TAX LAWS AMENDMENT (2011 MEASURES NO. 7) BILL 2011

i Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Amendment of assessments ............................................................... 3

Schedule 1--Removing tax issues facing special disability trusts

Part 1--Extending CGT main residence exemption to special

disability trusts

Income Tax Assessment Act 1997

Part 2--CGT exemption for assets transferred to special

disability trusts

Income Tax Assessment Act 1997

Part 3--Extending definitions to cover veterans' special

disability trusts

Income Tax Assessment Act 1997

Schedule 2--Pacific Seasonal Worker Pilot Scheme

Part 1--Amendments commencing on Royal Assent

Income Tax Rates Act 1986

Part 2--Amendments commencing on 1 July 2016

Income Tax Rates Act 1986

Schedule 3--TOFA and PAYG instalments

Part 1--Amendments

Taxation Administration Act 1953

Part 2--Application of amendments

Schedule 4--Notification of TOFA transitional elections

Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009

Schedule 5--Farm management deposits

Part 1--Early repayments in the event of applicable natural

disasters

Income Tax Assessment Act 1997

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 ii

Part 2--Providers must report monthly

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Part 3--Owners may have farm management deposits with

more than one FMD provider

Income Tax Assessment Act 1997

Part 4--Contacting owners before forfeiting FMD deposits as

unclaimed money

Banking Act 1959

Schedule 6--Temporary loss relief for merging superannuation

funds

Income Tax Assessment Act 1997

Tax Laws Amendment (2009 Measures No. 6) Act 2010

Schedule 7--Penalty notice validation

Schedule 8--Ancillary funds

Part 1--Public ancillary funds

Division 1--Main amendments

A New Tax System (Australian Business Number) Act 1999

Income Tax Assessment Act 1997

Taxation Administration Act 1953

Division 2--Amendments commencing on 1 July 2012

Taxation Administration Act 1953

Division 3--Transitional provisions

Part 2--Minor amendments

Income Tax Assessment Act 1936

Taxation Administration Act 1953

Schedule 9--Film tax offsets

Income Tax Assessment Act 1997

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 1

A Bill for an Act to amend the law relating to

taxation, and for other purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (2011

Measures No. 7) Act 2011.

2 Commencement

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

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

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

according to its terms.

2 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Commencement information

Column 1

Column 2

Column 3

Provision(s) Commencement

Date/Details

1. Sections 1 to 4

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1

The day this Act receives the Royal Assent.

3. Schedule 2,

Part 1

The day this Act receives the Royal Assent.

4. Schedule 2,

Part 2

1 July 2016.

1 July 2016

5. Schedule 3

The day this Act receives the Royal Assent.

6. Schedule 4

The day after this Act receives the Royal

Assent.

7. Schedules 5 to

The day this Act receives the Royal Assent.

8. Schedule 8,

Part 1, Division 1

1 January 2012.

1 January 2012

9. Schedule 8,

Part 1, Division 2

1 July 2012.

1 July 2012

10. Schedule 8,

Part 1, Division 3

1 January 2012.

1 January 2012

11. Schedule 8,

Part 2

The day this Act receives the Royal Assent.

12. Schedule 9

The day this Act receives the Royal Assent.

Note:

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

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

this Act.

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

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

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

3 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

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 3

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

according to its terms.

4 Amendment of assessments

Section 170 of the Income Tax Assessment Act 1936 does not

prevent the amendment of an assessment if:

(a) the assessment was made before the commencement of

Schedule 1 (about special disability trusts) to this Act; and

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

commencement; and

that Schedule.

Schedule 1 Removing tax issues facing special disability trusts

Part 1 Extending CGT main residence exemption to special disability trusts

4 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 1--Removing tax issues facing

special disability trusts

Part 1--Extending CGT main residence exemption to

special disability trusts

Income Tax Assessment Act 1997

1 Subsection 104-75(6)

Repeal the subsection, substitute:

Exceptions for beneficiary

(6)

capital gain or

capital loss the beneficiary makes is disregarded

if:

(a)

the

beneficiary

acquired the

CGT asset that is the interest

(except by way of an assignment from another entity) for no

expenditure; or

(b) the beneficiary acquired it before 20 September 1985; or

from the

CGT event is disregarded under Subdivision 118-B

(about main residence).

Expenditure can include giving property: see section 103-5.

Note 1:

For provisions affecting the application of Subdivision 118-B to the

trustee, see sections 118-215 to 118-230.

Note 2:

There are also exceptions for employee share trusts: see

sections 130-80 and 130-90.

2 Subsection 104-85(6)

Repeal the subsection, substitute:

Exceptions for beneficiary

(6)

capital gain or

capital loss the beneficiary makes is disregarded

if:

(a)

the

beneficiary

acquired the

CGT asset that is the interest

(except by way of an assignment from another entity) for no

expenditure; or

(b) the beneficiary acquired it before 20 September 1985; or

Removing tax issues facing special disability trusts Schedule 1

Extending CGT main residence exemption to special disability trusts Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 5

from the

CGT event is disregarded under Subdivision 118-B

(about main residence).

Expenditure can include giving property: see section 103-5.

Note 1:

For provisions affecting the application of Subdivision 118-B to the

trustee, see sections 118-215 to 118-230.

Note 2:

There is also an exception for employee share trusts: see

section 130-90.

3 Section 118-105

Repeal the section, substitute:

Schedule 1 Removing tax issues facing special disability trusts

Part 1 Extending CGT main residence exemption to special disability trusts

6 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

118-105 Map of this Subdivision

4 After section 118-210

Insert:

Special disability trusts

118-215 What the following provisions are about

The trustee of a trust that is or has been a special disability trust

may be eligible for an exemption to the extent that a dwelling is the

A CGT event

happens to your

dwelling

You are an individual

and did not acquire the

interest as a beneficiary

of a deceased estate

You acquire the interest

as trustee or beneficiary

of a deceased estate

Full exemption

section 118-110

Partial

exemption

section 118-185

Full exemption

section 118-195

Partial

exemption

section 118-200

Adjust if dwelling

used to produce

assessable income

section 118-190

Rules extending the

exemption: sections

118-135 to 118-160,

and 118-215 to 118-230

Rules limiting the

exemption: sections

118-165 to 118-180

Event that may

attract exemption

The 2 different

cases

Extent of exemption

depends on whether

dwelling is your main

residence throughout

ownership period

(and on other factors

for deceased estates)

Other rules

that apply

Basic case

Deceased estates

case

Separate exemption for a

compulsory acquisition of

land adjacent to your

dwelling: sections

118-240 to 118-265

Removing tax issues facing special disability trusts Schedule 1

Extending CGT main residence exemption to special disability trusts Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 7

main residence of the individual who is or has been the principal

beneficiary of the trust.

Another beneficiary of the trust may be eligible for an exemption if

the dwelling is distributed to that other beneficiary at or after the

principal beneficiary's death.

Note:

The following provisions also apply to the exemption about

compulsory acquisitions of adjacent land (see section 118-245).

118-218 Exemption available to trustee--main case

(1) This section applies to you in relation to a

CGT event if:

(a) the CGT event happens in relation to a

CGT asset; and

(b) just before the CGT event happens, you hold the CGT asset

as trustee of a trust; and

special disability trust on at least one of the

days on which you held the CGT asset.

(2) For the purposes of applying this Subdivision in relation to the

CGT event, on each day to which paragraph (1)(c) applies:

(a) treat yourself as holding the

CGT asset personally (and not

as trustee of the trust); and

(b)

the

principal beneficiary of the trust uses the applicable

dwelling in a particular way on that day--treat yourself as

using the dwelling in that way on that day.

Example: If the principal beneficiary uses the dwelling as his or her main

residence on the day, then treat yourself as using the dwelling as your

main residence on that day.

Note 1:

The CGT asset need not be a dwelling (or an ownership interest in a

dwelling) if it is land adjacent to a dwelling, an adjacent structure of a

flat or home unit, or an ownership interest in such an asset.

Note 2:

If the trustee is an individual, the individual's actual circumstances are

ignored. Similarly, this subsection does not affect how this

Subdivision applies for the individual's actual circumstances. See

section 960-100.

(3) If you are not an individual, treat yourself as being an individual

for the purposes of applying this Subdivision in relation to the

CGT event.

(4)

the

CGT asset, or your

ownership interest in it,

passed to you

as a beneficiary in a deceased estate:

Schedule 1 Removing tax issues facing special disability trusts

Part 1 Extending CGT main residence exemption to special disability trusts

8 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

(a) treat the deceased as never having used the applicable

dwelling for the

purpose of producing assessable income;

and

(b) treat the dwelling as being the deceased's main residence on

each day during the deceased's

ownership period;

for the purposes of applying this Subdivision in relation to the

CGT event.

118-220 Exemption available to trustee--after the principal

beneficiary's death

This section applies to you in relation to a

CGT event if:

(a) the trustee of a trust holds a

CGT asset on a particular day

(the transition day); and

(b) on the transition day, or on an earlier day on which the CGT

asset was held by the trustee of the trust, the trust is a

special

disability trust; and

principal beneficiary of

the trust dies on the transition day; and

(d) the CGT event happens in relation to the CGT asset at or

after the deceased's death; and

(e) the CGT event happens while you hold the CGT asset:

(i) as trustee of the trust; or

(ii) as trustee of an implied trust arising because of the

deceased's death.

118-222 Exemption available to other beneficiary who acquires the

CGT asset after the principal beneficiary's death

This section applies to you in relation to a

CGT event if:

(a) the CGT event happens in relation to a

CGT asset; and

(b)

you

acquired the CGT asset or your

ownership interest in it:

(i) as a result of an earlier CGT event; and

(ii) as a beneficiary of a trust; and

to the earlier CGT event and the CGT asset.

Removing tax issues facing special disability trusts Schedule 1

Extending CGT main residence exemption to special disability trusts Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 9

118-225 Amount of exemption available after the principal

beneficiary's death--general

Full exemption for trustee unless sells asset for proceeds etc.

(1)

capital gain or

capital loss you make from a

CGT event is

disregarded if:

(a) section 118-220 applies to you in relation to the CGT event;

and

(b) as a result of the CGT event, an entity

acquires the

CGT

asset:

(i) as trustee of an implied trust arising because of the

deceased's death; or

(ii) as a beneficiary of the relevant trust referred to in

paragraph 118-220(e).

Exemption for beneficiary, or trustee selling asset for proceeds etc.

(2)

If:

(a) section 118-220 applies to you in relation to a

CGT event,

but paragraph (1)(b) does not; or

(b) section 118-222 applies to you in relation to a CGT event;

the amount of the

capital gain or

capital loss that you would have

made apart from this section from the CGT event is decreased by

an amount that is reasonable.

(3) In determining what is a reasonable decrease:

(a) if section 118-220 applies to you, but paragraph (1)(b) does

not--treat yourself as being an individual who owned the

CGT asset as the trustee of the deceased's estate; and

(b) if section 118-222 applies to you--treat yourself as being an

individual and treat the CGT asset or your

ownership

interest in it as having

passed to you as a beneficiary in the

deceased's estate; and

(i) the extent that the applicable

dwelling was the

deceased's main residence for the relevant period; and

(ii) the extent that the dwelling was used for the

purpose of

producing assessable income during the relevant period.

Schedule 1 Removing tax issues facing special disability trusts

Part 1 Extending CGT main residence exemption to special disability trusts

10 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

(4) For the purposes of subparagraph (3)(c)(i), assume the

dwelling

was not the deceased's main residence on each day the trust

referred to in paragraph 118-220(b) was not a

special disability

trust.

118-227 Amount of exemption available after the principal

beneficiary's death--cost base and reduced cost base

(1) If section 118-220 applies to you and:

(a)

the

applicable

dwelling was the deceased's main residence

just before the deceased's death; and

(b) that dwelling was not then being used for the

purpose of

producing assessable income; and

special disability trust;

then:

(d) the first element of the

CGT asset's

cost base, in your

hands, is the CGT asset's

market value just before the

deceased's death; and

(e) the first element of the CGT asset's

reduced cost base, in

your hands, is worked out similarly.

(2) However, if section 118-220 applies to you as trustee of an implied

trust arising because of the deceased's death, but subsection (1)

does not, then:

(a) the first element of the

CGT asset's

cost base, in your

hands, is the CGT asset's cost base just before the deceased's

death; and

(b) the first element of the CGT asset's

reduced cost base, in

your hands, is worked out similarly.

(3) If section 118-222 applies to you:

(a) the first element of the

CGT asset's

cost base, in your

hands, is the CGT asset's cost base just before the earlier

CGT event happened that resulted in you

acquiring the

CGT asset or your

ownership interest in it; and

(b) the first element of the CGT asset's

reduced cost base, in

your hands, is worked out similarly.

Removing tax issues facing special disability trusts Schedule 1

Extending CGT main residence exemption to special disability trusts Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 11

118-230 Application of CGT events E5 and E7 in relation to main

residence exemption and special disability trusts

CGT event E5 or E7 happens in relation to a

CGT asset held

by a trust that is or has been a

special disability trust, treat the lists

of CGT events in paragraphs 118-110(2)(a) and 118-195(2)(a) as

including a reference to that CGT event.

5 Application of amendments

The amendments made by this Part apply to CGT events that happen on

or after 1 July 2006.

Schedule 1 Removing tax issues facing special disability trusts

Part 2 CGT exemption for assets transferred to special disability trusts

12 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Part 2--CGT exemption for assets transferred to

special disability trusts

Income Tax Assessment Act 1997

6 After section 118-80

Insert:

Special disability trusts

118-85 Special disability trusts

(1)

capital gain or

capital loss you make is disregarded if you

make it from transferring a

CGT asset for no consideration to:

(a)

special disability trust; or

(b) a trust that becomes a special disability trust as soon as

practicable after the transfer.

(2) In working out whether the transfer was for consideration,

disregard any interest in the trust.

7 Subsection 128-15(4) (table item 1)

Omit "or 3A", substitute ", 3A or 3B".

8 Subsection 128-15(4) (after table item 3A)

Insert:

One that

passes to a

trustee of a

special

disability trust

the

market value of the

asset on the day you

died

the market value of the

asset on the day you

died

9 Application of amendments

The amendments made by this Part apply to CGT events that happen on

or after 1 July 2006.

Removing tax issues facing special disability trusts Schedule 1

Extending definitions to cover veterans' special disability trusts Part 3

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 13

Part 3--Extending definitions to cover veterans'

special disability trusts

Income Tax Assessment Act 1997

10 Subsection 995-1(1) (definition of principal beneficiary)

Repeal the definition, substitute:

principal beneficiary of a

special disability trust has the meaning

given by:

(a) for a special disability trust within the meaning of the Social

Security Act 1991--subsection 1209M(1) of that Act; or

(b) for a special disability trust within the meaning of the

Veterans' Entitlements Act 1986--subsection 52ZZZWA(1)

of that Act.

11 Subsection 995-1(1) (definition of special disability trust)

Repeal the definition, substitute:

special disability trust means:

(a) a special disability trust within the meaning of the Social

Security Act 1991; or

(b) a special disability trust within the meaning of the Veterans'

Entitlements Act 1986.

12 Application of amendments

The amendments made by this Part apply to assessments for the

2006-07 income year and later income years.

Schedule 2 Pacific Seasonal Worker Pilot Scheme

Part 1 Amendments commencing on Royal Assent

14 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 2--Pacific Seasonal Worker Pilot

Scheme

Part 1--Amendments commencing on Royal Assent

Income Tax Rates Act 1986

1 After clause 1 of Part II of Schedule 7

Insert:

1A. Treat the reference in item 1 of the table in clause 1 to 29% as

being a reference to 15%, if:

(a) the year of income is the 2011-12 year of income; and

(b) at a time during the year of income, the non-resident

taxpayer:

(i) holds a Special Program Visa (subclass 416); and

(ii) is employed by an Approved Employer under the

Pacific Seasonal Worker Pilot Scheme.

Note:

This clause will be repealed on 1 July 2016. See Part 2 of Schedule 2

to the Tax Laws Amendment (2011 Measures No. 7) Act 2011.

Schedule 3 TOFA and PAYG instalments

Part 1 Amendments

16 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 3--TOFA and PAYG instalments

Part 1--Amendments

Taxation Administration Act 1953

1 After subsection 45-120(2B) in Schedule 1

Insert:

Effect of Division 230 of the Income Tax Assessment Act 1997 on

instalment income

(2C) Your instalment income for a period also includes the difference

between:

(a) a gain (or gains) you make from a

financial arrangement to

the extent to which it is (or they are):

(i) assessable under Division 230 of the Income Tax

Assessment Act 1997; and

(ii) reasonably attributable to that period; and

(b) a loss (or losses) you make from a financial arrangement to

the extent to which it is (or they are):

(i) allowable to you as a deduction under Division 230 of

the Income Tax Assessment Act 1997; and

(ii) reasonably attributable to that period.

This is so only if the gain (or gains) referred to in paragraph (a)

equals or exceeds the loss (or losses) referred to in paragraph (b).

(2D) However, your instalment income for a period is worked out

disregarding subsection (2C) if any of the following apply:

(a) you are an individual;

(b) the only gains and losses that would be taken into account

under subsection (2C) for the period are from

financial

arrangements that are

qualifying securities.

(2E) A gain or loss that is taken into account under subsection (2C) in

working out an amount (including a nil amount) to be included in

your instalment income for a period is not to be, to any extent,

taken into account again under another provision of this section in

calculating your instalment income for the same or any other

period.

TOFA and PAYG instalments Schedule 3

Application of amendments Part 2

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 17

Part 2--Application of amendments

2 Definitions

In this Part:

amended instalment income definition means section 45-120 in

Schedule 1 to the Taxation Administration Act 1953 as amended by this

Schedule.

first TOFA year means the first income year commencing on or after

1 July 2010 for which:

(a) either or both of the following applies:

(i) a gain (or gains) from a financial arrangement is

included in your assessable income under Division 230

of the Income Tax Assessment Act 1997;

(ii) a loss (or losses) from a financial arrangement is

allowable to you as a deduction under that Division; and

(b) at least one gain or loss referred to in paragraph (a) is from a

financial arrangement other than a qualifying security.

3 Application of amendments

Main rule

(1)

Subitem (2) applies to you if:

(a) the Commissioner gives you an instalment rate under

section 45-15 in Schedule 1 to the Taxation Administration

Act 1953 at a time that is:

(i) after this Act receives the Royal Assent; and

(ii) in the first instalment quarter in an income year (the

commencing year); and

(b) the base year that applies in working out that rate is your first

TOFA year, or a later year.

(2)

Subject to subitems (4) and (6), the amended instalment income

definition applies to you in working out:

(a) your base assessment instalment income for the base year

mentioned in paragraph (1)(b), and later years; and

(b) your instalment income for periods in the commencing year,

and later years.

Schedule 3 TOFA and PAYG instalments

Part 2 Application of amendments

18 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Partnerships

(3)

Subitem (4) applies in relation to your instalment income for a period if:

(a) the period starts after this Act receives the Royal Assent; and

(b) you are a partner in a partnership at any time during the

period; and

income for the period under section 45-260 in Schedule 1 to

the Taxation Administration Act 1953, the last income year

mentioned in the numerator of the formula in subsection

45-260(1) in that Schedule is:

(i) the first TOFA year for the partnership; or

(ii) a later year.

(4)

For the purpose of working out the amount to be included in your

instalment income for the period (the current period) under

section 45-260 in Schedule 1 to the Taxation Administration Act 1953,

the amended instalment income definition applies in working out the

instalment income of the partnership for:

(a) the last income year mentioned in the numerator of the

formula in subsection 45-260(1) in that Schedule; and

(b)

the

current

period.

Trusts

(5)

Subitem (6) applies in relation to your instalment income for a period if:

(a) the period starts after this Act receives the Royal Assent; and

(b) you are a beneficiary of a trust at any time during the period;

and

income for the period under section 45-280 in Schedule 1 to

the Taxation Administration Act 1953, the last income year

mentioned in the numerator of the formula in subsection

45-280(1) in that Schedule is:

(i) the first TOFA year for the trust; or

(ii) a later year.

(6)

For the purpose of working out the amount to be included in your

instalment income for the period (the current period) under

section 45-280 in Schedule 1 to the Taxation Administration Act 1953,

TOFA and PAYG instalments Schedule 3

Application of amendments Part 2

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 19

the amended instalment income definition applies in working out the

instalment income of the trust for:

(a) the last income year mentioned in the numerator of the

formula in subsection 45-280(1) in that Schedule; and

(b)

the

current

period.

Early opt-in for amended instalment income definition

(7)

Subitem (8) applies to you if:

(a) the Commissioner gives you an instalment rate under

section 45-15 in Schedule 1 to the Taxation Administration

Act 1953 at a time that is:

(i) after this Act receives the Royal Assent; and

(ii) in the first instalment quarter in an income year (the

commencing year); and

(b) the base year that applies in working out that rate is an

income year before your first TOFA year; and

(d) the Commissioner, having regard to the object of Part 2-10 in

Schedule 1 to the Taxation Administration Act 1953, is of the

opinion that it is reasonable for that subitem to apply to you.

(8)

Despite subitems (1) and (2), the amended instalment income definition

applies to you in working out:

(a) your base assessment instalment income for the base year

mentioned in paragraph (7)(b), and later years; and

(b) your instalment income for periods in the commencing year,

and later years.

(9)

If subitem (8) applies to you, in working out your base assessment

instalment income for the base year (or a later income year that ends

before your first TOFA year) (a pre-TOFA year), the financial

arrangement amendments (within the meaning of Part 3 of Schedule 1

to the Tax Laws Amendment (Taxation of Financial Arrangements) Act

2009) are taken to apply:

(a) to you in a pre-TOFA year in the same way they apply to you

in your first TOFA year; and

(b) to financial arrangements you have in a pre-TOFA year in the

same way they apply to financial arrangements you have in

your first TOFA year.

Schedule 4 Notification of TOFA transitional elections

20 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 4--Notification of TOFA transitional

elections

Tax Laws Amendment (Taxation of Financial Arrangements)

Act 2009

1 At the end of subitem 104(5) of Schedule 1

Add:

Note:

The Commissioner may, in limited circumstances, extend the time on or before which

the election must be notified to the Commissioner. See item 104A.

2 After item 104 of Schedule 1

Insert:

104A Application of financial arrangement amendments

(financial arrangements)--late notices

(1)

A reference in paragraph 104(5)(b) to the lodgment date is to be treated,

in relation to an election under subitem 104(2), as being a reference to a

later date specified in a notice the Commissioner gives to you under this

item, if the Commissioner gives you such a notice in relation to the

election.

(2)

The Commissioner may give you a notice in relation to the election if:

(a) the Commissioner is satisfied that the election was not

notified to the Commissioner on or before the lodgment date

because of:

(i) an honest mistake of yours; or

(ii) an inadvertence of yours; or

(b) the Commissioner is satisfied that:

(i) the election was not notified to the Commissioner on or

before the lodgment date because of circumstances

outside of your control; and

(ii) you took all reasonable steps to notify the

Commissioner of the election on or before the lodgment

date, or there were no such steps you could have taken.

Notification of TOFA transitional elections Schedule 4

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 21

(3)

The later date specified in the notice must be a date that occurred no

later than 3 months after the lodgment date mentioned in paragraph

104(5)(b) (disregarding this item).

3 Subitem 105(1) of Schedule 1

Omit "item 104 applies to arrangements that are not financial

arrangements in the same way that it applies", substitute "items 104 and

104A apply to arrangements that are not financial arrangements in the

same way that those items apply".

4 Application of amendments

The amendments made by this Schedule apply in relation to lodgment

dates mentioned in paragraph 104(5)(b) of Schedule 1 to the Tax Laws

Amendment (Taxation of Financial Arrangements) Act 2009, whether

the lodgment dates occur before, on or after the commencement of this

item.

Schedule 5 Farm management deposits

Part 1 Early repayments in the event of applicable natural disasters

22 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 5--Farm management deposits

Part 1--Early repayments in the event of applicable

natural disasters

Income Tax Assessment Act 1997

1 Section 393-1

After "exceptional circumstances", insert "or in the event of an

applicable natural disaster".

2 Paragraph 393-15(2)(d)

Repeal the paragraph, substitute:

(d) subsections 393-40(3), (3A) and (4) (about repayment of a

farm management deposit in exceptional circumstances or in

the event of an applicable natural disaster).

3 Subsection 393-40(1) (note 1)

After "subsection (3)", insert ", (3A)".

4 Subsection 393-40(2) (note 1)

After "subsection (3)", insert ", (3A)".

5 After subsection 393-40(3)

Insert:

Repayment in the event of an applicable natural disaster

(3A) Subsections (1) and (2) do not apply to a repayment of the whole

or a part of a

farm management deposit if:

(a) natural disaster relief and recovery arrangements made by or

on behalf of the Commonwealth apply, in a way specified in

regulations made for the purposes of this subsection, to a

primary production business of the

owner of the deposit;

and

(b) all of the other circumstances specified in those regulations

are satisfied.

6 Subsection 393-40(4)

Farm management deposits Schedule 5

Early repayments in the event of applicable natural disasters Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 23

Repeal the subsection, substitute:

Any later deposit not a farm management deposit

(4) If subsection (3) or (3A) applies to an

owner and a repayment, any

later deposit that is made by, or on behalf of, the owner in the

income year in which the repayment is made is not, and is taken

never to have been, a farm management deposit.

7 Subsection 393-55(2) (paragraph (d) of note 1)

Omit "(3) and (4) (about repayment in exceptional circumstances)",

substitute "(3), (3A) and (4) (about repayment in exceptional

circumstances or in the event of an applicable natural disaster)".

8 Application of amendments

The amendments made by this Part apply in relation to repayments

made on or after 1 July 2010.

Schedule 5 Farm management deposits

Part 2 Providers must report monthly

24 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Part 2--Providers must report monthly

Income Tax Assessment Act 1997

9 Section 393-1 (note)

Omit "quarter", substitute "calendar month".

Taxation Administration Act 1953

10 Subsection 398-5(1) in Schedule 1 (heading)

Repeal the heading, substitute:

FMD provider must provide monthly information

11 Subsection 398-5(1) in Schedule 1

Omit "within 60 days after the end of a

quarter", substitute "before the

11th day after the end of a calendar month".

12 Subsection 398-5(1) in Schedule 1

Omit "any month in the quarter", substitute "that month".

13 Paragraph 398-5(3)(a) in Schedule 1

Omit "each month in the

quarter", substitute "that month".

14 Paragraphs 398-5(3)(b) and (c) in Schedule 1

Omit "each month in the quarter", substitute "that month".

15 Paragraph 398-5(3)(d) in Schedule 1

Omit "the quarter", substitute "that month".

16 Application of amendments

The amendments made by this Part apply in relation to information to

be given for calendar months in the 2012-13 financial year and each

later financial year.

Note:

Section 398-5 in Schedule 1 to the Taxation Administration Act 1953, as in force before

the commencement of this Part, continues to apply in relation to information to be given

for quarters ending before 1 July 2012.

Farm management deposits Schedule 5

Owners may have farm management deposits with more than one FMD provider Part 3

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 25

Part 3--Owners may have farm management

deposits with more than one FMD provider

Income Tax Assessment Act 1997

17 Section 393-35 (table item 5)

Repeal the item.

18 Section 393-35 (table item 10)

Omit "the

FMD provider", substitute "

FMD providers".

19 Subsections 393-55(4) and (5)

Repeal the subsections.

20 Application of amendments

The amendments made by this Part apply in relation to agreements

made before, on or after 1 July 2012.

Schedule 5 Farm management deposits

Part 4 Contacting owners before forfeiting FMD deposits as unclaimed money

26 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Part 4--Contacting owners before forfeiting FMD

deposits as unclaimed money

Banking Act 1959

21 After subsection 69(1)

Insert:

(1A) However, farm management deposits (within the meaning of the

Income Tax Assessment Act 1997) of an owner (within the meaning

of that Act) are unclaimed moneys if, and only if:

(a) they are to the credit of an account with an ADI; and

(b) the account has not been operated on either by deposit or

withdrawal for a period of not less than 7 years; and

to contact the owner about those farm management deposits

after making reasonable efforts.

22 Subsection 69(2)

Omit "subsection (1)", substitute "subsections (1) and (1A)".

23 Application of amendments

The amendments made by this Part apply in relation to statements to be

delivered:

(a) within 3 months after 31 December 2012; and

(b) within 3 months after the 31 December in each later year.

Temporary loss relief for merging superannuation funds Schedule 6

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 27

Schedule 6--Temporary loss relief for

merging superannuation funds

Income Tax Assessment Act 1997

1 Section 310-1 (note 1)

After "30 June 2011", insert "(or, in certain circumstances,

30 September 2011)".

Tax Laws Amendment (2009 Measures No. 6) Act 2010

2 Item 11 of Schedule 2

Before "The amendments", insert "(1)".

3 Item 11 of Schedule 2 (note 1)

Omit "paragraph (a) is that", substitute "paragraph (1)(a) is that, subject

to subitem (2),".

4 Item 11 of Schedule 2 (note 2)

Omit "paragraph (b) is that", substitute "paragraph (1)(b) is that, subject

to subitem (2),".

5 At the end of item 11 of Schedule 2

Add:

(2)

The amendments also apply in relation to a transferring entity and a

receiving entity if:

(a) the condition in subsection 310-10(3), 310-15(3) or

310-20(3) of the Income Tax Assessment Act 1997 (as

amended by this Schedule) for those entities is satisfied

during the period starting on 24 December 2008 and ending

at the end of 30 September 2011; and

(b) all the transfer events (if any) referred to in subsection

310-45(2) of that Act for those entities happen during the

period starting on 1 July 2010 and ending at the end of

30 September 2011.

Schedule 6 Temporary loss relief for merging superannuation funds

28 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

6 Transitional provision--completion times and transfer

events

For the purposes of subsection 310-45(3) of the Income Tax Assessment

Act 1997, as in force just after the commencement of item 1 of

Schedule 2 to the Tax Laws Amendment (2009 Measures No. 6) Act

2010:

(a) treat the completion time for a losses choice as occurring in

the 2010-11 income year, if the completion time happens

during the period:

(i) starting on 1 July 2010; and

(ii) ending on 30 September 2011; and

(b) treat a transfer event as happening in that income year for the

transferring entity, if the transfer event happens during that

period.

Penalty notice validation Schedule 7

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 29

Schedule 7--Penalty notice validation

1 Validation of notices

(1)

This item applies if the Commissioner gave (or purported to give) a

notice under former section 222AOE on or after 10 December 2007 by

sending it by pre-paid post in accordance with section 28A of the Acts

Interpretation Act 1901.

(2)

For the purpose of former section 222AOE, treat the notice as having

been given at the time the Commissioner sent it by pre-paid post in

accordance with section 28A of the Acts Interpretation Act 1901.

(3)

This item applies despite section 29 of the Acts Interpretation Act 1901.

(4)

This item does not affect rights or liabilities arising between parties to

proceedings heard and finally determined by a court on or before the

commencement of this item, to the extent that those rights or liabilities

arose from, or were affected by, a notice referred to in subitem (1).

(5)

In this item:

former section 222AOE means former section 222AOE of the Income

Tax Assessment Act 1936 (as that section was in force before the

commencement of Schedule 1 to the Tax Laws Amendment (Transfer of

Provisions) Act 2010).

Schedule 8 Ancillary funds

Part 1 Public ancillary funds

30 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 8--Ancillary funds

Part 1--Public ancillary funds

Division 1--Main amendments

A New Tax System (Australian Business Number) Act 1999

1 Paragraph 26(3)(ga)

After "section 426-65", insert ", 426-104".

Income Tax Assessment Act 1997

2 Subsection 30-15(2) (cell at table item 2, column headed

"Recipient")

Omit "A public fund, or a

private ancillary fund,", substitute "An

ancillary fund".

3 Subsection 30-15(2) (cell at table item 2, column headed

"Special conditions")

Before "fund" (wherever occurring), insert "ancillary".

4 Paragraph 30-125(1)(d)

Omit "a

private ancillary fund", substitute "an

ancillary fund".

5 Subparagraph 30-125(1)(d)(i)

Omit "

private ancillary fund guidelines", substitute "

public ancillary

fund guidelines or the

private ancillary fund guidelines (whichever are

applicable)".

6 Paragraph 31-10(1)(b)

Omit "a public fund, or a

private ancillary fund,", substitute "an

ancillary fund".

7 Subsection 995-1(1)

Insert:

ancillary fund means:

Ancillary funds Schedule 8

Public ancillary funds Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 31

(a)

public ancillary fund; or

(b)

private ancillary fund.

8 Subsection 995-1(1)

Insert:

public ancillary fund has the meaning given by section 426-102 in

Schedule 1 to the Taxation Administration Act 1953.

9 Subsection 995-1(1)

Insert:

public ancillary fund guidelines has the meaning given by

section 426-103 in Schedule 1 to the Taxation Administration Act

1953.

Taxation Administration Act 1953

10 Subsection 355-65(8) in Schedule 1 (table item 6, column

headed "and the record or disclosure ...")

Omit "private ancillary fund", substitute "

ancillary fund".

11 Section 426-1 in Schedule 1

Omit:

Subdivision 426-D deals with a type of private philanthropic trust

fund known as a private ancillary fund.

substitute:

Subdivision 426-D deals with types of philanthropic trust funds

known as public ancillary funds and private ancillary funds.

12 Subdivision 426-D in Schedule 1 (heading)

Repeal the heading, substitute:

Subdivision 426-D--Public and private ancillary funds

13 Section 426-100 in Schedule 1

Schedule 8 Ancillary funds

Part 1 Public ancillary funds

32 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Omit:

This Subdivision deals with a type of private philanthropic trust

fund known as a private ancillary fund.

substitute:

This Subdivision deals with types of philanthropic trust funds

known as public ancillary funds and private ancillary funds.

14 Section 426-100 in Schedule 1

Omit "when private", substitute "when".

15 Section 426-100 in Schedule 1

Omit "private ancillary fund guidelines", substitute "public ancillary

fund guidelines or private ancillary fund guidelines (whichever are

applicable)".

16 Before the group heading before section 426-105 in

Schedule 1

Insert:

Public ancillary funds

426-102 Public ancillary funds

(1) A trust is a public ancillary fund if:

(a) at least one of the following subparagraphs applies:

(i) each trustee of the trust is a

constitutional corporation;

(ii) the only trustee of the trust is the Public Trustee of a

State or Territory, or is prescribed by the regulations for

the purposes of this subparagraph; and

(b) each trustee of the trust has agreed, in the

approved form

given to the Commissioner, to comply with the rules in the

public ancillary fund guidelines, as in force from time to

time; and

accordance with subsection (2).

Ancillary funds Schedule 8

Public ancillary funds Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 33

(2) A trustee may revoke an agreement mentioned in paragraph (1)(b)

only by giving the revocation to the Commissioner in the

approved form.

(3) Sections 426-125 to 426-165 do not apply to a

public ancillary

fund if subparagraph (1)(a)(ii) of this section applies to the fund.

426-103 Public ancillary fund guidelines

The Minister must, by legislative instrument, formulate guidelines

(the public ancillary fund guidelines) setting out:

(a)

rules

that

public ancillary funds and their trustees must

comply with if the funds are to be, or are to remain, endorsed

deductible gift recipients; and

(b) the amount of the administrative penalty, or how to work out

the amount of the administrative penalty, under subsection

426-120(1) in relation to public ancillary funds.

426-104 Australian Business Register must show public ancillary

fund status

(1)

public ancillary fund has an

ABN, the

Australian Business

Registrar may enter in the

Australian Business Register in relation

to the fund a statement that it is a public ancillary fund.

Note 1:

An entry (or lack of entry) of a statement required by this section does

not affect whether a trust is a public ancillary fund.

Note 2:

The Australian Business Register will also show if a public ancillary

fund is endorsed as a deductible gift recipient: see section 30-229 of

the Income Tax Assessment Act 1997.

(2)

The

Australian Business Registrar must take reasonable steps to

ensure that a statement appearing in the

Australian Business

may:

(a) change the statement; or

(b) remove the statement from the Register if the statement is not

true.

17 At the end of paragraph 426-110(b) in Schedule 1

Add "in relation to private ancillary funds".

18 Section 426-120 in Schedule 1 (heading)

Schedule 8 Ancillary funds

Part 1 Public ancillary funds

34 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Repeal the heading, substitute:

426-120 Administrative penalties for trustees of ancillary funds

19 Paragraph 426-120(1)(a) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

20 Subparagraph 426-120(2)(b)(ii) in Schedule 1

Omit "not a registered trustee company", substitute "neither a licensed

trustee company (within the meaning of Chapter 5D of the

Corporations Act 2001) nor the Public Trustee of a State or Territory".

21 Paragraph 426-120(3)(a) in Schedule 1

Repeal the paragraph, substitute:

(a) the amount specified in the

public ancillary fund guidelines

under paragraph 426-103(b), or the

private ancillary fund

guidelines under paragraph 426-110(b), whichever are

applicable; or

22 Subsection 426-120(3) in Schedule 1

Omit "private ancillary fund guidelines may", substitute "guidelines

may".

23 Subsection 426-125(1) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

24 Paragraph 426-125(1)(a) in Schedule 1

Repeal the paragraph, substitute:

(a)

the

public ancillary fund guidelines or the

private ancillary

fund guidelines (whichever are applicable); or

25 Subsection 426-125(6) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

26 Paragraph 426-125(6)(a) in Schedule 1

Repeal the paragraph, substitute:

(a)

the

public ancillary fund guidelines or the

private ancillary

fund guidelines (whichever are applicable); or

Ancillary funds Schedule 8

Public ancillary funds Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 35

27 Subsections 426-130(1) and (2) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

28 Subsection 426-130(5) in Schedule 1

Omit "paragraph 426-105(1)(b), agreed to comply with the rules in the

private ancillary fund guidelines,", substitute "paragraph 426-102(1)(b)

or 426-105(1)(b), agreed to comply with the rules in the

public

ancillary fund guidelines or the

private ancillary fund guidelines

(whichever are applicable)".

29 Paragraph 426-135(1)(b) in Schedule 1

Omit "

private ancillary fund's", substitute "

ancillary fund's".

30 Subsections 426-135(2) and 426-150(1) in Schedule 1

Omit "

private ancillary fund", substitute "

ancillary fund".

31 Subsection 426-150(3) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

32 Paragraph 426-155(b) in Schedule 1

Omit "

private ancillary fund's", substitute "

ancillary fund's".

33 Subsection 426-160(1) in Schedule 1

Omit "

private ancillary fund", substitute "

ancillary fund".

34 Paragraphs 426-165(1)(a) and (2)(a) in Schedule 1

Omit "a

private ancillary fund", substitute "an

ancillary fund".

35 At the end of Subdivision 426-D in Schedule 1

Add:

Transfers between ancillary funds

426-170 Ancillary funds must not provide funds to other ancillary

funds

ancillary fund must not provide money, property or benefits to

another ancillary fund unless permitted to do so by the

public

Schedule 8 Ancillary funds

Part 1 Public ancillary funds

36 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

ancillary fund guidelines or the

private ancillary fund guidelines

(whichever are applicable).

Division 2--Amendments commencing on 1 July 2012

Taxation Administration Act 1953

36 Subsection 426-104(1) in Schedule 1

Omit "may", substitute "must".

Division 3--Transitional provisions

37 Definitions

In this Division:

commencement time means the time at which this item commences.

constitutional corporation has the meaning given by the Income Tax

Assessment Act 1997.

private ancillary fund has the meaning given by section 426-105 in

Schedule 1 to the Taxation Administration Act 1953.

public ancillary fund has the meaning given by section 426-102 in

Schedule 1 to the Taxation Administration Act 1953.

public ancillary fund guidelines has the meaning given by

section 426-103 in Schedule 1 to the Taxation Administration Act 1953.

38 Application of Division

This Division applies to a trust if, just before the commencement time,

the trust was:

(a) a public fund covered by item 2 of the table in subsection

30-15(2) of the Income Tax Assessment Act 1997; and

(b) endorsed as a deductible gift recipient under section 30-120

of that Act; and

39 Transitional provision--trustees need not be

constitutional corporations

Ancillary funds Schedule 8

Public ancillary funds Part 1

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 37

Paragraph 426-102(1)(a) (trustees of public ancillary funds must be

constitutional corporations, Public Trustees or prescribed) and

sections 426-125 to 426-165 (Suspension and removal of trustees) in

Schedule 1 to the Taxation Administration Act 1953 do not apply to the

trust during the period:

(a) starting at the commencement time; and

(b) ending at the earlier of the following:

(i) the time (at or after the commencement time) the trust

first satisfies the requirements of that

paragraph (disregarding this item);

(ii) the first time any of the trustees of the trust revoke the

agreement mentioned in item 40 in accordance with

subsection 426-102(2) in that Schedule.

40 Transitional provision--agreement to comply with public

ancillary fund guidelines

(1)

For the purposes of Subdivision 426-D in Schedule 1 to the Taxation

Administration Act 1953, each of the trustees of the trust is taken to

have agreed, at the commencement time and in accordance with

paragraph 426-102(1)(b) in that Schedule, to comply with the rules in

the public ancillary fund guidelines, as in force from time to time.

(2)

To avoid doubt, subitem (1) does not prevent a trustee from revoking

that agreement at a later time as mentioned in paragraph 426-102(1)(c)

in that Schedule.

41 Transitional provision--transfer of property

For the purposes of item 2 of the column headed "Recipient" of the

table in subsection 30-15(2) of the Income Tax Assessment Act 1997,

disregard a transfer of all of the property of the trust to another public

ancillary fund if:

(a) the other fund is a deductible gift recipient; and

(b) at least one of the following subparagraphs applies:

(i) every trustee of the other fund is a

constitutional

corporation;

(ii) the only trustee of the other fund is the Public Trustee of

a State or Territory, or is prescribed by the regulations

for the purposes of subparagraph 426-102(1)(a)(ii) in

Schedule 1 to the Taxation Administration Act 1953;

and

Ancillary funds Schedule 8

Minor amendments Part 2

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 39

Part 2--Minor amendments

Income Tax Assessment Act 1936

42 Subsection 6(1) (definition of private ancillary fund)

Repeal the definition.

Note:

This item repeals a redundant definition.

Taxation Administration Act 1953

43 Subsection 2(1) (definition of private ancillary fund)

Repeal the definition.

Note:

This item repeals a redundant definition.

Schedule 9 Film tax offsets

40 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

Schedule 9--Film tax offsets

Income Tax Assessment Act 1997

1 Paragraph 376-2(3)(b)

Omit "15%", substitute "16.5%".

2 Paragraph 376-2(3)(c)

Omit "15%", substitute "30%".

3 Section 376-15

Omit "15%", substitute "16.5%".

4 Section 376-40

Omit "15%", substitute "30%".

5 Subparagraph 376-55(2)(b)(i)

Omit "65th episode is first in a state", substitute "episode in which the

65th commercial hour is reached is first in a state".

6 Subparagraph 376-55(2)(c)(i)

Omit "65th episode of the series is first in a state", substitute "episode

in which the 65th commercial hour is reached is first in a state".

7 At the end of subsection 376-55(4)

Add:

; or (g) the

film authority's Producer Equity Program has provided

financial assistance to the company or anyone else for the

making of the film.

8 Subparagraph 376-65(2)(c)(v)

Omit "drama", substitute "film".

9 Subsection 376-65(4) (heading)

Repeal the heading, substitute:

Film tax offsets Schedule 9

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 41

Short form animated film

10 Subsection 376-65(4)

Omit "drama", substitute "film".

11 Paragraph 376-65(4)(a)

Omit "drama".

12 Subsection 376-65(6) (cell at table item 1, column headed

"The total of the company's qualifying Australian

production expenditure on the film (as determined by

the film authority under section 376-75) is at least ...")

Repeal the cell, substitute:

$500,000

13 Subsection 376-65(6) (cell at table item 2, column headed

"The total of the company's qualifying Australian

production expenditure on the film (as determined by

the film authority under section 376-75) is at least ...")

Repeal the cell, substitute:

$500,000

14 Subsection 376-65(6) (cell at table item 2, column headed

"and the amount for the film worked out under

subsection (7) is at least ...")

Repeal the cell, substitute:

not applicable

15 Subsection 376-65(6) (cell at table item 3, column headed

"The total of the company's qualifying Australian

production expenditure on the film (as determined by

the film authority under section 376-75) is at least ...")

Repeal the cell, substitute:

$500,000

16 Subsection 376-65(6) (cell at table item 4, column headed

"For this type of film ...")

Omit "drama", substitute "film".

Schedule 9 Film tax offsets

42 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

17 Subsection 376-65(6) (cell at table item 6, column headed

"The total of the company's qualifying Australian

production expenditure on the film (as determined by

the film authority under section 376-75) is at least ...")

Repeal the cell, substitute:

$500,000

18 Subsection 376-65(6) (cell at table item 8, column headed

"The total of the company's qualifying Australian

production expenditure on the film (as determined by

the film authority under section 376-75) is at least ...")

Repeal the cell, substitute:

$500,000

19 Paragraph 376-125(4)(c)

Omit "film; or", substitute "film (other than the activities listed in

paragraphs (a) to (e) of item 7 of the table in subsection 376-170(2));

or".

20 Section 376-135 (cell at table item 1, column headed

"except to the extent to which the expenditure is ...")

Repeal the cell, substitute:

qualifying

Australian

production

expenditure under

item 6 of the table

in subsection

376-150(1) and

paragraph (a) of

item 5 of the table

in subsection

376-170(2)

21 Section 376-135 (cell at table item 5, column headed

"except to the extent to which the expenditure is ...")

Repeal the cell, substitute:

qualifying

Australian

Film tax offsets Schedule 9

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 43

production

expenditure under

item 3 or 4 of the

table in subsection

376-150(1) or

item 6 of the table

in subsection

376-170(2)

22 Subsection 376-150(1) (at the end of the table)

Add:

Certain financing expenditure

expenditure incurred in Australia prior to the end of the income year in

which

completion of the

film occurs in respect of any of the following:

(a) insurance related to making the film;

(b) fees for audit services and legal services provided in Australia in

relation to raising and servicing the financing of the film which are

incurred by the company that makes, or is responsible for making, the

film;

responsible for making the film.

23 Subsection 376-170(2) (at the end of the table)

Add:

Other expenditure

expenditure incurred in Australia in respect of any of the following:

(a) obtaining an independent opinion of the amount of a film's

qualifying

Australian production expenditure required for use in relation to the

financing of the film;

(b) offset carbon emissions created during the making of the film.

Expenditure incurred in producing Australian copyright promotional

material

expenditure incurred in Australia in the income year of the

completion of

the

film or an earlier year in respect of any of the following:

(a) producing material for publicising or otherwise promoting the film

where the copyright in the material is held or partially held by a

company that is an Australian resident;

(b) unit publicist fees.

Expenditure incurred in delivering or distributing the film

expenditure incurred by the applicant company in delivering or

Schedule 9 Film tax offsets

44 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

distributing the film prior to the end of the income year in which the

film

is complete to the extent to which it is incurred for, or reasonably

attributable to, any of the following:

(a) acquiring Australian classification certificates;

(b) sound mix mastering licenses;

(d) freight services provided by a company in Australia for delivery of

contracted deliverables in relation to the film;

(e) storing the film in a film vault in Australia.

24 Paragraph 376-170(4)(b)

Omit "the following", substitute "subject to subsection (4A), the

following".

25 Paragraph 376-170(4)(c)

Omit "65th episode of the series", substitute "episode in which the 65th

commercial hour of the series is reached".

26 After subsection 376-170(4)

Insert:

(4A) Paragraph (4)(b) does not apply to a

film that is a documentary.

27 Subsection 376-170(5)

Omit "2007", substitute "2011".

28 At the end of Subdivision 376-C

Add:

376-185 Expenditure to be worked out excluding GST

In determining an amount of expenditure for the purpose of this

Division, the expenditure is taken to exclude

GST.

29 Subsection 960-50(6) (cell at table item 9B, column headed

"In this case ...")

Omit "an amount that is relevant", substitute "subject to item 9C, an

amount that is relevant".

30 Subsection 960-50(6) (after table item 9B)

Film tax offsets Schedule 9

Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011 45

Insert:

an amount that is relevant for the

purposes of quantifying:

(a) the total of all of a company's

production expenditure on a

film; or

(b) the total of the company's

qualifying Australian

production expenditure on a

film; or

total film

expenditure on a film;

to the extent to which the total of the

company's qualifying Australian

production expenditure on a film is

less than $15 million and the amount

is relevant for the purposes of

calculating an amount of a

tax

offset under section 376-60

the amount is to be translated to

Australian currency at the exchange

rate applicable at the time when

expenditure is incurred on the film

31 Application of amendments

(1)

The amendments made by items 1 and 3 apply in respect of the location

offset to films commencing principal photography or production of the

animated image on or after 10 May 2011.

(2)

The amendments made by items 2 and 4 apply in respect of the PDV

offset to post, digital and visual effects production that commences on

or after 1 July 2011.

(3)

The amendments made by items 5 to 19, 21, 23 to 28 and 30 apply in

respect of the producer offset to:

(a) films for which production assistance (other than

development assistance) has been approved by the film

authority on or after 1 July 2011; or

(b) in any other case, films for which production expenditure is

first incurred in, or in relation to, pre-production of the film

on or after 1 July 2011.

(4)

The amendments made by items 20, 22 and 29 apply:

Schedule 9 Film tax offsets

46 Tax Laws Amendment (2011 Measures No. 7) Bill 2011 No. , 2011

(a) in respect of the location offset to films commencing

principal photography or production of the animated image

on or after 10 May 2011; and

(b) in respect of the PDV offset to post, digital and visual effects

production that commences on or after 1 July 2011; and

production assistance (other than development assistance)

has been approved by the film authority on or after 1 July

2011; or

(d) in any other case, in respect of the producer offset to films for

which production expenditure is first incurred in, or in

relation to, pre-production of the film on or after 1 July 2011.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2011 MEASURES NO. 7) BILL 2011