Insert in its appropriate alphabetical position, determined on a letter-by-letter basis:

Insert:

(1)

You cannot deduct under this Act a loss or outgoing to the extent that it was incurred in the furtherance of, or directly in relation to, a physical element of an offence against an ^* Australian law of which you have been convicted if the offence was, or could have been, prosecuted on indictment.

(2)

Despite section 170 of the Income Tax Assessment Act 1936 , the Commissioner may amend your assessment at any time within 4 years after you are convicted of the relevant offence for the purpose of giving effect to subsection (1) of this section.

Insert:

Expenditure does not form part of any element of the cost base to the extent that section 26-54 prevents it being deducted (even if some other provision also prevents it being deducted).

Note: Section 26-54 prevents deductions for expenditure related to certain offences.

Insert:

(9A)

Expenditure does not form part of the reduced cost base to the extent that section 26-54 prevents it being deducted (even if some other provision also prevents it being deducted).

Note: Section 26-54 prevents deductions for expenditure related to certain offences.

The amendments made by this Schedule apply to amounts incurred after 29 April 2005.