INCOME TAX ASSESSMENT AMENDMENT ACT (NO. 4) 1982 NO. 76, 1982 INCOME TAX ASSESSMENT AMENDMENT ACT (NO. 4) 1982 NO. 76, 1982 - TABLE OF PROVISIONS 1. Short title. 2. Commencement 3. Officers to observe secrecy 4. Exemptions 5. 6. Gifts, calls on afforestation shares, pensions &c. 7. Interpretation 8. Tax benefit not allowable in respect of certain recouped expenditure 9. Sufficient distribution 10. Additional tax in certain cases 11. Application of amendments made by sections 7 and 8 Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 1 Short title. An Act to amend the law relating to income tax (Assented to 13 September 1982) BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows: Short title, &c. 1. (1) This Act may be cited as the Income Tax Assessment Amendment Act (No. 4) 1982. (2) The Income Tax Assessment Act 1936*1* is in this Act referred to as the Principal Act. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 2 Commencement 2. This Act shall come into operation on the day on which it receives the Royal Assent. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 3 Officers to observe secrecy 3. Section 16 of the Principal Act is amended by omitting paragraph (4) (ga) and substituting the following paragraph: ''(ga) the Australian Statistician for the purposes of the Census and Statistics Act 1905, being information as to- (i) the name and address of a person who is an employer within the meaning of Division 2 of Part VI of this Act; (ii) the name or description of the industry, trade, business, calling, service, profession or occupation in which the person is such an employer; and (iii) the number of males and the number of females who are employees of the person for the purposes of that Division;''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 4 Exemptions 4. (1) Section 23 of the Principal Act is amended- (a) by inserting after paragraph (jd) the following paragraph: ''(je) income derived by the Phosphate Mining Company of Christmas Island Limited, a company incorporated in the Australian Capital Territory;''; and (b) by inserting after paragraph (kc) the following paragraph: ''(kca) payments of pensions, annuities and allowances- (i) that are made under a law of the Federal Republic of Germany, being payments the entitlement to which depends in whole or in part upon the treatment as a period of contribution of a period during which the recipient or another person was a victim of, or a fugitive from, National Socialist persecution; (ii) that are made under a law of the Kingdom of the Netherlands as or by way of compensation in respect of- (A) the persecution, during the Second World War, of the recipient or another person by forces of an enemy of the Commonwealth, being forces occupying the Kingdom of the Netherlands or the former Dutch East Indies; or (B) a disability arising out of the participation of the recipient or another person in the Dutch resistance movement in the Kingdom of the Netherlands during its occupation during the Second World War by forces of an enemy of the Commonwealth; or (iii) that, not being payments to which sub-paragraph (i) or (ii) applies, are made under a law (including a law of the Federal Republic of Germany or of the Kingdom of the Netherlands) other than a law of the Commonwealth, a State or a Territory and, in the opinion of the Commissioner, are related to, or take into account- (A) the persecution, during the Second World War, of the recipient or another person by forces of an enemy of the Commonwealth, or flight from such persecution; or (B) a disability arising out of the participation of the recipient or another person in a resistance movement during the Second World War against forces of an enemy of the Commonwealth;''. (2) Paragraph 23 (je) of the Principal Act as amended by this Act applies to income derived on or after a date notified by the Treasurer in the Gazette. (3) Paragraph 23 (kca) of the Principal Act as amended by this Act applies to pensions, annuities and allowances derived on or after 3 March 1982. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 5 5. After section 23H of the Principal Act the following section is inserted: Sale of securities purchased at a discount ''23J. (1) Subject to this section, no part of an amount received by a person upon the sale or redemption of eligible securities purchased or otherwise acquired at a discount on or before 30 June 1982, other than any part of that amount received as accrued interest, shall, for any purpose of this Act, be taken to be income derived by the person. ''(2) Sub-section (1) does not apply in relation to an amount received by a person by virtue of a transaction that is part of, or is incidental to, the carrying on by the person of a business that includes buying and selling eligible securities of any kind. ''(3) Sub-section (1) does not affect the operation of paragraph 26 (a), section 26AAA or section 26C. ''(4) In this section, 'eligible securities' means- (a) bonds, debentures, stock or other securities; and (b) any other document evidencing or acknowledging the indebtedness of a person, whether or not the debt is secured.''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 6 Gifts, calls on afforestation shares, pensions &c. 6. (1) Section 78 of the Principal Act is amended- (a) by omitting from sub-paragraph (1) (a) (lxvii) ''and the World Vision of Australia Poland Emergency Appeal'' and substituting '', the World Vision of Australia Poland Emergency Appeal or a public fund established and maintained exclusively or principally for the relief of persons in Poland''; (b) by inserting after sub-paragraph (1) (a) (lxvii) the following sub-paragraphs: ''; (lxviii) the Connellan Airways Trust; (lxix) the Queensland Cultural Centre Trust; (lxx) a public fund established and maintained exclusively for the relief of persons in Tonga affected by natural disasters in that country; (lxxi) a public fund established and maintained exclusively for the relief of persons affected by the conflict between Her Majesty's armed forces and the armed forces of Argentina in connection with the Falkland Islands and South Georgia, being- (A) residents of the Falkland Islands or South Georgia; (B) persons serving with, or in association with, Her Majesty's armed forces in the conflict; or (C) relatives of persons to whom sub-sub-paragraph (A) or (B) applies,''; (c) by omitting from sub-section (6AD) ''or (lxvii)'' and substituting '', (lxvii) or (lxx)''; and (d) by inserting after sub-section (6AD) the following sub-section: ''(6AE) A gift to a fund to which sub-paragraph (lxxi) applies is not an allowable deduction unless the gift was or is made on or after 1 July 1981 and on or before 30 June 1983.''. (2) Sub-paragraph 78 (1) (a) (lxviii) of the Principal Act as amended by this Act applies to gifts made after 31 May 1982. (3) Sub-paragraph 78 (1) (a) (lxix) of the Principal Act as amended by this Act applies to gifts made after 30 June 1982. (4) Nothing in section 170 of the Income Tax Assessment Act 1936 prevents the amendment of an assessment made before the commencement of this section for the purpose of giving effect to the amendment made by sub-section (1). Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 7 Interpretation 7. Section 82KH of the Principal Act is amended- (a) by inserting after the definition of ''market research'' in sub-section (1) the following definition: '' 'moneys paid on shares', in relation to a company, has the same meaning as in section 160ACA;''; (b) by omitting ''or'' (last occurring) from paragraph (q) of the definition of ''relevant expenditure'' in sub-section (1); (c) by adding at the end of the definition of ''relevant expenditure'' in sub-section (1) the following paragraphs: ''(s) calls paid by the taxpayer on shares owned by the taxpayer in respect of which a deduction would, apart from section 82KL, be allowable to the taxpayer under section 78; ''(t) calls paid by the taxpayer on shares owned by the taxpayer in respect of which an amount would, apart from section 82KL, be treated under section 159W as a rebatable amount for the purposes of section 159N; or ''(u) moneys paid on shares by the taxpayer to a company in respect of which a rebate of tax would, apart from section 82KL, be allowable under section 160ACA to- (i) where the taxpayer is a partnership-a partner in the partnership; (ii) where the taxpayer is the trustee of a trust estate-the taxpayer or a beneficiary of the trust estate; and (iii) in any other case-the taxpayer;''; (d) by omitting sub-section (1AD) and substituting the following sub-section: ''(1AD) A reference in this Subdivision to a tax benefit being allowed or allowable or not being allowed or allowable in respect of relevant expenditure incurred by a taxpayer shall be read as a reference to- (a) in a case where the relevant expenditure is relevant expenditure to which paragraph (h) or (n) of the definition of 'relevant expenditure' in sub-section (1) applies-a deduction being allowed or allowable or not being allowed or allowable, as the case may be, to the taxpayer under section 124M or 124N in respect of the residual value of a unit of industrial property where that residual value would be calculated by reference to the relevant expenditure; (b) in a case where the relevant expenditure is relevant expenditure to which paragraph (t) of the definition of 'relevant expenditure' in sub-section (1) applies-an amount being treated, or not being treated, as the case may be, under section 159W as a rebatable amount in respect of the relevant expenditure for the purposes of the application of section 159N in relation to the taxpayer; (c) in a case where the relevant expenditure is relevant expenditure to which paragraph (u) of the definition of 'relevant expenditure' in sub-section (1) applies- (i) where the taxpayer is a partnership-a rebate of tax being allowed or allowable or not being allowed or allowable, as the case may be, under section 160ACA in respect of the relevant expenditure to a partner in the partnership; (ii) where the taxpayer is the trustee of a trust estate-a rebate of tax being allowed or allowable or not being allowed or allowable, as the case may be, under section 160ACA in respect of the relevant expenditure to the taxpayer or a beneficiary of the trust estate; and (iii) in any other case-a rebate of tax being allowed or allowable or not being allowed or allowable, as the case may be, to the taxpayer under section 160ACA in respect of the relevant expenditure; and (d) in any other case-a deduction being allowed or allowable or not being allowed or allowable, as the case may be, to the taxpayer in respect of the relevant expenditure.''. (e) by omitting from sub-sections (1B), (1BA), (1C), (1D) and (1E) ''deduction'' (wherever occurring) and substituting ''tax benefit''; (f) by omitting from sub-sections (1B), (1BA), (1C) and (1D) ''deductions'' (wherever occurring) and substituting ''tax benefits''; (g) by omitting from sub-section (1E) ''deductible'' (wherever occurring) and substituting ''allowable''; (h) by omitting from paragraph (1F) (a) ''and''; (j) by adding at the end of sub-section (1F) the following word and paragraph: ''; and (c) in a case where the relevant expenditure is relevant expenditure to which paragraph (s) of the definition of 'relevant expenditure' in sub-section (1) applies-that amount of relevant expenditure was incurred by reason of, as a result of or as part of a tax avoidance agreement entered into before 28 May 1981.''; (k) by omitting from paragraph (1G) (q) ''and''; (m) by adding at the end of sub-section (1G) the following paragraphs: ''; (s) in a case where the relevant expenditure consists of calls paid by the taxpayer on shares owned by the taxpayer and is relevant expenditure to which paragraph (s) or (t) of the definition of 'relevant expenditure' in sub-section (1) applies-the satisfaction of any liability of the taxpayer to pay the calls and the taxpayer's continuing ownership of the shares; and (t) in a case where the relevant expenditure consists of moneys paid on shares by the taxpayer to a company and is relevant expenditure to which paragraph (u) of the definition of 'relevant expenditure' in sub-section (1) applies-the satisfaction of any liability of the taxpayer to pay the moneys and the taxpayer's ownership or continuing ownership, as the case may be, of the shares.''; (n) by inserting after sub-section (1JD) the following sub-section: ''(1JE) For the purposes of paragraph (1F) (b), but without limiting the generality of that paragraph, where- (a) an amount of relevant expenditure is incurred by a taxpayer by reason of, as a result of or as part of a tax avoidance agreement; (b) that relevant expenditure- (i) consists of calls paid by the taxpayer on shares owned by the taxpayer and is relevant expenditure to which paragraph (s) or (t) of the definition of 'relevant expenditure' in sub-section (1) applies; or (ii) consists of moneys paid on shares by the taxpayer to a company and is relevant expenditure to which paragraph (u) of the definition of 'relevant expenditure' in sub-section (1) applies; and (c) in relation to that relevant expenditure being incurred and by reason of, as a result of or as part of the tax avoidance agreement or by reason of an act, transaction or circumstance occurring as part of, in connection with or as a result of the tax avoidance agreement, consideration (in this sub-section referred to as the 'relevant consideration') is paid or given to the taxpayer or an associate of the taxpayer in respect of the acquisition by any person from the taxpayer of- (i) all or any of those shares; (ii) the right to purchase all or any of those shares; or (iii) the right to require a person to vote, in a meeting of shareholders of the company, in favour of a resolution to vary the rights attached to all or any of those shares, the taxpayer shall be deemed to have obtained, by reason of the tax avoidance agreement and in relation to the relevant expenditure being incurred by the taxpayer, a benefit in addition to the benefits referred to in sub-paragraphs (1F) (b) (i) and (ii) having a value equal to the amount or value of the relevant consideration reduced by the amount or value of the part (if any) of that relevant consideration that, in the opinion of the Commissioner, is attributable to expenditure (other than the relevant expenditure) incurred by the taxpayer in respect of the shares.''; (o) by omitting from paragraph (1L) (q) ''and''; (p) by adding at the end of sub-section (1L) the following paragraphs: ''; (s) in a case where paragraph (s) of the definition of 'relevant expenditure' in sub-section (1) applies in relation to each of those amounts-those amounts were calls paid on shares in the same company; (t) in a case where paragraph (t) of the definition of 'relevant expenditure' in sub-section (1) applies in relation to each of those amounts-those amounts were calls paid on shares in the same company; and (u) in a case where paragraph (u) of the definition of 'relevant expenditure' in sub-section (1) applies in relation to each of those amounts-those amounts were moneys paid on shares in the same company.''; and (q) by omitting from sub-section (1N) ''deduction'' and substituting ''tax benefit''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 8 Tax benefit not allowable in respect of certain recouped expenditure 8. Section 82KL of the Principal Act is amended- (a) by omitting from sub-section (1) ''deduction'' and substituting ''tax benefit''; (b) by omitting from sub-section (1) ''to the taxpayer''; (c) by omitting from sub-section (2) ''deduction'' (wherever occurring) and substituting ''tax benefit''; (d) by omitting from sub-section (2) ''to a taxpayer''; (e) by omitting from sub-section (2) ''incurred by the taxpayer'' and substituting ''incurred by a taxpayer''; (f) by omitting from sub-section (2) ''to the taxpayer''; (g) by omitting from sub-section (4) ''deduction'' (wherever occurring) and substituting ''tax benefit''; and (h) by omitting from sub-section (6) ''deduction'' and substituting ''tax benefit''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 9 Sufficient distribution 9. Section 105A of the Principal Act is amended by inserting after sub-section (3) the following sub-section: ''(3A) Sub-section (3) does not apply in relation to an amount, being the whole or a part of a dividend paid by a company after 20 January 1982, if- (a) the payment of the dividend was satisfied, in whole or in part, by the issue of shares in, or debentures of, the company; and (b) the Commissioner considers that it would be unreasonable for that sub-section to apply in relation to that amount.''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 10 Additional tax in certain cases 10. Section 226 of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-sections: ''(2) Any taxpayer who- (a) omits from his return any assessable income; (b) includes in his return as a deduction for, or as a rebate in respect of, expenditure incurred by him an amount in excess of the expenditure actually incurred by him; (c) in his return, whether furnished before or after the commencement of this sub-section, claims to be entitled to a rebate of tax in respect of recouped expenditure; or (d) in relation to a claim to be entitled to a rebate under section 23AB, 79A, 79B, 159J, 159K or 159L, includes in his return information that is false in any particular, shall be liable to pay as additional tax an amount equal to double the difference between the tax properly payable by him and the tax that would be payable if it were assessed upon the basis of the return furnished by him, or the amount of $2, whichever is the greater. ''(2AA) In sub-section (2), 'recouped expenditure', in relation to a taxpayer, means relevant expenditure within the meaning of Subdivision D of Division 3 of Part III that- (a) was or is incurred after 9 February 1982 by the taxpayer, by the trustee of a trust estate of which the taxpayer is or was a beneficiary or by a partnership in which the taxpayer is or was a partner; (b) was or is incurred by reason of, as a result of or as part of a tax avoidance agreement, within the meaning of that Division, entered into after that date; and (c) is relevant expenditure in respect of which section 82KL operates to deem a tax benefit not to be allowable and never to have been allowable to the taxpayer.''. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - SECT 11 Application of amendments made by sections 7 and 8 11. (1) The amendments made by sections 7 and 8 apply in relation to calls paid on shares, or moneys paid on shares, after 24 September 1978. (2) Where- (a) in the making of an assessment, a tax benefit has not been allowed to a taxpayer in respect of expenditure to which paragraph (s), (t) or (u) of the definition of ''relevant expenditure'' in sub-section 82KH (1) of the Income Tax Assessment Act 1936 applies; (b) on or before the date of commencement of this section, the taxpayer has posted to or lodged with the Commissioner an objection in writing against the assessment; and (c) within 60 days after the date of commencement of this section, the taxpayer posts to or lodges with the Commissioner an application in writing to amend the objection to include in the grounds of objection the ground that section 82KL of the Income Tax Assessment Act 1936 does not operate to deem a tax benefit not to be allowable to the taxpayer in respect of that expenditure, that ground of objection shall, for all purposes of the Income Tax Assessment Act 1936, be taken to be stated in the taxpayer's objection. Income Tax Assessment Amendment Act (No. 4) 1982 No. 76 of 1982 - NOTE NOTE 1. No. 27, 1936, as amended. For previous amendments, see No. 88, 1936; No. 5, 1937; No. 46, 1938; No. 30, 1939; Nos. 17 and 65, 1940; Nos. 58 and 69, 1941; Nos. 22 and 50, 1942; No. 10, 1943; Nos. 3 and 28, 1944; Nos. 4 and 37, 1945; No. 6, 1946; Nos. 11 and 63, 1947; No. 44, 1948; No. 66, 1949; No. 48, 1950; No. 44, 1951; Nos. 4, 28 and 90, 1952; Nos. 1, 28, 45 and 81, 1953; No. 43, 1954; Nos. 18 and 62, 1955; Nos. 25, 30 and 101, 1956; Nos. 39 and 65, 1957; No. 55, 1958; Nos. 12, 70 and 85, 1959; Nos. 17, 18, 58 and 108, 1960; Nos. 17, 27 and 94, 1961; Nos. 39 and 98, 1962; Nos. 34 and 69, 1963; Nos. 46, 68, 110 and 115, 1964; Nos. 33, 103 and 143, 1965; Nos. 50 and 83, 1966; Nos. 19, 38, 76 and 85, 1967; Nos. 4, 60, 70, 87 and 148, 1968; Nos. 18, 93 and 101, 1969; No. 87, 1970; Nos. 6, 54 and 93, 1971; Nos. 5, 46, 47, 65 and 85, 1972; Nos. 51, 52, 53, 164 and 165, 1973; No. 216, 1973 (as amended by No. 20, 1974); Nos. 26 and 126, 1974; Nos. 80 and 117, 1975; Nos. 50, 53, 56, 98, 143, 165 and 205, 1976; Nos. 57, 126 and 127, 1977; Nos. 36, 57, 87, 90, 123, 171 and 172, 1978; Nos. 12, 19, 27, 43, 62, 146, 147 and 149, 1979; Nos. 19, 24, 57, 58, 124, 133, 134 and 159, 1980; Nos. 61, 108, 109, 110, 111, 154 and 175, 1981; and Nos. 29, 38 and 39, 1982.