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TAX LAW IMPROVEMENT BILL 1996

The order of the day having been read for the resumption of the debate on the question—That the Bill be now read a second time—

Debate resumed.

Suspension of sitting: At 11.50 a.m., a division having been called in the House, the proceedings were suspended.

Resumption of sitting: At 12.03 p.m., the proceedings were resumed.


Debate continued.

Question—put and passed—Bill read a second time.

Consideration in detail

Bill, by leave, taken as a whole.

Mr Scott (Minister for Veterans[quot ] Affairs), by leave, moved the following amendments together:

Schedule 1—

Item 2—

Page 4 (after line 20), at the end of subsection (2), add:

  Note: If you sell property you acquired before 20 September 1985 for profit-making by sale, your assessable income includes the profit: see section 25A of the Income Tax Assessment Act 1936.

Page 5 (lines 1 to 6), omit section 15-20, substitute:

15-20 Royalties

  Your assessable income includes an amount that you receive as or by way of royalty within the ordinary meaning of "royalty" (disregarding the definition of royalty in subsection 995-1(1)) if the amount is not assessable as *ordinary income under section 6[hyphen]5.

Page 26 (before line 5), before paragraph 20-110(1)(a), insert:

  (aa) the car was designed mainly for carrying passengers; and

Page 30 (before line 9), before paragraph (b), insert:

  (ba) the car was designed mainly for carrying passengers; and

Item 4—

Page 40 (lines 22 to 25), omit subsection 25-20(1), substitute:

 (1) You can deduct expenditure you incur for preparing, registering or stamping:

  (a) a lease of property; or

  (b) an assignment or surrender of a lease of property;

  if you have used or will use the property solely for the *purpose of producing assessable income.

Page 41 (line 9), omit "period", substitute "*period".

Page 42—

(line 13), omit "period", substitute "*period".

(line 15), omit the note.

(line 21), omit "period", substitute "*period".

Page 43 (line 5), omit the note.

Page 47 (after line 10), at the end of subsection (2), add:

  Note: If you sell property you acquired before 20 September 1985 for profit-making by sale, you may be able to deduct a loss on the sale: see section 52 of the Income Tax Assessment Act 1936.


Item 5—

Page 56—

(lines 19 and 20), omit "or a private company which is a partner in a partnership", substitute "in which a private company is a partner".

(after line 25), after subsection (2), insert:

 (2A) In the case of a partnership, a related entity is any of the following:

  (a) a *relative of a partner in the partnership;

  (b) an individual who is or has been a director of a company that is a partner in the partnership and is a *private company for the income year;

  (c) an entity that is or has been a shareholder in a company of that kind;

  (d) a *relative of an individual who is or has been a director or shareholder of a company of that kind;

  (e) a beneficiary of a trust if the trustee is a partner in the partnership;

  (f) a *relative of a beneficiary of a trust if the trustee is a partner in the partnership;

 (g) another partnership, if a partner in the other partnership is a *relative of a partner in the first partnership.

  However, a partner in a partnership is not a related entity of the partnership.

Item 7—

Page 112 (after line 18), at the end of subsection (2), add:

  Note: These are some examples of what is entertainment:

[bull ] \*\'b7 business lunches

[bull ] \*\'b7social functions.

   These are some examples of what is not entertainment:

[bull ] \*\'b7 meals on business travel overnight

[bull ] \*\'b7theatre attendance by a critic

[bull ] a restaurant meal of a food writer.

Item 9—

Page 143—

(line 19), omit "and".

(lines 20 to 27), omit paragraph (g).

(after line 27), at the end of section 42[hyphen]18, add:

 (2) Plant also includes plumbing fixtures and fittings (including wall and floor tiles) provided by an entity mainly for:

  (a) either or both:

  
 (i) employees in a *business carried on by the entity for the *purpose of producing assessable income; or

   (ii) employees in a business carried on for that purpose by a company that is a member of the same *wholly-owned group of which the entity is a member; or

  (b) *children of any of those employees.

Page 145 (table item 1, 3rd column), omit paragraph (b).

Page 152—

(table item 3), omit the table item.

(table item 4, 2nd column), omit "or (2)".

(table item 5, 3rd column), before "attributable", insert "reasonably".

(table item 6, 3rd column), before "attributable", insert "reasonably".

Page 153 (table item 9), omit the item.

Page 154 (line 2), after "*car", insert "designed mainly for carrying passengers and which".

Page 155 (line 14), after "*car" (first occurring), insert "designed mainly for carrying passengers".

Page 163 (line 11), omit "an entity", substitute "the entity".

Page 166—

(line 22), before "the amounts", insert "for plant that is not a *car—".

(lines 23 and 24), omit ", other than under Division 28 (Car expenses)".

Page 167—

(line 1), before "any further amounts", insert "for plant that is not a car—".

(line 2), omit ", other than under Division 28,".

(line 12), omit "*car", substitute "car".

(lines 12 and 13), omit "for which you have deducted an amount under Division 28".

(lines 14 and 15), omit "or quasi-owner".

(line 24), after "Division 28", insert "(Car expenses)".

Page 173—

(table item 5, 2nd column), omit "or (2)".

(table items 6 and 7), omit the items.

(table item 8, 3rd column), before "attributable", insert "reasonably".

(table item 10, 3rd column), before "attributable" insert "reasonably".

Page 174 (table item 13), omit the item.

Page 175 (lines 3 to 24), omit section 42-208.

Page 176 (lines 6 and 7), omit "and disposals where a *hire purchase agreement is entered into".


Page 181 (line 4), omit "or *quasi-owner".

Page 182 (line 15), omit "or *quasi-owner".

Page 183—

(line 8), omit "or *quasi-owner".

(line 11), omit "or *quasi-owner".

Page 186 (line 15), after "written down value", insert "in section 42[hyphen]200".

Page 192—

(lines 13 to 15), omit subsection (1).

(line 16), omit the subsection heading.

(line 17), omit "also".

Page 193 (lines 24 to 26), omit subsection (4).

Page 195—

(line 5), omit "the plant", substitute "*plant".

(line 9), omit "the plant", substitute "*plant".

Item 13—

Page 269 (line 16), omit "that is held".

Page 271—

(after line 15), at the end of section 70-20, add:

  Note 2: This section is disregarded in applying Division 13 (about transfer-pricing arrangements) of Part III of the Income Tax Assessment Act 1936.

(line 21) to page 272 (line 31), omit section 70-30.

Page 276 (after line 11), after subsection 70-55(2), insert:

 (3) An election under this section must be made by the time you lodge your *income tax return for the income year in which you acquired the animal. However, the Commissioner can allow you to make it later.

Page 281—

(line 5), after "are", insert "or were".

(line 6), after "is", insert "or was".

Page 282 (lines 16 to 18), omit the note.

Page 283 (line 18), at the end of subsection (7), add "However, the Commissioner can allow the election to be made later.".

Page 285 (line 21) to page 286 (line 23), omit section 70-110, substitute:

 [The next section is section 70[hyphen]115.]

Schedule 4, item 59, page 388 (line 26), omit "subsection 26-35(2)", substitute "subsections 26-35(2) and (2A)".

Schedule 5—

Item 1, page 404 (line 11) to page 405 (line 17), omit section 70[hyphen]10, substitute:

 
[The next section is section 70[hyphen]20.]

Item 64, page 424 (lines 16 to 20), omit the item.

Item 81, page 426 (lines 21 to 25), omit the item.

Item 84, page 427 (lines 13 to 15), omit the item.

Item 85, page 427 (lines 16 to 18), omit the item.

Item 86, page 427 (lines 19 to 26), omit the item.

Item 87, page 428 (lines 1 to 5), omit the item.

Schedule 6—

Item 2—

Page 434—

(lines 2 to 5), omit paragraph (2)(a).

(lines 13 to 16), omit subsection (1), substitute:

 (1) The following subsections have effect if you have deducted or can deduct an amount for depreciation of plant:

  (a) under the old depreciation provisions; or

  (b) using the "log book" method or the "one-third of actual expenses" method under section 82KUD or 82KW, or Schedule 2A, of the 1936 Act;

  and you can deduct an amount for depreciation of it under the new depreciation provisions or Division 28 of the 1997 Act.

Page 439 (line 1), after "car", insert "designed mainly for carrying passengers".

Page 440 (line 25), before "any amounts", insert "for plant that is not a car—".

Page 441—

(line 1), before "any further amount", insert "for plant that is not a car—".

(lines 12 to 14), omit "for which you have claimed a deduction under Subdivision F of Division 3 of Part III, or Schedule 2A, of the 1936 Act".

Item 6, page 449 (lines 11 and 12), omit the item.

Item 8, page 450 (lines 8 and 9), omit the item.

Item 12, page 450 (lines 22 and 23), omit the item.

Item 47, page 458 (lines 3 and 4), omit the item.

Item 49, page 458 (lines 7 and 8), omit the item.

Item 50, page 458 (lines 9 and 10), omit the item.

Item 60, page 460 (lines 1 to 13), omit the item.

Schedule 12, page 538 (after line 30), after item 12, insert:

12A Subsection 995-1(1) (definition of car)

 Omit "or fewer", substitute "and fewer".

Paper: Mr Scott presented a supplementary explanatory memorandum to the Bill.


Amendments agreed to.

Bill, as amended, agreed to.

Consideration in detail concluded.

Ordered—That the Bill be reported to the House with amendments.