TAX LAWS AMENDMENT (2009 MEASURES NO. 2) BILL 2009

i Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Contents

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

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

Schedule(s) ......................................................................................... 3

Schedule 1--Tax treatment of payments unde r financial claims

scheme

Banking Act 1959

First Home Saver Accounts Act 2008

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Income Tax (Transitional Provisions) Act 1997

Insurance Act 1973

Taxation Administration Act 1953

Schedule 2--CGT concessions for small business

Part 1--Main amendments

Income Tax Assessment Act 1997

Part 2--Other amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

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

Part 3--Application provisions

Schedule 3--Tax benefits and capital gains tax

Income Tax Assessment Act 1997

Schedule 4--National Urban Water and Desalination Plan

Part 1--Main amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Taxation (Interest on Overpayments and Early Payments) Act 1983

Part 2--Sunsetting on 1 July 2014

Income Tax Assessment Act 1997

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 ii

Schedule 5--Deductible gift recipients

Part 1--Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

Part 2--Other amendments

Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006

Part 3--Application provision

Schedule 6--ABN changes

Part 1--Amendments commencing on Royal Assent

A New Tax System (Australian Business Number) Act 1999

Product Grants and Benefits Administration Act 2000

Taxation Administration Act 1953

Part 2--Amendments commencing on Proclamation

A New Tax System (Australian Business Number) Act 1999

Schedule 7--Fuel tax

Part 1--Fuel Tax Act 2006

Part 2--Fuel Tax (Consequential and Transitional Provisions)

Act 2006

Part 3--Application provisions

Schedule 8--Government grants for businesses in relation to

2009 Victorian bushfires

Part 1--Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

Part 2--Sunsetting on 1 July 2011

Income Tax Assessment Act 1997

Part 3--Application provision

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 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 (2009

Measures No. 2) Act 2009.

2 Commence ment

(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

according to its terms.

2 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day on which this Act receives the

Royal Assent.

2. Schedule 1

The day on which this Act receives the

Royal Assent.

3. Schedule 2,

item 1

Immediately after the commencement of

item 3 of Schedule 4 to the Tax Laws

Amendment (Small Business) Act 2007.

21 June 2007

4. Schedule 2,

items 2 to 39

The day on which this Act receives the

Royal Assent.

5. Schedule 2,

item 40

Immediately before the co mmencement of

item 52 of Schedule 4 to the Tax Laws

Amendment (2008 Measures No. 6) Act

2009.

6. Schedule 2,

Part 3

The day on which this Act receives the

Royal Assent.

7. Schedule 3

1 Ju ly 2009.

1 Ju ly 2009

8. Schedule 4,

Part 1

The day on which this Act receives the

Royal Assent.

9. Schedule 4,

Part 2

1 Ju ly 2014.

1 Ju ly 2014

10. Schedule 5,

Part 1

The day on which this Act receives the

Royal Assent.

11. Schedule 5,

Part 2

Immediately before the co mmencement of

Schedule 3 to the Tax Laws Amendment

(Repeal of Inoperative Provisions) Act 2006.

12. Schedule 5,

Part 3

The day on which this Act receives the

Royal Assent.

13. Schedule 6,

Part 1

The day on which this Act receives the

Royal Assent.

14. Schedule 6,

Part 2

A single day to be fixed by Proclamation.

However, if any of the provision(s) do not

commence with in the period of 12 months

beginning on the day on which this Act

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 3

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

receives the Royal Assent, they commence

on the first day after the end of that period.

15. Schedule 7

1 Ju ly 2009.

1 Ju ly 2009

16. Schedule 8,

Part 1

The day on which this Act receives the

Royal Assent.

17. Schedule 8,

Part 2

1 Ju ly 2011.

18. Schedule 8,

Part 3

The day on which this Act receives the

Royal Assent.

Note:

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

passed by both Houses of the Parliament and assented to. It will not be

expanded to deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

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

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

according to its terms.

Schedule 1 Tax treatment of pay ments under financial claims scheme

4 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Schedule 1

Tax treatment of payments under

financial claims scheme

Banking Act 1959

1 After section 16AH

Insert:

16AHA Giving information about payments in a financial year

(1) This section applies if one or more amounts are paid to, or applied

for the benefit of, one or more account-holders in a financial year

to meet (wholly or partly) the account-holders' entitlements under

this Subdivision.

Giving each account-holder an annual statement

(2) Within 14 days after the end of the financial year, APRA must give

each of those account-holders a statement about the amounts paid

to, or applied for the benefit of, the account-holder in the financial

year. The statement must:

(a) be in the approved form; and

(b) name the account-holder; and

and

(d) state the total of the amounts and the total of the amounts (if

any) withheld from them under the Taxation Administration

Act 1953; and

(e) specify the financial year to which the statement relates.

Giving the Commissioner of Taxation an annual report

(3) Within 4 months after the end of the financial year, APRA must

give the Commissioner a report in the approved form about all the

amounts described in subsection (1).

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 5

Provisions about statements and reports in approved forms

(4) Division 388 in Schedule 1 to the Taxation Administration Act

1953 applies as if this section were a taxation law for the purposes

of that Act.

Note:

That Division sets out rules about approved forms and when they can

be given.

This section does not limit the Taxation Administration Act 1953

(5) Subsection (4) does not limit the operation of the Taxation

Administration Act 1953 in relation to APRA.

2 Application of section 16AHA

Section 16AHA of the Banking Act 1959 applies in relation to amounts

paid or applied before, on or after the commencement of the section.

3 After paragraph 16AK(4)(e)

Insert:

(ea) preparing or giving a statement or report required by

section 16AHA;

(eb) complying with an obligation under a law relating to

taxation;

First Home Saver Accounts Act 2008

4 At the end of subsection 15(1)

Add:

Note:

If the person has or had an entitlement arise under Division 2AA

(Financial claims scheme for account-holders with insolvent ADIs) of

Part II of the Banking Act 1959 in relation to an FHSA, section 128A

of this Act affects this section.

5 At the end of subsection 19(3)

Add:

Note:

Section 128A prevents this section from applying to the opening of an

FHSA on a person's behalf by APRA or a liquidator under

Division 2AA (Financial claims scheme for account-holders with

insolvent ADIs) of Part II of the Banking Act 1959.

6 At the end of subsection 20(5)

Schedule 1 Tax treatment of pay ments under financial claims scheme

6 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Add:

Note:

Section 128A extends the operation of this section in relation to an

FHSA opened on a person's behalf by APRA or a liquidator under

Division 2AA (Financial claims scheme for account-holders with

insolvent ADIs) of Part II of the Banking Act 1959.

7 Subsection 31(1) (note)

Omit "Note:", substitute "Note 1:".

8 At the end of subsection 31(1)

Add:

Note 2:

If an entitlement under Division 2AA (Financial claims scheme for

account-holders with insolvent ADIs) of Part II of the Banking Act

1959 arises in connection with the FHSA, this section does not

prevent a payment from the FHSA connected with the right to be paid

that section 16AI of that Act gives APRA in relation to the FHSA (see

section 128A of this Act).

9 After section 128

Insert:

128A Special provisions applying if financial claims scheme

entitlements arise in relation to FHSAs

Application

(1) This section applies if an entitlement under Division 2AA

(Financial claims scheme for account-holders with insolvent ADIs)

of Part II of the Banking Act 1959 arises in connection with an

FHSA (the old FHSA) held by a person.

Some contributions treated as transfers from old FHSA

(2) If a contribution to another FHSA is made for the purposes of:

(a) meeting the entitlement (wholly or partly); or

(b) paying a distribution attributable to the old FHSA from the

liquidation of the provider of the old FHSA;

this Act applies as if the contribution were by way of a transfer

from the old FHSA to the other FHSA.

Note:

The effects of this include the contribution being covered by

paragraph 11(3)(a), so that the contribution is not a personal FHSA

contribution, does not count against the limit on contributions set by

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 7

section 27 and does not count for working out the amount of a

Government FHSA contribution for the person under section 38.

Old FHSA does not affect whether person meets FHSA eligibility

requirements

(3) For the purposes of determining whether the person meets the

FHSA eligibility requirements after the entitlement arises,

disregard the old FHSA for the purposes of paragraphs 15(1)(e)

and (f).

Note:

This ensures that the holding and closure of the old FHSA after the

entitlement arises cannot prevent the person from meeting the FHSA

eligibility requirements.

Opening of new FHSA to meet entitlement

(4) Subsection 19(1) does not apply to the opening of an FHSA:

(a) under section 16AH of the Banking Act 1959 for the purposes

of meeting the entitlement (wholly or partly); or

(b) under section 16AR of that Act for the purposes of paying a

distribution attributable to the old FHSA from the liquidation

of the provider of the old FHSA.

Note:

A defendant in a prosecution for an offence against section 19 bears

an evidential burden in relation to the matter in subsection (4) of this

section: see subsection 13.3(3) of the Criminal Code.

Notice of person not meeting the FHSA eligibility requirements

(5) If:

(a) an FHSA (the new FHSA) is opened:

(i) under section 16AH of the Banking Act 1959 for the

purposes of meeting the entitlement (wholly or partly);

(ii) under section 16AR of that Act for the purposes of

paying a distribution attributable to the old FHSA from

the liquidation of the provider of the old FHSA; and

(b) before the new FHSA was opened, circumstances arose

resulting in the person not meeting the FHSA eligibility

requirements; and

to meet the FHSA eligibility requirements;

Schedule 1 Tax treatment of pay ments under financial claims scheme

8 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

section 20 applies to the person as the holder of the new FHSA in

relation to the provider of the new FHSA, but so as to require the

person to give notice within 30 days after notice is sent to the

person of the opening of the new FHSA.

Payment connected with right given to APRA by the Banking Act

1959

(6) Nothing in this Act or the regulations prevents the provider of the

old FHSA from paying an amount out of the FHSA in connection

with a right to be paid an amount by the provider that APRA had in

connection with the old FHSA because of section 16AI of the

Banking Act 1959.

Note:

Section 16AI of the Banking Act 1959 gives APRA the right (or part

of the right) the holder of the old FHSA had to be paid an amount by

the provider of the old FHSA in connection with the old FHSA.

10 Application

The amendments of the First Home Saver Accounts Act 2008 made by

this Schedule apply in relation to entitlements arising under

Division 2AA (Financial claims scheme for account-holders with

insolvent ADIs) of Part II of the Banking Act 1959 after 17 October

2008.

Note:

Division 2AA of Part II of the Banking Act 1959 commenced on 18 October 2008.

Income Tax Assessment Act 1936

11 At the end of subsection 393-15(3) in Schedule 2G

Add:

Note:

Section 393-80 affects the unrecouped FMD deduction of a new

deposit linked to an old farm management deposit in relation to which

there arose an entitlement under Division 2AA (Financial claims

scheme for account-holders with insolvent ADIs) of Part II of the

Banking Act 1959.

12 At the end of subsection 393-15(4) in Schedule 2G

Add:

Note 3:

Section 393-85 limits the operation of subsection (4) of this section if:

(a)

the farm management deposit is with an ADI that becomes a

declared ADI under Division 2AA (Financial claims scheme for

account-holders with insolvent ADIs) of Part II of the Banking

Act 1959; and

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 9

(b)

an amount equal to the deposit has not been paid to you as an

entitlement under that Division, or in liquidation of the ADI, by

the end of the year of income.

13 Section 393-25 in Schedule 2G

Insert:

ADI has the same meaning as in the Banking Act 1959.

14 Section 393-25 in Schedule 2G (paragraph (a) of the

definition of financial institution)

Omit "(authorised deposit-taking institution) for the purposes of the

Banking Act 1959".

15 At the end of Division 393 in Schedule 2G

Add:

Subdivision 393-D--Special rules relating to financial claims

scheme for account-holders with insolvent ADIs

Guide to Subdivision 393-D

393-75 What this Subdivision is about

A deposit (the new deposit) arising from:

(a) an entitlement under Division 2AA of Part II of the

Banking Act 1959 relating to a farm management

deposit with an ADI; or

(b) a distribution from liquidation of the ADI that is

attributable to a farm management deposit;

is treated as a transfer of the farm management deposit that does

not give rise to new assessable income or deductions.

Table of sections

Operative provisions

Schedule 1 Tax treatment of pay ments under financial claims scheme

10 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

393-80

Farm management deposits arising from farm management deposits with

ADIs subject to financial claims scheme

393-85

Repayment if owner of farm management deposit with insolvent ADI is

bankrupt, dies or ceases to be a primary producer

Operative provisions

393-80 Farm management deposits arising from farm management

deposits with ADIs subject to financial claims scheme

Application

(1) This section applies if an entitlement arises under Division 2AA

(Financial claims scheme for account-holders with insolvent ADIs)

of Part II of the Banking Act 1959 in connection with an account

containing a farm management deposit (the old farm management

deposit) with an ADI (the old ADI) and either:

(a) an amount (the new deposit) is deposited into one of the

following to meet, in whole or part, so much of the

entitlement as relates to the old farm management deposit:

(i) an existing account for a farm management deposit;

(ii) an account established under section 16AH of that Act

for the purposes of meeting (wholly or partly) the

entitlement; or

(b) an amount (also the new deposit) is deposited by a liquidator

of the old ADI into one of the following as so much of a

distribution from the liquidation of the old ADI as relates to

the old farm management deposit:

(i) an existing account for a farm management deposit;

(ii) an account established under section 16AR of that Act

for the payment of the distribution.

Note:

If an amount is deposited in connection with an account with the old

ADI containing 2 or more old farm management deposits, the amount

is to be apportioned between each old farm management deposit, so

that so much of the amount as is attributable to a particular old farm

management deposit is regarded as a distinct new deposit relating to

that old farm management deposit.

New deposit is a farm management deposit

(2) This Division (except this section) applies to the new deposit as if

it were a transfer of the old farm management deposit in

accordance with a requirement of the agreement for the old farm

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 11

management deposit as mentioned in subsection 393-40(5). To

avoid doubt, this Division applies in that way as if the amount

transferred were the amount of the new deposit, even if that is

more or less than the amount of the old farm management deposit.

Note 1:

The effects of this include the following:

(a)

the applicable depositing day for the old farm management

deposit is maintained under paragraph 393-37(7)(c) or (d) for the

new deposit (which affects whether a withdrawal of the new

deposit prevents it from being a farm management deposit);

(b)

the new deposit is not regarded as a repayment of the old farm

management deposit that is assessable income (see subsection

393-50(5));

(c)

the making of the new deposit does not give rise to a deduction

(see subsection 393-50(5)).

Note 2:

Also, the unrecouped FMD deduction in respect of the new deposit is

the same as the unrecouped FMD deduction in respect of the old farm

management deposit (see subsection 393-50(5)), unless subsection (6)

or (7) of this section applies because the new deposit is less than the

old farm management deposit.

(3) Subsection 393-35(5) does not apply in relation to either of the

following to prevent it from being a farm management deposit:

(a) the new deposit;

(b) a deposit made later directly by the transfer of the new

deposit in accordance with a requirement of the agreement

for the new deposit as mentioned in subsection 393-40(5).

Note:

This means that the new deposit, or a deposit made as a direct result of

the transfer of the new deposit, can be a farm management deposit

(despite subsection 393-45(1)) even if it is less than $1,000.

(4) For the purposes of subsection 393-35(7), disregard the old farm

management deposit in determining whether a deposit made after

the entitlement arises is a farm management deposit.

Note:

This means that a deposit made with a financial institution other than

the old ADI after the entitlement arises can be a farm management

deposit (despite subsection 393-45(1)) even though the owner of the

deposit still has the old farm management deposit with the old ADI.

(5) Subsection 393-35(7) does not apply to the new deposit to prevent

it from being a farm management deposit.

Note:

This ensures that the new deposit can be a farm management deposit

(despite subsection 393-45(1)) even though the owner of the new

deposit has other farm management deposits with other financial

institutions when the new deposit is made.

Schedule 1 Tax treatment of pay ments under financial claims scheme

12 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Unrecouped FMD deduction for new deposit less than old farm

management deposit

(6) Despite subsection (2) and paragraph 393-50(5)(c), if the new

deposit is less than the old farm management deposit at the time

(the declaration time) the old ADI became a declared ADI under

the Banking Act 1959, the unrecouped FMD deduction in respect

of the new deposit is the amount worked out using the formula:

Unrecouped FMD deduction

New deposit

in respect of old farm management

Old farm management deposit

deposit just before declaration time

just before declaration time

Note:

The new deposit could be less than the old farm management deposit

if the entitlement is paid in instalments (each of which will be a

separate new deposit).

(7) However, if the amount worked out under subsection (6) is more

than the difference (if any) between:

(a) the unrecouped FMD deduction in respect of the old farm

management deposit just before the declaration time; and

(b) the total of the amounts worked out under all previous

applications of subsection (6) in relation to that old farm

management deposit;

the unrecouped FMD deduction in respect of the new deposit is

equal to the difference (if any).

Note:

This ensures that when new deposits linked to the old farm

management deposit are repaid, the total amount included in

assessable income will not exceed the unrecouped FMD deduction in

respect of the old farm management deposit.

Relationship with other provisions

(8) This section has effect despite Division 253 of the Income Tax

Assessment Act 1997 (which is about tax treatment of entitlements

under the financial claims scheme for insolvent ADIs).

393-85 Repayment if owne r of farm manage ment deposit with

insolvent ADI dies, is bankrupt or ceases to be a primary

producer

(1) This section applies if:

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 13

(a) you are the owner of a farm management deposit with an

ADI that becomes repayable during a year of income in

accordance with a requirement of the agreement concerned to

the effect mentioned in subsection 393-40(3) (which covers

death, bankruptcy and ceasing to be a primary producer); and

(b) during the year of income the ADI becomes a declared ADI

under Division 2AA (Financial claims scheme for

account-holders with insolvent ADIs) of Part II of the

Banking Act 1959; and

the following:

(i) an unmet entitlement under that Division connected

with the account for the farm management deposit;

(ii) an unmet claim against the ADI, or an unpaid debt owed

to you by the ADI, in the winding up of the ADI that is

a claim or debt that is connected with the account for the

farm management deposit.

(2) Subsection 393-15(4) does not apply in relation to so much of the

farm management deposit as is equal to the sum of the amounts

described in subparagraphs (1)(c)(i) and (ii).

16 Application

The amendments of Schedule 2G to the Income Tax Assessment Act

1936 made by this Schedule apply to assessments for the year of income

including 18 October 2008 and later years of income.

Note:

Division 2AA (Financial claims scheme for account-holders with insolvent ADIs) of

Part II of the Banking Act 1959 commenced on 18 October 2008.

Income Tax Assessment Act 1997

17 At the end of subsection 104-10(5)

Add:

Note 4:

A capital gain or loss you make because of section 16AI of the

Banking Act 1959 is disregarded: see section 253-10 of this Act.

Section 16AI of the Banking Act 1959:

(a)

reduces your right to be paid an amount by an ADI in connection

with an account to the extent of your entitlement under

Division 2AA of Part II of that Act to be paid an amount by

APRA; and

Schedule 1 Tax treatment of pay ments under financial claims scheme

14 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(b)

provides that, to the extent of the reduction, the right becomes a

right of APRA.

Note 5:

A capital gain or loss you make because, under section 62ZZL of the

Insurance Act 1973, you dispose of a CGT asset consisting of your

rights against a general insurance company to APRA is disregarded:

see section 322-30 of this Act.

18 At the end of subsection 104-25(5)

Add:

Note 7:

A capital gain or loss you make from the meeting of your entitlement

under Division 2AA (Financial claims scheme for account-holders

with insolvent ADIs) of Part II of the Banking Act 1959 or Part VC

(Financial claims scheme for account-holders with insolvent general

insurers) of the Insurance Act 1973 is disregarded: see sections 253-10

and 322-30 of this Act.

19 Section 112-97 (at the end of the table)

Add:

An entitlement arises under

Div ision 2AA of Part II of the

Banking Act 1959 in

connection with an

account-holder's account with

an ADI

The total cost base, and

reduced cost base, of the

entitlement and of the

remainder (if any) of the

right to be paid by the

ADI in connection with

the account

Section 253-15

20 At the end of Part 3-10

Add:

Division 253--Financial claims scheme for account-holders

with insolvent ADIs

Table of Subdivisions

253-A Tax treatment of entitlements under financial claims scheme

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 15

Subdivision 253-A--Tax treatment of entitlements under

financial claims scheme

Guide to Subdivision 253-A

253-1 What this Subdivision is about

This Act applies to a payment of an entitlement under

Division 2AA (Financial claims scheme for account-holders with

insolvent ADIs) of Part II of the Banking Act 1959 as if the

payment were made by the ADI under the agreement for the

account concerned.

Special rules prevent the arising and payment of such an

entitlement from creating inappropriate capital gains or losses

affecting assessable income.

Table of sections

Operative provisions

253-5

Payment of entitlement under financial claims scheme treated as payment

from ADI

253-10

Disposal of rights against ADI to APRA and meeting of financial claims

scheme entitlement have no CGT effects

253-15

Cost base of financial claims scheme entitlement and any remaining part of

account that gave rise to entitlement

Operative provisions

253-5 Payment of entitlement under financial claims scheme treated

as payment from ADI

(1) This Act applies to you as if an amount paid to you, or applied for

your benefit, to meet your entitlement under Division 2AA

(Financial claims scheme for account-holders with insolvent ADIs)

of Part II of the Banking Act 1959 connected with an account with

ADI had been paid to you by the ADI under the terms and

conditions of the agreement for keeping the account.

Note:

This section has effect subject to more detailed provisions about:

Schedule 1 Tax treatment of pay ments under financial claims scheme

16 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(a)

entitlements relating to retirement savings accounts (see

section 306-25); and

(b)

entitlements relating to farm management deposits (see

Subdivision 393-D in Schedule 2G to the Income Tax Assessment

Act 1936).

(2) To avoid doubt, subsection (1) does not affect the operation of

Part 2-5 in Schedule 1 to the Taxation Administration Act 1953.

Note:

Division 21 in Schedule 1 to the Taxation Administration Act 1953

contains special provisions about how Part 2-5 in that Schedule

operates in relation to the meeting of entitlements under Division 2AA

of Part II of the Banking Act 1959.

253-10 Disposal of rights against ADI to APRA and meeting of

financial claims scheme entitlement have no CGT effects

Disregard a

capital gain or

capital loss you make:

(a) because of the operation of section 16AI of the Banking Act

1959; or

(b) because your entitlement under Subdivision C of

Division 2AA of Part II of that Act is met.

Note:

Section 16AI of the Banking Act 1959 reduces the right of an

account-holder who has a protected account with a declared ADI to be

paid an amount by the ADI, by the account-holder's entitlement under

Subdivision C of Division 2AA of Part II of that Act to be paid an

amount by APRA in connection with the account.

253-15 Cost base of financial claims scheme entitlement and any

re maining part of account that gave rise to entitlement

(1) This section applies if an entitlement arises under Divis ion 2AA

(Financial claims scheme for account-holders with insolvent ADIs)

of Part II of the Banking Act 1959 in connection with an

account-holder's account with an

ADI.

(2) The

cost base and

reduced cost base of the

CGT asset consisting

of the entitlement are each the amount of the entitlement.

(3) The

cost base of the

CGT asset representing the part (if any) of

the account-holder's right to be paid an amount by the

ADI in

connection with the account that remains after the reduction of that

right by section 16AI of the Banking Act 1959 (by the amount of

the entitlement) is the difference (if any) between:

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 17

(a) the cost base of the right as it was immediately before the

reduction; and

(b) the amount of the entitlement.

The

reduced cost base is worked out similarly.

(4) This section has effect despite:

(a) Division 110 (Cost base and reduced cost base); and

(b) subsections 112-30(2), (3), (4) and (5) (which are about

apportioning a

cost base if a

CGT event happens to only

part of a

CGT asset).

21 At the end of Division 306

Add:

306-25 Payments connected with financial claims sche me to RSAs

(1) This section applies if:

(a) a person is the holder of an

RSA (the old RSA) of which an

ADI is the

RSA provider; and

(b) an entitlement of the person arises under Division 2AA

(Financial claims scheme for account-holders with insolvent

ADIs) of Part II of the Banking Act 1959 in connection with

the old RSA; and

(i) the entitlement, so far as it relates to the old RSA, is met

wholly or partly by the making of a payment to another

RSA (the new RSA) that the person is the holder of

(whether or not the new RSA was established under

section 16AH of the Banking Act 1959); or

(ii) a liquidator of the ADI pays a distribution from the

liquidation of the ADI, so far as the distribution is

attributable to the old RSA, to another RSA (also the

new RSA) that the person is the holder of (whether or

not the new RSA was established under section 16AR

of the Banking Act 1959).

(2) This Part (except this section), and the other provisions of this Act

(except this section) so far as they relate to this Part, apply in

relation to the payment to the new RSA as if:

(a) the payment were made from the old RSA to the new RSA;

and

Schedule 1 Tax treatment of pay ments under financial claims scheme

18 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(b) the entity that made the payment (rather than the

ADI) were

the

RSA provider of the old RSA.

Note:

The effects of this include:

(a)

the payment is a superannuation member benefit of the person

(because of sections 307-5 and 307-15); and

(b)

the payment is a superannuation lump sum under

Subdivision 307-B (unless regulations prevent this); and

(c)

the payment is a roll-over superannuation benefit under

section 306-10 (unless regulations prevent this); and

(d)

reporting obligations (such as those in section 390-10 in

Schedule 1 to the Taxation Administration Act 1953) apply to the

entity that made the payment as if it were the RSA provider of

the old RSA.

(3) However, for the purposes of section 307-125, determine the

value of the

superannuation interest, and the amount of each of

the

tax free component and the

taxable component of the interest:

(a) when the entitlement arose; or

(b) if a

superannuation income stream benefit had been paid

from the old RSA before that time--at the time the relevant

superannuation income stream commenced.

(4) Subsection (3) has effect despite:

(a) subsection 307-125(3) (as it applies because of subsection (2)

of this section); and

(b) paragraph 307-125(3)(a) of the Income Tax (Transitional

Provisions) Act 1997.

(5) This section has effect despite:

(a) Division 253; and

(b) Division 21 in Schedule 1 to the Taxation Administration Act

1953.

22 Application

(1)

Section 306-25 of the Income Tax Assessment Act 1997 applies in

relation to entitlements arising under Division 2AA (Financial claims

scheme for account-holders with insolvent ADIs) of Part II of the

Banking Act 1959 after 17 October 2008.

Note:

Division 2AA of Part II of the Banking Act 1959 commenced on 18 October 2008.

(2)

However, this item does not:

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 19

(a) require a person to do anything the person would have been

required by Division 390 in Schedule 1 to the Taxation

Administration Act 1953 to do before the commencement of

this item had section 306-25 of the Income Tax Assessment

Act 1997 commenced on 18 October 2008; or

(b) make a person liable to a criminal or administrative penalty

for an omission occurring before the commencement of this

item.

23 Division 322 (heading)

Repeal the heading, substitute:

Division 322--Assistance for policyholders with insolvent

general insurers

24 At the end of section 322-1

Add "and deals with the tax treatment of entitlements under Part VC

(Financial claims scheme for policyholders with insolvent general

insurers) of the Insurance Act 1973".

25 Group heading before section 322-5

Repeal the heading, substitute:

Subdivision 322-A--HIH rescue package

26 At the end of Division 322

Add:

Subdivision 322-B--Tax treatment of entitlements under

financial claims scheme

Guide to Subdivision 322-B

322-20 What this Subdivision is about

This Act applies to a payment of an entitlement under Part VC

(Financial claims scheme for policyholders with insolvent general

insurers) of the Insurance Act 1973 as if the payment were made

by the insurer under the insurance policy concerned.

Schedule 1 Tax treatment of pay ments under financial claims scheme

20 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Disregard a capital gain or loss from:

(a) the disposal to APRA under that Part of rights

against the insurer under an insurance policy; or

(b) the payment of an entitlement under that Part.

Table of sections

Operative provisions

322-25

Payment of entitlement under financial claims scheme treated as payment

from insurer

322-30

Disposal of rights against insurer to APRA and meeting of financial claims

scheme entitlement have no CGT effects

Operative provisions

322-25 Payment of entitlement under financial claims scheme

treated as payment from insurer

(1) This Act applies to you as if an amount paid to you, or applied for

your benefit, to meet your entitlement under Part VC (Financial

claims scheme for policyholders with insolvent general insurers) of

the Insurance Act 1973 relating to a

general insurance policy

issued by a

general insurance company had been paid to you by

the company under the terms and conditions of the policy.

(2) To avoid doubt, subsection (1) does not affect the operation of

Part 2-5 in Schedule 1 to the Taxation Administration Act 1953.

Note:

Division 21 in Schedule 1 to the Taxation Administration Act 1953

contains special provisions about how Part 2-5 in that Schedule

operates in relation to the meeting of entitlements under Part VC of

the Insurance Act 1973.

322-30 Disposal of rights against insurer to APRA and meeting of

financial claims scheme entitlement have no CGT effects

Disregard a

capital gain or

capital loss you make because:

(a) under section 62ZZL of the Insurance Act 1973, you

dispose

of a

CGT asset consisting of your rights against a

general

insurance company to

APRA; or

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 21

(b) your entitlement under Division 3 of Part VC of that Act is

met.

Note 1:

Section 62ZZL of the Insurance Act 1973 causes you to cease to be

the owner, and APRA to become the owner, of rights against a general

insurance company relating to a general insurance policy when your

entitlement arises under Part VC of that Act in relation to the policy.

Note 2:

Division 3 of Part VC of the Insurance Act 1973 entitles persons with

valid claims based on general insurance policies issued by certain

general insurance companies that have since become insolvent to be

paid the amount of those claims by APRA.

Income Tax (Transitional Provisions) Act 1997

27 At the end of Part 3-10

Add:

Division 253--Financial claims scheme for account-holders

with insolvent ADIs

Table of Subdivisions

253-A Tax treatment of entitlements under financial claims scheme

Subdivision 253-A--Tax treatment of entitlements under

financial claims scheme

Table of sections

253-5

Application of section 253-5 of the Income Tax Assessment Act 1997

253-10

Application of sections 253-10 and 253-15 of the Income Tax Assessment

Act 1997

253-5 Application of section 253-5 of the Income Tax Assessment Act

1997

Section 253-5 of the Income Tax Assessment Act 1997 applies to

amounts paid or applied before, on or after the commencement of

that section to meet entitlements arising under Division 2AA of

Part II of the Banking Act 1959 after 17 October 2008.

Note:

Division 2AA of Part II of the Banking Act 1959 commenced on

18 October 2008.

Schedule 1 Tax treatment of pay ments under financial claims scheme

22 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

253-10 Application of sections 253-10 and 253-15 of the Income Tax

Assessment Act 1997

Sections 253-10 and 253-15 of the Income Tax Assessment Act

1997 apply to CGT events happening after 17 October 2008.

28 Part 3-35 (heading)

Repeal the heading, substitute:

Part 3-35--Insurance business

29 At the end of Part 3-35

Add:

Division 322--Assistance for policyholders with insolvent

general insurers

Table of Subdivisions

322-B Tax treatment of entitlements under financial claims scheme

Subdivision 322-B--Tax treatment of entitlements under

financial claims scheme

Table of sections

322-25

Application of section 322-25 of the Income Tax Assessment Act 1997

322-30

Application of section 322-30 of the Income Tax Assessment Act 1997

322-25 Application of section 322-25 of the Income Tax Assessment

Act 1997

Section 322-25 of the Income Tax Assessment Act 1997 applies to

amounts paid or applied before, on or after the commencement of

that section to meet entitlements arising under Part VC of the

Insurance Act 1973 after 17 October 2008.

Note:

Part VC of the Insurance Act 1973 commenced on 18 October 2008.

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 23

322-30 Application of section 322-30 of the Income Tax Assessment

Act 1997

Section 322-30 of the Income Tax Assessment Act 1997 applies to

CGT events happening after 17 October 2008.

Insurance Act 1973

30 After section 62ZZK

Insert:

62ZZKA Giving information about payments in a financial year

(1) This section applies if one or more amounts are paid to, or applied

for the benefit of, one or more persons (the recipients) in a

financial year to meet (wholly or partly) the recipients'

entitlements under this Division.

Giving each recipient an annual statement

(2) Within 14 days after the end of the financial year, APRA must give

each of the recipients a statement about the amounts paid to, or

applied for the benefit of, the recipient in the financial year. The

statement must:

(a) be in the approved form; and

(b) name the recipient; and

(d) state the total of the amounts and the total of the amounts (if

any) withheld from them under the Taxation Administration

Act 1953; and

(e) specify the financial year to which the statement relates.

Giving the Commissioner of Taxation an annual report

(3) Within 4 months after the end of the financial year, APRA must

give the Commissioner a report in the approved form about all the

amounts described in subsection (1).

Schedule 1 Tax treatment of pay ments under financial claims scheme

24 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Provisions about statements and reports in approved forms

(4) Division 388 in Schedule 1 to the Taxation Administration Act

1953 applies as if this section were a taxation law for the purposes

of that Act.

Note:

That Division sets out rules about approved forms and when they can

be given.

This section does not limit the Taxation Administration Act 1953

(5) Subsection (4) does not limit the operation of the Taxation

Administration Act 1953 in relation to APRA.

31 Application of section 62ZZKA

Section 62ZZKA of the Insurance Act 1973 applies in relation to

amounts paid or applied before, on or after the commencement of the

section.

32 At the end of subsection 62ZZM(1)

Add "under the terms and conditions of the policy".

33 After paragraph 62ZZP(4)(d)

Insert:

(da) preparing or giving a statement or report required by

section 62ZZKA;

(db) complying with an obligation under a law relating to

taxation;

Taxation Administration Act 1953

34 At the end of Part 2-5 in Schedule 1

Add:

Division 21--Entitlements relating to insolvent ADIs and

general insurers

Table of Subdivisions

Guide to Division 21

21-A

Treatment of some payments by APRA

Tax treatment of pay ments under financial claims scheme Schedule 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 25

Guide to Division 21

21-1 What this Division is about

This Part applies in relation to a payment by APRA under:

(a) Division 2AA of Part II of the Banking Act 1959

applying in relation to an account with an ADI; or

(b) Part VC of the Insurance Act 1973 applying in

relation to a general insurance policy issued by a

general insurance company;

in a way corresponding to the way this Part would have applied if

the payment had been made by the ADI or company in connection

with the account or policy.

Subdivision 21-A--Treatment of some payments by APRA

Table of sections

21-5

APRA treated like ADI or general insurance company

21-5 APRA treated like ADI or general insurance company

(1) This section applies if:

(a) an entity's entitlement under Division 2AA of Part II of the

Banking Act 1959 to be paid an amount by

APRA in

connection with the entity's account with an

ADI is met

wholly or partly; or

(b) an entity's entitlement under Part VC of the Insurance Act

1973 to be paid an amount in connection with a

general

insurance policy issued by a

general insurance company is

met wholly or partly.

Note 1:

Division 2AA of Part II of the Banking Act 1959 entitles entities that

have certain accounts with certain insolvent ADIs to be paid amounts

by APRA worked out by reference to the balance of those accounts.

Note 2:

Part VC of the Insurance Act 1973 entitles entities with valid claims

against certain insolvent general insurance companies under certain

general insurance policies issued by those companies to be paid

amounts by APRA.

Schedule 1 Tax treatment of pay ments under financial claims scheme

26 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(2) This Part applies in relation to

APRA and the meeting of the

entitlement in a way corresponding to the way in which this Part

would have applied in relation to the

ADI or

general insurance

company doing, in connection with the account or policy, whatever

was done in meeting the entitlement.

Example: APRA (or APRA's agent or delegate) pays an entity an amount of the

entity's entitlement relating to an account with an ADI. This Part

applies in relation to APRA and the payment in a way corresponding

to the way in which this Part would have applied in relation to the

ADI had the ADI made a payment at that time of that amount under

the arrangements for keeping the account.

35 Application of Division 21 in Schedule 1 to the Taxation

Administration Act 1953

(1)

Division 21 in Schedule 1 to the Taxation Administration Act 1953

applies in relation to things done before, on or after the commencement

of the Division to meet entitlements arising after 17 October 2008 under

the following provisions:

(a) Division 2AA of Part II of the Banking Act 1959;

(b) Part VC of the Insurance Act 1973.

Note:

Division 2AA of Part II of the Banking Act 1959 and Part VC of the Insurance Act 1973

commenced on 18 October 2008.

(2)

However, this item does not:

(a) require APRA to do anything APRA would have been

required by Part 2-5 in Schedule 1 to the Taxation

Administration Act 1953 to do before the commencement of

this item had Division 21 in that Schedule commenced on

18 October 2008; or

(b) make APRA liable to a criminal or administrative penalty for

an omission occurring before the commencement of this

item.

CGT concessions for small business Schedule 2

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 27

Schedule 2

CGT concessions for small

business

Part 1

Main amendments

Income Tax Assessment Act 1997

1 Subparagraph 152-10(1)(c)(iii)

After "asset is an", insert "interest in an".

2 At the end of paragraph 152-10(1)(c) (before the note)

Add:

(iv) the conditions mentioned in subsection (1A) or (1B) are

satisfied in relation to the CGT asset in the income year;

3 Paragraph 152-10(1)(c) (note)

Repeal the note, substitute:

Note:

For determining whether an entity is a small business entity, see

Subdivision 328-C (as affected by section 152-48).

4 After subsection 152-10(1)

Insert:

Passively held assets--affiliates and entities connected with you

(1A) The conditions in this subsection are satisfied in relation to the

CGT asset in the income year if:

(a) your

affiliate, or an entity that is

connected with you, is a

small business entity for the income year; and

(b) you do not carry on a

business in the income year (other

than in partnership); and

not an interest in an asset of the partnership; and

(d) in any case--the small business entity referred to in

paragraph (a) is the entity that, at a time in the income year,

carries on the business (as referred to in subparagraph

152-40(1)(a)(ii) or (iii) or paragraph 152-40(1)(b)) in relation

to the CGT asset.

Schedule 2 CGT concessions for small business

Part 1 Main amendments

28 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Note 1:

For determining whether an entity is a small business entity, see

Subdivision 328-C (as affected by section 152-48).

Note 2:

For businesses that are winding up, see section 152-49 and subsection

328-110(5).

Passively held assets--partnerships

(1B) The conditions in this subsection are satisfied in relation to the

CGT asset in the income year if:

(a) you are a partner in a partnership in the income year; and

(b) the partnership is a

small business entity for the income

year; and

business in the income year (other

than in partnership); and

(d) the CGT asset is not an interest in an asset of the partnership;

and

(e) the business you carry on as a partner in the partnership

referred to in paragraph (a) is the business that you, at a time

in the income year, carry on (as referred to in subparagraph

152-40(1)(a)(i) or paragraph 152-40(1)(b)) in relation to the

CGT asset.

Note 1:

For determining whether an entity is a small business entity, see

Subdivision 328-C (as affected by section 152-48).

Note 2:

For businesses that are winding up, see section 152-49 and subsection

328-110(5).

5 Before subsection 152-10(2)

Insert:

Additional basic conditions for shares in a company or interests in

a trust

6 Before subsection 152-10(3)

Insert:

Extra conditions for some concessions

7 Before subsection 152-10(4)

Insert:

CGT concessions for small business Schedule 2

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 29

Special rules for certain CGT events

8 Paragraphs 152-40(1)(a) and (b)

Repeal the paragraphs, substitute:

(a) you own the asset (whether the asset is tangible or intangible)

and it is used, or held ready for use, in the course of carrying

on a

business that is carried on (whether alone or in

partnership) by:

(i) you; or

(ii) your

affiliate; or

(iii) another entity that is

connected with you; or

(b) if the asset is an intangible asset--you own it and it is

inherently connected with a business that is carried on

(whether alone or in partnership) by you, your affiliate, or

another entity that is connected with you.

9 Subsection 152-40(1) (note 2)

Omit "subparagraph (1)(a)(ii)", substitute "subparagraph (1)(a)(iii)".

10 At the end of subsection 152-40(1)

Add:

Note 3:

An example of an asset that is inherently connected with a business is

goodwill or the benefit of a restrictive covenant.

Note 4:

For businesses that are winding up, see section 152-49 and subsection

328-110(5).

11 Subsection 152-40(1A)

Repeal the subsection.

12 Subsection 152-40(2)

Omit "or (1A)".

13 Subsection 152-42(1)

Omit "subparagraph 152-40(1)(a)(ii)", substitute "subparagraph

152-40(1)(a)(iii)".

14 After section 152-45

Insert:

Schedule 2 CGT concessions for small business

Part 1 Main amendments

30 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Treatment of passively held CGT assets

152-47 Spouses or children taken to be affiliates for certain passively

held CGT assets

(1) This section applies if:

(a) one entity (the asset owner) owns a

CGT asset (whether the

asset is tangible or intangible); and

(b) either:

(i) the asset is used, or held ready for use, in the course of

carrying on a

business in an income year by another

entity (the business entity); or

(ii) the asset is inherently connected with a business that is

carried on in an income year by another entity (the

business entity); and

affiliate

of, or

connected with, the asset owner.

(2) For the purposes of this Subdivision, in determining whether the

business entity is an

affiliate of, or is

connected with, the asset

owner, take the following to be affiliates of an individual:

(a) a

spouse of the individual;

(b) a

child of the individual, being a child who is under 18

years.

(3) If an entity is an

affiliate of, or

connected with, another entity as

a result of subsection (2), then the

spouse or

child mentioned in

that subsection is, in addition, taken to be an affiliate of the

individual for the purposes of this Subdivision, and for the

purposes of sections 328-110 to 328-125 to the extent that they

relate to this Subdivision.

Example: The spouse or child mentioned in subsection (2) is taken to be an

affiliate of the individual for the purposes of working out which

entities are affiliates of or connected with entities under

section 152-48.

(4) To avoid doubt, subsection (2) applies:

(a) for the purposes of reducing or disregarding, under this

Division, any

capital gain from any

CGT asset; but

(b) only while:

(i) a

spouse remains a spouse; or

CGT concessions for small business Schedule 2

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 31

(ii) a

child remains a child who is under 18 years.

152-48 Working out an entity's aggregated turnove r for passively

held CGT assets

(1) This section applies for the purposes of section 328-115 to

determine whether an entity (the test entity) is a

small business

entity for the purposes of subsection 152-10(1A) or (1B).

(2) An entity (the deemed entity) is taken to be an

affiliate of, or

connected with, the test entity (as the case requires) if:

(a) the deemed entity is an affiliate of, or connected with, the

entity that owns the

CGT asset referred to in subsection

152-10(1A) or (1B); and

(b) the deemed entity is not (apart from this section) an affiliate

of, or connected with, the test entity.

(3) If:

(a) the entity that owns the

CGT asset referred to in subsection

152-10(1B) is a partner in 2 or more partnerships; and

(b) the asset is:

(i) used, or held ready for use, in the course of carrying on

business that is carried on by at least 2 of those

partnerships; or

(ii) inherently connected with businesses that are carried on

by at least 2 of those partnerships;

then, each partnership referred to in paragraph (b) that is not (apart

from this section)

connected with the test entity is taken to be

connected with the test entity.

152-49 Businesses that are winding up

(1) This section applies to an entity in an income year (the CGT event

year) if:

(a) a

business that the entity previously carried on (including in

partnership) is being wound up in that year; and

(b) either:

(i) the asset was used, or held ready for use, in the course

of carrying on the business at a time in the income year

in which the business stopped being carried on; or

Schedule 2 CGT concessions for small business

Part 1 Main amendments

32 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(ii) if the asset is an intangible asset--the asset was

inherently connected with the business that was carried

on at a time in the income year in which the business

stopped being carried on.

(2) For the purposes of paragraphs 152-40(1)(a) and (b) as they apply

for the purposes of paragraphs 152-10(1A)(d) and (1B)(e):

(a) the entity is taken to carry on the

business at a time in the

CGT event year; and

(b) either:

(i) the

CGT asset is taken to be used, or held ready for

use, in the course of carrying on the business at that

time; or

(ii) if the asset is an intangible asset--the CGT asset is

taken to be inherently connected with the business at

that time.

Note:

The entity might also be taken to be a small business entity in the

CGT event year (see subsection 328-110(5)).

15 At the end of subsection 328-115(1)

Add:

Note:

For small business relief purposes, additional entities may be treated

as being connected with you or your affiliate under section 152-48.

16 At the end of section 328-130 (before the example)

Add:

Note:

For small business relief purposes, a spouse or a child under 18 years

may also be an affiliate under section 152-47.

CGT concessions for small business Schedule 2

Other amend ments Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 33

Part 2

Other amendments

Income Tax Assessment Act 1936

17 At the end of subsection 109(1)

Add:

Note:

This section does not apply to an amount if the amount is paid to a

CGT concession stakeholder under subsection 152-325(1) of the

Income Tax Assessment Act 1997 (see subsection 152-325(11)).

18 Subsection 109C(1) (note 1)

Repeal the note, substitute:

Note 1:

Some payments do not give rise to dividends under Subdivision D.

This section also does not give rise to a dividend if the amount is paid

to a CGT concession stakeholder under subsection 152-325(1) of the

Income Tax Assessment Act 1997 (see subsection 152-325(11)).

Income Tax Assessment Act 1997

19 Section 11-

55 (after table item headed "bonds")

Insert:

capital gains tax

payments made by an interposed entity in relation to the

small business retirement exemption ................................

152-310(3)

20 At the end of subsection 104-197(1)

Add:

Note:

You do not have to satisfy the basic conditions in Subdivision 152-A

for the gain in relation to CGT event J5 (see subsection 152-305(4)).

21 At the end of subsection 104-198(1)

Add:

Note:

You do not have to satisfy the basic conditions in Subdivision 152-A

for the gain in relation to CGT event J6 (see subsection 152-305(4)).

22 Section 152-5

Omit:

Schedule 2 CGT concessions for small business

Part 2 Other amendments

34 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

There are limitations on the availability of the small business

concessions for CGT events J2, J5 and J6.

Substitute:

There are limitations on the availability of the small business

concessions for CGT events J2, J5 and J6.

You do not need to satisfy the basic conditions for the retirement

exemption in relation to CGT events J5 and J6.

23 Subsection 152-10(4) (note)

Omit "Note", substitute "Note 1".

24 At the end of subsection 152-10(4)

Add:

Note 2:

This Subdivision does not apply to CGT events J5 and J6 in relation to

the retirement exemption (see subsection 152-305(4)).

25 Paragraph 152-20(2)(a)

After "first-mentioned entity" (second occurring), insert ", but include

any liabilities related to any such shares, units or interests".

26 Paragraph 152-40(4)(e)

Omit "in the course of carrying on the

business mentioned in

subsection (1)", substitute "by you".

27 After subsection 152-40(4)

Insert:

(4A) For the purposes of paragraph (4)(e), in determining the main use

of an asset:

(a) disregard any personal use or enjoyment of the asset by you;

and

(b) treat any use by your

affiliate, or an entity that is

connected

with you, as your use.

28 Group heading before section 152-80

Repeal the heading, substitute:

CGT concessions for small business Schedule 2

Other amend ments Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 35

CGT event happens to asset or interest within 2 years of an

individual's death

29 Section 152-80 (heading)

Repeal the heading, substitute:

152-80 CGT event happens to an asset or inte rest within 2 years of

individual's death

30 Paragraphs 152-80(1)(a) and (b)

Repeal the paragraphs, substitute:

(a) a

CGT asset:

(i) forms part of the estate of a deceased individual; or

(ii) was owned by joint tenants and one of them dies; and

(b) any of the following applies:

(i) the asset devolves to the individual's

legal personal

representative;

(ii) the asset

passes to a beneficiary of the individual;

(iii) an interest in the asset is

acquired by the surviving joint

tenant or tenants (as the case may be) as mentioned in

section 128-50;

(iv) the asset devolves to a trustee of a trust established by

the will of the individual; and

31 Paragraph 152-80(1)(c)

Omit "the individual", substitute "the deceased individual referred to in

subparagraph (a)(i) or (ii)".

32 Subsection 152-80(2)

Repeal the subsection, substitute:

(2) A person mentioned in subsection (2A) is entitled to reduce or

disregard a

capital gain under this Division in the same way as the

deceased individual would have been entitled to as if:

(a) paragraph 152-105(d) only required the deceased individual

to have been 55 or over, or permanently incapacitated, at the

time of the

CGT event referred to in paragraph (1)(c) of this

section; and

(b) paragraph 152-305(1)(b) did not apply.

Schedule 2 CGT concessions for small business

Part 2 Other amendments

36 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(2A) The following persons (as the case requires) are entitled to reduce

or disregard a

capital gain under this Division in accordance with

subsection (2):

(a) the

legal personal representative of the individual;

(b) the beneficiary of the individual;

(d) the trustee or a beneficiary of the trust.

33 Section 152-300

Omit:

You may choose not to apply the concession in section 152-205

(small business 50% reduction) before this one. For an additional

concession, see also Subdivision 152-E (small business roll-over).

Substitute:

You may choose not to apply the concession in section 152-205

(small business 50% reduction) before this one. For an additional

concession, see also Subdivision 152-E (small business roll-over).

You do not need to satisfy the basic conditions for this exemption

in relation to CGT events J5 and J6.

34 After subsection 152-305(1)

Insert:

(1A) If you receive the

capital proceeds from the

CGT event in

instalments, paragraphs (1)(b) and (c) apply to each instalment in

succession (up to the asset's

CGT exempt amount).

35 At the end of section 152-305

Add:

(4) Paragraphs (1)(a) and (2)(a) do not apply if the

capital gain arose

from

CGT event J5 or J6.

36 Subsection 152-310(3)

Repeal the subsection, substitute:

CGT concessions for small business Schedule 2

Other amend ments Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 37

Additional consequences in relation to interposed entities

(3) If:

(a) an entity (the paying entity) receives a payment (whether

directly or indirectly through one or more interposed entities)

that a company or trust makes to comply with

section 152-325; and

(b) the paying entity passes on the payment to the

CGT

concession stakeholder or another interposed entity;

then:

assessable income; and

(d) the payment received by the paying entity is not assessable

income and is not

exempt income.

37 Subsection 152-325(1)

After "payment", insert "(whether directly or indirectly through one or

more interposed entities)".

38 Subsection 152-325(9)

Repeal the subsection, substitute:

Payments are not dividends or frankable distributions

(9) Subsection (10) applies if:

(a) a company makes a payment to comply with subsection (1)

to:

(i) a

CGT concession stakeholder; or

(ii) an interposed entity, in relation to a CGT concession

stakeholder; or

(b) both of the following apply:

(i) an interposed entity receives a payment (whether

directly or indirectly through one or more interposed

entities) that a company or trust makes to comply with

subsection (1), in relation to a CGT concession

stakeholder;

(ii) the interposed entity passes on the payment to the CGT

concession stakeholder or another interposed entity.

Schedule 2 CGT concessions for small business

Part 2 Other amendments

38 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

(10) This Act applies to the payment, to the extent that it is less than or

equal to the amount mentioned in subsection (3) for the

stakeholder, as if:

(a) it were not a

dividend; and

(b) it were not a

frankable distribution.

(11) Subsection (10) applies in relation to the payment despite

section 109 and Division 7A of Part III of the Income Tax

Assessment Act 1936.

39 At the end of section 328-110

Add:

Partners in a partnership

(6) A person who is a partner in a partnership in an income year is not,

in his or her capacity as a partner, a small business entity for the

income year.

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

40 Item 52 of Schedule 4 (table item 8)

Repeal the table item.

CGT concessions for small business Schedule 2

Application provisions Part 3

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 39

Part 3

Application provisions

41 Application of amendments made by Part 1

(1)

The amendments made by Part 1 of this Schedule apply to CGT events

(other than CGT events to which subitem (2) applies) happening in the

2007-08 income year and later income years.

(2)

Subitem (1) does not apply in relation to a CGT event (the excluded

event) if:

(a) the excluded event happens in relation to a CGT asset before

the day on which the Bill for this Act is introduced into the

Parliament; and

(b) an entity makes a capital gain from the excluded event; and

Assessment Act 1997 (as in force immediately before Part 1

of this Schedule commences) are satisfied for the gain; and

(d) the basic conditions would not be satisfied for the gain if:

(i) subsection 152-40(1A) of that Act (as in force

immediately before Part 1 of this Schedule commences)

did not apply to the entity; or

(ii) section 152-47 of that Act (as in force immediately after

Part 1 of this Schedule commences) applied to the

entity.

(3)

The amendments made by Part 1 of this Schedule apply to excluded

events happening on or after the day on which the Bill for this Act is

introduced into the Parliament.

42 Application of amendments made by items 25 to 27

The amendments made by items 25 to 27 of this Schedule apply to CGT

events that happen on or after the day on which this Act receives the

Royal Assent.

43 Application of amendments made by items 30 to 32

The amendments made by items 30 to 32 of this Schedule apply to CGT

events happening in the 2006-07 income year and later income years.

44 Application of amendment made by item 34

Schedule 2 CGT concessions for small business

Part 3 Application provisions

40 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

The amendment made by item 34 applies to proceeds received in the

2007-08 income year and later income years.

45 Application of amendment made by item 35

The amendment made by item 35 of this Schedule applies to CGT

events happening in the 2006-07 income year and later income years.

46 Application of amendments made by items 36 to 38

The amendments made by items 36 to 38 of this Schedule apply to

payments that are made (whether by a company or trust to comply with

section 152-325 of the Income Tax Assessment Act 1997 or by an

interposed entity) on or after the day on which this Act receives the

Royal Assent.

47 Application of amendment made by item 39

The amendment made by item 39 of this Schedule applies to

assessments for the 2007-08 income year and later income years.

48 Transitional: choice

(1)

Subitem (2) applies in relation to:

(a) a CGT event that happened before the day on which this Act

receives the Royal Assent; and

(b) an entity who becomes eligible to make a choice under

Division 152 of the Income Tax Assessment Act 1997 in

relation to that event because of this Schedule.

(2)

Despite subsection 103-25(1) of the Income Tax Assessment Act 1997,

any such choice must be made by the entity by the latest of:

(a) the day the entity lodges its income tax return for the income

year in which the relevant CGT event happened; and

(b) 12 months after the day on which this Act receives the Royal

Assent; and

Tax benefits and capital gains tax Schedule 3

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 41

Schedule 3

Tax benefits and capital gains tax

Income Tax Assessment Act 1997

1 Paragraph 118-37(1)(h)

Repeal the paragraph, substitute:

(h) a right or entitlement to a

tax offset, a

deduction, or a

similar benefit under an

Australian law, a

foreign law or a

law of part of a foreign country;

2 Application

The amendment made by this Schedule applies in relation to a CGT

event happening in:

(a) the 2009-10 income year; or

(b) a later income year.

Schedule 4 National Urban Water and Desalination Plan

Part 1 Main amendments

42 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Schedule 4

National Urban Water and

Desalination Plan

Part 1

Main amendments

Income Tax Assessment Act 1936

1 Subsection 73I(4) (note)

Omit "section 67-25", substitute "section 67-23".

Income Tax Assessment Act 1997

2 Section 13-

1 (after table item headed "unit trusts")

Insert:

water

urban water tax offset ................................................................

Subdivision 402-

3 After section 67-20

Insert:

67-23 Refundable tax offsets

The following

tax offsets are subject to the refundable tax offset

rules:

Refundable tax offsets

Item Subject matter

Tax offset

private health insurance

private health insurance tax offsets under

Subdivision 61-G, other than those arising

under subsection 61-205(2)

children

first child tax o ffsets under Subdivision 61-I

no-TFN contributions

income

the

tax offset availab le under

Subdivision 295-J

films

the

tax offsets available under Division 376

National Urban Water and

Desalination Plan

urban water tax offset under

Subdivision 402-W

National Urban Water and Desalination Plan Schedule 4

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 43

Refundable tax offsets

Item Subject matter

Tax offset

life insurance company's

subsidiary join ing

consolidated group

the

tax offset availab le under subsection

713-545(5)

research and development

the

tax offset availab le under section 73I of

the Income Tax Assessment Act 1936

Note 1:

Subsection 61-205(2) of this Act deals with tax offsets for trustees

who are assessed and liable to pay tax under section 98 of the Income

Tax Assessment Act 1936.

Note 2:

For the tax offsets available under Division 207 and

Subdivision 210-H (franked distributions), see section 67-25.

4 Section 67-25 (heading)

Repeal the heading, substitute:

67-25 Refundable tax offsets--franked distributions

5 Subsection 67-25(1) (heading)

Repeal the heading.

6 Subsections 67-25(2) to (6)

Repeal the subsections.

7 Subsection 376-10(1) (note)

Omit "subsection 67-25(2A)", substitute "section 67-23".

8 Subsection 376-35(1) (note)

Omit "subsection 67-25(2A)", substitute "section 67-23".

9 Subsection 376-55(1) (note)

Omit "subsection 67-25(2A)", substitute "section 67-23".

10 After Division 396

Insert:

Division 402--Environment protection expenditure

Table of Subdivisions

Schedule 4 National Urban Water and Desalination Plan

Part 1 Main amendments

44 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Guide to Division 402

402-W Urban water tax offset

Guide to Division 402

402-1 What this Division is about

This Division provides for certain tax measures in relation to

environment protection.

Subdivision 402-W--Urban water tax offset

Guide to Subdivision 402-W

402-750 What this Subdivision is about

A company may get a refundable tax offset under the National

Urban Water and Desalination Plan for a project that the Water

Minister certifies as being eligible for the tax offset.

The amount of the urban water tax offset is specified in the

certificate.

The urban water tax offset is only available for the income years

2009-10 to 2012-13.

Note:

This Subdivision will be repealed on 1 July 2014: see

Part 2 of Schedule 4 to the Tax Laws Amendment (2009

Measures No. 2) Act 2009.

Table of sections

402-755 Entitlement to urban water tax offset

402-760 Certificates

402-765 Amount of urban water tax offset

402-770 Revoking certificates

402-775 AAT review

402-780 Guidelines

National Urban Water and Desalination Plan Schedule 4

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 45

402-755 Entitle ment to urban wate r tax offset

(1) A company is entitled to a

tax offset for a project for an income

year if the

Water Minister certifies under section 402-760 that the

project is eligible for the tax offset for the year.

(2) The amount of the

tax offset is the amount specified in the

certificate.

Note:

The tax offset is subject to the refundable tax offset rules: see

section 67-23.

402-760 Certificates

Issuing certificates

(1) The

Water Minister may certify, in writing, to a company that a

project is eligible for the urban water tax offset for an income year,

if:

(a) the eligible up-front capital costs of the project (within the

meaning given by the guidelines made under

section 402-780) are:

(i) in the case of a stormwater harvesting project--$4

million or more; or

(ii) in any other case--$30 million or more; and

(b) the other requirements specified in those guidelines are met.

(2) The

Water Minister may only issue certificates for the following

income years:

(a) the 2009-10 income year;

(b) the 2010-11 income year;

(d) the 2012-13 income year.

(3) In deciding whether to issue a certificate, the

Water Minister must

comply with the guidelines made under section 402-780.

(4) If the

Water Minister issues a certificate under this section, he or

she must, within 30 days, give a copy to the Commissioner.

Schedule 4 National Urban Water and Desalination Plan

Part 1 Main amendments

46 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Refusal to issue certificates

(5) If the

Water Minister refuses to issue a certificate to a company

under this section, he or she must, within 30 days, give written

notice of the refusal to the company.

(6) The notice must explain that the company may apply to the

AAT

for review of the

Water Minister's refusal to issue a certificate to

the company (see section 402-775).

402-765 Amount of urban wate r tax offset

(1) A certificate issued under section 402-760 must specify the amount

of the

tax offset.

(2) In specifying an amount, the

Water Minister must comply with the

guidelines made under section 402-780.

(3) The total of the amounts specified in certificates issued to a

company for a stormwater harvesting project for one or more

income years:

(a) must not exceed 50% of the eligible up-front capital costs of

the project (within the meaning given by the guidelines made

under section 402-780); and

(b) must not exceed $20 million.

(4) The total of the amounts specified in certificates issued to a

company for a project (other than a stormwater harvesting project)

for one or more income years:

(a) must not exceed 10% of the eligible up-front capital costs of

the project (within the meaning given by the guidelines made

under section 402-780); and

(b) must not exceed $100 million.

(5) A certificate issued to a company under section 402-760 must

explain that the company may apply to the

AAT for review of the

amount specified in the certificate (see section 402-775).

National Urban Water and Desalination Plan Schedule 4

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 47

402-770 Revoking certificates

Revoking certificates

(1) The

Water Minister may revoke a certificate issued to a company

under section 402-760.

(2) However, the

Water Minister may only do so in the circumstances

provided for in the guidelines made under section 402-780.

(3) If the

Water Minister revokes the certificate, he or she must,

within 30 days, give to the company and to the Commissioner:

(a) written notice of the revocation; and

(b) written reasons for the decision to revoke the certificate.

(4) The notice given to the company must explain that the company

may apply to the

AAT for review of the

Water Minister's

revocation of the certificate (see section 402-775).

Revoked certificates taken never to have been issued

(5) If the

Water Minister revokes a certificate under this section, the

certificate is taken, for the purposes of this Subdivision, never to

have been issued.

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

prevent the amendment of an assessment for the purpose of giving

effect to this Subdivision for an income year if:

(a) a certificate issued to a company is revoked under this

section after the time the company lodged its

income tax

return for the income year; and

(b) the amendment is made at any time during the period of 4

years starting immediately after the revocation of the

certificate.

Note:

Section 170 of the Income Tax Assessment Act 1936 specifies the

usual period within which assessments may be amended.

Certificates cannot be varied

(7) A certificate issued under section 402-760 cannot be varied.

Schedule 4 National Urban Water and Desalination Plan

Part 1 Main amendments

48 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

402-775 AAT review

A company may apply to the

AAT for review of a decision of the

Water Minister under this Subdivision:

(a) to refuse to issue a certificate to the company; or

(b) to specify a particular amount in a certificate issued to the

company; or

402-780 Guidelines

(1) The

Water Minister must, by legislative instrument, make

guidelines about issuing and revoking certificates under this

Subdivision.

(2) Despite subsection 14(2) of the Legislative Instruments Act 2003,

the guidelines may make provision in relation to a matter by

applying, adopting or incorporating any matter contained in an

instrument or other writing as in force or existing from time to time

if:

(a) the instrument or other writing is issued by the

Water

Minister or by the

Water Department; and

(b) the instrument or other writing, as in force or existing from

time to time, is publicly available.

(3) A legislative instrument made under subsection (1) does not take

effect before the end of the period in which it could be disallowed

in either House of the Parliament.

11 Subsection 995-1(1)

Insert:

Water Department means the Department that:

(a) deals with matters arising under section 1 of the Water Act

2007; and

(b) is administered by the

Water Minister.

12 Subsection 995-1(1)

Insert:

Water Minister means the Minister administering section 1 of the

Water Act 2007.

National Urban Water and Desalination Plan Schedule 4

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 49

Taxation (Interest on Overpayments and Early Payments) Act

1983

13 Subsection 3(1) (note at the end of the definition of

income tax crediting amount)

Omit "Section 67-25", substitute "Division 67".

14 Subsection 8E(1) (note)

Omit "Section 67-25", substitute "Division 67".

15 Subsection 8G(1) (note)

Omit "Section 67-25", substitute "Division 67".

Schedule 4 National Urban Water and Desalination Plan

Part 2 Sunsetting on 1 July 2014

50 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Part 2

Sunsetting on 1 July 2014

Income Tax Assessment Act 1997

16 Section 13-

1 (table item headed "water")

Repeal the item.

17 Section 67-23 (table item 25)

Repeal the item.

18 Subdivision 402-W

Repeal the Subdivision.

19 Transitional

revoking certificates

Revoking certificates

(1)

Subject to subitem (3) and despite the repeal of section 402-770 of the

Income Tax Assessment Act 1997 by this Part, that section continues to

apply, after the commencement of this Part, to a certificate issued under

former section 402-760 of that Act until the end of the period of 10

years starting on the day the certificate was issued.

(2)

For the purposes of subitem (1), a reference in section 402-770 of the

Income Tax Assessment Act 1997 to guidelines made under

section 402-780 of that Act is taken, from the commencement of this

Part, to be a reference to those guidelines as in force immediately before

that commencement.

(3)

Despite the repeal of subsection 402-770(6) of the Income Tax

Assessment Act 1997 by this Part, that subsection continues to apply,

after the commencement of this Part, in relation to the revocation of a

certificate occurring before or after that commencement.

AAT review

(4)

Despite the repeal of section 402-775 of the Income Tax Assessment Act

1997 by this Part, that section continues to apply, after the

commencement of this Part, in relation to a decision to revoke a

certificate made before or after that commencement.

Deductible gift recipients Schedule 5

Amend ments commencing on Royal Assent Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 51

Schedule 5

Deductible gift recipients

Part 1

Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

1 Subsection 30-20(2) (at the end of the table)

Add:

1.2.18

The Australasian College for Emergency

Medicine

the gift must be made

after 2 February 2009

2 Subsection 30-25(2) (table item 2.2.34)

Omit "1 July 2008", substitute "1 July 2009".

3 Subsection 30-40(2) (at the end of the table)

Add:

3.2.11

Grattan Institute

the gift must be made

after 4 March 2009 and

before 5 March 2011

4 Subsection 30-45(2) (after table item 4.2.31)

Insert:

4.2.31

ACT Region Crime Stoppers Limited

the gift must be made

after 12 February 2009

5 Section 30-105 (table item 13.2.8)

Omit "1 January 2008", substitute "1 January 2011".

6 Section 30-105 (table item 13.2.12) (the item 13.2.12 dealing

with the Bunbury Diocese Cathedral Rebuilding Fund)

Repeal the item, substitute:

13.2.14

Bunbury Diocese Cathedral Rebuilding Fund the gift must be made

after 18 December 2006

and before 19 December

2010

7 Section 30-105 (at the end of the table)

Add:

Schedule 5 Deductible gift recipients

Part 1 A mend ments commencing on Royal Assent

52 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

13.2.17 PWR Melbourne 2009 Limited

the gift must be made

after 2 February 2009 and

before 1 January 2010

8 Section 30-315 (after table item 2AAA)

Insert:

2AAB

ACT Region Crime Stoppers Limited

item 4.2.31A

9 Section 30-315 (after table item 9AA)

Insert:

9AB

Australasian College for Emergency

Medicine

item 1.2.18

10 Section 30-315 (table item 28ABA)

Omit "item 13.2.12", substitute "13.2.14A".

11 Section 30-315 (after table item 52)

Insert:

52A

Grattan Institute

item 3.2.11

12 Section 30-315 (after table item 93)

Insert:

PWR Melbourne 2009 Limited

item 13.2.17

ABN changes Schedule 6

Amend ments commencing on Royal Assent Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 55

Schedule 6

ABN changes

Part 1

Amendments commencing on Royal Assent

A New Tax System (Australian Business Number) Act 1999

1 Subsection 9(1)

After "apply", insert "to the

Registrar".

2 Subsections 9(2) and (3)

Repeal the subsections, substitute:

(2)

Your application must be in the

approved form.

(3) That form may request, but not compel,

you to provide your

TFN

or that of an

associate.

Note:

Including a TFN in an application will not be an offence against

subsection 8WB(1) of the Taxation Administration Act 1953 (see

paragraph 8WB(1A)(a) of that Act).

3 After paragraph 10(1)(c)

Insert:

(ca) if details about an

associate of yours were requested in the

approved form for registration--the Registrar is satisfied

that the identity of the associate has been established; and

4 Paragraph 10(2)(b)

After "your identity", insert ", or that of an

associate referred to in

paragraph (1)(ca),".

5 At the end of subsection 11(1)

Add:

Note:

A decision setting the date of effect of your registration is a

reviewable ABN decision.

6 Subsection 11(3) (note)

Omit "a registered entity", substitute "an entity registered under this

section".

Schedule 6 ABN changes

Part 1 A mend ments commencing on Royal Assent

56 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

7 At the end of subsection 12(1)

Add:

Note:

This subsection applies only to entities registered under section 11.

8 Subsection 13(1) (note)

Repeal the note, substitute:

Note:

A decision refusing to register you is a reviewable ABN decision.

9 Paragraph 14(2)(b)

Repeal the paragraph, substitute:

(b) must be in the

approved form.

10 Subsection 14(2) (note)

Repeal the note.

11 Section 15

Repeal the section, substitute:

15 Obligation to give Registrar information if requested

(1) The

Registrar may request an

entity to give the Registrar

information in accordance with the following table. The entity

must comply with the request.

Entities that can be requested to give information

Item

These entities ...

can be requested to give this

information ...

You, if you are registered in the

Australian Business Register

information that is relevant to:

(a) your entitlement to be registered;

(b) confirming your identity; or

you in the Register

Your

associate (if any) entered in

the

Australian Business Register in

relation to you

information relevant to confirming

the associate's identity

Note:

This Act is a taxation law for the purposes of the Taxation

Administration Act 1953. If an entity fails to comply with this

ABN changes Schedule 6

Amend ments commencing on Royal Assent Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 57

subsection, the entity commits an offence against section 8C of that

Act.

(2) A request under subsection (1) to an

entity:

(a) is to be made by notice in writing to the entity; and

(b) may ask the entity to give the information in writing; and

(i) the information the entity is to give; and

(ii) the period within which the entity is to give the

information.

The period specified under subparagraph (c)(ii) must end at least

14 days after the notice is given.

Note:

Section 12 deals with giving notice to an entity registered under

section 11.

(3) If the request asks the

entity to give the information in writing, the

information:

(a) must be lodged with the

Registrar; and

(b) must be in the

approved form.

12 Subsection 17(1) (note)

Omit "a registered entity", substitute "an entity registered under

section 11".

13 Subsection 18(1) (note)

Omit "Note", substitute "Note 1".

14 At the end of subsection 18(1)

Add:

Note 2:

A decision to cancel your registration is a reviewable ABN decision.

15 Subsection 18(2) (note 1)

Repeal the note, substitute:

Note 1:

A decision setting the date of effect of a cancellation is a reviewable

ABN decision.

16 Subsection 18(2) (note 2)

Omit "a registered entity", substitute "an entity registered under

section 11".

Schedule 6 ABN changes

Part 1 A mend ments commencing on Royal Assent

58 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

17 Subsection 18(4)

Repeal the subsection, substitute:

At your request

(4) The

Registrar may cancel

your registration if you apply to the

Registrar for cancellation of the registration in the

approved form.

Note:

A decision to refuse to cancel your registration is a reviewable ABN

decision.

18 Subsection 18(5) (note)

Repeal the note, substitute:

Note 1:

Section 12 deals with giving notice to an entity registered under

section 11.

19 At the end of subsection 18(5)

Add:

Note 2:

A decision setting the date of effect of a cancellation is a reviewable

ABN decision.

20 Subsection 19(2) (note)

Omit "a registered entity", substitute "an entity registered under

section 11".

21 Division 7

Repeal the Division.

22 Division 8

Repeal the Division, substitute:

Division 8--Review of reviewable ABN decisions

21 Review of reviewable ABN decisions

(1)

You may object, in the manner set out in Part IVC of the Taxation

Administration Act 1953, against a decision you are dissatisfied

with that is a

reviewable ABN decision.

(2) Each of the following decisions is a reviewable ABN decision:

ABN changes Schedule 6

Amend ments commencing on Royal Assent Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 59

Reviewable ABN decisions

Item

Decision

Provision under

which decision is

made

Setting the date of effect of

your registration

subsection 11(1)

Refusing to register

you

section 13

Cancelling

your registration

subsection 18(1)

Refusing to cancel

your registration

subsection 18(4)

Setting the date of effect of a cancellation

subsection 18(2) or (5)

Refusing an application not to disclose details

subsection 26(4) or

27(7)

(3) Part IVC of the Taxation Administration Act 1953 applies in

relation to a

reviewable ABN decision as if references in that Part

to the Commissioner of Taxation were references to the

Registrar.

23 After paragraph 25(2)(a)

Insert:

(aa) details about the entity's

associates that were requested in

the

approved form for registration in that Register;

24 At the end of subsection 26(4)

Add:

Note:

A decision refusing an application not to disclose details is a

reviewable ABN decision.

25 At the end of subsection 27(7)

Add:

Note:

A decision refusing an application not to disclose details is a

reviewable ABN decision.

26 Division 10A

Repeal the Division.

27 After section 29

Insert:

Schedule 6 ABN changes

Part 1 A mend ments commencing on Royal Assent

60 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

29A Adjustments to details

(1) This section applies if the

Registrar is satisfied that details entered

in relation to an

entity in the

Australian Business Register are

incorrect and the Registrar has access to details that the Registrar

believes to be the correct ones.

(2) The

Registrar may adjust the details accordingly.

28 Section 41

Insert:

approved form has the same meaning as in the

ITAA 1997.

29 Section 41 (definition of electronic signature)

Repeal the definition.

30 Section 41 (definition of lodged electronically)

Repeal the definition.

31 Section 41

Insert:

reviewable ABN decision has the meaning given by section 21.

32 Application

(1)

The amendments made by items 1, 2, 3, 4, 23 and 28 of this Schedule

apply in relation to applications made under section 9 of the A New Tax

System (Australian Business Number) Act 1999 after the

commencement of those items.

(2)

The amendments made by items 9 and 10 of this Schedule apply in

relation to changes in circumstances, for the purposes of paragraph

14(1)(c) of that Act, happening after the commencement of those items.

(3)

The amendment made by item 11 of this Schedule applies in relation to

requests given under subsection 15(1) of that Act after the

commencement of that item.

(4)

The amendment made by item 17 of this Schedule applies in relation to

applications made under subsection 18(4) of that Act after the

commencement of that item.

ABN changes Schedule 6

Amend ments commencing on Royal Assent Part 1

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 61

Product Grants and Benefits Administration Act 2000

33 Paragraph 57(1)(a)

After "address shown in the Register", insert "under subsection 25(2) of

the A New Tax System (Australian Business Number) Act 1999".

Taxation Administration Act 1953

34 Paragraph 105-140(1)(a) in Schedule 1

After "address shown in the Register", insert "under subsection 25(2) of

the A New Tax System (Australian Business Number) Act 1999".

Schedule 6 ABN changes

Part 2 A mend ments commencing on Proclamation

62 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Part 2

Amendments commencing on Proclamation

A New Tax System (Australian Business Number) Act 1999

35 Before subsection 3(1)

Insert:

Main object

36 Before subsection 3(3)

Insert:

Reducing registration and reporting requirements

37 At the end of section 3

Add:

Multi-agency dealings

(4) The objects of this Act also include allowing the

Registrar to

businesses

that are registered under this Act, for the purpose of facilitating

electronic dealings by those businesses with

government entities.

38 Section 9 (heading)

Repeal the heading, substitute:

9 Applying for an ABN

39 After section 9

Insert:

9A Applying for registration of representatives

(1) If

you are registered in the

Australian Business Register, or you

are applying to be so registered, you may make an application to

the

Registrar requesting the Registrar to register details about a

nominated representative (who is an individual) for the purpose of

facilitating your electronic dealings with

government entities.

ABN changes Schedule 6

Amend ments commencing on Proclamation Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 63

(2) An application must be in the

approved form.

(3) That form may request, but not compel, the provision of:

(a) the

TFN of the representative; and

(b) the TFN of the individual (the nominating individual) who is

to sign the declaration in the form.

Note:

Including a TFN in an application will not be an offence against

subsection 8WB(1) of the Taxation Administration Act 1953 (see

paragraph 8WB(1A)(a) of that Act).

40 After section 10

Insert:

10A Registrar must register your representative if conditions met

(1) The

Registrar must register

your representative in the

Australian

Business Register if:

(a) an application has been made under section 9A; and

(b) the Registrar is satisfied that the identity of the nominating

individual (see paragraph 9A(3)(b)) has been established; and

representatives of yours--the Registrar is satisfied that the

identity of the representative has been established; and

(d) the representative's details are not already registered in the

Australian Business Register in relation to you.

(2) If

your proposed representative is to be authorised to nominate

other representatives of yours, the

Registrar may request you or

your proposed representative to give the Registrar specified

information or a specified document the Registrar needs to be

satisfied that the identity of the proposed representative is

established.

41 Subsection 11(1)

After "

you", insert "(for an application under section 9)".

42 After section 11

Insert:

Schedule 6 ABN changes

Part 2 A mend ments commencing on Proclamation

64 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

11A Steps taken by Registrar to register your representative

The

Registrar registers

your representative (for an application

under section 9A) by entering in the

Australian Business Register

in relation to you:

(a) the name of the representative; and

(b) the representative's email address; and

43 Subsection 13(1)

After "for registration", insert "under section 9 or your application for

registration of your representative under section 9A".

44 Subsection 13(1) (note)

After "register you", insert "or your representative".

45 Subsection 13(2)

After "for registration", insert "under section 9, or your application for

registration of your representative under section 9A,".

46 Subsection 13(4)

Repeal the subsection, substitute:

(4) For the purposes of measuring the 28 days mentioned in

subsection (2) for

your application under section 9, disregard each

period (if any):

(a) starting on the day when the

Registrar requests you under

subsection 10(2) to give the Registrar specified information

or a specified document; and

(b) ending at the end of the day you give the Registrar the

specified information or document.

(5) For the purposes of measuring the 28 days mentioned in

subsection (2) for

your application under section 9A, disregard

each period (if any):

(a) starting on the day when the

Registrar requests you, or your

proposed representative, under subsection 10A(2) to give the

Registrar specified information or a specified document; and

(b) ending at the end of the day you give the Registrar the

specified information or document.

ABN changes Schedule 6

Amend ments commencing on Proclamation Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 65

47 Subsection 15(1) (at the end of the table)

Add:

Either:

(a)

your representative (if any)

registered in the

Australian

Business Register in relation to

you; or

(b) you

information relevant to:

(a) confirming the representative's

identity; or

(b) the details entered in relation to

the representative in the Register

48 After subsection 18(1)

Insert:

(1A) The

Registrar may cancel the registration of

your representative

in the

Australian Business Register if satisfied that:

(a) your registration is cancelled under subsection (1); or

(b) the representative no longer represents you; or

the representative's true identity; or

(d) the representative's identity is no longer satisfactorily

established.

Note:

A decision to cancel the registration of your representative is a

reviewable ABN decision.

49 Subsection 18(4)

Repeal the subsection, substitute:

At your request

(4) The

Registrar may:

(a) cancel

your registration if you apply to the Registrar for

cancellation of the registration in the

approved form; or

(b) cancel the registration of your representative, if you apply to

the Registrar for cancellation of the registration in the

approved form.

Note:

A decision to refuse to cancel your registration or that of your

representative is a reviewable ABN decision.

50 Subsection 19(1)

After "

your registration", insert ", or the registration of your

representative,".

Schedule 6 ABN changes

Part 2 A mend ments commencing on Proclamation

66 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

51 Subsection 21(2)

Repeal the subsection, substitute:

(2) Each of the following decisions is a reviewable ABN decision:

Reviewable ABN decisions

Item

Decision

Provision under

which decision is

made

Setting the date of effect of

your registration

subsection 11(1)

Refusing to register

you or your representative

section 13

Cancelling

your registration

subsection 18(1)

Cancelling the registration of

your

representative

subsection 18(1A)

Refusing to cancel

your registration or that of

your representative

subsection 18(4)

Setting the date of effect of a cancellation

subsection 18(2) or (5)

Refusing an application not to disclose details

subsection 26(4) or

27(7)

52 Division 9 (heading)

Repeal the heading, substitute:

Division 9--Offences

53 Section 23 (heading)

Repeal the heading, substitute:

23 Identification offences

54 At the end of section 23

Add:

(3)

You commit an offence if:

(a) you purport to identify yourself as being registered under this

Act as the representative of an

entity; and

(b) you are not the registered representative of the entity.

ABN changes Schedule 6

Amend ments commencing on Proclamation Part 2

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 67

Penalty: Imprisonment for 2 years.

55 At the end of section 25 (before the notes)

Add:

(3) Under section 11A, the

Registrar enters in the

Australian

Business Register in relation to each representative registered in

the Register:

(a) the representative's name; and

(b) the representative's email address; and

(4) The

Registrar must also enter in the

Australian Business Register

in relation to a representative the details prescribed in the

regulations.

56 Subsection 29A(1)

Repeal the subsection, substitute:

(1) This section applies if the

Registrar is satisfied that:

(a) details entered in relation to an

entity in the

Australian

Business Register; or

(b) details entered in relation to an entity's representative in that

are incorrect and the Registrar has access to details that the

Registrar believes to be the correct ones.

57 At the end of subsection 30(3)

Add:

; (e) the entrusted person is the Registrar and the disclosure:

(i) is of information relating to an individual who is, or

who has been, registered as an

entity's representative in

the

Australian Business Register; and

(ii) is for the purposes of facilitating the entity's electronic

dealings with

government entities or for maintaining

details in the Register.

Note:

A disclosure under paragraph (3)(e) could, for example, be for the

purpose of administering or cancelling the representative's

registration.

Schedule 7 Fuel tax

Part 1 Fuel Tax Act 2006

68 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Schedule 7

Fuel tax

Part 1

Fuel Tax Act 2006

1 Section 41-5 (note 1)

Omit "Subdivisions 41-B and 45-A", substitute "Subdivision 41-B".

2 Section 44-1 (note)

Repeal the note.

3 Division 45

Repeal the Division.

4 Subsection 60-5(1) (note 1 at the end of the definition of

Total fuel tax credits)

Repeal the note.

5 Subsection 60-5(1) (note 2 at the end of the definition of

Total fuel tax credits)

Omit "2".

6 Subsection 65-5(5)

Repeal the subsection.

7 Subsection 65-10(1)

Omit "(1)".

8 Subsection 65-10(2)

Repeal the subsection.

9 Section 110-5 (paragraph (a) of the definition of decreasing

fuel tax adjustment)

Omit "and subsection 45-5(2)".

10 Section 110-5 (definition of Environment Minister)

Repeal the definition.

11 Section 110-5 (definition of Environment Secretary)

Fuel tax Schedule 7

Application provisions Part 3

Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009 71

Part 3

Application provisions

16 Application of Part 1 amendments

Meaning of programme end time

(1)

In this Part:

programme end time means the time occurring just before the

commencement of Part 1 of this Schedule.

Application

(2)

The amendments made by Part 1 of this Schedule apply in relation to

tax periods ending in financial years commencing on or after 1 July

2009.

(3)

To avoid doubt, despite the repeal of subsection 65-5(5) of the Fuel Tax

Act 2006 by that Part, subsection 65-5(4) of that Act continues not to

apply in respect of the whole or a part of a fuel tax credit that, just

before the programme end time, you were not entitled to take into

account under subsection 45-5(1) of that Act.

Decreasing fuel tax adjustment

(4)

Subitem (5) applies if, at the programme end time, you were not a

member of a programme mentioned in subsection 45-5(1) of the Fuel

Tax Act 2006.

(5)

The Fuel Tax Act 2006 is taken to have had effect, at the programme

end time, as if you became a member of such a programme at that time.

Schedule 8 Govern ment grants for businesses in relation to 2009 Victorian bushfires

Part 1 A mend ments commencing on Royal Assent

72 Tax Laws Amendment (2009 Measures No. 2) Bill 2009 No. , 2009

Schedule 8

Government grants for

businesses in relation to 2009

Victorian bushfires

Part 1

Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

1 Section 11-

55 (after table item headed "demutualisation of

private health insurers")

Insert:

disasters

2009 Victorian bushfires--Clean-up and Restoration

Grants for primary producers ............................................

59-50

2009 Victorian bushfires--Clean-up and Restoration

Grants for small businesses ...............................................

59-50

2 At the end of Division 59

Add:

59-50 Clean-up and Restoration Grants for 2009 Victorian bushfires

The following payments administered by the Rural Finance

Corporation of Victoria in relation to the Victorian bushfires of

2009 are not assessable income and are not

exempt income:

(a) Clean-up and Restoration Grants for primary producers;

(b) Clean-up and Restoration Grants for small businesses.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2009 MEASURES NO. 2) BILL 2009