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Tax Laws Amendment (2008 Measures No. 6) Bill 2009

Schedule 4 Minor amendments

Part 1 General

A New Tax System (Goods and Services Tax) Act 1999

1  Section 195-1 (definition of hospital treatment )

Repeal the definition, substitute:

hospital treatment has the same meaning as in the Private Health Insurance Act 2007 .

Fringe Benefits Tax Assessment Act 1986

2  Subsection 5C(3) (method statement, steps 3 and 4)

Repeal the steps, substitute:

Step 3.   Identify the excluded fringe benefits (other than an amortised fringe benefit) for the year of tax in respect of each of the employer’s employees that are GST-creditable benefits, and add up the taxable values of all those excluded fringe benefits.

                   Note 1:          Subsection 5E(3) explains what is an excluded fringe benefit.

                   Note 2:          Section 149A explains what is a GST-creditable benefit.

Step 4.   Add the total from step 2 to the total from step 3.

                   Note:             The result of step 4 is the employer’s type 1 aggregate fringe benefits amount if there are no amortised amounts in relation to the employer.

Step 5.   Add to the total from step 4 the amortised amount for the year of tax of each amortised fringe benefit (if any) relating to an employee of the employer, the employer and any year of tax that are GST-creditable benefits. The total amount is the employer’s type 1 aggregate fringe benefits amount for the year of tax.

                   Note:             Section 65CA explains what is an amortised fringe benefit.

3  Subsection 5C(4) (method statement, steps 3 and 4)

Repeal the steps, substitute:

Step 3.   Identify, in respect of each of the employer’s employees, the excluded fringe benefits (other than an amortised fringe benefit) for the year of tax that are not taken into account under step 3 of the method statement in subsection (3), and add up the taxable values of all those excluded fringe benefits.

                   Note:             Subsection 5E(3) explains what is an excluded fringe benefit.

Step 4.   Add the total from step 2 to the total from step 3.

                   Note:             The result of step 4 is the employer’s type 2 aggregate fringe benefits amount if there are no amortised amounts or reducible fringe benefits in relation to the employer.

Step 5.   Add to the total from step 4 the amortised amount for the year of tax of each amortised fringe benefit (if any) relating to an employee of the employer, the employer and any year of tax that is not taken into account under step 5 of the method statement in subsection (3).

                   Note 1:          The result of step 5 is the employer’s type 2 aggregate fringe benefits amount if there are no reducible fringe benefits in relation to the employer.

                   Note 2:          Section 65CA explains what is an amortised fringe benefit.

Step 6.   Subtract from the total from step 5 the reduction amount for the year of tax of each reducible fringe benefit (if any) relating to an employee of the employer, the employer and the year of tax. The total amount is the employer’s type 2 aggregate fringe benefits amount for the year of tax.

4  Application

(1)       The amendments made by items 2 and 3 apply to the year of tax starting on 1 April 2000 and later years of tax.

(2)       Despite section 74 of the Fringe Benefits Tax Assessment Act 1986 , the Commissioner may amend an assessment at any time within the period of 3 years after the commencement of this item for the purpose of giving effect to the amendments made by items 2 and 3.

5  At the end of subparagraph 58PB(4)(c)(i)

Add “, or to death benefits dependants (within the meaning of the Income Tax Assessment Act 1997 ) or legal personal representatives (within the meaning of that Act) of those persons”.

Income Tax Assessment Act 1936

6  Paragraph 23AB(5)(a)

Omit “ Commonwealth Employees’ Rehabilitation and Compensation Act 1988 ”, substitute “ Safety, Rehabilitation and Compensation Act 1988 ”.

7  Subsection 23AG(1)

Omit “is exempt from tax”, substitute “are exempt from tax”.

8  Subsection 73A(6) (definition of Research Secretary )

Omit “ Education Research Act 1970 ”, substitute “ Australian Research Council Act 2001 ”.

9  Subsection 82KZMGA(1)

Repeal the subsection, substitute:

             (1)  A taxpayer cannot deduct expenditure in relation to which the requirements in section 82KZMG (apart from paragraph 82KZMG(2)(a)) are met if:

                     (a)  the taxpayer holds the taxpayer’s interest in the agreement mentioned in section 82KZMG as an initial participant in the agreement; and

                     (b)  a CGT event happens in relation to that interest within 4 years after the end of the year of income in which the taxpayer first incurred expenditure under the agreement; and

                     (c)  the expenditure is incurred on or before 30 June 2008.

10  Subsection 102T(27) (definition of unit trust distribution )

Omit “subsection 102M(1)”, substitute “section 102M”.

Income Tax Assessment Act 1997

11  Subsection 20-55(1) (table item 1)

Omit “an allowable deduction” (wherever occurring), substitute “a deduction”.

12  Subsection 20-55(1) (table item 6)

Omit “allowed or allowable as a deduction”, substitute “you have deducted or can deduct”.

13  Subsection 25-5(8)

Omit “an allowable deduction”, substitute “a deduction”.

14  Paragraphs 25-7(b) and (c)

Repeal the paragraphs, substitute:

                     (b)  you lodge the claim for family tax benefit with an officer of the Australian Taxation Office (within the meaning of that Act) for determination by such an officer.

15  Subsection 36-17(5) (example)

Omit “allowable deductions”, substitute “deductions”.

16  Subsection 40-340(1) (after table item 2)

Insert:

2A

Transfer of a * CGT asset of a trust to a company under a trust restructure

The transferor and transferee are able to choose a roll-over under Subdivision 124-N for the * CGT event.

17  Application

The amendment made by item 16 applies to balancing adjustment events happening in the 2008-09 income year or a later income year.

18  At the end of subsection 40-340(2)

Add:

             ; and (c)  subsection 124-870(5) (which excludes certain assets from roll-over relief under Subdivision 124-N).

19  Subsection 40-340(5)

Omit “a person dies”, substitute “you die”.

20  Subsection 40-340(5)

Omit “the person’s”, substitute “your”.

21  Subsections 43-50(1) and (2)

Omit “an allowable deduction” (wherever occurring), substitute “a deduction”.

22  Section 43-210 (step 6)

Omit “allowable deduction”, substitute “deduction”.

23  Section 43-215 (step 4)

Omit “allowable deduction”, substitute “deduction”.

24  Subsection 116-30(2B)

Omit “Despite paragraph (2)(b), subsection (2) does not apply”, substitute “Subsection (2) does not apply to a situation that would otherwise be covered by paragraph (2)(b)”.

25  Application

The amendment made by item 24 applies to CGT events happening after the start of the 2006-07 income year.

26  Subsection 122-50(1) (example)

Repeal the example, substitute:

Example:    Nick is a small trader. He wants to incorporate his business. He disposes of all its assets to a company and receives 10 shares in return.

                   Nick acquired all the assets of the business after 20 September 1985.

                   Trading stock, plant and equipment and office furniture are precluded assets.

                   The market value of Nick’s trading stock when he disposed of it is $20,000. The market value of his plant and equipment at that time is $50,000 and the market value of his office furniture at that time is $10,000.

                   The cost bases of Nick’s land and buildings at that time total $120,000.

                   Nick has a business overdraft of $15,000. It is taken to be a liability in respect of all the assets of his business.

                   The first element of the cost base of the 10 shares is:

                   The first element of the reduced cost base of the 10 shares is worked out similarly.

27  Section 240-55 (heading)

Repeal the heading, substitute:

240-55   Arrangement payments not to be deductions

28  Subsection 290-90(2) (note 2)

Omit “allowable deductions”, substitute “deductions”.

29  Subsection 707-310(3)

Omit “transferee’s income” (wherever occurring), substitute “transferee’s * ordinary income, * statutory income”.

30  Subsection 707-310(3) (table, heading to column 1)

Omit “ income ”, substitute “ ordinary income, statutory income ”.

31  Subsection 707-310(3) (table item 5)

Omit “and * excluded exempt income”.

32  Paragraph 711-30(3)(a)

Omit “(the receivable )”.

33  Paragraph 711-30(3)(b)

Omit “the receivables”, substitute “the asset’s”.

34  Paragraph 711-30(3)(c)

Omit “the receivable”, substitute “the asset”.

Income Tax Rates Act 1986

35  Paragraph 23(2)(c)

Omit “subsection (4C) or (4D)”, substitute “subsection (4) or (5)”.

36  Application

The amendment made by item 35 applies to assessments for the 2007-08 income year and later income years.

Taxation Administration Act 1953

37  Section 16-5 in Schedule 1 (note 2)

Omit “that section”, substitute “that provision”.

38  Paragraph 20-35(2)(b) in Schedule 1

Omit “that section”, substitute “that provision”.

39  Application

The amendment made by item 38 applies to fund payments made in relation to the first income year starting on or after 1 July 2008 and later income years.

40  Section 45-10 in Schedule 1

Omit “items 3 and 4, and 6 to 12”, substitute “items 4 to 10, and 12 and 13”.

41  Section 45-10 in Schedule 1 (note 1)

Omit “items 6 to 12”, substitute “items 4 to 8, and 12 and 13,”.

42  Section 45-10 in Schedule 1 (note 2)

Omit “item 5”, substitute “item 11”.

43  Subsection 45-450(1) in Schedule 1

Omit “items 6 to 12”, substitute “items 4 to 8, and 12 and 13,”.

44  Application

The amendments made by items 40 to 43 apply to assessments for the 2007-08 income year and later income years.

Taxation (Interest on Overpayments and Early Payments) Act 1983

45  Subsection 3(1) (before paragraph (b) of the definition of income tax crediting amount )

Insert:

                     (a)  any amount of a credit that does not arise under Division 770 of the Income Tax Assessment Act 1997 or under the International Tax Agreements Act 1953 ; or

46  Application

The amendment made by item 45 applies to income years, statutory accounting periods and notional accounting periods starting on or after 1 July 2008.

47  Subsections 9(2) and (3)

Omit “subsection 10(1)”, substitute “section 10”.

48  Subsection 10(1)

Omit “(1)”.

49  Paragraph 10(1)(a)

Repeal the paragraph, substitute:

                     (a)  in respect of the period that commenced on the later of the following days:

                              (i)  the day on which notice of the assessment, determination or decision, being the assessment, determination or decision in relation to which the decision to which this Act applies was made, was issued to the person by the Commissioner;

                             (ii)  the day on which the amount of relevant tax was paid to the Commissioner;

                            and ended on the day on which the amount of the relevant tax or the part of the amount of relevant tax, as the case may be, was so refunded or applied; and

50  Transitional

If subparagraph 10(1)(a)(iii) of the Taxation (Interest on Overpayments and Early Payments) Act 1983 (as in force before the commencement of item 49) could apply to a taxpayer, that subparagraph continues to apply despite the amendment made by that item.

Tax Laws Amendment (Budget Measures) Act 2008

51  Item 15 of Schedule 1

Repeal the item, substitute:

15  Application

(1)       Subject to subitem (2), the amendment made by item 14 applies in relation to CGT events happening after 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2008 (the Budget time ).

(2)       An entity may choose that the amendment made by item 14 applies to a CGT event that happened:

                     (a)  after the start of the entity’s 1998-99 income year; and

                     (b)  before the Budget time.



 

Part 2 Asterisking amendments

Income Tax Assessment Act 1997

52  Asterisking amendments of the Income Tax Assessment Act 1997

The provisions of the Income Tax Assessment Act 1997 listed in the table are amended as set out in the table.

Asterisking amendments

Item

Provision

Omit:

Substitute:

1

Subparagraph 26-50(3)(b)(iv)

children

* children

2

Subsection 30-15(2) (table items 1 and 2) (column headed “How much you can deduct”)

* market value

market value

3

Subparagraph 51-50(2)(b)(i)

child

* child

4

Paragraph 52-70(b)

children

* children

5

Paragraph 52-105(3)(b)

children

* children

6

Paragraph 149-15(1)(b)

* ultimate owners

ultimate owners

7

Paragraph 149-15(1)(b)

* indirectly

indirectly

8

Paragraph 152-40(1A)(a)

child

* child

9

Subparagraph 215-10(1)(b)(ii)

more schemes

more * schemes

10

Paragraph 215-10(1)(b)

prudential standards

* prudential standards

11

Paragraph 215-10(1)(c)

permanent establishment

* permanent establishment

12

Subparagraph 215-10(2)(a)(ii)

connected entity

* connected entity

13

Paragraph 295-485(1)(a)

child

* child

14

Paragraph 320-107(1)(a)

child

* child

 



 

Part 3 Repeal

Pay-roll Tax Act 1941

53  The whole of the Act

Repeal the Act .