Part 1Amendments based on old CGT law
Income Tax Assessment Act 1936
1 Section 317 (definition of designated
concession income )
Repeal the definition, substitute: designated
concession income , in relation to a broad-exemption listed country, means:
- (a)
- income or profits of a kind specified in the regulations if:
- (i)
- foreign tax imposed by a tax law of the country is not payable in respect
of the income or profits because of a particular feature; or
- (ii)
- foreign tax imposed by a tax law of the country is payable in respect of
the income or profits but there is a feature in relation to that tax;
and the feature is of a kind specified in the regulations; or
- (b)
- capital gains that would accrue because of section 160ZZOA, if the
assumptions in paragraphs 383(a) to (c) applied.
- Note 1: Section 160ZZOA is about companies ceasing to be related after a
roll-over.
Note 2: Basically, the effect of those assumptions is that the company
concerned is taken to be a taxpayer and a resident and may therefore be taken
to have disposed of an asset because of section 160ZZOA.
2 Section 317 (definition of disposal )
Repeal the definition, substitute:
disposal of an asset includes:
- (a)
- redemption; and
- (b)
- a disposal that would be taken to occur under section 160ZZOA (about
companies ceasing to be related after a roll-over) if the assumptions in
paragraphs 383(a) to (c) applied.
- Note: Basically, the effect of those assumptions is that the company concerned
is taken to be a taxpayer and a resident and may therefore be taken to have
disposed of an asset under section 160ZZOA.
3 Section 317 (definition of tainted commodity gain )
Omit all the words
after "a statutory accounting period,", substitute: means:
- (a)
- a gain realised by the company in the statutory accounting period from
disposing of a tainted commodity investment; or
- (b)
- a capital gain that would have accrued to the company in the statutory
accounting period, if the assumptions in paragraphs 383(a) to (c) applied,
because the company would be taken to have disposed of a tainted commodity
investment under section 160ZZOA.
- Note: Basically, the effect of those assumptions is that the company concerned
is taken to be a taxpayer and a resident and may therefore be taken to have
disposed of an asset under section 160ZZOA.
4 Section 317 (definition of tainted commodity loss )
Omit all the words
after "a statutory accounting period,", substitute: means:
- (a)
- a loss realised by the company in the statutory accounting period from
disposing of a tainted commodity investment; or
- (b)
- a capital loss that the company would have incurred in the statutory
accounting period, if the assumptions in paragraphs 383(a) to (c) applied,
because the company would be taken to have disposed of a tainted commodity
investment under section 160ZZOA.
- Note: Basically, the effect of those assumptions is that the company concerned
is taken to be a taxpayer and a resident and may therefore be taken to have
disposed of an asset under section 160ZZOA.
5 After subsection 401(6)
Insert:
- (6A)
- In determining, for the purposes of
this section, whether there was an attribution surplus immediately before a
disposal, and the amount of such a surplus, also take into account any
attribution credit that later arises because the disposal caused section
160ZZOA (as it notionally applies to the disposal entity under this Division)
to operate.
6 After subsection 434(1)
Insert:
- (1A)
- In working out the gross turnover of
a company of a statutory accounting period, assume that the amounts shown in
the company's recognised accounts, as mentioned in paragraphs (1)(b) and (c),
for that period had been worked out by also including:
- (a)
- as gains derived by the company in that periodcapital gains that
would have accrued to the company; and
- (b)
- as losses incurred by the company in that periodcapital losses the
company would have incurred;
in that period because of section 160ZZOA, if the assumptions in paragraphs
383(a) to (c) had applied.
- Note 1: Section 160ZZOA is about companies ceasing to be related after a
roll-over.
Note 2: Basically, the effect of the assumptions in paragraphs 383(a) to (c)
is that the company concerned is taken to be a taxpayer and a resident and may
therefore be taken to have disposed of an asset because of section 160ZZOA.
7 At the end of section 445
Add:
- (2)
- In paragraph (1)(a):
gains includes capital gains that would have accrued to the company in the
statutory accounting period because of section 160ZZOA, if the assumptions in
paragraphs 383(a) to (c) applied.
losses includes capital losses that the company would have incurred in the
statutory accounting period because of section 160ZZOA, if the assumptions in
paragraphs 383(a) to (c) applied.
- Note 1: Section 160ZZOA is about companies ceasing to be related after a
roll-over.
Note 2: Basically, the effect of the assumptions in paragraphs 383(a) to (c)
is that the company concerned is taken to be a taxpayer and a resident period
and may therefore be taken to have disposed of an asset because of section
160ZZOA.
8 At the end of Division 9 of Part X
Add: 460A Effect of reducing section
160ZZOA amount
- (1)
- This section applies in either of the following cases:
- (a)
- one or more schemes or arrangements have the effect of reducing the
attribution percentage of an attributable taxpayer in relation to a company
that is a CFC, and are intended by the attributable taxpayer or an associate
of the attributable taxpayer to have that effect;
- (b)
- a company ceases to be a CFC in relation to a particular taxpayer.
- (2)
- Work out the amount (if any) included under this Division in the
taxpayer's assessable income because of section 160ZZOA (as it notionally
applies to the company under Division 7) as though the reduction or cessation
had not happened.
- Note: Section 160ZZOA is about companies ceasing to be related after a
roll-over.
9 After subsection 461(4)
Insert:
- (4A)
- In determining, for the purposes of
this section, whether there was an attribution surplus immediately before a
disposal, and the amount of such a surplus, also take into account any
attribution credit that later arises because the disposal caused section
160ZZOA (as it notionally applies to the disposal entity under Division 7) to
operate.
10 Application of amendments
The amendments made by this Part apply in
determining the attributable income of a CFC if a disposal was taken to have
occurred, under section 160ZZOA of the Income Tax Assessment Act 1936 , after
7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997.
11 Transitionalgroup roll-over disposals before 13 May 1997
(1) This
item applies if a group roll-over disposal (within the meaning of section
160ZZOA of the Income Tax Assessment Act 1936 ) happened at or before 7.30 pm,
by legal time in the Australian Capital Territory, on 13 May 1997 and during a
particular statutory accounting period of an attributable taxpayer.
(2) In
applying section 460A of that Act (as amended by this Schedule), the taxpayer
may elect to disregard so much of any change to the attribution percentage of
the taxpayer in relation to the relevant CFC as happened before the end of the
statutory accounting period.
Part 2Amendments based on new CGT law
Income Tax Assessment Act 1936
12 Section 317 (paragraph (b) of the
definition of designated concession income )
Omit "accrue because of section
160ZZOA", substitute "be made because of CGT event J1".
13 Section 317 (note
1 to the definition of designated concession income )
Omit "Section 160ZZOA",
substitute "CGT event J1".
14 Section 317 (note 2 to the definition of
designated concession income )
Omit all the words after "resident",
substitute "and CGT event J1 may therefore be taken to have happened.".
15
Section 317 (paragraph (b) of the definition of disposal )
Omit "a disposal
that would be taken to occur under section 160ZZOA", substitute "CGT event J1
happening in relation to the asset".
16 Section 317 (note to the definition
of disposal )
Omit all the words after "resident", substitute "and CGT event
J1 may therefore be taken to have happened.".
17 Section 317 (paragraph (b)
of the definition of tainted commodity gain and the note to that definition)
Repeal the paragraph and the note, substitute:
- (b)
- a capital gain that the
company would have made in the statutory accounting period because CGT event
J1 would have happened in relation to a tainted commodity investment, if the
assumptions in paragraphs 383(a) to (c) applied.
- Note: Basically, the effect of those assumptions is that the company concerned
is taken to be a taxpayer and a resident and CGT event J1 may therefore be
taken to have happened.
18 Section 317 (paragraph (b) of the definition of tainted commodity loss and
the note to that definition)
Repeal the paragraph and the note, substitute:
- (b)
- a capital loss that the company would have made in the statutory
accounting period because CGT event J1 would have happened in relation to a
tainted commodity investment, if the assumptions in paragraphs 383(a) to (c)
applied.
- Note: Basically, the effect of those assumptions is that the company concerned
is taken to be a taxpayer and a resident and CGT event J1 may therefore be
taken to have happened.
19 Subsection 401(6A)
Omit "disposal" (wherever occurring), substitute "CGT
event".
20 Subsection 401(6A)
Omit "160ZZOA", substitute "104-175 of the
Income Tax Assessment Act 1997 ".
21 Subsection 434(1A)
Repeal the
subsection, substitute:
- (1A)
- In working out the gross turnover of a company
of a statutory accounting period, assume that the amounts shown in the
company's recognised accounts, as mentioned in paragraphs (1)(b) and (c), for
that period had been worked out by also including:
- (a)
- as gains derived by the company in that periodcapital gains the
company would have made; and
- (b)
- as losses incurred by the company in that periodcapital losses the
company would have made;
in that period because of CGT event J1, if the assumptions in paragraphs
383(a) to (c) had applied.
- Note 1: CGT event J1 is about companies ceasing to be related after a
roll-over.
Note 2: Basically, the effect of the assumptions in paragraphs 383(a) to (c)
is that the company concerned is taken to be a taxpayer and a resident and CGT
event J1 may therefore be taken to have happened.
22 Subsection 445(2)
Repeal the subsection, substitute:
- (2)
- In paragraph
(1)(a):
gains includes capital gains the company would have made in the statutory
accounting period because of CGT event J1, if the assumptions in paragraphs
383(a) to (c) applied.
losses includes capital losses the company would have made in the statutory
accounting period because of CGT event J1, if the assumptions in paragraphs
383(a) to (c) applied.
- Note 1: CGT event J1 is about companies ceasing to be related after a
roll-over.
Note 2: Basically, the effect of the assumptions in paragraphs 383(a) to (c)
is that the company concerned is taken to be a taxpayer and a resident and CGT
event J1 may therefore be taken to have happened.
23 Subsection 460A(2)
Omit "section 160ZZOA (as it notionally applies",
substitute "CGT event J1 (as it notionally happens".
- Note: The section
heading to section 460A is altered by omitting " 160ZZOA " and substituting "
CGT event J1 ".
24 Subsection 460A(2) (note)
Omit "Section 160ZZOA", substitute "CGT event
J1".
25 Subsection 461(4A)
Omit "disposal" (wherever occurring), substitute
"CGT event".
26 Subsection 461(4A)
Omit "160ZZOA", substitute "104-175 of
the Income Tax Assessment Act 1997 ".
27 Application of amendments
The
amendments made by this Part apply in determining the attributable income of a
CFC if CGT event J1 is taken to have happened at any time, whether before or
after the Part commences.