985; No. 173, 1985 (as amended by No. 49, 1986); Nos. 41, 46, 48, 51,

109, 112 and 154, 1986; No. 49, 1986 (as amended by No. 141, 1987); No. 52,

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

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

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

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

Nos. 8, 11, 59, 75, 78, 80, 87, 95, 97, 127 and 153, 1988; Nos. 2, 11, 56, 70,

73, 105, 107, 129, 163 and 167, 1989; No. 97, 1989 (as amended by No. 105,

1989); Nos. 20, 35, 45, 57, 58, 60, 61, 87, 119 and 135, 1990; Nos. 4, 5, 6,

48, 55, 100, 203, 208, and 216, 1991; and No. 3, 1992.

Division 2 - Amendments relating to horticulture

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 4

Interpretation

4. Section 6 of the Principal Act is amended:

(a) by omitting "or" from paragraph (c) of the definition of "primary

production" in subsection (1);

(b) by inserting after paragraph (d) of the definition of "primary

production" in subsection (1) the following word and paragraph:

"; or (e) horticulture;";

" 'horticulture' includes:

(a) propagation as well as cultivation; or

(b) propagation or cultivation of seeds, bulbs, spores or similar things;

(d) propagation or cultivation in environments other than soil, whether

natural or artificial;

but does not include the doing of any thing other than in the course of, or

for the purposes of, a business;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

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Application of amendments

5. The amendments made by this Division apply to the doing of things after

26 May 1992.

Division 3 - Amendment relating to expenditure on research and

development activities

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

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Expenditure on research and development activities

6. Section 73B of the Principal Act is amended by omitting from paragraph

(2)(c) "determining the size or quality of any deposits" and substituting

"discovering deposits, determining more precisely the location of deposits or

determining the size or quality of deposits".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 7

Application of amendment

7. The amendment made by this Division applies to activities carried on on

or after 1 July 1985 (including after the commencement of this section).

Division 4 - Amendments relating to pooled development funds

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 8

Interpretation

8. Section 6 of the Principal Act is amended:

(a) by omitting from subsection (1) the definition of "taxable income" and

substituting the following definition:

" 'taxable income' means:

(a) except in a case where paragraph (b) or (c) applies - the amount

remaining after deducting from the assessable income all allowable deductions;

(b) in a case where paragraph (c) does not apply and Subdivision B of

Division 2A of Part III applies - the amount calculated in accordance with

section 50C; or

(i) a company becomes a PDF during the year of income

and is still a PDF at the end of the year of income; and

(ii) the PDF component for the year of income is a nil

amount;

the amount that, if the period ('the notional year') beginning at the start of

the year of income and ending immediately before the company becomes a PDF

were a year of income of the company, would be the taxable income of the

notional year because of paragraph (a) or (b), as the case requires;";

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

" 'PDF' (pooled development fund) means a company that is a PDF within the

meaning of the Pooled Development Funds Act 1992, but does not include such a

company in the capacity of a trustee;

'PDF component', in relation to a company that becomes a PDF during the year

of income and is still a PDF at the end of the year of income, means:

(a) in a case where the amount that, if:

(i) the period beginning at the start of the year of

income and ending immediately before the company becomes a PDF were a year of

income of the company; and

(ii) the period ('the PDF notional year') beginning

when the company becomes a PDF and ending at the end of the year of income

were a year of income of the company; and

(iii) paragraph (c) of the definition of 'taxable

income' were omitted;

would be the company's taxable income of the PDF notional year is $1 or more -

that amount; or

(b) otherwise - a nil amount;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 9

9. After section 79E of the Principal Act the following sections are

inserted:

Loss of company's first year as a PDF where taxable income consists of pre-PDF

income

"79EA.(1) If a company has a taxable income for a year of income because of

paragraph (c) of the definition of 'taxable income' in subsection 6(1), this

section applies for the purposes of section 79E despite subsections 79E(1) and

(2).

"(2) The company incurs a loss in that year of income equal to the loss (if

any) that, if:

(a) the period beginning at the start of that year of income and ending

immediately before the company became a PDF were a year of income of the

company; and

(b) the period ('the PDF notional year') beginning when the company became

a PDF and ending at the end of the first-mentioned year of income were a year

of income of the company;

the company would be taken because of section 79E to incur in the PDF notional

year.

Losses incurred while a PDF not allowable after company ceases to be a PDF

"79EB.(1) If a company is a PDF throughout the last day of a year of income

in which it incurs a loss, the loss is not allowable as a deduction from the

company's assessable income of a later year of income unless the company is a

PDF throughout the later year of income.

"(2) However, if:

(a) a company becomes a PDF during a year of income and is still a PDF at

the end of the year of income; and

(b) the company incurs a loss in that year of income otherwise than because

of section 79EA;

subsection (1) of this section does not apply to so much of the loss as does

not exceed the loss (if any) that, if the period ('the notional year')

beginning at the start of the year of income and ending immediately before the

company becomes a PDF were a year of income of the company, the company would

be taken to incur in the notional year.

"(3) An expression has in this section the same meaning as in section 79E.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 10

Transfer of loss within company group

10. Section 80G of the Principal Act is amended by inserting after

subsection (9) the following subsections:

"(9A) If the loss company was a PDF throughout the last day of the loss

year, the right to an allowable deduction in respect of any part of the loss

incurred by the loss company in the loss year must not be transferred.

"(9B) However, if:

(a) the loss company became a PDF during the loss year and was still a PDF

at the end of the loss year; and

(b) the loss company incurred a loss in the loss year otherwise than

because of section 79EA;

subsection (9A) does not apply to so much of the loss as does not exceed the

loss (if any) that, if the period ('the notional year') beginning at the start

of the loss year and ending immediately before the loss company became a PDF

were a year of income of the loss company, the loss company would be taken to

incur in the notional year.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 11

11. After section 124ZL of the Principal Act the following Division is

inserted:

"Division 10E - Shares in PDFs

Treatment of dividends on shares in a PDF

"124ZM.(1) If a company pays a dividend to a shareholder at a time when the

company is a PDF, then:

(a) so much (if any) of the dividend as has not been franked in accordance

with section 160AQF is exempt from income tax; and

(b) if the whole or a part of the dividend has been so franked - the rest

of this section applies.

"(2) If, apart from this subsection, the assessable income of a year of

income of a taxpayer who or that is:

(a) a company or a natural person (other than a company or natural person

in the capacity of a trustee); or

(b) a corporate unit trust in relation to that year of income; or

(d) an eligible entity within the meaning of Part IX in relation to that

year of income;

would include:

(e) the franked amount; or

(f) a trust amount or partnership amount in relation to which there would

be a flow-on franking amount;

the franked amount, or so much of the trust amount or partnership amount as

would constitute the flow-on franking amount, as the case may be, is exempt

income of the taxpayer.

"(3) Subsection (2) does not exempt, and is taken never to have exempted, an

amount if the taxpayer's return of income of the year of income is prepared on

the basis that the amount is included in the taxpayer's assessable income of

that year.

"(4) If, apart from this subsection, a partnership amount in relation to

which there would be a flow-on franking amount would be allowable as a

deduction from the assessable income of a year of income of a taxpayer of a

kind referred to in subsection (2), so much of the partnership amount as would

constitute the flow-on franking amount is not allowable as a deduction from

that assessable income.

"(5) Subsection (4) does not prevent, and is taken never to have prevented,

an amount from being allowable as a deduction if the taxpayer's return of

income of the year of income is prepared on the basis that the amount is so

allowable.

"(6) If, apart from this subsection, a trustee would be liable under section

98, 99 or 99A to be assessed and pay tax on a trust amount or partnership

amount in relation to which there would be a flow-on franking amount, the

trustee is not liable under that section to be assessed and to pay tax on so

much of the trust amount or partnership amount as would constitute the flow-on

franking amount.

"(7) Subsection (6) does not prevent, and is taken never to have prevented,

the trustee from being liable under that section to be assessed and to pay tax

on an amount if the trustee elects to be so liable.

"(8) An election must be made in the trustee's return of income of the trust

estate for the year of income concerned.

"(9) In this section:

'flow-on franking amount' means:

(a) in relation to a trust amount - so much of the trust amount as is

attributable to:

(i) if the franked amount is included in the

assessable income of the trust estate - the franked amount; or

(ii) the flow-on franking amount in relation to another

trust amount included in the assessable income of the trust estate; or

(iii) the flow-on franking amount in relation to a

partnership amount included in, or allowable as a deduction from, the

assessable income of the trust estate; and

(b) in relation to a partnership amount - so much of the partnership amount

as is attributable to:

(i) if the franked amount is included in the assessable

income of the partnership - the franked amount; or

(ii) the flow-on franking amount in relation to a trust

amount included in the assessable income of the partnership; 'franked amount'

means so much of the dividend as has been franked in accordance with section

160AQF;

'partnership amount' has the same meaning as in Part IIIAA;

'trust amount' has the same meaning as in Part IIIAA.

Exemption of income from sale of shares in a PDF

"124ZN. Income derived by a taxpayer from selling shares in a company is

exempt from income tax if the company is a PDF at the time of the sale.

Shares in a PDF are not trading stock

"124ZO. Shares in a PDF are not trading stock for the purposes of this Act.

Part IIIA does not apply to disposal of shares in a PDF

"124ZP. Part IIIA does not apply in respect of a disposal (within the

meaning of that Part) of shares in a company if the company is a PDF at the

time of the disposal.

Effect of company becoming a PDF

"124ZQ.(1) This section applies to shares in a company that a taxpayer holds

when the company becomes a PDF.

"(2) In determining for the purposes of this Act whether an amount is or was

allowable as a deduction to the taxpayer in respect of acquiring the shares,

the shares are taken to have been shares in a PDF throughout the period

beginning immediately before the taxpayer acquired them and ending when the

company became a PDF.

"(3) For the purposes of this Act, the shares are taken to have been trading

stock of the taxpayer at no time during that period.

"(4) Section 170 does not prevent an assessment from being amended to give

effect to this section.

Effect of company ceasing to be a PDF

"124ZR.(1) This section applies to shares in a company that a taxpayer holds

when the company ceases to be a PDF.

"(2) For the purposes of this Act (other than Part IIIA), the taxpayer is

taken:

(a) to have sold the shares immediately before the company ceased to be a

PDF; and

(b) to have rebought the shares immediately after the company so ceased;

for a consideration equal to the market value of the shares immediately after

the company so ceased.

"(3) For the purposes of Part IIIA, the taxpayer is taken:

(a) to have disposed of the shares immediately before the company ceased to

be a PDF; and

(b) to have re-acquired the shares immediately after the company so

ceased;

for a consideration equal to the market value of the shares immediately after

the company so ceased.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 12

Liability to withholding tax

12. Section 128B of the Principal Act is amended by inserting after

paragraph (3)(b) the following paragraph:

"(ba) income that is exempt from income tax because of section 124ZM (which

exempts dividends paid by PDFs);".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 13

Interpretation

13. Section 160APA of the Principal Act is amended by omitting "or life

assurance companies" from the definition of "general company tax rate" and

substituting ", life assurance companies or companies that are PDFs throughout

the last day of the year of income".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 14

Receipt of franked dividends

14. Section 160APP of the Principal Act is amended by inserting after

subsection (3) the following subsection:

"(3A) In determining for the purposes of subsection (2) or (3) whether the

dividend is wholly or partly exempt income of the shareholder, section 124ZM

(which exempts dividends paid by PDFs) is to be disregarded.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 15

Extra amount to be included in assessable income where franked dividend paid

15. Section 160AQT of the Principal Act is amended by adding at the end the

following subsection:

"(5) For the purposes of this section, if:

(a) because of subsection 124ZM(3), subsection 124ZM(2) does not exempt the

franked amount of a dividend paid by a company to a shareholder; and

(b) the dividend is not otherwise exempt income of the shareholder;

the dividend is taken not to be exempt income of the shareholder.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 16

Transfer of shareholder status for tax purposes - cum-dividend stock exchange

sales and securities lending arrangements

16. Section 160AQUA of the Principal Act is amended by inserting in

subsection (1) ", of section 124ZM" after "Part III".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 17

Net capital gains and net capital losses

17. Section 160ZC of the Principal Act is amended by adding at the end the

following subsections:

"(6) If:

(a) at some time during the last day of a year of income, a company is not

a PDF; and

(b) the company was a PDF throughout the last day of the previous year of

income ('the final PDF year');

a net capital loss that the company is taken to have incurred in respect of

the final PDF year is to be disregarded in ascertaining whether a net capital

gain accrued to the company, or the company incurred a net capital loss, in

the first-mentioned year.

"(7) However, subsection (6) does not apply to so much of the net capital

loss as does not exceed the amount (if any) by which the total of:

(a) if the company is taken to have incurred a net capital loss in respect

of the last year of income before the year of income at the start of which, or

during which, it became a PDF - that net capital loss; and

(b) if the company incurred a capital loss or capital losses after that

last year of income and before it became a PDF - that capital loss or those

capital losses;

exceeds:

last year of income and before the year of income referred to in paragraph

(6)(a) - that capital gain or the total of those capital gains; or

(d) otherwise - a nil amount.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 18

Return of capital on investment in trust

18. Section 160ZM of the Principal Act is amended by omitting subsection

(3A) and substituting the following subsection:

"(3A) In subsections (2) and (3):

'adjusted payment' means so much of the amount of the payment as is

attributable to none of the following:

(a) a deduction allowed under Division 10C or 10D of Part III;

(b) income that is exempt from income tax because of section 124ZM or 124ZN

(which exempt income arising from shares in a PDF);

PDF at the time of the disposal.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 19

Transfer of net capital loss within company group

19. Section 160ZP of the Principal Act is amended by inserting before

subsection (10) the following subsections:

"(9B) If the loss company was a PDF throughout the last day of the loss

year, no part of the net capital loss incurred by that company in respect of

that year can be specified in a notice under paragraph (7)(c).

"(9C) However, subsection (9B) does not apply to so much of the net capital

loss as does not exceed the amount (if any) by which the total of:

(a) if the loss company is taken to have incurred a net capital loss in

respect of the last year of income before the year of income at the start of

which, or during which, it became a PDF - that net capital loss; and

(b) if the loss company incurred a capital loss or capital losses after

that last year of income and before it became a PDF - that capital loss or

those capital losses;

exceeds:

that last year of income and before the end of the loss year - that capital

gain or the total of those capital gains; or

(d) otherwise - a nil amount.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 20

Application of amendments

20.(1) In this section:

"amended Act" means the Principal Act as amended by this Division;

"at any time" includes at a time before the commencement of this section.

(2) The following apply in relation to a year of income beginning at any

time:

(a) the amendments made by sections 8, 10, 13, 17 and 19;

(b) sections 79EA and 79EB of the amended Act.

(3) The following apply in relation to a dividend paid at any time:

(a) section 124ZM of the amended Act;

(b) the amendments made by sections 14, 15 and 16 of this Act.

(4) The following apply in relation to income derived at any time:

(a) section 124ZN of the amended Act;

(b) the amendment made by section 12 of this Act.

(5) Section 124ZO of the amended Act applies in relation to shares acquired

at any time.

(6) Section 124ZP of the amended Act applies in relation to a disposal

(within the meaning of Part IIIA of that Act) occurring at any time.

(7) Section 124ZQ of the amended Act applies in relation to a company

becoming a PDF at any time.

(8) Section 124ZR of the amended Act applies in relation to a company

ceasing at any time to be a PDF.

(9) The amendment made by section 18 applies in relation to a payment made

at any time.

Division 5 - Amendments relating to debts

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 21

Interpretation

21. Section 50B of the Principal Act is amended by adding at the end the

following subsections:

"(13) Where a part of a debt is an allowable deduction in an assessment,

this Subdivision (other than subsection (14) of this section) applies as if

the part were an entire debt that is an allowable deduction in the assessment.

"(14) This Subdivision has the same effect in relation to an allowable

deduction under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 22

Bad debts

22. Section 63 of the Principal Act is amended:

(a) by omitting from subsection (3) "to him under this or the previous Act,

his" and substituting "to the taxpayer under section 51 or this section, the

taxpayer's";

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

"(4) Where a part of a debt is bad, this section applies as if the part were

an entire debt that is bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 23

Bad debts etc. of company not allowable deductions unless there is substantial

continuity of beneficial ownership of shares in company

23. Section 63A of the Principal Act is amended by adding at the end the

following subsections:

"(13) Where a part of a debt is an allowable deduction in an assessment, the

preceding provisions of this section apply as if the part were an entire debt

that is an allowable deduction in the assessment.

"(14) This section has the same effect in relation to an allowable deduction

under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 24

Bad debts etc. of company not allowable deductions in certain circumstances

24. Section 63B of the Principal Act is amended by adding at the end the

following subsections:

"(10) Where a part of a debt is an allowable deduction in an assessment, the

preceding provisions of this section apply as if the part were an entire debt

that is an allowable deduction in the assessment.

"(11) This section has the same effect in relation to an allowable deduction

under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 25

Bad debts etc. of a company may be allowable deductions where company carries

on same business

25. Section 63C of the Principal Act is amended by adding at the end the

following subsections:

"(3) Where a part of a debt is written off by a company as bad, the

preceding provisions of this section apply as if the part were an entire debt

that is written off by the company as bad.

"(4) This section has the same effect in relation to an allowable deduction

under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 26

Bad debts etc. of money-lenders not allowable deductions where attributable to

listed country branches

26. Section 63D of the Principal Act is amended:

(a) by omitting from subsection (1) all the words from and including

"Where" to the end of paragraph (1)(a) and substituting:

"Subject to section 63F, where:

(a) apart from this section and section 63F, a deduction would be allowable

to a taxpayer:

(i) under section 51 or 63 in respect of the writing

off of a debt as bad; or

(ii) under section 63E in respect of a debt/equity swap

in relation to a debt; and";

(b) by inserting in subsection (2) ", or in respect of which there is a

debt/equity swap (within the meaning of section 63E)," after "written off";

"(3) Where a part of a debt is written off as bad, this section applies as

if the part were an entire debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 27

27. After section 63D of the Principal Act, the following sections are

inserted:

Debt/equity swaps

(Meaning of "debt/equity swap")

"63E.(1) For the purposes of this section, a 'debt/equity swap' occurs if:

(a) under an arrangement (defined in subsection (6)), a taxpayer

discharges, releases or otherwise extinguishes the whole or part of a debt

owed to the taxpayer in return for the issue by the debtor to the taxpayer of

shares (other than redeemable preference shares), or units, in the debtor;

and

(b) the debtor is:

(i) a company; or

(ii) a trading trust (within the meaning of section

102N), or a public unit trust (within the meaning of section 102P), in

relation to the year of income in which the units are issued; and

(i) has been brought to account by the taxpayer as

assessable income of any year of income; or

(ii) is in respect of money lent in the ordinary course

of the business of the lending of money by the taxpayer who carries on that

business.

(Meaning of "equity value" and "swap loss")

"(2) For the purposes of this section:

(a) the 'equity value' of the shares or units is the greater of:

(i) their market value at the time of their issue to

the taxpayer; and

(ii) their value shown in the accounts of the taxpayer

as at the time of their issue to the taxpayer; and

(b) a 'swap loss' occurs if the amount of the whole or the part of the debt

that is extinguished is greater than the equity value of the shares or units.

(Swap loss is deductible etc.)

"(3) If a debt/equity swap occurs:

(a) subject to section 63F, any swap loss is allowable as a deduction from

the taxpayer's assessable income of the year of income in which the shares or

units are issued; and

(b) no amount is allowable as a deduction from the assessable income of the

taxpayer of any year of income under section 51 or 63 in respect of the

writing off of the whole or part of the debt as bad in connection with the

debt/equity swap; and

the issue of the shares or units to the taxpayer, the amount received in

respect of the issue is taken to be the same as the equity value of the shares

or units.

(Effect of debt/equity swap on later equity disposal etc.)

"(4) If a debt/equity swap occurs and the taxpayer later disposes of any of

the shares or units or they are cancelled or redeemed:

(a) except in accordance with paragraph (b), no amount is included in, or

allowable as a deduction from, the taxpayer's assessable income of any year of

income under this Act in respect of the later disposal, cancellation or

redemption; and

(b) if the consideration received or receivable by the taxpayer in respect

of the disposal, cancellation or redemption is different from the equity value

of the shares or units:

(i) if the consideration is greater - the difference

is included in the taxpayer's assessable income of the year of income in which

the disposal, cancellation or redemption occurs; or

(ii) if it is less - the difference is allowable as a

deduction from that assessable income.

(Consideration of a nil amount)

"(5) For the purposes of subsection (4), if no consideration is received or

receivable by the taxpayer in respect of the disposal, cancellation or

redemption, then consideration of a nil amount is taken to have been so

received or receivable.

(Meaning of "arrangement")

"(6) In this section: 'arrangement' means any agreement, arrangement,

understanding, promise, undertaking or scheme, whether express or implied, and

whether or not enforceable, or intended to be enforceable, by legal

proceedings.

Limit on deductions where debt write offs and debt/equity swaps occur

(Situations where limit is to be applied)

"63F.(1) If:

(a) apart from this section, a deduction ('the current deduction') would be

allowable to a taxpayer:

(i) under section 51 or 63 in respect of the writing

off of the whole or part of a debt as bad; or

(ii) under section 63E in respect of a debt/equity swap

relating to the whole or part of a debt; and

(b) a deduction ('a previous deduction') was allowed or allowable to the

taxpayer under any of those sections in respect of any number of occurrences

of either or both of the following:

(i) a previous writing off as bad of the whole or part

of a debt ('a previous debt') that was the same as, or included, the debt

mentioned in subparagraph (a)(i) or (ii);

(ii) a previous debt/equity swap relating to a part of

a debt ('a previous debt') that was the same as, or included, the debt

mentioned in subparagraph (a)(i) or (ii); and

allowable under section 63E in respect of a debt/equity swap;

then the current deduction is only allowable to the extent that it does not

exceed the limit worked out under subsection (2).

(Calculation of limit)

"(2) The limit is worked out as follows:

Step 1: Take the amount of the previous debt in respect of the earliest or

only writing off or debt/equity swap to which paragraph (1)(b) applies.

Step 2: Reduce the amount by the previous deduction in respect of that

writing off or debt/equity swap.

Step 3: If one or more of the following events occur after the writing off or

debt/equity swap, progressively reduce the balance of the amount in the way

set out below and in the order in which the events occur:

Event

How balance reduced

A writing off or debt/equity swap in respect of which there is a

previous deduction.

Reduce the balance by the amount of that previous

deduction. If the reduced balance is higher than the level

of the debt owing after the event, further reduce the

balance to that lower level.

Any other event (e.g. a repayment) that reduces the amount

of debt owing, being an event that occurs before the writing

off or debt/equity swap in respect of the current deduction.

If the balance at the time of the event is higher than the

level of the debt owing after the event occurs, reduce the

balance to that lower level.

The limit is the resulting balance.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 28

Loss resulting from bad debt etc. not to be taken into account in certain

circumstances

28. Section 80F of the Principal Act is amended by adding at the end the

following subsections:

"(2) Where a part of a debt is written off as bad, subsection (1) applies as

if the part were an entire debt that is written off as bad.

"(3) This section has the same effect in relation to an allowable deduction

under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 29

Interpretation

29. Section 82KH of the Principal Act is amended:

(a) by inserting in subsection (1AA) ", or a part of a debt," after "to a

debt";

(b) by inserting after subsection (1AB) the following subsection:

"(1ABA) This section has the same effect in relation to an allowable

deduction under section 63E in respect of the extinguishing of the whole or

part of a debt as it has in respect of an allowable deduction under section 51

or 63 in respect of the writing off of the whole or part of a debt as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 30

Modified application of bad debt etc. provisions

30. Section 399A of the Principal Act is amended by adding at the end the

following subsections:

"(4) Where a part of a debt is written off as bad, the preceding provisions

of this section apply as if the part were an entire debt that is written off

as bad.

"(5) This section has the same effect in relation to an allowable deduction

under section 63E in respect of the whole or part of a debt that is

extinguished as it has in relation to an allowable deduction under section 51

or 63 in respect of the whole or part of a debt that is written off as bad.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 31

Application of amendments

(Part-debt write offs)

31.(1) The amendments made by this Division, so far as they relate to the

writing off of part of a debt, apply to a writing off occurring after 26

February 1992, and the amendments are to be disregarded for the purpose of

interpreting any of the amended provisions of the Principal Act in relation to

the writing off of a part of a debt on or before that day.

(Debt/equity swaps)

(2) Section 63E of the Principal Act as amended by this Division applies

where the debt or part of the debt concerned is extinguished after 26 February

1992.

Division 6 - Amendments relating to infrastructure borrowings

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 32

Division not to apply to certain interest

32. Section 125 of the Principal Act is amended by adding at the end ", or

that is not included in assessable income because of section 159GZZZZE.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 33

Liability to withholding tax

33. Section 128B of the Principal Act is amended by inserting after

paragraph (3)(ba) the following paragraph:

"(bb) income that is not included in assessable income because of section

159GZZZZE;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 34

34. After Division 16K of Part III of the Principal Act, the following

Division is inserted:

"Division 16L - Tax-exempt infrastructure borrowings

"Subdivision A - Interpretation

General

"159GZZZU. In this Division:

'associate' has the same meaning as in subsection 26AAB(14);

'borrowing' means any form of borrowing, whether secured or unsecured, and

includes the raising of funds by the issue of a bond, debenture, discounted

security or other document evidencing indebtedness;

'Crown lease' means a lease granted by the Crown under a statutory law of the

Commonwealth, a State or a Territory;

'direct infrastructure borrowing' has the meaning given by section 159GZZZW;

'exemption period', in relation to an infrastructure borrowing, means:

(a) in the case of a direct infrastructure borrowing or an indirect

infrastructure borrowing - the period of 10 years beginning at the time of the

borrowing; or

(b) in the case of a refinancing infrastructure borrowing - so much of the

period that under paragraph (a) is the exemption period in respect of the

direct infrastructure borrowing, or the indirect infrastructure borrowing, to

which the refinancing infrastructure borrowing relates as remains at the time

of the refinancing infrastructure borrowing;

'government body' means the Commonwealth, a State, a Territory or a body to

which paragraph 23(d) applies;

'indirect infrastructure borrowing' has the meaning given by section

159GZZZX;

'listed company' means a company any of the shares of which are listed for

quotation in the official list of a stock exchange in Australia or elsewhere;

'Loan Council' means the Australian Loan Council constituted under the

Financial Agreement referred to in the Financial Agreement Validation Act

1929;

'refinancing infrastructure borrowing' has the meaning given by section

159GZZZY;

'used for assessable income purposes' means used for gaining or producing

assessable income or installed ready for use for that purpose and held in

reserve;

'25 year assessable use period', in relation to a direct infrastructure

borrowing, means the period of 25 years mentioned in paragraph

159GZZZZB(1)(b).

Kinds of infrastructure borrowing

"159GZZZV. There are 3 kinds of infrastructure borrowing:

(a) a direct infrastructure borrowing (see section 159GZZZW); and

(b) an indirect infrastructure borrowing (see section 159GZZZX); and

Direct infrastructure borrowing

"159ZZZW. A direct infrastructure borrowing is a borrowing of money where:

(a) the borrower requirements set out in section 159GZZZZ are met; and

(b) the requirement relating to the spending of the borrowed money, set out

in section 159GZZZZA, is met; and

money is spent, set out in section 159GZZZZB, is met.

Indirect infrastructure borrowing

"159GZZZX. An indirect infrastructure borrowing is a borrowing of money by

an incorporated body where:

(a) the borrower requirements set out in section 159GZZZZ are met; and

(b) the body intends, at the time of the borrowing:

(i) to lend all the borrowed money to another person;

and

(ii) that the loan will constitute the whole or part of

a direct infrastructure borrowing by that other person.

Refinancing infrastructure borrowing

(Meaning of "refinancing infrastructure borrowing")

"159GZZZY.(1) A refinancing infrastructure borrowing is a borrowing of money

where:

(a) the borrower requirements set out in section 159GZZZZ are met; and

(b) the borrower intends, at the time of the borrowing, to use the money

borrowed only to repay the whole or part of any of the following borrowings of

the borrower:

(i) a direct infrastructure borrowing; or

(ii) an indirect infrastructure borrowing; or

(iii) a borrowing that is a refinancing infrastructure

borrowing because of another application of this subsection.

(Interpretive provision)

"(2) For the purposes of references in this Division, a refinancing

infrastructure borrowing relates to a direct infrastructure borrowing or to an

indirect infrastructure borrowing if the repayment mentioned in paragraph

(1)(b) is of:

(a) the direct infrastructure borrowing or the indirect infrastructure

borrowing, as the case may be; or

(b) another refinancing infrastructure borrowing that, under a previous

application of this subsection, relates to the direct infrastructure borrowing

or the indirect infrastructure borrowing, as the case may be.

Infrastructure borrowings - borrower requirements

(Borrower requirements)

"159GZZZZ.(1) For a borrowing to be an infrastructure borrowing, the

requirements of this section must be met.

(Basic borrower requirement)

"(2) The borrower must:

(a) be:

(i) in any case - an incorporated body at the time of

the borrowing; or

(ii) in the case of a direct infrastructure borrowing

or a refinancing infrastructure borrowing that relates to a direct

infrastructure borrowing - a corporate unit trust (within the meaning of

section 102J), or a public trading trust (within the meaning of section 102R),

in relation to the year of income in which the borrowing takes place; and

(b) where the borrower is an incorporated body and the borrowing is a

direct infrastructure borrowing or a refinancing infrastructure borrowing that

relates to a direct infrastructure borrowing - at the time of the borrowing,

intend to be an incorporated body throughout the 25 year assessable use period

in relation to the direct infrastructure borrowing; and

at the time of the borrowing, intend to be such a trust in relation to each

year of income the whole or part of which occurs during the 25 year assessable

use period in relation to the direct infrastructure borrowing mentioned in

that subparagraph; and

(d) in any case - not be making the borrowing in partnership (disregarding

the definition of that expression in section 6) with anyone else; and

(e) in any case - subject to subsection (4), not be a government body or

government owned (see subsection (3)) at the time of the borrowing.

(Meaning of "government owned")

"(3) For the purposes of paragraph (2)(e):

(a) an incorporated body is government owned if:

(i) it is limited by shares; and

(ii) a government body is the beneficial owner of at least 50% of the total

rights:

(A) to dividends paid by the body; or

(B) to distributions of capital of the body on winding-up

or otherwise; or

(b) a trust is government owned if a government body is the beneficial

owner of more than 50% of the interests in income or corpus of the trust.

(Paragraph (2)(e) not to apply to certain bodies)

"(4) Paragraph (2)(e) does not apply to a borrower if the Loan Council has

declared the borrower to be exempt from the coverage of the global borrowing

limits for the financial year in which the infrastructure borrowing takes

place.

(Treasurer to publish notice)

"(5) The Treasurer must, as soon as practicable after the Loan Council has

made a declaration in relation to a borrower, arrange for notice of the making

of the declaration in relation to the borrower to be published in the Gazette.

(Direct infrastructure borrowings by listed companies)

"(6) Where:

(a) the infrastructure borrowing is:

(i) a direct infrastructure borrowing; or

(ii) a refinancing infrastructure borrowing that

relates to a direct infrastructure borrowing;

by an incorporated body limited by shares; and

(b) the incorporated body is a listed company; and

shares carrying more than half the voting rights in the incorporated body;

that person must not, at the time of the borrowing, intend to dispose of

sufficient of those shares to cause the number of voting rights to fall to or

below half during the 25 year assessable use period in relation to the

borrowing.

(Direct infrastructure borrowings by unlisted companies)

"(7) Where:

(a) the infrastructure borrowing is:

(i) a direct infrastructure borrowing; or

(ii) a refinancing infrastructure borrowing that

relates to a direct infrastructure borrowing; by an incorporated body limited

by shares; and

(b) the incorporated body is not a listed company; and

associate or associates is the beneficial owner of shares carrying more than

half the voting rights in the incorporated body;

that person, or that person and the associates, must not intend, at the time

of the borrowing, to dispose of sufficient of those shares to cause the number

of voting rights to fall to or below half during the 25 year assessable use

period in relation to the borrowing.

Direct infrastructure borrowing - requirement relating to spending of borrowed

money

(Spending requirement)

"159GZZZZA.(1) For a borrowing to be a direct infrastructure borrowing, the

borrower must, at the time of the borrowing, intend to spend the money

borrowed only on:

(a) the construction of one or more infrastructure facilities; or

(b) subject to subsection (2), the construction or acquisition of one or

more related facilities.

(Spending on related facilities)

"(2) Spending money on the construction or acquisition of a related facility

only qualifies under subsection (1) if:

(a) the borrower also intends to spend some of the borrowed money as

mentioned in paragraph (1)(a) on one or more of the infrastructure facilities

to which the related facility is related; or

(b) the following conditions are satisfied:

(i) the borrower already owns the infrastructure

facility or facilities to which the related facility is related; and

(ii) the requirements of section 159GZZZZB are

satisfiedin relation to that infrastructure facility or those infrastructure

facilities (assuming the money were also to be spent on them) as well as the

related facility at the time of the borrowing; and

(iii) the borrower intends to begin the construction or

make the acquisition of the related facility not later than 10 years after:

(A) if the borrower constructed the infrastructure

facility or facilities to which it is related - the beginning of construction

of the infrastructure facility, or the first of the infrastructure facilities,

to which it is related; or

(B) if the borrower acquired the infrastructure facility

or facilities to which it is related - the time of acquisition of the

infrastructure facility, or the first of the infrastructure facilities, to

which it is related.

(Exclusions)

"(3) A borrowing does not qualify for the purposes of subsection (1) if the

body intends to spend the money borrowed:

(a) on entering into or acquiring a lease; or

(b) on acquiring land on which there is a building or structure that is to

form part of the infrastructure facility or the related facility concerned;

(Facility can be part of or related to other facilities)

"(4) It does not matter for the purposes of subsection (1) if the

infrastructure facility is to be part of or related to any other

infrastructure facility of any person.

("acquisition" includes dismantling etc.)

"(5) In paragraph (1)(b), 'acquisition' includes dismantling, transportation

or installation in connection with the acquisition.

Direct infrastructure borrowing - requirement relating to use of facilities on

which borrowed money is to be spent (Facility use requirements)

"159GZZZZB.(1) For the borrowing to be a direct infrastructure borrowing, it

is also necessary that, at the time of the borrowing, the borrower intends:

(a) that it will own, use and effectively control the use of, the

facilities on which the money will be spent (other than by leasing them)

principally for assessable income purposes; and

(b) that the use for assessable income purposes will continue for at least

25 years after the first such use by the body of any of the facilities

concerned; and

16D to apply to any of the facilities concerned.

(Crown leases)

"(2) For the purposes of paragraph (1)(a), if:

(a) the borrower intends that any of the facilities concerned will be a

fixture on land that is the subject of a Crown lease; and

(b) it can reasonably be expected, when the borrowing takes place, that the

Crown lease will run, or (because of law, custom or otherwise) be extended or

renewed to run, for at least the 25 year assessable use period;

then the borrower is taken to intend to own the facility concerned.

Infrastructure facilities

(3 kinds of facilities)

"159GZZZZC.(1) There are 3 kinds of infrastructure facility.

(Land transport facility)

"(2) One kind of infrastructure facility is a land transport facility, that

is to say, a road, tunnel, bridge, or railway line, or a combination of these,

in Australia that is to be used for the transport of the public or their goods

at a charge (whether the transport is by the member of the public concerned or

by another person).

(Seaport facility)

"(3) Another kind of infrastructure facility is a seaport facility, that is

to say, a wharf, or dock, in Australia for the public to embark or disembark,

or for loading or unloading their cargo, onto or from seagoing vessels, where

there is a charge for the transport of the public or their cargo on the

vessels.

(Electricity generating facility)

"(4) The other kind of infrastructure facility is an electricity generating

facility in Australia, where the electricity generated is primarily or

principally for sale to the public through the public electricity grid.

Related facilities

(Basic test)

"159GZZZZD.(1) Related facilities are facilities in Australia that are

reasonably necessary for an infrastructure facility to be able to operate for

the purpose for which it was constructed.

(Examples)

"(2) The following are examples of facilities that are related facilities in

respect of an infrastructure facility, provided that they pass the test in

subsection (1):

(a) plant and other equipment (for example, rolling stock in the case of a

railway) for use in operating the infrastructure facility;

(b) buildings or other structures from which staff are to operate the

infrastructure facility;

stores or equipment;

(d) stations or passenger terminals;

(e) maintenance facilities.

(Access roads etc. excluded)

"(3) In the case of any infrastructure facility, a road, bridge, tunnel or

railway to provide access to the infrastructure facility is not a related

facility (or part of the infrastructure facility itself).

(Dry-docks etc. excluded)

"(4) In the case of a seaport facility, a dry-dock or other facility for

repair or maintenance of vessels is not a related facility (or part of the

infrastructure facility itself).

(Dams etc. excluded)

"(5) In the case of an electricity generating facility, the following are

not related facilities (or part of the infrastructure facility itself):

(a) a dam or coal mine;

(b) facilities for transporting fuel to the site at which the electricity

generating takes place;

electricity generated to the public electricity grid.

"Subdivision B - Tax effects of infrastructure borrowings Infrastructure

borrowings to be non-assessable and non-deductible

(Basic non-assessability/non-deductibility provision)

"159GZZZZE.(1) No amount is included in, or allowable as a deduction from,

the assessable income of a taxpayer of a year of income in respect of:

(a) payments of principal or interest, or in the nature of interest, made

or liable to be made by or to the taxpayer under an infrastructure borrowing

during the exemption period in relation to the borrowing; or

(b) amounts received or receivable, or paid or payable, by the taxpayer by

way of consideration for the acquisition or disposal, during the exemption

period in relation to an infrastructure borrowing, of:

(i) rights or liabilities in respect of the borrowing;

(ii) any bond, debenture, discounted security, or other

document evidencing indebtedness, in respect of the borrowing; or

in paragraph (b), or in respect of the repayment of an infrastructure

borrowing by or to the taxpayer during the exemption period in relation to the

borrowing; or

(d) the writing off or extinguishing of the whole or part of any debt that

consists of a payment or amount to which this subsection applies that is

liable to be made to, or is receivable by, the taxpayer.

(Special provision relating to Division 16E)

"(2) No amount is included in, or allowable as a deduction from, the

assessable income of a taxpayer of a year of income:

(a) under section 159GQ in relation to the exemption period in respect of

an infrastructure borrowing; or

(b) under subsection 159GR(2) in relation to any payment made or liable to

be made to the taxpayer during the exemption period in respect of an

infrastructure borrowing; or

period in respect of an infrastructure borrowing, of:

(i) rights or liabilities in respect of the borrowing;

(ii) any bond, debenture, discounted security, or other

document evidencing indebtedness, in respect of the borrowing; or

(d) under section 159GT in respect of the exemption period in relation to

an infrastructure borrowing.

(Deemed re-acquisition after exemption period)

"(3) For the purposes of this Act:

(a) if a taxpayer holds a bond, debenture, discounted security, or other

document evidencing indebtedness, in respect of an infrastructure borrowing -

that bond, debenture, discounted security or other document; or

(b) in any other case - all rights of a taxpayer under any infrastructure

borrowing;

is or are taken to have been disposed of by the taxpayer immediately before

the end of the exemption period and to have been re-acquired by the taxpayer

immediately after the end of the period for their market value at that time.

Tax exemption to be disregarded for certain purposes

"159GZZZZF. The exclusion under section 159GZZZZE of amounts from assessable

income is to be disregarded for the purpose of applying any provision of this

Act to determine allowable deductions in respect of infrastructure borrowings

(other than deductions to which section 159GZZZZE applies).".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 35

Return of capital on investment in trust

35. Section 160ZM of the Principal Act is amended by adding at the end of

the definition of "adjusted payment" in subsection (3A) the following

paragraph:

"; (d) an amount that, because of section 159GZZZZE (which relates to

infrastructure borrowings), is not included in assessable income.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 36

Application of Division

36. The amendments made by this Division apply to an infrastructure

borrowing, where all of the following conditions are satisfied:

(a) the borrowing takes place on or after 1 July 1992;

(b) no contract for spending any of the borrowed money was entered into

before 27 February 1992;

spent began before 1 July 1992.

Division 7 - Amendments relating to depreciation of property installed

on leased Crown land

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 37

37. After section 54 of the Principal Act the following section is inserted:

Property installed on leased Crown land - lessee deemed to be owner etc.

(When section applies)

"54AA.(1) This section applies if:

(a) a taxpayer is the lessee of land under a Crown lease; and

(b) a unit of property is affixed to the land; and

and

(d) if the property was not already affixed to the land at the time when

the taxpayer acquired the lease:

(i) the taxpayer acquired or constructed the property

and affixed it to the land; and

(ii) at the time when the property was first affixed to

the land as mentioned in subparagraph (i), the taxpayer had not entered into a

scheme:

(A) under which a person other than the lessor would

become the owner of the property at a later time; or

(B) where it would be concluded that a purpose of the

scheme was to provide finance to enable a person other than the taxpayer or

the lessor to become the end-user of the property for the whole, or a

substantial part of, the effective life of the property; and

(e) if the property was already affixed to the land at the time when the

taxpayer acquired the lease:

(i) the taxpayer acquired the lease from a prior

holder of the lease; and

(ii) either:

(A) the prior holder acquired or constructed the property

and affixed the property to the land; or

(B) if there have been 2 or more prior successive holders

of the lease - one of those prior successive holders acquired or constructed

the property and affixed the property to the land; and

(iii) at the time when the taxpayer acquired the lease,

the taxpayer had not entered into a scheme:

(A) under which a person other than the lessor would

become the owner of the property at a later time; or

(B) where it would be concluded that a purpose of the

scheme was to provide finance to enable a person other than the taxpayer or

the lessor to become the end-user of the property for the whole, or a

substantial part of, the remainder of the effective life of the property.

(Modification of depreciation provisions)

"(2) The provisions of this Act relating to depreciation apply as if:

(a) the taxpayer were the owner of the property instead of the lessor; and

(b) if the taxpayer acquired the lease from a prior holder of the lease and

the property was already affixed to the land at the time when the taxpayer

acquired the lease:

(i) the cost to the taxpayer of the property were

equal to so much of the consideration paid or given by the taxpayer for the

acquisition of the lease as is attributable to the property; and

(ii) the taxpayer had acquired the property under a

contract entered into at the time the taxpayer acquired the lease; and

(i) the lease expires or is surrendered; and

(ii) the expiry or surrender is not followed by the

grant to the taxpayer, or to an associate of the taxpayer, of:

(A) one or more fresh Crown leases of the land; or

(B) an estate in fee simple in the land;

the taxpayer had disposed of the property to the lessor, and the lessor had

acquired the property from the taxpayer, for:

(iii) if the taxpayer receives, or is entitled to

receive, consideration in respect of the expiry or surrender - a consideration

equal to so much of the consideration received or receivable by the taxpayer

as is attributable to the property; or

(iv) in any other case - no consideration; and

(d) if:

(i) the lease expires or is surrendered; and

(ii) the expiry or surrender is followed by the grant

to an associate of the taxpayer of:

(A) one or more fresh Crown leases of the land; or

(B) an estate in fee simple in the land;

the taxpayer had disposed of the property to the lessor, and the lessor had

acquired the property from the taxpayer, for a consideration equal to the

amount that would have been the market value of the property immediately

before the expiry or surrender if the taxpayer had held an estate in fee

simple in the land instead of the lease; and

(e) if:

(i) the lessor terminates the lease; and

(ii) the termination is not followed by the grant to

the taxpayer, or to an associate of the taxpayer, of:

(A) one or more fresh Crown leases of the land; or

(B) an estate in fee simple in the land;

the taxpayer had disposed of the property to the lessor, and the lessor had

acquired the property from the taxpayer, for:

(iii) if the taxpayer receives, or is entitled to

receive, consideration in respect of the termination - a consideration equal

to so much of the consideration received or receivable by the taxpayer as is

attributable to the property; or

(iv) in any other case - no consideration; and

(f) if:

(i) the lessor terminates the lease; and

(ii) the termination is followed by the grant to an

associate of the taxpayer of:

(A) one or more fresh Crown leases of the land; or

(B) an estate in fee simple in the land;

the taxpayer had disposed of the property to the lessor, and the lessor had

acquired the property from the taxpayer, for a consideration equal to the

amount that would have been the market value of the property immediately

before the termination if the taxpayer had held an estate in fee simple in the

land instead of the lease; and

(g) if the taxpayer disposes of the lease to another person - the taxpayer

had disposed of the property to the other person for a consideration equal to

so much of the consideration paid or given by the other person for the

acquisition of the lease as is attributable to the property.

(Modification of market value)

"(3) In working out the following amounts in relation to the property:

(a) the value mentioned in paragraph 59(3)(d);

(b) the market value mentioned in subsection 59(4);

it is to be assumed that the taxpayer had held an estate in fee simple in the

land instead of the lease.

(Modification of section 51AD and Division 16D)

"(4) Section 51AD, and Division 16D, to the extent to which that section and

that Division relate to depreciation, apply as if the taxpayer were the owner

of the property instead of the lessor.

(Expiry or surrender of certain leases to be ignored)

"(5) For the purposes of the application of this section to a unit of

property affixed to land, if:

(a) a taxpayer is the lessee of the land under a Crown lease; and

(b) the Crown lease expires or is surrendered or terminated; and

the lease or leases mentioned in paragraph (c) are taken to be a continuation

of the lease mentioned in paragraph (b).

(Extended meaning of "associate" - government authorities)

"(6) For the purposes of this section, but without limiting the meaning of

the expression 'associate':

(a) the Commonwealth is taken to be an associate of each authority of the

Commonwealth; and

(b) an authority of the Commonwealth is taken to be an associate of each

other authority of the Commonwealth; and

and

(d) an authority of a State is taken to be an associate of each other

authority of the State; and

(e) a Territory is taken to be an associate of each authority of the

Territory; and

(f) an authority of a Territory is taken to be an associate of each other

authority of the Territory.

(Extended meaning of "associate" - former partnerships)

"(7) For the purposes of this section, the definition of 'associate' in

section 26AAB has effect as if:

(a) subparagraph (a)(ii) of that definition were omitted and the following

subparagraph were substituted:

'(ii) a partner of the taxpayer or a partnership in

which the taxpayer is or was a partner (whether or not the partnership still

exists);'; and

(b) subparagraph (b)(i) of that definition were omitted and the following

subparagraph were substituted:

'(i) a partner of the taxpayer or a partnership in

which the taxpayer is or was a partner (whether or not the partnership still

exists);'.

(Definitions)

"(8) In this section:

'associate' has the same meaning as in section 26AAB;

'Crown lease' has the same meaning as in section 160K;

'effective life' has the same meaning as in section 54A;

'scheme' includes:

(a) any agreement, arrangement, understanding, promise or undertaking:

(i) whether expressed or implied; or

(ii) whether or not enforceable, or intended to be

enforceable, by legal proceedings; and

(b) any scheme, plan, proposal, action, course of action or course of

conduct, whether unilateral or otherwise.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 38

Application of amendments relating to depreciation of property installed on

leased Crown land (Definitions)

38.(1) In this section:

"amended Act" means the Principal Act as amended by this Act;

"first year of income", in relation to a unit of property owned by a taxpayer,

means the year of income for which depreciation is first allowable to the

taxpayer in relation to the property;

"interim Act" means the Principal Act as in force immediately before the

commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1992;

"pre-27 February 1992 property", in relation to a taxpayer, has the same

meaning as in section 66 of the Taxation Laws Amendment Act (No. 2) 1992.

(General application of amendments: post-26 February 1992 periods)

(2) Section 54AA of the amended Act applies in calculating the depreciation

allowable to a taxpayer in relation to a unit of property in respect of so

much of a year of income as occurred on or after27 February 1992.

(Modified basis for calculating depreciation of pre-27 February 1992

property)

(3) If:

(a) section 54AA of the amended Act operates so as to deem a taxpayer to be

the owner of a unit of property; and

(b) the property is pre-27 February 1992 property of the taxpayer; the

provisions of the Income Tax Assessment Act 1936 relating to depreciation

apply as if:

Amendment Act (No. 4) 1988 did not apply to the taxpayer in relation to the

property - those amendments applied to the taxpayer in relation to the

property; and

(d) if the depreciation allowable to the taxpayer in respect of the

property for the first year of income was calculated in accordance with

paragraph 56(1)(a) of the interim Act - the taxpayer had acquired the property

for a consideration equal to the amount that would have been the depreciated

value of the property immediately before 27 February 1992 if:

(i) section 54AA of the amended Act had applied in

calculating the depreciation allowable to the taxpayer in relation to the

property in respect of so much of a year of income as occurred before 27

February 1992; and

(ii) subsection 55(5) of the interim Act (which deals

with broadbanding) had not been enacted; and

(iii) repealed sections 57AA, 57AB, 57AC, 57AD, 57AE,

57AH and 57AL of the Principal Act (which dealt with special depreciation) had

not been enacted; and

(iv) section 57AK of the amended Act (which deals with

special depreciation) had not been enacted; and

(e) if paragraph (d) does not apply - depreciation were not allowable to the

taxpayer in relation to the property in respect of so much of the cost of the

property as would have been allowable to the taxpayer in respect of depreciation in

relation to the property if:

(i) section 54AA of the amended Act had applied in

calculating the depreciation allowable to the taxpayer in relation to the

property in respect of so much of a year of income as occurred before 27

February 1992; and

(ii) subsection 55(5) of the interim Act (which deals

with broadbanding) had not been enacted; and

(iii) repealed sections 57AA, 57AB, 57AC, 57AD, 57AE,

57AH and 57AL of the Principal Act (which dealt with special depreciation) had

not been enacted; and

(iv) section 57AK of the amended Act (which deals with

special depreciation) had not been enacted; and

(v) section 61 of the amended Act (which deals with

property used partly for income-producing purposes) had not been enacted; and

(f) if paragraph (d) does not apply - the depreciated value of the property

at a time when the property was owned by the taxpayer were worked out as if

the assumptions set out in subparagraphs (e)(i) to (v) (inclusive) were

made.

(Paragraph (3)(d) has effect in spite of subparagraph 54AA(2)(b)(i) of amended

Act)

(4) Paragraph (3)(d) of this section has effect in spite of subparagraph

54AA(2)(b)(i) of the amended Act.

Division 8 - Amendments relating to deductions for capital expenditure

on traveller accommodation

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 39

Interpretation

39. Section 124ZA of the Principal Act is amended:

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

" 'post-26 February 1992 qualifying apartment expenditure' means qualifying

apartment expenditure where the building, or the extension, alteration or

improvement, in respect of the construction of which the qualifying apartment

expenditure was incurred commenced to be constructed after 26 February 1992;

'post-26 February 1992 qualifying hotel expenditure' means qualifying hotel

expenditure where the building, or the extension, alteration or improvement,

in respect of the construction of which the qualifying hotel expenditure was

incurred commenced to be constructed after 26 February 1992;

'pre-18 July 1985 qualifying apartment expenditure' means qualifying apartment

expenditure where the building, or the extension, alteration or improvement,

in respect of the construction of which the qualifying apartment expenditure

was incurred commenced to be constructed before 18 July 1985;

'pre-18 July 1985 qualifying hotel expenditure' means qualifying hotel

expenditure where the building, or the extension, alteration or improvement,

in respect of the construction of which the qualifying hotel expenditure was

incurred commenced to be constructed before 18 July 1985.";

(b) by omitting from subsection (16) "qualifying hotel expenditure or"

(first occurring) and substituting "pre-18 July 1985 qualifying hotel

expenditure or pre-18 July 1985";

"(16A) For the purposes of this Division, if there is an amount of post-26

February 1992 qualifying hotel expenditure in respect of an eligible building,

the amount of so much of the residual capital expenditure at a particular time

('relevant time') in relation to that qualifying hotel expenditure as is

attributable to the hotel part or a part ('relevant part') of the hotel part

is the amount (if any) worked out by:

(a) identifying the period:

(i) commencing on the day on which the hotel part or

relevant part was first used by any person for any purpose after completion of

the relevant construction; and

(ii) ending at the relevant time; and

(b) calculating, for each day (if any) in that period during the whole of

which any part ('4% part') of the hotel part or relevant part, as the case may

be, was dealt with in the prescribed manner by a taxpayer who owned that part

of the hotel part or relevant part, the amount worked out using the formula:

Portion of qualifying expenditure X 0.04

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying hotel

expenditure as is attributable to the 4% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

which any part ('2.5% part') of the hotel part or relevant part, as the case

may be, was not dealt with in the prescribed manner by a taxpayer who owned

that part of the hotel part or relevant part, the amount worked out using the

formula:

Portion of qualifying expenditure x 0.025

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying hotel

expenditure as is attributable to the 2.5% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

(d) adding the amounts calculated under paragraphs (b) and (c); and

(e) deducting the result of the addition mentioned in paragraph (d) from so

much of the amount of that qualifying hotel expenditure as is attributable to

the hotel part or relevant part, as the case requires.

"(16B) For the purposes of this Division, if there is an amount of post-26

February 1992 qualifying apartment expenditure in respect of an eligible

building, the amount of so much of the residual capital expenditure at a

particular time ('relevant time') in relation to that qualifying apartment

expenditure as is attributable to the apartment part or a part ('relevant

part') of the apartment part is the amount (if any) worked out by:

(a) identifying the period:

(i) commencing on the day on which the apartment part

or relevant part was first used by any person for any purpose after completion

of the relevant construction; and

(ii) ending at the relevant time; and

(b) calculating, for each day (if any) in that period during the whole of

which any part ('4% part') of the apartment part or relevant part, as the case

may be, was dealt with in the prescribed manner by a taxpayer who owned that

part of the apartment part or relevant part, the amount worked out using the

formula:

Portion of qualifying expenditure 0.04

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying apartment

expenditure as is attributable to the 4% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

which any part ('2.5% part') of the apartment part or relevant part, as the

case may be, was not dealt with in the prescribed manner by a taxpayer who

owned that part of the apartment part or relevant part, the amount worked out

using the formula:

Portion of qualifying expenditure 0.025

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying apartment

expenditure as is attributable to the 2.5% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

(d) adding the amounts calculated under paragraphs (b) and (c); and

(e) deducting the result of the addition mentioned in paragraph (d) from so

much of the amount of that qualifying apartment expenditure as is attributable

to the apartment part or relevant part, as the case requires.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 40

Qualifying expenditure

40. Section 124ZB of the Principal Act is amended:

(a) by omitting from paragraphs (1)(a) and (2)(a) "in Australia" (wherever

occurring);

(b) by omitting paragraph (1)(c) and substituting the following paragraph:

"(c) either:

(i) the building or the extension, alteration or

improvement, as the case may be, commenced to be constructed after 21 August

1979 and before 18 July 1985 and construction of the building or of the

extension, alteration or improvement, as the case may be, has been completed;

(ii) the building or the extension, alteration or

improvement, as the case may be, commenced to be constructed after 26 February

1992 and construction of the building or of the extension, alteration or

improvement, as the case may be, has been completed;";

"(b) either:

(i) the building or the extension, alteration or

improvement, as the case may be, commenced to be constructed after 21 August

1979 and before 18 July 1985 and construction of the building or of the

extension, alteration or improvement, as the case may be, has been completed;

(ii) the building or the extension, alteration or

improvement, as the case may be, commenced to be constructed after 26 February

1992 and construction of the building or of the extension, alteration or

improvement, as the case may be, has been completed;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 41

Deductions in respect of capital expenditure

41. Section 124ZC of the Principal Act is amended:

(a) by inserting in paragraphs (1)(a), (2)(a), (3)(a) and (4)(a) "pre-18

July 1985" before "qualifying";

(b) by inserting after subsection (2) the following subsection:

"(2A) Subject to this section and section 124ZD, if:

(a) there is an amount of post-26 February 1992 qualifying hotel

expenditure in respect of a building; and

(b) during a period in a year of income, a taxpayer:

(i) was the owner of the hotel part and used any part

of the hotel part for the purpose of producing assessable income; or

(ii) was the owner of a part of the hotel part and used

any part of that part of the hotel part for the purpose of producing

assessable income;

a deduction is allowable to the taxpayer for the year of income equal to the

amount worked out by:

which any part ('4% part') of the hotel part owned by the taxpayer was dealt

with by the taxpayer in the prescribed manner, the amount worked out using the

formula:

Portion of qualifying expenditure

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 42

Reduction of deductions

42. Section 124ZD of the Principal Act is amended:

(a) by omitting from paragraph (5)(a) "the whole or a part of" and

substituting "so much of";

(b) by inserting in paragraph (5)(a) "as is attributable to the hotel part,

a part of the hotel part, the apartment part or a part of the apartment part"

after "building" (last occurring).

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 43

Deduction in respect of destruction of building

43. Section 124ZE of the Principal Act is amended:

(a) by omitting from paragraphs (1)(e), (2)(e), (3)(e) and (4)(e) "in the

prescribed manner" (wherever occurring) and substituting "in the eligible

manner";

(b) by inserting in paragraphs (1)(f) and (3)(f) "so much of" before "the

residual capital expenditure";

after "qualifying hotel expenditure";

(d) by inserting in paragraph (3)(f) "as is attributable to the apartment

part" after "qualifying apartment expenditure";

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

"(7) For the purposes of the application of this section to an amount of

qualifying hotel expenditure or qualifying apartment expenditure in respect of

a building, a part of the building is taken to be used in an eligible manner

if:

(a) in the case of pre-18 July 1985 qualifying hotel expenditure or pre-18

July 1985 qualifying apartment expenditure - the part of the building was used

in the prescribed manner; or

(b) in the case of post-26 February 1992 qualifying hotel expenditure or

post-26 February 1992 apartment expenditure - the part of the building was

used for the purpose of producing assessable income.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 44

Qualifying expenditure

44. Section 124ZG of the Principal Act is amended by inserting after

subsection (2B) the following subsection:

"(2C) If there is an amount of post-26 February 1992 qualifying hotel

expenditure, or post-26 February 1992 qualifying apartment expenditure, in

respect of a building (within the meaning of Division 10C), no part of the

amount of qualifying hotel expenditure, or qualifying apartment expenditure,

as the case may be, is taken to be qualifying expenditure in respect of a

building.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 45

Keeping of records

45. Section 262A of the Principal Act is amended by inserting after

subsection (4AE) the following subsections:

"(4AF) If:

(a) a person (the 'transferor') disposes of, or of a lease of, any part of

a building within the meaning of Division 10C of Part III to another person

(the 'transferee'); and

(b) either:

(i) one or more deductions have been allowed or are

allowable to the transferor under subsection 124ZC(2A) or (4A) in respect of

qualifying hotel expenditure or qualifying apartment expenditure in respect of

the building; or

(ii) if there have been one or more prior successive

owners or lessees of the building - one or more deductions have been allowed

or are allowable to any of the prior successive owners or lessees under

subsection 124ZC(2A) or (4A) in respect of qualifying hotel expenditure or

qualifying apartment expenditure in respect of the building; then:

in subsection (4AG), a notice containing such information about the

transferor's holding or lease of the building as will enable the transferee to

work out how Division 10C of Part III will apply to the transferee's holding

or lease of the building; and

(d) the transferee must retain the notice, or a copy, until the end of 5

years after the earlier of:

(i) the transferee ceasing to be the owner or lessee of

the part of the building; or

(ii) the destruction of the building.

"(4AG) The notice referred to in subsection (4AF) must be given within 6

months after the later of the following:

(a) the end of the year of income of the transferee in which the disposal

occurred;

(b) the commencement of subsection (4AF);

or within such further period as the Commissioner allows.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 46

Application of amendments relating to deductions for traveller accommodation

46. The amendments made by paragraph 40(a) apply in relation to expenditure

incurred in respect of the construction of a building, or an extension,

alteration or improvement to a building, if the construction commenced after

26 February 1992.

Division 9 - Amendments relating to deductions for capital expenditure

on industrial buildings

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 47

Interpretation

47. Section 124ZF of the Principal Act is amended:

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

" 'eligible industrial manner', in relation to a building, has the meaning

given by section 124ZFA;

'post-26 February 1992 qualifying expenditure' means qualifying expenditure

where the building, or the extension, alteration or improvement, in respect of

the construction of which the qualifying expenditure was incurred commenced to

be constructed after 26 February 1992;

'pre-27 February 1992 qualifying expenditure' means qualifying expenditure

where the building, or the extension, alteration or improvement, in respect of

the construction of which the qualifying expenditure was incurred commenced to

be constructed before 27 February 1992;";

(b) by inserting in subsection (11) "pre-27 February 1992" before

"qualifying expenditure" (first occurring);

"(11A) For the purposes of this Division, if there is an amount of post-26

February 1992 qualifying expenditure in respect of an eligible building, the

amount of so much of the residual capital expenditure at a particular time

('relevant time') in relation to that qualifying expenditure as is

attributable to the prescribed part or a part ('relevant part') of the

prescribed part is the amount (if any) worked out by:

(a) identifying the period:

(i) commencing on the day on which the prescribed part

or relevant part was first used by any person for any purpose after completion

of the relevant construction; and

(ii) ending at the relevant time; and

(b) calculating, for each day (if any) in that period during the whole of

which any part ('4% part') of the prescribed part or relevant part, as the

case may be, was dealt with in an eligible industrial manner by a taxpayer who

owned that part of the prescribed part or relevant part, the amount worked out

using the formula:

Portion of qualifying expenditure 0.04

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying

expenditure as is attributable to the 4% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

of which any part ('2.5% part') of the prescribed part or relevant part, as

the case may be, was not dealt with in an eligible industrial manner by a

taxpayer who owned that part of the prescribed part or relevant part, the

amount worked out using the formula:

Portion of qualifying expenditure 0.025

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying

expenditure as is attributable to the 2.5% part;

'Days in year' means the number of days in the financial year in which that

day occurred; and

(d) adding the amounts calculated under paragraphs (b) and (c); and

(e) deducting the result of the addition mentioned in paragraph (d) from so

much of the amount of that qualifying expenditure as is attributable to the

prescribed part or relevant part, as the case requires.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 48

48. After section 124ZF of the Principal Act the following section is

inserted:

When building used in eligible industrial manner

(Purposes of section)

"124ZFA.(1) This section has effect for the purposes of the application of

this Division in determining:

(a) the amount of any deduction allowable under section 124ZH or 124ZK; or

(b) the amount of the residual capital expenditure;

in respect of an amount of qualifying expenditure in respect of a building

other than a structural improvement that is taken to be a building because of

section 124ZFB.

(Eligible industrial manner)

"(2) A person is taken to have dealt with a part of a building in an

eligible industrial manner at a particular time if, at that time:

(a) the person used that part of the building for the purpose of producing

assessable income; and

(b) that part of the building was used (whether by that person or by

another person):

(i) wholly or principally for eligible industrial

activities; or

(ii) in the provision of meal rooms, rest-rooms,

first-aid rooms, change-rooms or similar facilities wholly or principally for

use by:

(A) workers employed wholly or principally to undertake

the work directly involved in carrying out eligible industrial activities;

(B) the immediate supervisors of those workers; or

(iii) wholly or principally as office accommodation for

the immediate supervisors of those workers.

(Eligible industrial activities)

"(3) A reference in this section to eligible industrial activities is a

reference to:

(a) any of the following activities ('core activities') carried on by a

person:

(i) operations by means of which:

(A) manufactured goods are derived from other goods

(including other manufactured goods) by the person or by other persons on

whose behalf the person performs services; or

(B) manufactured goods manufactured by the person or by

other persons are (otherwise than by packing, placing in containers or

labelling) brought into or maintained in the form or condition in which they

are sold or used by the person or by those other persons, as the case may be;

(ii) the concentration of a metal or the treatment or

processing of a metal after its concentration; or

(iii) in the case of a metal not requiring

concentration - the application to the metal of a treatment or process which,

if the metal had required concentration, would not have been applied until

after the concentration;

(iv) the refining of petroleum;

(v) the scouring or carbonising of wool;

(vi) the milling of timber;

(vii) the freezing of primary products;

(viii) the operations of:

(A) printing; or

(B) lithographing; or

(D) any similar process;

in the course of carrying on a business as a publisher, printer, lithographer

or engraver;

(ix) the curing of meat or fish;

(x) the production of chilled or frozen meat;

(xi) the pasteurising of milk;

(xii) the canning or bottling of foodstuffs;

(xiii) the production of electric current, hydraulic

power, steam, compressed air or gases (other than natural gas) for the

purposes of:

(A) sale by the person; or

(B) use wholly or principally in carrying on an activity

mentioned in any of the preceding subparagraphs of this paragraph; or

(b) any of the following activities carried on by a person:

(i) the packing, placing in containers or labelling of

any goods resulting from the carrying on by the person of core activities;

(ii) the disposal of waste substances resulting from

the carrying on by the person of core activities;

(iii) the cleansing or sterilising of bottles, vats or

other containers used by the person to store:

(A) goods to be used by the person in carrying on core

activities; or

(B) goods resulting from the carrying on by the person of

core activities;

(iv) the assembly, maintenance, cleansing, sterilising

or repair of property used by the person in carrying on core activities;

(v) the storage, within premises in which the taxpayer

carries on core activities or premises contiguous to such premises, of:

(A) goods to be used by the person in carrying on core

activities; or

(B) goods in relation to which the taxpayer has

commenced, but not finally completed, the carrying on of core activities; or

the person;

but does not include the preparation of food or drink (whether for consumption

on the premises where it is prepared or elsewhere) in, or in premises occupied

in connection with:

(d) a boarding house; or

(e) a catering establishment; or

(f) a restaurant, cafe, milk-bar or coffee shop; or

(g) a retail shop; or

(h) any similar establishment.

(Definitions)

"(4) In this section:

'concentration', in relation to a metal, means the separation of the metal

from its ore by any process, but does not include crushing, grinding,

breaking, screening or sizing in order to enable or facilitate the carrying

out of any such process;

'eligible industrial activity' has the meaning given by subsection (3);

'goods' includes:

(a) liquids, gases and substances; and

(b) ships and aircraft;

'manufactured goods' includes goods manufactured for the purpose of use as

parts or materials in the manufacture of other goods;

'metal' includes a compound of a metal.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 49

Deductions in respect of qualifying expenditure

49. Section 124ZH of the Principal Act is amended:

(a) by inserting in paragraphs (1)(a) and (2)(a) "pre-27 February 1992"

before "qualifying expenditure";

(b) by inserting after subsection (2) the following subsection:

"(2A) Subject to this section and section 124ZJ, if:

(a) there is an amount of post-26 February 1992 qualifying expenditure in

respect of a building; and

(b) during a period in a year of income, a taxpayer:

(i) was the owner of the prescribed part and dealt

with any part of the prescribed part in the prescribed manner; or

(ii) was the owner of a part of the prescribed part and

dealt with any part of that part of the prescribed part in the prescribed

manner;

a deduction is allowable to the taxpayer for the year of income equal to the

amount worked out by:

which any part ('4% part') of the prescribed part owned by the taxpayer was

dealt with by the taxpayer in an eligible industrial manner, the amount worked

out using the formula:

Portion of qualifying expenditure 0.04

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying

expenditure as is attributable to the 4% part;

'Days in year' means the number of days in the year of income; and

(d) calculating, for each day (if any) in that period during any part of

which any part ('2.5% part') of the prescribed part owned by the taxpayer was

not dealt with by the taxpayer in an eligible industrial manner but was dealt

with by the taxpayer in the prescribed manner, the amount worked out using the

formula:

Portion of qualifying expenditure 0.025

Days in year

where:

'Portion of qualifying expenditure' means so much of the qualifying

expenditure as is attributable to the 2.5% part;

'Days in year' means the number of days in the year of income; and

(e) adding the amounts calculated under paragraphs (c) and (d).";

"subsection (1) or (2)";

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

"(3A) A deduction allowable to a taxpayer under subsection (2A) in relation

to a year of income in respect of so much of an amount of qualifying

expenditure as is attributable to the prescribed part, or the part of the

prescribed part, mentioned in paragraph (2A)(b), must not exceed so much of

the residual capital expenditure at whichever of the following times is

applicable:

(a) if the taxpayer's ownership of the prescribed part, or the part of the

prescribed part, as the case may be, commenced during the year of income -

immediately after the time when that ownership commenced; or

(b) in any other case - the beginning of the year of income;

in relation to the amount of the qualifying expenditure as is attributable to

the prescribed part, or the part of the prescribed part, as the case

requires.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 50

Reduction of deductions

50. Section 124ZJ of the Principal Act is amended:

(a) by omitting from paragraph (2)(a) "the whole or a part of" and

substituting "so much of";

(b) by inserting in paragraph (2)(a) "as is attributable to the prescribed

part or a part of the prescribed part" after "building" (last occurring).

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 51

Deduction in respect of destruction of building

51. Section 124ZK of the Principal Act is amended:

(a) by inserting in paragraph (1)(f) "so much of" before "the residual

capital expenditure";

(b) by inserting in paragraph (1)(f) "as is attributable to the prescribed

part" after "qualifying expenditure".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 52

Keeping of records

52. Section 262A of the Principal Act is amended by inserting before

subsection (5) the following subsections:

"(4AH) If:

(a) a person (the 'transferor') disposes of, or of a lease of, any part of

a building within the meaning of Division 10D of Part III to another person

(the 'transferee'); and

(b) either:

(i) one or more deductions have been allowed or are

allowable to the transferor under subsection 124ZH(2A) in respect of

qualifying expenditure in respect of the building; or

(ii) if there have been one or more prior successive

owners or lessees of the building - one or more deductions have been allowed

or are allowable to any of the prior successive owners or lessees under

subsection 124ZH(2A) in respect of qualifying expenditure in respect of the

building;

then:

in subsection (4AJ), a notice containing such information about the

transferor's holding or lease of the building as will enable the transferee to

work out how Division 10D of Part III will apply to the transferee's holding

or lease of the building; and

(d) the transferee must retain the notice, or a copy, until the end of 5

years after the earlier of:

(i) the transferee ceasing to be the owner or lessee

of the part of the building; or

(ii) the destruction of the building.

"(4AJ) The notice referred to in subsection (4AH) must be given within 6

months after the later of the following:

(a) the end of the year of income of the transferee in which the disposal

occurred;

(b) the commencement of subsection (4AH);

or within such further period as the Commissioner allows.".

Division 10 - Amendments relating to deductions for capital expenditure

on income-producing structural improvements

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 53

Heading to Division 10D of Part III

53. The heading to Division 10D of Part III of the Principal Act is amended

by adding at the end "and Structural Improvements".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 54

Interpretation

54. Section 124ZF of the Principal Act is amended by inserting the following

definition in subsection (1):

" 'building' includes a structural improvement covered by section 124ZFB;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 55

Qualifying expenditure

55. Section 124ZG of the Principal Act is amended by inserting in subsection

(3) ", 75D, 124F" after "75B".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 56

56. Before section 124ZG of the Principal Act the following section is

inserted:

Division has effect as if certain structural improvements were buildings

(Structural improvements to which this section applies)

"124ZFB.(1) This section applies to a structural improvement if:

(a) apart from this section, the structural improvement is not a building;

and

(b) the structural improvement does not consist of earthworks that:

(i) are not reasonably likely to require replacement

because of physical deterioration (assuming that the earthworks are maintained

in reasonably good order and condition); and

(ii) can be economically maintained in reasonably good

order and condition for an indefinite period; and

(iii) are not integral to the construction of things

that, apart from this paragraph, are structural improvements to which this

section applies;

(for example: unlined channels; unlined basins; earth tanks; and dirt tracks);

and

create artificial landscapes (for example: grass golf course fairways and

greens; gardens; and grass sports fields).

(Examples of structural improvements to which this section applies)

"(2) The following are examples of structural improvements to which this

section applies:

(a) sealed roads, sealed driveways or sealed car parks;

(b) bridges;

(d) pipelines;

(e) lined road tunnels;

(f) retaining walls;

(g) fences;

(h) concrete or rock dams;

(i) artificial sports fields.

(Structural improvements deemed to be buildings)

"(3) This Division has effect as if the structural improvement were a

building.

(Application of section - post-26 February 1992 structural improvements)

"(4) This section applies in relation to expenditure incurred in respect of

the construction of a structural improvement, or an extension, alteration or

improvement to a structural improvement, if the construction commenced after

26 February 1992.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 57

Application of amendments relating to structural improvements

57. The amendment made by section 55 applies in relation to expenditure

incurred in respect of the construction of a structural improvement, or an

extension, alteration or improvement to a structural improvement, if the

construction commenced after 26 February 1992.

Division 11 - Amendments relating to development allowance

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 58

Officers to observe secrecy

58. Section 16 of the Principal Act is amended by inserting after paragraph

(4)(hb) the following paragraph:

"(hba) the Development Allowance Authority, for the purpose of the

administration of the Development Allowance Authority Act 1992 or of the

prosecution provisions within the meaning of that Act;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 59

Deductions not allowable for entertainment expenses

59. Section 51AE of the Principal Act is amended by omitting from subsection

(14) "(other than Subdivision B of this Division)".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 60

Special depreciation on trading ships

60. Section 57AM of the Principal Act is amended by omitting from paragraph

(33)(h) "and, if the ship was acquired new by the lessee under a contract

entered into on or after 1 January 1976 or was constructed by the lessee and

the construction commenced on or after that date, for the purposes of

Subdivision B".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 61

Heading to Subdivision B of Division 3 of Part III

61. The heading to Subdivision B of Division 3 of Part III of the Principal

Act is amended by omitting "Investment Allowance" and substituting

"Development Allowance".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 62

62. Before section 82AA of the Principal Act the following section is

inserted:

Object

"82AAAA.(1) The object of this Subdivision and the Development Allowance

Authority Act 1992 is to provide tax incentives for investment in large

Australian projects which cost $50 million or more and meet certain other

criteria.

"(2) The tax incentive takes the form of an allowable deduction, which may

be referred to as development allowance.

"(3) The main deduction provision is section 82AB.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 63

Property to which Subdivision applies

63. Section 82AA of the Principal Act is amended:

(a) by omitting from paragraph (1)(b) "1 January 1976" and substituting "27

February 1992";

(b) by omitting subsections (2), (3) and (4) and substituting the following

subsection:

"(2) Sub-subparagraphs (1)(a)(ii)(A) and (C) do not applyif the taxpayer

leases the property, or grants rights touse the property, in the taxpayer's

capacity as an eligible entertainment/tourism operator.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 64

Deduction for new plant installed after 26 February 1992

64. Section 82AB of the Principal Act is amended:

(a) by omitting subsections (1) to (5B) (inclusive) and substituting the

following subsection:

"(1) Subject to this Subdivision, if:

(a) after 26 February 1992, a taxpayer incurs expenditure of a capital

nature in respect of the acquisition or construction by the taxpayer of a new

unit of eligible property to which this Subdivision applies; and

(b) the expenditure has pre-qualified under the Development Allowance

Authority Act 1992; and

(i) in respect of a unit of property acquired by the

taxpayer under a contract entered into after 26 February 1992; or

(ii) in respect of a unit of property that was

constructed by the taxpayer where the construction commenced after 26 February

1992; and

(d) the unit of property was first used or installed ready for use before 1

July 2002;

a deduction equal to 10% of the expenditure is allowable to the taxpayer for

the first year of income during which that unit was either used for the

purpose of producing assessable income or installed ready for use for that

purpose.";

(b) by omitting from subsection (6) "the foregoing provisions of this

section" and substituting "subsection (1)";

(d) by omitting subsections (6A) and (6B);

(e) by omitting from paragraph (7)(d) and subsection (8) "1 January 1976"

and substituting "27 February 1992";

(f) by omitting subsections (9) and (10).

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 65

Lessor may transfer benefit of deduction to lessees

65. Section 82AD of the Principal Act is amended:

(a) by omitting subparagraph (1)(b)(i) and substituting the following

subparagraph:

"(i) a description of the property;";

(b) by omitting subsection (1A);

paragraphs:

"(a) if the agreement for the lease was entered into before 1 January 1993

- 8 January 1993; or

(b) in any other case - the 8th day after the end of the month in which the

agreement for the lease is entered into;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 66

Subdivision not to apply to certain structural improvements

66. Section 82AE of the Principal Act is amended by inserting before

paragraph (a) the following paragraph:

"(aa) structural improvements that, apart from subsection 54(2), are plant

or articles within the meaning of section 54; or".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 67

Subdivision not to apply to certain other property

67. Section 82AF of the Principal Act is amended:

(a) by inserting before subparagraphs (1)(a)(i) and (b)(i) the following

subparagraph:

"(ia) for use in a business carried on by the taxpayer which consists

principally of the provision by the taxpayer of either or both of the

following:

(A) entertainment;

(B) accommodation for tourists or travellers; or";

(b) by omitting paragraph (2)(h);

(d) by adding at the end of subsection (2) the following paragraphs:

"(k) aircraft; or

(l) ships other than ships covered by any of the following subparagraphs:

(i) ships that are:

(A) capable of navigating the high seas; and

(B) registered under the Shipping Registration Act

1981; and

within Australia;

(ii) ships that are:

(A) incapable of navigating the high seas; and

(B) wholly and exclusively for use in trade or commerce

within Australia;

(iii) ships that are off-shore industry vessels, or

off-shore industry mobile units, within the meaning of the Navigation Act

1912.";

(e) by omitting subsection (3A);

(f) by omitting from subsection (4) "1 January 1976" and substituting "27

February 1992".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 68

Disposal etc. of property within 12 months after installation etc.

68. Section 82AG of the Principal Act is amended:

(a) by omitting paragraph (1)(b) and substituting the following paragraph:

"(b) the taxpayer:

(i) leased the property; or

(ii) let the property on hire under a hire-purchase

agreement; or

(iii) otherwise granted a right to another person to

use the property; or";

(b) by inserting after subsection (1) the following subsection:

"(1A) Subparagraphs (1)(b)(i) and (iii) do not apply if the taxpayer leased

the property, or granted rights to use the property, in the taxpayer's

capacity as an eligible entertainment/tourism operator.";

(d) by omitting subsection (3A) and substituting the following subsection:

"(3A) Paragraphs (3)(d) and (f) do not apply if the lessee entered into the

contract or arrangement concerned in the lessee's capacity as an eligible

entertainment/tourism operator.";

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

"(5) Subsection (4) does not apply if the lessee entered into the contract

or arrangement concerned in the lessee's capacity as an eligible

entertainment/tourism operator.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 69

Disposal etc. of property after 12 months after installation etc.

69. Section 82AH of the Principal Act is amended:

(a) by omitting subparagraph (1)(b)(ii) and substituting the following

subparagraph:

"(ii) the taxpayer:

(A) leased the property; or

(B) let the property on hire under a hire-purchase

agreement; or

(b) by inserting after subsection (1) the following subsection:

"(1A) Sub-subparagraphs (1)(b)(ii)(A) and (C) do not apply if the taxpayer

leased the property, or granted rights to use the property, in the taxpayer's

capacity as an eligible entertainment/tourism operator.";

(d) by omitting subsection (3A) and substituting the following subsection:

"(3A) Subparagraphs (3)(b)(iv) and (vi) do not apply if the lessee entered

into the contract or arrangement concerned in the lessee's capacity as an

eligible entertainment/tourism operator.";

(e) by omitting subsection (5) and substituting the following subsection:

"(5) Subparagraphs (4)(b)(iii) and (v) do not apply if the taxpayer entered

into the contract or arrangement concerned in the taxpayer's capacity as an

eligible entertainment/tourism operator.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 70

Goods or services used to produce exempt income

70. Section 82AHA of the Principal Act is amended by omitting "18 December

1981" (wherever occurring) and substituting "26 February 1992".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 71

Notional disposal of property under hire-purchase

71. Section 82AI of the Principal Act is amended by omitting paragraphs (a)

and (b) and substituting the following paragraphs:

"(a) the taxpayer is taken to have disposed of the property; and

(b) the disposal is taken to have occurred at the time when possession of

the property was so obtained by the owner.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 72

Special provisions relating to partnerships

72. Section 82AJ of the Principal Act is amended:

(a) by omitting paragraph (1)(c) and substituting the following paragraph:

"(c) before the end of 12 months after the property was first used or

installed ready for use by the partnership, the taxpayer disposed of the whole

or a part of the taxpayer's interest in the partnership or in the property;";

(b) by omitting paragraphs (2)(c) and (d) and substituting the following

paragraphs:

"(c) after the end of 12 months after the property was first used or

installed ready for use by the partnership, the taxpayer disposed of the whole

or a part of the taxpayer's interest in the partnership or in the property;

and

(d) the Commissioner is satisfied that, at the time the property was

acquired or constructed by the partnership, the taxpayer intended to dispose

of the whole or a part of the taxpayer's interest in the partnership or in the

property after the partnership became entitled to a deduction under this

Subdivision;";

(d) by omitting subsection (7AA) and substituting the following subsection:

"(7AA) Paragraphs (7)(d) and (f) do not apply if the lessee entered into the

contract or arrangement concerned in the lessee's capacity as an eligible

entertainment/tourism operator.";

(e) by inserting after subsection (7A) the following subsection:

"(7B) Subsection (7A) does not apply if the lessee entered into the contract

or arrangement concerned in the lessee's capacity as an eligible

entertainment/tourism operator.";

(f) by omitting subsection (9) and substituting the following subsection:

"(9) Subparagraphs (8)(b)(iv) and (vi) do not apply if the lessee entered

into the contract or arrangement concerned in the lessee's capacity as an

eligible entertainment/tourism operator.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 73

Disposals within company group

73. Section 82AJA of the Principal Act is amended:

(a) by omitting from subsection (1) "after 19 August 1979 by a taxpayer

being a company, and paragraph 82AG(2A)(b) does not apply in relation to a

ship ceasing to be an eligible Australian ship by reason only of the disposal

of the ship";

(b) by omitting subparagraph (1)(d)(i) and substituting the following

subparagraphs:

"(i) lease the property; or

(ia) let the property on hire under a hire-purchase agreement; or

(ib) otherwise grant a right to another person to use

the property; or";

is subsection 82AA(1) property - ";

(d) by inserting after subsection (1) the following subsection:

"(1A) Subparagraphs (1)(d)(i) and (ib) do not apply if the person leased the

property, or granted rights to use the property, in the person's capacity as

an eligible entertainment/tourism operator.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 74

Property acquired etc. in substitution for other property

74. Section 82AL of the Principal Act is amended:

(a) by omitting "1 January 1976" (wherever occurring) and substituting "27

February 1992";

(b) by omitting from paragraphs (1)(c) and (2)(c) "obtaining a deduction

under this Subdivision," and substituting the following word and

subparagraphs: "obtaining:

(i) a deduction under this Subdivision; or

(ii) a benefit related directly or indirectly to a

deduction under this Subdivision;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 75

Deduction under Subdivision to be in addition to certain other deductions

75. Section 82AM of the Principal Act is amended:

(a) by omitting from subsection (1) "subsection (2)" and substituting

"subsections (2), (3) and (4)";

(b) by inserting in subsection (2) "73B, 75B," after "70A,";

"(3) A deduction under this Subdivision is not allowable for expenditure in

relation to a unit of property if:

(a) a deduction is allowable for depreciation in relation to the property;

and

(b) assuming that paragraph 55(2)(b) and subsection 55(8) had not been

enacted, the annual depreciation percentage fixed under section 55 is 100%.

"(4) A deduction under this Subdivision is not allowable for expenditure in

relation to a unit of property if a deduction is allowable in accordance with

section 57AM in respect of the property (section 57AM deals with special

depreciation on trading ships).".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 76

Repeal of section 82AP

76. Section 82AP of the Principal Act is repealed.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 77

77. Before section 82AQ of the Principal Act the following section is

inserted:

Leases etc. granted in an entity's capacity as an eligible

entertainment/tourism operator

"82APA.(1) For the purposes of this Subdivision, if:

(a) an entity:

(i) leases property; or

(ii) grants a right to another person to use property;

(iii) enters into a contract or arrangement with

another person for the use of the property by that other person; and

(b) the property is:

(i) for use in a business carried on by the entity

which consists principally of the provision by the entity of either or both of

the following:

(A) entertainment;

(B) accommodation for tourists or travellers; or

(ii) for use in a business carried on by the entity a

substantial part of which consists of the provision by the entity of

accommodation for tourists or travellers; or

(iii) for use in premises used or held for use by the

entity principally for the purpose of deriving income in the nature of rent by

the provision of accommodation for tourists or travellers;

the entity is taken to have leased the property, granted rights to use the

property, or entered into a contract or arrangement with the other person for

the use of the property by that other person, as the case requires, in the

entity's capacity as an eligible entertainment/tourism operator.

"(2) In this section:

'entity' means:

(a) a company; or

(b) a partnership; or

(d) any other person.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 78

Interpretation

78. Section 82AQ of the Principal Act is amended:

(a) by omitting from subsection (1) the definitions of "commissioning

date", "eligible Australian ship", "eligible date", "new ship", "subsection

82AA(1) property" and "subsection 82AA(2) ship";

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

" 'aircraft' means a machine or apparatus that derives support in the

atmosphere from the reactions of the air or from buoyancy, but does not

include an air-cushion vehicle; 'Australian satellite' has the same meaning as

in the Radiocommunications Act 1983;

'ship' means a vessel or boat of any description, and includes an air-cushion

vehicle, but does not include a floating structure;";

"(4) For the purposes of this Subdivision, an Australian satellite is taken

to be in Australia.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 79

Minor consequential amendments

79. The following provisions of the Principal Act are amended by omitting

"subsection 82AA(1) property" (wherever occurring) and substituting

"property":

paragraph 82AB(7)(a)

subsection 82AF(3)

subsections 82AG(1), (2), (3) and (4)

subsections 82AH(1), (2), (3) and (4)

subsections 82AJ(5), (6), (7), (7A) and (8).

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 80

Transitional - old investment allowance provisions

80. In spite of the amendments made by this Division, subsections 51AE(14)

and 57AM(33) and Subdivision B of Division 3 of Part III of the Principal Act

continue to apply, in relation to:

(a) a unit of subsection 82AA(1) property that was first used or installed

ready for use before 1 January 1988; or

(b) a subsection 82AA(2) ship that was first used or installed ready for

use before 1 January 1988; as if those amendments had not been made.

PART 3 - AMENDMENT OF THE INCOME TAX RATES ACT 1986

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 82

Principal Act

82. In this Part, "Principal Act" means the Income Tax Rates Act 1986.*2*

*2* No. 107, 1986, as amended. For previous amendments, see Nos. 60 and 138,

1987; Nos. 11, 78 and 118, 1988; Nos. 70, 98 and 106, 1989; and Nos. 48, 100

and 216, 1991.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 83

Interpretation

83. Section 3 of the Principal Act is amended by inserting in subsection (1)

the following definitions:

" 'PDF' (pooled development fund) has the same meaning as in the Assessment

Act;

'PDF component' has the same meaning as in the Assessment Act;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 84

Rates of tax payable by companies

84. Section 23 of the Principal Act is amended:

(a) by adding "or" at the end of paragraphs (2)(a) and (c);

(b) by inserting after paragraph (2)(c) the following paragraph:

"(d) a company to which subsection (4C) or (4D) applies;";

substituting "neither a life assurance company nor a company to which

subsection (4C) or (4D) applies,";

(d) by inserting after subsection (4B) the following subsections:

"(4C) The rates of tax in respect of the taxable income of a company that

becomes a PDF during the year of income and is still a PDF at the end of the

year of income are:

(a) in respect of so much of the taxable income as does not exceed the PDF

component - 30%; and

(b) in respect of so much of the taxable income as exceeds the PDF

component - 39%.

"(4D) The rate of tax in respect of the taxable income of a company that is

a PDF throughout the year of income is 30%.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 85

Application of amendments

85. The amendments made by this Part apply for any year of income, whether

beginning before, at or after the commencement of this section.

PART 4 - AMENDMENT OF THE OCCUPATIONAL SUPERANNUATION STANDARDS ACT 1987

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 86

Principal Act

86. In this Part, "Principal Act" means the Occupational Superannuation

Standards Act 1987.*3*

*3* No. 97, 1987, as amended. For previous amendments, see No. 138, 1987;

Nos. 97 and 105, 1989; Nos. 61 and 135, 1990; and Nos. 55 and 216, 1991.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 87

Notification of determinations

87.(1) Section 15M of the Principal Act is amended:

(a) by omitting from subsection (1) "in relation to an eligible termination

payment made to a person or the payment of a superannuation pension or an

annuity to a person" and substituting "that a payment to a person is in excess

of the reasonable benefit limits";

(b) by omitting from paragraph (1)(b) "and" (last occurring);

(d) by omitting subsection (2) and substituting the following subsections:

"(2) Whenever the Commissioner makes a determination under subsection 15K(1)

or section 15L, the Commissioner may, at the request of the Commissioner of

Taxation, give to the Commissioner of Taxation:

(a) a copy of the determination; and

(b) any or all information disclosed or obtained under or for the purposes

of this Act and concerning the payment to which the determination relates.

"(3) A request by the Commissioner of Taxation under subsection (2) may

relate to a particular determination or a class of determinations.

"(4) Whenever, under subsection 15K(1) or section 15L, the Commissioner

makes a determination to which subsection (1) does not apply, the Commissioner

may, if he or she thinks it desirable, give to the recipient of the payment to

which the determination relates the documents mentioned in paragraphs (1)(a)

and (b).".

(2) Subsections 15M(1) and (4) of the Principal Act as amended by this Act

apply in relation to any determination that relates to a payment made on or

after 1 July 1991.

(3) Section 15M of the Principal Act as in force immediately before the

commencement of this section continues to apply in relation to a determination

that relates to a payment made before 1 July 1991.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 88

Amendment of interim determinations

88.(1) Section 15N of the Principal Act is amended by omitting subsection

(5) and substituting the following subsection:

"(5) If the Commissioner amends a determination under this section, the

following provisions have effect:

(a) if the determination, as amended, is a determination that a payment is

in excess of the reasonable benefit limits, the Commissioner must give a copy

of the amended determination, and a written statement setting out the basis on

which the determination was amended, to the person;

(b) in any other case, if the Commissioner thinks it desirable, he or she

may give the person the documents mentioned in paragraph (a);

the Commissioner of Taxation:

(i) a copy of the amended determination; and

(ii) any or all information disclosed or obtained under

or for the purposes of this Act and concerning the payment to which the

determination relates.".

(2) Subsection 15N(5) of the Principal Act as amended by this Act applies in

relation to any amended determination that relates to a payment made on or

after 1 July 1991.

(3) Section 15N of the Principal Act as in force immediately before the

commencement of this section continues to apply in relation to an amended

determination that relates to a payment made before 1 July 1991.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 89

Person may request copy of previous determination

89. Section 15Q of the Principal act is amended by adding at the end the

following subsection:

"(3) If:

(a) the Commissioner has provided a copy of a determination to a person in

accordance with subsection (1); and

(b) the Commissioner had not previously given the person documents under

section 15M or 15N in relation to the determination or provided a copy of the

determination to the person;

subsection 16(1A) has effect as if, on the day on which the copy was so

provided, the Commissioner had given the person notice of the decision to make

the determination and of any decision to amend the determination.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 90

Review of certain decisions

90. Section 16 of the Principal Act is amended by inserting after subsection

(1A) the following subsection:

"(1B) A request under subsection (1A) in relation to the decision to make or

amend a determination to which subsection 15Q(3) applies must be made within

one year after the end of the financial year in which the payment to which the

determination relates was made or within such further period as the

Commissioner allows.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 91

91. After section 18 of the Principal Act the following section is inserted:

Transmission of information to the Commissioner of Taxation

"18A. Where a provision of this Act requires or authorises the Commissioner

or a superannuation standards officer to give information to the Commissioner

of Taxation or a taxation officer, the information may be given by means of a

data processing device.".

PART 5 - AMENDMENT OF THE TAXATION ADMINISTRATION ACT 1953

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 92

Principal Act

92. In this Part, "Principal Act" means the Taxation Administration Act

1953.*4*

*4* No. 1, 1953, as amended. For previous amendments, see Nos. 28, 39, 40

and 52, 1953; No. 18, 1955; No. 39, 1957; No. 95, 1959; No. 17, 1960; No. 75,

1964; No. 155, 1965; No. 93, 1966; No. 120, 1968; No. 216, 1973; No. 133,

1974; No. 37, 1976; Nos. 19 and 59, 1979; Nos. 39 and 117, 1983; No. 123,

1984; No. 65, 1985 (as amended by No. 193, 1985); Nos. 4, 47, 104, 123 and

168, 1985; Nos. 41, 46, 48, 112, 144 and 154, 1986; No. 49, 1986 (as amended

by No. 141, 1987); Nos. 120 and 145, 1987; No. 62, 1987 (as amended by No.

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

amended by No. 11, 1988); Nos. 95 and 97, 1988; Nos. 97, 105, 107, 124, 163

and 167, 1989; Nos. 20, 60, 61, 110, 119 and 136, 1990; and Nos. 5, 6, 48,

100, 122 and 216, 1991.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 93

Annual report

93. Section 3B of the Principal Act is amended by inserting after subsection

(1A) the following subsection:

"(1B) Subsection (1) does not apply in relation to Part III and sections

13J, 15 and 15A insofar as that Part and those sections apply in relation to

the Development Allowance Authority Act 1992.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 94

Secrecy

94. Section 3C of the Principal Act is amended by inserting after subsection

(1AA) the following subsection:

"(1AB) This section does not apply in relation to information disclosed or

obtained under or for the purposes of Part III insofar as that Part applies in

relation to the Development Allowance Authority Act 1992.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 95

95. After section 8AA of the Principal Act the following section is

inserted:

Application of Part to the Development Allowance Authority Act 1992

"8AB. This Part applies in relation to the Development Allowance Authority

Act 1992 as if:

(a) that Act were a taxation law; and

(b) references in this Part to the Commissioner were references to the

Development Allowance Authority.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 96

Interpretation

96. Section 8J of the Principal Act is amended by inserting after paragraph

(2)(g) the following paragraph:

"(ga) paragraph 79(1)(b) or (c) of the Development Allowance Authority Act

1992;".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 97

Court may order payment of amount in addition to penalty

97. Section 8W of the Principal Act is amended by inserting after subsection

(1A) the following subsection:

"(1B) For the purposes of paragraph (1)(b), a decision made by the

Development Allowance Authority under Part 2, 3, 4, 5 or 6 of the Development

Allowance Authority Act 1992 is taken to form part of the process of making

assessments of income tax.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 98

Provision of Commonwealth taxation information to State taxation authorities

98. Section 13J of the Principal Act is amended by adding at the end the

following subsection:

"(8) This section applies in relation to the Development Allowance Authority

Act 1992 as if:

(a) that Act were a taxation law; and

(b) references in this section to the Commissioner were references to the

Development Allowance Authority.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 99

Certification by State taxation officer of copies of, and extracts from,

documents

99. Section 13K of the Principal Act is amended by adding at the end the

following subsection:

"(11) This section applies in relation to the Development Allowance

Authority Act 1992 as if that Act were a taxation law.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 100

Appearance by Commissioner etc.

100. Section 15 of the Principal Act is amended by adding at the end the

following subsection:

"(4) This section applies in relation to the Development Allowance Authority

Act 1992 as if:

(a) that Act were a taxation law; and

(b) references in this section to the Commissioner were references to the

Development Allowance Authority; and

Commissioner were omitted.".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 101

Certification by Commissioner of copies of, and extracts from, documents

101. Section 15A of the Principal Act is amended by adding at the end the

following subsection:

"(11) This section applies in relation to the Development Allowance

Authority Act 1992 as if:

(a) that Act were a taxation law; and

(b) references in this section to the Commissioner were references to the

Development Allowance Authority.".

PART 6 - AMENDMENT OF THE TAXATION LAWS AMENDMENT ACT 1992

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 102

Principal Act

102. In this Part, "Principal Act" means the Taxation Laws Amendment Act

1992.*5*

*5* No. 35, 1992.

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 103

Transitional - section 58 of the amended Act

103. Section 71 of the Principal Act is amended by omitting from

sub-subparagraphs (4)(b)(ii)(A), (5)(b)(ii)(A) and (6)(b)(ii)(A) "transferee"

and substituting "transferor".

TAXATION LAWS AMENDMENT ACT (No. 3) 1992No. 98, 1992

- SECT 104

Application of amendments

104. The amendments made by this Part apply in relation to disposals of

property, whether occurring before or after the commencement of this section.

Notes to the Taxation Laws Amendment Act (No. 3) 1992

Note 1

The Taxation Laws Amendment Act (No. 3) 1992 as shown in this compilation comprises
Act No. 98, 1992 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. 3) 1992	98, 1992	30 June 1992	See s. 2
Taxation Laws Amendment Act 1993	17, 1993	9 June 1993	S. 65: (a)	—
Tax Laws Amendment (2010 Measures No. 2) Act 2010	75, 2010	28 June 2010	Schedule 6 (item 60): 29 June 2010	—

(a) Subsection 2(3) of the Taxation Laws Amendment Act 1993 provides as follows:

(3) Part 6 is taken to have commenced immediately after the commencement of section 38 of the
Taxation Laws Amendment Act (No. 3) 1992.

Section 38 of the Taxation Laws Amendment Act (No. 3) 1992 commenced on 30 June 1992.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
S. 38...................	am. No. 17, 1993
Div. 12 of Part 2...........	rep. No. 75, 2010
S. 81...................	rep. No. 75, 2010