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Tax and Superannuation Laws Amendment (Norfolk Island Reforms) Bill 2015

Schedule 1 Income tax (including the Medicare levy)

   

Income Tax Assessment Act 1936

1  Division 1A of Part III

Repeal the Division.

2  Paragraph 202DDB(2)(a)

Omit “or 202EF, or both”.

3  Sub-subparagraph 202DDB(2)(b)(ii)(A)

Omit “or 202EF, or both”.

4  Section 202EF

Repeal the section.

5  Paragraphs 251S(1)(a) and (b)

Omit “other than a Territory resident (within the meaning of section 24C)”.

6  At the end of paragraph 251T(a)

Add “or”.

7  Paragraph 251T(b)

Repeal the paragraph.

8  Paragraph 251U(1)(d)

Omit “, or was a resident only because the definition of Australia includes the prescribed Territory (within the meaning of section 24B)”.

Income Tax Assessment Act 1997

9  Section 11-15 (table item headed “foreign aspects of income taxation”)

Omit:

Territory resident company or trust, income from sources outside Australia .............................................



24F

Territory resident, income from sources in a prescribed Territory ..........................................................................



24G

10  Section 109-60 (table item 1)

Omit “ section 24P ”, substitute “subsection 102-25(1) of the Income Tax (Transitional Provisions) Act 1997 ”.

11  Section 109-60 (after table item 1)

Insert:

1A

CGT event happens to Norfolk Island asset

30 June 2016

subsection 102-25(2) of the Income Tax (Transitional Provisions) Act 1997

12  Section 112-97 (table item 2)

Omit “ section 24P ”, substitute “subsection 102-25(1) of the Income Tax (Transitional Provisions) Act 1997 ”.

13  Section 112-97 (after table item 2)

Insert:

2AA

CGT event happens to Norfolk Island asset

First element of cost base and reduced cost base

subsection 102-25(2) of the Income Tax (Transitional Provisions) Act 1997

14  Section 118-1 (note 1)

Omit:

•       section 24B (about External Territories);

15  Paragraph 202-45(b)

Repeal the paragraph.

16  Subsection 960-505(1) (note 1)

Omit “Note 1”, substitute “Note”.

17  Subsection 960-505(1) (note 2)

Repeal the note.

Income Tax (Transitional Provisions) Act 1997

18  At the end of Division 102

Add:

102-25   Transitional capital gains tax provisions for certain Cocos (Keeling) Islands and Norfolk Island assets

             (1)  If:

                     (a)  an entity was a prescribed person (within the meaning of former Division 1A of Part III of the Income Tax Assessment Act 1936 ) because of residence in the Territory of Cocos (Keeling) Islands on or before 30 June 1991; and

                     (b)  the entity acquired a CGT asset on or before that day; and

                     (c)  the asset is not a pre-CGT asset; and

                     (d)  had a CGT event happened in relation to the asset immediately before 1 July 1991, and had the Income Tax Assessment Act 1997 been in force at the time of the event, any capital gain or capital loss from the event would have been disregarded because the entity was a prescribed person;

then, for the purposes of Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 :

                     (e)  the asset is taken to have been acquired by the entity on 30 June 1991; and

                      (f)  the first element of the asset’s cost base in the hands of the entity (at the end of that day) is its market value at that time.

Note:          A prescribed person was a Territory resident, a Territory company or a trustee of a Territory trust, as defined by former sections 24C, 24D and 24E of the Income Tax Assessment Act 1936 .

             (2)  If:

                     (a)  an entity was a prescribed person (within the meaning of former Division 1A of Part III of the Income Tax Assessment Act 1936 ) because of residence in Norfolk Island on or before 30 June 2016; and

                     (b)  the entity acquired a CGT asset on or before that day; and

                     (c)  the asset is not a pre-CGT asset; and

                     (d)  had a CGT event happened in relation to the asset immediately before 1 July 2016, any capital gain or capital loss from the event would have been disregarded because the entity was a prescribed person;

then, for the purposes of Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 :

                     (e)  the asset is taken to have been acquired by the entity on 30 June 2016; and

                      (f)  the first element of the asset’s cost base in the hands of the entity (at the end of that day) is its market value at that time.

             (3)  Despite Division 121 of the Income Tax Assessment Act 1997 , the entity is not required to keep records of the date of acquisition of an asset in relation to which subsection (1) or (2) of this section applies, or its cost base on 30 June 1991 or 30 June 2016 (as the case requires).

             (4)  However, if, as at the date on which a CGT event happens in relation to the asset, the entity has complied with Division 121 of the Income Tax Assessment Act 1997 in relation to the asset, the entity may choose that this section does not apply in relation to the asset.

19  Application

The amendments made by this Part (other than item 18) apply in relation to the 2016-17 income year and later income years.