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Income Tax Laws Amendment Act (No. 2) 1981

  • - C2004A02487
  • No longer in force
Act No. 110 of 1981 as made
An Act to amend the law relating to income tax
Administered by: Treasury
Date of Assent 24 Jun 1981
Date of repeal 10 Dec 2015
Repealed by Amending Acts 1980 to 1989 Repeal Act 2015
 

INCOME TAX LAWS AMENDMENT ACT (No. 2) 1981 No. 110, 1981

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - TABLE OF PROVISIONS


INCOME TAX LAWS AMENDMENT ACT (No. 2) 1981

No. 110 of 1981

TABLE OF PROVISIONS

PART I - PRELIMINARY
Section
1. Short title

2. Commencement

PART II - AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

3. Principal Act

4. Losses of previous years

5. Losses of previous years incurred in engaging in primary production

6. Reinsurance with non-residents

7. Insertion of new Part -

PART IVA - SCHEMES TO REDUCE INCOME TAX

177A. Interpretation

177B. Operation of Part

177C. Tax benefits

177D. Schemes to which Part applies

177E. Stripping of company profits

177F. Cancellation of tax benefits, &c.

177G. Amendment of assessments

8. Powers of Board

9. Additional tax in certain cases

10. Contracts to evade tax void

11. Arrangements to avoid the operation of sections 4 and 5

PART III - AMENDMENTS OF THE INCOME TAX (INTERNATIONAL
AGREEMENTS) ACT 1953

12. Principal Act

13. Incorporation

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 1.
Short title.

INCOME TAX LAWS AMENDMENT ACT (No. 2) 1981

No. 110 of 1981

An Act to amend the law relating to income tax

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

PART I - PRELIMINARY
Short title
1. This Act may be cited as the Income Tax Laws Amendment Act (No. 2) 1981.*1*

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 2.
Commencement

2. This Act shall come into operation on the day on which it receives the Royal Assent. *1*

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 3.
Principal Act

PART II - AMENDMENTS OF THE INCOME TAX


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ASSESSMENT ACT 1936
3. The Income Tax Assessment Act 1936*2*is in this Part referred to as the Principal Act.

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 4.
Losses of previous years


4. Section 80 of the Principal Act is amended -

(a) by omitting from sub-section (2) "and (6)" and substituting ",(6) and (7)"; and

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

"(7) For the purpose of determining whether a deduction is allowable to a taxpayer under sub-section (2) in respect of the year of income that commenced on 1 July 1980 or in respect of a subsequent year of income and for the purpose of ascertaining the amount of any such deduction, there shall be disregarded so much of the amount of any loss deemed to have been incurred by the taxpayer as would not have been deemed to have been incurred by the taxpayer if Part IVA extended to schemes entered into or carried out on or before 27 May 1981.".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 5.
Losses of previous years incurred in engaging in primary production

5. Section 80AA of the Principal Act is amended -

(a) by omitting from sub-section (4) " and (10)" and substituting", (10) and (11)"; and

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

"(11) For the purpose of determining whether a deduction is allowable to a taxpayer under sub-section (4) in respect of the year of income that commenced on 1 July 1980 or in respect of a subsequent year of income and for the purpose of ascertaining the amount of any such deduction, there shall be disregarded so much of the amount of any loss deemed to have been incurred by the taxpayer in engaging in primary production as would not have been deemed to have been incurred by the taxpayer in engaging in primary production if Part IVA extended to schemes entered into or carried out on or before 27 May 1981.".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 6.
Reinsurance with non-residents

6. Section 148 of the Principal Act is amended by inserting in sub-section (1) "other than section 177F" after "this Act".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 7.

7. After Part IV of the Principal Act the following Part is inserted:

"PART IVA - SCHEMES TO REDUCE INCOME TAX
Interpretation
"177A. (1) In this Part, unless the contrary intention appears - 'scheme' means -

(a) any agreement, arrange,ent, understanding, promise or undertaking, whether express or implied and 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;

'taxpayer' includes a taxpayer in the capacity of a trustee.

"(2) The definition of 'taxpayer' in sub-section (1) shall not be taken to affect in any way the interpretation of that expression where it is used in this Act other than this Part.

"(3) The reference in the definition of 'scheme' in sub-section (1) to a scheme, plan, proposal, action, course of action of course of conduct shall be read as including a reference to a unilateral scheme, plan, proposal, action, course of action or course of conduct, as the case may be.

"(4) A reference in this Part to the carrying out of a scheme by a person shall be read as including a reference to the carrying out of a scheme by a person together with another person or other persons.

"(5) A reference in this Part to a scheme or a part of a scheme being entered into or carried out by a person for a particular purpose shall be read as including a reference to the scheme or the part of the scheme being entered into or carried out by the person for 2 or more purposes of which that particular purpose is the dominant purpose.
Operation of Part
"177B. (1) Subject to sub-section (2), nothing in the provisions of this Act
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other than this Part or in the Income Tax (International Agreements) Act 1953 shall be taken to limit the operation of this Part.

"(2) This Part shall not be taken to affect the operation of Division 16C of Part III.

"(3) Where a provision of this Act other than this Part is expressed to have effect where a deduction would be allowable to a taxpayer but for or apart from a provision or provisions of this Act, the reference to that provision or to those provisions, as the case may be, shall be read as including a reference to sub-section 177F (1).

"(4) Where a provision of this Act other than this Part is expressed to have effect where a deduction would otherwise be allowable to a taxpayer, that provision shall be deemed to be expressed to have effect where a deduction would, but for sub-section 177F(1), be otherwise allowable to the taxpayer.
Tax benefits
"177C. (1) Subject to this section, a reference in this Part to the obtaining by a taxpayer of a tax benefit in connection with a scheme shall be read as a reference to -

(a) an amount not being included in the assessable income of the taxpayer of a year of income where that amount would have been included, or might reasonably be expected to have been included, in the assessable income of the taxpayer of that year of income if the scheme had not been entered into or carried out; or

(b) a deduction being allowable to the taxpayer in relation to a year of income where the whole or a part of that deduction would not have been allowable, or might reasonably be expected not to have been allowable, to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out,
and, for the purposes of this Part, the amount of the tax benefit shall be taken to be -

(c) in a case to which paragraph (a) applies - the amount referred to in that paragraph; and

(d) in a case to which paragraph (b) applies - the amount of the whole of the deduction or of the part of the deduction, as the case may be, referred to in that paragraph.

"(2) A reference in this Part to the obtaining by a taxpayer of a tax benefit in connection with a scheme shall be read as not including a reference to -

(a) the assessable income of the taxpayer of a year of income not including an amount that would have been included, or might reasonably be expected to have been included, in the assessable income of the taxpayer of that year of income if the scheme had not been entered into or carried out where -

(i) the non-inclusion of the amount in the assessable income of the taxpayer is attributable to the making of a declaration, election or selection, the giving of a notice or the exercise of an option by any person, being a declaration, election, selection, notice or option expressly provided for by this Act; and

(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, election, selection, notice or option to be made, given or exercised, as the case may be; or

(b) a deduction being allowable to the taxpayer in relation to a year of income the whole or a part of which would not have been, or might reasonably be expected not to have been, allowable to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out where -

(i) the allowance of the deduction to the taxpayer is attributable to the making of a declaration, election or selection, the giving of a notice or the exercise of an option by any person, being a declaration, election, selection, notice or option expressly provided for by this Act; and

(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, election, selection, notice or option to be made, given or exercised, as the case may be.

"(3) For the purposes of sub-paragraph (2) (a) (i) or (b) (i), the non-inclusion of an amount in the assessable income of a taxpayer or the allowance of a deduction to a taxpayer shall be deemed to be attributable to
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the making of a declaration, election or selection, the giving of a notice or the exercise of an option where the amount would have been included in that assessable income, or the deduction would not have been allowable, if the declaration, election, selection, notice or option had not been made, given or exercised, as the case may be.
Schemes to which Part applies
"177D. This Part applies to any scheme that has been or is entered into after 27 May 1981, and to any scheme that has been or is carried out or commenced to be carried out after that date (other than a scheme that was entered into on or before that date), whether the scheme has been or is entered into or carried out in Australia or outside Australia or partly in Australia and partly outside Australia, where -

(a) a taxpayer (in this section referred to as the 'relevant taxpayer') has obtained, or would but for section 177F obtain, a tax benefit in connection with the scheme; and

(b) having regard to -
(i) the manner in which the scheme was entered into or carried out;

(ii) the form and substance of the scheme;

(iii) the time at which the scheme was entered into and the length of the period during which the scheme was carried out;

(iv) the result in relation to the operation of this Act that, but for this Part, would be achieved by the scheme;

(v) any change in the financial position of the relevant taxpayer that has resulted, will result, or may reasonably be expected to result, from the scheme;

(vi) any change in the financial position of any person who has, or has had, any connection (whether of a business, family or other nature) with the relevant taxpayer, being a change that has resulted, will result or may reasonably be expected to result, from the scheme;

(vii) any other consequence for the relevant taxpayer, or for any person referred to in sub-paragraph (vi), of the scheme having been entered into or carried out; and

(viii) the nature of any connection (whether of a business, family or other nature) between the relevant taxpayer and any person referred to in sub-paragraph (vi),
it would be concluded that the person, or one of the persons, who entered into or carried out the scheme or any part of the scheme did so for the purpose of enabling the relevant taxpayer to obtain a tax benefit in connection with the scheme or of enabling the relevant taxpayer and another taxpayer or other taxpayers each to obtain a tax benefit in connection with the scheme (whether or not that person who entered into or carried out the scheme or any part of the scheme is the relevant taxpayer or is the other taxpayer or one of the other taxpayers).
Stripping of company profits
"177E. (1) Where -

(a) as a result of a scheme that is, in relation to a company -

(i) a scheme by way of or in the nature of dividend stripping; or

(ii) a scheme having substantially the effect of a scheme by way of or in the nature of a dividend stripping,
any property of the company is disposed of;

(b) in the opinion of the Commissioner, the disposal of that property represents, in whole or in part, a distribution (whether to a shareholder or another person) of profits of the company (whether of the accounting period in which the disposal occurred or of any earlier or later accounting period);

(c) if, immediately before the scheme was entered into, the company had paid a dividend out of profits of an amount equal to the amount determined by the Commissioner to be the amount of profits the distribution of which is, in his opinion, represented by the disposal of the property referred to in paragraph (a), an amount (in this sub-section referred to as the 'notional amount') would have been included, or might reasonably be expected to have been included, by reason of the payment of that dividend, in the assessable income of a taxpayer of a year of income; and

(d) the scheme has been or is entered into after 27 May 1981, whether in Australia or outside Australia,
the following provisions have effect:

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(e) the scheme shall be taken to be a scheme to which this Part applies;

(f) for the purposes of section 177F, the taxpayer shall be taken to have obtained a tax benefit in connection with the scheme that is referable to the notional amount not being included in the assessable income of the taxpayer of the year of income; and

(g) the amount of that tax benefit shall be taken to be the notional amount.

"(2) Without limiting the generality of sub-section (1), a reference in that sub-section to the disposal of property of a company shall be read as including a reference to -

(a) the payment of a dividend by the company;

(b) the making of a loan by the company (whether or not it is intended or likely that the loan will be repaid);

(c) a bailment of property by the company; and

(d) any transaction having the effect, directly or indirectly, of diminishing the value of any property of the company.

"(3) In this section, 'property' includes a chose in action and also includes any estate, interest, right or power, whether at law or in equity, in or over property.
Cancellation of tax benefits, &c.
"177F. (1) Where a tax benefit has been obtained, or would but for this section be obtained, by a taxpayer in connection with a scheme to which this Part applies, the Commissioner may -

(a) in the case of a tax benefit that is referable to an amount not being included in the assessable income of the taxpayer of a year of income - determine that the whole or a part of that amount shall be included in the assessable income of the taxpayer of that year of income; or

(b) in the case of a tax benefit that is referable to a deduction or a part of a deduction being allowable to the taxpayer in relation to a year of income - determine that the whole or a part of the deduction or of the part of the deduction, as the case may be, shall not be allowable to the taxpayer in relation to that year of income,
and, where the Commissioner makes such a determination, he shall take such action as he considers necessary to give effect to that determination.

"(2) Where the Commissioner determines under paragraph (1) (a) that an amount is to be included in the assessable income of a taxpayer of a year of income, that amount shall be deemed to be included in that assessable income by virtue of such provision of this Act as the Commissioner determines.

"(3) Where the Commissioner has made a determination under sub-section (1) in respect of a taxpayer in relation to a scheme to which this Part applies, the Commissioner may, in relation to any taxpayer (in this sub-section referred to as the 'relevant taxpayer') -

(a) if, in the opinion of the Commissioner -

(i) there has been included, or would but for this sub-section be included, in the assessable income of the relevant taxpayer of a year of income an amount that would not have been included or would not be included, as the case may be, in the assessable income of the relevant taxpayer of that year of income if the scheme had not been entered into or carried out; and

(ii) it is fair and reasonable that that amount or a part of that amount should not be included in the assessable income of the relevant taxpayer of that year of income,
determine that that amount or that part of that amount, as the case may be, should not have been included or shall not be included, as the case may be, in the assessable income of the relevant taxpayer of that year of income; or

(b) if, in the opinion of the Commissioner -

(i) an amount would have been allowed or would be allowable to the relevant taxpayer as a deduction in relation to a year of income if the scheme had not been entered into or carried out, being an amount that was not allowed or would not, but for this sub-section, be allowable, as the case may be, as a deduction to the relevant taxpayer in relation to that year of income; and

(ii) it is fair and reasonable that that amount or a part of that amount

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should be allowable as a deduction to the relevant taxpayer in relation to that year of income,
determine that that amount or that part, as the case may be, should have been allowed or shall be allowable, as the case may be, as a deduction to the relevant taxpayer in relation to that year of income,
and the Commissioner shall take such action as he considers necessary to give effect to any such determination.

"(4) Where the Commissioner makes a determination under sub-section (3) by virtue of which an amount is allowed as a deduction to a taxpayer in relation to a year of income, that amount shall be deemed to be so allowed as a deduction by virtue of such provision of this Act as the Commissioner determines.

"(5) Where, at any time, a taxpayer considers that the Commissioner ought to make a determination under sub-section (3) in relation to the taxpayer in relation to a year of income, the taxpayer may post to or lodge with the Commissioner a request in writing for the making by the Commissioner of a determination under that sub-section.

"(6) The Commissioner shall consider the request and serve on the taxpayer, by post or otherwise, a written notice of his decision on the request.

"(7) If the taxpayer is dissatisfied with the Commissioner's decision on the request, the taxpayer may, within 60 days after service on the taxpayer of notice of the decision of the Commissioner, post to or lodge with the Commissioner an objection in writing against the decision stating fully and in detail the grounds on which the taxpayer relies.

"(8) The provisions of Division 2 of Part V (other than section 185) apply in relation to an objection made under sub-section (7) in like manner as those provisions apply in relation to an objection against an assessment.
Amendment of assessments
"177G. (1) Nothing in section 170 prevents the amendment of an assessment at any time before the expiration of 6 years after the date on which tax became due and payable under the assessment if the amendment is for the purposes of giving effect to sub-section 177F (1).

"(2) Nothing in section 170 prevents the amendment of an assessment at any time if the amendment is for the purpose of giving effect to sub-section 177F (3).".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 8.
Powers of Board

8. Section 193 of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-section:

"(2) The Board does not have power to review decisions of the Commissioner relating to the remission of additional tax except decisions relating to the remission of additional tax imposed by section 226 where the additional tax payable, after the making by the Commissioner of his decision, exceeds -

(a) in any case to which sub-section 226 (1) applies - the greater of the following amounts, namely, $2 or an amount calculated, in respect of the period commencing on the last day allowed for furnishing the return or information and ending on the day upon which the return or information is furnished or the day upon which the assessment is made, whichever first happens, at the rate of 10% per annum of the tax assessable to the taxpayer;

(b) in any case to which sub-section 226 (2) applies - the greater of the following amounts, namely, $2 or an amount calculated, in respect of the period commencing on the last day allowed for furnishing the return and ending on the day upon which the assessment in respect of the omitted income or excessive deduction or rebate is made or the day upon which the assessment is made in which the rebate is wholly or partly disallowed, as the case may be, at the rate of 10% per annum of the difference between the tax properly payable by the taxpayer and the tax that would be payable if it were assessed upon the basis of the return furnished by him; or

(c) in any case to which sub-section 226 (2A) applies - the greater of the following amounts, namely, $2 or an amount calculated, in respect of the period commencing on the last day allowed for furnishing the return and ending on the day upon which the assessment referred to in paragraph 226 (2A) (a) is made, at the rate of 5% per annum of the amount of the additional tax that would be payable but for any remission.".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 9.
Additional tax in certain cases

9. Section 226 of the Principal Act is amended by inserting after subsection (2) the following sub-section:

"(2A) Where -

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(a) for the purposes of making an assessment, the Commissioner has calculated the tax that, but for this section, is assessable to a taxpayer in relation to a year of income (in this sub-section referred to as the 'relevant year of income');

(b) in calculating the tax assessable to the taxpayer, a determination or determinations made by the Commissioner under sub-section 177F (1) was or were taken into account; and

(c) if no determination had been made under that sub-section in relation to the taxpayer in relation to the relevant year of income -

(i) no tax would have been assessable to the taxpayer in relation to the relevant year of income; or

(ii) there would but for this section have been assessable to the taxpayer in relation to the relevant year of income an amount of tax that is less than the amount of the tax referred to in paragraph (a),
the taxpayer is liable to pay as additional tax in relation to the relevant year of income an amount equal to -

(d) in a case to which sub-paragraph (c) (i) applies - double the amount of the tax referred to in paragraph (a); or

(e) in a case to which sub-paragraph (c) (ii) applies - double the amount by which the amount of the tax referred to in paragraph (a) exceeds the amount of tax that would, but for this section, have been assessable to the taxpayer in relation to the relevant year of income if no determination had been made under sub-section 177F (1) in relation to the taxpayer in relation to the relevant year of income.".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 10.
Contracts to evade tax void

10. Section 260 of the Principal Act is amended by adding at the end thereof the following sub-section:

"(2) This section does not apply to any contract, agreement or arrangement made or entered into after 27 May 1981.".

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 11.
Arrangements to avoid the operation of sections 4 and 5

11. (1) Where -

(a) an amount (in this sub-section referred to as the "relevant amount") is included in the assessable income of a taxpayer (in this sub-section referred to as the "recipient taxpayer") of the year of income that commenced on 1 July 1980 (in this sub-section referred to as the "relevant year of income");

(b) the relevant amount is a loss, outgoing or expenditure (which loss, outgoing or expenditure is in this sub-section referred to as the "relevant expenditure") incurred (whether before or after the commencement of this section) by another taxpayer (in this sub-section referred to as the "associated taxpayer");

(c) but for this sub-section, a deduction would be allowable to the associated taxpayer in relation to a year of income in respect of the whole or a part of the relevant expenditure;

(d) either of the following sub-paragraphs is applicable:

(i) the recipient taxpayer is not deemed to have incurred a loss in the relevant year of income but would be deemed to have incurred a loss in that year of income if the relevant amount had not been included in the assessable income of the recipient taxpayer; or

(ii) the recipient taxpayer is deemed to have incurred a loss in the relevant year of income but the loss would have been greater if the relevant amount had not been included in the assessable income of the recipient taxpayer;

(e) if Part IVA of the Income Tax Assessment Act 1936 were extended to schemes entered into or carried out on or before 27 May 1981 -

(i) an amount that is not included in the assessable income of the recipient taxpayer of the relevant year of income would be included in that assessable income; or

(ii) an amount that has been allowed or is allowable as a deduction to the recipient taxpayer in the relevant year of income would not have been allowed or would not be allowable; and


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(f) the associated taxpayer incurred the whole or a part of the relevant expenditure (which whole or part is in this sub-section referred to as the "prescribed relevant expenditure") for the purpose, or for purposes that included the purpose, of wholly or partly preventing the operation of section 4 or 5 of this Act in relation to the recipient taxpayer or, if the recipient taxpayer is a partnership, in relation to a partner or partners in the partnership, by securing that the recipient taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss that the recipient taxpayer would be deemed to have incurred in the relevant year of income if an amount equal to the prescribed relevant expenditure were not included in the assessable income of the recipient taxpayer of the relevant year of income,
then, notwithstanding anything contained in the Income Tax Assessment Act 1936, a deduction is not allowable to the associated taxpayer in respect of any part of the prescribed relevant expenditure.

(2) Where -

(a) the value of the trading stock of a taxpayer that, but for this sub-section, would be taken into account at the end of the year of income that commenced on 1 July 1980 (in this sub-section referred to as the "relevant year of income") for the purposes of the Income Tax Assessment Act 1936 is greater than the value of that trading stock that would be taken into account at that time if the taxpayer had valued that trading stock in such a way that the value of that trading stock to be taken into account at that time would have been the lowest possible amount at which the value of that trading stock could be taken into account at that time in accordance with Subdivision B of Division 2 of Part III of the Income Tax Assessment Act 1936;

(b) either of the following sub-paragraphs is applicable:

(i) the taxpayer is not deemed to have incurred a loss in the relevant year of income but would be deemed to have incurred a loss in that year of income if the taxpayer had valued the trading stock of the taxpayer in such a way that the value of that trading stock to be taken into account at the end of the relevant year of income would have been the lowest possible amount at which the value of that trading stock could have been taken into account at that time in accordance with Subdivision B of Division 2 of Part III of the Income Tax Assessment Act 1936; or

(ii) the taxpayer is deemed to have incurred a loss in the relevant year of income but the loss would have been greater if the taxpayer had valued the trading stock of the taxpayer in such a way that the value of that trading stock to be taken into account at the end of the relevant year of income would have been the lowest possible amount at which the value of that trading stock could have been taken into account at that time in accordance with Subdivision B of Division 2 of Part III of the Income Tax Assessment Act 1936;

(c) if Part IVA of the Income Tax Assessment Act 1936 were extended to schemes entered into or carried out on or before 27 May 1981 -

(i) an amount that is not included in the assessable income of the recipient taxpayer of the relevant year of income would be included in that assessable income; or

(ii) an amount that has been allowed or is allowable as a deduction to the recipient taxpayer in the relevant year of income would not have been allowed or would not be allowable; and

(d) some or all of the trading stock was valued by the taxpayer in the way in which it was valued by the taxpayer for the purpose, or for purposes that included the purpose, of wholly or partly preventing the operation of section 4 or 5 in relation to the taxpayer or, if the taxpayer is a partnership, in relation to a partner or partners in the partnership, by securing that the taxpayer would not be deemed to have incurred a loss in the relevant year of income or would be deemed to have incurred a loss in the relevant year of income of an amount less than the amount of the loss that the taxpayer would be deemed to have incurred in the relevant year of income if the trading stock of the taxpayer had been valued by the taxpayer at a lesser value,
then, notwithstanding anything contained in the Income Tax Assessment Act 1936, the value of the trading stock of the taxpayer to be taken into account at the end of the relevant year of income and at the commencement of the next succeeding year of income is -

(e) in a case to which paragraph (f) does not apply - the value referred to in paragraph (b); or

(f) if the taxpayer satisfies the Commissioner that, if the taxpayer had not valued any of the trading stock of the taxpayer for the purpose, or for purposes that included the purpose, mentioned in paragraph (d), the taxpayer might reasonably be expected to have valued the trading stock of the taxpayer in such a way that the value of the trading stock of the taxpayer to be taken into account at the end of the relevant year of income would be greater than the value of the trading stock referred to in paragraph (b) - that greater value.

(3) In sub-section (2) -

(a) a reference to trading stock shall be read as not including a reference to live stock; and

(b) a reference to the valuation of trading stock by a taxpayer shall be read as a reference to the exercise by the taxpayer of an option or options under section 31 of the Income Tax Assessment Act 1936 in relation to the trading stock of the taxpayer.

(4) A reference in the preceding provisions of this section (other than the reference in paragraph (1) (b)), in relation to a taxpayer, to a loss shall be read as a reference to -

(a) in a case where the taxpayer is a partnership that is being treated as a taxpayer for the purposes of section 90 of the Income Tax Assessment Act 1936 - a partnership loss for the purposes of section 92 of that Act; and

(b) in any other case - a loss for the purposes of section 80 or 80AA of the Income Tax Assessment Act 1936.

(5) Notwithstanding anything contained in the Income Tax Assessment Act 1936, the Commissioner may amend an assessment for the purpose of giving effect to this section if the amendment is made within 3 years after the date on which the tax became due and payable under the assessment, but nothing in this sub-section limits the power of the Commissioner to amend an assessment in accordance with the provisions of that Act.

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 12.
Principal Act

PART III - AMENDMENTS OF THE INCOME TAX
(INTERNATIONAL AGREEMENTS) ACT 1953
12. The Income Tax (International Agreements) Act 1953*3* is in this Part referred to as the Principal Act.

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - SECT. 13.
Incorporation

13. Section 4 of the Principal Act is amended by inserting in sub-section (2) "or Part IVA" after "section 160AO". ------------------------------------------------------------------------------ --

INCOME TAX LAWS AMENDMENT ACT (NO. 2) 1981 No. 110 of 1981 - NOTES


NOTES
1. Act No. 110, 1981; assented to 24 June 1981.

2. 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. 24 and 69, 1963; Nos. 46, 68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos. 19, 38, 76 and 85, 1967; Nos. 4, 60, 70, 87 and 148, 1968; Nos. 18, 93 and 101, 1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972; Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20, 1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143, 165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 57, 87, 123, 171 and 172, 1978; and Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 22, 24, 57, 58, 124, 133, 134 and 159, 1980; and Nos. 108 and 109, 1981.

3. No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No. 88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965; No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972; No. 11, 1973; No. 216, 1973 (as amended by No. 20, 1974); No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143, 1976; No. 134, 1977; No. 87, 1978; and No. 23, 1980.