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This is a Bill, not an Act. For current law, see the Acts databases.
1998
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Taxation Laws
Amendment (Film Licensed Investment Company) Bill
1998
No. ,
1998
(Treasury)
A Bill
for an Act to provide income tax deductions for investment in film licensed
investment companies, and for related purposes
ISBN: 0642
377448
Contents
Part 1—Insertion of new Subdivision
375-H 3
Income Tax Assessment Act
1997 3
Part 2—Consequential
amendments 8
Income Tax Assessment Act
1997 8
Income Tax Assessment Act
1936 9
A Bill for an Act to provide income tax deductions for
investment in film licensed investment companies, and for related
purposes
The Parliament of Australia enacts:
This Act may be cited as the Taxation Laws Amendment (Film Licensed
Investment Company) Act 1998.
This Act commences on the same day as the Film Licensed
Investment Company Act 1998.
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repealed as set out in the applicable items in the Schedule concerned, and any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.
Part
1—Insertion of new
Subdivision 375-H
Income
Tax Assessment Act 1997
1 Section 375-820 (link
note)
Repeal the link note.
2 After Subdivision 375-G
Insert:
You can deduct amounts you have paid for shares issued to you by a film
licensed investment company (FLIC). The deduction does not apply to shares
issued after 1 July 2000.
Because of these deductions, there are special rules about the tax
treatment of FLICs.
Table of sections
Provisions affecting you if you own shares in a film licensed investment
company
375-855 What can you deduct?
375-860 When can you claim the deduction?
375-865 How can you lose your entitlement?
375-870 How this Subdivision applies to partners and
partnerships
Provisions affecting film licensed investment companies
375-875 Tax losses cannot be transferred to or from
FLICs
375-880 FLIC cannot claim deductions for concessional
capital
(1) You can deduct money you pay for
*shares in a
*film licensed investment company (a
FLIC) if the shares are issued to you by the FLIC during the
period the FLIC’s concessional capital licence is in force.
Note: The period a FLIC’s licence is in force is
determined under the Film Licensed Investment Company Act 1998. It cannot
be in force after 30 June 2000.
(2) A film licensed investment company is a company that has
been granted a licence to raise concessional capital under the Film Licensed
Investment Company Act 1998 (whether or not the licence has ceased to be in
force).
Note: Under the Film Licensed Investment Company Act
1998 concessional capital is money paid to the FLIC for the issue of shares
during the period its concessional capital licence is in force (see section 5 of
that Act).
(1) If you pay for the *shares in an
income year and the shares are issued in the same income year, you get the
deduction for that income year.
(2) If you pay for the *shares in an
income year but the shares are not issued until a later income year, you get the
deduction for the later income year.
Note: A FLIC can only issue fully paid shares (see section
15 of the Film Licensed Investment Company Act 1998).
(1) You lose your entitlement to the deduction if the
*Arts Minister decides to remove the
concessional status of your shares.
Note: The Arts Minister may do this if the FLIC in which you
hold shares breaches the conditions imposed on it under the FLIC’s
Act. See section 32 of the Film Licensed Investment Company Act
1998.
(2) You also lose your entitlement to the deduction if the Commissioner is
satisfied that:
(a) the *FLIC in which you hold the
*shares has breached a condition imposed on it
under the Film Licensed Investment Company Act 1998; and
(b) the Arts Minister has been given notice that the Commissioner
is satisfied as mentioned in paragraph (a); and
(c) the Arts Minister has not, within 6 months after that notice, notified
the Commissioner that the Arts Minister has made a decision about the alleged
breach of conditions.
Note: The Arts Minister’s decisions about alleged
breaches of conditions are made under section 32 of the Film Licensed
Investment Company Act 1998. Subsection (2) above is only relevant in a
situation where the Arts Minister has, as far as the Commissioner knows, made
no decision under that section.
(3) If the Commissioner is satisfied of the matters set out in subsection
(2), the Commissioner must, within 28 days, give written notice to the
*Arts Minister about the loss of entitlement
that has occurred under subsection (2).
Amendment of assessment
(4) If you lose your entitlement after you have already got the
deduction, your assessment may be amended to disallow the deduction.
Application
(1) This section applies to allocate to you, for the purposes of this
Subdivision, money paid for *shares issued by a
*FLIC during an income year if:
(a) you are a partner in a partnership; and
(b) the shares have been issued to you and your partners jointly;
and
(c) the partnership has paid for the shares.
Allocation of payments to partners
(2) For the purposes of this Subdivision, you are taken to have paid for
the shares during that income year:
(a) the amount of the payment for the
*shares that the partners agreed is
attributable to you; or
(b) if there was no such agreement—the proportion of the payment for
the shares that is equal to the proportion of your individual interest in the
net income or partnership loss of the partnership for that income
year.
This Subdivision does not apply to net income or partnership
loss
(3) Disregard this Subdivision when working out the net income or
partnership loss of the partnership under section 90 of the Income Tax
Assessment Act 1936.
(1) A *FLIC cannot transfer to another
company a *tax loss or a
*net capital loss for an income year if the
FLIC’s concessional capital licence is in force during some or all of that
income year.
(2) A company cannot transfer to a *FLIC
a *tax loss or a
*net capital loss for an income year if the
FLIC’s concessional capital licence is in force during some or all of that
income year.
Note 1: A FLIC’s concessional capital licence is
granted under the Film Licensed Investment Company Act
1998.
Note 2: These 2 rules are exceptions to the general rules
about transfer of losses between companies in Subdivisions 170-A and
170-B.
(1) If a *FLIC has spent an amount of
*FLIC concessional capital in respect of a
film, the FLIC cannot deduct the amount under this Act.
(2) FLIC concessional capital means money paid to the FLIC
by a person for the issue, during the period the FLIC’s concessional
capital licence is in force, of *shares to that
person.
[The next Division is Division 385.]
Part
2—Consequential
amendments
Income
Tax Assessment Act 1997
3 Section 12-5 (table item headed
“shares”)
After:
|
employee share acquisition schemes, deduction for provider of qualifying
shares or rights |
|
||
insert:
|
film licensed investment companies, deduction for subscription for shares
in |
Subdivision 375-H |
|||
4 Section 12-5 (after the table item headed
“film income”)
Insert:
|
film licensed investment companies (FLICs) |
|
|||||
|
see shares |
|
|||||
5 Section 40-30 (before the table item dealing
with films, Australian)
Insert:
|
Film licensed investment companies |
Money paid for issue of shares in a film licensed investment
company |
Any entity |
Immediate 100% write off |
See Parts 3-1 and 3-3 (CGT) |
Subdivision 375-H |
Add:
Note: This Subdivison does not apply in some circumstances
involving film licensed investment companies. These circumstances are set out in
Subdivision 375-H.
7 At the end of section
170-105
Add:
Note: This Subdivison does not apply in some circumstances
involving film licensed investment companies. These circumstances are set out in
Subdivision 375-H.
8 Subsection 995-1(1)
Insert:
Arts Minister means the Minister administering the Film
Licensed Investment Company Act 1998.
9 Subsection 995-1(1)
Insert:
film licensed investment company has the meaning given by
section 375-855.
10 Subsection 995-1(1)
Insert:
FLIC (film licensed investment company) has the meaning given
by section 375-855.
11 Subsection 995-1(1)
Insert:
FLIC concessional capital has the
meaning given by section 375-880.
Income
Tax Assessment Act 1936
12 After paragraph
170(10AA)(m)
Insert:
(p) Subdivision 375-H;