Commonwealth Consolidated Acts

TAX LAW IMPROVEMENT ACT (NO. 1) 1998 - SCHEDULE 5

Part 1—Amendment of the Income Tax (Transitional Provisions) Act 1997
1 At the end of section 20-5

Add:

(2)

Sections 82BE and 124ZZN of the Income Tax Assessment Act 1936 do not apply to an assessment for the 1998-99 income year or a later income year. This has effect despite subsection (1).

2 Section 387-140 (link note)

Repeal the link note, substitute:

Subdivision 387-C—Establishing horticultural plants

Table of sections

387-160 Application of Subdivision 387-C of the Income Tax Assessment Act 1997
387-175 Saving of determinations specifying periods for effective life
387-190 Deduction for destruction of a horticultural plant first used in horticulture business before 1998-99 income year
387-195 Treatment of deductions under Division 10F of Part III of the Income Tax Assessment Act 1936
387-205 New owners' requests for tax information from last owners of horticultural plants

387-160 Application of Subdivision 387-C of the Income Tax Assessment Act 1997

(1)

Subdivision 387-C of the Income Tax Assessment Act 1997 applies to assessments for the 1998-99 income year and later income years, in relation to expenditure incurred on or after 10 May 1995.

(2)

You can deduct an amount under that Subdivision for expenditure incurred before the 1998-99 income year only to the extent to which you could have deducted an amount for that expenditure under Division 10F of Part III of the Income Tax Assessment Act 1936 if that Division had allowed deductions for the 1998-99 income year and later income years.

Note: This means that you cannot deduct an amount for expenditure that was recouped before the 1997-98 income year.

(3)

If the effective life of a horticultural plant was set under section 124ZZK of the Income Tax Assessment Act 1936 , its effective life is the same for the purposes of Subdivision 387-C of the Income Tax Assessment Act 1997 .

[The next section is section 387-175.]

387-175 Saving of determinations specifying periods for effective life

(1)

A determination in force under section 124ZZL of the Income Tax Assessment Act 1936 immediately before 1 July 1998 also has effect for the purposes of Subdivision 387-C of the Income Tax Assessment Act 1997 on and after that day as if it were a determination under section 387-175 of the Income Tax Assessment Act 1997 .

Note: Section 124ZZL of the Income Tax Assessment Act 1936 and section 387-175 of the Income Tax Assessment Act 1997 allow the Commissioner to make a determination specifying a period that an entity can adopt as the effective life of a horticultural plant.

(2)

Anything done in relation to the determination under that Subdivision also has effect for the purposes of Division 10F (Deduction for capital expenditure incurred in establishing horticultural plants) of Part III of the Income Tax Assessment Act 1936 .

[The next section is section 387-190.]

387-190 Deduction for destruction of a horticultural plant first used for commercial horticulture before 1998-99 income year

(1)

Section 387-190 of the Income Tax Assessment Act 1997 applies in relation to a horticultural plant first used (or held ready for use) for commercial horticulture before the 1998-99 income year and destroyed in that income year or later, as if sections 387-165 and 387-185 of that Act had applied to assessments for income years before that income year.

Note: Section 387-190 of the Income Tax Assessment Act 1997 allows a deduction for the destruction of a horticultural plant with an effective life of 3 years or more. This deduction is additional to the deduction for the plant under section 387-165 of that Act.

(2)

This section has effect despite section 387-160.

387-195 Treatment of deductions under Division 10F of Part III of the Income Tax Assessment Act 1936

(1)

In applying subsection 387-195(2) of the Income Tax Assessment Act 1997 to work out whether you can deduct an amount under Subdivision 387-C of that Act for expenditure on establishing a horticultural plant, disregard any amount deducted or deductible under Division 10F of Part III of the Income Tax Assessment Act 1936 .

Note: This ensures that you can deduct amounts for the 1998-99 income year and later income years under Subdivision 387-C of the Income Tax Assessment Act 1997 for expenditure on establishing a horticultural plant, even if an entity did or can deduct amounts for one or more income years before the 1998-99 income year under Division 10F of Part III of the Income Tax Assessment Act 1936 for the expenditure.

(2)

Subdivision 387-C of the Income Tax Assessment Act 1997 does not affect a deduction, or an entitlement to a deduction, under Division 10F of Part III of the Income Tax Assessment Act 1936 for the 1997-98 income year or an earlier income year.

[The next section is section 387-205.]

387-205 New owners' requests for tax information from last owners of horticultural plants

Section 387-205 of the Income Tax Assessment Act 1997 applies to a change of ownership of a horticultural plant that occurs on or after 1 July 1998.

Note: That section allows the new owner of a horticultural plant to require the last owner to provide tax information relating to the plant.

Part 2—Consequential amendment of the Income Tax Assessment Act 1997
3 Section 12-5 (table item headed "primary production")

Omit "124ZZD to 124ZZR", substitute "Subdivision 387-C".

4 Subsection 20-30(1) (after table item 1.15)

Insert:

5 Section 40-30 (table item dealing with horticultural plants)

Omit "Division 10F of Part III", substitute "Subdivision 387-C".

Part 3—Consequential amendment of the Income Tax Assessment Act 1936
6 Before Subdivision A of Division 10F of Part III

Insert:

Subdivision AA—Application
124ZZEA This Division does not apply after 1997-98 year of income

An amount is not deductible under this Division for a year of income after the 1997-98 year of income.

Note: Subdivision 387-C of the Income Tax Assessment Act 1997 allows deductions for the 1998-99 year of income and later years of income for capital expenditure relating to the establishment of a horticultural plant (including expenditure incurred before the 1998-99 year of income—see Subdivision 387-C of the Income Tax (Transitional Provisions) Act 1997 ).

7 At the end of subsection 124ZZO(6)

Add "but before 1 July 1998".

8 At the end of subsection 124ZZO(6)

Add:

Note: Section 387-205 of the Income Tax Assessment Act 1997 allows an entity that becomes the owner of a horticultural plant on or after 1 July 1998 to require the previous owner to provide tax information relating to the plant.

9 Subsection 245-140(1) of Schedule 2C (table item dealing with expenditure incurred in establishing horticultural plants)

Omit "Sections 124ZZF and 124ZZG and subsection 124ZZM(2)", substitute "Subdivision 387-C".

10 Application

Section 4 of this Act does not apply to the amendments made by items 6 and 7.