Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (NO. 4) 1997 NO. 174 OF 1997 - SCHEDULE 4--Tax

1 Paragraph 57-40(1)(b)

Omit "defined benefit scheme", substitute "defined benefit superannuation scheme".

2 Paragraph 57-40(5)(c)

Omit "defined benefit schemes", substitute "defined benefit superannuation schemes".

Note: The heading to section 57-45 of Schedule 2D to the Income Tax Assessment Act 1936 is altered by inserting " superannuation " after " defined benefit ".

Repeal the paragraphs, substitute:

(a) at the transition time, according to a particular defined benefit superannuation scheme's accounts, an amount is available to meet liabilities of the transition taxpayer under the scheme to provide superannuation benefits for, or for dependants of, employees of the transition taxpayer; and

(b) the amount exceeds the total value (as worked out according to actuarial principles) of the liabilities of that kind that have accrued as at the transition time; and

(c) before the transition time, the transition taxpayer makes a written election that the excess is to be used solely to meet liabilities of that kind accruing after the transition time, and the excess is later used solely to meet such liabilities;

After "actually contributed", insert "before the start of the transition year".

5 Subsection 57-50(5) (step 2)

Omit "start of the transition year" (last occurring), substitute "transition time".

6 After section 57-50

Insert:

SECT 57-52 Section 57-50 does not apply if there is a surplus at transition time Section 57-50 does not apply to a deduction of the kind mentioned in subsection 57-50(1) if:

(a) at the transition time, according to the accounts of the fund concerned, an amount is available to meet liabilities of the transition taxpayer in relation to the fund to provide superannuation benefits for, or for dependants of, employees of the transition taxpayer; and

(b) the amount exceeds the value (as worked out according to actuarial principles) of the liabilities of that kind that have accrued as at the transition time.

Add:

Reduction of limit if debt later disposed of

(7) If:

(a) at the transition time, a debt is owed to the transition taxpayer; and

(b) there is an amount (the debt provision amount ) greater than nil that, under generally accepted accounting principles, would be the appropriate doubtful debt provision in relation to the debt as at the transition time; and

(c) after the transition time, the transition taxpayer disposes of the debt to another person;

(d) if, after the transition time, the transition taxpayer wrote off part of the debt as bad--the excess (if any) of the debt provision amount over the amount or amounts so written off; or

(e) in any other case--the debt provision amount.

Part 2--Application and transitional

8 Application

The amendments made by Part 1 apply if the transition time is after 2 July 1995.

9 Transitional--when election may be made

Despite paragraph 57-45(c) of Schedule 2D to the Income Tax Assessment Act 1936 (as amended by this Act), if the transition time is before the end of the 28th day after the commencement of this item (the later time ), the transition taxpayer may make a written election under that subparagraph at any time before the later time.