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This is a Bill, not an Act. For current law, see the Acts databases.
2002-2003
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Taxation
Laws Amendment Bill (No. 9) 2003
No.
, 2003
(Treasury)
A
Bill for an Act to amend the law relating to taxation, and for related
purposes
Contents
Income Tax (Transitional Provisions) Act
1997 5
Part 1—Amendments 7
Fringe Benefits Tax Assessment Act
1986 7
Income Tax Assessment Act
1997 7
Part 2—Application of
amendments 9
Income Tax Assessment Act
1936 10
Income Tax Assessment Act
1997 10
Taxation Administration Act
1953 12
Income Tax Assessment Act
1936 13
Income Tax Assessment Act
1997 14
Part 1—Making and revoking certain
choices 22
Income Tax (Transitional Provisions) Act
1997 22
Part 2—Research and
development 26
Income Tax Assessment Act
1936 26
Part 3—Technical
corrections 28
Income Tax Assessment Act
1997 28
Income Tax (Transitional Provisions) Act
1997 28
Part 4—Application of
amendments 29
A Bill for an Act to amend the law relating to taxation,
and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Taxation Laws Amendment Act (No. 9)
2003.
(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.
|
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 on which this Act receives the Royal Assent. |
|
|
2. Schedules 1 to 5 |
The day on which this Act receives the Royal Assent. |
|
|
3. Schedule 6 |
1 July 2000. |
1 July 2000 |
|
4. Schedules 7 and 8 |
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 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.
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repealed as set out in the applicable items in the Schedule concerned, and any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.
Section 170 of the Income Tax Assessment Act 1936 does not
prevent the amendment of an assessment made before the commencement of this
section for the purposes of giving effect to this Act.
1 Section 195-1 (paragraph (b) of the
definition of first aid or life saving course)
Omit “a body that is”, substitute “an
entity”.
2 Section 195-1 (subparagraph (b)(i) of
the definition of first aid or life saving course)
Before “registered”, insert “that is”.
3 Section 195-1 (subparagraph (b)(i) of
the definition of first aid or life saving course)
Omit “bodies”, substitute “entities”.
4 Section 195-1 (subparagraph (b)(ii) of
the definition of first aid or life saving course)
Before “approved”, insert “that is”.
5 Section 195-1 (at the end of
paragraph (b) of the definition of first aid or life saving
course)
Add:
; or (iii) that uses, as the instructor for the course, a person who holds
a training qualification for that course that was issued by Austswim Limited
(ACN 097 784 122); or
(iv) that uses, as the instructor for the course, a person who holds a
training qualification for that course that was issued by Surf Life Saving
Australia Limited (ACN 003 147 180); or
(v) that uses, as the instructor for the course, a person who holds a
training qualification for that course that was issued by The Royal Life Saving
Society—Australia (ACN 008 594 616).
6 Application
The amendments made by this Schedule apply, and are taken to have applied,
in relation to net amounts for tax periods starting on or after 1 July
2000.
Income Tax (Transitional
Provisions) Act 1997
1 At the end of
Division 727
Add:
(1) An indirect value shift does not have consequences under
Division 727 of the Income Tax Assessment Act 1997 if, to the extent
of at least 95% of their total market value, the greater benefits consist
entirely of:
(a) a right to have services that are covered by section 727-240 of
that Act provided directly by the losing entity to the gaining entity;
or
(b) services that are covered by that section and have been, are being, or
are to be, so provided;
or both, and the IVS time for the scheme that results in the indirect value
shift is before:
(c) unless paragraph (d) applies—the start of the losing
entity’s 2003-2004 income year; or
(d) if the losing entity’s 2002-2003 income year ends before
30 June 2003—the start of the losing entity’s 2004-2005 income
year.
How subsection (1) applies to a presumed indirect value
shift
(2) For the purposes of section 727-850 (about a presumed indirect
value shift affecting a realisation event) of the Income Tax Assessment Act
1997, subsection (1) of this section applies to the presumed indirect
value shift:
(a) on the assumptions set out in subsection 727-865(3) of that Act;
and
(b) as if the exclusion in subsection (1) of this section were an
exclusion in Subdivision 727-C of that Act.
Fringe Benefits Tax
Assessment Act 1986
1 After section 61F
Insert:
If:
(a) a fringe benefit is provided in the year of tax in respect of the
employment of a current employee; and
(b) the person providing the benefit cannot deduct an amount under the
Income Tax Assessment Act 1997 for providing the benefit because of
section 85-15, 85-20 or 86-60 of that Act;
the amount that, but for this section, would be the taxable value of the
fringe benefit in relation to the year of tax is reduced by the amount mentioned
in paragraph (b).
Note: Sections 85-15, 85-20 and 86-60 of the Income
Tax Assessment Act 1997 limit the extent to which a person can deduct
payments to associates that relate to personal services income.
Income Tax Assessment Act
1997
2 Subsection 86-20(1) (note 2)
Repeal the note, substitute:
Note 2: If the amount of the deductions exceeds the amount
of the personal services income, a deduction for the excess is available to you
under section 86-27. The personal services entity cannot deduct the amount
of the excess: see section 86-87.
3 After section 86-25
Insert:
If your personal services deduction amount exceeds your unreduced
personal services income, then you can deduct the excess amount. For this
purpose:
(a) your personal services deduction amount is the amount of
deductions relating to your *personal services
income worked out under step 1 of the method statement in section 86-20,
increased by the amount (if greater than zero) worked out under step 4 of the
method statement; and
(b) your unreduced personal services income is the personal
services income that would have been included in your assessable income for the
income year if there had not been any reduction under
section 86-20.
4 After section 86-85
Insert:
The total amount of the deductions to which a
*personal services entity is entitled for an
income year is reduced by the amount of any deduction that an individual, whose
*personal services income is ordinary or
statutory income of the entity for that income year, is entitled to under
section 86-27.
Part 2—Application
of amendments
5 Application of amendment in
item 1
The amendment made by item 1 of this Schedule applies to fringe
benefits provided after 30 June 2000.
6 Application of amendments in items 2, 3 and
4
The amendments made by items 2, 3 and 4 of this Schedule apply to
assessments for the 2000-2001 income year and each subsequent income
year.
Income Tax Assessment Act
1936
1 Subsection 170(10AA) (before table
item 1)
Insert:
|
1A |
Subsection 15-65(2) |
Sugar industry exit grant becomes assessable because of breach of
undertaking |
Income Tax Assessment Act
1997
2 Section 10-5 (after table item headed
“subsidies”)
Insert:
|
sugar industry exit grants |
|
|
........ |
15-65 |
3 Section 11-10 (at the end of the
table)
Add:
|
sugar industry exit grants |
|
|
.......... |
53-10 |
4 At the end of
Division 15
Add:
(1) Your assessable income includes the amount of a sugar industry exit
grant that you receive under the program known as the Sugar Industry Reform
Program if, as a condition of receiving the grant, you entered into an
undertaking not to become the owner or operator of a sugar industry
*enterprise within 5 years after receiving the
grant.
(2) Your assessable income also includes the amount of a sugar industry
exit grant that you receive under that program if:
(a) as a condition of receiving the grant, you entered into an undertaking
not to become the owner or operator of any agricultural
*enterprise within 5 years after receiving the
grant; and
(b) you become the owner or operator of an agricultural enterprise (except
a sugar industry enterprise) within that period.
(3) The amount is included for the income year in which you receive
it.
Note: You will be required to repay the grant if you
re-enter the sugar industry within the 5 year period. If you repay the grant in
an income year after the year in which you receive it, section 59-30 will
exclude the grant from your assessable income.
5 Section 53-10 (after table
item 4A)
Insert:
|
4B |
Sugar industry exit grant |
The program known as the Sugar Industry Reform Program |
As a condition of receiving the grant, you entered into an undertaking not
to become the owner or operator of any agricultural
*enterprise within 5 years after receiving the
grant |
6 Section 53-10 (note)
Omit “Note”, substitute “Note 1”.
7 At the end of
section 53-10
Add:
Note 2: A sugar industry exit grant referred to in table
item 4B is included in assessable income if the recipient becomes the owner
or operator of an agricultural enterprise (except a sugar industry enterprise)
within 5 years after receiving the grant: see subsection
15-65(2).
8 At the end of subsection
118-37(1)
Add:
; (f) a sugar industry exit grant that you receive under the program known
as the Sugar Industry Reform Program.
9 Application
The amendments made by this Schedule apply to sugar industry exit grants
received on or after 1 February 2003.
Taxation Administration Act
1953
1 Section 12-7 in
Schedule 1
After “This Division”, insert “(other than the provisions
mentioned in subsection (2))”.
2 At the end of section 12-7 in
Schedule 1
Add:
(2) The provisions are:
(a) Subdivision 12-FB; and
(b) any other provisions in this Division to the extent that they apply in
relation to that Subdivision.
Income Tax Assessment Act
1936
1 Subparagraph 121AB(1)(b)(iii)
Omit “members.”, substitute “members;
or”.
2 At the end of subsection
121AB(1)
Add:
(c) that satisfies all of the following conditions:
(i) at 7.30 pm, by legal time in the Australian Capital Territory, on
9 May 1995, it was a friendly society (within the meaning of this Act as in
force at that time);
(ii) it was an insurance company on 1 July 1999;
(iii) it does not have capital divided into shares held by its
members.
Income Tax Assessment Act
1997
1 Subsection 40-340(3) (note)
Omit “Note”, substitute “Note 1”.
2 At the end of subsection
40-340(3)
Add:
Note 2: There can also be roll-over relief as a result of a
variation in the constitution of a partnership or in the interests of the
partners where the transferor and transferee partnerships are STS taxpayers and
certain conditions are met: see section 328-240.
3 At the end of subsection
328-175(3)
Add:
Note: A choice made by a transferor partnership under this
subsection for an asset applies also to the transferee partnership if roll-over
relief under section 328-240 is chosen: see
section 328-245.
4 At the end of
section 328-190
Add:
Note: The amounts that a transferor partnership and
transferee partnership can deduct under this section are modified if roll-over
relief under section 328-240 is chosen: see
section 328-247.
5 At the end of
section 328-200
Add:
Note: A transferor partnership does not subtract anything
for certain balancing adjustment events under paragraph (a) of step 2 if
roll-over relief under section 328-240 is chosen: see
section 328-245.
6 At the end of subsection
328-205(1)
Add:
Note 3: This subsection does not apply to a transferee
partnership for certain assets if roll-over relief under section 328-240 is
chosen: see section 328-257.
7 At the end of subsection
328-225(1)
Add:
Note: This section is modified in its application to a
transferee partnership for certain assets if roll-over relief under
section 328-240 is chosen: see section 328-257.
8 At the end of
Subdivision 328-D
Add:
(1) There is roll-over relief if:
(a) *balancing adjustment events occur
for *depreciating assets on a day (the
BAE day) because of subsection 40-295(2) as a result of a
variation in the constitution of a partnership or in the interests of the
partners; and
(b) deductions for the assets are calculated under this Subdivision;
and
(c) the entity or entities that had an interest in the assets just before
the balancing adjustment events occurred (the transferor) and the
entity or entities that have an interest in the assets just after the events
occurred (the transferee) jointly choose the roll-over relief;
and
(d) the conditions in section 328-243 are met.
Note: There will be another BAE day in the income year if
there is a variation in the constitution of the transferee partnership or in the
interests of the partners and a further roll-over is chosen.
(2) The choice must:
(a) be in writing; and
(b) contain enough information about the transferor’s
*holding of the assets for the transferee to
work out how this Subdivision applies to the transferee’s holding of the
assets; and
(c) be made within 6 months after the end of the transferee’s income
year (the BAE year) in which the
*balancing adjustment events occurred, or
within a longer period allowed by the Commissioner.
(3) If a person dies before the end of the time allowed for jointly
choosing roll-over relief, the trustee of the person’s estate may be a
party to the choice.
(4) The transferor must keep the choice or a copy of it for 5 years after
the *balancing adjustment events
occurred.
Penalty: 30 penalty units.
Note: See section 4AA of the Crimes Act 1914 for
the current value of a penalty unit.
(5) The transferee must keep the choice or a copy of it until the end of 5
years after the next *balancing adjustment
event occurs for any of the *depreciating
assets.
Penalty: 30 penalty units.
(1) The transferee must become an *STS
taxpayer for the BAE year.
(2) All of the *depreciating assets that,
just before the *balancing adjustment events
occurred, were:
(a) *held by the transferor;
and
(b) allocated to the transferor’s
*general STS pool or
*long life STS pool;
must be held by the transferee just after those events occurred.
(1) The transferor does not subtract anything for the
*balancing adjustment events under:
(a) paragraph (a) of step 2 in the method statement in
section 328-200; or
(b) subsection 328-210(2).
(2) Subsection 328-215(4) does not apply to the
*balancing adjustment events for the
transferor.
(3) A choice made by the transferor for a
*depreciating asset under subsection 328-175(3)
(about primary production assets) applies to the transferee as if it had been
made by the transferee.
(4) Sections 328-247 to 328-257 have effect.
(1) The amount that can be deducted for the transferor’s
*general STS pool and
*long life STS pool for the BAE year under
subsection 328-190(1) or section 328-210 for the BAE year is split equally
between:
(a) the transferor and the transferee; or
(b) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year and a roll-over
is chosen for each variation—the partnerships concerned.
Example: John and Dave operate a dry cleaning business in
partnership (the transferor). The transferor is an STS taxpayer. On the 90th day
of an income year, Jonathan joins the partnership. The new partnership (the
transferee) becomes an STS taxpayer for the income year. Had there been no
partnership change, a deduction of $6,600 would have been available for the
transferor’s general STS pool. The transferor and transferee jointly
choose the roll-over.
The deduction available to the transferor and the
transferee for the pool under subsection 328-190(1) is $3,300
each.
(2) The transferor cannot deduct any amount for the transferor’s
*general STS pool or
*long life STS pool for an income year after
the BAE year.
(1) This section applies in working out the amount that the transferor or
transferee can deduct for the BAE year under subsection 328-180(1) (low-cost
assets) or subsection 328-190(2) (assets that will be pooled) for a
*depreciating asset that the transferor or
transferee started to use, or have *installed
ready for use, for a *taxable purpose during
the BAE year.
Asset first used by transferor
(2) If the asset was first used or
*installed ready for use by the transferor, the
amount that can be deducted under subsection 328-180(1) or subsection 328-190(2)
for the asset for the BAE year is split equally between:
(a) the transferor and the transferee; or
(b) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year and a roll-over
is chosen for each variation—the partnerships concerned.
Asset first used by transferee
(3) If the asset was first used or
*installed ready for use by the
transferee:
(a) the transferor cannot deduct anything for the asset for the BAE year;
and
(b) the amount that can be deducted under subsection 328-180(1) or
328-190(2) for the asset for the BAE year is:
(i) deductible by the transferee; or
(ii) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year and a roll-over
is chosen for each variation—split equally between the partnerships
concerned (except ones that did not use the asset or have it installed ready for
use).
Example: To continue the example from section 328-247,
the transferee buys a low-cost asset on the 150th day of the BAE year for
$800.
On the 250th day of the year, Evan joins the transferee
partnership. The new transferee partnership becomes an STS taxpayer for the BAE
year, and a further roll-over is chosen.
The original transferor cannot deduct anything for the
asset. The original transferee (now a transferor) and the new transferee can
deduct $400 each.
Special rule for low-cost assets
(4) Subsection (5) applies if:
(a) the transferor started to use, or have
*installed ready for use, a
*low-cost asset during the BAE year;
and
(b) a *balancing adjustment event occurs
for that asset before the BAE day.
(5) The transferee cannot deduct anything for the asset for the BAE year,
and subsection 328-215(4) does not apply to the transferee in relation to the
asset.
(1) This section applies in working out the amount that the transferor or
transferee can deduct for the BAE year under subsection 328-180(2) or 328-190(3)
for expenditure incurred by the transferor or transferee during the BAE year
that is included in the second element of the
*cost of a depreciating asset.
Expenditure incurred by transferor
(2) If the expenditure was incurred by the transferor, the amount that can
be deducted under subsection 328-180(2) or 328-190(3) for the BAE year is split
equally between:
(a) the transferor and the transferee; or
(b) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year and a roll-over
is chosen for each variation—the partnerships concerned.
Expenditure incurred by transferee
(3) If the expenditure was incurred by the transferee:
(a) the transferor cannot deduct anything for the expenditure for the BAE
year; and
(b) the amount that can be deducted under subsection 328-180(1) or
328-190(2) for the expenditure for the BAE year is:
(i) deductible by the transferee; or
(ii) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year after the
expenditure was incurred and a roll-over is chosen for each
variation—split equally between the partnerships concerned.
Special rule for expenditure on low-cost assets
(4) Subsection (5) applies if:
(a) the transferor incurred the expenditure in relation to a
*low-cost asset; and
(b) a *balancing adjustment event occurs
for that asset before the BAE day.
(5) The transferee cannot deduct anything for the expenditure for the BAE
year, and subsection 328-215(4) does not apply to the transferee in relation to
the asset.
(1) This section applies if:
(a) the *closing pool balance of the
transferor’s *general STS pool or
*long life STS pool for the BAE year is less
than zero; or
(b) the amount worked out under subsection 328-210(2) for that pool for
the BAE year is less than zero;
because a *balancing adjustment event
occurred for an asset allocated to that pool during that year.
(2) The amount included in assessable income under subsection 328-215(2)
is split equally between:
(a) the transferor and transferee; or
(b) if there are 2 or more variations in the constitution of a relevant
partnership or in the interests of the partners for the BAE year and a roll-over
is chosen for each variation—the partnerships concerned.
(1) This section applies to *depreciating
assets (the previously held assets) that were
*held by the transferor just before the
*balancing adjustment events
occurred.
(2) Subsection 328-205(1) (about estimates of taxable use) does not apply
to previously held assets in the hands of the transferee for the BAE year.
Instead, the transferee uses for the BAE year:
(a) the estimate made by the transferor under that subsection for the
asset; or
(b) if the transferor had made one or more estimates for the asset under
subsection 328-225(1) that resulted in an adjustment under section 328-225
(about change in business use)—that estimate or the most recent of those
estimates.
(3) Section 328-225 applies to the transferee for each previously
held asset for income years after the BAE year as if:
(a) the transferee had *held the asset
during the period that the transferor held it; and
(b) estimates applicable to the transferor for the asset under that
section were also applicable to the transferee.
9 Application
The amendments made by this Schedule apply to balancing adjustment events
occurring on or after 1 July 2001.
Part 1—Making
and revoking certain choices
Income Tax (Transitional
Provisions) Act 1997
1 Subsection 701-5(1)
After “may”, insert “, subject to
subsection (3),”.
2 Subsections 701-5(2) and (3)
Repeal the subsections, substitute:
Period for making choice
(2) The choice must be made by the later of:
(a) the end of the period described in subsection 703-50(3) of the
Income Tax Assessment Act 1997 for giving the Commissioner the choice
under section 703-50 of that Act that the group is taken to be
consolidated; and
(b) the end of 31 December 2004.
Agreement of other entities required in certain cases
(3) If the choice is to be made after the end of the period mentioned in
paragraph (2)(a) and before the end of the day mentioned in
paragraph (2)(b), it cannot be made unless each entity in relation to which
the conditions in subsection (5) are satisfied has agreed to it being
made.
Choice is irrevocable in certain circumstances
(4) The choice cannot be revoked unless:
(a) the revocation takes place before the end of 31 December 2004;
and
(b) each entity in relation to which the conditions in subsection (5)
are satisfied has agreed to the revocation.
(5) For the purposes of subsections (3) and (4), the conditions are
that:
(a) the entity (the leaving entity) ceased to be a
subsidiary member of the group before the choice was made (in a
subsection (3) case) or before the revocation took place (in a
subsection (4) case); and
(b) an asset became that of the leaving entity because section 701-1
(the single entity rule) of the Income Tax Assessment Act 1997 ceased to
apply when the leaving entity ceased to be a subsidiary member; and
(c) the asset had become that of the head company because that section
applied when a chosen transitional entity (whether or not the same entity as the
leaving entity) became a subsidiary member.
3 Before Subdivision 707-C
Insert:
Subsection 707-145(3) of the Income Tax Assessment Act 1997 does
not apply if:
(a) the revocation of the choice mentioned in that subsection takes place
before 1 January 2005; and
(b) each entity in relation to which the following conditions are
satisfied has agreed to the revocation:
(i) the entity (the leaving entity) ceased to be a
subsidiary member of the group before the revocation took place;
(ii) an asset became that of the leaving entity because section 701-1
(the single entity rule) of the Income Tax Assessment Act 1997 ceased to
apply when the leaving entity ceased to be a subsidiary member;
(iii) the asset had become that of the head company because that section
applied when the joining entity to which Subdivision 707-A of that Act
applies (whether or not the same entity as the leaving entity) became a
subsidiary member.
4 Subsections 707-325(5) and
(6)
Repeal the subsections, substitute:
Choice to work out available fraction using this section
(5) The transferee may choose to use a fixed percentage (greater than 0%
and not more than 100%) of the value donor’s modified market value to work
out the available fraction for the bundle. The transferee may do so only by the
later of:
(a) the day on which it lodges its income tax return for the first income
year for which it utilises (except in accordance with section 707-350)
losses transferred to it under Subdivision 707-A of the Income Tax
Assessment Act 1997; and
(b) the end of 31 December 2004.
(6) The choice cannot be amended, or revoked, after 31 December
2004.
5 Subsection 707-327(5)
Repeal the subsection, substitute:
Choice to treat value donor’s loss as included in
bundle
(5) A choice for the purposes of subsection (4):
(a) may be made only by the later of:
(i) the day on which the transferee lodges its income tax return for the
first income year for which it utilises (except in accordance with
section 707-350) losses transferred to it under Subdivision 707-A of
the Income Tax Assessment Act 1997; and
(ii) the end of 31 December 2004; and
(b) cannot be revoked after 31 December 2004.
6 Subsection 707-328A(4)
Repeal the subsection, substitute:
Choice
(4) A choice for the purposes of paragraph (1)(e):
(a) may be made only by the later of:
(i) the day on which the transferee lodges its income tax return for the
first income year for which it utilises (except in accordance with
section 707-350) losses transferred to it under Subdivision 707-A of
the Income Tax Assessment Act 1997; and
(ii) the end of 31 December 2004; and
(b) cannot be amended, or revoked, after 31 December 2004.
7 Subsections 707-350(5) and
(6)
Repeal the subsections, substitute:
Making choice
(5) The transferee may choose that this section apply to the utilisation
for any income year of all losses (of any sort) in the bundle that meet the
conditions in paragraphs (1)(a), (b), (c) and (d). The transferee may do so
only by the later of:
(a) the day on which it lodges its income tax return for the first income
year for which it could utilise any losses transferred to it under
Subdivision 707-A of the Income Tax Assessment Act 1997 (as
described in subsection (1) or otherwise); and
(b) the end of 31 December 2004.
When choice has effect
(6) The choice has effect for that income year and all later income years
(and cannot be revoked after 31 December 2004).
8 After section 719-305
Insert:
Subsection 719-325(7) of the Income Tax Assessment Act 1997 does
not apply if the revocation of the choice mentioned in that subsection takes
place before 1 January 2005.
Part 2—Research
and development
Income Tax Assessment Act
1936
9 Section 73BAA
Omit “, 73BAC, 73BAD, 73BAE and”, substitute
“to”.
10 After section 73BAB
Insert:
If:
(a) a company becomes a subsidiary member of a consolidated group or MEC
group; and
(b) things happening in relation to the company before it became a
subsidiary member are, because of section 701-5 (the entry history rule) of
the Income Tax Assessment Act 1997, taken into account as things
happening in relation to the head company of the group in applying paragraph
73J(1)(c) or (d) of this Act to determine for the head company core
purposes whether the head company is eligible to choose a tax offset;
the things happening are not taken into account as mentioned in
paragraph (b).
Note: The heading to section 73BAC is altered by
inserting “for purposes of sections 73P to 73Z” after
“history”.
11 After section 73BAC
Insert:
If:
(a) a company ceases to be a subsidiary member of a consolidated group or
MEC group; and
(b) while the company was a subsidiary member, things happened in relation
to an entity with which, if section 701-1 (the single entity rule) of the
Income Tax Assessment Act 1997 were disregarded, the company would have
been grouped (within the meaning of section 73L of this Act); and
(c) those things would, if section 701-1 of the Income Tax
Assessment Act 1997 were disregarded, have been taken into account in
applying paragraph 73J(1)(c) or (d) of this Act to determine whether the
company is eligible to choose a tax offset; and
(d) the things are not also things that, because of section 701-40
(the exit history rule) of the Income Tax Assessment Act 1997, are taken
into account as things happening in relation to an eligible asset etc. (within
the meaning of that section) of the company in applying paragraph 73J(1)(c) or
(d) of this Act to determine for the entity core purposes whether the
company is eligible to choose a tax offset;
the things are taken into account in applying paragraph 73J(1)(c) or (d)
of this Act to determine whether the company is eligible to choose a tax
offset.
Note: The heading to section 73BAD is altered by
inserting “for purposes of sections 73P to 73Z” after
“expenditure”.
Income Tax Assessment Act
1997
12 Paragraph 721-25(3)(b)
Omit “approved form”, substitute
“*approved form”.
Income Tax (Transitional
Provisions) Act 1997
13 Division 707 (heading)
Repeal the heading, substitute:
Part 4—Application
of amendments
14 Application of amendments made by this
Schedule
The amendments made by this Schedule apply on and after 1 July
2002.