TAX LAW IMPROVEMENT ACT 1997 NO. 121, 1997 - SCHEDULE 2

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TAX LAW IMPROVEMENT ACT 1997 NO. 121, 1997 - SCHEDULE 2

- Assessable income Part 1—Amendment of the Income Tax (Transitional Provisions) Act 1997

1 Chapter 2 (link note after the heading)

Repeal the link note.

2 Before Part 2-5

Insert:

Part 2-1—Assessable income

[The next Division is Division 15.]

Division 15—Some items of assessable income

Table of sections

15-1 General application provision
15-10 Application of section 15-10 of the Income Tax Assessment Act 1997 to bounties and subsidies
15-15 Application of section 15-15 of the Income Tax Assessment Act 1997 to profit-making plans
15-20 Application of section 15-20 of the Income Tax Assessment Act 1997 to royalties
15-30 Application of section 15-30 of the Income Tax Assessment Act 1997 to insurance or indemnity payments
15-35 Application of section 15- 35 of the Income Tax Assessment Act 1997 to interest on overpayments and early payments of tax

15-1 General application provision

(1): Division 15 of the Income Tax Assessment Act 1997 applies to assessments for the 1997-98 income year and later income years.
(2): However, the sections of that Act listed in the table apply in accordance with the corresponding sections of this Act.

Application provisions for specific sections
Item	This section of the Income Tax Assessment Act 1997 ...	Applies as described in this section of this Act ...
1	15-10	15-10
2	15-15	15-15
3	15-20	15-20
4	15-30	15-30
5	15-35	15-35

15-10 Application of section 15-10 of the Income Tax Assessment Act 1997 to bounties and subsidies

Section 15-10 (Bounties and subsidies) of the Income Tax Assessment Act 1997 applies to a bounty or subsidy received in the 1997-98 income year or a later income year.

15-15 Application of section 15-15 of the Income Tax Assessment Act 1997 to profit-making undertaking or plan

Section 15-15 (Profit-making undertaking or plan) of the Income Tax Assessment Act 1997 applies to a profit arising in the 1997-98 income year or a later income year, even if the undertaking or plan was entered into, or began to be carried on or carried out, before the 1997-98 income year.

15-20 Application of section 15-20 of the Income Tax Assessment Act 1997 to royalties

Section 15-20 (Royalties) of the Income Tax Assessment Act 1997 applies to an amount received as or by way of royalty in the 1997-98 income year or a later income year.

[The next section is section 15-30.]

15-30 Application of section 15-30 of the Income Tax Assessment Act 1997 to insurance or indemnity payments

Section 15-30 (Insurance or indemnity for loss of assessable income) of the Income Tax Assessment Act 1997 applies to an amount received in the 1997-98 income year or a later income year as insurance or indemnity for the loss at any time of an amount that would have been assessable income under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 .

15-35 Application of section 15- 35 of the Income Tax Assessment Act 1997 to interest on overpayments and early payments of tax

Section 15-35 (Interest on overpayments and early payments of tax) of the Income Tax Assessment Act 1997 applies to interest that is paid or applied in the 1997-98 income year or a later income year, even if some or all of the interest became payable earlier.

[The next Division is Division 20.]

Part 2—Consequential amendment of the Income Tax Assessment Act 1997
3 Section 10-5 (table item headed "accrued leave transfer payments")

Omit "26(ec)", substitute "15-5".

4 Section 10-5 (table item headed "bounties")

Omit "26(g)", substitute "15-10".

5 Section 10-5 (table item headed "compensation")

Omit:

lessee pays for non-compliance with covenant to repair

26(l)

6 Section 10-5 (table item headed "compensation")

Omit:

profit or income, insurance or indemnity for loss of

26(j)

substitute:

profits or income, insurance or indemnity for loss of	15-30
received by lessor for lessee's non-compliance with lease obligation to repair	15-25

7 Section 10-5 (table item headed "employment")

Omit "26(eb)", substitute "15-3".

8 Section 10-5 (table item headed "interest")

Omit "26(jb)", substitute "15-35".

9 Section 10-5 (table item headed "leases")

Before:

crown leases used for primary production, assignment of

88A(3)

insert:

amounts received by lessor from lessee for non-compliance with lease obligation to repair

15-25

10 Section 10-5 (table item headed "leases")

Omit:

lessees' payments for non-compliance with covenant to repair

26(l)

11 Section 10-5 (table item headed "leases")

Omit:

premiums relating to a grant or assignment

26AB

substitute:

premiums relating to assignment of a lease granted before 20 September 1985

26AB

12 Section 10-5 (table item headed "leave payments")

Omit "26(ec)", substitute "15-5".

13 Section 10-5 (table item headed "loans")

Repeal the item.

14 Section 10-5 (table item headed "profits")

Omit:

profit-making undertakings or the sale of property acquired for profit-making by sale

25A

substitute:

profit-making undertaking or plan	15-15
sale of property acquired before 20 September 1985 for profit-making by sale	25A

15 Section 10-5 (table item headed "royalties")

Omit "26(f)", substitute "15-20".

16 Section 10-5 (table item headed "subsidies")

Omit "26(g)", substitute "15-10".

17 Subsection 995- 1(1)

Insert:

"royalty" has the meaning given by subsection 6(1) of the Income Tax Assessment Act 1936 .

Part 3—Consequential amendment of the Income Tax Assessment Act 1936
18 Subsection 23J(3)

After "26C", insert "of this Act or section 15-15 of the Income Tax Assessment Act 1997 ".

19 After subsection 25A(1A)

Insert:

(1B): This section does not apply to a profit arising in the 1997-98 year of income or a later year of income from the carrying on or carrying out of a profit-making undertaking or scheme, even if the undertaking or scheme was entered into, or began to be carried on or carried out, before the 1997-98 year of income.

Note: Section 15-15 (Profit-making undertaking or plan) of the Income Tax Assessment Act 1997 deals with such a profit.

20 After section 25A

Insert:

25B Limits on application of section 26

A paragraph of section 26 does not apply to what is shown in the following table.

Note: The last column of the table shows the provision of the Income Tax Assessment Act 1997 that applies instead.

Limits on application of section 26
Item	Paragraph of section 26	What the paragraph does not apply to	Provision of Income Tax Assessment Act 1997 that applies instead
1	26(eb)	Amount paid in the 1997-98 year of income or a later year of income (regardless of when the agreement, arrangement or understanding that was the basis for the payment was entered into)	section 15- 3
2	26(ec)	Amount received in the 1997-98 year of income or a later year of income (regardless of when the leave accrued that the amount relates to)	section 15-5
3	26(f)	Amount received in the 1997-98 year of income or a later year of income	section 15-20
4	26(g)	Bounty or subsidy received in the 1997-98 year of income or a later year of income	section 15-10
5	26(h)	Amount received in the 1997-98 year of income or a later year of income	section 6-5
6	26(j)	Amount received in the 1997-98 year of income or a later year of income (regardless of when the loss occurred, or the loss or outgoing was incurred, that led to payment of the amount)	* section 15-30 (for loss of assessable income) * Subdivision 20-A (for deductible loss or outgoing) * section 70-115 (for loss of trading stock)
7	26(ja)	Amount received in the 1997-98 year of income or a later year of income	none
8	26(jb)	Amount of interest paid or applied in the 1997-98 year of income or a later year of income (regardless of when the interest became payable)	section 15-35
9	26(k)	Amount received in the 1997-98 year of income or a later year of income (regardless of when the loss occurred)	Subdivision 20-A
10	26(l)	Amount received in the 1997-98 year of income or a later year of income	section 15-25

21 Section 26

Omit "The assessable income", substitute "Subject to section 25B, the assessable income".

22 Before subsection 26AB(1)

Insert:

(1A): For the purposes of assessments for the 1997-98 year of income and later years of income, this section applies only in relation to assignments of leases granted before 20 September 1985.

Note: For the 1997-98 year of income and later years of income, Part IIIA (Capital gains and capital losses) deals with the income tax treatment of premiums for:

* * granting leases; and
* * assigning leases granted on or after 20 September 1985.

The Income Tax Assessment Act 1997 does not contain a rewritten version of this section.

23 Subsection 110(1) (definition of modified 25/25A amount )

After "6-5", insert "or 15-15".

24 Subsection 110(1) (definition of ordinary 25/25A amount )

After "6-5", insert "or 15-15".

25 Paragraph 111B(1)(e)

After "Act", insert "and section 15-15 of the Income Tax Assessment Act 1997 ".

26 Subsection 116E(1) (definition of modified 25/25A amount )

After "6-5", insert "or 15-15".

27 Subsection 116E(1) (definition of ordinary 25/25A amount )

After "6-5", insert "or 15-15".

28 Paragraph 116GC(1)(e)

After "Act", insert "and section 15-15 of the Income Tax Assessment Act 1997 ".

29 Subsection 159ZR(1) (paragraph (a) of the definition of salary or wages )

After "section 26AC", insert "of this Act or section 15-3 of the Income Tax Assessment Act 1997 ".

30 Subsection 221A(1) (definition of salary or wages )

Omit "paragraph 26(eb) or section 26AC", substitute "section 26AC of this Act or section 15-3 of the Income Tax Assessment Act 1997 ".

31 Application of amendment of subsection 221A(1) (definition of salary or wages )

Section 4 of this Act does not apply to the amendment made by item 30.

32 Subsection 221C(1AC)

Omit "paragraph 26(eb)", substitute "section 15-3 of the Income Tax Assessment Act 1997 ".

33 Saving of regulations made for purposes of subsection 221C(1AC) of the Income Tax Assessment Act 1936

The amendment of subsection 221C(1AC) of the Income Tax Assessment Act 1936 does not affect the validity of regulations prescribing rates of deduction specifically for salary or wages that are amounts to which paragraph 26(eb) of that Act applies.

34 Subsection 221C(2B)

Omit "paragraph 26(eb)", substitute "section 15-3 of the Income Tax Assessment Act 1997 ".

35 Paragraph 304(b)

After "Act", insert "and section 15-15 of the Income Tax Assessment Act 1997 ".

36 Subsection 396(1)

After "this Act", insert "and the Income Tax Assessment Act 1997 ".

37 Subsection 396(1)

After "52", insert "of this Act and section 15-15 of the Income Tax Assessment Act 1997 ".

Part 4—Consequential amendments of other Acts

Financial Corporations (Transfer of Assets and Liabilities) Act 1993

38 Paragraph 15(1)(a)

After "6-5", insert "or 15-15".

39 Paragraph 15(3)(a)

After "6-5", insert "or 15-15".

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