TAX LAWS AMENDMENT (2008 MEASURES NO. 6) BILL 2008

i Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Contents

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

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

Schedule(s) ......................................................................................... 1

Schedule 1--CGT roll-ove rs for corporate restructures

Income Tax Assessment Act 1997

Schedule 2--Mutual assistance in collection

Taxation Administration Act 1953

Schedule 3--Late payme nt offset for superannuation guarantee

contributions

Superannuation Guarantee (Administration) Act 1992

Schedule 4--Minor amendme nts

Part 1--General

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

Fringe Benefits Tax Assessment Act 1986

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Income Tax Rates Act 1986

Taxation Administration Act 1953

Taxation (Interest on Overpayments and Early Payments) Act 1983

Tax Laws Amendment (Budget Measures) Act 2008

Part 2--Asterisking amendments

Income Tax Assessment Act 1997

Part 3--Repeal

Pay-roll Tax Act 1941

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

Measures No. 6) Act 2008.

2 Commence ment

This Act commences on the day on which it receives the Royal

Assent.

3 Schedule(s)

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

repealed as set out in the applicable items in the Schedule

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 3

Schedule 1

CGT roll-overs for corporate

restructures

Income Tax Assessment Act 1997

1 Section 112-53 (after table item 2)

Insert:

Interest is acquired by an

entity where there is a

roll-over under

Subdivision 124-M and the

arrangement is taken to be a

restructure

First element of cost base

and reduced cost base

124-784B

2 After section 124-784

Insert:

124-784A When arrangement is a restructure

(1) This section applies in relation to a single

arrangement if:

(a) the replacement entity for the arrangement knows, or could

reasonably be expected to know:

(i) that a roll-over under section 124-780 has been, or will

be, obtained in relation to the arrangement; and

(ii) that there is a

common stakeholder for the arrangement

(disregarding subsections 124-783(4) and (5)); and

(b) subsection (2) is satisfied for the arrangement.

Note:

If this section applies, the first element of the cost base and reduced

cost base of interests in the original entity acquired under the

arrangement is worked out under section 124-784B.

(2) This subsection is satisfied for the

arrangement if the result of step

2 is more than 80% of the result of step 3.

Schedule 1 CGT ro ll-overs for corporate restructures

4 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Method statement

Step 1. Add up the

market value just after the

arrangement was

completed (the completion time) of all of the replacement

interests issued by the replacement entity under the

arrangement in exchange for the following interests (the

qualifying interests):

(a) original interests in the original entity;

(b) any interests issued by the original entity to an

acquiring entity under the arrangement in respect

of other original interests in the original entity

cancelled under the arrangement.

Step 2. Add to the result of step 1 the

market value at the

completion time of all of the replacement interests issued

by the replacement entity under any earlier arrangement

for which this section applied in exchange for qualifying

interests in the original entity.

Step 3. Add up the

market value at the completion time of all of

the:

(a)

on issue by the replacement entity; and

(b) options, rights and similar interests issued by the

replacement entity that give the holder an

entitlement to acquire a share in the replacement

entity at or after the completion time.

Application if an entity is listed

(3) For the purposes of:

(a) subsection (2); and

(b) step 5 of the method statement in subsection 124-784B(2);

if interests in an entity are listed for quotation in the official list of

approved stock exchange at the completion time, then the

replacement entity may choose that the

market value at that time

of an interest in the first-mentioned entity is taken to be the

officially quoted price of the interest at that time.

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 5

Application if more than one original entity

(4) If qualifying interests in more than one original entity are

acquired

under the

arrangement, then, for the purposes of subsections (1)

and (2):

(a) those interests of each of those original entities are taken to

have been acquired under separate arrangements; and

(b) those separate arrangements are taken to have happened in

the same order as the acquisitions.

(5) If qualifying interests in more than one original entity:

(a) would be taken by subsection (4) to have been

acquired

under separate

arrangements happening at the same time; or

(b) are acquired under separate arrangements that commence at

the same time;

then, for the purposes of subsections (1) and (2), the replacement

entity must choose the order in which those separate arrangements

are to have happened.

Meaning of officially quoted price

(6) An interest in an entity has an officially quoted price at a particular

time if, during the one week period starting on the day in which

that time occurred, there was at least one transaction on the

relevant stock exchange in interests of that class. That price is the

weighted average of the prices at which those interests were traded

on that stock exchange during that period.

(7) For the purposes of subsection (6), if an interest is quoted on 2 or

approved stock exchanges on that day, the officially quoted

price of the interest is determined under subsection (6) in respect

of whichever of those the entity chooses.

124-784B What is the cost base and reduced cost base when

arrange ment is a restructure?

(1) This section applies in relation to each qualifying interest in the

original entity:

(a)

acquired by an acquiring entity under an

arrangement to

which section 124-784A applies; and

(b) for which the first element of the

cost base of the acquiring

entity is not worked out under section 124-782.

Schedule 1 CGT ro ll-overs for corporate restructures

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

Note:

Section 124-782 applies when an original interest holder is a

significant stakeholder or a common stakeholder.

First element of cost base--qualifying interests acquired in

exchange for replacement interests only

(2) The first element of the

cost base of the acquiring entity for the

qualifying interest in the original entity is worked out as follows:

Method statement

Step 1. Add up:

(a) the

market value, at the completion time, of the

original entity's

pre-CGT assets (except

trading

stock); and

(b) the

cost bases, at the completion time, of the

original entity's

post-CGT assets (except trading

stock); and

CGT assets (except

trading stock) that had no cost base--the

maximum amount of consideration the original

entity would need to receive if it were to dispose,

at the completion time, of those assets without an

amount being assessable income of, or deductible

to, the original entity; and

(d) the amount worked out under steps 2 and 3.

Step 2. For the original entity's

trading stock, add up:

(a) the

value of the trading stock at the start of the

income year containing the completion time; and

(b) for

livestock acquired by natural increase during

that income year but before the completion time--

the

cost of that livestock; and

with acquiring an item of trading stock during that

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 7

income year but before the completion time

(except livestock acquired by natural increase); and

(d) the amount of any outgoings forming part of the

cost of the trading stock incurred by the entity

during its current holding of the trading stock but

before the completion time.

Step 3. For any asset of the original entity not covered by steps 1

and 2, work out the amount that would be the asset's

cost base at the completion time if it were a

CGT asset.

Step 4. Subtract from the result of step 1 the original entity's

liabilities (if any) at the completion time in respect of

those assets.

Step 5. If there is one class of

membership interests in the

original entity, divide the result of step 4 by the total

number of those membership interests at the completion

time.

If there are 2 or more classes of membership interests in

the original entity, allocate a portion of the result of step

4 to each class in proportion to the

market value of all

the membership interests in that class and divide that

result by the total number of membership interests in that

class at the completion time.

Note 1:

For the purposes of this subsection, Division 701 (Core rules for

consolidated groups) is disregarded for an original entity that becomes

a subsidiary member of a consolidated group or MEC group under the

arrangement (see paragraph 715-910(1)(a)).

Note 2:

If the original entity is the head company of a consolidated group or

MEC group, then subsection 701-1(1) (the single entity rule) and

section 701-5 (the entry history rule) apply in relation to that group

when working out steps 1 and 2 (see subsection 715-910(2)).

Note 3:

For step 5, the replacement entity may choose to use the officially

quoted price of the qualifying interests as their market value (see

subsection 124-784A(3)).

Schedule 1 CGT ro ll-overs for corporate restructures

8 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

First element of cost base--interests acquired in exchange for

replacement interests and cash etc.

(3) However, if the qualifying interest was acquired under the

arrangement partly in exchange for one or more replacement

interests and partly for something else, subsection (2) applies only

for working out the first element of that part of the

cost base of the

qualifying interest that is attributable to the replacement interests.

Note 1:

This means that the acquiring entity will have to apportion the cost

base amount worked out under subsection (2) according to the relative

values of the replacement interests and the other component.

Note 2:

The first element of that part of the cost base, and reduced cost base,

of the qualifying interest that is attributable to cash etc. is worked out

using the general rules about cost base.

Liabilities

(4) For the purposes of step 4 of subsection (2), a liability of the

original entity that is not a liability in respect of a specific asset or

assets of the entity is taken to be a liability in respect of all the

assets of the entity.

(5) If a liability is in respect of 2 or more assets, the proportion of the

liability that is in respect of any one of those assets is equal to:

The market value of the asset

The total of the market values of all the

assets that the liability is in respect of

First element of reduced cost base

(6) The first element of the

reduced cost base of the acquiring entity

for the qualifying interest in the original entity is worked out

similarly.

Rights and options to acquire membership interests

(7) For the purposes of step 5 of subsection (2), if at the completion

time a person holds an option, right or similar interest (including a

contingent option, right or interest), created or issued by the

original entity, to acquire a

membership interest in the original

entity, that option, right or interest is treated as if it were a

membership interest in the original entity.

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 9

124-784C Cost base of equity or debt given by acquiring entity to

ultimate holding company

Purpose

(1) This section allocates an appropriate

cost base to equity issued, or

new debt owed, by an acquiring entity under the

arrangement to

the

ultimate holding company of a

wholly-owned group where

the cost base of the acquiring entity for a qualifying interest was

worked out under section 124-784B.

Allocation of cost base

(2) The first element of the

cost base of the equity or debt for the

ultimate holding company is that part of the cost base of the

qualifying interest worked out under section 124-784B as:

(a) may be reasonably allocated to the equity or debt; and

(b) is not more than the

market value of the equity or debt at the

completion time.

No capital gain on debt repayment

(3) Any

capital gain of the

ultimate holding company from the

repayment of new debt owed by an acquiring entity under the

arrangement is disregarded to the extent that it relates to the

difference between the part of the

cost base worked out under

section 124-784B and the

market value of the debt at the

completion time.

Note:

If the debt is assigned or exchanged, there may be a capital gain.

3 At the end of section 124-795

Add:

(4) You cannot obtain the roll-over for the

CGT event happening in

relation to the exchange of your qualifying interest if:

(a) the replacement entity makes a choice to that effect under

this subsection; and

(b) that entity or the original entity notifies you in writing of the

choice before the exchange.

4 At the end of Division 715

Schedule 1 CGT ro ll-overs for corporate restructures

10 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Add:

Subdivision 715-W--Effect on arrangements where CGT

roll-overs are obtained

Table of sections

715-910 Effect on restructures--original entity becomes a subsidiary member

715-915 Effect on restructures--original entity is a head company

715-920 Effect on restructures--original entity is a head company that becomes a

subsidiary member of another group

715-925 Effect on restructures--original entity ceases being a subsidiary member

715-910 Effect on restructures--original entity becomes a subsidiary

me mber

(1) This section applies if:

(a) as a result of an

arrangement to which section 124-784A

applies, an original entity (within the meaning of that section)

becomes a

subsidiary member of a

consolidated group; and

(b) section 715-920 does not apply.

Note 1:

Section 715-920 applies if the original entity was the head company of

another consolidated group before the arrangement was completed.

Note 2:

Sections 124-784A and 124-784B apply to arrangements for

restructures.

(2) For the purposes of section 124-784B:

(a) the completion time (within the meaning of that section) for

the

arrangement is taken to be the time the original entity

becomes a member of the group; and

(b) disregard Division 701 (Core rules) in relation to the original

entity becoming a member of the group.

(3) The

head company of the group may choose for:

(a) section 701-10 (cost to head company of assets of joining

entity); and

(b) subsection 701-35(4) (setting value of trading stock at

tax-neutral amount);

not to apply to the original entity's assets in respect of the original

entity becoming a

subsidiary member of the group.

Note:

This subsection does not affect the application of subsection 701-1(1)

(the single entity rule).

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 11

715-915 Effect on restructures--original entity is a head company

If:

(a) section 124-784A applies in relation to an

arrangement; and

(b) the original entity (within the meaning of that section) for the

arrangement is the

head company of a

consolidated group

just before the arrangement was completed; and

then, for the purposes of section 124-784B, subsection 701-1(1)

(the single entity rule) and section 701-5 (the entry history rule)

apply in respect of the group.

Note 1:

This section does not otherwise affect the application of subsection

701-1(1) or section 701-5.

Note 2:

Sections 124-784A and 124-784B apply to arrangements for

restructures.

715-920 Effect on restructures--original entity is a head company

that becomes a subsidiary member of another group

(1) This section applies if:

(a) section 124-784A applies in relation to an

arrangement; and

(b) the original entity (within the meaning of that section) for the

arrangement is the

head company of a

consolidated group

(the acquired group) just before the arrangement was

completed; and

(i) the original entity; and

(ii) the

subsidiary members of the acquired group just

before the arrangement was completed;

become subsidiary members of another consolidated group.

Note:

Sections 124-784A and 124-784B apply to arrangements for

restructures.

(2) For the purposes of section 124-784B:

(a) the original entity is taken to be the

head company of the

acquired group at the completion time (within the meaning of

that section) for the

arrangement; and

(b) the operation of this Part for the head company core purposes

(mentioned in subsection 701-1(2)) in relation to:

(i) the original entity; and

Schedule 1 CGT ro ll-overs for corporate restructures

12 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

(ii) the entities that were

subsidiary members of the

acquired group just before the arrangement was

completed;

continue to have effect at the completion time for the

arrangement; and

time the original entity becomes a member of the other

group; and

(d) disregard Division 701 (Core rules) in relation to the original

entity becoming a member of the other group.

Note:

Paragraph (b) means that, for the purposes of section 124-784B, the

subsidiary members of the acquired group are treated as part of the

original entity.

(3) The

head company of the other group may choose for:

(a) section 701-10 (cost to head company of assets of joining

entity); and

(b) subsection 701-35(4) (setting value of trading stock at

tax-neutral amount);

not to apply to the original entity's assets in respect of the original

entity becoming a

subsidiary member of the other group.

Note:

This subsection does not affect the application of subsection 701-1(1)

(the single entity rule).

715-925 Effect on restructures--original entity ceases being a

subsidiary me mber

If, as a result of an

arrangement to which section 124-784A

applies, an original entity (within the meaning of that section):

(a) ceases to be a

subsidiary member of a

consolidated group

after the completion time (within the meaning of that section)

for the arrangement; and

(b) does not become a member of another consolidated group;

then, for the purposes of section 124-784B, the completion time for

the arrangement is taken to happen at the time of the cessation.

Note:

Sections 124-784A and 124-784B apply to arrangements for

restructures.

5 Subsection 995-1(1)

Insert:

CGT ro ll-overs for corporate restructures Schedule 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 13

officially quoted price has the meaning given by subsections

124-784A(6) and (7).

6 Application

(1)

The amendments made by this Schedule apply in relation to an

arrangement that is or relates to a takeover bid (within the meaning of

the Corporations Act 2001) if:

(a) for an off-market bid (within the meaning of that Act)--step

4 of the table in subsection 633(1) of that Act; or

(b) for a market bid (within the meaning of that Act)--step 2 of

the table in subsection 635(1) of that Act;

is completed after 7.30 pm, by legal time in the Australian Capital

Territory, on 13 May 2008.

(2)

The amendments made by this Schedule apply in relation to an

arrangement if:

(a) a court orders, under subsection 411(1) of the Corporations

Act 2001, a meeting or meetings of:

(i) a company's members; or

(ii) one or more classes of a company's members;

about the arrangement; and

(b) the application for the order was made after 7.30 pm, by legal

time in the Australian Capital Territory, on 13 May 2008.

(3)

The amendments made by this Schedule apply in relation to an

arrangement if:

(a) the arrangement is not, and does not relate to, a takeover bid

(within the meaning of the Corporations Act 2001); and

(b) a court does not order, under subsection 411(1) of the

Corporations Act 2001, a meeting or meetings of:

(i) a company's members; or

(ii) one or more classes of a company's members;

about the arrangement; and

7.30 pm, by legal time in the Australian Capital Territory, on

13 May 2008.

Schedule 2 Mutual assistance in collection

14 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Schedule 2

Mutual assistance in collection

Taxation Administration Act 1953

1 After subsection 263-30(1) in Schedule 1

Insert:

(1A) To avoid doubt, the amount owed by the debtor may not be the

same as the amount (if any) entered in the Register.

2 Subsection 263-30(2) in Schedule 1

Omit "That amount", substitute "The amount owed by the debtor".

3 Section 263-35 in Schedule 1 (heading)

Repeal the heading, substitute:

363-35 Amending the Register etc.

4 After subsection 263-35(2) in Schedule 1

Insert:

(2A) To avoid doubt, the Commissioner may reduce an amount to be

recovered from a debtor under paragraph (2)(b) without amending

the Register.

5 Subsection 263-35(5) in Schedule 1

Repeal the subsection, substitute:

(5) If the Commissioner removes particulars of a

foreign revenue

claim relating to the recovery of an amount from the Register

under paragraph (2)(a) or subsection (4), the debtor is entitled to a

credit for the purposes of Part IIB equal to the sum of:

(a) the amount (as reduced by any previous application of

subsection (6)); and

(b) any

general interest charge for which the debtor is liable as a

result of the foreign revenue claim.

Note:

How the credit is applied is set out in Part IIB.

6 Subsection 263-35(6) in Schedule 1

Mutual assistance in collection Schedule 2

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 15

Omit "the amount of the reduction is taken never to have been payable

by the debtor", substitute "the debtor is entitled to a credit for the

purposes of Part IIB equal to the amount of the reduction".

7 At the end of subsection 263-35(6) in Schedule 1

Add:

Note:

How the credit is applied is set out in Part IIB.

8 At the end of section 263-40 in Schedule 1

Add:

(3) The Commissioner may also pay to the competent authority all or

part of an amount that the Commissioner has received and that is

attributable to any of the following in relation to the claim:

(a) judgment interest;

(b) costs that:

(i) have been recovered in the course of legal proceedings;

and

(ii) represent an amount that has previously been paid by

the competent authority to the Commonwealth in

relation to the recovery of the claim.

9 Application

The amendments made by this Schedule apply to foreign revenue

claims, the particulars of which are in the Register at the

commencement of this Schedule or are entered in the Register after that

commencement.

Schedule 3 Late payment offset for superannuation guarantee contributions

16 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Schedule 3

Late payment offset for

superannuation guarantee

contributions

Superannuation Guarantee (Administration) Act 1992

1 Paragraph 23A(1)(a)

Repeal the paragraph, substitute:

(a) the contribution is made:

(i) after the end of the period of 28 days after the end of a

quarter; and

(ii) before the employer's original assessment for that

quarter is made; and

2 Paragraph 23A(2)(b)

Omit "superannuation guarantee charge for the quarter became

payable", substitute "original assessment for the quarter is made".

3 Subsection 23A(3)

After "The contribution is offset", insert ", at the time the employer's

original assessment for the quarter is made,".

4 Subsection 49(3A)

Repeal the subsection, substitute:

(3A) To avoid doubt, for the purposes of this section and subsection

8AAC(3) of the Taxation Administration Act 1953, an election

under section 23A in relation to the superannuation guarantee has

effect from the time the employer's original assessment for the

quarter is made.

5 Application

The amendments made by this Schedule apply to elections under

section 23A of the Superannuation Guarantee (Administration) Act

1992 made on or after the commencement of this Schedule.

Minor amend ments Schedule 4

General Part 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 17

Schedule 4

Minor amendments

Part 1

General

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

1 Section 195-1 (definition of hospital treatment)

Repeal the definition, substitute:

hospital treatment has the same meaning as in the Private Health

Insurance Act 2007.

Fringe Benefits Tax Assessment Act 1986

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

Repeal the steps, substitute:

Step 3. Identify the excluded fringe benefits (other than an

amortised fringe benefit) for the year of tax in respect of

each of the employer's employees that are

GST-creditable benefits, and add up the taxable values of

all those excluded fringe benefits.

Note 1:

Subsection 5E(3) explains what is an excluded fringe

benefit.

Note 2:

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

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

Note:

The result of step 4 is the employer's type 1 aggregate

fringe benefits amount if there are no amortised amounts

in relation to the employer.

Step 5. Add to the total from step 4 the amortised amount for the

year of tax of each amortised fringe benefit (if any)

relating to an employee of the employer, the employer

and any year of tax that are GST-creditable benefits. The

total amount is the employer's type 1 aggregate fringe

benefits amount for the year of tax.

Note:

Section 65CA explains what is an amortised fringe

benefit.

Schedule 4 Minor amendments

Part 1 General

18 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

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

Repeal the steps, substitute:

Step 3. Identify, in respect of each of the employer's employees,

the excluded fringe benefits (other than an amortised

fringe benefit) for the year of tax that are not taken into

account under step 3 of the method statement in

subsection (3), and add up the taxable values of all those

excluded fringe benefits.

Note:

Subsection 5E(3) explains what is an excluded fringe

benefit.

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

Note:

The result of step 4 is the employer's type 2 aggregate

fringe benefits amount if there are no amortised amounts

or reducible fringe benefits in relation to the employer.

Step 5. Add to the total from step 4 the amortised amount for the

year of tax of each amortised fringe benefit (if any)

relating to an employee of the employer, the employer

and any year of tax that is not taken into account under

step 5 of the method statement in subsection (3).

Note 1:

The result of step 5 is the employer's type 2 aggregate

fringe benefits amount if there are no reducible fringe

benefits in relation to the employer.

Note 2:

Section 65CA explains what is an amortised fringe

benefit.

Step 6. Subtract from the total from step 5 the reduction amount

for the year of tax of each reducible fringe benefit (if any)

relating to an employee of the employer, the employer

and the year of tax. The total amount is the employer's

type 2 aggregate fringe benefits amount for the year of

tax.

4 Application

(1)

The amendments made by items 2 and 3 apply to the year of tax starting

on 1 April 2000 and later years of tax.

(2)

Despite section 74 of the Fringe Benefits Tax Assessment Act 1986, the

Commissioner may amend an assessment at any time within the period

Minor amend ments Schedule 4

General Part 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 19

of 3 years after the commencement of this item for the purpose of

giving effect to the amendments made by items 2 and 3.

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

Add ", or to death benefits dependants (within the meaning of the

Income Tax Assessment Act 1997) or legal personal representatives

(within the meaning of that Act) of those persons".

Income Tax Assessment Act 1936

6 Paragraph 23AB(5)(a)

Omit "Commonwealth Employees' Rehabilitation and Compensation

Act 1988", substitute "Safety, Rehabilitation and Compensation Act

1988".

7 Subsection 23AG(1)

Omit "is exempt from tax", substitute "are exempt from tax".

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

Omit "Education Research Act 1970", substitute "Australian Research

Council Act 2001".

9 Subsection 82KZMGA(1)

Repeal the subsection, substitute:

(1) A taxpayer cannot deduct expenditure in relation to which the

requirements in section 82KZMG (apart from paragraph

82KZMG(2)(a)) are met if:

(a) the taxpayer holds the taxpayer's interest in the agreement

mentioned in section 82KZMG as an initial participant in the

agreement; and

(b) a CGT event happens in relation to that interest within 4

years after the end of the year of income in which the

taxpayer first incurred expenditure under the agreement; and

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

Omit "subsection 102M(1)", substitute "section 102M".

Schedule 4 Minor amendments

Part 1 General

20 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Income Tax Assessment Act 1997

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

Omit "an allowable deduction" (wherever occurring), substitute "a

deduction".

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

Omit "allowed or allowable as a deduction", substitute "you have

deducted or can deduct".

13 Subsection 25-5(8)

Omit "an allowable deduction", substitute "a deduction".

14 Paragraphs 25-7(b) and (c)

Repeal the paragraphs, substitute:

(b) you lodge the claim for family tax benefit with an officer of

the Australian Taxation Office (within the meaning of that

Act) for determination by such an officer.

15 Subsection 36-17(5) (example)

Omit "allowable deductions", substitute "deductions".

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

Insert:

Transfer of a

CGT asset

of a trust to a company

under a trust restructure

The transferor and transferee are able to

choose a roll-over under Subdivision 124-N

for the

CGT event.

17 Application

The amendment made by item 16 applies to balancing adjustment

events happening in the 2008-09 income year or a later income year.

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

Add:

; and (c) subsection 124-870(5) (which excludes certain assets from

roll-over relief under Subdivision 124-N).

19 Subsection 40-340(5)

Omit "a person dies", substitute "you die".

Minor amend ments Schedule 4

General Part 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 21

20 Subsection 40-340(5)

Omit "the person's", substitute "your".

21 Subsections 43-50(1) and (2)

Omit "an allowable deduction" (wherever occurring), substitute "a

deduction".

22 Section 43-210 (step 6)

Omit "allowable deduction", substitute "deduction".

23 Section 43-215 (step 4)

Omit "allowable deduction", substitute "deduction".

24 Subsection 116-30(2B)

Omit "Despite paragraph (2)(b), subsection (2) does not apply",

substitute "Subsection (2) does not apply to a situation that would

otherwise be covered by paragraph (2)(b)".

25 Application

The amendment made by item 24 applies to CGT events happening

after the start of the 2006-07 income year.

26 Subsection 122-50(1) (example)

Repeal the example, substitute:

Example: Nick is a small trader. He wants to incorporate his business. He

disposes of all its assets to a company and receives 10 shares in return.

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

Trading stock, plant and equipment and office furniture are precluded

assets.

The market value of Nick's trading stock when he disposed of it is

$20,000. The market value of his plant and equipment at that time is

$50,000 and the market value of his office furniture at that time is

$10,000.

The cost bases of Nick's land and buildings at that time total

$120,000.

Nick has a business overdraft of $15,000. It is taken to be a liability in

respect of all the assets of his business.

Schedule 4 Minor amendments

Part 1 General

22 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

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

$20,000

$50,000

$10,000

$120,000

$15,000

$185,000

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

out similarly.

27 Section 240-55 (heading)

Repeal the heading, substitute:

240-55 Arrangement payments not to be deductions

28 Subsection 290-90(2) (note 2)

Omit "allowable deductions", substitute "deductions".

29 Subsection 707-310(3)

Omit "transferee's income" (wherever occurring), substitute

"transferee's

ordinary income,

statutory income".

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

Omit "income", substitute "ordinary income, statutory income".

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

Omit "and

excluded exempt income".

32 Paragraph 711-30(3)(a)

Omit "(the receivable)".

33 Paragraph 711-30(3)(b)

Omit "the receivables", substitute "the asset's".

34 Paragraph 711-30(3)(c)

Omit "the receivable", substitute "the asset".

Income Tax Rates Act 1986

35 Paragraph 23(2)(c)

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

36 Application

Minor amend ments Schedule 4

General Part 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 23

The amendment made by item 35 applies to assessments for the

2007-08 income year and later income years.

Taxation Administration Act 1953

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

Omit "that section", substitute "that provision".

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

Omit "that section", substitute "that provision".

39 Application

The amendment made by item 38 applies to fund payments made in

relation to the first income year starting on or after 1 July 2008 and later

income years.

40 Section 45-10 in Schedule 1

Omit "items 3 and 4, and 6 to 12", substitute "items 4 to 10, and 12 and

13".

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

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

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

Omit "item 5", substitute "item 11".

43 Subsection 45-450(1) in Schedule 1

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

44 Application

The amendments made by items 40 to 43 apply to assessments for the

2007-08 income year and later income years.

Taxation (Interest on Overpayments and Early Payments) Act

1983

45 Subsection 3(1) (before paragraph (b) of the definition of

income tax crediting amount)

Schedule 4 Minor amendments

Part 1 General

24 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Insert:

(a) any amount of a credit that does not arise under Division 770

of the Income Tax Assessment Act 1997 or under the

International Tax Agreements Act 1953; or

46 Application

The amendment made by item 45 applies to income years, statutory

accounting periods and notional accounting periods starting on or after

1 July 2008.

47 Subsections 9(2) and (3)

Omit "subsection 10(1)", substitute "section 10".

48 Subsection 10(1)

Omit "(1)".

49 Paragraph 10(1)(a)

Repeal the paragraph, substitute:

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

following days:

(i) the day on which notice of the assessment,

determination or decision, being the assessment,

determination or decision in relation to which the

decision to which this Act applies was made, was issued

to the person by the Commissioner;

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

the Commissioner;

and ended on the day on which the amount of the relevant tax

or the part of the amount of relevant tax, as the case may be,

was so refunded or applied; and

50 Transitional

If subparagraph 10(1)(a)(iii) of the Taxation (Interest on Overpayments

and Early Payments) Act 1983 (as in force before the commencement of

item 49) could apply to a taxpayer, that subparagraph continues to apply

despite the amendment made by that item.

Tax Laws Amendment (Budget Measures) Act 2008

Minor amend ments Schedule 4

General Part 1

Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 25

51 Item 15 of Schedule 1

Repeal the item, substitute:

15 Application

(1)

Subject to subitem (2), the amendment made by item 14 applies in

relation to CGT events happening after 7.30 pm, by legal time in the

Australian Capital Territory, on 13 May 2008 (the Budget time).

(2)

An entity may choose that the amendment made by item 14 applies to a

CGT event that happened:

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

(b) before the Budget time.

Schedule 4 Minor amendments

Part 2 Asterisking amend ments

26 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008

Part 2

Asterisking amendments

Income Tax Assessment Act 1997

52 Asterisking amendments of the Income Tax Assessment

Act 1997

The provisions of the Income Tax Assessment Act 1997 listed in the

table are amended as set out in the table.

Asterisking amendments

Item Provision

Omit:

Substitute:

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

children

Subsection 30-15(2) (table

items 1 and 2) (colu mn headed

"How much you can deduct")

market value

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

child

Paragraph 52-70(b)

children

Paragraph 52-105(3)(b)

children

Paragraph 149-15(1)(b)

ultimate owners

Paragraph 149-15(1)(b)

indirectly

Paragraph 152-40(1A)(a)

child

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

more schemes

schemes

Paragraph 215-10(1)(b)

prudential

standards

prudential

standards

Paragraph 215-10(1)(c)

permanent

establishment

permanent

establishment

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

connected entity

Paragraph 295-485(1)(a)

child

Paragraph 320-107(1)(a)

child

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2008 MEASURES NO. 6) BILL 2008