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Tuesday, 30 November 1965


Mr FOX (Henty) .- I move-

Omit the clause, insert the following clause:- " 15. After section 62 of the principal Act the following section is inserted: - 62 aaa. - (1.) In this section - " compensation payment ", in relation to a unit of property, means a payment received by the taxpayer in respect of the unit in pursuance of the Decimal Currency Board Act 1963-1965; and " unit of property " means a unit of property not being trading stock of the taxpayer. (2.) For the purpose of calculating the depreciation allowable under this Act in respect of a unit of property in respect of which a compensation payment has been, or is, or compensation payments have been, or are, received by the taxpayer during a year of income, the depreciated value of the unit at the end of that year of income shall be deemed to have been, or to be, as the case may be, reduced by so much of the amount of that payment, or of the sum of the amounts of those payments, as does not exceed the amount that, but for this sub-section, would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income. (3.) Where the amount of a compensation payment that has been, or is, or the sum of the amounts of any compensation payments that have been, or are, received by a taxpayer during a year of income in respect of a unit of property exceeds the amount that, but for the last preceding subsection, would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income, the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of -

(a)   any unit of property acquired by the taxpayer during that year of income to replace the first-mentioned unit of property;

(b)   any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a description, of having a use, similar to that of the first-mentioned unit of property;

(c)   any other unit of property acquired by the taxpayer during that year of income;

(d)   any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

(e)   any other units of property owned by the taxpayer, by such amounts as are not, in the aggregate, greater than the amount of the excess. (4.) An amount equal to so much, if any, of the amount of the excess referred to in the last preceding sub-section as is greater than the sum of the reductions made under that sub-section shall be included in the assessable income of the taxpayer of the year of income referred to in that sub-section. (5.) Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in the year of income in which the disposal, loss or destruction took place or takes place -

(a)   the depreciated value of the unit immediately before the disposal, loss or destruction shall be deemed to have been reduced by so much of the amount of the compensation payment as does not exceed the amount that, but for this paragraph, would have been, or would be, as the case may be, that depreciated value; and

(b)   if the compensation payment exceeds that last-mentioned amount -

(i)   the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of the units of property referred to in paragraphs (a) to (e), inclusive, of sub-section (3.) of this section by such amounts as are not, in the aggregate, greater than the amount of the excess; and

(ii)   an amount equal to so much, if any, of the amount of the excess as is greater than the sum of the reductions made under the last preceding subparagraph shall be included in the assessable income of the taxpayer of that year of income. (6.) Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in a year of income succeeding the year of "income in which the disposal, loss or destruction took place or takes place, sub-sections (3.) and (4.) of this section do not apply in relation to that payment but -

(a)   the Commissioner shall successively reduce the respective depreciated values, at the end of the year of income in which the payment was, or is, received, of-

(i)   any unit of property acquired by the taxpayer during that year of income to replace the firstmentioned unit of property;

(ii)   any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a descrip tion, or having a use, similar to that of the first-mentioned unit of property;

(iii)   any other unit of property acquired by the taxpayer during that year of income;

(iv)   any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

(v)   any other units of property owned by the taxpayer, by such amounts as are not, in the aggregate, greater than the amount of the payment; and

(b)   an amount equal to so much, if any, of the amount of the payment as is greater than the sum of the reductions made under the last preceding paragraph shall be included in the assessable income of the taxpayer of the year of income in which the payment was, or is, received. (7.) The depreciated value of a unit of property shall not be reduced under sub-section (3.), paragraph (b) of sub-section (5.) or sub-section (6.) of this section unless -

(a)   at the end of the year of income, the unit was used exclusively for the purpose of producing assessable income or had been installed ready for use exclusively for that purpose and was held in reserve; and

(b)   depreciation under this Act is allowable to the taxpayer in respect of the unit. (8.) An amount by which the depreciated value of a unit of property has been reduced in pursuance of this section shall, for the purposes of this Act, be deemed to be depreciation that has been allowed in respect of that unit in the assessment in which the reduction was made.'.".

The purpose of this amendment is to provide that where the Government has paid to the owner of a business machine an amount of compensation towards the cost of converting the machine for use with decimal currency, the amount of this compensation shall be applied to reducing the book value of the equipment before depreciation is claimed. Where the equipment has been scrapped and new equipment purchased, the amount of the compensation shall be applied towards reducing the book value of this new equipment before depreciation is claimed. Where the equipment has been lost and not replaced the written down value of the asset shall be reduced by the amount of compensation. Where the amount of compensation paid by the Government exceeds the written down value of any equipment being used for decimal currency the excessive amount of compensation shall be applied towards reducing the book value of other equipment used by the taxpayer and on which he is entitled to claim depreciation.

Finally, where the amount of compensation exceeds the written down value of all such equipment the amount of the excess shall be included in the taxpayer's income for that year. This, of course, is subject to the fact that whatever amount the taxpayer pays out of compensation or otherwise for conversion costs may be deducted in full in the year in which it is paid. These amounts would otherwise have been treated as capital expenditure and would only be capable of being depreciated over a number of years.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 16 agreed to.

Clause 17.

Section 79 of the Principal Act is repealed and the following section inserted in its stead: - " 79.- (1.) In this section- asset' does not include a policy as defined by sub-section (1.) of section four of the Life Insurance Act 1945-1961; " (2.) Subject to the succeeding provisions of this section, this section applies, in relation to a year of income, to a superannuation fund if the Commissioner is satisfied that -

(c)   the right of each member of the fund and his dependants to receive benefits from the fund is defined by the terms and conditions applicable to the fund and was communicated in writing to the member either before, or at the time when, contributions were first paid to the fund in respect of the member or of his dependants or before such later date as the Commissioner approves in relation to the member;

(d)   where a right of a member of the fund or of the dependants of a member to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was appropriated for the provision of benefits for the member or his dependants - the amount of the benefits the right to receive which has so ceased is applied in the year of income or in the period of two months after the year of income, or will be applied after the year of income in accordance with an undertaking by the trustee of the fund given to, and approved by, the Commissioner, being an undertaking that has effect in relation to the year of income, for all or any of the following purposes:-

(i)   the provision of the benefits that other members of the fund or their dependants have rights to receive from the fund;

(ii)   the provision for other members of the fund or their dependants who have rights to receive benefits from the fund of additional benefits on a basis that is reasonable, having regard to all the circumstances; and

(iii)   any other purposes approved by the Commissioner;

(e)   where a right of a member of the fund or of the dependants of a member to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was not appropriated for the provision of benefits for the member or his dependants - any additional benefits that have been, or will be, provided from the fund for other members of the fund or their dependants' by reason of the cessation of the right have been, or will be, provided on a basis that is reasonable, having regard to all the circumstances; and

(f)   at all times during the year of income, the terms and conditions that were applicable to the fund -

(i)   did not permit a member of the fund or dependants of a member to receive, otherwise than in the event of the death, sickness or permanent incapacity for work of the member or in such other circumstances as the Commissioner approves, any benefits from the fund before the sixtieth anniversary of the birth of the member;

(ii)   required that any pension or annuity that a member had a right to receive from the fund was to commence to be paid, and any other benefits that a member had a right to receive from the fund were to be paid, not later than the seventieth anniversary of the birth of the member; and

(iii)   required that any pensions or annuities that dependants of a member had a right to receive from the fund were to commence to be paid, and any other benefits that dependants of a member bad a right to receive from the fund were to be paid, not later than the seventieth anniversary of the birth of the member or were to commence to be paid or were to be paid, as the case may be, in the event of the death of the member before that anniversary, and the terms and conditions applicable to the fund during the year of income have been approved by the Commissioner having regard to -

(g)   the reasonableness of the benefits that have been, are being or may be provided from the fund or from any other provident, benefits, superannuation or retirement fund, whether a superannuation fund for the purposes of this section or not, for members of the first-mentioned fund or their dependants;

(h)   the amount of the fund in relation to the benefits that are being or may be provided for its' members; and

(i)   such other matters as the Commissioner thinks fit, and were complied with by the trustee of the fund during the year of income. " (6.) Subject to the next succeeding sub-section, where the Commissioner is not satisfied that an undertaking approved by him in relation to a superannuation fund for the purposes of paragraph (d) of sub-section (2.) of this section was complied with during a year of income of the fund in relation to which it had effect -

(a)   the Commissioner shall inform the trustee of the fund, by notice in writing giving for the purposes of this sub-section, that he is not so satisfied;

(b)   for the purposes of sub-section (10.) of this section and of this Act other than this section, this section shall be deemed not to have applied to the fund in relation to that year of income of the fund; and

(c)   the undertaking does not have effect, and shall be deemed not to have had effect, in relation to any succeeding year of income of the fund.







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