2004-2005 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 (Treasury) A Bill for an Act to amend the law relating to taxation, and for related purposes [Page Break] 1 Short title ...........................................................................................1 2 Commencement.................................................................................1 3 Schedule(s) ........................................................................................2 Schedule 1--Consolidation: available fraction for loss utilisation purposes 3 Income Tax Assessment Act 1997 3 Schedule 2--Extension of mutuality principle 4 Income Tax Assessment Act 1997 4 Schedule 3--Child care tax offset 5 Income Tax Assessment Act 1997 5 Schedule 4--Medical expenses offset 6 Income Tax Assessment Act 1936 6 Schedule 5--Specific gift recipients 8 Income Tax Assessment Act 1997 8 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 ii [Page Break] 2 taxation, and for related purposes 3 The Parliament of Australia enacts: 4 1 Short title 5 This Act may be cited as the Tax Laws Amendment (2005 6 Measures No. 6) Act 2005. 7 2 Commencement 8 (1) Each provision of this Act specified in column 1 of the table 9 commences, or is taken to have commenced, in accordance with 10 column 2 of the table. Any other statement in column 2 has effect 11 according to its terms. 12 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 1 [Page Break] Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 The day on which this Act receives the and anything in Royal Assent. this Act not elsewhere covered by this table 2. Schedule 1 The day on which this Act receives the Royal Assent. 3. Schedule 2 The day on which this Act receives the Royal Assent. 4. Schedule 3 The later of: (a) the start of the day on which this Act receives the Royal Assent; and (b) immediately after the commencement of the Family and Community Services Legislation Amendment (Welfare to Work) Act 2005. However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur. 5. Schedule 4 The day on which this Act receives the Royal Assent. 6. Schedule 5 The day on which this Act receives the Royal Assent. 1 Note: This table relates only to the provisions of this Act as originally 2 passed by the Parliament and assented to. It will not be expanded to 3 deal with provisions inserted in this Act after assent. 4 (2) Column 3 of the table contains additional information that is not 5 part of this Act. Information in this column may be added to or 6 edited in any published version of this Act. 7 3 Schedule(s) 8 Each Act that is specified in a Schedule to this Act is amended or 9 repealed as set out in the applicable items in the Schedule 10 concerned, and any other item in a Schedule to this Act has effect 11 according to its terms. 2 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 [Page Break] 1 2 Schedule 1--Consolidation: available fraction 3 for loss utilisation purposes 4 5 Income Tax Assessment Act 1997 6 1 Subsection 707-320(4) 7 Repeal the subsection, substitute: 8 (4) For a *bundle of losses: 9 (a) subject to paragraph (b)--the available fraction is worked 10 out to 3 decimal places, rounding up if the fourth decimal 11 place is 5 or more; or 12 (b) if the available fraction worked out under paragraph (a) is 13 0.000 and, if it were worked out to more decimal places, it 14 would include one or more non-zero digits--the available 15 fraction is worked out to the number of decimal places that 16 includes the first or only such digit, rounding up if the next 17 decimal place is 5 or more. 18 Examples: For 0.000328, the available fraction is 0.0003. For 19 0.000086, the available fraction is 0.00009. 20 (4A) Subsections (1) and (2) have effect subject to subsection (4). 21 2 Application 22 The amendment made by this Schedule applies on and after 1 July 23 2002. Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 3 [Page Break] 1 2 Schedule 2--Extension of mutuality principle 3 4 Income Tax Assessment Act 1997 5 1 Section 11-55 (after table item headed "mining") 6 Insert: mutual receipts amounts that would be mutual receipts but for prohibition on distributions to members............................................. 59-35 7 2 At the end of subsection 25-75(1) (before the note) 8 Add: 9 ; or (e) for the purpose of producing amounts to which section 59-35 10 applies (amounts that would be mutual receipts but for 11 prohibition on distributions to members); or 12 (f) in carrying on a *business for the purpose of producing 13 amounts to which section 59-35 applies. 14 3 At the end of Division 59 15 Add: 16 59-35 Amounts that would be mutual receipts but for prohibition on 17 distributions to members 18 An amount of *ordinary income of an entity is not assessable 19 income and not *exempt income if: 20 (a) the amount would be a mutual receipt, but for the entity's 21 constituent document preventing the entity from making any 22 *distribution, whether in money, property or otherwise, to its 23 members; and 24 (b) apart from this section, the amount would be assessable 25 income only because of section 6-5. 26 4 Application 27 The amendments made by this Schedule apply in relation to income 28 years commencing on or after 1 July 2000. 4 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 [Page Break] 1 2 Schedule 3--Child care tax offset 3 4 Income Tax Assessment Act 1997 5 1 Subsection 61-470(3) 6 Omit "20", substitute "24". 7 2 At the end of section 61-470 8 Add: 9 (4) The 50 hour limit is taken, for the purposes of paragraph (2)(c), to 10 apply to your entitlement for child care benefit for the week if it 11 would have applied but for the fact that you failed to meet the 12 requirements of paragraph 17A(1)(b) of the A New Tax System 13 (Family Assistance) Act 1999 in relation to the week. 14 3 Application 15 The amendments made by this Schedule apply in relation to 16 assessments for income years that start on or after 1 July 2007. Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 5 [Page Break] 1 2 Schedule 4--Medical expenses offset 3 4 Income Tax Assessment Act 1936 5 1 Subsection 159P(1) 6 After "himself", insert "or herself". 7 2 Subsection 159P(4) 8 Insert: 9 ineligible medical expenses means payments: 10 (a) to a legally qualified medical practitioner, nurse or chemist, 11 or a public or private hospital, in respect of a cosmetic 12 operation that is not a professional service for which a 13 medicare benefit is payable under Part II of the Health 14 Insurance Act 1973; or 15 (b) to a legally qualified dentist for: 16 (i) dental services; or 17 (ii) treatment; 18 that is solely cosmetic. 19 3 Subsection 159P(4) (at the end of paragraphs (a) to (f) of 20 the definition of medical expenses) 21 Add "or". 22 4 Subsection 159P(4) (at the end of subparagraph (g)(ii) of 23 the definition of medical expenses) 24 Add "or". 25 5 Subsection 159P(4) (paragraph (i) of the definition of 26 medical expenses) 27 Repeal the paragraph, substitute: 28 (i) for the maintenance of a dog used for the guidance or 29 assistance of, but not social therapy for, a person with a 30 disability, being a dog that the Commissioner is satisfied is 31 properly trained in the guidance or assistance of persons with 32 disabilities; 6 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 [Page Break] 1 but does not include ineligible medical expenses. 2 6 Subsection 159P(4) 3 Insert: 4 professional service has the meaning given by subsection 3(1) of 5 the Health Insurance Act 1973. 6 7 Subsection 159P(5) 7 Omit "paragraph (a) of the definition of medical expenses", substitute 8 "the definitions of ineligible medical expenses and medical expenses". 9 8 Subsection 159P(6) 10 Omit "paragraph (b) of the definition of medical expenses", substitute 11 "the definitions of ineligible medical expenses and medical expenses". 12 9 Application 13 The amendments made by this Schedule apply to assessments for the 14 2005-06 year of income and later years of income. Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 7 [Page Break] 1 2 Schedule 5--Specific gift recipients 3 4 Income Tax Assessment Act 1997 5 1 Subsection 30-25(2) (at the end of the table) 6 Add: 2.2.33 International Specialised Skills Institute the gift must be made Incorporated after 11 August 2005 2.2.34 Yachad Accelerated Learning Project the gift must be made Limited after 29 June 2005 and before 1 July 2006 7 2 Subsection 30-50(2) (table item 5.2.24) 8 Omit "25 April 2005", substitute "1 July 2005". 9 3 Subsection 30-50(2) (at the end of the table) 10 Add: 5.2.26 C E W Bean Foundation the gift must be made after 14 November 2005 and before 15 November 2007 5.2.27 The Vietnam War Memorial of Victoria the gift must be made Incorporated after 31 December 2004 and before 1 January 2006 11 4 Subsection 30-80(2) (at the end of the table) 12 Add: 9.2.15 Australian Red Cross Society--US 2005 the gift must be made Hurricane Relief Appeal after 31 August 2005 and before 1 September 2006 9.2.16 The Salvation Army Hurricane Katrina the gift must be made Relief Appeal after 1 September 2005 and before 2 September 2006 9.2.17 Xanana Vocational Education Trust the gift must be made after 20 July 2005 and before 21 July 2007 8 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 [Page Break] 1 5 Section 30-315 (after table item 25B) 2 Insert: 25C Australian Red Cross Society--US 2005 item 9.2.15 Hurricane Relief Appeal 3 6 Section 30-315 (after table item 30) 4 Insert: 30AA C E W Bean Foundation item 5.2.26 5 7 Section 30-315 (after table item 63A) 6 Insert: 63B International Specialised Skills Institute item 2.2.33 Incorporated 7 8 Section 30-315 (after table item 105A) 8 Insert: 105B Salvation Army Hurricane Katrina item 9.2.16 Relief Appeal 9 9 Section 30-315 (after table item 121B) 10 Insert: 121C Vietnam War Memorial of Victoria item 5.2.27 Incorporated 11 10 Section 30-315 (after table item 127) 12 Insert: 127A Xanana Vocational Education Trust item 9.2.17 127B Yachad Accelerated Learning Project item 2.2.34 Limited 13 Tax Laws Amendment (2005 Measures No. 6) Bill 2005 No. , 2005 9