Australian Government

Federal Register of Legislation

Income Tax (Transitional Provisions) Act 1997No. 40, 1997

In force

Administered by

Department of the Treasury

Superseded version

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View as made version

C2011C00504

29 June 2011 - 07 September 2011

Table of contents

Chapter 1—Introduction and core provisions
Part 1-1—Preliminary
- Division 1—Preliminary
Part 1-3—Core Provisions
- Division 4—How to work out the income tax payable on your taxable income
  - 4-1 Application of the Income Tax Assessment Act 1997
  - 4-10 Temporary flood and cyclone reconstruction levy
- Division 5—How to work out when to pay your income tax
  - Subdivision 5-A—How to work out when to pay your income tax
- Division 6—Assessable income and exempt income
- Division 8—Deductions
Chapter 2—Liability rules of general application
Part 2-1—Assessable income
- Division 15—Some items of assessable income
- Division 20—Items included to reverse the effect of past deductions
  - Subdivision 20-A—Insurance, indemnity or recoupment for deductible expenses
    - 20-1 Application of Subdivision 20-A of the Income Tax Assessment Act 1997
  - Subdivision 20-B—Disposal of a car for which lease payments have been deducted
Part 2-5—Rules about deductibility of particular kinds of amounts
- Division 25—Some amounts you can deduct
- Division 26—Some amounts you cannot deduct, or cannot deduct in full
  - 26-1 Application of Division 26 of the Income Tax Assessment Act 1997
  - 26-30 Application of section 26-30 of the Income Tax Assessment Act 1997
- Division 30—Gifts or contributions
- Division 32—Entertainment expenses
  - 32-1 Application of Division 32 of the Income Tax Assessment Act 1997
- Division 34—Non-compulsory uniforms
  - 34-1 Application of Division 34 of the Income Tax Assessment Act 1997
  - 34-5 Things done under former section 51AL of the Income Tax Assessment Act 1936
- Division 35—Deferral of losses from non-commercial business activities
  - 35-10 Deductions for certain new business investment
  - 35-20 Application of Commissioner’s decisions
- Division 36—Tax losses of earlier income years
Part 2-10—Capital allowances: rules about deductibility of capital expenditure
- Division 40—Capital allowances
- Division 43—Deductions for capital works
- Division 45—Disposal of leases and leased plant
Part 2-15—Exempt income
- Division 50—Exempt entities
  - 50-1 Application of Division 50 of the Income Tax Assessment Act 1997
- Division 51—Exempt amounts
  - 51-1 Application of Division 51 of the Income Tax Assessment Act 1997
- Division 52—Certain pensions, benefits and allowances are exempt from income tax
  - 52-1 Application of Division 52 of the Income Tax Assessment Act 1997
- Division 53—Various exempt payments
  - 53-1 Application of Division 53 of the Income Tax Assessment Act 1997
- Division 54—Exemption for certain payments made under structured settlements and structured orders
  - 54-1 Application of Division 54 of the Income Tax Assessment Act 1997
- Division 55—Payments that are not exempt from income tax
  - 55-1 Application of Division 55 of the Income Tax Assessment Act 1997
Part 2-20—Tax offsets
- Division 61—Generally applicable tax offsets
  - Subdivision 61-L—Tax offset for Medicare levy surcharge (lump sum payments in arrears)
    - 61-575 Application of Subdivision 61-L of the Income Tax Assessment Act 1997
Part 2-25—Trading stock
- Division 70—Trading stock
Part 2-40—Rules affecting employees and other taxpayers receiving PAYG withholding payments
- Division 82—Pre-10 May 2006 entitlements to life benefit termination payments
- Division 83A—Employee share schemes
  - Subdivision 83A-A—Application of Division 83A of the Income Tax Assessment Act 1997
    - 83A-5 Application of Division 83A of the Income Tax Assessment Act 1997
  - Subdivision 83A-B—Application of former provisions of the Income Tax Assessment Act 1936
    - 83A-10 Savings—continued operation of former provisions
    - 83A-15 Indeterminate rights
Chapter 3—Specialist liability rules
Part 3-1—Capital gains and losses: general topics
- Division 102—Application of Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997
- Division 104—CGT events
- Division 108—CGT assets
- Division 109—Acquisition of CGT assets
  - Subdivision 109-A—Operative rules
    - 109-5 General acquisition rules
- Division 110—Cost base and reduced cost base
  - Subdivision 110-A—Cost base
    - 110-25 Cost base of CGT asset of life insurance company or registered organisation
    - 110-35 Incidental costs
- Division 112—Modifications to cost base and reduced cost base
  - Subdivision 112-A—General rules
    - 112-20 Market value substitution rule
  - Subdivision 112-B—Special rules
    - 112-100 Effect of terminated gold mining exemptions
- Division 114—Indexation of cost base
  - 114-5 When indexation relevant
- Division 118—Exemptions
- Division 121—Record keeping
  - 121-15 Retaining records under Division 121
  - 121-25 Records for mergers between qualifying superannuation funds
Part 3-3—Capital gains and losses: special topics
- Division 124—Replacement-asset roll-overs
  - Subdivision 124-C—Statutory licences
- Division 125—Demerger relief
  - Subdivision 125-B—Consequences for owners of interests
    - 125-75 Employee share schemes
- Division 126—Roll-overs
  - Subdivision 126-A—Merger of qualifying superannuation funds
    - 126-100 Merger of qualifying superannuation funds
  - Subdivision 126-B—Transfer of life insurance business
- Division 128—Effect of death
  - 128-15 Effect on the legal personal representative or beneficiary
- Division 130—Investments
- Division 134—Options
  - 134-1 Exercise of options
- Division 136—Foreign residents
  - Subdivision 136-A—Making a capital gain or loss
    - 136-25 When an asset is taxable Australian property
- Division 140—Share value shifting
  - Subdivision 140-A—When is there share value shifting?
    - 140-7 Pre-1994 share value shifts irrelevant
    - 140-15 Off-market buy backs
- Division 149—When an asset stops being a pre-CGT asset
  - 149-5 Assets that stopped being pre-CGT assets under old law
- Division 152—Small business relief
Part 3-5—Corporate taxpayers and corporate distributions
- Division 165—Income tax consequences of changing ownership or control of a company
- Division 166—Income tax consequences of changing ownership or control of a listed public company
  - Subdivision 166-C—Deducting bad debts
    - 166-40 Application of Subdivision 166-C of the Income Tax Assessment Act 1997
- Division 170—Treatment of company groups for income tax purposes
- Division 175—Use of a company’s losses, deductions or bad debts to avoid income tax
- Division 197—Tainted share capital accounts
Part 3-6—The imputation system
- Division 201—Object and application of Part 3-6
  - 201-1 Estimated debits
- Division 203—Benchmark rule
  - 203-1 Franking periods straddling 1 July 2002
- Division 205—Franking accounts
- Division 208—Exempting entities and former exempting entities
  - 208-111 Converting former exempting company’s exempting account balance on 30 June 2002
- Division 210—Venture capital franking
- Division 214—Administering the imputation system
- Division 219—Imputation for life insurance companies
  - 219-40 Reversing and replacing (on tax paid basis) certain franking credits that arose before 1 July 2002
  - 219-45 Reversing (on tax paid basis) certain franking debits that arose before 1 July 2002
- Division 220—Imputation for NZ resident companies and related companies
Part 3-10—Financial transactions
- Division 242—Leases of luxury cars
  - 242-10 Application
  - 242-20 Balancing adjustments
- Division 245—Forgiveness of commercial debts
  - Subdivision 245-A—Application of Division 245 of the Income Tax Assessment Act 1997
    - 245-5 Application and saving
    - 245-10 Pre-28 June 1996 arrangements etc.
- Division 247—Capital protected borrowings
  - Subdivision 247-A—Interim apportionment methodology
  - Subdivision 247-B—Other transitional provisions
- Division 253—Financial claims scheme for account-holders with insolvent ADIs
  - Subdivision 253-A—Tax treatment of entitlements under financial claims scheme
    - 253-5 Application of section 253-5 of the Income Tax Assessment Act 1997
    - 253-10 Application of sections 253-10 and 253-15 of the Income Tax Assessment Act 1997
Part 3-25—Particular kinds of trusts
- Division 275—Australian managed investment trusts
  - Subdivision 275-A—Choice for capital treatment of MIT gains and losses
    - 275-10 Consequences of making choice—Commissioner cannot make certain amendments to previous assessments
Part 3-30—Superannuation
- Division 290—Contributions
  - 290-10 Directed termination payments not deductible etc.
  - 290-15 Early balancers—deduction limits from end of 2006-2007 income year to 1 July 2007
- Division 292—Excess contributions tax
- Division 295—Taxation of superannuation entities
- Division 301—Superannuation member benefits paid from complying plans etc.
  - 301-5 Extended application to certain foreign superannuation funds
  - 301-85 Extended meaning of disability superannuation benefit for superannuation income stream
- Division 302—Superannuation death benefits paid from complying plans etc.
- Division 303—Superannuation benefits paid in special circumstances
  - 303-10 Superannuation lump sum member benefit paid to member having a terminal medical condition
- Division 304—Superannuation benefits in breach of legislative requirements etc.
  - 304-15 Excess payments from release authorities
- Division 306—Roll-overs etc.
  - 306-10 Roll-over superannuation benefit—directed termination payment
- Division 307—Key concepts relating to superannuation benefits
Part 3-32—Co-operatives and mutual entities
- Division 316—Demutualisation of friendly society health or life insurers
  - Subdivision 316-A—Application
    - 316-1 Application of Division 316 of the Income Tax Assessment Act 1997
Part 3-35—Insurance business
- Division 320—Life insurance companies
- Division 322—Assistance for policyholders with insolvent general insurers
  - Subdivision 322-B—Tax treatment of entitlements under financial claims scheme
    - 322-25 Application of section 322-25 of the Income Tax Assessment Act 1997
    - 322-30 Application of section 322-30 of the Income Tax Assessment Act 1997
Part 3-45—Rules for particular industries and occupations
- Division 328—Small business entities
- Division 375—Australian films
  - Subdivision 375-G—Film losses
- Division 392—Long-term averaging of primary producers’ tax liability
  - 392-1 Application of Division 392 of the Income Tax Assessment Act 1997
  - 392-25 Transitional provision—election under section 158A of the Income Tax Assessment Act 1936
- Division 393—Farm management deposits
  - Subdivision 393-A—Tax consequences of farm management deposits
  - Subdivision 393-B—Meaning of farm management deposit and owner
    - 393-40 The day the deposit was made for deposits made as a result of section 25B of the Loan (Income Equalization Deposits) Act 1976
- Division 410—Copyright collecting societies
  - 410-1 Application of section 51-43 of the Income Tax Assessment Act 1997
Part 3-90—Consolidated groups
- Division 700—Application of Part 3-90 of Income Tax Assessment Act 1997
  - 700-1 Application of Part 3-90 of Income Tax Assessment Act 1997
- Division 701—Modified application of provisions of Income Tax Assessment Act 1997 for certain consolidated groups formed in 2002-3 and 2003-4 financial years
  - Subdivision 701-A—Preliminary
  - Subdivision 701-B—Modified application of provisions
- Division 701A—Modified application of provisions of Income Tax Assessment Act 1997 for entities with continuing majority ownership from 27 June 2002 until joining a consolidated group
- Division 701B—Modified application of provisions of Income Tax Assessment Act 1997 relating to CGT event L1
  - 701B-1 Modified application of CGT Consolidation provisions to allow immediate availability of capital loss for CGT event L1
- Division 701C—Modified application etc. of provisions of Income Tax Assessment Act 1997: transitional foreign-held membership structures
- Division 701D—Transitional foreign loss makers
  - Subdivision 701D-A—Object of this Division
    - 701D-1 Object of this Division
  - Subdivision 701D-B—Rules allowing transitional foreign loss makers to remain outside consolidated group
    - 701D-10 Transitional foreign loss maker not member of group if certain conditions satisfied
    - 701D-15 Choice to apply transitional rules to entity
- Division 702—Modified application of this Act to assets that an entity brings into a consolidated group
- Division 703—Consolidated groups and their members
  - 703-30 Debt interests that are not membership interests
  - 703-35 Employee share schemes
- Division 705—Tax cost setting amount for assets where entities become members of consolidated groups
  - Subdivision 705-E—Expenditure relating to exploration, mining or quarrying
- Division 707—Losses for head companies when entities become members etc.
- Division 709—Other rules applying when entities become subsidiary members etc.
  - Subdivision 709-D—Deducting bad debts
    - 709-200 Application of Subdivision 709-D of the Income Tax Assessment Act 1997
- Division 712—Certain rules for where entities cease to be subsidiary members of consolidated groups
  - Subdivision 712-E—Expenditure relating to exploration, mining or quarrying
    - 712-305 Reducing adjustable value of head company’s notional asset
- Division 713—Rules for particular kinds of entities
  - Subdivision 713-L—Transitional relief for certain transactions relating to life insurance companies
  - Subdivision 713-M—General insurance companies
    - 713-700 Application
- Division 715—Interactions between the consolidation rules and other areas of the income tax law
- Division 716—Miscellaneous special rules
  - Subdivision 716-G—Software development pools
    - 716-340 Expenditure incurred before 1 July 2001 and allocated to a software pool
- Division 719—MEC rules
- Division 721—Liability for payment of tax where head company fails to pay on time
  - Subdivision 721-A—Application of Division
    - 721-25 References in tax sharing agreements to former table item 25
Part 3-95—Value shifting
- Division 723—Direct value shifting by creating right over non-depreciating asset
  - 723-1 Application of Division 723
- Division 725—Direct value shifting affecting interests in companies and trusts
  - 725-1 Application of Division 725
- Division 727—Indirect value shifting affecting interests in companies and trusts, and arising from non-arm’s length dealings
Chapter 4—International aspects of income tax
Part 4-5—General
- Division 770—Foreign income tax offsets and foreign losses
- Division 820—Application of the thin capitalisation rules
- Division 830—Application of the foreign hybrid rules
- Division 840—Withholding taxes
  - Subdivision 840-M—Managed investment trust amounts
    - 840-805 Managed investment trust amounts
    - 840-810 Payment of tax under section 840-805
Chapter 5—Administration
Part 5-35—Miscellaneous
- Division 909—Regulations
  - 909-1 Regulations
Chapter 6—The Dictionary
Part 6-1—Concepts and topics
- Division 960—General
  - Subdivision 960-E—Entities
  - Subdivision 960-M—Indexation
    - 960-262 Application of Subdivision 960-M of the Income Tax Assessment Act 1997
    - 960-275 Indexation factor
      - Notes to the STYLEREF ShortT \* MERGEFORMAT Income Tax (Transitional Provisions) Act 1997