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TAX AND SUPERANNUATION LAWS AMENDMENT (2015 MEASURES NO. 2) BILL 2015

 

 

 

2013-2014-2015 

 

The Parliament of the 

Commonwealth of Australia 

 

HOUSE OF REPRESENTATIVES 

 

 

 

 

Presented and read a first time 

 

 

 

 

Tax and Superannuation Laws 

Amendment (2015 Measures No. 2) Bill 

2015 

 

No.      , 2015 

 

(Treasury) 

 

 

 

A Bill for an Act to amend the law relating to 

taxation, and for related purposes 

   

   

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

i 

 

Contents 

Short title ........................................................................................... 1

 

Commencement ................................................................................. 1

 

Schedules ........................................................................................... 2

 

Amendment of assessments ............................................................... 2

 

Schedule 1--Tax relief for certain mining arrangements

 

4

 

Part 1--Interest realignment arrangements

 

4

 

Income Tax Assessment Act 1997

 

4

 

Income Tax (Transitional Provisions) Act 1997

 

14

 

Part 2--Farm-in farm-out arrangements

 

16

 

Income Tax Assessment Act 1997

 

16

 

Part 3--Mining, quarrying or prospecting information

 

25

 

Income Tax Assessment Act 1997

 

25

 

Schedule 2--In-house software

 

26

 

Income Tax Assessment Act 1997

 

26

 

Schedule 3--Instalment trusts

 

27

 

Income Tax Assessment Act 1997

 

27

 

Income Tax (Transitional Provisions) Act 1997

 

34

 

Taxation Administration Act 1953

 

35

 

Schedule 4--Company losses

 

36

 

Part 1--Changes in company ownership

 

36

 

Division 1--Main amendments

 

36

 

Income Tax Assessment Act 1997

 

36

 

Division 2--Other amendments

 

45

 

Income Tax Assessment Act 1997

 

45

 

Income Tax (Transitional Provisions) Act 1997

 

53

 

Part 2--Same business test

 

55

 

Income Tax Assessment Act 1997

 

55

 

Part 3--Shares held by certain entities

 

56

 

 

 

ii 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Income Tax Assessment Act 1997

 

56

 

 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

1 

 

A Bill for an Act to amend the law relating to 

taxation, and for related purposes 

The Parliament of Australia enacts: 

1  Short title 

 

  This Act may be cited as the Tax and Superannuation Laws 

Amendment (2015 Measures No. 2) Act 2015

2  Commencement 

 

(1)  Each provision of this Act specified in column 1 of the table 

commences, or is taken to have commenced, in accordance with 

column 2 of the table. Any other statement in column 2 has effect 

10 

according to its terms. 

11 

 

12 

   

   

 

 

 

2 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Commencement information 

Column 1 

Column 2 

Column 3 

Provisions 

Commencement 

Date/Details 

1.  Sections 1 to 4 

and anything in 

this Act not 

elsewhere covered 

by this table 

The day this Act receives the Royal Assent. 

 

2.  Schedule 1 

The day this Act receives the Royal Assent. 

 

3.  Schedule 2 

1 July 2015. 

1 July 2015 

4.  Schedule 3 

The day this Act receives the Royal Assent. 

 

5.  Schedule 4 

The day after this Act receives the Royal 

Assent. 

 

Note: 

This table relates only to the provisions of this Act as originally 

enacted. It will not be amended to deal with any later amendments of 

this Act. 

 

(2)  Any information in column 3 of the table is not part of this Act. 

Information may be inserted in this column, or information in it 

may be edited, in any published version of this Act. 

3  Schedules 

 

  Legislation that is specified in a Schedule to this Act is amended or 

repealed as set out in the applicable items in the Schedule 

concerned, and any other item in a Schedule to this Act has effect 

10 

according to its terms. 

11 

4  Amendment of assessments 

12 

 

(1)  Section 170 of the Income Tax Assessment Act 1936 does not 

13 

prevent the amendment of an assessment if: 

14 

 

(a)  the assessment was made before the commencement of 

15 

Schedule 3 to this Act (Instalment trusts); and 

16 

 

(b)  the amendment is made for the purpose of giving effect to 

17 

that Schedule; and 

18 

 

(c)  the amendment is made within 2 years after that 

19 

commencement. 

20 

   

   

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

3 

 

 

(2)  Section 170 of the Income Tax Assessment Act 1936 does not 

prevent the amendment of an assessment if: 

 

(a)  the assessment was made before the commencement of 

Schedule 4 to this Act (Company losses); and 

 

(b)  the amendment is made for the purpose of giving effect to 

that Schedule; and 

 

(c)  the amendment is made within 4 years after that 

commencement. 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

4 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Schedule 1

--Tax relief for certain mining 

arrangements 

Part 1

--Interest realignment arrangements 

Income Tax Assessment Act 1997 

1  After section 40-362 

Insert: 

40-363  Roll-over relief for interest realignment arrangements 

Circumstances giving rise to roll-over relief 

 

(1)  There is roll-over relief if: 

 

(a)  there is a 

*

balancing adjustment event under section 40-295 

10 

because, in an income year, you dispose of a 

*

depreciating 

11 

asset to another entity; and 

12 

 

(b)  the asset is a 

*

mining, quarrying or prospecting right; and 

13 

 

(c)  the disposal occurs under an 

*

interest realignment 

14 

arrangement; and 

15 

 

(d)  you choose to apply roll-over relief in relation to the asset. 

16 

Choosing to apply roll-over relief 

17 

 

(2)  The choice must: 

18 

 

(a)  be in writing; and 

19 

 

(b)  be made at or before the time you lodge your 

*

income tax 

20 

return for the income year in which the 

*

balancing 

21 

adjustment event occurs, or within a longer period allowed 

22 

by the Commissioner. 

23 

The effect of roll-over relief 

24 

 

(3)  If there is roll-over relief under this section: 

25 

 

(a)  section 40-285 does not apply to the 

*

balancing adjustment 

26 

event in relation to the asset; and 

27 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

5 

 

 

(b)  an amount is included in your assessable income if such an 

amount (the non-realignment amount) would have been 

included under subsection 40-285(1) if: 

 

(i)  paragraph (a) of this subsection did not apply; and 

 

(ii)  the 

*

adjustable value of the 

*

mining, quarrying or 

prospecting rights that you disposed of under the 

arrangement were taken to be the market value of the 

mining, quarrying or prospecting rights that you 

received under the arrangement; and 

 

(c)  in working out the 

*

cost of a mining, quarrying or 

10 

prospecting right that you receive under the arrangement, if: 

11 

 

(i)  some or all of the cost consists of a 

*

non-cash benefit 

12 

that you provide; and 

13 

 

(ii)  that benefit is a mining, quarrying or prospecting right 

14 

that you disposed of under the arrangement; 

15 

 

  the market value of the benefit is taken to be the adjustable 

16 

value of the benefit. 

17 

 

(4)  The amount included in your assessable income under 

18 

paragraph (3)(b) is the non-realignment amount, and it is included 

19 

for the income year in which the balancing adjustment event 

20 

occurred. 

21 

Meaning of interest realignment arrangement etc. 

22 

 

(5)  An interest realignment arrangement is an 

*

arrangement: 

23 

 

(a)  that is entered into between entities: 

24 

 

(i)  that are undertaking jointly, or propose to undertake 

25 

jointly, a project for carrying out 

*

mining and quarrying 

26 

operations; and 

27 

 

(ii)  that each 

*

holds one or more 

*

mining, quarrying or 

28 

prospecting rights relating to the project; and 

29 

 

(b)  under which those entities exchange (or agree to exchange), 

30 

with the effect set out in subsection (6), parts of those rights; 

31 

and 

32 

 

(c)  that does not provide for any transfer, of a mining, quarrying 

33 

or prospecting right, that does not give rise to the effect 

34 

referred to in subsection (6). 

35 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

6 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Note: 

The parts referred to in paragraph (b) are themselves mining, 

quarrying or prospecting rights (see paragraph (c) of the definition of 

mining, quarrying or prospecting right in subsection 995-1(1)), and 

are therefore not referred to elsewhere in this Act as parts of such 

rights. 

 

(6)  The effect referred to in paragraphs (5)(b) and (c) must be that, for 

each of those entities, the following are equal: 

 

(a)  the entity's percentage interest in the project; 

 

(b)  the reserves and resources represented by the 

*

mining, 

quarrying or prospecting rights that the entity 

*

holds relating 

10 

to the project, expressed as a percentage of the reserves and 

11 

resources represented by all mining, quarrying or prospecting 

12 

rights that any of the entities hold relating to the project. 

13 

 

(7)  For the purposes of subsection (6): 

14 

 

(a)  the reserves represented by a 

*

mining, quarrying or 

15 

prospecting right are taken to be the reserves, reasonably 

16 

estimated using an appropriate accepted industry practice, 

17 

that are expected to be extracted from the mine, 

*

petroleum 

18 

field or quarry to which the right relates; and 

19 

 

(b)  the resources represented by a mining, quarrying or 

20 

prospecting right are taken to be the resources, reasonably 

21 

estimated using an appropriate accepted industry practice, 

22 

that are expected to be situated in the area to which the right 

23 

relates (other than those resources that are reserves referred 

24 

to in paragraph (a)). 

25 

40-364  Interest realignment adjustments 

26 

Effect of receiving interest realignment adjustment on assessable 

27 

income 

28 

 

(1)  If you receive an 

*

interest realignment adjustment in an income 

29 

year, include in your assessable income for the year an amount (the 

30 

adjustment amount) equal to: 

31 

 

(a)  the amount of the adjustment; or 

32 

 

(b)  if the adjustment is not an amount--the 

*

market value of the 

33 

adjustment. 

34 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

7 

 

Effect of providing interest realignment adjustment on cost, or cost 

base and reduced cost base 

 

(2)  If an 

*

interest realignment adjustment is provided by you or on 

your behalf: 

 

(a)  include the adjustment amount in the second element of the 

*

cost of a 

*

mining, quarrying or prospecting right that you 

acquired under the 

*

interest realignment arrangement to 

which the adjustment amount relates; or 

 

(b)  if this Division does not apply to that right--include the 

adjustment amount in the 

*

cost base and 

*

reduced cost base 

10 

of that right. 

11 

However, if you acquired more than one such right under the 

12 

arrangement, apportion the adjustment amount between the costs, 

13 

or cost bases and reduced cost bases, of those rights on a 

14 

reasonable basis. 

15 

Note: 

Subsections 40-77(1D) and (1E) of the Income Tax (Transitional 

16 

Provisions) Act 1997 set out when this Division does not apply to the 

17 

right. 

18 

Tax effects of the right to an interest realignment adjustment 

19 

 

(3)  In calculating the 

*

termination value of a 

*

mining, quarrying or 

20 

prospecting right that you provide under an 

*

interest realignment 

21 

arrangement, assume to be zero the 

*

market value of any 

22 

contractual right conferred by the arrangement to an 

*

interest 

23 

realignment adjustment to be received by you. 

24 

 

(4)  In calculating the 

*

cost of a 

*

mining, quarrying or prospecting right 

25 

that you receive under an 

*

interest realignment arrangement, 

26 

assume to be zero the 

*

market value of any contractual right 

27 

conferred by the arrangement to an 

*

interest realignment 

28 

adjustment to be provided by you. 

29 

 

(5)  The creation of a right to an 

*

interest realignment adjustment does 

30 

not cause 

*

CGT event D1 or CGT event D3 to happen. 

31 

 

(6)  Your receipt of an 

*

interest realignment adjustment does not cause 

32 

*

CGT event C2 to happen in relation to the right to receive the 

33 

adjustment. 

34 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

8 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Meaning of interest realignment adjustment 

 

(7)  An interest realignment adjustment is an amount, or an asset 

(other than a 

*

mining, quarrying or prospecting right), that: 

 

(a)  is provided under an 

*

interest realignment arrangement to a 

party to the arrangement by or on behalf of another party to 

the arrangement; and 

 

(b)  is provided as an adjustment, to the parties' contributions of 

value to the project to which the arrangement relates, that 

arises because information that has become available since 

the time the arrangement took effect indicates that the other 

10 

party did not make an appropriate contribution at that time. 

11 

2  At the end of Division 124 

12 

Add: 

13 

Subdivision 124-S--Interest realignment arrangements 

14 

Guide to Subdivision 124-S 

15 

124-1220  What this Subdivision is about 

16 

There is roll-over relief if an interest in a mining, quarrying or 

17 

prospecting right is disposed of under an interest realignment 

18 

arrangement. 

19 

Table of sections 

20 

124-1225  Disposals of interests under interest realignment arrangements 

21 

124-1230  Roll-over consequences--partial roll-over 

22 

124-1235  Roll-over consequences--all original interests were post-CGT 

23 

124-1240  Roll-over consequences--all original interests were pre-CGT 

24 

124-1245  Roll-over consequences--original interests were of mixed CGT status, all 

25 

were pre-UCA 

26 

124-1250  Roll-over consequences--some original interests were pre-UCA 

27 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

9 

 

Operative provisions 

124-1225  Disposals of interests under interest realignment 

arrangements 

 

(1)  There is a roll-over if: 

 

(a) 

*

CGT event A1 happens because you 

*

dispose of one or more 

assets each of which: 

 

(i)  is an interest (an original interest) in a 

*

mining, 

quarrying or prospecting right; and 

 

(ii)  is an interest that you started to 

*

hold before 1 July 

2001; and 

10 

 

(b)  the disposal occurs under an 

*

interest realignment 

11 

arrangement. 

12 

 

(2)  The first element of the 

*

cost base and 

*

reduced cost base of an 

13 

interest (a new interest) in a 

*

mining, quarrying or prospecting 

14 

right that you acquire under the 

*

interest realignment arrangement 

15 

includes any amount you paid to acquire the new interest. 

16 

Note 1: 

The rest of the first element is worked out under Subdivision 124-A. 

17 

Note 2: 

Under subsections 124-10(2) and 124-15(2), a capital gain or capital 

18 

loss you make from the original interest is disregarded. 

19 

 

(3)  The amount can include giving property: see section 103-5. 

20 

However, it does not include a 

*

mining, quarrying or prospecting 

21 

right that you dispose of under the 

*

interest realignment 

22 

arrangement. 

23 

124-1230  Roll-over consequences--partial roll-over 

24 

 

(1)  You can obtain only a partial roll-over in relation to an original 

25 

interest if the 

*

capital proceeds for that interest includes something 

26 

(the ineligible proceeds) other than a new interest or new interests. 

27 

There is no roll-over for that part (the ineligible part) of the 

28 

interest for which you received the ineligible proceeds. 

29 

Note: 

If there is more than one original interest, some or all of those original 

30 

interests may each have an ineligible part. 

31 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

10 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(2)  The 

*

cost base of the ineligible part is that part of the cost base of 

the original interest as is reasonably attributable to the ineligible 

part. 

 

(3)  The 

*

reduced cost base of the ineligible part is that part of the 

reduced cost base of the original interest as is reasonably 

attributable to the ineligible part. 

 

(4)  For the purposes of sections 124-1235 and 124-1245, for each 

original interest that has an ineligible part: 

 

(a)  reduce the 

*

cost base of that interest (just before the 

*

CGT 

event that happened in relation to it) by so much of that cost 

10 

base as is attributable to that ineligible part; and 

11 

 

(b)  reduce the 

*

reduced cost base of that interest (just before the 

12 

CGT event that happened in relation to it) by so much of that 

13 

reduced cost base as is attributable to that ineligible part. 

14 

124-1235  Roll-over consequences--all original interests were 

15 

post-CGT and pre-UCA 

16 

 

(1)  If you acquire the new interest in exchange for: 

17 

 

(a)  one original interest that you started to 

*

hold on or after 

18 

20 September 1985 and before 1 July 2001; or 

19 

 

(b)  2 or more original interests, each of which you started to hold 

20 

on or after 20 September 1985 and before 1 July 2001; 

21 

you are taken to have started to hold the new interest (or all of the 

22 

new interests) on or after 20 September 1985 and before 1 July 

23 

2001. 

24 

 

(2)  The first element of the 

*

cost base of the new interest (or of each of 

25 

the new interests) is such amount as is reasonable having regard to: 

26 

 

(a)  the total of the cost bases of all the original interests; and 

27 

 

(b)  the number, 

*

market value and character of the original 

28 

interests; and 

29 

 

(c)  the number, market value and character of the new interests. 

30 

 

(3)  The first element of the 

*

reduced cost base of the new interest (or 

31 

of each of the new interests) is such amount as is reasonable having 

32 

regard to: 

33 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

11 

 

 

(a)  the total of the reduced cost bases of all the original interests; 

and 

 

(b)  the number, 

*

market value and character of the original 

interests; and 

 

(c)  the number, market value and character of the new interests. 

124-1240  Roll-over consequences--all original interests were 

pre-CGT 

 

  If you acquire the new interest in exchange for: 

 

(a)  one original interest that you started to 

*

hold before 

20 September 1985; or 

10 

 

(b)  2 or more original interests, each of which you started to hold 

11 

before 20 September 1985; 

12 

you are taken to have started to hold the new interest (or all of the 

13 

new interests) before that day. 

14 

124-1245  Roll-over consequences--original interests were of mixed 

15 

CGT status, all were pre-UCA 

16 

 

(1)  This section applies if: 

17 

 

(a)  you acquire the new interest in exchange for more than one 

18 

original interest; and 

19 

 

(b)  you started to 

*

hold one or more of the original interests 

20 

before 20 September 1985; and 

21 

 

(c)  you started to hold one or more of the original interests on or 

22 

after that day; and 

23 

 

(d)  you did not start to hold any of the original interests on or 

24 

after 1 July 2001. 

25 

 

(2)  Each new interest is taken to be 2 separate 

*

CGT assets that are 

26 

both new interests: 

27 

 

(a)  one (which you are taken to have started to 

*

hold on or after 

28 

20 September 1985 and before 1 July 2001) representing the 

29 

extent to which you started to hold the original interests on or 

30 

after 20 September 1985 and before 1 July 2001; and 

31 

 

(b)  another (which you are taken to have started to hold before 

32 

20 September 1985) representing the extent to which you 

33 

started to hold the original interests before that day. 

34 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

12 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(3)  The first element of the 

*

cost base and 

*

reduced cost base of the 

*

CGT asset mentioned in paragraph (2)(a) in relation to a new 

interest is worked out under the formula: 

Market value of new interest

Total post-CGT cost base

Market value of all new interests

 

where: 

market value of all new interests is the total of the 

*

market values 

of all of the new interests. 

market value of new interest is the 

*

market value of the new 

interest to which the 

*

CGT asset mentioned in paragraph (2)(a) 

relates. 

10 

total post-CGT cost base is the total of the 

*

cost bases of all the 

11 

original interests that you started to 

*

hold on or after 20 September 

12 

1985. 

13 

124-1250  Roll-over consequences--some original interests were 

14 

pre-UCA 

15 

 

(1)  This section applies if: 

16 

 

(a)  you acquire the new interest in exchange for more than one 

17 

original interest; and 

18 

 

(b)  you started to 

*

hold one or more of the original interests 

19 

(pre-UCA interests) before 1 July 2001; and 

20 

 

(c)  you started to hold one or more of the original interests 

21 

(post-UCA interests) on or after that day. 

22 

 

(2)  If you started to 

*

hold all of the pre-UCA interests on or after 

23 

20 September 1985, each new interest is taken to be 2 separate 

24 

assets that are both new interests: 

25 

 

(a)  one (which you are taken to have started to hold on or after 

26 

that day and before 1 July 2001) representing the extent to 

27 

which the original interests are pre-UCA interests; and 

28 

 

(b)  another (which you are taken to have started to hold on or 

29 

after 1 July 2001) representing the extent to which the 

30 

original interests are post-UCA interests. 

31 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

13 

 

Apply section 124-1235 to the interest referred to in paragraph (a) 

as if the pre-UCA interests were the only original interests. Apply 

Division 40 to the interests referred to in paragraph (b). 

 

(3)  If you started to 

*

hold all of the pre-UCA interests before 

20 September 1985, each new interest is taken to be 2 separate 

assets that are both new interests: 

 

(a)  one (which you are taken to have started to hold before that 

day) representing the extent to which the original interests are 

pre-UCA interests; and 

 

(b)  another (which you are taken to have started to hold on or 

10 

after 1 July 2001) representing the extent to which the 

11 

original interests are post-UCA interests. 

12 

Apply section 124-1240 to the new interest referred to in 

13 

paragraph (a) as if the pre-UCA interests were the only original 

14 

interests. Apply Division 40 to the new interest referred to in 

15 

paragraph (b). 

16 

 

(4)  If you started to 

*

hold one or more of the pre-UCA interests before 

17 

20 September 1985 and one or more of the pre-UCA interests on or 

18 

after that day, each new interest is taken to be 3 separate assets that 

19 

are all new interests: 

20 

 

(a)  one (which you are taken to have started to hold on or after 

21 

20 September 1985 and before 1 July 2001) representing the 

22 

extent to which the original interests that you started to hold 

23 

on or after 20 September 1985 are pre-UCA interests; and 

24 

 

(b)  another (which you are taken to have started to hold before 

25 

20 September 1985) representing the extent to which the 

26 

original interests that you started to hold before 20 September 

27 

1985 are pre-UCA interests; and 

28 

 

(c)  another (which you are taken to have started to hold on or 

29 

after 1 July 2001) representing the extent to which the 

30 

original interests are post-UCA interests. 

31 

Apply section 124-1245 to the new interests referred to in 

32 

paragraphs (a) and (b) as if the pre-UCA interests were the only 

33 

original interests. Apply Division 40 to the new interest referred to 

34 

in paragraph (c). 

35 

Schedule 1  Tax relief for certain mining arrangements 

Part 1  Interest realignment arrangements 

 

 

 

14 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

3  Subsection 995-1(1) 

Insert: 

interest realignment adjustment has the meaning given by 

subsection 40-364(7). 

interest realignment arrangement has the meaning given by 

subsection 40-363(5). 

Income Tax (Transitional Provisions) Act 1997 

4  After subsection 40-77(1C) 

Insert: 

 

(1D)  Division 40 of the new Act does not apply to an interest in a 

10 

mining, quarrying or prospecting right that you started to hold on 

11 

or after 1 July 2001 if: 

12 

 

(a)  you acquired the interest under an interest realignment 

13 

arrangement; and 

14 

 

(b)  the interest was acquired in exchange for one or more other 

15 

interests in other mining, quarrying or prospecting rights all 

16 

of which you had started to hold before 1 July 2001. 

17 

 

(1E)  If: 

18 

 

(a)  you acquired, under an interest realignment arrangement, an 

19 

interest (a new interest) in a mining, quarrying or prospecting 

20 

right; and 

21 

 

(b)  the interest was acquired in exchange for one or more other 

22 

interests (old interests) in other mining, quarrying or 

23 

prospecting rights; and 

24 

 

(c)  you started to hold some of the old interests before 1 July 

25 

2001; 

26 

Division 40 of the new Act applies to the new interest only to the 

27 

extent that the new interest was acquired in exchange for the old 

28 

interests that you started to hold on or after 1 July 2001. 

29 

Tax relief for certain mining arrangements  Schedule 1 

Interest realignment arrangements  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

15 

 

5  Application of amendments 

The amendments made by this Part apply in relation to interest 

realignment arrangements entered into after 7.30 pm, by legal time in 

the Australian Capital Territory, on 14 May 2013. 

Schedule 1  Tax relief for certain mining arrangements 

Part 2  Farm-in farm-out arrangements 

 

 

 

16 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Part 2

--Farm-in farm-out arrangements 

Income Tax Assessment Act 1997 

6  Section 11-

55 (after table item headed "environment") 

Insert: 

farm-in farm-out arrangements 

 

rewards for providing exploration benefits .........................  40-1135 

7  Section 40-175 (note) 

After: 

 

paragraph 40-365(5)(a); 

insert: 

 

section 40-1110; 

8  At the end of subsection 40-180(4) 

10 

Add: 

11 

Note: 

The first element of cost may be reduced under section 40-1105 to 

12 

account for exploration benefits received under farm-in farm-out 

13 

arrangements. 

14 

9  Subsection 40-300(3) (note) 

15 

Repeal the note, substitute: 

16 

Note 1: 

Termination value may be adjusted under Subdivision 27-B so that 

17 

any GST consequences are accounted for. 

18 

Note 2: 

Termination value may be reduced under section 40-1105 to account 

19 

for exploration benefits received under farm-in farm-out 

20 

arrangements. 

21 

10  At the end of Division 40 

22 

Add: 

23 

Tax relief for certain mining arrangements  Schedule 1 

Farm-in farm-out arrangements  Part 2 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

17 

 

Subdivision 40-K--Farm-in farm-out arrangements 

Guide to Subdivision 40-K 

40-1095  What this Subdivision is about 

The costs and termination values of parts of interests in mining, 

quarrying or prospecting rights that are transferred under farm-in 

farm-out arrangements are reduced by the market value of the 

exploration benefits conferred under the arrangements. 

Table of sections 

Farm-in farm-out arrangements and exploration benefits 

40-1100  Meaning of farm-in farm-out arrangement and exploration benefit 

10 

Consequences for transferors 

11 

40-1105  Treatment of certain exploration benefits received under farm-in farm-out 

12 

arrangements 

13 

40-1110  Cost of split interests resulting from farm-in farm-out arrangements 

14 

40-1115  Deductions for certain expenditure covered by exploration benefits 

15 

40-1120  Cost base and reduced cost base of exploration benefits etc. 

16 

40-1125  Effect of exploration benefits on the cost of mining, quarrying or 

17 

prospecting information 

18 

Consequences for transferees 

19 

40-1130  Consequences of certain exploration benefits provided under farm-in 

20 

farm-out arrangements 

21 

Farm-in farm-out arrangements and exploration benefits 

22 

40-1100  Meaning of farm-in farm-out arrangement and exploration 

23 

benefit 

24 

 

(1)  A farm-in farm-out arrangement is an 

*

arrangement under which: 

25 

 

(a)  an entity (the transferor) transfers, or agrees to transfer, part 

26 

of the entity's interest in a 

*

mining, quarrying or prospecting 

27 

right to another entity (the transferee); and 

28 

 

(b)  in exchange for the transfer, the transferee provides to the 

29 

transferor one or more 

*

exploration benefits. 

30 

Schedule 1  Tax relief for certain mining arrangements 

Part 2  Farm-in farm-out arrangements 

 

 

 

18 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(2)  The transferee provides an exploration benefit to the transferor if: 

 

(a)  the transferee: 

 

(i)  conducts 

*

exploration or prospecting for 

*

minerals, or 

quarry materials, obtainable by 

*

mining and quarrying 

operations; or 

 

(ii)  undertakes to conduct exploration or prospecting for 

minerals, or quarry materials, obtainable by mining and 

quarrying operations; or 

 

(iii)  funds, on the transferor's behalf, expenditure that the 

transferor incurs in relation to exploration or 

10 

prospecting by the transferor or another entity (other 

11 

than the transferee); or 

12 

 

(iv)  undertakes to fund, on the transferor's behalf, 

13 

expenditure that the transferor incurs in relation to 

14 

exploration or prospecting by the transferor or another 

15 

entity (other than the transferee); and 

16 

 

(b)  the exploration or prospecting relates to the part of the 

17 

transferor's interest in the 

*

mining, quarrying or prospecting 

18 

right that the transferor does not transfer, or agree to transfer, 

19 

under the arrangement; and 

20 

 

(c)  in a case where the transferor conducts the exploration or 

21 

prospecting--expenditure incurred by the transferor relating 

22 

to the exploration or prospecting is: 

23 

 

(i)  included in the 

*

cost of 

*

mining, quarrying or 

24 

prospecting information 

*

held by the transferor; or 

25 

 

(ii)  included in any other 

*

depreciating asset, held by the 

26 

transferor, for which the decline in value is provided 

27 

under section 40-80; or 

28 

 

(iii)  expenditure, of a kind referred to in 

29 

subsection 40-730(1), that meets the requirements of 

30 

subsection (3) of this section; and 

31 

 

(d)  in a case where the transferor does not conduct the 

32 

exploration or prospecting--were the transferor to conduct 

33 

the exploration or prospecting, expenditure incurred by the 

34 

transferor relating to the exploration or prospecting would: 

35 

 

(i)  be included in the cost of mining, quarrying or 

36 

prospecting information held by the transferor; or 

37 

Tax relief for certain mining arrangements  Schedule 1 

Farm-in farm-out arrangements  Part 2 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

19 

 

 

(ii)  be included in any other depreciating asset, held by the 

transferor, for which the decline in value is provided 

under section 40-80; or 

 

(iii)  be expenditure, of a kind referred to in 

subsection 40-730(1), that meets the requirements of 

subsection (3) of this section. 

 

(3)  Expenditure meets the requirements of this subsection if: 

 

(a)  for that expenditure, the transferor satisfies, or would satisfy, 

one or more of paragraphs 40-730(1)(a) to (c); and 

 

(b)  the expenditure is not of a kind referred to in 

10 

subsection 40-730(2) or (3); and 

11 

 

(c)  the expenditure is not of a kind that another provision of this 

12 

Act provides is not deductible. 

13 

Consequences for transferors 

14 

40-1105  Treatment of certain exploration benefits received under 

15 

farm-in farm-out arrangements 

16 

 

  If, under a 

*

farm-in farm-out arrangement, you receive an 

17 

*

exploration benefit in relation to the transfer of part of your 

18 

interest in a 

*

mining, quarrying or prospecting right, the 

19 

*

termination value of the part of the interest is reduced by the 

20 

*

market value of the exploration benefit. 

21 

40-1110  Cost of split interests resulting from farm-in farm-out 

22 

arrangements 

23 

 

  Despite section 40-205, if: 

24 

 

(a)  under a 

*

farm-in farm-out arrangement, you provide a part of 

25 

your interest in a 

*

mining, quarrying or prospecting right; and 

26 

 

(b)  because of subsection 40-115(2), this Division applies as if 

27 

you had split your interest into the part you stopped 

*

holding 

28 

and the rest of your interest; 

29 

then: 

30 

 

(c)  the first element of the 

*

cost of the asset that consists of the 

31 

part you stopped holding is a reasonable proportion of the 

32 

Schedule 1  Tax relief for certain mining arrangements 

Part 2  Farm-in farm-out arrangements 

 

 

 

20 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

amount you are taken to have paid under section 40-185 for 

any economic benefit involved in splitting your interest; and 

 

(d)  the first element of the cost of the asset that consists of the 

rest of your interest is the sum of: 

 

(i)  the 

*

adjustable value of your interest just before it was 

split; and 

 

(ii)  a reasonable proportion of the amount you are taken to 

have paid under section 40-185 for any economic 

benefit involved in splitting your interest. 

40-1115  Deductions relating to receipt of exploration benefits 

10 

 

(1)  If: 

11 

 

(a)  under a 

*

farm-in farm-out arrangement, you receive an 

12 

*

exploration benefit in exchange for providing a part of your 

13 

interest in a 

*

mining, quarrying or prospecting right; and 

14 

 

(b)  because of section 40-1105, the 

*

termination value of the 

15 

interest you provide is reduced (including reduced to nil); 

16 

you are not entitled to a deduction under a provision of this Act in 

17 

relation to your expenditure consisting of the provision of that part. 

18 

 

(2)  If: 

19 

 

(a)  under a 

*

farm-in farm-out arrangement, you receive an 

20 

*

exploration benefit in exchange for providing a part of your 

21 

interest in a 

*

mining, quarrying or prospecting right; and 

22 

 

(b)  because of section 40-1105, the 

*

termination value of the 

23 

interest you provide is reduced (including reduced to nil); and 

24 

 

(c)  the exploration benefit consists of another party to the 

25 

arrangement funding on your behalf, or undertaking to fund 

26 

on your behalf, expenditure that you incur in relation to 

27 

exploration or prospecting; 

28 

your entitlement (if any) to a deduction under a provision of this 

29 

Act in relation to that expenditure is reduced to the same extent as 

30 

the extent to which the expenditure is reasonably attributable to the 

31 

exploration benefit. 

32 

40-1120  Cost base and reduced cost base of exploration benefits etc. 

33 

 

  If: 

34 

Tax relief for certain mining arrangements  Schedule 1 

Farm-in farm-out arrangements  Part 2 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

21 

 

 

(a)  under a 

*

farm-in farm-out arrangement, you receive an 

*

exploration benefit; and 

 

(b)  the benefit involves one or more undertakings of the kinds 

referred to in subparagraphs 40-1100(2)(a)(ii) and (iv); 

the first element of the 

*

cost base and the 

*

reduced cost base of the 

benefit are reduced by the 

*

market value of the undertakings. 

40-1125  Effect of exploration benefits on the cost of mining, 

quarrying or prospecting information 

 

  If: 

 

(a)  you 

*

hold a 

*

depreciating asset that is 

*

mining, quarrying or 

10 

prospecting information; and 

11 

 

(b)  under a 

*

farm-in farm-out arrangement, you receive an 

12 

*

exploration benefit; and 

13 

 

(c)  an amount or expenditure would, apart from this section, be 

14 

included in the second element of the 

*

cost of the asset; 

15 

do not include that amount or expenditure in the second element to 

16 

the extent (if any) that it is reasonably attributable to the 

17 

exploration benefit. 

18 

Consequences for transferees 

19 

40-1130  Consequences of certain exploration benefits provided 

20 

under farm-in farm-out arrangements 

21 

 

(1)  If, under a 

*

farm-in farm-out arrangement, you provide an 

22 

*

exploration benefit in relation to the transfer to you of part of 

23 

another entity's interest in a 

*

mining, quarrying or prospecting 

24 

right: 

25 

 

(a)  the first element of the 

*

cost of the part of the interest is 

26 

reduced by the 

*

market value of the exploration benefit; and 

27 

 

(b)  if, for providing the exploration benefit, you receive a reward 

28 

as a result of which an amount would, apart from this 

29 

paragraph, be included in your assessable income--the entire 

30 

amount of the reward is not assessable income and is not 

31 

*

exempt income; and 

32 

 

(c)  subsection 40-730(3) does not apply in relation to 

33 

expenditure that you incur under the arrangement if the 

34 

Schedule 1  Tax relief for certain mining arrangements 

Part 2  Farm-in farm-out arrangements 

 

 

 

22 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

reduction in market value under paragraph (a) took into 

account your liability to incur that expenditure. 

 

(2)  A reduction under paragraph(1)(a) may be a reduction to nil. 

11  Paragraph 104-35(5)(f) 

Omit "the trust.", substitute "the trust; or". 

12  After paragraph 104-35(5)(f) 

Insert: 

 

(g)  you created the right by creating in another entity a right to 

receive an 

*

exploration benefit under a 

*

farm-in farm-out 

arrangement. 

10 

13  Section 112-97 (before table item 1) 

11 

Insert: 

12 

1A 

You receive, under a 

*

farm-in farm-out 

arrangement, an 

*

exploration benefit or an 

entitlement to an 

exploration benefit 

First element of cost 

base and reduced cost 

base 

Section 40-1120 

14  Section 116-25 (at the end of the cell at table item A1, 

13 

column headed "Special rules:") 

14 

Add: 

15 

If the disposal is a disposal of part of an interest in a 

*

mining, quarrying or prospecting 

16 

right under a 

*

farm-in farm-out arrangement: see section 116-115 

17 

15  Section 116-25 (cell at table item C2, column headed 

18 

"Special rules:") 

19 

Omit "and 116-110", substitute ", 116-110 and 116-115". 

20 

16  After section 116-110 

21 

Insert: 

22 

Tax relief for certain mining arrangements  Schedule 1 

Farm-in farm-out arrangements  Part 2 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

23 

 

116-115  Farm-in farm-out arrangements 

 

(1)  If: 

 

(a) 

*

CGT event A1 is the 

*

disposal of part of your interest in a 

*

mining, quarrying or prospecting right; and 

 

(b)  the part is disposed of under a 

*

farm-in farm-out 

arrangement; and 

 

(c)  you have received an 

*

exploration benefit in respect of the 

event happening; 

in working out the 

*

capital proceeds for the CGT event, treat as 

zero the 

*

market value of the exploration benefit. 

10 

 

(2)  If: 

11 

 

(a) 

*

CGT event C2 arises as a result of an 

*

exploration benefit 

12 

being provided to you; and 

13 

 

(b)  the exploration benefit is provided under a 

*

farm-in farm-out 

14 

arrangement; 

15 

in working out the 

*

capital proceeds for the CGT event, treat as 

16 

zero the 

*

market value of the exploration benefit. 

17 

17  After subsection 230-460(17) 

18 

Insert: 

19 

Exploration benefits 

20 

 

(17A)  A right or obligation that arises because of the provision of an 

21 

*

exploration benefit under a 

*

farm-in farm-out arrangement is the 

22 

subject of an exception. 

23 

18  Subsection 995-1(1) 

24 

Insert: 

25 

exploration benefit has the meaning given by 

26 

subsection 40-1100(2). 

27 

farm-in farm-out arrangement has the meaning given by 

28 

subsection 40-1100(1). 

29 

Schedule 1  Tax relief for certain mining arrangements 

Part 2  Farm-in farm-out arrangements 

 

 

 

24 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

19  Application of amendments 

The amendments made by this Part apply in relation to farm-in farm-out 

arrangements entered into after 7.30 pm, by legal time in the Australian 

Capital Territory, on 14 May 2013. 

Tax relief for certain mining arrangements  Schedule 1 

Mining, quarrying or prospecting information  Part 3 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

25 

 

Part 3

--Mining, quarrying or prospecting information 

Income Tax Assessment Act 1997 

20  Paragraph 40-80(1AB)(d) 

Repeal the paragraph, substitute: 

 

(d)  if the amount relates to 

*

mining, quarrying or prospecting 

information--after the inclusion of the amount in the second 

element: 

 

(i)  you satisfy paragraph (1)(e) in relation to the 

information; or 

 

(ii)  you would satisfy that paragraph, in relation to the 

10 

economic benefit that resulted in the inclusion of the 

11 

amount in the second element, if that economic benefit 

12 

were the asset referred to in that paragraph. 

13 

21  Application of amendment 

14 

The amendment made by this Part applies to any mining, quarrying or 

15 

prospecting information to which item 16 of Schedule 1 to the Tax and 

16 

Superannuation Laws Amendment (2014 Measures No. 3) Act 2014 

17 

applies. 

18 

Schedule 2  In-house software 

   

 

 

 

26 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Schedule 2

--In-house software 

   

Income Tax Assessment Act 1997 

1  Subsection 40-95(7) (cell at table item 8, column headed 

"The effective life is:") 

Repeal the cell, substitute: 

5 years 

2  Section 40-455 (table) 

Repeal the table, substitute: 

 

Deductions allowed for software development pool 

 

Column 1 

Column 2 

Item 

Income year 

Amount of expenditure you can deduct for that year 

Year 1 

Nil 

Year 2 

30% 

Year 3 

30% 

Year 4 

30% 

Year 5 

10% 

3  Application of amendments 

10 

(1) 

The amendment made by item 1 applies to in-house software if its start 

11 

time occurs on or after 1 July 2015. 

12 

(2) 

The amendment made by item 2 applies to expenditure incurred in an 

13 

income year starting on or after 1 July 2015. 

14 

Instalment trusts  Schedule 3 

   

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

27 

 

Schedule 3

--Instalment trusts 

   

Income Tax Assessment Act 1997 

1  After Division 230 

Insert: 

Division 235--Particular financial transactions

 

Table of Subdivisions

 

 

Guide to Division 235

 

235-I 

Instalment trusts 

Guide to Division 235

 

10 

235-1  What this Division is about

 

11 

This Division is about the tax treatment of particular kinds of 

12 

financial transactions. 

13 

Subdivision 235-I--Instalment trusts 

14 

Guide to Subdivision 235-I 

15 

235-805  What this Subdivision is about

 

16 

An entity that invests in an asset through an instalment warrant, 

17 

instalment receipt, or other similar arrangement, is treated for most 

18 

income tax purposes as if it had invested in the asset directly. 

19 

A regulated superannuation fund that invests in an asset through a 

20 

limited recourse borrowing is treated in the same way. 

21 

Table of sections 

22 

Schedule 3  Instalment trusts 

   

 

 

 

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No.      , 2015 

 

Operative provisions 

235-810  Object of this Subdivision 

235-815  Application of Subdivision 

235-820  Look-through treatment for instalment trusts 

235-825  Meaning of instalment trust and instalment trust asset 

235-830  What trusts are covered--instalment trust arrangements 

235-835  Requirement for underlying investments to be listed or widely held 

235-840  What trusts are covered--limited recourse borrowings by regulated 

superannuation funds 

235-845  Interactions with other provisions 

10 

Operative provisions 

11 

235-810  Object of this Subdivision 

12 

 

  The object of this Subdivision is to ensure that, for most income 

13 

tax purposes, the consequences of ownership of an 

*

instalment 

14 

trust asset flow to the entity that has the beneficial interest in the 

15 

asset, instead of to the trustee. 

16 

235-815  Application of Subdivision 

17 

 

(1)  This Subdivision applies to: 

18 

 

(a)  the entity that has the beneficial interest in an 

*

instalment 

19 

trust asset as the beneficiary of an 

*

instalment trust; and 

20 

 

(b)  the trustee of the instalment trust. 

21 

 

(2)  This Subdivision applies for the purposes of this Act, apart from: 

22 

 

(a)  Part VA of the Income Tax Assessment Act 1936 (which is 

23 

about tax file numbers); and 

24 

 

(b)  Subdivisions 12-E, 12-F and 12-H in Schedule 1 to the 

25 

Taxation Administration Act 1953 (which are about PAYG 

26 

withholding). 

27 

Joint investments 

28 

 

(3)  This Subdivision applies in relation to 2 or more entities that hold 

29 

an interest in a trust as joint tenants, or as tenants in common, in 

30 

the same way it applies in relation to a single entity that holds such 

31 

an interest. 

32 

Instalment trusts  Schedule 3 

   

 

 

 

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Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

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29 

 

Note: 

Each investor that is treated by this Subdivision as jointly owning an 

instalment trust asset is treated for CGT purposes as owning a separate 

asset: see section 108-7. 

235-820  Look-through treatment for instalment trusts 

 

(1)  If an entity (the investor) has a beneficial interest in an 

*

instalment 

trust asset under an 

*

instalment trust, the asset is treated as being 

the investor's asset (instead of being an asset of the trust). 

Example:  A dividend in respect of the asset is paid to the trustee. It is treated 

(but not for the purposes of the PAYG withholding provisions 

mentioned in paragraph 235-815(2)(b)) as if it had been paid directly 

10 

to the investor. 

11 

 

(2)  An act done in relation to an 

*

instalment trust asset of an 

12 

*

instalment trust by the trustee of the trust is treated as if the act 

13 

had been done by the investor (instead of by the trustee). 

14 

Example:  A trustee disposes of the asset. Any capital gain or loss is made by the 

15 

investor, not by the trustee. 

16 

 

(3)  The investor is treated as having the 

*

instalment trust asset in the 

17 

same circumstances as the investor actually has the interest in the 

18 

*

instalment trust. 

19 

 

(4)  Without limiting subsection (3), the circumstances include: 

20 

 

(a)  whether the interest is held on capital account or on revenue 

21 

account; and 

22 

 

(b)  whether the interest is held as a joint tenant or tenant in 

23 

common. 

24 

 

(5)  Any consequence arising under the 

*

GST Act for the trustee of the 

25 

*

instalment trust, as a result of anything done in relation to the 

26 

*

instalment trust asset, is treated as if it had arisen for the investor 

27 

(instead of for the trustee), even if that consequence would not 

28 

have arisen had the thing been done by or to the investor. 

29 

Example:  If the trustee has a net input tax credit under the GST Act, the investor 

30 

must apply the credit to reduce the investor's cost base for the 

31 

instalment trust asset (even if the investor is not registered or required 

32 

to be registered for GST purposes): see section 103-30. 

33 

Schedule 3  Instalment trusts 

   

 

 

 

30 

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2015 

No.      , 2015 

 

235-825  Meaning of instalment trust and instalment trust asset 

 

(1)  A trust is an instalment trust if: 

 

(a)  the trust is covered by section 235-830 (about instalment trust 

arrangements) and satisfies the requirements in 

section 235-835 (about requirements for underlying 

investments to be listed or widely held); or 

 

(b)  the trust is covered by section 235-840 (about limited 

recourse borrowings by 

*

regulated superannuation funds). 

 

(2)  An instalment trust asset is an asset that is, or is part of, the 

underlying investment of an 

*

instalment trust (as mentioned in 

10 

section 235-830 or 235-840, as the case requires). 

11 

235-830  What trusts are covered--instalment trust arrangements 

12 

 

(1)  This section covers a trust if, under an 

*

arrangement: 

13 

 

(a)  an entity (the investor) makes a 

*

borrowing, or is provided 

14 

with credit; and 

15 

 

(b)  to secure the borrowing or provision of credit, the trustee of 

16 

the trust acquires an asset or assets (the underlying 

17 

investment); and 

18 

 

(c)  the investor has a beneficial interest in the underlying 

19 

investment as the sole beneficiary of the trust; and 

20 

 

(d)  for a provision of credit--the credit was provided to the 

21 

investor to acquire the asset, or one of the assets, that 

22 

comprises the underlying investment; and 

23 

 

(e)  the investor is entitled to the benefit of all income from the 

24 

underlying investment; and 

25 

 

(f)  the investor is entitled to acquire legal ownership of the 

26 

underlying investment on discharging its obligations relating 

27 

to the borrowing or provision of credit. 

28 

Note: 

For paragraph (c), the sole beneficiary of the trust may be 2 or more 

29 

entities that have an interest in the trust as joint tenants or tenants in 

30 

common: see subsection 235-815(3). 

31 

 

(2)  However, this section does not cover a trust if the investor is a 

32 

trustee of a 

*

regulated superannuation fund and the 

*

arrangement 

33 

includes a 

*

borrowing. 

34 

Instalment trusts  Schedule 3 

   

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

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(3)  This section does not cover a trust if the underlying investment is 

subject to any charge, security or other encumbrance (apart from 

any charge securing the obligations relating to the 

*

borrowing or 

provision of credit). 

235-835  Requirement for underlying investments to be listed or 

widely held 

 

(1)  A trust satisfies the requirements in this section if: 

 

(a)  each asset that is, or is part of, the underlying investment is: 

 

(i)  a 

*

share, a unit in a unit trust or a stapled security; or 

 

(ii)  an interest in an entity that holds an interest in a share, a 

10 

unit in a unit trust or a stapled security either directly, or 

11 

indirectly through one or more interposed entities; and 

12 

 

(b)  each such share, unit or stapled security: 

13 

 

(i)  is listed for quotation in the official list of an 

*

approved 

14 

stock exchange; or 

15 

 

(ii)  meets the widely held requirement set out in the 

16 

applicable item of the following table. 

17 

 

18 

Widely held requirements 

Item 

Column 1 

Type of asset 

Column 2 

Widely held requirement 

*

share in a 

company 

The company is a 

*

widely held company 

A unit in a unit 

trust 

The unit trust is a widely held unit trust as defined in 

section 272-105 in Schedule 2F to the Income Tax 

Assessment Act 1936 

A stapled security 

All companies involved are 

*

widely held companies 

and all trusts involved are such widely held unit trusts 

 

(2)  A 

*

share, unit in a unit trust or a stapled security that fails the 

19 

widely held requirement set out in the table in subsection (1) is 

20 

treated as satisfying that requirement if the failure: 

21 

 

(a)  is of a temporary nature only; and 

22 

 

(b)  is caused by circumstances outside the investor's control. 

23 

Schedule 3  Instalment trusts 

   

 

 

 

32 

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No.      , 2015 

 

 

(3)  In applying subsection (1), disregard an asset, or the cash proceeds 

from disposing of an asset, if: 

 

(a)  the trustee became entitled to the asset in respect of a 

*

share, 

unit or stapled security that was, or was part of, the 

underlying investment just before the entitlement arose; and 

 

(b)  the asset is not a 

*

share, unit in a unit trust, or stapled 

security; and 

 

(c)  if the asset is an interest in an entity, or a right, option or 

similar interest that gives the holder an entitlement to acquire 

an interest in an entity: 

10 

 

(i)  an interest in the entity is listed for quotation in the 

11 

official list of an 

*

approved stock exchange; or 

12 

 

(ii)  the entity meets a widely held requirement set out in 

13 

column 2 of item 1 or 2 of the table in subsection (1); 

14 

and 

15 

 

(d)  the underlying investment comprises one or more other assets 

16 

that are not disregarded under this subsection. 

17 

Example:  Examples of the types of assets disregarded by this subsection are: 

18 

(a)  assets that represent distributions and capital payments in respect 

19 

of the underlying investment; and 

20 

(b)  bonus rights issued in respect of the underlying investment. 

21 

 

(4)  Despite subsections (1) to (3), the underlying investment does not 

22 

satisfy the requirement in this section if an asset that is, or is part 

23 

of, the underlying investment is an 

*

ESS interest to which 

24 

Subdivision 83A-B or 83A-C (about employee share schemes) 

25 

applies. 

26 

235-840  What trusts are covered--limited recourse borrowings by 

27 

regulated superannuation funds 

28 

 

  This section covers a trust if: 

29 

 

(a)  under an 

*

arrangement, an asset or assets (the underlying 

30 

investment) is acquired by the trustee of the trust for the 

31 

benefit of a trustee of a 

*

regulated superannuation fund to 

32 

secure a 

*

borrowing; and 

33 

 

(b)  until the borrowing is repaid, the arrangement is covered by: 

34 

Instalment trusts  Schedule 3 

   

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

33 

 

 

(i)  the exception in subsection 67A(1) of the 

Superannuation Industry (Supervision) Act 1993 (which 

is about limited recourse borrowing arrangements); or 

 

(ii)  the exception in former subsection 67(4A) of that Act 

(which was about instalment warrants). 

235-845  Interactions with other provisions 

 

(1)  Section 106-50 (about absolutely entitled beneficiaries) does not 

apply to an 

*

instalment trust asset. 

 

(2)  Section 106-60 (about securities, charges and encumbrances) does 

not apply to an 

*

instalment trust asset. 

10 

 

(3)  Nothing in this Subdivision limits Division 247 (which is about 

11 

capital protected borrowings). 

12 

Note: 

Division 247 may apply to an arrangement to which this Subdivision 

13 

applies. 

14 

2  Subsections 290-60(4) and 290-230(4) 

15 

Omit "regulated superannuation fund (within the meaning of that Act)", 

16 

substitute "

*

regulated superannuation fund". 

17 

3  Section 295-175 

18 

Omit "regulated superannuation fund (within the meaning of that Act)", 

19 

substitute "

*

regulated superannuation fund". 

20 

4  Subsection 995-1(1) (definition of complying 

21 

superannuation plan

22 

Repeal the definition, substitute: 

23 

complying superannuation plan means: 

24 

 

(a)  a 

*

complying superannuation fund; or 

25 

 

(b)  a 

*

public sector superannuation scheme that is: 

26 

 

(i)  a 

*

regulated superannuation fund; or 

27 

 

(ii)  an exempt public sector superannuation scheme (within 

28 

the meaning of section 10 of the Superannuation 

29 

Industry (Supervision) Act 1993); or 

30 

 

(c)  a 

*

complying approved deposit fund; or 

31 

Schedule 3  Instalment trusts 

   

 

 

 

34 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(d)  an 

*

RSA. 

5  Subsection 995-1(1) 

Insert: 

instalment trust has the meaning given by section 235-825. 

instalment trust asset has the meaning given by section 235-825. 

regulated superannuation fund has the same meaning as in the 

Superannuation Industry (Supervision) Act 1993

Income Tax (Transitional Provisions) Act 1997 

6  Before Division 242 

Insert: 

10 

Division 235--Particular financial transactions

 

11 

Table of Subdivisions

 

12 

235-I 

Instalment trusts 

13 

Subdivision 235-I--Instalment trusts 

14 

Table of sections 

15 

235-810  Application of Subdivision 235-I of the Income Tax Assessment Act 1997 

16 

235-810  Application of Subdivision 235-I of the Income Tax 

17 

Assessment Act 1997 

18 

 

  Subdivision 235-I of the Income Tax Assessment Act 1997 applies 

19 

to assets acquired by the trustee of an instalment trust in: 

20 

 

(a)  the 2007-08 income year; or 

21 

 

(b)  a later income year. 

22 

Instalment trusts  Schedule 3 

   

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

35 

 

Taxation Administration Act 1953 

7  Subsection 355-65(3) in Schedule 1 (table item 10, column 

hea

ded "The record is made for or the disclosure is to 

...", paragraphs (a) and (b)) 

Repeal the paragraphs, substitute: 

(a) a 

*

regulated superannuation fund; or 

(b) a public sector superannuation scheme (within the meaning of the Superannuation 

Industry (Supervision) Act 1993); or 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

36 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Schedule 4

--Company losses 

Part 1

--Changes in company ownership 

Division 1

--Main amendments 

Income Tax Assessment Act 1997 

1  After Division 166 

Insert: 

Division 167--Companies whose shares carry unequal 

rights to dividends, capital distributions or voting 

power 

Table of Subdivisions 

10 

 

Guide to Division 167 

11 

167-A  Rights to dividends or capital distributions 

12 

167-B  Voting power 

13 

Guide to Division 167 

14 

167-1  What this Division is about 

15 

This Division modifies the way conditions relating to this Part 

16 

apply to companies whose shares: 

17 

 

(a) 

do not all carry the same rights to dividends or capital 

18 

distributions; or 

19 

 

(b) 

do not all carry the same voting rights, or do not carry 

20 

all of the voting rights in the company. 

21 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

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37 

 

Subdivision 167-A--Rights to dividends or capital distributions 

Guide to Subdivision 167-A 

167-5  What this Subdivision is about 

Companies whose shares do not all carry the same rights to 

dividends or capital distributions may test the possession of those 

rights similarly to companies whose shares are all of a single class 

with the same rights. 

167-7  Simplified outline of this Subdivision 

If a condition of the continuity of ownership test cannot be worked 

out for a company: 

10 

 

(a) 

because of its unequal share structure; or 

11 

 

(b) 

because of a holding company's unequal share structure; 

12 

an entity can choose to reconsider that condition in up to 3 ways. 

13 

The first way involves disregarding debt interests. 

14 

The second way involves disregarding debt interests and secondary 

15 

share classes. 

16 

The third way involves disregarding those shares, and treating the 

17 

remaining shares as carrying certain percentages of the rights to 

18 

receive dividends and capital distributions. 

19 

The second way can only be tried after the first way, while the 

20 

third way can only be tried after the second way. 

21 

Table of sections 

22 

Operative provisions 

23 

167-10 

When this Subdivision applies 

24 

167-15 

First way--disregard debt interests 

25 

167-20 

Second way--also disregard secondary share classes 

26 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

38 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

167-25 

Third way--treat remaining shares as having fixed rights to dividends and 

capital distributions 

167-30 

Fixing rights if practicable to work out market values 

167-35 

Fixing rights if impracticable to work out market values etc. 

167-40 

The valuing times for conditions listed in subsection 167-10(1) 

Operative provisions 

167-10  When this Subdivision applies 

When this Subdivision applies 

 

(1)  This Subdivision applies in relation to a company if: 

 

(a)  as described in the following table, a condition (the 

10 

unsatisfied condition) cannot be worked out for the company 

11 

for a particular period (the test period); and 

12 

 

(b)  at one or more times during the test period: 

13 

 

(i)  the company; or 

14 

 

(ii)  a company that has a 

*

shareholding interest in it; 

15 

 

  (an unequally structured company) has an 

*

unequal share 

16 

structure. 

17 

 

18 

Conditions that can be reconsidered under this Subdivision 

Item 

Column 1 

Each of the following provisions 

contains a condition: 

Column 2 

that cannot be worked out for: 

(a) subsection 165-12(3) or (4); 

(b) paragraph 165-37(1)(b) or (c); 

(c) subsection 165-123(3) or (4); 

(d) paragraph 175-10(3)(b) or (c), 

175-45(3)(b) or (c) or 175-85(3)(b) 

or (c); 

(e) subparagraph (b)(ii) or (iii) of the 

definition of eligible Division 166 

company in subsection 995-1(1) 

a period that is all or part of the 

period to which that provision 

relates 

Note: 

Each of these conditions is about rights to the company's dividends or 

19 

capital distributions. 

20 

 

(2)  This Subdivision also applies in relation to a company if: 

21 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

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2015 

39 

 

 

(a)  as described in the following table, a condition (the 

unsatisfied condition) cannot be worked out for the company 

for a particular time (the test time); and 

 

(b)  at the test time, the company, or a company that has a 

*

shareholding interest in it, (an unequally structured 

company) has an 

*

unequal share structure. 

 

Conditions that can be reconsidered under this Subdivision 

Item 

Column 1 

Each of the following provisions 

contains a condition: 

Column 2 

that cannot be worked out for: 

(a) paragraph 165-115C(1)(b) or (c) or 

165-115L(1)(b) or (c); 

(b) subparagraph 165-115X(1)(b)(ii) or 

(iii); 

(c) paragraph 165-115Z(1)(b) or (c); 

(d) subsection 166-145(3) or (4); 

(e) subparagraph 166-175(1)(e)(ii) or 

(iii); 

(f) paragraph 166-225(1)(b) or (c); 

(g) subparagraph 166-230(1)(a)(ii) or 

(iii); 

(h) paragraph 166-240(1)(b) or (c); 

(i) subparagraph 166-255(1)(e)(ii) or (iii) 

or 166-260(1)(e)(ii) or (iii); 

(j) paragraph 166-260(3)(b) or (c) or 

166-270(2)(c); 

(k) paragraph 170-260(3)(b) or (c) or 

170-265(2)(b) or (c) 

a time that is the time, or one of 

the times, to which that 

provision relates 

Note 1: 

Each of these conditions is about rights to the company's dividends or 

capital distributions. 

Note 2: 

If a condition cannot be worked out for several of the times to which 

10 

the provision relates, apply this Subdivision separately for each of 

11 

those times. 

12 

Meaning of unequal share structure 

13 

 

(3)  A company has an unequal share structure at a particular time if, 

14 

at that time: 

15 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

40 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(a)  the company's 

*

shares do not all carry the same rights to 

*

dividends, or capital distributions, of the company; or 

 

(b)  some or all of the company's shares carry discretionary rights 

to dividends, or capital distributions, of the company; or 

 

(c)  the company is a 

*

co-operative company that has 

*

on issue 

one or more interests (other than shares) in the company's 

capital. 

167-15  First way--disregard debt interests 

 

(1)  The unsatisfied condition may be reconsidered by disregarding any 

*

debt interests in each unequally structured company. 

10 

 

(2)  The way an entity prepares its 

*

income tax return is sufficient 

11 

evidence of it choosing to work out the unsatisfied condition under 

12 

subsection (1). 

13 

167-20  Second way--also disregard secondary share classes 

14 

 

(1)  This section applies in relation to each unequally structured 

15 

company if: 

16 

 

(a)  despite section 167-15, the unsatisfied condition cannot be 

17 

worked out; and 

18 

 

(b)  on the last day of the test period or at the test time (as 

19 

appropriate), there is 

*

on issue in that company one or more 

20 

classes of 

*

shares (the secondary share classes) other than: 

21 

 

(i)  the class or classes of ordinary or common shares that 

22 

represent the majority of that company's value; and 

23 

 

(ii) 

*

debt interests; and 

24 

 

(c)  it is reasonable to conclude that the total 

*

market value of the 

25 

secondary share classes does not exceed 25% of the total 

26 

market value of all of that company's shares (other than debt 

27 

interests); and 

28 

 

(d)  for one or more of the secondary share classes, it is 

29 

reasonable to conclude that the market value of each of them 

30 

does not exceed 10% of the total market value of all of that 

31 

company's shares (other than debt interests). 

32 

Note: 

This section can apply separately for each unequally structured 

33 

company. 

34 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

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(2)  For the purposes of subsection (1), use 

*

market values on the last 

day of the test period, or at the test time, (as appropriate). 

 

(3)  The unsatisfied condition may be reconsidered by disregarding: 

 

(a)  those of the secondary share classes that, under 

paragraph (1)(d), caused this section to apply; and 

 

(b)  any 

*

debt interests in that company. 

 

(4)  The way an entity prepares its 

*

income tax return is sufficient 

evidence of it choosing to work out the unsatisfied condition under 

subsection (3). 

167-25  Third way--treat remaining shares as having fixed rights to 

10 

dividends and capital distributions 

11 

When this section applies 

12 

 

(1)  This section applies if, despite sections 167-15 and 167-20, the 

13 

unsatisfied condition cannot be worked out for the test period or 

14 

test time (as appropriate). 

15 

How to fix rights to dividends and capital distributions 

16 

 

(2)  The unsatisfied condition may be reconsidered by applying 

17 

subsections (3) and (4) to each unequally structured company. 

18 

When doing this for an unsatisfied condition listed in 

19 

subsection 167-10(1), assume: 

20 

 

(a)  that the test period consists only of the valuing times worked 

21 

out under section 167-40; and 

22 

 

(b)  that each of those valuing times is a test time. 

23 

 

(3)  Firstly, disregard any 

*

debt interests in that company and any of its 

24 

*

shares that can be disregarded under subsection 167-20(3). 

25 

 

(4)  Secondly, treat each of that company's remaining 

*

shares 

*

on issue 

26 

at the test time as having at that time the percentage of the rights to 

27 

receive 

*

dividends, and capital distributions, worked out either: 

28 

 

(a)  under section 167-30; or 

29 

 

(b)  under section 167-35 if: 

30 

 

(i)  it is not reasonably practicable to work out the market 

31 

values of each of those remaining shares; or 

32 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

42 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

 

(ii)  the sum of the 

*

market values of all of those remaining 

shares is nil. 

Note: 

The remaining shares are those remaining after disregarding the shares 

mentioned in subsection (3). 

Evidence of a choice under this section 

 

(5)  The way an entity prepares its 

*

income tax return is sufficient 

evidence of it choosing to work out the unsatisfied condition under 

this section. 

167-30  Fixing rights if practicable to work out market values 

 

  Each remaining 

*

share is treated at the test time as carrying the 

10 

following percentage of the rights to receive 

*

dividends, and 

11 

capital distributions, from the company: 

12 

*

*

Share's  market value

100

Sum of market values of all

 of the remaining shares in the company

 

13 

where market value is worked out at the test time. 

14 

167-35  Fixing rights if impracticable to work out market values etc. 

15 

 

(1)  Each remaining 

*

share is treated at the test time as carrying such a 

16 

percentage of the rights to receive 

*

dividends, and capital 

17 

distributions, from the company as is reasonable worked out: 

18 

 

(a)  at the test time; and 

19 

 

(b)  having regard to the purpose of the unsatisfied condition. 

20 

 

(2)  In working out what is reasonable for subsection (1), have regard 

21 

to the following: 

22 

 

(a)  the company's 

*

constitution; 

23 

 

(b)  any agreements between the company and either or both of 

24 

the following: 

25 

 

(i)  any or all of the shareholders in the company; 

26 

 

(ii)  any or all of the 

*

associates of a shareholder in the 

27 

company; 

28 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

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(c)  any statement by the company of its policy in paying 

*

dividends or making capital distributions; 

 

(d)  the ability of an entity to control (whether directly, or 

indirectly through one or more interposed entities) how the 

company pays dividends or makes capital distributions; 

 

(e)  how the company has previously paid dividends or made 

capital distributions; 

 

(f)  whether all classes of 

*

shares carry substantially the same 

rights to receive dividends and capital distributions; 

 

(g)  the principle that: 

10 

 

(i)  a 

*

tax loss or bad debt should only be deductible; and 

11 

 

(ii)  a 

*

net capital loss should only be applied; 

12 

 

  if a majority of the persons entitled to the benefits of 

13 

dividend and capital distributions of the company is 

14 

maintained. 

15 

167-40  The valuing times for conditions listed in 

16 

subsection 167-10(1) 

17 

 

(1)  For the purposes of subsection 167-25(2), the valuing times for the 

18 

test period are: 

19 

 

(a)  the time the test period starts; and 

20 

 

(b)  the time just before, and the time just after, any of the 

21 

following events that happen during the test period: 

22 

 

(i)  the issue of 

*

shares of a class of remaining shares; 

23 

 

(ii)  the variation of rights attached to any remaining shares 

24 

to receive 

*

dividends or capital distributions; 

25 

 

(iii)  the redemption or cancellation of any remaining shares; 

26 

and 

27 

 

(c)  the time the test period ends. 

28 

 

(2)  For paragraph (1)(b), disregard a time if it is outside the test period. 

29 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

44 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Subdivision 167-B--Voting power 

Guide to Subdivision 167-B 

167-75  What this Subdivision is about 

Companies whose shares: 

 

(a) 

do not all carry the same voting rights; or 

 

(b) 

do not carry all of the voting rights in the company; 

may test the possession of voting rights similarly to companies 

whose shares are all of a single class with the same rights. 

Table of sections 

Operative provisions 

10 

167-80 

When this Subdivision applies 

11 

167-85 

Different method for working out voting power 

12 

167-90 

Dual listed companies 

13 

Operative provisions 

14 

167-80  When this Subdivision applies 

15 

 

(1)  For the purposes of this Part, voting power in a company at one or 

16 

more times can be worked out under section 167-85 if: 

17 

 

(a)  the company's 

*

shares do not all, at those times, carry the 

18 

same voting rights for all matters affecting the company; or 

19 

 

(b)  the company's shares do not carry all of the voting rights in 

20 

the company; 

21 

whether this is because of the company's 

*

constitution, an 

22 

*

arrangement or some other reason. 

23 

Note: 

Disregard dual listed company voting shares (see section 167-90). 

24 

 

(2)  Further, if those times are consecutive times during a period, the 

25 

voting power in the company can be worked out under 

26 

section 167-85 as if that period consists only of: 

27 

 

(a)  the time that period starts; and 

28 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

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(b)  each later time (if any) during that period when there is a 

change in the maximum number of votes any entity could 

cast on a poll described in paragraph 167-85(1)(a) or (b). 

167-85  Different method for working out voting power 

 

(1)  An entity may choose whether voting power in the company at a 

particular time is worked out solely by reference to: 

 

(a)  the maximum number of votes that could be cast on a poll on 

the election of a director of the company, if such a poll were 

to be held at that time; or 

 

(b)  the maximum number of votes that could be cast on a poll on 

10 

an amendment to the company's 

*

constitution, other than an 

11 

amendment altering: 

12 

 

(i)  the rights carried by any of the company's 

*

shares; or 

13 

 

(ii)  other forms of voting power in the company; 

14 

 

  if such a poll were to be held at that time. 

15 

 

(2)  The way the entity prepares its 

*

income tax return is sufficient 

16 

evidence of it making a choice under subsection (1). 

17 

167-90  Dual listed companies 

18 

 

  For the purposes of this Subdivision, disregard 

*

shares that are 

19 

*

dual listed company voting shares. 

20 

Division 2

--Other amendments 

21 

Income Tax Assessment Act 1997 

22 

2  Subsection 165-12(2) (note) 

23 

Omit "Note", substitute "Note 1". 

24 

3  At the end of subsection 165-12(2) 

25 

Add: 

26 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

27 

company whose shares do not all carry the same voting rights, or do 

28 

not carry all of the voting rights in the company. 

29 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

46 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

4  Subsection 165-12(3) (note) 

Omit "Note", substitute "Note 1". 

5  At the end of subsection 165-12(3) 

Add: 

Note 2: 

Subdivision 167-A has special rules for working out rights to 

dividends in a company whose shares do not all carry the same rights 

to dividends. 

6  Subsection 165-12(4) (note) 

Omit "Note", substitute "Note 1". 

7  At the end of subsection 165-12(4) 

10 

Add: 

11 

Note 2: 

Subdivision 167-A has special rules for working out rights to capital 

12 

distributions in a company whose shares do not all carry the same 

13 

rights to capital distributions. 

14 

8  At the end of subsection 165-37(1) 

15 

Add: 

16 

Note: 

Division 167 has special rules for working out rights to voting power, 

17 

dividends and capital distributions in a company whose shares do not 

18 

all carry the same rights to those matters. 

19 

9  Subsection 165-40(1) (note) 

20 

Omit "Note", substitute "Note 1". 

21 

10  At the end of subsection 165-40(1) 

22 

Add: 

23 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

24 

company whose shares do not all carry the same voting rights, or do 

25 

not carry all of the voting rights in the company. 

26 

11  At the end of subsection 165-115C(1) 

27 

Add: 

28 

Note 5: 

Division 167 has special rules for working out rights to voting power, 

29 

dividends and capital distributions in a company whose shares do not 

30 

all carry the same rights to those matters. 

31 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

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2015 

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12  Subsection 165-115D(1) (note) 

Omit "Note", substitute "Note 1". 

13  At the end of subsection 165-115D(1) 

Add: 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

company whose shares do not all carry the same voting rights, or do 

not carry all of the voting rights in the company. 

14  At the end of subsection 165-115L(1) 

Add: 

Note 4: 

Division 167 has special rules for working out rights to voting power, 

10 

dividends and capital distributions in a company whose shares do not 

11 

all carry the same rights to those matters. 

12 

15  Subsection 165-115M(1) (note) 

13 

Omit "Note", substitute "Note 1". 

14 

16  At the end of subsection 165-115M(1) 

15 

Add: 

16 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

17 

company whose shares do not all carry the same voting rights, or do 

18 

not carry all of the voting rights in the company. 

19 

17  At the end of subsection 165-115X(1) 

20 

Add: 

21 

Note: 

For paragraph (b), Division 167 has special rules for working out 

22 

rights to voting power, dividends and capital distributions in a 

23 

company whose shares do not all carry the same rights to those 

24 

matters. 

25 

18  Subsection 165-115Z(1) (note) 

26 

Omit "Note", substitute "Note 1". 

27 

19  At the end of subsection 165-115Z(1) 

28 

Add: 

29 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

48 

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2015 

No.      , 2015 

 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

dividends and capital distributions in a company whose shares do not 

all carry the same rights to those matters. 

20  Subsection 165-123(2) (note) 

Repeal the note, substitute: 

Note 1: 

See section 165-150 to work out who had more than 50% of the 

voting power. 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

company whose shares do not all carry the same voting rights, or do 

not carry all of the voting rights in the company. 

10 

21  Subsection 165-123(3) (note) 

11 

Repeal the note, substitute: 

12 

Note 1: 

See section 165-155 to work out who had rights to more than 50% of 

13 

the company's dividends. 

14 

Note 2: 

Subdivision 167-A has special rules for working out rights to 

15 

dividends in a company whose shares do not all carry the same rights 

16 

to dividends. 

17 

22  Subsection 165-123(4) (note) 

18 

Omit "Note", substitute "Note 1". 

19 

23  At the end of subsection 165-123(4) 

20 

Add: 

21 

Note 2: 

Subdivision 167-A has special rules for working out rights to capital 

22 

distributions in a company whose shares do not all carry the same 

23 

rights to capital distributions. 

24 

24  Subsection 165-129(1) (note) 

25 

Omit "Note", substitute "Note 1". 

26 

25  At the end of subsection 165-129(1) 

27 

Add: 

28 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

29 

company whose shares do not all carry the same voting rights, or do 

30 

not carry all of the voting rights in the company. 

31 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

49 

 

26  Subsection 166-145(2) (note) 

Repeal the note, substitute: 

Note 1: 

To work out who had more than 50% of the voting power, see 

section 165-150. 

Note 2: 

Subdivision 167-B has special rules for working out voting power in a 

company whose shares do not all carry the same voting rights, or do 

not carry all of the voting rights in the company. 

27  Subsection 166-145(3) (note) 

Repeal the note, substitute: 

Note 1: 

To work out who had rights to more than 50% of the company's 

10 

dividends, see section 165-155. 

11 

Note 2: 

Subdivision 167-A has special rules for working out rights to 

12 

dividends in a company whose shares do not all carry the same rights 

13 

to dividends. 

14 

28  Subsection 166-145(4) (note) 

15 

Omit "Note", substitute "Note 1". 

16 

29  At the end of subsection 166-145(4) 

17 

Add: 

18 

Note 2: 

Subdivision 167-A has special rules for working out rights to capital 

19 

distributions in a company whose shares do not all carry the same 

20 

rights to capital distributions. 

21 

30  At the end of subsection 166-175(1) 

22 

Add: 

23 

Note: 

For paragraph (e), Division 167 has special rules for working out 

24 

rights to voting power, dividends and capital distributions in a 

25 

company whose shares do not all carry the same rights to those 

26 

matters. 

27 

31  Subsection 166-225(1) (note) 

28 

Omit "Note", substitute "Note 1". 

29 

32  At the end of subsection 166-225(1) 

30 

Add: 

31 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

50 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

dividends and capital distributions in a company whose shares do not 

all carry the same rights to those matters. 

33  At the end of subsection 166-230(1) 

Add: 

Note 3: 

For paragraph (a), Division 167 has special rules for working out 

rights to voting power, dividends and capital distributions in a 

company whose shares do not all carry the same rights to those 

matters. 

34  At the end of subsection 166-235(2) 

10 

Add: 

11 

Note: 

For working out the size of a voting stake (for example, for 

12 

paragraph 166-225(1)(a)), Subdivision 167-B has special rules for 

13 

working out voting power in a company whose shares do not all carry 

14 

the same voting rights, or do not carry all of the voting rights in the 

15 

company. 

16 

35  At the end of subsection 166-235(4) 

17 

Add: 

18 

Note: 

For working out the size of a dividend stake (for example, for 

19 

paragraph 166-225(1)(b)), Subdivision 167-A has special rules for a 

20 

company whose shares do not all carry the same rights to dividends. 

21 

36  At the end of subsection 166-235(6) 

22 

Add: 

23 

Note: 

For working out the size of a capital stake (for example, for 

24 

paragraph 166-225(1)(c)), Subdivision 167-A has special rules for a 

25 

company whose shares do not all carry the same rights to capital 

26 

distributions. 

27 

37  Subsection 166-240(1) (note) 

28 

Omit "Note", substitute "Note 1". 

29 

38  At the end of subsection 166-240(1) 

30 

Add: 

31 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

32 

dividends and capital distributions in a company whose shares do not 

33 

all carry the same rights to those matters. 

34 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

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39  At the end of subsection 166-255(1) 

Add: 

Note 3: 

For paragraph (e), Division 167 has special rules for working out 

rights to voting power, dividends and capital distributions in a 

company whose shares do not all carry the same rights to those 

matters. 

40  At the end of subsection 166-260(1) 

Add: 

Note 3: 

For paragraph (e), Division 167 has special rules for working out 

rights to voting power, dividends and capital distributions in a 

10 

company whose shares do not all carry the same rights to those 

11 

matters. 

12 

41  At the end of subsection 166-260(3) 

13 

Add: 

14 

Note: 

Division 167 has special rules for working out rights to voting power, 

15 

dividends and capital distributions in a company whose shares do not 

16 

all carry the same rights to those matters. 

17 

42  At the end of subsection 170-260(3) 

18 

Add: 

19 

Note: 

Division 167 has special rules for working out rights to voting power, 

20 

dividends and capital distributions in a company whose shares do not 

21 

all carry the same rights to those matters. 

22 

43  At the end of subsection 170-265(2) 

23 

Add: 

24 

Note: 

Division 167 has special rules for working out rights to voting power, 

25 

dividends and capital distributions in a company whose shares do not 

26 

all carry the same rights to those matters. 

27 

44  Subsection 175-10(3) (note) 

28 

Repeal the note, substitute: 

29 

Note 1: 

See section 165-12 (which is about the company maintaining the same 

30 

owners). 

31 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

32 

dividends and capital distributions in a company whose shares do not 

33 

all carry the same rights to those matters. 

34 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

52 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

45  Subsection 175-45(3) (note) 

Repeal the note, substitute: 

Note 1: 

See section 165-12 (which is about the company maintaining the same 

owners). 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

dividends and capital distributions in a company whose shares do not 

all carry the same rights to those matters. 

46  Subsection 175-85(3) (note) 

Repeal the note, substitute: 

Note 1: 

See section 165-123 (about the company maintaining the same 

10 

owners). 

11 

Note 2: 

Division 167 has special rules for working out rights to voting power, 

12 

dividends and capital distributions in a company whose shares do not 

13 

all carry the same rights to those matters. 

14 

47  Subsection 707-205(1) 

15 

Omit "Divisions 165 and 166", substitute "Divisions 165, 166 and 167". 

16 

48  Subsection 707-205(2) 

17 

Omit "Division 166", substitute "Divisions 166 and 167". 

18 

49  Subsection 974-10(1) (note) 

19 

Omit "Note", substitute "Note 1". 

20 

50  At the end of subsection 974-10(1) 

21 

Add: 

22 

Note 2: 

Subdivision 167-A has special rules for working out rights to 

23 

dividends and capital distributions in a company whose shares do not 

24 

all carry the same rights to those matters. Those rules include 

25 

disregarding debt interests. 

26 

51  Subsection 995-1(1) (at the end of the definition of eligible 

27 

Division 166 company

28 

Add: 

29 

Note: 

For subparagraphs (b)(i), (ii) and (iii), Division 167 has special rules 

30 

for working out rights to voting power, dividends and capital 

31 

distributions in a company whose shares do not all carry the same 

32 

rights to those matters. 

33 

Company losses  Schedule 4 

Changes in company ownership  Part 1 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

53 

 

52  Subsection 995-1(1) 

Insert: 

unequal share structure has the meaning given by 

subsection 167-10(3). 

Income Tax (Transitional Provisions) Act 1997 

53  After Division 166 

Insert: 

Division 167--Companies whose shares carry unequal 

rights to dividends, capital distributions or voting 

power 

10 

Table of sections 

11 

167-1 

Application of provisions 

12 

167-1  Application of provisions 

13 

 

(1)  Division 167 of the Income Tax Assessment Act 1997 applies: 

14 

 

(a)  to any tax loss that is incurred in an income year 

15 

commencing on or after 1 July 2002; and 

16 

 

(b)  to any net capital loss that is made in an income year 

17 

commencing on or after 1 July 2002; and 

18 

 

(c)  to any deduction in respect of a bad debt that is claimed in an 

19 

income year commencing on or after 1 July 2002; and 

20 

 

(d)  in determining whether any changeover time or alteration 

21 

time occurred on or after 1 July 2002. 

22 

 

(2)  Division 167 of the Income Tax Assessment Act 1997 also applies: 

23 

 

(a)  to any tax loss of a company: 

24 

 

(i)  that is incurred in an income year commencing on or 

25 

before 30 June 2002; and 

26 

 

(ii)  that could have been deducted, in accordance with 

27 

Divisions 165 and 166 of that Act as in force at that 

28 

time, in the first income year commencing after 30 June 

29 

Schedule 4  Company losses 

Part 1  Changes in company ownership 

 

 

 

54 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

2002 if the deduction had not been limited by the 

company's income for that income year; and 

 

(b)  to any net capital loss of a company: 

 

(i)  that is made in an income year commencing on or 

before 30 June 2002; and 

 

(ii)  that could have been applied, in accordance with 

Divisions 165 and 166 of that Act as in force at that 

time, in the first income year commencing after 30 June 

2002 if the application of the loss had not been limited 

by the company's capital gains for that income year. 

10 

Company losses  Schedule 4 

Same business test  Part 2 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

55 

 

Part 2

--Same business test 

Income Tax Assessment Act 1997 

54  Section 165-212E 

Repeal the section, substitute: 

165-212E  Entry history rule does not apply for the purposes of 

section 165-210 

 

  For the purposes of section 165-210, section 701-5 (the entry 

history rule) does not operate in relation to an entity becoming a 

*

subsidiary member of a 

*

consolidated group or a 

*

MEC group. 

55  Application of amendments 

10 

The amendment made by this Part applies on and after 1 July 2002. 

11 

Schedule 4  Company losses 

Part 3  Shares held by certain entities 

 

 

 

56 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

No.      , 2015 

 

Part 3

--Shares held by certain entities 

Income Tax Assessment Act 1997 

56  At the end of subsection 165-202(1) 

Add: 

 

; (h)  a 

*

complying superannuation fund; 

 

(i)  a superannuation fund that is established in a foreign country 

and is regulated under a 

*

foreign law; 

 

(j)  a 

*

complying approved deposit fund; 

 

(k)  a 

*

special company; 

 

(l)  a 

*

managed investment scheme. 

10 

57  Application of amendments 

11 

The amendment made by item 56 applies in relation to: 

12 

 

(a)  deducting a tax loss in the 2011-12 income year or a later 

13 

income year; or 

14 

 

(b)  applying a net capital loss in the 2011-12 income year or a 

15 

later income year; or 

16 

 

(c)  a deduction in respect of a bad debt claimed in the 2011-12 

17 

income year or a later income year; or 

18 

 

(d)  determining whether any changeover time or alteration time 

19 

occurred during the 2011-12 income year or a later income 

20 

year. 

21 

58  Transitional

--FHSA trusts 

22 

(1) 

An FHSA trust (within the meaning of the Income Tax Assessment Act 

23 

1997 on 1 January 2015) is taken to be one of the kinds of entities listed 

24 

in the paragraphs of subsection 165-202(1) of that Act. 

25 

(2) 

Subitem (1) applies in relation to: 

26 

 

(a)  deducting a tax loss in an applicable income year; or 

27 

 

(b)  applying a net capital loss in an applicable income year; or 

28 

 

(c)  a deduction in respect of a bad debt claimed in an applicable 

29 

income year; or 

30 

Company losses  Schedule 4 

Shares held by certain entities  Part 3 

 

 

 

No.      , 2015 

Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 

2015 

57 

 

 

(d)  determining whether any changeover time or alteration time 

occurred during an applicable income year. 

(3) 

In this item: 

applicable income year means the 2011-12 income year, the 2012-13 

income year, the 2013-14 income year or the 2014-15 income year. 

 


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