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A Bill for an Act to amend the law relating to taxation, and for related purposes
Administered by: Treasury
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 27 Mar 2008
Introduced HR 19 Mar 2008

2008

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

 

 

 

Tax Laws Amendment (2008 Measures No. 2) Bill 2008

 

No.      , 2008

 

(Treasury)

 

 

 

A Bill for an Act to amend the law relating to taxation, and for related purposes

  

  


Contents

1............ Short title............................................................................................ 1

2............ Commencement.................................................................................. 1

3............ Schedule(s).......................................................................................... 2

Schedule 1—Amounts misappropriated by an employee or agent              3

Part 1—Capital allowances                                                                                           3

Income Tax Assessment Act 1997                                                                              3

Part 2—Capital gains and losses                                                                                 5

Income Tax Assessment Act 1997                                                                              5

Part 3—Application                                                                                                          9

Schedule 2—Late payment offset for superannuation guarantee contributions     10

Superannuation Guarantee (Administration) Act 1992                                    10

Schedule 3—CGT market value substitution rule for interests in widely held entities       13

Income Tax Assessment Act 1997                                                                            13

Schedule 4—Endeavour Research Fellowships and Executive Awards 16

Income Tax Assessment Act 1997                                                                            16

Schedule 5—Early completion bonuses for apprentices                                 17

Income Tax Assessment Act 1997                                                                            17

Schedule 6—Deductible gift recipients                                                                     18

Income Tax Assessment Act 1997                                                                            18

 


A Bill for an Act to amend the law relating to taxation, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Tax Laws Amendment (2008 Measures No. 2) Act 2008.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day on which this Act receives the Royal Assent.

 

2.  Schedules 1 to 4

The day on which this Act receives the Royal Assent.

 

3.  Schedule 5

Immediately after the commencement of the provisions covered by table item 2.

 

4.  Schedule 6

The day on which this Act receives the Royal Assent.

 

Note:          This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

             (2)  Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


 

Schedule 1Amounts misappropriated by an employee or agent

Part 1Capital allowances

Income Tax Assessment Act 1997

1  Section 12‑5 (after the table item headed “mining”)

Insert:

misappropriation

 

by employee or agent...............................................................

25‑47

2  Subsection 20‑30(1) (after table item 1.5)

Insert:

1.5A

25‑47

misappropriation by an employee or agent

3  After section 25‑45

Insert:

25‑47  Misappropriation where a balancing adjustment event occurs

             (1)  You can deduct an amount if:

                     (a)  a *balancing adjustment event occurs for a *depreciating asset you *held; and

                     (b)  your employee or *agent misappropriates (whether by theft, embezzlement, larceny or otherwise) all or part of the amount applicable to you under:

                              (i)  item 8 of the table in subsection 40‑300(2); or

                             (ii)  item 1, 3, 4 or 6 of the table in subsection 40‑305(1);

                            in relation to the balancing adjustment event.

Note 1:       The amount applicable to you under subsection 40‑300(2) or 40‑305(1) may be the market value of an asset or of a non‑cash benefit.

Note 2:       If you receive an amount as recoupment of the amount misappropriated, the amount may be included in your assessable income: see Subdivision 20‑A.

             (2)  The amount you can deduct is so much of the amount misappropriated as represents an amount applicable to you under item 8 of the table in subsection 40‑300(2) or item 1, 3, 4 or 6 of the table in subsection 40‑305(1) in relation to the *balancing adjustment event.

             (3)  You can deduct the amount for the income year in which the misappropriation happens.

             (4)  You must reduce the amount you can deduct under this section if your deductions for the asset have been reduced under section 40‑25 because of use for a purpose other than a *taxable purpose. The reduction is by the same proportion you reduce the balancing adjustment amount for the asset under section 40‑290.

             (5)  Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:

                     (a)  you discover the misappropriation after you lodged your *income tax return for the income year; and

                     (b)  the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation.

4  At the end of subsections 40‑285(1) and (2)

Add:

Note 3:       There is a modification to the calculation in the case of misappropriation by your employee or agent: see section 25‑47.


 

Part 2Capital gains and losses

Income Tax Assessment Act 1997

5  Subsection 104‑190(1)

After “subsection 116‑45(2)”, insert “or 116‑60(3)”.

6  Subsection 104‑190(1) (note)

Repeal the note, substitute:

Note:          Section 116‑45 applies if you do not receive your capital proceeds despite having taken all reasonable steps to get them, and section 116‑60 applies if your capital proceeds are misappropriated by your employee or agent.

7  At the end of section 104‑240

Add:

             (3)  In applying subsection (1) or (2), reduce the *termination value of the *depreciating asset by so much of an amount misappropriated by your employee or *agent (whether by theft, embezzlement, larceny or otherwise) as represents an amount applicable to you under:

                     (a)  item 8 of the table in subsection 40‑300(2); or

                     (b)  item 1, 3, 4 or 6 of the table in subsection 40‑305(1);

in relation to the *balancing adjustment event.

             (4)  If you later receive an amount as *recoupment of all or part of the amount misappropriated, the amount applicable under subsection (3) is increased by the amount received.

             (5)  Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:

                     (a)  you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and

                     (b)  the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.

8  At the end of section 104‑245

Add:

             (3)  In applying subsection (1) or (2), reduce the *termination value of the *depreciating asset by so much of an amount misappropriated by your employee or *agent (whether by theft, embezzlement, larceny or otherwise) as represents an amount applicable to you under:

                     (a)  item 8 of the table in subsection 40‑300(2); or

                     (b)  item 1, 3, 4 or 6 of the table in subsection 40‑305(1);

in relation to the *balancing adjustment event.

             (4)  If you later receive an amount as *recoupment of all or part of the amount misappropriated, the amount applicable under subsection (3) is increased by the amount received.

             (5)  Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:

                     (a)  you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and

                     (b)  the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.

9  Subsection 116‑10(1)

Omit “5 modifications”, substitute “6 modifications”.

10  At the end of section 116‑10 (before the note)

Add:

             (7)  The sixth relates to misappropriation by an employee or agent. It is relevant if your employee or agent misappropriates all or part of the capital proceeds from a CGT event.

11  Section 116‑25

Omit “5 modifications”, substitute “6 modifications”.

12  Section 116‑25 (table items dealing with CGT events A1 and B1, column headed “Only these modifications can apply:”)

After “, 5”, insert “, 6”.

13  Section 116‑25 (table items dealing with CGT events C1, C2, C3, D1, D2 and D3, column headed “Only these modifications can apply:”)

After “, 4”, insert “, 6”.

14  Section 116‑25 (table items dealing with CGT events D4, E1, E2 and E8, column headed “Only these modifications can apply:”)

After “, 5”, insert “, 6”.

15  Section 116‑25 (table items dealing with CGT events F1, F2, F4, F5 and H2, column headed “Only these modifications can apply:”)

After “, 4”, insert “, 6”.

16  Section 116‑25 (table items dealing with CGT event K6, column headed “Only these modifications can apply:”)

After “, 5”, insert “, 6”.

17  Section 116‑25 (table items dealing with CGT event K9, column headed “Only these modifications can apply:”)

After “, 4”, insert “, 6”.

18  After section 116‑55

Insert:

116‑60  Misappropriation rule: modification 6

             (1)  The *capital proceeds from a *CGT event are reduced if your employee or *agent misappropriates (whether by theft, embezzlement, larceny or otherwise) all or part of those proceeds.

Note:          This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.

             (2)  The *capital proceeds are reduced by the amount misappropriated.

             (3)  There is a further consequence if:

                     (a)  those proceeds are reduced by the amount misappropriated; and

                     (b)  you later receive an amount as *recoupment of all or part of the amount misappropriated.

Those proceeds are increased by the amount received.

             (4)  This Part and Part 3‑3 apply to the debt owed to you (the amount misappropriated) as if it were not a *CGT asset.

             (5)  Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:

                     (a)  you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and

                     (b)  the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.


 

Part 3Application

19  Application

The amendments made by this Schedule apply to amounts misappropriated in the 2007‑08 income year and later income years.


 

Schedule 2Late payment offset for superannuation guarantee contributions

  

Superannuation Guarantee (Administration) Act 1992

1  Paragraph 23A(1)(a)

Repeal the paragraph, substitute:

                     (a)  the contribution is made after the end of the period of 28 days after the end of a quarter; and

2  Subsection 23A(2)

Repeal the subsection, substitute:

             (2)  The election must be made:

                     (a)  in a statement having effect under section 35 as the employer’s assessment for the quarter; or

                     (b)  within 4 years after the employer’s superannuation guarantee charge for the quarter became payable.

The election cannot be revoked.

3  After subsection 23A(4)

Insert:

          (4A)  If the election happens after the employer’s assessment for the quarter is made, then, for the offset to take effect, the assessment must be amended accordingly under section 37.

4  Subsection 49(1)

After “unpaid amount”, insert “(the original unpaid amount)”.

5  Subsection 49(1) (note)

Repeal the note, substitute:

Note 1:       The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953.

Note 2:       Subsections (2) and (3A) deal with reducing the original unpaid amount.

6  Subsection 49(2)

Before “unpaid amount”, insert “original”.

7  After subsection 49(3)

Insert:

          (3A)  For the purposes of this section and subsection 8AAC(3) of the Taxation Administration Act 1953, if:

                     (a)  the employer gives the Commissioner an election under section 23A at a time (the election time) after the time the superannuation guarantee charge is due to be paid; and

                     (b)  the effect of the election is to reduce the employer’s liability to pay the superannuation guarantee charge by an amount (the offset amount);

then, from the election time, the proportion of the original unpaid amount that remains unpaid immediately before that time is taken to be reduced by the offset amount.

Note:          The original unpaid amount will not be reduced by the offset amount during the period when the charge is payable before the election time.

8  Transitional—charge remaining payable at commencement

(1)        If, for the purposes of the Superannuation Guarantee (Administration) Act 1992, superannuation guarantee charge:

                     (a)  became payable under an assessment before the commencement of this Schedule; and

                     (b)  was not fully paid before that commencement;

this item applies in relation to the employer’s liability to pay the proportion of the charge (the remaining charge) remaining payable at that commencement.

(2)        After that commencement, subsection 23A(2) of that Act applies as if the remaining charge became payable at that commencement.

(3)        If it is proposed to amend the assessment to effect a reduction, as a result of an offset under section 23A of that Act, in the employer’s liability to pay the remaining charge, then:

                     (a)  subsection 37(3) of that Act applies as if the assessment were made at that commencement; and

                     (b)  paragraph 37(5)(a) of that Act applies as if the remaining charge became payable under the assessment at that commencement.

(4)        If the assessment was of superannuation guarantee charge payable in relation to a year (instead of a quarter), then that Act also applies as if references in that Act to a quarter were references to a year.

9  Transitional—charge for a year that becomes payable after commencement

If, for the purposes of the Superannuation Guarantee (Administration) Act 1992, superannuation guarantee charge:

                     (a)  is payable in relation to a year (instead of a quarter) happening before the commencement of this Schedule; and

                     (b)  does not become payable until after that commencement;

then that Act applies, in relation to the employer’s liability to pay the charge, as if references in that Act to a quarter were references to a year.


 

Schedule 3CGT market value substitution rule for interests in widely held entities

  

Income Tax Assessment Act 1997

1  After subsection 116‑30(2A)

Insert:

          (2B)  Despite paragraph (2)(b), subsection (2) does not apply if the *CGT event is *CGT event C2 (about cancellation, surrender and similar endings) and the *CGT asset that is the subject of the event is:

                     (a)  a *share in a company that has at least 300 *members and is not a company that is covered by section 116‑35; or

                     (b)  a unit in a unit trust that has at least 300 unit holders and is not a trust that is covered by section 116‑35.

Note:          So, for one of these assets, the capital proceeds for the cancellation will be what you actually received.

2  After section 116‑30

Insert:

116‑35  Companies and trusts that are not widely held

Coverage

             (1)  A company is covered by this section if subsection (3) or (5) applies to the company.

             (2)  A unit trust is covered by this section if subsection (4) or (5) applies to the trust.

Concentrated ownership

             (3)  This subsection applies to a company if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, *shares in the company:

                     (a)  carrying *fixed entitlements to at least 75% of the company’s income or at least 75% of the company’s capital; or

                     (b)  carrying at least 75% of the voting power in the company.

             (4)  This subsection applies to a trust if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, units in the trust:

                     (a)  carrying *fixed entitlements to at least 75% of the trust’s income or at least 75% of the trust’s capital; or

                     (b)  if unit holders of the trust have a right to vote in respect of activities of the trust—carrying at least 75% of the voting power in the trust.

Possible variation of rights

             (5)  This subsection applies to a company or trust if, because of:

                     (a)  any provision in the entity’s constituent document, or in any contract, agreement or instrument:

                              (i)  authorising the variation or abrogation of rights attaching to any of the *shares or units in the entity; or

                             (ii)  relating to the conversion, cancellation, extinguishment or redemption of any of those shares or units; or

                     (b)  any contract, *arrangement, option or instrument under which a person has power to acquire any of those shares or units; or

                     (c)  any power, authority or discretion in a person in relation to the rights attaching to any of those shares or units;

it is reasonable to conclude that the rights attaching to any of those shares or units are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that, directly or indirectly, subsection (3) or (4) would apply to the entity.

Single individual

             (6)  For the purposes of subsections (3) and (4), all of the following are taken to be a single individual:

                     (a)  an individual, whether or not the individual holds *shares or units in the entity concerned;

                     (b)  the individual’s *associates;

                     (c)  for any shares or units in respect of which other individuals are nominees of the individual or of the individual’s associates—those other individuals.

3  Application

The amendments made by this Schedule apply to CGT events happening after the start of the 2006‑07 income year.


 

Schedule 4Endeavour Research Fellowships and Executive Awards

  

Income Tax Assessment Act 1997

1  Section 11‑15 (table item headed “education”)

After “education” (first occurring), insert “and training”.

2  Section 11‑15 (table item headed “education”)

After:

CRAFT scheme, employer’s income from...........................

51‑10

insert:

Endeavour Awards, research fellowship under.................

51‑10

Endeavour Executive Award.................................................

51‑10

3  Section 11‑15 (table item headed “student”)

Omit:

see education

 

substitute:

see education and training

 

4  Section 51‑10 (at the end of the table)

Add:

2.5

a recipient of:

(a) a research fellowship under the Endeavour Awards; or

(b) an Endeavour Executive Award

the fellowship or award

none

5  Application

The amendments of the Income Tax Assessment Act 1997 made by items 2 and 4 of this Schedule apply in relation to fellowships and awards received in the 2007‑08 income year and later income years.


 

Schedule 5Early completion bonuses for apprentices

  

Income Tax Assessment Act 1997

1  Section 11‑15 (table item headed “education and training”)

After:

CRAFT scheme, employer’s income from...........................

51‑10

insert:

early completion bonuses for apprentices..........................

51‑10 and 51‑42

2  Section 51‑10 (at the end of the table)

Add:

2.6

a recipient of a bonus for early completion of an apprenticeship

so much of the bonus as does not exceed $1,000

see section 51‑42

3  After section 51‑40

Insert:

51‑42  Bonuses for early completion of an apprenticeship

             (1)  The bonus must be provided under a scheme provided by a State or Territory, and the scheme must be specified in the regulations for the purposes of this section.

             (2)  The apprenticeship:

                     (a)  must be for an occupation of a kind specified in the regulations; and

                     (b)  must be completed within a time frame specified in the regulations for apprenticeships of that kind.

4  Application

The amendments made by this Schedule apply to assessments for the 2007‑08 income year and later income years.


 

Schedule 6Deductible gift recipients

  

Income Tax Assessment Act 1997

1  Subsection 30‑25(2) (at the end of the table)

Add:

2.2.36

The Spirit of Australia Foundation

the gift must be made after 10 September 2007

2  Subsection 30‑45(2) (at the end of the table)

Add:

4.2.40

Ian Thorpe’s Fountain for youth Limited

the gift must be made after 28 February 2008

3  Subsection 30‑50(2) (table item 5.2.25)

Omit “28 August 2007”, substitute “1 July 2009”.

4  Subsection 30‑50(2) (at the end of the table)

Add:

5.2.29

AE 2 Commemorative Foundation Ltd

the gift must be made after 28 February 2008 and before 1 March 2010

5.2.30

Memorials Development Committee Ltd

the gift must be made after 4 September 2007 and before 1 July 2010

5  Subsection 30‑70(2) (at the end of the table)

Add:

8.2.12

Playgroup Australia Incorporated

the gift must be made after 2 August 2006

6  Subsection 30‑80(2) (after table item 9.2.8)

Insert:

9.2.10

Australia for UNHCR

the gift must be made after 27 June 2007 and before 28 June 2012

7  Subsection 30‑80(2) (table item 9.2.17)

Omit “21 July 2007”, substitute “21 July 2009”.

8  Subsection 30‑80(2) (at the end of the table)

Add:

9.2.19

WHEELCHAIRS FOR KIDS Incorporated

the gift must be made after 28 February 2008 and before 1 March 2010

9.2.20

World Youth Day 2008 Trust

the gift must be made after 4 September 2007 and before 1 July 2009

9  Section 30‑90 (at the end of the table)

Add:

10.2.8

Amy Gillett Foundation

the gift must be made after 13 September 2007

10  Section 30‑105 (before table item 13.2.2)

Insert:

13.2.1

the Council for Jewish Community Security

the gift must be made after 9 August 2007

11  Section 30‑105 (table item 13.2.6)

Omit “1 January 2008”, substitute “1 January 2009”.

12  Subsection 30‑315(2) (after table item 2AC)

Insert:

2ACA

AE 2 Commemorative Foundation Ltd

item 5.2.29

13  Subsection 30‑315(2) (after table item 3)

Insert:

3A

Amy Gillett Foundation

item 10.2.8

14  Subsection 30‑315(2) (before table item 10)

Insert:

9A

Australia for UNHCR

item 9.2.10

15  Subsection 30‑315(2) (after table item 39)

Insert:

39A

Council for Jewish Community Security

item 13.2.1

16  Subsection 30‑315(2) (after table item 72)

Insert:

72AA

Memorials Development Committee Ltd

item 5.2.30

17  Subsection 30‑315(2) (after table item 86A)

Insert:

86AA

Playgroup Australia Incorporated

item 8.2.12

18  Subsection 30‑315(2) (after table item 111B)

Insert:

111C

Spirit of Australia Foundation

item 2.2.36

19  Subsection 30‑315(2) (after table item 124)

Insert:

124A

WHEELCHAIRS FOR KIDS Incorporated

item 9.2.19

20  Subsection 30‑315(2) (after table item 127)

Insert:

127AA

World Youth Day 2008 Trust

item 9.2.20