2008 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 (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) ......................................................................................... 1 Schedule 1--CGT roll-ove rs for corporate restructures 3 Income Tax Assessment Act 1997 3 Schedule 2--Mutual assistance in collection 14 Taxation Administration Act 1953 14 Schedule 3--Late payme nt offset for superannuation guarantee contributions 16 Superannuation Guarantee (Administration) Act 1992 16 Schedule 4--Minor amendme nts 17 Part 1--General 17 A New Tax System (Goods and Services Tax) Act 1999 17 Fringe Benefits Tax Assessment Act 1986 17 Income Tax Assessment Act 1936 19 Income Tax Assessment Act 1997 20 Income Tax Rates Act 1986 22 Taxation Administration Act 1953 23 Taxation (Interest on Overpayments and Early Payments) Act 1983 23 Tax Laws Amendment (Budget Measures) Act 2008 24 Part 2--Asterisking amendments 26 Income Tax Assessment Act 1997 26 Part 3--Repeal 27 Pay-roll Tax Act 1941 27 i Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [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 (2008 6 Measures No. 6) Act 2008. 7 2 Commence ment 8 This Act commences on the day on which it receives the Royal 9 Assent. 10 3 Schedule(s) 11 Each Act that is specified in a Schedule to this Act is amended or 12 repealed as set out in the applicable items in the Schedule Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 1 [Page Break] 2 according to its terms. 3 2 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 2 Schedule 1--CGT roll-overs for corporate 3 restructures 4 5 Income Tax Assessment Act 1997 6 1 Section 112-53 (after table item 2) 7 Insert: 2A Interest is acquired by an First element of cost base 124-784B entity where there is a and reduced cost base roll-over under Subdivision 124-M and the arrangement is taken to be a restructure 8 2 After section 124-784 9 Insert: 10 124-784A When arrangement is a restructure 11 (1) This section applies in relation to a single * arrangement if: 12 (a) the replacement entity for the arrangement knows, or could 13 reasonably be expected to know: 14 (i) that a roll-over under section 124-780 has been, or will 15 be, obtained in relation to the arrangement; and 16 (ii) that there is a *common stakeholder for the arrangement 17 (disregarding subsections 124-783(4) and (5)); and 18 (b) subsection (2) is satisfied for the arrangement. 19 Note: If this section applies, the first element of the cost base and reduced 20 cost base of interests in the original entity acquired under the 21 arrangement is worked out under section 124-784B. 22 (2) This subsection is satisfied for the * arrangement if the result of step 23 2 is more than 80% of the result of step 3. Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 3 [Page Break] 1 Method statement 2 Step 1. Add up the * market value just after the * arrangement was 3 completed (the completion time) of all of the replacement 4 interests issued by the replacement entity under the 5 arrangement in exchange for the following interests (the 6 qualifying interests): 7 (a) original interests in the original entity; 8 (b) any interests issued by the original entity to an 9 acquiring entity under the arrangement in respect 10 of other original interests in the original entity 11 cancelled under the arrangement. 12 Step 2. Add to the result of step 1 the * market value at the 13 completion time of all of the replacement interests issued 14 by the replacement entity under any earlier arrangement 15 for which this section applied in exchange for qualifying 16 interests in the original entity. 17 Step 3. Add up the * market value at the completion time of all of 18 the: 19 (a) * shares * on issue by the replacement entity; and 20 (b) options, rights and similar interests issued by the 21 replacement entity that give the holder an 22 entitlement to acquire a share in the replacement 23 entity at or after the completion time. 24 Application if an entity is listed 25 (3) For the purposes of: 26 (a) subsection (2); and 27 (b) step 5 of the method statement in subsection 124-784B(2); 28 if interests in an entity are listed for quotation in the official list of 29 an *approved stock exchange at the completion time, then the 30 replacement entity may choose that the * market value at that time 31 of an interest in the first-mentioned entity is taken to be the 32 * officially quoted price of the interest at that time. 4 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 Application if more than one original entity 2 (4) If qualifying interests in more than one original entity are * acquired 3 under the * arrangement, then, for the purposes of subsections (1) 4 and (2): 5 (a) those interests of each of those original entities are taken to 6 have been acquired under separate arrangements; and 7 (b) those separate arrangements are taken to have happened in 8 the same order as the acquisitions. 9 (5) If qualifying interests in more than one original entity: 10 (a) would be taken by subsection (4) to have been * acquired 11 under separate * arrangements happening at the same time; or 12 (b) are acquired under separate arrangements that commence at 13 the same time; 14 then, for the purposes of subsections (1) and (2), the replacement 15 entity must choose the order in which those separate arrangements 16 are to have happened. 17 Meaning of officially quoted price 18 (6) An interest in an entity has an officially quoted price at a particular 19 time if, during the one week period starting on the day in which 20 that time occurred, there was at least one transaction on the 21 relevant stock exchange in interests of that class. That price is the 22 weighted average of the prices at which those interests were traded 23 on that stock exchange during that period. 24 (7) For the purposes of subsection (6), if an interest is quoted on 2 or 25 more * approved stock exchanges on that day, the officially quoted 26 price of the interest is determined under subsection (6) in respect 27 of whichever of those the entity chooses. 28 124-784B What is the cost base and reduced cost base when 29 arrange ment is a restructure? 30 (1) This section applies in relation to each qualifying interest in the 31 original entity: 32 (a) * acquired by an acquiring entity under an * arrangement to 33 which section 124-784A applies; and 34 (b) for which the first element of the * cost base of the acquiring 35 entity is not worked out under section 124-782. Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 5 [Page Break] 1 Note: Section 124-782 applies when an original interest holder is a 2 significant stakeholder or a common stakeholder. 3 First element of cost base--qualifying interests acquired in 4 exchange for replacement interests only 5 (2) The first element of the *cost base of the acquiring entity for the 6 qualifying interest in the original entity is worked out as follows: 7 Method statement 8 Step 1. Add up: 9 (a) the * market value, at the completion time, of the 10 original entity's * pre-CGT assets (except * trading 11 stock); and 12 (b) the *cost bases, at the completion time, of the 13 original entity's * post-CGT assets (except trading 14 stock); and 15 (c) for the original entity's * CGT assets (except 16 trading stock) that had no cost base--the 17 maximum amount of consideration the original 18 entity would need to receive if it were to dispose, 19 at the completion time, of those assets without an 20 amount being assessable income of, or deductible 21 to, the original entity; and 22 (d) the amount worked out under steps 2 and 3. 23 Step 2. For the original entity's * trading stock, add up: 24 (a) the * value of the trading stock at the start of the 25 income year containing the completion time; and 26 (b) for * livestock acquired by natural increase during 27 that income year but before the completion time-- 28 the *cost of that livestock; and 29 (c) the amount of any outgoing incurred in connection 30 with acquiring an item of trading stock during that 6 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 income year but before the completion time 2 (except livestock acquired by natural increase); and 3 (d) the amount of any outgoings forming part of the 4 cost of the trading stock incurred by the entity 5 during its current holding of the trading stock but 6 before the completion time. 7 Step 3. For any asset of the original entity not covered by steps 1 8 and 2, work out the amount that would be the asset's 9 * cost base at the completion time if it were a * CGT asset. 10 Step 4. Subtract from the result of step 1 the original entity's 11 liabilities (if any) at the completion time in respect of 12 those assets. 13 Step 5. If there is one class of * membership interests in the 14 original entity, divide the result of step 4 by the total 15 number of those membership interests at the completion 16 time. 17 If there are 2 or more classes of membership interests in 18 the original entity, allocate a portion of the result of step 19 4 to each class in proportion to the * market value of all 20 the membership interests in that class and divide that 21 result by the total number of membership interests in that 22 class at the completion time. 23 Note 1: For the purposes of this subsection, Division 701 (Core rules for 24 consolidated groups) is disregarded for an original entity that becomes 25 a subsidiary member of a consolidated group or M EC group under the 26 arrangement (see paragraph 715-910(1)(a)). 27 Note 2: If the original entity is the head company of a consolidated group or 28 M EC group, then subsection 701-1(1) (the single entity rule) and 29 section 701-5 (the entry history rule) apply in relation to that group 30 when working out steps 1 and 2 (see subsection 715-910(2)). 31 Note 3: For step 5, the replacement entity may choose to use the officially 32 quoted price of the qualifying interests as their market value (see 33 subsection 124-784A(3)). Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 7 [Page Break] 1 First element of cost base--interests acquired in exchange for 2 replacement interests and cash etc. 3 (3) However, if the qualifying interest was acquired under the 4 * arrangement partly in exchange for one or more replacement 5 interests and partly for something else, subsection (2) applies only 6 for working out the first element of that part of the *cost base of the 7 qualifying interest that is attributable to the replacement interests. 8 Note 1: This means that the acquiring entity will have to apportion the cost 9 base amount worked out under subsection (2) according to the relative 10 values of the replacement interests and the other component. 11 Note 2: The first element of that part of the cost base, and reduced cost base, 12 of the qualifying interest that is attributable to cash etc. is worked out 13 using the general rules about cost base. 14 Liabilities 15 (4) For the purposes of step 4 of subsection (2), a liability of the 16 original entity that is not a liability in respect of a specific asset or 17 assets of the entity is taken to be a liability in respect of all the 18 assets of the entity. 19 (5) If a liability is in respect of 2 or more assets, the proportion of the 20 liability that is in respect of any one of those assets is equal to: The *market value of the asset 21 The total of the *market values of all the assets that the liability is in respect of 22 First element of reduced cost base 23 (6) The first element of the * reduced cost base of the acquiring entity 24 for the qualifying interest in the original entity is worked out 25 similarly. 26 Rights and options to acquire membership interests 27 (7) For the purposes of step 5 of subsection (2), if at the completion 28 time a person holds an option, right or similar interest (including a 29 contingent option, right or interest), created or issued by the 30 original entity, to acquire a * membership interest in the original 31 entity, that option, right or interest is treated as if it were a 32 membership interest in the original entity. 8 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 124-784C Cost base of equity or debt given by acquiring entity to 2 ultimate holding company 3 Purpose 4 (1) This section allocates an appropriate * cost base to equity issued, or 5 new debt owed, by an acquiring entity under the * arrangement to 6 the * ultimate holding company of a * wholly-owned group where 7 the cost base of the acquiring entity for a qualifying interest was 8 worked out under section 124-784B. 9 Allocation of cost base 10 (2) The first element of the *cost base of the equity or debt for the 11 * ultimate holding company is that part of the cost base of the 12 qualifying interest worked out under section 124-784B as: 13 (a) may be reasonably allocated to the equity or debt; and 14 (b) is not more than the * market value of the equity or debt at the 15 completion time. 16 No capital gain on debt repayment 17 (3) Any * capital gain of the * ultimate holding company from the 18 repayment of new debt owed by an acquiring entity under the 19 * arrangement is disregarded to the extent that it relates to the 20 difference between the part of the *cost base worked out under 21 section 124-784B and the * market value of the debt at the 22 completion time. 23 Note: If the debt is assigned or exchanged, there may be a capital gain. 24 3 At the end of section 124-795 25 Add: 26 (4) You cannot obtain the roll-over for the * CGT event happening in 27 relation to the exchange of your qualifying interest if: 28 (a) the replacement entity makes a choice to that effect under 29 this subsection; and 30 (b) that entity or the original entity notifies you in writing of the 31 choice before the exchange. 32 4 At the end of Division 715 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 9 [Page Break] 1 Add: 2 Subdivision 715-W--Effect on arrangements where CG T 3 roll-overs are obtained 4 Table of sections 5 715-910 Effect on restructures--original entity becomes a subsidiary member 6 715-915 Effect on restructures--original entity is a head company 7 715-920 Effect on restructures--original entity is a head company that becomes a 8 subsidiary member of another group 9 715-925 Effect on restructures--original entity ceases being a subsidiary member 10 715-910 Effect on restructures--original entity becomes a subsidiary 11 me mber 12 (1) This section applies if: 13 (a) as a result of an * arrangement to which section 124-784A 14 applies, an original entity (within the meaning of that section) 15 becomes a *subsidiary member of a *consolidated group; and 16 (b) section 715-920 does not apply. 17 Note 1: Section 715-920 applies if the original entity was the head company of 18 another consolidated group before the arrangement was completed. 19 Note 2: Sections 124-784A and 124-784B apply to arrangements for 20 restructures. 21 (2) For the purposes of section 124-784B: 22 (a) the completion time (within the meaning of that section) for 23 the *arrangement is taken to be the time the original entity 24 becomes a member of the group; and 25 (b) disregard Division 701 (Core rules) in relation to the original 26 entity becoming a member of the group. 27 (3) The * head company of the group may choose for: 28 (a) section 701-10 (cost to head company of assets of joining 29 entity); and 30 (b) subsection 701-35(4) (setting value of trading stock at 31 tax-neutral amount); 32 not to apply to the original entity's assets in respect of the original 33 entity becoming a * subsidiary member of the group. 34 Note: This subsection does not affect the application of subsection 701-1(1) 35 (the single entity rule). 10 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 715-915 Effect on restructures--original entity is a head company 2 If: 3 (a) section 124-784A applies in relation to an * arrangement; and 4 (b) the original entity (within the meaning of that section) for the 5 arrangement is the * head company of a *consolidated group 6 just before the arrangement was completed; and 7 (c) section 715-920 does not apply; 8 then, for the purposes of section 124-784B, subsection 701-1(1) 9 (the single entity rule) and section 701-5 (the entry history rule) 10 apply in respect of the group. 11 Note 1: This section does not otherwise affect the application of subsection 12 701-1(1) or section 701-5. 13 Note 2: Sections 124-784A and 124-784B apply to arrangements for 14 restructures. 15 715-920 Effect on restructures--original entity is a head company 16 that becomes a subsidiary member of another group 17 (1) This section applies if: 18 (a) section 124-784A applies in relation to an * arrangement; and 19 (b) the original entity (within the meaning of that section) for the 20 arrangement is the * head company of a *consolidated group 21 (the acquired group) just before the arrangement was 22 completed; and 23 (c) as a result of the arrangement: 24 (i) the original entity; and 25 (ii) the * subsidiary members of the acquired group just 26 before the arrangement was completed; 27 become subsidiary members of another consolidated group. 28 Note: Sections 124-784A and 124-784B apply to arrangements for 29 restructures. 30 (2) For the purposes of section 124-784B: 31 (a) the original entity is taken to be the * head company of the 32 acquired group at the completion time (within the meaning of 33 that section) for the * arrangement; and 34 (b) the operation of this Part for the head company core purposes 35 (mentioned in subsection 701-1(2)) in relation to: 36 (i) the original entity; and Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 11 [Page Break] 1 (ii) the entities that were * subsidiary members of the 2 acquired group just before the arrangement was 3 completed; 4 continue to have effect at the completion time for the 5 arrangement; and 6 (c) the completion time for the arrangement is taken to be the 7 time the original entity becomes a member of the other 8 group; and 9 (d) disregard Division 701 (Core rules) in relation to the original 10 entity becoming a member of the other group. 11 Note: Paragraph (b) means that, for the purposes of section 124-784B, the 12 subsidiary members of the acquired group are treated as part of the 13 original entity. 14 (3) The * head company of the other group may choose for: 15 (a) section 701-10 (cost to head company of assets of joining 16 entity); and 17 (b) subsection 701-35(4) (setting value of trading stock at 18 tax-neutral amount); 19 not to apply to the original entity's assets in respect of the original 20 entity becoming a * subsidiary member of the other group. 21 Note: This subsection does not affect the application of subsection 701-1(1) 22 (the single entity rule). 23 715-925 Effect on restructures--original entity ceases being a 24 subsidiary me mber 25 If, as a result of an * arrangement to which section 124-784A 26 applies, an original entity (within the meaning of that section): 27 (a) ceases to be a * subsidiary member of a * consolidated group 28 after the completion time (within the meaning of that section) 29 for the arrangement; and 30 (b) does not become a member of another consolidated group; 31 then, for the purposes of section 124-784B, the completion time for 32 the arrangement is taken to happen at the time of the cessation. 33 Note: Sections 124-784A and 124-784B apply to arrangements for 34 restructures. 35 5 Subsection 995-1(1) 36 Insert: 12 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 officially quoted price has the meaning given by subsections 2 124-784A(6) and (7). 3 6 Application 4 (1) The amendments made by this Schedule apply in relation to an 5 arrangement that is or relates to a takeover bid (within the meaning of 6 the Corporations Act 2001) if: 7 (a) for an off-market bid (within the meaning of that Act)--step 8 4 of the table in subsection 633(1) of that Act; or 9 (b) for a market bid (within the meaning of that Act)--step 2 of 10 the table in subsection 635(1) of that Act; 11 is completed after 7.30 pm, by legal time in the Australian Capital 12 Territory, on 13 May 2008. 13 (2) The amendments made by this Schedule apply in relation to an 14 arrangement if: 15 (a) a court orders, under subsection 411(1) of the Corporations 16 Act 2001, a meeting or meetings of: 17 (i) a company's members; or 18 (ii) one or more classes of a company's members; 19 about the arrangement; and 20 (b) the application for the order was made after 7.30 pm, by legal 21 time in the Australian Capital Territory, on 13 May 2008. 22 (3) The amendments made by this Schedule apply in relation to an 23 arrangement if: 24 (a) the arrangement is not, and does not relate to, a takeover bid 25 (within the meaning of the Corporations Act 2001); and 26 (b) a court does not order, under subsection 411(1) of the 27 Corporations Act 2001, a meeting or meetings of: 28 (i) a company's members; or 29 (ii) one or more classes of a company's members; 30 about the arrangement; and 31 (c) a decision to enter into the arrangement was not made before 32 7.30 pm, by legal time in the Australian Capital Territory, on 33 13 May 2008. 34 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 13 [Page Break] 1 2 Schedule 2--Mutual assistance in collection 3 4 Taxation Administration Act 1953 5 1 After subsection 263-30(1) in Schedule 1 6 Insert: 7 (1A) To avoid doubt, the amount owed by the debtor may not be the 8 same as the amount (if any) entered in the Register. 9 2 Subsection 263-30(2) in Schedule 1 10 Omit "That amount", substitute "The amount owed by the debtor". 11 3 Section 263-35 in Schedule 1 (heading) 12 Repeal the heading, substitute: 13 363-35 Amending the Register etc. 14 4 After subsection 263-35(2) in Schedule 1 15 Insert: 16 (2A) To avoid doubt, the Commissioner may reduce an amount to be 17 recovered from a debtor under paragraph (2)(b) without amending 18 the Register. 19 5 Subsection 263-35(5) in Schedule 1 20 Repeal the subsection, substitute: 21 (5) If the Commissioner removes particulars of a * foreign revenue 22 claim relating to the recovery of an amount from the Register 23 under paragraph (2)(a) or subsection (4), the debtor is entitled to a 24 credit for the purposes of Part IIB equal to the sum of: 25 (a) the amount (as reduced by any previous application of 26 subsection (6)); and 27 (b) any * general interest charge for which the debtor is liable as a 28 result of the foreign revenue claim. 29 Note: How the credit is applied is set out in Part IIB. 30 6 Subsection 263-35(6) in Schedule 1 14 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] 1 Omit "the amount of the reduction is taken never to have been payable 2 by the debtor", substitute "the debtor is entitled to a credit for the 3 purposes of Part IIB equal to the amount of the reduction". 4 7 At the end of subsection 263-35(6) in Schedule 1 5 Add: 6 Note: How the credit is applied is set out in Part IIB. 7 8 At the end of section 263-40 in Schedule 1 8 Add: 9 (3) The Commissioner may also pay to the competent authority all or 10 part of an amount that the Commissioner has received and that is 11 attributable to any of the following in relation to the claim: 12 (a) judgment interest; 13 (b) costs that: 14 (i) have been recovered in the course of legal proceedings; 15 and 16 (ii) represent an amount that has previously been paid by 17 the competent authority to the Commonwealth in 18 relation to the recovery of the claim. 19 9 Application 20 The amendments made by this Schedule apply to foreign revenue 21 claims, the particulars of which are in the Register at the 22 commencement of this Schedule or are entered in the Register after that 23 commencement. 24 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 15 [Page Break] 1 2 Schedule 3--Late payment offset for 3 superannuation guarantee 4 contributions 5 6 Superannuation Guarantee (Administration) Act 1992 7 1 Paragraph 23A(1)(a) 8 Repeal the paragraph, substitute: 9 (a) the contribution is made: 10 (i) after the end of the period of 28 days after the end of a 11 quarter; and 12 (ii) before the employer's original assessment for that 13 quarter is made; and 14 2 Paragraph 23A(2)(b) 15 Omit "superannuation guarantee charge for the quarter became 16 payable", substitute "original assessment for the quarter is made". 17 3 Subsection 23A(3) 18 After "The contribution is offset", insert ", at the time the employer's 19 original assessment for the quarter is made,". 20 4 Subsection 49(3A) 21 Repeal the subsection, substitute: 22 (3A) To avoid doubt, for the purposes of this section and subsection 23 8AAC(3) of the Taxation Administration Act 1953, an election 24 under section 23A in relation to the superannuation guarantee has 25 effect from the time the employer's original assessment for the 26 quarter is made. 27 5 Application 28 The amendments made by this Schedule apply to elections under 29 section 23A of the Superannuation Guarantee (Administration) Act 30 1992 made on or after the commencement of this Schedule. 31 16 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] General Part 1 1 2 Schedule 4--Minor amendments 3 Part 1--General 4 A New Tax System (Goods and Services Tax) Act 1999 5 1 Section 195-1 (definition of hospital treatment) 6 Repeal the definition, substitute: 7 hospital treatment has the same meaning as in the Private Health 8 Insurance Act 2007. 9 Fringe Benefits Tax Assessment Act 1986 10 2 Subsection 5C(3) (method statement, steps 3 and 4) 11 Repeal the steps, substitute: 12 Step 3. Identify the excluded fringe benefits (other than an 13 amortised fringe benefit) for the year of tax in respect of 14 each of the employer's employees that are 15 GST-creditable benefits, and add up the taxable values of 16 all those excluded fringe benefits. 17 Note 1: Subsection 5E(3) explains what is an excluded fringe 18 benefit. 19 Note 2: Section 149A explains what is a GST-creditable benefit. 20 Step 4. Add the total from step 2 to the total from step 3. 21 Note: The result of step 4 is the emp loyer's type 1 aggregate 22 fringe benefits amount if there are no amortised amounts 23 in relation to the employer. 24 Step 5. Add to the total from step 4 the amortised amount for the 25 year of tax of each amortised fringe benefit (if any) 26 relating to an employee of the employer, the employer 27 and any year of tax that are GST-creditable benefits. The 28 total amount is the employer's type 1 aggregate fringe 29 benefits amount for the year of tax. 30 Note: Section 65CA explains what is an amortised fringe 31 benefit. Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 17 [Page Break] Part 1 General 1 3 Subsection 5C(4) (method statement, steps 3 and 4) 2 Repeal the steps, substitute: 3 Step 3. Identify, in respect of each of the employer's employees, 4 the excluded fringe benefits (other than an amortised 5 fringe benefit) for the year of tax that are not taken into 6 account under step 3 of the method statement in 7 subsection (3), and add up the taxable values of all those 8 excluded fringe benefits. 9 Note: Subsection 5E(3) explains what is an excluded fringe 10 benefit. 11 Step 4. Add the total from step 2 to the total from step 3. 12 Note: The result of step 4 is the employer's type 2 aggregate 13 fringe benefits amount if there are no amortised amounts 14 or reducible fringe benefits in relation to the employer. 15 Step 5. Add to the total from step 4 the amortised amount for the 16 year of tax of each amortised fringe benefit (if any) 17 relating to an employee of the employer, the employer 18 and any year of tax that is not taken into account under 19 step 5 of the method statement in subsection (3). 20 Note 1: The result of step 5 is the employer's type 2 aggregate 21 fringe benefits amount if there are no reducible fringe 22 benefits in relation to the employer. 23 Note 2: Section 65CA explains what is an amortised fringe 24 benefit. 25 Step 6. Subtract from the total from step 5 the reduction amount 26 for the year of tax of each reducible fringe benefit (if any) 27 relating to an employee of the employer, the employer 28 and the year of tax. The total amount is the employer's 29 type 2 aggregate fringe benefits amount for the year of 30 tax. 31 4 Application 32 (1) The amendments made by items 2 and 3 apply to the year of tax starting 33 on 1 April 2000 and later years of tax. 34 (2) Despite section 74 of the Fringe Benefits Tax Assessment Act 1986, the 35 Commissioner may amend an assessment at any time within the period 18 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] General Part 1 1 of 3 years after the commencement of this item for the purpose of 2 giving effect to the amendments made by items 2 and 3. 3 5 At the end of subparagraph 58PB(4)(c)(i) 4 Add ", or to death benefits dependants (within the meaning of the 5 Income Tax Assessment Act 1997) or legal personal representatives 6 (within the meaning of that Act) of those persons". 7 Income Tax Assessment Act 1936 8 6 Paragraph 23AB(5)(a) 9 Omit "Commonwealth Employees' Rehabilitation and Compensation 10 Act 1988", substitute "Safety, Rehabilitation and Compensation Act 11 1988". 12 7 Subsection 23AG(1) 13 Omit "is exempt from tax", substitute "are exempt from tax". 14 8 Subsection 73A(6) (definition of Research Secretary) 15 Omit "Education Research Act 1970", substitute "Australian Research 16 Council Act 2001". 17 9 Subsection 82KZMGA(1) 18 Repeal the subsection, substitute: 19 (1) A taxpayer cannot deduct expenditure in relation to which the 20 requirements in section 82KZMG (apart from paragraph 21 82KZMG(2)(a)) are met if: 22 (a) the taxpayer holds the taxpayer's interest in the agreement 23 mentioned in section 82KZMG as an initial participant in the 24 agreement; and 25 (b) a CGT event happens in relation to that interest within 4 26 years after the end of the year of income in which the 27 taxpayer first incurred expenditure under the agreement; and 28 (c) the expenditure is incurred on or before 30 June 2008. 29 10 Subsection 102T(27) (definition of unit trust distribution) 30 Omit "subsection 102M(1)", substitute "section 102M". Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 19 [Page Break] Part 1 General 1 Income Tax Assessment Act 1997 2 11 Subsection 20-55(1) (table item 1) 3 Omit "an allowable deduction" (wherever occurring), substitute "a 4 deduction". 5 12 Subsection 20-55(1) (table item 6) 6 Omit "allowed or allowable as a deduction", substitute "you have 7 deducted or can deduct". 8 13 Subsection 25-5(8) 9 Omit "an allowable deduction", substitute "a deduction". 10 14 Paragraphs 25-7(b) and (c) 11 Repeal the paragraphs, substitute: 12 (b) you lodge the claim for family tax benefit with an officer of 13 the Australian Taxation Office (within the meaning of that 14 Act) for determination by such an officer. 15 15 Subsection 36-17(5) (example) 16 Omit "allowable deductions", substitute "deductions". 17 16 Subsection 40-340(1) (after table item 2) 18 Insert: 2A Transfer of a * CGT asset The transferor and transferee are able to of a trust to a company choose a roll-over under Subdivision 124-N under a trust restructure for the * CGT event. 19 17 Application 20 The amendment made by item 16 applies to balancing adjustment 21 events happening in the 2008-09 income year or a later income year. 22 18 At the end of subsection 40-340(2) 23 Add: 24 ; and (c) subsection 124-870(5) (which excludes certain assets from 25 roll-over relief under Subdivision 124-N). 26 19 Subsection 40-340(5) 27 Omit "a person dies", substitute "you die". 20 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] General Part 1 1 20 Subsection 40-340(5) 2 Omit "the person's", substitute "your". 3 21 Subsections 43-50(1) and (2) 4 Omit "an allowable deduction" (wherever occurring), substitute "a 5 deduction". 6 22 Section 43-210 (step 6) 7 Omit "allowable deduction", substitute "deduction". 8 23 Section 43-215 (step 4) 9 Omit "allowable deduction", substitute "deduction". 10 24 Subsection 116-30(2B) 11 Omit "Despite paragraph (2)(b), subsection (2) does not apply", 12 substitute "Subsection (2) does not apply to a situation that would 13 otherwise be covered by paragraph (2)(b)". 14 25 Application 15 The amendment made by item 24 applies to CGT events happening 16 after the start of the 2006-07 income year. 17 26 Subsection 122-50(1) (example) 18 Repeal the example, substitute: 19 Example: Nick is a small trader. He wants to incorporate his business. He 20 disposes of all its assets to a company and receives 10 shares in return. 21 Nick acquired all the assets of the business after 20 September 1985. 22 Trading stock, plant and equipment and office furniture are precluded 23 assets. 24 The market value of Nick's trading stock when he disposed of it is 25 $20,000. The market value of his plant and equipment at that time is 26 $50,000 and the market value of his office furniture at that time is 27 $10,000. 28 The cost bases of Nick's land and buildings at that time total 29 $120,000. 30 Nick has a business overdraft of $15,000. It is taken to be a liability in 31 respect of all the assets of his business. Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 21 [Page Break] Part 1 General 1 The first element of the cost base of the 10 shares is: 2 $20,000 $50,000 $10,000 $120,000 $15,000 $185,000 3 The first element of the reduced cost base of the 10 shares is worked 4 out similarly. 5 27 Section 240-55 (heading) 6 Repeal the heading, substitute: 7 240-55 Arrangement payments not to be deductions 8 28 Subsection 290-90(2) (note 2) 9 Omit "allowable deductions", substitute "deductions". 10 29 Subsection 707-310(3) 11 Omit "transferee's income" (wherever occurring), substitute 12 "transferee's * ordinary income, * statutory income". 13 30 Subsection 707-310(3) (table, heading to column 1) 14 Omit "income", substitute "ordinary income, statutory income". 15 31 Subsection 707-310(3) (table item 5) 16 Omit "and * excluded exempt income". 17 32 Paragraph 711-30(3)(a) 18 Omit "(the receivable)". 19 33 Paragraph 711-30(3)(b) 20 Omit "the receivables", substitute "the asset's". 21 34 Paragraph 711-30(3)(c) 22 Omit "the receivable", substitute "the asset". 23 Income Tax Rates Act 1986 24 35 Paragraph 23(2)(c) 25 Omit "subsection (4C) or (4D)", substitute "subsection (4) or (5)". 26 36 Application 22 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] General Part 1 1 The amendment made by item 35 applies to assessments for the 2 2007-08 income year and later income years. 3 Taxation Administration Act 1953 4 37 Section 16-5 in Schedule 1 (note 2) 5 Omit "that section", substitute "that provision". 6 38 Paragraph 20-35(2)(b) in Schedule 1 7 Omit "that section", substitute "that provision". 8 39 Application 9 The amendment made by item 38 applies to fund payments made in 10 relation to the first income year starting on or after 1 July 2008 and later 11 income years. 12 40 Section 45-10 in Schedule 1 13 Omit "items 3 and 4, and 6 to 12", substitute "items 4 to 10, and 12 and 14 13". 15 41 Section 45-10 in Schedule 1 (note 1) 16 Omit "items 6 to 12", substitute "items 4 to 8, and 12 and 13,". 17 42 Section 45-10 in Schedule 1 (note 2) 18 Omit "item 5", substitute "item 11". 19 43 Subsection 45-450(1) in Schedule 1 20 Omit "items 6 to 12", substitute "items 4 to 8, and 12 and 13,". 21 44 Application 22 The amendments made by items 40 to 43 apply to assessments for the 23 2007-08 income year and later income years. 24 Taxation (Interest on Overpayments and Early Payments) Act 25 1983 26 45 Subsection 3(1) (before paragraph (b) of the definition of 27 income tax crediting amount) Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 23 [Page Break] Part 1 General 1 Insert: 2 (a) any amount of a credit that does not arise under Division 770 3 of the Income Tax Assessment Act 1997 or under the 4 International Tax Agreements Act 1953; or 5 46 Application 6 The amendment made by item 45 applies to income years, statutory 7 accounting periods and notional accounting periods starting on or after 8 1 July 2008. 9 47 Subsections 9(2) and (3) 10 Omit "subsection 10(1)", substitute "section 10". 11 48 Subsection 10(1) 12 Omit "(1)". 13 49 Paragraph 10(1)(a) 14 Repeal the paragraph, substitute: 15 (a) in respect of the period that commenced on the later of the 16 following days: 17 (i) the day on which notice of the assessment, 18 determination or decision, being the assessment, 19 determination or decision in relation to which the 20 decision to which this Act applies was made, was issued 21 to the person by the Commissioner; 22 (ii) the day on which the amount of relevant tax was paid to 23 the Commissioner; 24 and ended on the day on which the amount of the relevant tax 25 or the part of the amount of relevant tax, as the case may be, 26 was so refunded or applied; and 27 50 Transitional 28 If subparagraph 10(1)(a)(iii) of the Taxation (Interest on Overpayments 29 and Early Payments) Act 1983 (as in force before the commencement of 30 item 49) could apply to a taxpayer, that subparagraph continues to apply 31 despite the amendment made by that item. 32 Tax Laws Amendment (Budget Measures) Act 2008 24 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] General Part 1 1 51 Item 15 of Schedule 1 2 Repeal the item, substitute: 3 15 Application 4 (1) Subject to subitem (2), the amendment made by item 14 applies in 5 relation to CGT events happening after 7.30 pm, by legal time in the 6 Australian Capital Territory, on 13 May 2008 (the Budget time). 7 (2) An entity may choose that the amendment made by item 14 applies to a 8 CGT event that happened: 9 (a) after the start of the entity's 1998-99 income year; and 10 (b) before the Budget time. 11 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 25 [Page Break] Part 2 Asterisking amend ments 1 2 Part 2--Asterisking amendments 3 Income Tax Assessment Act 1997 4 52 Asterisking amendments of the Income Tax Assessment 5 Act 1997 6 The provisions of the Income Tax Assessment Act 1997 listed in the 7 table are amended as set out in the table. Asterisking amendments Item Provision Omi t: Substitute: 1 Subparagraph 26-50(3)(b)(iv) children * children 2 Subsection 30-15(2) (table * market value market value items 1 and 2) (colu mn headed "How much you can deduct") 3 Subparagraph 51-50(2)(b)(i) child * child 4 Paragraph 52-70(b) children * children 5 Paragraph 52-105(3)(b) children * children 6 Paragraph 149-15(1)(b) * ultimate owners ultimate owners 7 Paragraph 149-15(1)(b) * indirectly indirectly 8 Paragraph 152-40(1A)(a) child * child 9 Subparagraph 215-10(1)(b)(ii) more schemes more * schemes 10 Paragraph 215-10(1)(b) prudential * prudential standards standards 11 Paragraph 215-10(1)(c) permanent * permanent establishment establishment 12 Subparagraph 215-10(2)(a)(ii) connected entity * connected entity 13 Paragraph 295-485(1)(a) child * child 14 Paragraph 320-107(1)(a) child * child 8 9 26 Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 [Page Break] Repeal Part 3 1 2 Part 3--Repeal 3 Pay-roll Tax Act 1941 4 53 The whole of the Act 5 Repeal the Act. Tax Laws Amendment (2008 Measures No. 6) Bill 2008 No. , 2008 27