Commonwealth Consolidated Acts

AUSTRALIAN INDUSTRY DEVELOPMENT CORPORATION ACT 1970 - SECT 29ZC

             (1)  The provisions of this section apply in relation to the Corporation and the receiving subsidiary if the Corporation has converted, for income tax purposes, to an accruals basis for returning interest payable and interest receivable in the financial year commencing on 1 July 1987.

             (2)  The Corporation shall not be entitled, or required, to convert, for income tax purposes, to an accruals basis for returning interest payable and interest receivable in a financial year commencing before 1 July 1987.

             (3)  Subject to subsections (5) and (6), a deduction of an amount equal to one‑fifth of the amount (if any) by which the Undeducted Interest exceeds the Deducted Interest shall be allowed to the Corporation under the Income Tax Assessment Act 1936 in relation to the financial year commencing on 1 July 1987 and each of the four immediately following financial years:

                   where:

"Undeducted Interest" is the total of amounts of interest payable by the Corporation that accrued before 1 July 1987 in relation to which, and to the extent to which, a deduction is allowable, or would have been allowable but for the conversion, to the Corporation under subsection 51(1) of that Act, but has not been allowed to the Corporation in relation to a financial year commencing before that day; and

"Deducted Interest" is the total of amounts of interest payable by the Corporation that accrue on or after 1 July 1987 in relation to which, and to the extent to which, a deduction has been allowed to the Corporation under subsection 51(1) of that Act in relation to a financial year commencing before that day.

             (4)  Subject to subsections (5) and (6), an amount equal to one‑fifth of the amount (if any) by which the Unassessed Interest exceeds the Assessed Interest shall, for the purposes of the Income Tax Assessment Act 1936 , be included in the assessable income of the Corporation in relation to the financial year commencing on 1 July 1987 and each of the four immediately following financial years:

                   where:

"Unassessed Interest" is the total of amounts of interest receivable by the Corporation that accrued before 1 July 1987 to the extent to which those amounts are assessable income of the Corporation, or would have been assessable income of the Corporation but for the conversion, but had not been included in the assessable income of the Corporation in relation to a financial year commencing before that day; and

"Assessed Interest" is the total of amounts of interest receivable by the Corporation that accrue on or after 1 July 1987 to the extent to which those amounts have been included in the assessable income of the Corporation in relation to a financial year commencing before that day.

             (5)  If the re‑organisation day is a day other than 1 July, the following provisions apply, for the purposes of the Income Tax Assessment Act 1936 , in relation to the Corporation and the receiving subsidiary in relation to the financial year in which the re‑organisation day occurs:

                     (a)  the amount (in this paragraph called the net undeducted interest amount ) of the deduction that would, but for this paragraph, have been allowable to the Corporation under subsection (3) in relation to the financial year shall be reduced by an amount (in paragraph (b) called the receiving subsidiary deduction amount ) calculated in accordance with the formula:

                            where:

"days in remainder of yea r" is the number of days in the financial year that occur on and after the re-organisation day; and

"days in year" is the number of days in the financial year;

                     (b)  a deduction of an amount equal to the receiving subsidiary deduction amount shall be allowed to the receiving subsidiary in relation to the financial year;

                     (c)  the amount (in this paragraph called the net assessable income amount ) that would, but for this paragraph, have been included in the assessable income of the Corporation under subsection (4) in relation to the financial year shall be reduced by an amount (in paragraph (d) called the receiving subsidiary assessable income amount ) calculated in accordance with the formula:

                            where:

"days in remainder of year" is the number of days in the financial year that occur on and after the re-organisation day; and

"days in year" is the number of days in the financial year;

                     (d)  an amount equal to the receiving subsidiary assessable income amount shall be included in the assessable income of the receiving subsidiary in relation to the financial year.

             (6)  Subsections (3) and (4) have effect in relation to a financial year commencing on or after the re‑organisation day as if the first reference in each of those subsections to the Corporation were a reference to the receiving subsidiary.