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Taxation Laws Amendment Act 1992

Act No. 35 of 1992 as amended, taking into account amendments up to Act No. 75 of 2010
An Act to amend the law relating to taxation
Administered by: Treasury
Registered 23 Sep 2010
Start Date 29 Jun 2010
End Date 10 Mar 2016
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016

Taxation Laws Amendment Act 1992

Act No. 35 of 1992 as amended

This compilation was prepared on 23 September 2010
taking into account amendments up to Act No. 75 of 2010

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra

  

  


TABLE OF PROVISIONS

 

PART 1 - PRELIMINARY 

Section

1.  Short title [see Note 1]

2.  Commencement [see Note 1]

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

3.  Principal Act 

4.  Insertion of new section:

    123B.     Substantiation requirements not to apply in special circumstances

5.  Amendment of assessments 

PART 3 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

6.  Principal Act 

7.  Exemptions 

8.  Index of payments covered by Subdivision 

9.  Insertion of new section:

    24ABNA.   Education entry payment

10. Insertion of new section:

    45Z.      Entitlement to intercorporate dividend rebate where shareholder is

              a trustee or partnership

11. Rebate on dividends 

12. Rebate on dividends paid as part of dividend stripping operation

13. Composition of taxable income 

14. Losses and outgoings 

15. Depreciation 

16. Repeal of section 55 and substitution of new sections:

    54A.      Effective life of property

    55.       Annual depreciation percentage

17. Calculation of depreciation 

18. Limit on cost price for depreciation of motor vehicle 

19. Repeal of section 57AG 

20. Special depreciation on property used for basic iron or steel production 

21. Insertion of new section:

    58.       Depreciation roll-over relief for unpooled property where CGT

              roll-over relief allowed under section 160ZZM, 160ZZMA, 160ZZN,

              160ZZNA or 160ZZO or where election for roll-over relief made

              under section 59AA

22. Disposal, loss or destruction of depreciated property 

23. Disposal of depreciated property on change of ownership or interest 

24. Insertion of new sections:

    62AAB.    Object of pooling of depreciable property

    62AAC.    Taxpayer may create pools to which depreciable property may be

              allocated

    62AAD.    Pool percentage

    62AAE.    Allocation of property to a pool

    62AAF.    Cancellation of allocation to pool - taxpayer's notice

    62AAG.    Cancellation of allocation to pool – cessation of exclusive

              assessable income-producing use

    62AAH.    Cancellation of allocation to pool – annual depreciation

              percentage not equal to pool percentage

    62AAJ.    Cancellation of allocation to pool – subsequent application of

              special depreciation provisions

    62AAK.    Cancellation of allocation to pool - disposal to which section

              58 applies

    62AAL.    Effect of cancellation of allocation to pool

    62AAM.    Reconstruction assumptions and reconstructed depreciated value

    62AAN.    Opening balance of pool

    62AAO.    Closing balance of pool

    62AAP.    Calculation of depreciation - pooled property

    62AAQ.    Cancellation of allocation of property to a pool – effect on

              subsequent operation of depreciation provisions

    62AAR.    Cancellation of allocation of property to pool – taxpayer must

              use diminishing value method to calculate subsequent

              depreciation

    62AAS.    No balancing charges/deductions while property allocated to

              pool

    62AAT.    Taxpayer's assessable income to include proceeds of disposal

              of pooled property etc.

    62AAU.    Disposal of pooled property - application of CGT provisions

    62AAV.    Taxpayers may use their own form of words in pool notices

25. Deductions for debt dividends 

26. Expenditure on scientific research 

27. Insertion of new section:

    73AA.     Section 73A roll-over relief where CGT roll-over relief allowed

              under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO

28. Expenditure on research and development activities 

29. Guaranteed returns to investors 

30. Losses to be allowable deductions 

31. Modified application of Act in relation to certain unit trusts 

32. Modified application of Act in relation to certain unit trusts 

33. Effect of Division on rebate under section 46 or 46A 

34. Insertion of new section:

    122JAA.   Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 122R

35. Insertion of new section:

    122JG.    Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 122R

36. Change in interests in property 

37. Insertion of new section:

    123BBA.   Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 123F

38. Insertion of new section:

    123BF.    Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 123F

39. Change in interests in property 

40. Insertion of new section:

    124AMAA.  Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 124AO

41. Change in interests in property 

42. Interpretation 

43. Rehabilitation-related activity 

44. No deduction for certain expenditure 

45. Insertion of new section:

    124GA.    Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO

46. Insertion of new section and Subdivision:

    124JD.    Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO

    Subdivision C - Non-arm's length transactions

    124JE.    Transactions between persons not at arm's length

47. Insertion of new section:

    124PA.    Roll-over relief where CGT roll-over relief allowed under

              section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

              election for roll-over relief made under section 122W

48. Disposal of unit of industrial property on change of partnership etc. 

49. Interpretation 

50. Indexation of indexed cost base limit 

51. Transfer of partnership assets to wholly-owned company 

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

53. Interpretation 

54. Credits in respect of deducted amounts 

55. Insertion of new section:

    221YHZLA. Refunds in relation to certain credit entitlements

56. Keeping of records 

57. Interpretation 

58. Insertion of new section:

    327A.     Widely distributed finance shares

59. Direct attribution interest in a CFC or CFT 

60. Direct attribution account interest in a company 

61. Notional allowable deduction for eligible finance share dividends and widely

    distributed finance share dividends 

62. Additional notional exempt income - unlisted or listed country CFC 

63. Application of amendments - general

64. Application of depreciation amendments: effective life; 100% depreciation;

    broadbanding; loading and pooling

65. Application of tax file number amendments

66. Transitional - intercorporate dividend rebate amendments 

67. Transitional - section 55 of the amended Act 

68. Transitional - repealed paragraph 56(1)(b) of the Principal Act 

69. Transitional - repealed section 57AH of the Principal Act 

70. Transitional - repealed section 57AL of the Principal Act 

71. Transitional - section 58 of the amended Act

72. Transitional - elective capital deduction roll-over relief where CGT

    roll-over relief available under section 160ZZO of the Principal Act and

    property disposed of after 6 December 1990

73. Transitional - section 160AFE of the Principal Act 

74. Transitional - Part X record-keeping offences 

PART 4 - AMENDMENT OF THE INCOME TAX (INTERNATIONAL AGREEMENTS) ACT

1953 

76. Principal Act 

77. Schedule 32 

78. Application of amendment


TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992 - LONG TITLE

 

        An Act to amend the law relating to taxation

 

PART 1 - PRELIMINARY

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 1

Short title [see Note 1]

 

  1. This Act may be cited as the Taxation Laws Amendment Act 1992.

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 2

Commencement [see Note 1]

 

  2. This Act commences on the day on which it receives the Royal Assent.

 

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

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 3

Principal Act

 

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

Act 1986.*1*

*1*  No. 39, 1986, as amended. For previous amendments, see Nos. 48 and 112,

1986; Nos. 23 and 145, 1987; No. 139, 1987 (as amended by Nos. 11 and 78,

1988); Nos. 6, 78, 95, 97 and 153, 1988; Nos. 2, 11, 97 and 107, 1989; Nos.

58, 60 and 135, 1990; and Nos. 48 and 100, 1991.

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 4

 

  4. After section 123A of the Principal Act the following section is inserted

in Part X:

Substantiation requirements not to apply in special circumstances

  "123B.(1) If the Commissioner is satisfied that:

  (a)  a benefit has been provided in, or in respect of, a year of tax in

respect of the employment of an employee of an employer; and

  (b)  it would be unreasonable for the substantiation requirements under this

Act in relation to the benefit to apply; the substantiation requirements do

not so apply.

  "(2) In making a decision under subsection (1), the Commissioner is to have

regard to:

  (a)  the nature and quality of evidence that the employer makes available to

substantiate:

    (i)  if the benefit provided is a fringe benefit - the

taxable value of the fringe benefit; or

    (ii)  whether the benefit provided is an exempt benefit;

and

  (b)  special circumstances affecting the employer, including, but not

limited to, the following:

    (i)  the extent to which the substantiation requirements

were complied with;

    (ii)  whether the failure to comply with the substantiation

requirements was inadvertent or deliberate.

  "(3) The Commissioner may only make a decision under subsection (1):

  (a)  in the course of reviewing on the Commissioner's own motion the affairs

of the employer; or

  (b)  in considering an objection against the assessment of the employer of

the year of tax; or

  (c)  in considering whether to make an amendment of the assessment of the

employer of the year of tax in response to a request made by the employer

before the commencement of this section.

  "(4) This section does not apply to a declaration made for the purposes of

this Act.

  "(5) If:

  (a)  an employer makes an application under subsection 82(1) or (2), as in

force immediately before the commencement of section 113 of the Taxation Laws

Amendment Act (No. 3) 1991; and

  (b)  the period mentioned in the subsection concerned ended before the

commencement of this section;

the following provisions have effect:

  (c)  the Commissioner, the Tribunal or the Federal Court of Australia, as

the case requires, when making a decision on the application, must disregard

subsection (1) of this section;

  (d)  if the Commissioner, the Tribunal or the Federal Court of Australia, as

the case requires, grants the application:

    (i)  the employer's objection has no effect to the extent

that it relates to grounds based on subsection (1) of this section; and

    (ii)  the Tribunal or the Federal Court of Australia, when

making a decision under:

      (A)  paragraph 86A(a) of this Act, as in force

immediately before the commencement of section 113 of the Taxation Laws

Amendment Act (No. 3) 1991; or

      (B)  paragraph 14ZZK(a) or 14ZZO(a) of the Taxation

Administration Act 1953, as the case requires;

must disregard subsection (1) of this section.

  "(6) This section applies to a benefit provided before, at or after the

commencement of this section.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 5

Amendment of assessments

 

  5. Section 74 of the Principal Act does not prevent the amendment of an

assessment made before the commencement of this section for the purpose of

giving effect to this Part.

 

PART 3 - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 6

Principal Act

 

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

1936.*2*

*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. 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; and Nos. 4, 5,

6, 48, 55 and 100, 1991.

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 7

Exemptions

 

  7. Section 23 of the Principal Act is amended:

  (a)  by omitting from the end of subparagraph (z)(viii) "or";

  (b)  by adding at the end of paragraph (z) the following word and

subparagraph:

  "or  (x)  an education entry payment received under Part 2.13A of the Social

Security Act 1991;";

  (c)  by omitting from the end of subparagraph (zaa)(v) "or";

  (d)  by omitting from the end of subparagraph (zaa)(vi) "and" and

substituting "or";

  (e)  by adding at the end of paragraph (zaa) the following subparagraph:

  "(vii)  an education entry payment received under Part 2.13A of the Social

Security Act 1991;".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 8

Index of payments covered by Subdivision

 

  8. Section 24AB of the Principal Act is amended by inserting in the table in

the appropriate alphabetical position, determined on a letter-by-letter

basis:

  "Education entry payment 24ABNA".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 9

 

  9. After section 24ABN of the Principal Act the following section is

inserted:

Education entry payment

  "24ABNA. Payments of education entry payment under Part 2.13A of the Social

Security Act 1991 are not exempt.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 10

 

  10. Before section 46 of the Principal Act the following section is

inserted:

Entitlement to intercorporate dividend rebate where shareholder is a trustee

or partnership

(Shareholder a trustee - beneficiary absolutely entitled to share)

  "45Z.(1) If:

  (a)  a share in a company (in this subsection called the 'first company') is

held by a shareholder as trustee for another company (in this subsection

called the 'second company') who is absolutely entitled to the share as

against the trustee; and

  (b)  the second company is not a taxpayer in the capacity of trustee; and

  (c)  a dividend is paid to the trustee in respect of the share; and

  (d)  the whole or a part of an amount included in the second company's

assessable income under section 97 (which whole or part is in this subsection

called the 'assessable amount') is attributable to that dividend;

sections 46 to 46F (inclusive) apply as if:

  (e)  the second company were a shareholder in the first company; and

  (f)  the dividend were paid by the first company to the second company

instead of to the trustee; and

  (g)  the amount of the dividend were equal to the assessable amount; and

  (h)  the second company's interest in the share were the share in respect of

which the dividend was paid; and

  (i)  a reference to the year of income in which the dividend was paid to the

second company were a reference to the year of income to which the assessable

amount relates; and

  (j)  a reference to a specified date or specified time before, on, at or

after which the dividend was paid to the second company were a reference to

the date or time before, on, at or after which the dividend was paid to the

trustee; and

  (k)  the question of when the share was issued to the second company were

answered by reference to the time when the share was issued to the trustee;

and

  (l)  the question of when the share was issued to a person other than the

second company were answered by reference to the time when the share was

issued to the other person; and

  (m)  the question whether the payment of the dividend to the second company

may reasonably be regarded as equivalent to the payment of interest on a loan

were answered by reference to matters relating to the payment of the dividend

to the trustee; and

  (n)  the question of the extent to which the dividend was paid by the first

company to the second company out of particular profits were answered by

reference to the dividend paid to the trustee; and

  (o)  the question of the extent to which the dividend paid to the second

company was franked were answered by reference to the dividend paid to the

trustee; and

  (p)  the question of when the dividend paid to the second company was

declared were answered by reference to the dividend paid to the trustee.

(Shareholder a trustee - beneficiary not absolutely entitled to share)

  "(2) If:

  (a)  a share in a company (in this subsection called the 'first company') is

held by a shareholder as trustee of a trust estate; and

  (b)  a dividend is paid to the trustee in respect of the share; and

  (c)  the following conditions are satisfied in relation to a taxpayer, being

a company (in this subsection called the 'second company'):

    (i)  the second company is not a taxpayer in the capacity

of trustee;

    (ii)  the second company is not absolutely entitled to the

share as against the trustee;

    (iii)  an amount is included in the assessable income of

the second company of a year of income under subsection 92(1) or section 97 or

100;

    (iv)  the whole or a part of the amount so included in the

second company's assessable income (which whole or part is in this subsection

called the 'assessable amount') is either:

      (A)  directly attributable to that dividend; or

      (B)  indirectly attributable to that dividend, through

one or more interposed trusts or partnerships;

sections 46 to 46F (inclusive) apply as if:

  (d)  the second company were a shareholder in the first company; and

  (e)  the dividend were paid by the first company to the second company

instead of to the trustee; and

  (f)  the amount of the dividend were equal to the assessable amount; and

  (g)  if the second company has an interest in the share (whether that

interest is held directly or indirectly through one or more interposed trusts

or partnerships) - that interest were the share in respect of which the

dividend was paid; and

  (h)  if the second company does not have an interest in the share (including

an interest held directly or indirectly through one or more interposed trusts

or partnerships):

    (i)  the second company had an interest in the share; and

    (ii)  that interest had been acquired by the second company

at the time when the share was acquired by the trustee; and

    (iii)  that interest were the share in respect of which the

dividend was paid; and

  (i)  a reference to the year of income in which the dividend was paid to the

second company were a reference to the year of income to which the assessable

amount relates; and

  (j)  a reference to a specified date or specified time before, on, at or

after which the dividend was paid to the second company were a reference to

the date or time before, on, at or after which the dividend was paid to the

trustee; and

  (k)  the question of when the share was issued to the second company were

answered by reference to the time when the share was issued to the trustee; and

  (l)  the question of when the share was issued to a person other than the

second company were answered by reference to the time when the share was

issued to the other person; and

  (m)  the question whether the payment of the dividend to the second company

may reasonably be regarded as equivalent to the payment of interest on a loan

were answered by reference to matters relating to the payment of the dividend

to the trustee; and

  (n)  the question of the extent to which the dividend was paid by the first

company to the second company out of particular profits were answered by

reference to the dividend paid to the trustee; and

  (o)  the question of the extent to which the dividend paid to the second

company was franked were answered by reference to the dividend paid to the

trustee; and

  (p)  the question of when the dividend paid to the second company was

declared were answered by reference to the dividend paid to the trustee.

(Shareholder a partnership - non-trustee partner)

  "(3) If:

  (a)  a share in a company (in this subsection called the 'first company') is

held by a partnership in which another company (in this subsection called the

'second company') is a partner; and

  (b)  the second company is not a taxpayer in the capacity of trustee; and

  (c)  a dividend is paid to the partnership in respect of the share; and

  (d)  the whole or a part of an amount included in the second company's

assessable income under section 92 (which whole or part is in this subsection

called the 'assessable amount') is attributable to that dividend; sections 46

to 46F (inclusive) apply as if:

  (e)  the second company were a shareholder in the first company; and

  (f)  the dividend were paid by the first company to the second company

instead of to the partnership; and

  (g)  the amount of the dividend were equal to the assessable amount; and

  (h)  the second company's interest in the share were the share in respect of

which the dividend was paid; and

  (i)  a reference to the year of income in which the dividend was paid to the

second company were a reference to the year of income to which the assessable

amount relates; and

  (j)  a reference to a specified date or specified time before, on, at or

after which the dividend was paid to the second company were a reference to

the date or time before, on, at or after which the dividend was paid to the

partnership; and

  (k)  the question of when the share was issued to the second company were

answered by reference to the time when the share was issued to the

partnership; and

  (l)  the question of when the share was issued to a person other than the

second company were answered by reference to the time when the share was

issued to the other person; and

  (m)  the question whether the payment of the dividend to the second company

may reasonably be regarded as equivalent to the payment of interest on a loan

were answered by reference to matters relating to the payment of the dividend

to the partnership; and

  (n)  the question of the extent to which the dividend was paid by the first

company to the second company out of particular profits were answered by

reference to the dividend paid to the partnership; and

  (o)  the question of the extent to which the dividend paid to the second

company was franked were answered by reference to the dividend paid to the

partnership; and

  (p)  the question of when the dividend paid to the second company was

declared were answered by reference to the dividend paid to the partnership.

(Shareholder a partnership - trustee partner)

  "(4) If:

  (a)  a share in a company (in this subsection called the 'first company') is

held by a partnership; and

  (b)  a dividend is paid to the partnership in respect of the share; and

  (c)  the following conditions are satisfied in relation to a taxpayer, being

a company (in this subsection called the 'second company'):

    (i)  the second company is not a taxpayer in the capacity

of trustee;

    (ii)  the second company is not a partner in the

partnership;

    (iii)  an amount is included in the assessable income of

the second company of a year of income under subsection 92(1) or section 97 or

100;

    (iv)  the whole or a part of the amount so included in the

second company's assessable income (which whole or part is in this subsection

called the 'assessable amount') is either:

      (A)  directly attributable to that dividend; or

      (B)  indirectly attributable to that dividend, through

one or more interposed trusts or partnerships;

sections 46 to 46F (inclusive) apply as if:

  (d)  the second company were a shareholder in the first company; and

  (e)  the dividend were paid by the first company to the second company

instead of to the partnership; and

  (f)  the amount of the dividend were equal to the assessable amount; and

  (g)  if the second company has an interest in the share (whether that

interest is held directly or indirectly through one or more interposed trusts

or partnerships) - that interest were the share in respect of which the

dividend was paid; and

  (h)  if the second company does not have an interest in the share (including

an interest held directly or indirectly through one or more interposed trusts

or partnerships):

    (i)  the second company had an interest in the share; and

    (ii)  that interest had been acquired by the second company

at the time when the share was acquired by the partnership; and

    (iii)  that interest were the share in respect of which the

dividend was paid; and

  (i)  a reference to the year of income in which the dividend was paid to the

second company were a reference to the year of income to which the assessable

amount relates; and

  (j)  a reference to a specified date or specified time before, on, at or

after which the dividend was paid to the second company were a reference to

the date or time before, on, at or after which the dividend was paid to the

partnership; and

  (k)  the question of when the share was issued to the second company were

answered by reference to the time when the share was issued to the

partnership; and

  (l)  the question of when the share was issued to a person other than the

second company were answered by reference to the time when the share was

issued to the other person; and

  (m)  the question whether the payment of the dividend to the second company

may reasonably be regarded as equivalent to the payment of interest on a loan

were answered by reference to matters relating to the payment of the dividend

to the partnership; and

  (n)  the question of the extent to which the dividend was paid by the first

company to the second company out of particular profits were answered by

reference to the dividend paid to the partnership; and

  (o)  the question of the extent to which the dividend paid to the second

company was franked were answered by reference to the dividend paid to the

partnership; and

  (p)  the question of when the dividend paid to the second company was

declared were answered by reference to the dividend paid to the partnership.

(Modifications for corporate unit trusts and public trading trusts)

  "(5) A reference in paragraphs (1)(a) and (b), (2)(a) and (c), (3)(b) and

(4)(c) to a trustee does not include a reference to the trustee of:

  (a)  a corporate unit trust within the meaning of Division 6B; or

  (b)  a public trading trust within the meaning of Division 6C.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 11

Rebate on dividends

 

  11. Section 46 of the Principal Act is amended by adding at the end the

following subsections:

  "(12) A shareholder in a capacity of trustee is not, and is taken never to

have been, entitled to a rebate under this section.

  "(13) Subsection (12) does not apply to the trustee of:

  (a)  a corporate unit trust within the meaning of Division 6B; or

  (b)  a public trading trust within the meaning of Division 6C.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 12

Rebate on dividends paid as part of dividend stripping operation

 

  12. Section 46A of the Principal Act is amended by adding at the end the

following subsections:

  "(19) A shareholder in a capacity of trustee is not, and is taken never to

have been, entitled to a rebate under this section.

  "(20) Subsection (19) does not apply to the trustee of:

  (a)  a corporate unit trust within the meaning of Division 6B; or

  (b)  a public trading trust within the meaning of Division 6C.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 13

Composition of taxable income

 

  13. Section 50N of the Principal Act is amended by adding at the end the

following subsection:

  "(24) Section 45Z applies for the purposes of subsection (23) of this

section in a corresponding way to the way in which it applies for the purposes

of sections 46 and 46A.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 14

Losses and outgoings

 

  14. Section 51 of the Principal Act is amended by inserting after subsection

(2) the following subsection:

  "(2A) If:

  (a)  a taxpayer incurs expenditure in a year of income in connection with

the acquisition of stock that will become trading stock on hand of the

taxpayer; and

  (b)  as at the end of the year of income, a part of the stock is not, and

has not been, trading stock on hand of the taxpayer; and

  (c)  a deduction under subsection (1) in respect of the expenditure would,

apart from this subsection, be allowable from the assessable income of the

taxpayer of the year of income;

then, instead of the deduction under subsection (1) being allowable as

mentioned in paragraph (c), a deduction under subsection (1) in relation to

each part of the stock, equal to so much of the expenditure as is attributable

to that part, is allowable from the assessable income of the taxpayer of:

  (d)  the year of income in which that part of the stock first becomes

trading stock on hand of the taxpayer; or

  (e)  if an amount is included in the assessable income of the taxpayer of an

earlier year of income in connection with the disposal of that part of the

stock - that earlier year of income.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 15

Depreciation

 

  15. Section 54 of the Principal Act is amended by inserting after subsection

(2) the following subsection:

  "(2A) If the annual depreciation percentage fixed under section 55 for a

unit of property owned by a taxpayer is 100%, depreciation is only allowable

for the year of income in which the property is first used, or first installed

and held in reserve, as mentioned in subsection (1).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 16

 

  16. Section 55 of the Principal Act is repealed and the following sections

are substituted:

Effective life of property

(Definition of effective life)

  "54A.(1) For the purposes of section 55, the effective life of a unit of

property owned by a taxpayer is whichever of the following periods is

applicable:

  (a)  if:

    (i)  there is in force a determination by the Commissioner

under subsection (2) which specifies a period that the taxpayer may elect to

adopt as the effective life of the property; and

    (ii)  the taxpayer makes a written election to adopt that

period;

  that period;

  (b)  if paragraph (a) does not apply - the period, worked out as at the time

when the property is first used for assessable income-producing purposes by

the taxpayer, during which it would be reasonable to conclude that the

property would be held by the taxpayer assuming:

    (i)  if the property was not new at that time - that the

property was new at that time; and

    (ii)  that the taxpayer was to hold the property until it

was no longer reasonably capable of being used, by the taxpayer or by any

other person, for:

      (A)  assessable income-producing purposes; or

      (B)  exempt income-producing purposes; and

    (iii)  if, at the time the property was first used for

assessable income-producing purposes by the taxpayer, it may reasonably be

expected that the property will be subject to wear and tear by the taxpayer at

a particular rate - that that rate were the rate of wear and tear to which the

property will be subject; and

    (iv)  that the property were to be maintained in reasonably

good order and condition;

  (c)  if:

    (i)  paragraph (a) does not apply; and

    (ii)  the property was new at the time when the property

was first used by the taxpayer for assessable income-producing purposes; and

    (iii)  at the time of that first use, it would be

reasonable to conclude that the property is likely to be:

      (A)  scrapped; or

      (B)  sold for scrap; or

      (C)  abandoned;

by the taxpayer at a later time; and

    (iv)  the period beginning at the time of that first use

and ending at that later time is shorter than the period mentioned in

paragraph (b);

that shorter period;

  (d)  if:

    (i)  paragraph (a) does not apply; and

    (ii)  the property was not new at the time when the

property was first used by the taxpayer for assessable income-producing

purposes; and

    (iii)  assuming that the property was new at the time of

that first use, it would be reasonable to conclude at that time that the

property would be likely to be:

      (A)  scrapped; or

      (B)  sold for scrap; or

      (C)  abandoned;

by the taxayer at a later time; and

    (iv)  the period beginning at the time of that first use

and ending at that later time is shorter than the period mentioned in

paragraph (b);

that shorter period.

(Commissioner may determine etc. periods which taxpayers may elect to adopt as

the effective lives of units of property)

  "(2) The Commissioner may, by writing:

  (a)  make a determination specifying periods that taxpayers may elect to

adopt as the effective lives of units of property owned by them; and

  (b)  revoke or vary such a determination.

(Period may be specified unconditionally)

  "(3) A period may be specified unconditionally.

(Specification of period may be conditional)

  "(4) A period, or 2 or more different periods, may be specified in relation

to property of a particular kind subject to one or more specified conditions

being satisfied as at the time when the property is first used by the taxpayer

for assessable income-producing purposes.

(Conditions may relate to use)

  "(5) The conditions may include, but are not limited to, conditions relating

to:

  (a)  if the property is installed ready for use for the purpose of producing

assessable income and held in reserve by the taxpayer - the particular use or

uses for which the property has been installed and held in reserve; or

  (b)  in any other case - the particular use or uses of the property by the

taxpayer.

(Criteria for specifying periods)

  "(6) The matters to which the Commissioner may have regard in specifying

periods include, but are not limited to, the periods that, apart from

paragraph (1)(a), would be applicable under paragraph (1)(b) to property owned

by particular groups of taxpayers who use similar property in a similar

manner.

(Taxpayer may require the Commissioner to vary a determination so that it

specifies a period in relation to property)

  "(7) If, at the time when the property was first used by the taxpayer for

assessable income-producing purposes:

  (a)  a determination is in force under subsection (2); and

  (b)  the determination does not specify a period that the taxpayer may elect

to adopt as the effective life of the property;

the taxpayer may lodge with the Commissioner a written notice requiring the

Commissioner to vary the determination in accordance with paragraph (2)(b) so

that the determination specifies such a period.

(Time within which Commissioner must vary determination)

  "(8) The Commissioner must comply with the requirement to vary a

determination by whichever is the latest of the following times:

  (a)  the end of the period of 60 days (in this subsection called the

`original 60-day period') after the notice requiring the Commissioner to vary

the determination is lodged;

  (b)  if the Commissioner, by written notice served on the taxpayer within

the original 60-day period, requests the taxpayer to give information relating

to the variation sought by the taxpayer - the end of 60 days after the

Commissioner receives that information;

  (c)  if the Commissioner, by written notice served under section 264 within

the original 60-day period, requires a person other than the taxpayer to give

information relating to the variation sought by the taxpayer - the end of 60

days after the Commissioner receives that information.

(Determination etc. to be available for sale to public)

  "(9) A determination, or a variation or revocation of a determination, must

be made available for sale to the public.

(When determination etc. may be retrospective)

  "(10) A determination, or a variation or revocation of a determination, may

be expressed to apply in relation to property first used by taxpayers for

assessable income- producing purposes before the determination, variation or

revocation, as the case may be, was made if, and only if:

  (a)  in the case of a determination or a variation of a determination - the

specified period is the first period applicable to property of that kind; or

  (b)  in any case - the retrospectivity works to the advantage of taxpayers

in calculating the effective lives of property of that kind.

(Election to adopt period specified in determination as effective life)

  "(11) An election under paragraph (1)(a) is irrevocable and must be made:

  (a)  within 6 months after the later of the following:

    (i)  the end of the year of income in which the property is

first used by the taxpayer for assessable income-producing purposes;

    (ii)  the commencement of this section; or

  (b)  within such further period as the Commissioner allows.

(Commissioner to make first determination within 28 days)

  "(12) The Commissioner must make a determination under subsection (2) within

28 days after the commencement of this section.

(Meaning of 'use for assessable income-producing purposes')

  "(13) For the purposes of this section, a unit of property is taken to be

used for assessable income-producing purposes by a taxpayer if, and only if,

the property is:

  (a)  used by the taxpayer for the purpose of producing assessable income;

or

  (b)  installed ready for use for that purpose and held in reserve by the

taxpayer.

(Meaning of 'use for exempt income-producing purposes')

  "(14) For the purposes of this section, a unit of property is taken to be

used for exempt income-producing purposes by a person if, and only if, the

property is:

  (a)  used by the person for the purpose of producing exempt income; or

  (b)  installed ready for use for that purpose and held in reserve by the

person.

Annual depreciation percentage

  "55.(1) The annual depreciation percentage for a unit of property owned by a

taxpayer is worked out as follows.

  "(2) (Step 1: raw percentage) Work out, to 2 decimal places, the percentage

(in this section called the 'raw percentage') using the formula:

                         1

                 No. of years  x  100

                 in effective life

where:

'No. of years in effective life' means:

  (a)  the number (calculated to 2 decimal places) of years in the effective

life of the property; or

  (b)  1;

whichever is the greater.

  "(3) (Step 2: 100% depreciation) If:

  (a)  the cost of the property does not exceed $300 or such higher amount as

is prescribed; or

  (b)  the raw percentage is more than 33;f8%;

the annual depreciation percentage is 100%.

  "(3A) (Step 2A: scientific research) If:

  (a)  step 2 does not apply; and

  (b)  the property is used by the taxpayer for the purposes of scientific

research only; and

  (c)  the property was acquired by the taxpayer before 1 July 1995;

the annual depreciation percentage is 33;f8%.

  "(4) (Step 3: employee amenities) If neither step 2 nor 2A applies and the

property is used by the taxpayer principally for the purpose of providing

clothing cupboards, first aid, rest-room or recreational facilities, or meals

or facilities for meals:

  (a)  for persons employed by the taxpayer in a business carried on by the

taxpayer for the purpose of producing assessable income; or

  (b)  for the care of children of those persons;

the annual depreciation percentage is 33;f8%.

  "(5) (Step 4: broadbanding) If:

  (a)  none of steps 2, 2A and 3 apply; and

  (b)  the raw percentage is below one of the following:

23/4%, 5%, 73/4%, 10%, 15%, 20% or 33;f8%; and

  (c)  the property is none of the following:

    (i)  a painting, sculpture, drawing, engraving or

photograph;

    (ii)  a reproduction of any such thing;

    (iii)  property of a description, or of a use, similar to

anything covered by subparagraph (i) or (ii); and

  (d)  the taxpayer does not elect, in accordance with subsection (8), to

waive broadbanding;

the raw percentage is re-calculated as the next highest of those percentages.

  "(6) (Step 5: loading) If:

  (a)  none of steps 2, 2A and 3 apply; and

  (b)  the property is not an eligible motor vehicle; and

  (c)  a deduction has not been allowed, and is not allowable, to the taxpayer

in relation to any year of income in respect of the property in accordance

with section 57AK or 57AM;

the annual depreciation percentage is calculated using the formula:

             Raw percentage  x  1.2

  "(7) (Step 6: no loading) If none of steps 2, 2A, 3 and 5 apply, the annual

depreciation percentage is the raw percentage.

  "(8) A taxpayer may elect to waive broadbanding for a unit of property in

respect of which depreciation is allowable to the taxpayer for a particular

year of income.

  "(9) In this section:

  'eligible motor vehicle' means a motor vehicle (including a vehicle known as

a four wheel drive vehicle) that is:

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

vehicle; or

  (b)  a motor cycle or similar vehicle; or

  (c)  any other road vehicle designed to carry a load of less than one tonne

or fewer than 9 passengers;

  'scientific research' has the same meaning as in section 73A.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 17

Calculation of depreciation

 

  17. Section 56 of the Principal Act is amended:

  (a)  by omitting from paragraph (1)(a) "percentage fixed by or under section

55, or under the previous Act," and substituting "annual depreciation

percentage fixed under section 55";

  (b)  by omitting from paragraph (1)(b) "percentage fixed, by or under

section 55," and substituting "annual depreciation percentage fixed under

section 55";

  (c)  by inserting in subsection (1A) "the annual depreciation percentage

fixed under section 55 for a unit of property is less than 100% and" after

"Where".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 18

Limit on cost price for depreciation of motor vehicle

 

  18. Section 57AF of the Principal Act is amended by omitting from subsection

(10) all the words preceding "before" and substituting "The Commissioner must

publish by written notice".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 19

Repeal of section 57AG

 

  19. Section 57AG of the Principal Act is repealed.

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 20

Special depreciation on property used for basic iron or steel production

 

  20. Section 57AK of the Principal Act is amended by omitting from paragraph

(5)(a) "the annual depreciation fixed under subsection 55(1), as increased by

any amount that would, but for this section, be applicable under section

57AG," and substituting "the annual depreciation percentage fixed under

section 55,".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 21

 

  21. After section 57AM of the Principal Act the following section is

inserted:

Depreciation roll-over relief for unpooled property where CGT roll-over relief

allowed under section 160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where

election for roll-over relief made under section 59AA

(Roll-over relief where CGT roll-over relief allowed)

  "58.(1) This section applies to the disposal of a unit of property by a

taxpayer (in this section called the 'transferor') to another taxpayer (in

this section called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  depreciation has been allowed, or is allowable, to the transferor in

respect of the property.

(Roll-over relief where joint election made under section 59AA)

  "(2) This section also applies if a joint election for roll-over relief is

made under section 59AA by both the transferor and the transferee referred to

in that section in relation to the disposal of a unit of property.

(No balancing charges or deductions)

  "(3) Section 59 (which deals with balancing charges and deductions) does not

apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

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

  (a)  if the depreciation allowable to the transferor in respect of the

property for the year of income in which the disposal occurred was calculated

in accordance with paragraph 56(1)(a):

    (i)  the transferee were not entitled to make an election

under subsection 56(1AA) in relation to the property; and

    (ii)  the transferee had acquired the unit of property for

a consideration equal to the depreciated value of the property immediately

before the time of disposal (worked out on the assumption that subsection

60(2) had not been enacted); and

  (b)  if:

    (i)  the depreciation allowable to the transferor in

respect of the property for the year of income in which the disposal occurred

was calculated in accordance with paragraph 56(1)(b); or

    (ii)  both:

      (A)  the depreciation allowable to the transferor in

respect of the property for the year of income in which the disposal occurred

was calculated in accordance with section 57AK or 57AM; and

      (B)  neither section 57AK nor 57AM applied to the

transferee in respect of the property;

then:

    (iii)  the transferee had made an election under subsection

56(1AA) in relation to the property; and

    (iv)  the transferee had acquired the unit of property for

a consideration equal to the cost of the unit to the transferor; and

    (v)  depreciation were not allowable to the transferee in

respect of:

      (A)  so much of the cost of the property as was allowed

or allowable to the transferor in respect of depreciation in relation to the

property (worked out as if section 61 had not been enacted); or

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

applications of this section - so much of the cost of the property as was

allowed or allowable to the prior successive transferors in respect of

depreciation in relation to the property (worked out as if section 61 had not

been enacted); and

    (vi)  the depreciated value of the property at a time when

the property was owned by the transferee were worked out as if the total of:

      (A)  the amounts allowed or allowable to the transferor

in respect of depreciation in relation to the property; and

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

applications of this section - the amounts allowed or allowable to the prior

successive transferors in respect of depreciation in relation to the

property;

were taken to have been amounts allowed or allowable to the transferee in

respect of depreciation in relation to the property; and

  (c)  the effective life of the property worked out under section 54A in

relation to the transferor were the effective life of the property worked out

under that section in relation to the transferee; and

  (d)  if step 2A in section 55 applied to the transferor in relation to the

property in relation to the year of income in which the disposal occurred -

that step has effect, in relation to the transferee in relation to the

property, as if the transferee had acquired the property before 1 July 1995.

(Section 57AK - special rules)

  "(5) If section 57AK (which deals with iron or steel production) applied to

the transferor in relation to the property in relation to the year of income

of the transferor in which the time of the disposal occurred, then:

  (a)  section 57AK has effect, in relation to the transferee and in relation

to the property, as if:

    (i)  the conditions set out in paragraphs 57AK(1)(b) and

        (c) that were satisfied in relation to the transferor were satisfied in

relation to the transferee; and

    (ii)  subsection 57AK(8) had not been enacted; and

  (b)  if section 57AK applies to the transferee in relation to the property -

the provisions of this Act relating to depreciation apply as if:

    (i)  the transferee had acquired the unit of property for a

consideration equal to the cost of the unit to the transferor; and

    (ii)  depreciation were not allowable to the transferee in

respect of:

      (A)  so much of the cost of the property as was allowed

or allowable to the transferor in respect of depreciation in relation to the

property (worked out as if section 61 had not been enacted); or

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

applications of this section - so much of the cost of the property as was

allowed or allowable to the prior successive transferors in respect of

depreciation in relation to the property (worked out as if section 61 had not

been enacted); and

    (iii)  the depreciated value of the property at a time when

the property was owned by the transferee were worked out as if the total of:

      (A)  the amounts allowed or allowable to the transferor

in respect of depreciation in relation to the property; and

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

applications of this section - the amounts allowed or allowable to the prior

successive tranferors in respect of depreciation in relation to the property;

were taken to have been amounts allowed or allowable to the transferee in

respect of depreciation in relation to the property.

(Pro-rating of depreciation)

  "(6) Subsection 56(1A) (which deals with pro-rating) applies to the

transferor and transferee in relation to the year of income in which the

disposal occurred as if a reference to depreciation allowable in accordance

with subsection 56(1) in respect of the property included a reference to

depreciation allowable otherwise than in accordance with subsection 56(1).

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(7) If:

  (a)  after the disposal of the property to the transferee, the property is

lost or destroyed or the transferee disposes of the property; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of subsection 59(2) in relation to

the loss, destruction or disposal, the total of:

  (c)  the amounts allowed or allowable to the transferor in respect of

depreciation in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the amounts allowed or allowable to the prior successive transferors

in respect of depreciation in relation to the property;

are taken to have been amounts allowed or allowable to the transferee in

respect of depreciation in relation to the property.

(CGT roll-over relief applies to motor vehicles)

  "(8) For the purposes of this section, in addition to the effect that

sections 160ZZM, 160ZZMA, 160ZZN, 160ZZNA and 160ZZO have apart from this

subsection, those sections also have the effect that they would have if a

reference in those sections to an asset included a reference to a motor

vehicle of a kind mentioned in paragraph 82AF(2)(a).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 22

Disposal, loss or destruction of depreciated property

 

  22. Section 59 of the Principal Act is amended:

  (a)  by omitting from paragraph (4)(a) "the Commissioner is satisfied" and

substituting "it would be concluded";

  (b)  by omitting from paragraph (4)(b) "and less than the depreciated value

of the property immediately before the time of disposal";

  (c)  by omitting from subsection (4) "or the depreciated value of the

property immediately before the time of disposal, whichever is the less";

  (d)  by omitting subsection (4A).

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 23

Disposal of depreciated property on change of ownership or interest

 

  23. Section 59AA of the Principal Act is amended:

  (a)  by omitting from subsection (1) "Subject to this section, where" and

substituting "If";

  (b)  by omitting from subsection (1) all the words after "property before

the change" (second occurring) and substituting "(in this section called the

'transferor') had, on the day on which the change occurred, disposed of the

whole of the property to the person, or all the persons, by whom the property

is owned after the change (in this section called the 'transferee')";

  (c)  by omitting subsection (2) and substituting the following subsections:

  "(2) Unless a joint election for roll-over relief is made by both the

transferor and the transferee, the provisions of this Act relating to

depreciation apply as if the consideration for the disposal were equal to the

market value of the property immediately before the time when the change

occurred.

  "(2A) If a joint election for roll-over relief is made by both the

transferor and the transferee, section 58 applies to the disposal.

  "(2B) A joint election for roll-over relief has no effect unless it:

  (a)  is in writing; and

  (b)  is made:

    (i)  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 this subsection; or

    (ii)  within such further period as the Commissioner

allows; and

  (c)  contains such information about the transferor's holding of the

property as will enable the transferee to work out how section 58 will apply

to the transferee's holding of the property.

  "(2C) If a person dies before the end of the period allowed for making a

joint election for roll-over relief, the trustee of the deceased person's

estate may be a party to the election on the deceased person's behalf.";

  (d)  by omitting from subsection (4) "This section" and substituting

"Subsection (2)".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 24

 

  24. After section 62AAA the following sections are inserted:

Object of pooling of depreciable property

  "62AAB. The object of pooling is to provide taxpayers with a simplified

method of quantifying the annual depreciation allowable in respect of 2 or

more units of property which are depreciable at the same rate.

Taxpayer may create pools to which depreciable property may be allocated

  "62AAC.(1) A taxpayer may, by written notice:

  (a)  create a pool to which depreciable property may be allocated; and

  (b)  specify a year of income as the earliest year of income for which

property may be allocated to the pool; and

  (c)  specify a percentage as the pool percentage for the pool.

  "(2) A notice under subsection (1) is irrevocable and must be made:

  (a)  within 6 months after the later of the following:

    (i)  the end of the specified year of income;

    (ii)  the commencement of this section; or

  (b)  within such further period as the Commissioner allows.

Pool percentage

  "62AAD. For the purposes of this Act, the pool percentage for a pool is the

pool percentage specified in the notice creating the pool.

Allocation of property to a pool

  "62AAE.(1) A taxpayer may, by written notice, allocate a unit of property to

a specified pool for a specified year of income and for subsequent years of

income if:

  (a)  depreciation is allowable to the taxpayer under this Act in respect of

the property in relation to the specified year of income; and

  (b)  at all times during the period:

    (i)  commencing at the time the taxpayer's ownership of the

property began; and

    (ii)  ending immediately after the beginning of the

specified year of income;

the property was:

    (iii)  used by the taxpayer exclusively for the purpose of

producing assessable income; or

    (iv)  installed ready for exclusive use for that purpose

and held in reserve by the taxpayer; and

  (c)  the annual depreciation percentage fixed under section 55 for the

property in relation to the specified year of income equals the pool

percentage for the pool; and

  (d)  the taxpayer has not allocated the property to any other pool for the

specified year of income or a subsequent year of income; and

  (e)  each amount of depreciation allowed or allowable to the taxpayer in

respect of the property in relation to a year of income earlier than the

specified year of income was calculated in accordance with subsection 56(1) or

section 62AAP; and

  (f)  apart from that allocation, the depreciation allowable to the taxpayer

in respect of the property in relation to the specified year of income would

have been calculated in accordance with subsection 56(1); and

  (g)  the specified year of income is not earlier than the earliest year of

income for which property may be allocated to the pool.

  "(2) A notice under subsection (1) is irrevocable and must be made:

  (a)  within 6 months after the later of the following:

    (i)  the end of the specified year of income;

    (ii)  the commencement of this section; or

  (b)  within such further period as the Commissioner allows.

Cancellation of allocation to pool - taxpayer's notice

  "62AAF.(1) A taxpayer may, by written notice, cancel the allocation of

specified property to a pool insofar as the allocation applies for a specified

year of income and for subsequent years of income.

  "(2) A notice under subsection (1) is irrevocable and must be made:

  (a)  within 6 months after the later of the following:

    (i)  the end of the specified year of income;

    (ii)  the commencement of this section; or

  (b)  within such further period as the Commissioner allows.

  "(3) If, under this section, a taxpayer cancels the allocation of property

to a pool for a year of income, this Act does not prevent the taxpayer from

re-allocating the property to the pool for the year of income in accordance

with section 62AAE.

Cancellation of allocation to pool - cessation of exclusive assessable

income-producing use

  "62AAG.(1) If:

  (a)  property is allocated by a taxpayer to a pool for a year of income; and

  (b)  during the year of income, the taxpayer ceased to use the property

exclusively for assessable income-producing purposes; and

  (c)  that cessation was not by way of the disposal, loss or destruction of

the property;

the allocation is cancelled insofar as it applies for that year of income and

for subsequent years of income.

  "(2) For the purposes of this section, a unit of property is taken to be

used for assessable income-producing purposes by a taxpayer if, and only if,

the property is:

  (a)  used by the taxpayer for the purpose of producing assessable income; or

  (b)  installed ready for use for that purpose and held in reserve by the

taxpayer.

Cancellation of allocation to pool - annual depreciation percentage not equal

to pool percentage

  "62AAH. If:

  (a)  property is allocated by a taxpayer to a pool for a year of income;

and

  (b)  the annual depreciation percentage fixed under section 55 for the

property in relation to the year of income does not equal the pool percentage

for the pool;

the allocation is cancelled insofar as it applies for that year of income and

for subsequent years of income.

Cancellation of allocation to pool - subsequent application of special

depreciation provisions

  "62AAJ. If:

  (a)  property is allocated by a taxpayer to a pool for a year of income;

and

  (b)  apart from that allocation, the depreciation allowable to the taxpayer

in respect of the property in relation to the year of income would have been

calculated otherwise than in accordance with subsection 56(1);

the allocation is cancelled insofar as it applies for that year of income and

for subsequent years of income.

Cancellation of allocation to pool - disposal to which section 58 applies

  "62AAK. If:

  (a)  property is allocated by a taxpayer to a pool for a year of income; and

  (b)  the property is disposed of during the year of income; and

  (c)  section 58 applies to that disposal;

the allocation is cancelled insofar as it applies for that year of income and

for subsequent years of income.

Effect of cancellation of allocation to pool

  "62AAL. If the allocation of property to a pool for a year of income is

cancelled, the property is taken never to have been allocated to the pool for

the year of income.

Reconstruction assumptions and reconstructed depreciated value

  "62AAM.(1) If property is allocated by a taxpayer to a pool for a year of

income, the reconstruction assumptions applicable to the property for the year

of income are as follows:

  (a)  the assumption that the property had not been allocated to the pool for

the year of income;

  (b)  the assumption that the depreciation allowable to the taxpayer in

relation to the year of income in respect of the property had been calculated

in accordance with paragraph 56(1)(a);

  (c)  the assumption that the percentage specified in that paragraph was

equal to the pool percentage for the pool.

  "(2) The reconstructed depreciated value of property allocated to a pool for

a year of income is the amount that would have been the depreciated value of

the property if the reconstruction assumptions had applied to the property for

each year of income for which the property was allocated to the pool.

Opening balance of pool

  "62AAN. The opening balance of a pool for a year of income (in this section

called the 'current year of income') is calculated using the formula:

 Closing balance for  +  Depreciated value  - Reconstructed

 preceding year          of new property      depreciated value

                                              of cancelled property

where:

  'Closing balance for preceding year' means the closing balance of the pool

for the preceding year of income;

  'Depreciated value of new property' means the amount obtained by:

  (a)  identifying each unit of property allocated to the pool for the current

year of income where the current year of income is the first year of income

for which the allocation applies; and

  (b)  calculating the depreciated value, as at the beginning of the current

year of income, of each such unit of property; and

  (c)  adding up those depreciated values;

  'Reconstructed depreciated value of cancelled property' means the amount

obtained by:

  (a)  identifying each unit of property allocated to the pool for the

preceding year of income where the allocation of the property to the pool for

the current year of income is cancelled; and

  (b)  calculating the reconstructed depreciated value, as at the beginning of

the current year of income, of each such unit of property; and

  (c)  adding up those reconstructed depreciated values.

Closing balance of pool

  "62AAO. The closing balance of a pool for a year of income is worked out

using the formula:

        Opening balance - Total depreciation

where:

  'Opening balance' means the opening balance of the pool for the year of

income;

  'Total depreciation' means the total depreciation allowable to the taxpayer

under this Act in relation to the year of income in respect of all the units

of property allocated to the pool for the year of income.

Calculation of depreciation - pooled property

  "62AAP.(1) The total depreciation allowable to a taxpayer under this Act in

relation to a year of income in respect of all the units of property allocated

to a pool for the year of income is worked out using the formula:

      1.5 x Pool percentage x Opening balance

where:

  'Pool percentage' means the pool percentage for the pool;

  'Opening balance' means the opening balance of the pool for the year of

income.

  "(2) This section applies in spite of section 56.

Cancellation of allocation of property to a pool - effect on subsequent

operation of depreciation provisions

  "62AAQ. If the allocation of a unit of property to a pool is cancelled, the

provisions of this Act relating to depreciation apply, in relation to each

year of income to which the cancellation applies and any subsequent year of

income, as if the reconstruction assumptions had applied for each year of

income for which the property was allocated to the pool.

Cancellation of allocation of property to pool - taxpayer must use diminishing

value method to calculate subsequent depreciation

  "62AAR. If:

  (a)  the allocation of a unit of property to a pool for a year of income (in

this section called the 'current year of income') is cancelled; and

  (b)  the property is allocated to the pool for the preceding year of income;

then, in calculating the depreciation (if any) allowable to the taxpayer in

respect of the property in accordance with subsection 56(1) for the current

year of income or a subsequent year of income, this Act has effect as if

paragraph 56(1)(b) had not been enacted.

No balancing charges/deductions while property allocated to pool

  "62AAS. If property is allocated to a pool for a year of income, subsections

59(1) and (2) do not apply to the disposal, loss or destruction of the

property during the year of income.

Taxpayer's assessable income to include proceeds of disposal of pooled

property etc.

  "62AAT.(1) If:

  (a)  property is allocated by a taxpayer to a pool for a year of income; and

  (b)  the property is disposed of, lost or destroyed during the year of income;

then:

  (c)  an amount equal to so much of the consideration receivable in respect

of the disposal, loss or destruction (within the meaning of section 59) as

does not exceed the cost of the property is included in the taxpayer's

assessable income of the year of income; and

  (d)  the disposal, loss or destruction does not affect the allocation of the

property to the pool for a subsequent year of income; and

  (e)  so long as the property remains allocated to the pool for a subsequent

year of income, section 62AAP applies to the subsequent year of income as if

depreciation were allowable to the taxpayer under this Act in relation to the

subsequent year of income in respect of the property.

  "(2) Subsections 59(2A) to (2E) (inclusive) apply to the taxpayer and in

relation to the property as if a reference in each of those subsections to

subsection 59(2) included a reference to subsection (1) of this section.

  "(3) If:

  (a)  property owned by a taxpayer is disposed of to another person; and

  (b)  an amount (in this subsection called the 'assessable amount'):

    (i)  is included in the taxpayer's assessable income under

subsection (1) of this section in respect of the disposal; or

    (ii)  would, apart from subsection 59(2A) or (2D), be

included in the taxpayer's assessable income under subsection (1) of this

section in respect of the disposal; and

  (c)  section 60 applies to the acquisition of the property by the other

person;

then:

  (d)  in spite of anything in subsection 60(1), the person acquiring the

property is to be allowed depreciation calculated on the assessable amount; and

  (e)  in spite of anything in subsection 62(2), for the purposes of

subsection 62(1), the person acquiring the property is taken to have acquired

the property at a cost equal to the assessable amount.

Disposal of pooled property - application of CGT provisions

  "62AAU. If:

  (a)  property is allocated by a taxpayer to a pool for a year of income (in

this section called the 'current year of income'); and

  (b)  the property is disposed of (within the meaning of Part IIIA);

section 160ZK applies to the disposal of the property as if the reconstruction

assumptions had applied for each year of income for which the property was

allocated to the pool.

Taxpayers  may use their own form of words in pool notices

  "62AAV. If:

  (a)  subsection 62AAC(1), 62AAE(1) or 62AAF(1) expresses an idea in a

particular form of words; and

  (b)  a notice made by a taxpayer under the subsection concerned appears to

have expressed the same idea in a different form of words for the purpose of

convenience; the ideas are not taken to be different merely because different

forms of words were used.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 25

Deductions for debt dividends

 

  25. Section 67AA of the Principal Act is amended by adding at the end the

following subsection:

  "(3) Section 45Z applies for the purposes of this section in a corresponding

way to the way in which it applies for the purposes of sections 46, 46A and

46C.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 26

Expenditure on scientific research

 

  26.(1) Section 73A of the Principal Act is amended by inserting after

subsection (4) the following subsection:

  "(4A) If:

  (a)  a person has purchased from another person a building, or part of a

building, where the vendor had incurred capital expenditure of a kind in

respect of which deductions are or have been allowable under subsection (2);

and

  (b)  it would be concluded that, having regard to any connection between the

vendor and the purchaser or to any other relevant circumstances, those persons

were not dealing with each other at arm's length; and

  (c)  the purchase price is greater or lesser than the market value of the

building, or the part of the building, at the time of the purchase;

the purchase price is, for all purposes of the application of this Act in

relation to the vendor, taken to have been the amount of the market value of

the property at the time of the purchase.".

  (2) Section 73A of the Principal Act is amended:

  (a)  by omitting subsection (5);

  (b)  by omitting from subsection (9) all the words after "30 June 1995".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 27

 

  27. After section 73A of the Principal Act the following section is

inserted:

Section 73A roll-over relief where CGT roll-over relief allowed under section

160ZZM, 160ZZMA, 160ZZN, 160ZZNA or 160ZZO

(Roll-over relief where CGT roll-over relief allowed)

  "73AA.(1) This section applies to the disposal of a building, or part of a

building, by a taxpayer (in this section called the 'transferor') to another

taxpayer (in this section called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

building or the part of the building by the transferor; or

    (ii)  if the transferor is a partnership - the building or

the part of the building is partnership property of the partnership and

section 160ZZNA applies to the corresponding disposal, by all of the partners

in the partnership, of their interests in the building or the part of the

building; and

  (b)  deductions have been allowed or are allowable under subsection 73A(2)

to the transferor in respect of the building or the part of the building.

(No balancing charges)

  "(2) Subsection 73A(4) (which deals with balancing charges) does not apply

to the disposal of the building or the part of the building by the

transferor.

(Transferee to inherit certain characteristics from transferor)

  "(3) Section 73A applies as if:

  (a)  the transferee had acquired the building or the part of the building

for a consideration equal to the cost of the building or the part of the

building to the transferor; and

  (b)  deductions were not allowable to the transferee under subsection 73A(2)

in respect of:

    (i)  so much of the cost of the building or the part of the

building to the transferor as was allowed or allowable as a deduction to the

transferor under that subsection in respect of the building or the part of the

building; or

    (ii)  if there have been 2 or more prior successive

applications of this section - so much of the cost of the building or the part

of the building to the transferor as was allowed or allowable as a deduction

to the prior successive transferors under that subsection in respect of the

building or the part of the building; and

  (c)  deductions were not allowable to the transferor under subsection 73A(2)

in respect of the building or the part of the building for the year of income

in which the disposal took place or for a subsequent year of income.

(Subsection 73A(2A) - special rules)

  "(4) If subsection 73A(2A) applies to the transferor and in relation to the

building or the part of the building, that subsection applies in relation to

the transferee and in relation to the building or the part of the building.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(5) If:

  (a)  after the disposal of the building or the part of the building to the

transferee, the building or the part of the building is lost or destroyed or

the transferee disposes of the building or the part of the building; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of subsection 73A(4) in relation to

the loss, destruction or disposal, the total of:

  (c)  the deductions allowed or allowable to the transferor under subsection

73A(2) in relation to the building or the part of the building; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under subsection 73A(2) in relation to the building or the part of

the building;

are taken to have been deductions allowed or allowable to the transferee under

subsection 73A(2) in relation to the building or the part of the building.

(Meaning of 'cost')

  "(6) A reference in this section to the cost of a building or of a part of a

building to the transferor is a reference to expenditure of a capital nature

incurred by the transferor in the construction or acquisition of the building

or the part of the building, or in making any alteration or addition to the

building or to the part of the building.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 28

Expenditure on research and development activities

 

  28. Section 73B of the Principal Act is amended:

  (a) by inserting after subsection (15A) the following subsection:

  "(15B) For the purposes of the application of paragraphs (15)(a), (23)(e)

and (24)(e), if the eligible company commences to use the unit of plant

exclusively for the purpose of the carrying on by or on behalf of it of

research and development activities during the year of income ending on 30

June 1993 or an earlier year of income, the definition of 'deduction

acceleration factor' in subsection (1) is to be read as if:

  (a)  the words '(a) in the case of the year of income ending on 30 June 1993

or an earlier year of income:' were omitted from the definition; and

  (b)  the word 'or' before paragraph (b) of the definition and that paragraph

were omitted from the definition.";

  (b) by inserting in paragraph (31)(a) "an amount of core technology

expenditure," after "research and development expenditure,".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 29

Guaranteed returns to investors

 

  29. Section 73CA of the Principal Act is amended by adding at the end of

subsection (6) the following definition:

  " 'expenditure' does not include core technology expenditure.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 30

Losses to be allowable deductions

 

  30. Section 82Z of the Principal Act is amended:

  (a)  by omitting from paragraph (3)(a) "primary" and substituting "loss";

  (b)  by omitting paragraph (3)(b) and substituting the following

paragraphs:

  "(b)  the taxpayer or another person has made a currency exchange gain under

another contract (in this subsection called the 'gain contract'); and

  (ba)  either:

    (i)  the loss contract would not have been entered into, or

might reasonably be expected not to have been entered into, if the gain

contract had not been entered into; or

    (ii)  the gain contract would not have been entered into,

or might reasonably be expected not to have been entered into, if the loss

contract had not been entered into;".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 31

Modified application of Act in relation to certain unit trusts

 

  31.(1) Section 102L of the Principal Act is amended by omitting from

subsection (2) "and 46E" and substituting ", 46E and 46F".

  (2) Section 102L of the Principal Act is amended by inserting in subsection

(2) "45Z," before "46" (first occurring).

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 32

Modified application of Act in relation to certain unit trusts

 

  32.(1) Section 102T of the Principal Act is amended by omitting from

subsection (2) "and 46E" and substituting ", 46E and 46F".

  (2) Section 102T of the Principal Act is amended by inserting in subsection

(2) "45Z," before "46" (first occurring).

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 33

Effect of Division on rebate under section 46 or 46A

 

  33. Section 116J of the Principal Act is amended by adding at the end the

following subsection:

  "(2) Section 45Z applies for the purposes of this section in a corresponding

way to the way in which it applies for the purposes of sections 46 and 46A.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 34

 

  34. After section 122JA of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNO or 160ZZO or where election for roll-over relief made

under section 122R

(Roll-over relief where CGT roll-over relief allowed)

  "122JAA.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under this Subdivision to

the transferor in respect of the property.

(Roll-over relief where joint election made under section 122R)

  "(2) This section also applies if a joint election for roll-over relief is

made under subsection 122R(2) by both the transferor and the transferee

referred to in that subsection in relation to the disposal of property.

(No balancing charges or deductions)

  "(3) Section 122K (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Subdivision and Subdivision C (to the extent to which it relates

to this Subdivision) apply as if:

  (a)  if any part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for a consideration equal to the amount worked out

using the formula:

  Transferor's  -  Transferor's deductions + Undeducted excess

  expenditure                                amounts

where:

  'Transferor's expenditure' means so much of the total expenditure of a

capital nature of the transferor in respect of the property as is allowable

capital expenditure of the transferor;

  'Transferor's deductions' means the sum of the deductions allowed or

allowable to the transferor under this Subdivision in respect of so much of

the expenditure of a capital nature of the transferor in respect of the

property as is allowable capital expenditure of the transferor;

  'Undeducted excess amounts' means the sum of the excess amounts referred to

in subsection (5) in respect of the property; and

  (b)  if no part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for nil consideration; and

  (c)  if the property is a mining or prospecting right or mining or

prospecting information:

    (i)  a notice under section 122B in respect of the

acquisition of the property had been given to the Commissioner by the

transferor and the transferee; and

    (ii)  the amount specified in the notice were the amount

worked out under paragraph (a) of this subsection; and

    (iii)  subsections 122B(2), 122DG(9) and 122J(5) were not

applicable to that notice; and

  (d)  if the property is not a mining or prospecting right or mining or

prospecting information - subsection 122DG(8) were not applicable to the

disposal of the property; and

  (e)  the reference in paragraph 122DG(3)(a) to a year of income in respect

of which a deduction has been allowed or is allowable, or, apart from the

operation of subsection 122DG(6), would have been allowed or would be

allowable, in respect of an amount of allowable capital expenditure of the

transferee in respect of the property included a reference to a year of income

in respect of which a deduction has been allowed or is allowable, or, apart

from the operation of subsection 122DG(6), would have been allowed or would be

allowable, in respect of allowable capital expenditure of:

    (i)  the transferor in respect of the property; or

    (ii)  if there have been 2 or more prior successive

applications of this section - any of the prior successive transferors in

respect of the property.

(Transfer of subsection 122DG(7) excess amounts)

  "(5) If, apart from this subsection, the following conditions are satisfied

in relation to a deduction allowable to the transferor under subsection

122DG(2) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

122DG(7);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the deduction is allowable for the year of income in which the disposal

took place;

then:

  (d)  the excess amount is taken, under subsection 122DG(7), to be a

deduction that is allowable under subsection 122DG(2) to the transferee for

the year of income in which the disposal took place; and

  (e)  a deduction is not allowable to the transferor under subsection

122DG(2) in respect of the excess amount.

(Transfer of subsection 122J(3) excess amounts)

  "(6) If, apart from this subsection, the following conditions would have

been satisfied in relation to an amount (in this subsection called the 'excess

amount') of contingent allowable capital expenditure of the transferor in

respect of the property:

  (a)  the expenditure is taken to be contingent allowable capital expenditure

because of subsection 122J(3);

  (b)  the contingency is that the transferor carried on prescribed mining

operations in the year of income in which the disposal took place or a

subsequent year of income;

then:

  (c)  the excess amount is taken, under subsection 122J(3), to be allowable

capital expenditure incurred by the transferee in:

    (i)  if the transferee carried on prescribed mining

operations in the year of income in which the disposal took place - that year

of income; or

    (ii)  the first subsequent year of income in which the

transferee carried on prescribed mining operations; and

  (d)  subsection 122J(3) does not apply in relation to the excess amount in

relation to the transferor.

(Transfer of subsection 122J(4) excess amounts)

  "(7) If, apart from this subsection, the following conditions would have

been satisfied in relation to a contingent deduction allowable to the

transferor under subsection 122J(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

122J(4);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure in respect of the property;

  (c)  the contingency is that the transferor had carried on prescribed mining

operations in the year of income in which the disposal took place or a

subsequent year of income;

then:

  (d)  the excess amount is taken, under subsection 122J(4), to be a deduction

that is allowable under subsection 122J(1) to the transferee for:

    (i)  if the transferee carried on prescribed mining

operations in the year of income in which the disposal took place - that year

of income; or

    (ii)  the first subsequent year of income in which the

transferee carried on prescribed mining operations; and

  (e)  a deduction is not allowable to the transferor under subsection 122J(1)

in respect of the excess amount.

(Transfer of subsection 122J(4C) excess amounts)

  "(8) If, apart from this subsection, the following conditions would have

been satisfied in relation to a contingent deduction allowable to the

transferor under subsection 122J(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

122J(4C);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the contingency is that the transferor had derived assessable income in

the year of income in which the disposal took place or a subsequent year of

income;

then:

  (d)  the excess amount is taken, under subsection 122J(4C), to be a

deduction that is allowable under subsection 122J(1) to the transferee for:

    (i)  if the transferee derives assessable income in the

year of income in which the disposal took place - that year of income; or

    (ii)  the first subsequent year of income in which the

transferee derives assessable income; and

  (e)  a deduction is not allowable to the transferor under subsection 122J(1)

in respect of the excess amount.

(Section 122C, 122DA, 122DC and 122DE and subsection 122DG(1) - inheritance of

threshold conditions)

  "(9) If section 122C, 122DA, 122DC or 122DE or subsection 122DG(1) applied

to the expenditure of a capital nature of the transferor in respect of the

property, that section or subsection has effect, in relation to the transferee

and in relation to the property, as if the threshold conditions that were

satisfied in relation to the transferor were satisfied in relation to the

transferee.

(Subsection (9) - threshold conditions)

  "(10) For the purposes of subsection (9), the following are taken to be

threshold conditions in relation to expenditure in respect of property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  if the expenditure was incurred under a contract - a condition that the

contract was, or was not, entered into before, at or after a particular time;

  (c)  if the expenditure was incurred in respect of the construction of

property - a condition that the construction commenced, or did not commence,

before, at or after a particular time.

(Subsections 122J(3) and (4) - inheritance of threshold conditions)

  "(11) If subsection 122J(3) or (4) applied to the expenditure of the

transferor in respect of the property, that subsection has effect, in relation

to the transferee and in relation to the property, as if the threshold

conditions that were satisfied in relation to the transferor were satisfied in

relation to the transferee.

(Subsection (11) - threshold conditions)

  "(12) For the purposes of subsection (11), the following are taken to be

threshold conditions in relation to expenditure in respect of the property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  a condition that the expenditure was incurred during a particular year

of income.

(Inheritance of section 122H election)

  "(13) If the transferor made an election under section 122H in respect of

expenditure on the property, the transferee is taken to have made an election

under section 122H in respect of expenditure on the property.

(Rule where no section 122H election made)

  "(14) If the transferor did not make an election under section 122H in

respect of expenditure on the property, the transferee is not entitled to make

an election under section 122H in respect of expenditure on the property.

(Inheritance of subsection 122A(1B) threshold conditions)

  "(15) If:

  (a)  the property is plant or articles for the purposes of section 54; and

  (b)  the expenditure of a capital nature of the transferor in respect of the

property is allowable capital expenditure; then, section 122A has effect in

relation to the transferee and in relation to the property, as if the

conditions set out in subsection 122A(1B) that were satisfied in relation to

the transferor were satisfied in relation to the transferee.

(Leases - subsection 88B(5) election to have no effect)

  "(16) If the property is a lease, being a mining or prospecting right, an

election under subsection 88B(5) (whether made before or after the disposal)

has no effect in relation to the grant, assignment or surrender of the lease.

(Provisions of Subdivision B of Division 16H - inheritance of threshold

conditions)

  "(17) If a provision of Subdivision B of Division 16H applied to the

expenditure of the transferor in respect of the property, that provision has

effect, in relation to the transferee and in relation to the property, as if

the threshold conditions that were satisfied in relation to the transferor

were satisfied in relation to the transferee.

(Subsection (17) - threshold conditions)

  "(18) For the purposes of subsection (17), the following are taken to be

threshold conditions in relation to expenditure in respect of the property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  a condition that the expenditure was incurred during a particular year

of income.

(Recoupment of expenditure - consequential amendment of assessments)

  "(19) Section 170 does not prevent the amendment at any time of an

assessment of the transferee where section 122T has applied to:

  (a)  the transferor in respect of the property; or

  (b)  if there have been 2 or more prior successive applications of this

section - any of the prior successive transferors in respect of the property.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(20) If:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee for

prescribed purposes or eligible purposes (within the meaning of section 122K)

is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 122K in relation to the

loss, destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under this

Subdivision in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under this Subdivision in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

this Subdivision in relation to the property.

(Disposal by transferee where no roll-over relief - inheritance of total

expenditure of a capital nature)

  "(21) In spite of subsection (4), if:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee for

prescribed purposes or eligible purposes (within the meaning of section 122K)

is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 122K in relation to the

loss, destruction, disposal or termination, the total expenditure of a capital

nature of the transferee in respect of the property is to be worked out as if

the rule set out in subsection (22) had been applicable to:

  (c)  the disposal of the property by the transferor to the transferee; and

  (d)  if there have been 2 or more prior successive applications of this

section - each prior successive disposal.

(Rule referred to in subsection (21))

  "(22) The rule referred to in subsection (21) is that the transferee had

acquired the property for a consideration equal to the total expenditure of a

capital nature of the transferor in respect of the property.

(CGT roll-over relief applies to motor vehicles)

  "(23) For the purposes of this section, in addition to the effect that

sections 160ZZM, 160ZZMA, 160ZZN, 160ZZNA and 160ZZO have apart from this

subsection, those sections also have the effect that they would have if a

reference in those sections to an asset included a reference to a motor

vehicle of a kind mentioned in paragraph 82AF(2)(a).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 35

 

  35. After section 122JF of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made

under section 122R

(Roll-over relief where CGT roll-over relief allowed)

  "122JG.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under this Subdivision to

the transferor in respect of the property.

(Roll-over relief where joint election made under section 122R)

  "(2) This section also applies if a joint election for roll-over relief is

made under subsection 122R(2A) by both the transferor and the transferee

referred to in that subsection in relation to the disposal of property.

(No balancing charges or deductions)

  "(3) Section 122K (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Subdivision and Subdivision C (to the extent to which it relates

to this Subdivision) apply as if:

  (a)  if any part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for a consideration equal to the amount worked out

using the formula:

  Transferor's  -  Transferor's deductions  +  Undeducted excess

  expenditure                                  amounts

where:

  'Transferor's expenditure' means so much of the total expenditure of a

capital nature of the transferor in respect of the property as is allowable

capital expenditure of the transferor;

  'Transferor's deductions' means the sum of the deductions allowed or

allowable to the transferor under this Subdivision in respect of so much of

the expenditure of a capital nature of the transferor in respect of the

property as is allowable capital expenditure of the transferor;

  'Undeducted excess amounts' means the sum of the excess amounts referred to

in subsection (5) in respect of the property; and

  (b)  if no part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for nil consideration; and

  (c)  if the property is a quarrying or prospecting right or quarrying or

prospecting information:

    (i)  a notice under section 122JD in respect of the

acquisition of the property had been given to the Commissioner by the

transferor and the transferee; and

    (ii)  the amount specified in the notice were the amount

worked out under paragraph (a) of this subsection; and

    (iii)  subsections 122JD(2), 122JE(11) and 122JF(9) were

not applicable to that notice; and

  (d)  if the property is not a quarrying or prospecting right or quarrying or

prospecting information - subsection 122JE(10) were not applicable to the

disposal of the property; and

  (e)  the reference in subparagraph 122JE(2)(a)(ii) to a year of income in

respect of which a deduction has been allowed or is allowable, or, apart from

the operation of subsection 122JE(5), would have been allowed or would be

allowable, in respect of an amount of allowable capital expenditure of the

transferee in respect of the property included a reference to a year of income

in respect of which a deduction has been allowed or is allowable, or, apart

from the operation of subsection 122JE(5), would have been allowed or would be

allowable, in respect of allowable capital expenditure of:

    (i)  the transferor in respect of the property; or

    (ii)  if there have been 2 or more prior successive

applications of this section - any of the prior successive transferors in

respect of the property.

(Transfer of subsection 122JE(9) excess amounts)

  "(5) If, apart from this subsection, the following conditions are satisfied

in relation to a deduction allowable to the transferor under subsection

122JE(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

122JE(9);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the deduction is allowable for the year of income in which the disposal

took place;

then:

  (d)  the excess amount is taken, under subsection 122JE(9), to be a

deduction that is allowable under subsection 122JE(1) to the transferee for

the year of income in which the disposal took place; and

  (e)  a deduction is not allowable to the transferor under subsection

122JE(1) in respect of the excess amount.

(Transfer of subsection 122JF(6) excess amounts)

  "(6) If, apart from this subsection, the following conditions would have

been satisfied in relation to a contingent deduction allowable to the

transferor under subsection 122JF(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

122JF(6);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the contingency is that the transferor had derived assessable income in

the year of income in which the disposal took place or a subsequent year of

income;

then:

  (d)  the excess amount is taken, under subsection 122JF(6), to be a

deduction that is allowable under subsection 122JF(1) to the transferee for:

    (i)  if the transferee derives assessable income in the

year of income in which the disposal took place - that year of income; or

    (ii)  the first subsequent year of income in which the

transferee derives assessable income; and

  (e)  a deduction is not allowable to the transferor under subsection

122JF(1) in respect of the excess amount.

(Inheritance of section 122JF election)

  "(7) If the transferor made an election under subsection 122JF(10) in

respect of expenditure on the property, the transferee is taken to have made

an election under subsection 122JF(10) in respect of expenditure on the

property.

(Rule where no section 122JF election made)

  "(8) If the transferor did not make an election under subsection 122JF(10)

in respect of expenditure on the property, the transferee is not entitled to

make an election under subsection 122JF(10) in respect of expenditure on the

property.

(Recoupment of expenditure - consequential amendment of assessments)

  "(9) Section 170 does not prevent the amendment at any time of an assessment

of the transferee where section 122T has applied to:

  (a)  the transferor in respect of the property; or

  (b)  if there have been 2 or more prior successive applications of this

section - any of the prior successive transferors in respect of the property.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(10) If:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee for

prescribed purposes or eligible purposes (within the meaning of section 122K)

is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 122K in relation to the

loss, destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under this

Subdivision in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under this Subdivision in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

this Subdivision in relation to the property.

(Disposal by transferee where no roll-over relief - inheritance of total

expenditure of a capital nature)

  "(11) In spite of subsection (4), if:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee for

prescribed purposes or eligible purposes (within the meaning of section 122K)

is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 122K in relation to the

loss, destruction, disposal or termination, the total expenditure of a capital

nature of the transferee in respect of the property is to be worked out as if

the rule set out in subsection (12) had been applicable to:

  (c)  the disposal of the property by the transferor to the transferee; and

  (d)  if there have been 2 or more prior successive applications of this

section - each prior successive disposal.

(Rule referred to in subsection (11))

  "(12) The rule referred to in subsection (11) is that the transferee had

acquired the property for a consideration equal to the total expenditure of a

capital nature of the transferor in respect of the property.

(CGT roll-over relief applies to motor vehicles)

  "(13) For the purposes of this section, in addition to the effect that

sections 160ZZM, 160ZZMA, 160ZZN, 160ZZNA and 160ZZO have apart from this

subsection, these sections also have the effect that they would have if a

reference in those sections to an asset included a reference to a motor

vehicle of a kind mentioned in paragraph 82AF(2)(a).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 36

Change in interests in property

 

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

  (a)  by omitting from subsection (1) "Subject to this section, where'' and

substituting "If";

  (b)  by omitting from subsection (1) all the words after "property before

the change'' (second occurring) and substituting "in this section called the

'transferor') had, on the day on which the change occurred, disposed of the

whole of the property to the person, or all the persons, by whom the property

is owned after the change (in this section called the 'transferee')";

  (c)  by omitting subsection (2) and substituting the following subsections:

  "(2) If deductions have been allowed or are allowable under Subdivision A in

respect of the property:

  (a)  unless a joint election for roll-over relief is made by both the

transferor and the transferee - this Division applies as if the consideration

for the disposal were equal to the market value of the property immediately

before the time when the change occurred; or

  (b)  if a joint election for roll-over relief is made by both the transferor

and the transferee - section 122JAA applies to the disposal.

  "(2A) If deductions have been allowed or are allowable under Subdivision B

in respect of the property:

  (a)  unless a joint election for roll-over relief is made by both the

transferor and the transferee - this Division applies as if the consideration

for the disposal were equal to the market value of the property immediately

before the time when the change occurred; or

  (b)  if a joint election for roll-over relief is made by both the transferor

and the transferee - section 122JG applies to the disposal.

  "(2B) A joint election for roll-over relief has no effect unless it:

  (a)  is in writing; and

  (b)  is made:

    (i)  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 this subsection; or

    (ii)  within such further period as the Commissioner

allows; and

  (c)  contains such information about the transferor's holding of the

property as will enable the transferee to work out how section 122JAA or

122JG, as the case may be, will apply to the transferee's holding of the

property.

  "(2C) If a person dies before the end of the period allowed for making a

joint election for roll-over relief, the trustee of the deceased person's

estate may be a party to the election on the deceased person's behalf.";

  (d)  by inserting in subsection (3) "or (2A)" after "subsection (2)".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 37

 

  37. After section 123BB of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made

under section 123F

(Roll-over relief where CGT roll-over relief allowed)

  "123BBA.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under this Subdivision to

the transferor in respect of the property.

(Roll-over relief where joint election made under section 123F)

  "(2) This section also applies if a joint election for roll-over relief is

made under subsection 123F(2) by both the transferor and the transferee

referred to in that subsection in relation to the disposal of property.

(No balancing charges or deductions)

  "(3) Section 123C (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Subdivision and Subdivision C (to the extent to which it relates

to this Subdivision) apply as if:

  (a)  the transferee had acquired the property for a consideration equal to

so much of the capital expenditure of the transferor in respect of the

property as is expenditure to which this Subdivision applies; and

  (b)  deductions were not allowable to the transferee under this Subdivision

in respect of:

    (i)  so much of the capital expenditure of the transferor

in respect of the property as was allowed or allowable as a deduction to the

transferor under this Subdivision; or

    (ii)  if there have been 2 or more prior successive

applications of this section - so much of the capital expenditure in respect

of the property as was allowed or allowable as a deduction to the prior

successive transferors under this Subdivision; and

  (c)  the 10-year period referred to in paragraph 123B(1)(a) or the 20-year

period referred to in paragraph 123B(1)(b), as the case may be, over which the

transferee would otherwise be allowed deductions in respect of the property

were reduced by one year for each year of income for which a deduction was

allowed or was allowable under this Subdivision to:

    (i)  the transferor in respect of the property; or

    (ii)  if there have been 2 or more prior successive

applications of this section - any of the prior successive transferors in

respect of the property.

(Inheritance of section 123BA election)

  "(5) If the transferor made an election under section 123BA in respect of

capital expenditure incurred by the transferor in respect of the property,

this Subdivision applies as if the transferee had made an election under that

section in respect of the capital expenditure of the transferee.

(Rule where no section 123BA election made)

  "(6) If the transferor did not make an election under section 123BA in

respect of capital expenditure incurred by the transferor in respect of the

property, the transferee is not entitled to make an election under that

section in respect of the capital expenditure of the transferee.

(Inheritance of section 123BB election)

  "(7) If the transferor made an election under section 123BB in respect of

capital expenditure incurred by the transferor in respect of the property,

this Subdivision applies as if the transferee had made an election under that

section in respect of the capital expenditure of the transferee.

(Rule where no section 123BB election made)

  "(8) If the transferor did not make an election under section 123BB in

respect of capital expenditure incurred by the transferor in respect of the

property, the transferee is not entitled to make an election under that

section in respect of the capital expenditure of the transferee.

(Subparagraphs 123B(1)(a)(i) and (ii) and paragraph 123B(1)(b) - inheritance

of threshold conditions)

  "(9) If  subparagraph 123B(1)(a)(i) or (ii) or paragraph 123B(1)(b) applied

to the expenditure of a capital nature of the transferor in respect of the

property, that  paragraph or subparagraph has effect, in relation to the

transferee and in relation to the property, as if the threshold conditions

that were satisfied in relation to the transferor were satisfied in relation

to the transferee.

(Subsection (9) - threshold conditions)

  "(10) For the purposes of subsection (9), the following are taken to be

threshold conditions in relation to expenditure in respect of property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  if the expenditure was incurred under a contract - a condition that the

property was acquired under a contract that was entered into before, at or

after a particular time.

(Deduction where section 123BA election made by transferee)

  "(11) If:

  (a)  the transferee incurs capital expenditure referred to in subparagraph

123B(1)(a)(i) or (ii) in respect of the property; and

  (b)  the transferee elects that section 123BA applies in respect of the

capital expenditure of the transferee; and

  (c)  apart from the disposal, a deduction (in this subsection called the

'notional deduction') would have been allowable to the transferor under

paragraph 123BA(3)(a) in respect of a particular year of income, being the

year of income in which the disposal took place or a subsequent year of

income;

the amount of the notional deduction is taken to be a deduction allowable

under that paragraph to the transferee for the year of income concerned.

(Recoupment of expenditure - consequential amendment of assessments)

  "(12) Section 170 does not prevent the amendment at any time of an

assessment of the transferee where subsection 123A(2) has applied to:

  (a)  the transferor in respect of the property; or

  (b)  if there have been 2 or more prior successive applications of this

section - one or more of the prior successive transferors in respect of the

property.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(13) If:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee primarily

and principally for a purpose referred to in section 123A is otherwise

terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 123C in relation to the

loss, destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under this

Subdivision in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under this Subdivision in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

this Subdivision in relation to the property.

(Disposal by transferee where no roll-over relief - inheritance of total

expenditure of a capital nature)

  "(14) In spite of subsection (4), if:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee primarily

and principally for a purpose referred to in section 123A is otherwise

terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 123C in relation to the

loss, destruction, disposal or termination, the total expenditure of a capital

nature of the transferee in respect of the property is to be worked out as if

the rule set out in subsection (15) had been applicable to:

  (c)  the disposal of the property by the transferor to the transferee; and

  (d)  if there have been 2 or more prior successive applications of this

section - each prior successive disposal.

(Rule referred to in subsection (14))

  "(15) The rule referred to in subsection (14) is that the transferee had

acquired the property for a consideration equal to the total expenditure of a

capital nature of the transferor in respect of the property.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 38

 

  38. After section 123BE of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made

under section 123F

(Roll-over relief where CGT roll-over relief allowed)

  "123BF.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under this Subdivision to

the transferor in respect of the property.

(Roll-over relief where joint election made under section 123F)

  "(2) This section also applies if a joint election for roll-over relief is

made under subsection 123F(2) by both the transferor and the transferee

referred to in that subsection in relation to the disposal of property.

(No balancing charges or deductions)

  "(3) Section 123C (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Subdivision and Subdivision C (to the extent to which it relates

to this Subdivision) apply as if:

  (a)  the transferee had acquired the property for a consideration equal to

so much of the capital expenditure of the transferor in respect of the

property as is expenditure to which this Subdivision applies; and

  (b)  deductions were not allowable to the transferee under this Subdivision

in respect of:

    (i)  so much of the capital expenditure of the transferor

in respect of the property as was allowed or allowable as a deduction to the

transferor under this Subdivision; or

    (ii)  if there have been 2 or more prior successive

applications of this section - so much of the capital expenditure in respect

of the property as was allowed or allowable as a deduction to the prior

successive transferors under this Subdivision; and

  (c)  the 20-year period referred to in subsection 123BE(1) over which the

transferee would otherwise be allowed deductions in respect of the property

were reduced by one year for each year of income for which a deduction was

allowed or allowable under this Subdivision to:

    (i)  the transferor in respect of the property; or

    (ii)  if there have been 2 or more prior successive

applications of this section - any of the prior successive transferors in

respect of the property.

(Recoupment of expenditure - consequential amendment of assessments)

  "(5) Section 170 does not prevent the amendment at any time of an assessment

of the transferee where subsection 123BD(4) has applied to:

  (a)  the transferor in respect of the property; or

  (b)  if there have been 2 or more prior successive applications of this

section - any of the prior successive transferors in respect of the property.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(6) If:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee primarily

and principally for a purpose referred to in section 123BD is otherwise

terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 123C in relation to the

loss, destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under this

Subdivision in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under this Subdivision in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

this Subdivision in relation to the property.

(Disposal by transferee where no roll-over relief - inheritance of total

expenditure of a capital nature)

  "(7) In  spite of subsection (4), if:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the transferee primarily

and principally for a purpose referred to in section 123BD is otherwise

terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 123C in relation to the

loss, destruction, disposal or termination, the total expenditure of a capital

nature of the transferee in respect of the property is to be worked out as if

the rule set out in subsection (8) had been applicable to:

  (c)  the disposal of the property by the transferor to the transferee; and

  (d)  if there have been 2 or more prior successive applications of this

section - each prior successive disposal.

(Rule referred to in subsection (7))

  "(8) The rule referred to in subsection (7) is that the transferee had

acquired the property for a consideration equal to the total expenditure of a

capital nature of the transferor in respect of the property.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 39

Change in interests in property

 

  39. Section 123F of the Principal Act is amended:

  (a)  by omitting from subsection (1) "Subject to this section, where" and

substituting "If";

  (b)  by omitting from subsection (1) all the words after "property before

the change" (second occurring) and substituting "(in this section called the

'transferor') had, on the day on which the change occurred, disposed  of the

whole of the property to the person, or all the persons, by whom the property

is owned after the change (in this section called the 'transferee')";

  (c)  by omitting subsection (2) and substituting the following subsections:

  "(2) If deductions have been allowed or are allowable under Subdivision A in

respect of the property:

  (a)  unless a joint election for roll-over relief is made by both the

transferor and the transferee - this Division applies as if the consideration

for the disposal were equal to the market value of the property immediately

before the time when the change occurred; or

  (b)  if a joint election for roll-over relief is made by both the transferor

and the transferee - section 123BBA applies to the disposal.

  "(2A) If deductions have been allowed or are allowable under Subdivision B

in respect of the property:

  (a)  unless a joint election for roll-over relief is made by both the

transferor and the transferee - this Division applies as if the consideration

for the disposal were equal to the market value of the property immediately

before the time when the change occurred; or

  (b)  if a joint election for roll-over relief is made by both the transferor

and the transferee - section 123BF applies to the disposal.

  "(2B) A joint election for roll-over relief has no effect unless it:

  (a)  is in writing; and

  (b)  is made:

    (i)  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 this subsection; or

    (ii)  within such further period as the Commissioner

allows; and

  (c)  contains such information about the transferor's holding of the

property as will enable the transferee to work out how section 123BBA or

123BF,  as the case may be, will apply to the transferee's holding of the

property.

  "(2C) If a person dies before the end of the period allowed for making a

joint election for roll-over relief, the trustee of the deceased person's

estate may be a party to the election on the deceased person's behalf.";

  (d)  by inserting in subsection (3) "or (2A)" after "subsection (2)".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 40

 

  40. After section 124AM of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made

under section 124AO

(Roll-over relief where CGT roll-over relief allowed)

  "124AMAA.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under this Division to

the transferor in respect of the property.

(Roll-over relief where joint election made under section 124AO)

  "(2) This section also applies if a joint election for roll-over relief is

made under section 124AO by both the transferor and the transferee referred to

in that section in relation to the disposal of property.

(No balancing charges or deductions)

  "(3) Section 124AM (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Division applies as if:

  (a)  if any part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for a consideration equal to the amount worked out

using the formula:

  Transferor's  -  Transferor's deductions  +  Undeducted excess

  expenditure                                  amounts

where:

  'Transferor's expenditure' means so much of the total expenditure of a

capital nature of the transferor in respect of the property as is allowable

capital expenditure of the transferor;

  'Transferor's deductions' means the sum of the deductions allowed or

allowable to the transferor under this Division in respect of so much of the

expenditure of a capital nature of the transferor in respect of the property

as is allowable capital expenditure of the transferor;

  'Undeducted excess amounts' means the sum of the excess amounts referred to

in subsection (5) in respect of the property; and

  (b)  if no part of the expenditure of the transferor in respect of the

property is allowable capital expenditure of the transferor - the transferee

had acquired the property for nil consideration; and

  (c)  if the property is a petroleum prospecting or mining right or petroleum

prospecting or mining information:

    (i)  a notice under section 124AB in respect of the

acquisition of the property had been given to the Commissioner by the

transferor and the transferee; and

    (ii)  the amount specified in the notice were the amount

worked out under paragraph (a) of this subsection; and

    (iii)  subsections 124AB(3), 124ADG(9) and 124AH(5) were

not applicable to that notice; and

  (d)  if the property is not a petroleum prospecting or mining right or

petroleum prospecting or mining information - subsection 124ADG(8) were not

applicable to the disposal of the property; and

  (e)  if:

    (i)  the property is a qualifying interest in relation to a

cash bidding exploration permit (within the meaning of section 124ABA); and

    (ii)  immediately before the disposal, the transferor had

an entitlement to an eligible cash bidding amount (within the meaning of that

section) in relation to that permit;

then:

    (iii)  a notice under section 124ABA in respect of the

acquisition of the property had been given to the Commissioner by the

transferor and the transferee; and

    (iv)  the amount specified in the notice were equal to the

whole of the transferor's entitlement to the eligible cash bidding amount; and

  (f)  the reference in paragraph 124ADG(3)(a) to a year of income in respect

of which a deduction has been allowed or is allowable, or, apart from the

operation of subsection 124ADG(6), would have been allowed or would be

allowable, in respect of an amount of allowable capital expenditure of the

transferee in respect of the property included a reference to a year of income

in respect of which a deduction has been allowed or is allowable, or, apart

from the operation of subsection 124ADG(6), would have been allowed or would

be allowable, in respect of allowable capital expenditure of:

    (i)  the transferor in respect of the property; or

    (ii)  if there have been 2 or more prior successive

applications of this section - any of the prior successive transferors in

respect of the property.

(Transfer of subsection 124ADG(7) excess amounts)

  "(5) If, apart from this subsection, the following conditions are satisfied

in relation to a deduction allowable to the transferor under subsection

124ADG(2) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

124ADG(7);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the deduction is allowable for the year of income in which the disposal

took place;

then:

  (d)  the excess amount is taken, under subsection 124ADG(7), to be a

deduction that is allowable under subsection 124ADG(2) to the transferee for

the year of income in which the disposal took place; and

  (e)  a deduction is not allowable to the transferor under subsection

124ADG(2) in respect of the excess amount.

(Transfer of subsection 124AH(4) excess amounts)

  "(6) If, apart from this subsection, the following conditions would have

been satisfied in relation to a contingent deduction allowable to the

transferor under subsection 124AH(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

124AH(4);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the contingency is that the transferor had derived assessable income

from petroleum in the year of income in which the disposal took place or a

subsequent year of income;

then:

  (d)  the excess amount is taken, under subsection 124AH(4), to be a

deduction that is allowable under subsection 124AH(1) to the transferee for:

    (i)  if the transferee derives assessable income from

petroleum in the year of income in which the disposal took place - that year

of income; or

    (ii)  the first subsequent year of income in which the

transferee derives assessable income from petroleum; and

  (e)  a deduction is not allowable to the transferor under subsection

124AH(1) in respect of the excess amount.

(Transfer of subsection 124AH(4B) excess amounts)

  "(7) If, apart from this subsection, the following conditions would have

been satisfied in relation to a contingent deduction allowable to the

transferor under subsection 124AH(1) in respect of the property:

  (a)  the deduction is allowable because of the application of subsection

124AH(4B);

  (b)  the deduction is in respect of an amount (in this subsection called the

'excess amount') of expenditure of a capital nature in respect of the

property;

  (c)  the contingency is that the transferor had derived assessable income in

the year of income in which the disposal took place or a subsequent year of

income;

then:

  (d)  the excess amount is taken, under subsection 124AH(4B), to be a

deduction that is allowable under subsection 124AH(1) to the transferee for:

    (i)  if the transferee derives assessable income in the

year of income in which the disposal took place - that year of income; or

    (ii)  the first subsequent year of income in which the

transferee derives assessable income; and

  (e)  a deduction is not allowable to the transferor under subsection

124AH(1) in respect of the excess amount.

(Section 124AB, 124AC, 124ADA, 124ADC and 124ADE and subsection 124ADG(1) -

inheritance of threshold conditions)

  "(8) If section 124AB, 124AC, 124ADA, 124ADC or 124ADE or subsection

124ADG(1) applied to the expenditure of a capital nature of the transferor in

respect of the property, that section or subsection has effect, in relation to

the transferee and in relation to the property, as if the threshold conditions

that were satisfied in relation to the transferor were satisfied in relation

to the transferee.

(Subsection (8) - threshold conditions)

  "(9) For the purposes of subsection (8), the following are taken to be

threshold conditions in relation to expenditure in respect of property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  if the expenditure was incurred under a contract - a condition that the

contract was, or was not, entered into before, at or after a particular time;

  (c)  if the expenditure was incurred in respect of the construction of

property - a condition that the construction commenced, or did not commence,

before, at or after a particular time.

(Subsection 124AH(4) - inheritance of threshold conditions)

  "(10) If subsection 124AH(4) applied to the expenditure of the transferor in

respect of the property, that subsection has effect, in relation to the

transferee and in relation to the property, as if the threshold conditions

that were satisfied in relation to the transferor were satisfied in relation

to the transferee.

(Subsection (10) - threshold conditions)

  "(11) For the purposes of subsection (10), the following are taken to be

threshold conditions in relation to expenditure in respect of the property:

  (a)  a condition that the expenditure was incurred before, at or after a

particular time;

  (b)  a condition that the expenditure was incurred during a particular year

of income.

(Inheritance of section 124AG election)

  "(12) If the transferor made an election under section 124AG in respect of

expenditure on the property, the transferee is taken to have made an election

under section 124AG in respect of expenditure on the property.

(Rule where no section 124AG election made)

  "(13) If the transferor did not make an election under section 124AG in

respect of expenditure on the property, the transferee is not entitled to make

an election under section 124AG in respect of expenditure on the property.

(Inheritance of subsection 124AA(2A) threshold conditions)

  "(14) If:

  (a)  the property is plant or articles for the purposes of section 54; and

  (b)  the expenditure of a capital nature of the transferor in respect of the

property is allowable capital expenditure;

then, section 124AA has effect in relation to the transferee and in relation

to the property, as if the conditions set out in subsection 124AA(2A) that

were satisfied in relation to the transferor were satisfied in relation to the

transferee.

(Recoupment of expenditure - consequential amendment of assessments)

  "(15) Section 170 does not prevent the amendment at any time of an

assessment of the transferee where section 124AQ has applied to:

  (a)  the transferor in respect of the property; or

  (b)  if there have been 2 or more prior successive applications of this

section - any of the prior successive transferors in respect of the property.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(16) If:

  (a) after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of property by the transferee for purposes

of carrying on prescribed petroleum operations or of exploring or prospecting

for petroleum (within the meaning of section 124AM) is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 124AM in relation to the

loss, destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under this

Division in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under this Division in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

this Division in relation to the property.

(Disposal by transferee where no roll-over relief - inheritance of total

expenditure of a capital nature)

  "(17) In spite of subsection (4), if:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is lost or destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use of the property by the taxpayer for purposes

of carrying on prescribed petroleum operations or of exploring or prospecting

for petroleum (within the meaning of section 124AM) is otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 124AM in relation to the

loss, destruction, disposal or termination, the total expenditure of a capital

nature of the transferee in respect of the property is to be worked out as if

the rule set out in subsection (18) had been applicable to:

  (c)  the disposal of the property by the transferor to the transferee; and

  (d)  if there have been 2 or more prior successive applications of this

section - each prior sucessive disposal.

(Rule referred to in subsection (17))

  "(18) The rule referred to in subsection (17) is that the transferee had

acquired the property for a consideration equal to the total expenditure of a

capital nature of the transferor in respect of the property.

(CGT roll-over relief applies to motor vehicles)

  "(19) For the purposes of this section, in addition to the effect that

sections 160ZZM, 160ZZMA, 160ZZN, 160ZZNA and 160ZZO have apart from this

subsection, those sections also have the effect that they would have if a

reference in those sections to an asset included a reference to a motor

vehicle of a kind mentioned in paragraph 82AF(2)(a).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 41

Change in interests in property

 

  41. Section 124AO of the Principal Act is amended:

  (a)  by omitting from subsection (1) "Subject to this section, where" and

substituting "If";

  (b)  by omitting from subsection (1) all the words after "property before

the change" (second occurring) and substituting "(in this section called the

'transferor') had, on the day on which the change occurred, disposed of the

whole of the property to the person, or all the persons, by whom the property

is owned after the change (in this section called the 'transferee')";

  (c)  by omitting subsection (2) and substituting the following subsections:

  "(2) Unless a joint election for roll-over relief is made by both the

transferor and the transferee, this Division applies as if the consideration

for the disposal were equal to the market value of the property immediately

before the time when the change occurred.

  "(2A) If a joint election for roll-over relief is made by both the

transferor and the transferee, section 124AMAA applies to the disposal.

  "(2B) A joint election for roll-over relief has no effect unless it:

  (a)  is in writing; and

  (b)  is made:

    (i)  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 this subsection; or

    (ii)  within such further period as the Commissioner

allows; and

  (c)  contains such information about the transferor's holding of the

property as will enable the transferee to work out how section 124AMAA will

apply to the transferee's holding of the property.

  "(2C) If a person dies before the end of the period allowed for making a

joint election for roll-over relief, the trustee of the deceased person's

estate may be a party to the election on the deceased person's behalf.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 42

Interpretation

 

  42. Section 124B of the Principal Act is amended by inserting the following

definitions:

  " 'ancillary activities', in relation to a person, means:

  (a)  the preparation of a site for the carrying on by the person of

prescribed mining operations within the meaning of Subdivision A of Division

10; or

  (b)  the provision of:

    (i)  water, light or power for use on; or

    (ii)  access to or communications with;

a site on which prescribed mining operations within the meaning of Subdivision

A of Division 10 are carried on, or to be carried on, by the person; or

  (c)  the treatment of minerals obtained from the carrying on by the person

of prescribed mining operations within the meaning of Subdivision A of

Division 10; or

  (d)  the storage (whether before or after treatment) of minerals in relation

to the operation of plant for use primarily and principally in the treatment

of minerals obtained from the carrying on by the person of prescribed mining

operations within the meaning of Subdivision A of Division 10; or

  (e)  the preparation of a site for the carrying on by the person of eligible

quarrying operations within the meaning of Subdivision B of Division 10; or

  (f)  the provision of:

    (i)  water, light or power for use on; or

    (ii)  access to or communications with;

a site on which eligible quarrying operations within the meaning of

Subdivision B of Division 10 are carried on, or to be carried on, by the

person; or

  (g)  the treatment of quarry materials obtained from the carrying on by the

person of eligible quarrying operations within the meaning of Subdivision B of

Division 10; or

  (h)  the storage (whether before or after treatment) of quarry materials in

relation to the operation of plant for use primarily and principally in the

treatment of quarry materials obtained from the carrying on by the person of

eligible quarrying operations within the meaning of Subdivision B of Division

10; or

    (i)  the provision of:

    (i)  water, light or power for use on; or

    (ii)  access to or communications with;

a site on which prescribed petroleum operations within the meaning of Division

10AA are carried on, or to be carried on, by the person; or

  (j)  the liquefaction of natural gas obtained from the carrying on by the

person of prescribed petroleum operations within the meaning of Division

10AA;

  'eligible building site', in relation to a person, means a site on which

buildings, or other improvements or plant necessary for the carrying on by the

person of:

  (a)  prescribed mining operations within the meaning of Subdivision A of

Division 10; or

  (b)  eligible quarrying operations within the meaning of Subdivision B of

Division 10; or

  (c)  prescribed petroleum operations within the meaning of Division 10AA;

are or were located, but does not include that part (if any) of the site on

which housing and welfare are or were located;

  'person' means any of the following:

  (a)  a company;

  (b)  a partnership;

  (c)  a person in the capacity of trustee;

  (d)  any other person;

  'quarry materials' has the same meaning as in Subdivision B of Division 10;

  'site' includes a part of a site;

  'treatment':

  (a)  in relation to minerals - has the same meaning as in Subdivision A of

Division 10; and

  (b)  in relation to quarry materials - has the same meaning as in

Subdivision B of Division 10.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 43

Rehabilitation-related activity

 

  43.(1) Section 124BB of the Principal Act is amended by inserting after

subsection (1) the following subsection:

  "(1A) A reference in this section to the restoration of a site includes a

reference to the partial restoration of the site (even if the taxpayer had no

intention of completing the restoration).".

  (2) Section 124BB of the Principal Act is amended:

  (a) by inserting in subsection (1) "or ancillary activities" after

"extractive activities";

  (b) by inserting in subsection (2) "or ancillary activities or both" after

"extractive activities";

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

  "(3) A reference in this section to a site on which the taxpayer conducted

ancillary activities includes a reference to an eligible building site.

  "(4) In the case of an eligible building site, a reference in this section

to the time at which ancillary activities were first commenced on the site is

a reference to the earliest time at which the buildings, improvements or plant

concerned were located on the site.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 44

No deduction for certain expenditure

 

  44. Section 124BC of the Principal Act is amended:

  (a)  by omitting paragraph (1)(a);

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

  "(3) A deduction is not allowable under section 124BA for expenditure to the

extent to which it is taken into account in calculating an amount of

depreciation that is allowable as a deduction.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 45

 

  45. After section 124G of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO

(Roll-over relief where CGT roll-over relief allowed)

  "124GA.(1) This section applies to the disposal of property by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

property by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the property; and

  (b)  deductions have been allowed or are allowable under section 124F to the

transferor in respect of the property.

(No balancing charges or deductions)

  "(2) Section 124G (which deals with balancing charges and deductions) does

not apply to the disposal of the property by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(3) This Subdivision applies as if:

  (a)  the transferee had acquired the property for a consideration equal to

the residual capital expenditure immediately before the disposal; and

  (b)  section 124H had not been enacted.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(4) If:

  (a)  after the disposal of the property to the transferee:

    (i)  the property is destroyed; or

    (ii)  the transferee disposes of the property; or

    (iii)  the use by the transferee of the property for the

purpose for which the access road was primarily and principally constructed is

otherwise terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 124G in relation to the

destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under section

124F in relation to the property; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under section 124F in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under

section 124F in relation to the property.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 46

 

  46. After section 124JC of the Principal Act the following section and

Subdivision are inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO

(Roll-over relief where CGT roll-over relief allowed)

  "124JD.(1) This section applies to the disposal of a building by a taxpayer

(in this section called the 'transferor') to another taxpayer (in this section

called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the

building by the transferor; or

    (ii)  if the transferor is a partnership - the property is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the building; and

  (b)  deductions have been allowed or are allowable under section 124JA to

the transferor in respect of the building.

(No balancing charges or deductions)

  "(2) Section 124JB (which deals with balancing charges and deductions) does

not apply to the disposal of the building by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(3) This Subdivision applies as if:

  (a)  the transferee had acquired the building for a consideration equal to

the residual capital expenditure immediately before the disposal; and

  (b)  section 124JC had not been enacted.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(4) If:

  (a)  after the disposal of the building to the transferee:

    (i)  the building is destroyed; or

    (ii)  the transferee disposes of the building; or

    (iii)  the use by the transferee of the building for the

purpose for which it was primarily and principally purchased is otherwise

terminated; and

  (b)  in the case of a disposal by the transferee - this section does not

apply to the disposal;

then, for the purposes of the application of section 124JB in relation to the

destruction, disposal or termination, the total of:

  (c)  the deductions allowed or allowable to the transferor under section

124JA in relation to the building; and

  (d)  if there have been 2 or more prior successive applications of this

section - the deductions allowed or allowable to the prior successive

transferors under section 124JA in relation to the building;

are taken to have been deductions allowed or allowable to the transferee under

section 124JA in relation to the building.

        "Subdivision C - Non-arm's length transactions

Transactions between persons not at arm's length

  "124JE. If:

  (a)  a person has purchased from another person a unit of property where:

    (i)  the vendor had incurred capital expenditure of a kind

in respect of which deductions are or have been allowable under this Division;

or

    (ii)  the expenditure of the purchaser in acquiring the

unit of property is capital expenditure of a kind in respect of which

deductions are or have been allowable under this Division; and

  (b)  it would be concluded that, having regard to any connection between the

vendor and the purchaser or to any other relevant circumstances, those persons

were not dealing with each other at arm's length; and

  (c)  the purchase price is greater or lesser than the market value of the

unit at the time of the purchase;

the purchase price is, for all purposes of the application of this Act in

relation to the vendor or the purchaser, taken to have been the amount of the

market value of the unit at the time of the purchase.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 47

 

  47.  After section 124P of the Principal Act the following section is

inserted:

Roll-over relief where CGT roll-over relief allowed under section 160ZZM,

160ZZMA, 160ZZN, 160ZZNA or 160ZZO or where election for roll-over relief made

under section 122W

(Roll-over relief where CGT roll-over relief allowed)

  "124PA.(1) This section applies to the disposal of a unit of industrial

property by a taxpayer (in this section called the 'transferor') to another

taxpayer (in this section called the 'transferee') if:

  (a)  either:

    (i)  in a case where the transferor is not a partnership -

section 160ZZM, 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the unit

by the transferor; or

    (ii)  if the transferor is a partnership - the unit is

partnership property of the partnership and section 160ZZNA applies to the

corresponding disposal, by all of the partners in the partnership, of their

interests in the unit; and

  (b)  deductions have been allowed or are allowable under this Division to

the transferor in respect of the unit; and

  (c)  no part of the cost of the unit to the transferor is attributable to

expenditure covered by subsection 124K(2A) or 124KA(1).

(Roll-over relief where joint election made under section 124W)

  "(2) This section also applies if a joint election for roll-over relief is

made under subsection 124W(3) by both the transferor and the transferee

referred to in that subsection in relation to the disposal of a unit of

industrial property.

(No balancing charges or deductions)

  "(3) Sections 124N and 124P (which deal with balancing charges and

deductions) do not apply to the disposal of the unit by the transferor.

(Transferee to inherit certain characteristics from transferor)

  "(4) This Division applies as if:

  (a)  the cost of the unit of industrial property in relation to the

transferee were equal to the residual value of the unit in relation to the

transferor immediately before the disposal; and

  (b)  the effective life of the unit of industrial property determined in

relation to the transferor immediately before the disposal under whichever of

sections 124U and 124UA is applicable were the effective life of the unit of

industrial property in relation to the transferee; and

  (c)  if the transferor had not made an election under section 124UA in

relation to the unit of industrial property - the transferee were not entitled

to make an election under that section in relation to the unit.

(Disposal by transferee where no roll-over relief - inheritance of deductions)

  "(5) If:

  (a)  the transferee disposes of the unit of industrial property; and

  (b)  this section does not apply to the disposal;

then, for the purposes of the application of subsection 124P(3) in relation to

the disposal:

  (c)  the total of:

    (i)  the deductions allowed or allowable to the transferor

under this Division in relation to the unit; and

    (ii)  if there have been 2 or more prior successive

applications of this section - the deductions allowed or allowable to the

prior successive transferors under this Division in relation to the unit;

are taken to have been deductions allowed or allowable to the transferee under

this Division in relation to the unit; and

  (d)  the total of:

    (i)  the amounts included in the transferor's assessable

income under section 124P in relation to the unit; and

    (ii)  if there have been 2 or more prior successive

applications of this section - the amounts included in the prior successive

transferors' assessable incomes under that section in relation to the unit;

are taken to have been included in the transferee's assessable income under

that section in relation to the unit.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 48

Disposal of unit of industrial property on change of partnership etc.

 

  48. Section 124W of the Principal Act is amended:

  (a)  by inserting in subsection (2) "(in this section called the

'transferor')" after "before the change";

  (b)  by inserting in subsection (2) "(in this section called the

'transferee')" after "after the change";

  (c)  by omitting subsections (3), (4) and (5) and substituting the following

subsections:

  "(3) Unless a joint election for roll-over relief has been made by both the

transferor and the transferee, this Division applies as if the consideration

for the disposal were equal to the market value of the unit immediately before

the change.

  "(4) If a joint election for roll-over relief has been made by both the

transferor and the transferee, section 124PA applies to the disposal.

  "(5) A joint election for roll-over relief has no effect unless it:

  (a)  is in writing; and

  (b)  is made:

    (i)  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 this subsection; or

    (ii)  within such further period as the Commissioner

allows; and

  (c)  contains such information about the transferor's holding of the unit as

will enable the transferee to work out how section 124PA will apply to the

transferee's holding of the unit.

  "(6) If a person dies before the end of the period allowed for making a

joint election for roll-over relief, the trustee of the deceased person's

estate may be a party to the election on the deceased person's behalf.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 49

Interpretation

 

  49. Section 160APA of the Principal Act is amended by inserting ", apart

from section 45Z," after "a dividend that" in paragraph (f) of the definition

of "frankable dividend".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 50

Indexation of indexed cost base limit

 

  50. Section 160Q of the Principal Act is amended by omitting from subsection

(7) all the words preceding "before" and substituting "The Commissioner must

publish by written notice".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 51

Transfer of partnership assets to wholly-owned company

 

  51. Section 160ZZNA of the Principal Act is amended:

  (a)  by inserting in subparagraph (10)(d)(i) "Net" before "ICB" (wherever

occurring);

  (b)  by adding at the end of the definition of "ICB of post-CGT interests"

in subparagraph (10)(d)(i) ", being that sum reduced by the amount worked out

in relation to the taxpayer using the reduction formula in subsection (10A)";

  (c)  by inserting in subparagraph (10)(d)(ii) "Net" before "RCB" (wherever

occurring);

  (d)  by adding at the end of the definition of "RCB of post-CGT interests"

in subparagraph (10)(d)(ii) ", being that sum reduced by the amount worked out

in relation to the taxpayer using the reduction formula in subsection (10A)";

  (e)  by inserting after subsection (10) the following subsection:

  "(10A) This is the reduction formula referred to in subparagraphs (10)(d)(i)

and (ii):

  Assumed      x  Ex-partner's  x  Post-20 September 1985

  liabilities     interest         replacement shares

                                   Replacement shares

where:

  'Assumed liabilities' means the total amount of any liability or liabilities

in respect of the eligible asset assumed by the company in connection with the

disposal of the eligible asset;

  'Ex-partner's interest' means the taxpayer's percentage interest in the

eligible asset immediately before its disposal;

  'Post-20 September 1985 replacement shares' means the number of post-20

September 1985 replacement shares acquired by the taxpayer;

  'Replacement shares' means the total number of replacement shares acquired

by the taxpayer.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 52

Explanation of terms: investment, investor, investment body

 

  52. Section 202D of the Principal Act is amended:

  (a)  by inserting in paragraph (3)(a) "other than an entrepot nominee

company" after "a body corporate";

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

  "(3A) In the case of an investment that is a relevantPart VA investment for

the purposes of section 221YHZLA, subsection (3) does not apply to a person's

right to receive income if:

  (a)  the body corporate concerned has received a payment of the kind

referred to in paragraph 221YHZLA(2)(a); and

  (b)  the circumstances referred to in subparagraph 221YHZLA(2)(c)(i) or (ii)

in relation to an applicant exist in relation to the body corporate.";

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

  "(9) For the purposes of subsection (3), an entrepot nominee company is a

body corporate that is:

  (a)  controlled solely by a securities dealer or by 2 or more persons each

of whom is a securities dealer; and

  (b)  operated for the sole purpose of facilitating settlement of security

transactions.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 53

Interpretation

 

  53. Section 221YHZA of the Principal Act is amended:

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

and substituting the following definition:

  " 'unattributed income':

  (a)  in relation to a non-transferable Part VA investment, means income in

respect of the investment that becomes payable to the investor at a time when

the investor's tax file number is not taken, for the purposes of Part VA, to

have been quoted in connection with the investment, other than such income

that becomes payable at a time when:

    (i)  a provision of Division 5 of Part VA that previously

applied to the investor has ceased to apply; and

    (ii)  the investment body concerned has not been informed

of anything that would result in the provision ceasing to apply; or

  (b)  in relation to a transferable Part VA investment, means income payable

in respect of that investment to an investor who, at the books closing time

applicable to the income, is not or was not taken, for the purposes ofPart VA,

to have quoted the investor's tax file number in connection with the

investment, other than such income that becomes payable at a time when:

    (i)  a provision of Division 5 of Part VA that previously

applied to the investor has ceased to apply; and

    (ii)  the investment body concerned has not been informed

of anything that would result in the provision ceasing to apply.";

  (b)  by omitting subsection (4) and substituting the following subsections:

  "(4) For the purposes of this Division (other than subparagraphs (a)(ii) and

        (b)(ii) of the definition of 'unattributed income' in subsection (1)),

if the investment body in relation to an investment of the kind mentioned in

item 5 or item 7 in the table in subsection 202D(1) is not liable to pay income

in respect of the investment, any other person who is liable to pay it is taken

to be the investment body.

  "(5) For the purposes of this Division, if income in relation to a Part VA

investment becomes payable to a person because the person was registered with

the investment body as the investor as at a particular time, that time is the

books closing time in relation to the income.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 54

Credits in respect of deducted amounts

 

  54. Section 221YHZK of the Principal Act is amended by omitting subsection

(5).

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 55

 

  55. After section 221YHZL of the Principal Act the following section is

inserted:

Refunds in relation to certain credit entitlements

  "221YHZLA.(1) In this section:

  'relevant credit entitlement' means an entitlement to a credit under

subsection 221YHZK(1), (2) or (3) in respect of a deduction made under

subsection 221YHZC(1A);

  'relevant Part VA investment' means an investment of a kind mentioned in

item 3, 5 or 6 in the table in section 202D;

  'securities lending arrangement' means an agreement covered by subsection

26BC(3).

  "(2) Where, on an application made by a person, the Commissioner is

satisfied that:

  (a)  the applicant has received payment of part of the income due at a

particular time in respect of a relevant Part VA investment; and

  (b)  the applicant has a relevant credit entitlement in respect of the

income; and

  (c)  either:

    (i)  at the books closing time applicable to the income,

the applicant was under an obligation to transfer the investment to another

person under a contract for the sale of the investment where the contract is:

      (A)  of the kind known as a 'cum-dividend' contract; or

      (B)  of the kind known as a 'cum-interest' contract; or

    (ii)  all of the following conditions are satisfied:

      (A)  at the time the payment of income was made, the

applicant was under an obligation to pay the income to the lender under a

securities lending arrangement;

      (B)  the obligation was incurred by the applicant as a

borrower under the arrangement;

      (C)  the books closing time applicable to the income was

reached during the borrowing period;

the Commissioner must refund to the applicant an amount equal to the credit

entitlement.

  "(3) An application is to be in the form approved by the Commissioner.

  "(4) A person who:

  (a)  receives a refund; or

  (b)  has an application pending;

under subsection (2) in respect of a relevant credit entitlement may not claim

the entitlement for the purposes of subsection 221YHZL(2).

  "(5) A person may not make an application under subsection (2) if the

relevant credit entitlement has been claimed for the purposes of subsection

221YHZL(2).

  "(6) The regulations may make provision in relation to the giving of notice

of, and reports concerning:

  (a)  the transfer of relevant Part VA investments under a contract of the

kind referred to in subparagraph (2)(c)(i); or

  (b)  the payment of income to the lender under a securities lending

arrangement;

and, without limiting the provision that may be made by regulations made for

the purposes of this subsection, may provide that any such notice or report is

to be in a form approved by the Commissioner.

  "(7) A notice or report, or a copy of a notice or report, required under

regulations made for the purposes of subsection (6) is a record for the

purposes of section 262A.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 56

Keeping of records

 

  56. Section 262A of the Principal Act is amended by inserting after

subsection (4) the following subsections:

  "(4AA) A person who is a party to a joint election for roll-over relief made

under section 59AA, 122R, 123F, 124AO or 124W must retain the election, or a

copy, until the end of 5 years after the earlier of:

  (a)  the disposal by the person of the property; or

  (b)  the loss or destruction of the property.

  "(4AB) A person who brings into existence a notice under section 62AAC,

62AAE or 62AAF must retain the notice, or a copy, until the end of 5 years

after the notice came into existence.

  "(4AC) If subsection 58(1), 73AA(1), 122JAA(1), 122JG(1), 123BBA(1),

123BF(1), 124AMAA(1), 124GA(1), 124JD(1) or 124PA(1) applies to the disposal

of property by the transferor referred to in that subsection to the transferee

referred to in that subsection:

  (a)  the transferor must give to the transferee, within the period specified

in subsection (4AD), a notice containing such information about the

transferor's holding of the property as will enable the transferee to work out

how section 58, 73AA, 122JAA, 122JG, 123BBA, 123BF, 124AMAA, 124GA, 124JD or

124PA, as the case may be, will apply to the transferee's holding of the

property; and

  (b)  the transferee must retain the notice, or a copy, until the end of 5

years after the earlier of:

    (i)  the disposal by the person of the property; or

    (ii)  the loss or destruction of the property.

  "(4AD) The notice referred to in subsection (4AC) 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 (4AC);

or within such further period as the Commissioner allows.

  "(4AE) A person who makes an election under paragraph 54A(1)(a) in relation

to a unit of property must retain the election, or a copy, until the end of 5

years after the earlier of:

  (a)  the disposal by the person of the property; or

  (b)  the loss or destruction of the property.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 57

Interpretation

 

  57. Section 317 of the Principal Act is amended by inserting the following

definitions:

  " 'widely distributed finance share' has the meaning given by section 327A;

  'widely distributed finance share dividend' means a dividend in respect of a

widely distributed finance share.".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 58

 

  58. After section 327 of the Principal Act the following section is

inserted:

Widely distributed finance shares

(Meaning of 'widely distributed finance shares')

  "327A.(1) For the purposes of this Part, a share in a company is a widely

distributed finance share if both:

  (a)  either:

    (i)  the company is an eligible listed company; or

    (ii)  the aggregate of the eligible share interests in the

company held by an eligible listed company is 90% or more; and

  (b)  the share is a recognised finance share.

(Meaning of 'eligible listed company')

  "(2) For the purposes of this section, a company is an eligible listed

company at a particular time during a statutory accounting period of the

company if:

  (a)  shares in the company (other than shares entitled to a fixed rate of

dividend whether with or without a further right to participate in profits)

are listed for quotation in the official list of a stock exchange in Australia

or elsewhere; and

  (b)  none of the following subparagraphs apply:

    (i)  at any time during the statutory accounting period, a

single entity, or less than 21 entities, held, or were entitled to acquire,

75% or more of the paid-up share capital of the company (other than capital

represented by shares entitled to a fixed rate of dividend only);

    (ii)  at any time during the statutory accounting period, a

single entity, or less than 21 entities held, or were entitled to acquire, 75%

or more of the total rights (other than rights arising in respect of shares

entitled to a fixed rate of dividend only) of shareholders to vote, or

participate in any decision-making, concerning any of the following:

      (A)  the making of distributions of capital or profits of

the company to its shareholders;

      (B)  the constituent document of the company;

      (C)  any variation of the share capital of the company;

    (iii)  75% or more of the total amount of all of the

dividends paid by the company (other than dividends paid in respect of shares

entitled to a fixed rate of dividend only) during the statutory accounting

period was paid to a single entity or to less than 21 entities;

    (iv)  dividends (other than dividends paid in respect of

shares entitled to a fixed rate of dividend only) were not paid by the company

during the statutory accounting period but it would be concluded that, if such

dividends had been paid by the company during the statutory accounting period,

75% or more of those dividends would have been paid to a single entity or to

less than 21 entities.

(Meaning of 'recognised finance shares')

  "(3) For the purposes of this section, shares in a company are recognised

finance shares if all the following conditions are satisfied:

  (a)  the shareholder is not an associate of the company;

  (b)  having regard to:

    (i)  the manner in which the amount of dividends in respect

of the shares are to be calculated; and

    (ii)  the conditions applicable to the payment of dividends

in respect of the shares; and

    (iii)  any other relevant matters;

the payment of the dividends in respect of the shares may reasonably be

regarded as equivalent to the payment of interest on a loan;

  (c)  having regard to:

    (i)  the arrangements under which the shares were offered

for subscription; and

    (ii)  the ordinary business practices of brokers, agents,

underwriters or other persons who took part in the arrangements for the issue

of the shares; and

    (iii)  the arrangements that were made for dealing with

applications that were made for subscription of the shares; and

    (iv)  any circumstances indicating the existence, at the

time of the issue of the shares, of any arrangement for any of the shares to

be offered for subscription, or purchased after subscription, by entities

connected:

      (A)  with each other; or

      (B)  with the company issuing the shares; or

      (C)  with a person by whom the amounts raised by the

subscription, or amounts derived directly or indirectly from those amounts,

were intended to be used;

it is reasonable to regard the shares as having been issued with a view to

public subscription or purchase or other wide distribution among investors.

(Meaning of 'eligible share interest')

  "(4) For the purposes of this section, a person holds an eligible share

interest in a company at a particular time equal to the percentage of the

company's total paid-up share capital (excluding recognised finance shares)

beneficially owned by the person at that time.

(Extended meaning of 'eligible share interest': tiers of companies)

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

  (a)  a person holds an eligible share interest (including an eligible share

interest that is taken to be held because of one or more previous applications

of this subsection) in a company (in this subsection called the 'first level

company'); and

  (b)  the first level company holds an eligible share interest in another

company (in this subsection called the 'second level company');

the person is taken to hold an eligible share interest in the second level

company equal to the percentage calculated using the formula:

First level percentage ;ts Second level percentage where:

  'First level percentage' means the percentage of the eligible share interest

held by the person in the first level company;

  'Second level percentage' means the percentage of the eligible share

interest held by the first level company in the second level company.

(Definitions)

  "(6) In this section:

  'eligible listed company' has the meaning given by subsection (2);

  'eligible share interest' has the meaning given by subsections

(4)'recognised finance share' has the meaning given by subsection (3).".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 59

Direct attribution interest in a CFC or CFT

 

  59. Section 356 of the Principal Act is amended by inserting in subsection

(4) "and widely distributed finance shares" after "Eligible finance shares".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 60

Direct attribution account interest in a company

 

  60. Section 366 of the Principal Act is amended by inserting in subsection

(5) "and widely distributed finance shares" after "Eligible finance shares".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 61

Notional allowable deduction for eligible finance share dividends and widely

distributed finance share dividends

 

  61. Section 394 of the Principal Act is amended:

  (a)  by inserting in paragraph (a) "or a widely distributed finance share

dividend" after "eligible finance share dividend";

  (b)  by inserting in paragraph (b) "or 327A(3)(b), as the case requires,"

after "327(d)".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 62

Additional notional exempt income - unlisted or listed country CFC

 

  62. Section 402 of the Principal Act is amended by inserting in paragraphs

(2)(c) and (d) "(other than a widely distributed finance share dividend)"

after "non-portfolio dividend".

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 63

Application of amendments - general

(Meaning of "amended Act")

 

  63.(1) In this section:

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

(Education entry payments)

  (2) The amendments made by sections 7, 8 and 9 apply to payments received on

or after 1 January 1992.

(Intercorporate dividend rebates: shareholder a trustee/partnership)

  (3) The amendments made by sections 10, 13 and 25, subsections 31(2) and

32(2) and sections 33 and 49 apply in relation to dividends paid after 17

August 1976.

(Trading stock)

  (4) The amendment made by section 14 applies to expenditure incurred after

19 December 1991.

(Gazette notices)

  (5) The amendments made by sections 18 and 50 apply in relation to the

1992-93 year of income and to all subsequent years of income.

(Capital deductions: roll-overs etc.)

  (6) Subject to subsection (7) of this section, the amendments made by

sections 21, 22, 23, 27, 34 to 41 (inclusive) and 45 to 48 (inclusive) apply

to disposals of property after 19 December 1991.

(Scientific research buildings, timber operations and timber mill buildings:

non-arm's transactions)

  (7) Subsection 73A(4A) and section 124JE of the amended Act apply to

purchases of property after 19 December 1991.

(Core technology expenditure - non-arm's length dealing)

  (8) The amendment made by paragraph 28(b) applies to core technology

expenditure incurred by an eligible company on or after19 December 1991.

(Guaranteed returns to investors - exclusion of core technology expenditure)

  (9) The amendment of subsection 73CA(6) of the Principal Act made by this

Part applies to expenditure incurred by an eligible company on or after 19

December 1991.

(Currency exchange losses)

  (10) The amendments made by section 30 apply to currency exchange losses

incurred on or after 19 December 1991.

(Corporate unit trusts and public trading trusts)

  (11) The amendments made by subsections 31(1) and 32(1) apply to dividends

paid after the commencement of this subsection.

(Mine site rehabilitation)

  (12) The amendments made by sections 42, 43 and 44 apply in relation to

expenditure incurred on or after 1 July 1991.

(CGT roll-over of partnership property)

  (13) The amendments made by section 51 apply in relation to disposals of

assets after 6 December 1990.

(Widely distributed finance shares: direct attribution interest)

  (14) The amendment made by section 59 applies in relation to the calculation

of a direct attribution interest in a CFC at a particular time, whether before

or after the commencement of that section.

(Widely distributed finance shares: direct attribution account interest)

  (15) The amendment made by section 60 applies in relation to the calculation

of a direct attribution account interest in a company at a particular time,

whether before or after the commencement of that section.

(Widely distributed finance shares: calculation of attributable income)

  (16) The amendment made by section 61 applies in relation to the calculation

of attributable income of any eligible period, whether beginning before or

after the commencement of that section.

(Widely distributed finance shares: section 402 non-portfolio dividends)

  (17) The amendment made by section 62 applies in relation to dividends,

whether paid before or after the commencement of that section.

 

TAXATION LAWS AMENDMENT ACT 1992No. 35, 1992

- SECT 64

Application of depreciation amendments: effective life;

100% depreciation; broadbanding; loading and pooling

(Definitions)

 

  64.(1) In this section:

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

  "old depreciation percentage" means the annual depreciation per centum fixed

under the repealed subsection 55(1) of the Principal Act, disregarding any

notional application of the repealed section 57AG of the Principal Act;

  "post-12 March 1991 property", in relation to a taxpayer, means:

  (a)  a unit of property that was acquired by the taxpayer under a contract

entered into after 12 March 1991; or

  (b)  a unit of property that was constructed by the taxpayer and commenced

to be constructed after 12 March 1991;

  "pre-13 March 1991 property", in relation to a taxpayer, means:

  (a)  a unit of property that was acquired by the taxpayer under a contract

entered into before 13 March 1991; or

  (b)  a unit of property that was constructed by the taxpayer and commenced

to be constructed before 13 March 1991;

  "recognised holding period", in relation to post-12 March 1991 property of a

taxpayer, in relation to the taxpayer's 1 July 1991 year of income, means the

period:

  (a)  commencing on the later of the following:

    (i)  the day on which the property was first used by the

taxpayer for assessable income-producing purposes;

    (ii)  the beginning of the year of income; and

  (b)  ending on the earlier of the following:

    (i)  the day on which the taxpayer ceased, or last ceased,

to use the property for assessable income-producing purposes;

    (ii)  the end of the year of income;

  "1 July 1991 year of income" means the year of income in which1 July 1991

occurred.

(Meaning of "notional application of repealed section 57AG")

  (2) In this section:

  (a)  a reference to the notional application of the repealed section 57AG of

the Principal Act in relation to an old depreciation percentage is a reference

to the application that section would have in relation to that percentage if:

    (i)  that section and section 55 of the Principal Act had

not been repealed; and

    (ii)  subsection 73A(5) of the Principal Act had not been

repealed; and

  (b)  a reference to the notional application of the repealed section 57AG of

the Principal Act in relation to a percentage calculated using a formula in

section 55 of the amended Act is a reference to the application that that

repealed section would have had in relation to that percentage if:

    (i)  it had not been repealed; and

    (ii)  a reference in the repealed section to the annual

depreciation per centum fixed under subsection 55(1) of the Principal Act were

a reference to the percentage calculated using that formula; and

    (iii)  a reference in the repealed section to property in

respect of which subsection 55(2) applies were a reference to property covered

by subsection 55(4) of the amended Act; and

    (iv)  a reference in the repealed section to property in

respect of which subsection 73A(5) applies were a reference to property

covered by subsection 55(3A) of the amended Act.

(Meaning of "use for assessable income-producing purposes")

  (3) For the purposes of this section, a unit of property is taken to be used

for assessable income-producing purposes by a taxpayer if, and only if, the

property is:

  (a)  used by the taxpayer for the purpose of producing assessable income; or

  (b)  installed ready for use for that purpose and held in reserve by the

taxpayer.

(General application of non-pooling amendments: 1 July 1991 year of income and

subsequent years)

  (4) Subject to this section, the amendments made by sections 15 to 20

        (inclusive) and subsection 26(2) apply to assessments in respect of

income of the 1 July 1991 year of income and of all subsequent years of income.

(Old depreciation percentage continues to apply to pre-13 March 1991 property:

post-1990-91 years)

  (5) If:

  (a)  a taxpayer's year of income is later than the 1990-91 year of income; and

  (b)  the taxpayer's property is pre-13 March 1991 property;

section 55 of the amended Act has the effect in relation to the property and

in relation to the year of income that it would have if subsection (2) of that

section were omitted and the following subsection were substituted:

  "(2) (Step 1: Raw percentage) The raw percentage applicable to the property

equals the old depreciation percentage applicable to the property.".

(Taxpayers with substituted accounting periods and post-12 March 1991

property: post-1990-91 years)

  (6) If:

  (a)  the taxpayer's 1 July 1991 year of income is later than the 1990-91

year of income; and

  (b)  the taxpayer's property is post-12 March 1991 property; and

  (c)  any part of the taxpayer's recognised holding period occurred before 1

July 1991;

the amended Act has effect as if the annual depreciation percentage applicable

to the property under section 55 of that Act in relation to that year of

income were calculated using the formula:

   Pre-             Notional          Post-            Notional

   1 July           former            1 July           new annual

   1991             annual            1991             depreciation

   days          x  depreciation   +  days         x   percentage

   Days in          percentage        Days in

   recognised                         recognised

   holding                            holding

   period                             period

where:

  "Pre-1 July 1991 days" means the number of days in the taxpayer'srecognised

holding period that occurred before 1 July 1991;

  "Days in recognised holding period" means the number of days in the

taxpayer's recognised holding period;

  "Notional former annual depreciation percentage" means the percentage that,