Commonwealth Numbered Acts

INCOME TAX ASSESSMENT AMENDMENT (CAPITAL GAINS) ACT 1986 No. 52 of 1986 - SECT 9

9. Section 26AAC of the Principal Act is amended-

   (a)  by inserting after sub-section (8) the following sub-sections:

"(8A) Where a taxpayer has acquired a right (whether that right was
unconditional or was subject to conditions) to acquire a share in a company
under a scheme for the acquisition of shares by employees, being a right
issued after 19 September 1985, the taxpayer may elect that sub-section (8C)
is to apply in relation to that right.

"(8B) An election under sub-section (8A) in relation to a right-

   (a)  shall be made by notice in writing addressed to the Commissioner; and

   (b)  does not have effect unless it is lodged with the Commissioner on or
        before the date of lodgment of the return of income of the taxpayer
        for the year of income in which the right was acquired, or before such
        later date as the Commissioner allows.

"(8C) Where a taxpayer has made an election under sub-section (8A) in relation
to a right-

   (a)  the assessable income of the taxpayer of the year of income during
        which that right was issued to the taxpayer includes the value of that
        right at the time when it was issued to the taxpayer less the amount,
        if any, paid or payable by the taxpayer as consideration for the
        right;

   (b)  no amount shall be included in the assessable income of the taxpayer
        of any year of income in respect of that right by virtue of any other
        provision of this section; and

   (c)  no amount shall be included in the assessable income of the taxpayer
        of any year of income by virtue of sub-section (5) in respect of a
        share acquired by the taxpayer as a result of the exercise or
        operation of the right.

"(8D) Where-

   (a)  a taxpayer has made an election under sub-section (8A) in relation to
        a right;

   (b)  by virtue of paragraph (8C) (a), an amount has been included, or
        would, but for this sub-section, be included, in the assessable income
        of the taxpayer of a year of income in respect of that right; and

   (c)  by virtue of any conditions or restrictions (being conditions or
        restrictions applicable only to rights to acquire shares in the
        company acquired under a scheme for the acquisition of shares by
        employees) attached to, or to the issue of, the right, the taxpayer
        has been divested of ownership of the right,
then, notwithstanding paragraph (8C) (a), the assessable income of the
taxpayer of the year of income referred to in paragraph (b) of this
sub-section shall be deemed not to have included, or not to include, as the
case may be, the amount referred to in that paragraph.";

   (b)  by inserting after sub-section (11) the following sub-section:

"(11A) Sub-section (11) does not apply in relation to a disposition of a right
to acquire a share in a company if Part IIIa applies in relation to that
disposition.";

   (c)  by inserting after sub-section (12) the following sub-section:

"(12A) Sub-section (12) does not apply in relation to a disposition of a share
in a company if Part IIIa applies in relation to that disposition.";

   (d)  by inserting after sub-section (13) the following sub-section:

"(13A) Sub-section (13) does not apply in relation to a disposition of a share
in a company if Part IIIa applies in relation to that disposition.";

   (e)  by inserting after sub-section (15) the following sub-sections:

"(15A) A taxpayer may elect that sub-section (15) is not to apply in relation
to a share specified in the election, being a share issued to the taxpayer
after 19 September 1985.

"(15B) An election under sub-section (15A) in relation to a share-

   (a)  shall be made by notice in writing addressed to the Commissioner; and

   (b)  does not have any effect unless it is lodged with the Commissioner on
        or before the date of lodgment of the return of income of the taxpayer
        for the year of income in which the share was issued, or within such
        further period as the Commissioner allows.

"(15C) Where-

   (a)  a taxpayer has made an election under sub-section (15A) in relation to
        a share;

   (b)  by virtue of sub-section (5), an amount has been included, or would,
        but for this sub-section, be included, in the assessable income of the
        taxpayer of a year of income in respect of that share; and

   (c)  by virtue of any conditions or restrictions mentioned in paragraph
        (15) (b) attached to, or to the issue of, the share, the taxpayer has
        been divested of ownership of the share,
then, notwithstanding sub-section (5), the assessable income of the taxpayer
of the year of income referred to in paragraph (b) of this sub-section shall
be deemed not to have included, or not to include, as the case may be, the
amount referred to in that paragraph."; and

   (f)  by adding at the end the following sub-sections:

"(18) For the purposes of this section, in determining the value of a share or
of a right to acquire a share, the share or the right, and any share that may
be acquired as a consequence of the exercise or operation of the right, shall
be deemed not to be subject to any conditions or restrictions (being
conditions or restrictions applicable only to shares in, or rights to acquire
shares in, the company acquired under a scheme for the acquisition of shares
by employees).

"(19) Nothing in section 170 prevents the amendment of an assessment made in
relation to a taxpayer if the amendment is made for the purpose of giving
effect to sub-section (8D) or (15C) and effects a reduction in the liability
of the taxpayer.".