Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987 - SECT 39

39. Section 159GP of the Principal Act is amended:

   (a)  by omitting paragraph (b) of the definition of component B in the
definition of "notional accrual amount" in subsection (1) and substituting:

"(b) in any other case-the sum of:

        (i)    the issue price or transfer price, as the case requires, of the
               security; and

        (ii)   the notional accrual amounts in relation to all preceding
               eligible notional accrual periods in the term or the adjusted
               term, as the case requires, of the security; reduced by the
               amounts of all payments (other than payments of periodic
               interest) made or liable to be made under the security during
               those periods; and";

   (b)  by omitting the definition of component C in the definition of

"notional accrual amount" in subsection (1) and substituting:

"C is the sum of:

   (a)  all periodic interest payments made or liable to be made under the
        security during the eligible notional accrual period, properly
        adjusted in the case of any payment made otherwise than at the end of
        the period; and

   (b)  where any payments (other than payments of periodic interest) made or
        liable to be made under the security during the eligible notional
        accrual period are made or liable to be made otherwise than at the end
        of the period-an amount to adjust properly for the making of the
        payments otherwise than at the end of the period;";

   (c)  by omitting paragraph (e) of the definition of "qualifying security"
        in subsection (1) and substituting the following:

"(e) where the precise amount of the eligible return is able to be ascertained
at the time of issue of the security-in relation to which the amount of the
eligible return is greater than 11/2% of the amount ascertained by multiplying
the amount of the payment or the sum of the payments (excluding any periodic
interest) liable to be made under the security by the number (including any
fraction) of years in the term of the security; but does not, except as
provided by subsection (10), include an annuity;";

   (d)  by inserting in subsection (1) the following definitions in their
        respective appropriate alphabetical positions (determined on a
        letter-by-letter basis):

" 'agreement' has the same meaning as in Subdivision D of Division 3;
'associate' has the same meaning as in Subdivision D of Division 3;
'ineligible annuity' means an annuity issued by a life assurance company,
within the meaning of Subdivision AA of Division 2, or by a registered
organization, within the meaning of that Subdivision, to or for the benefit of
a natural person other than in the capacity of trustee of a trust estate;";
and

   (e)  by adding at the end the following subsection:

"(10) Where:

   (a)  an annuity is issued on or after 29 October 1987;

   (b)  the requirements of paragraphs (b) to (e) (inclusive) of the
        definition of 'qualifying security' in subsection (1) are satisfied in
        relation to the annuity; and

   (c)  the annuity is not an ineligible annuity;
the annuity is a qualifying security for the purposes of this Division.".