Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987 - SECT 8

8. Sections 23F, 23FA and 23FB of the Principal Act are repealed and the
following sections are substituted: Exemption of income of certain
superannuation funds

"23FC. (1) Subject to this section, the income derived during a year of income
by a fund is exempt from income tax if:

   (a)  the Insurance and Superannuation Commissioner has given a notice in
        relation to the fund under section 12 of the Occupational
        Superannuation Standards Act 1987 stating that the Insurance and
        Superannuation Commissioner is satisfied that the fund satisfied the
        superannuation fund conditions in relation to the year of income; or

   (b)  the Insurance and Superannuation Commissioner has given a notice in
        relation to the fund under section 13 of the Occupational
        Superannuation Standards Act 1987 stating that the Insurance and
        Superannuation Commissioner is satisfied that the fund should be
        treated as if it had satisfied the superannuation fund conditions in
        relation to the year of income.

"(2) A dividend paid to a fund:

   (a)  if the fund is a former paragraph 23 (ja) fund in relation to the year
        of income of the fund in which the dividend was paid-in a year of
        income of the fund and after 29 October 1987; or

   (b)  in any other case-in a year of income of the fund; by a company that
        is a private company in relation to the year of income of the company
        in which the dividend was paid is not exempt from tax by virtue of
        subsection (1) unless the Commissioner is of the opinion that it would
        be reasonable to exempt the dividend from tax, having regard to:

   (c)  the paid-up value of the shares in that company that are assets of the
        fund;

   (d)  the cost to the fund of the shares on which the dividend was paid by
        the company;

   (e)  the rate of the dividend paid to the fund by the company on the shares
        in the company that are assets of the fund;

   (f)  whether the company has paid a dividend on other shares in the company
        and, if so, the rate of that dividend;

   (g)  whether any shares have been issued by the company to the fund in
        satisfaction of, or of a part of, a dividend paid by the company and,
        if so, the circumstances of the issue of those shares; and

   (h)  any other matters that the Commissioner considers relevant.

"(3) For the purposes of subsection (2), income that, in the opinion of the
Commissioner, was derived by a fund:

   (a)  if the fund is a former paragraph 23 (ja) fund in relation to the year
        of income of the fund in which the income was derived-in a year of
        income of the fund and after 29 October 1987; or

   (b)  in any other case-in a year of income of the fund; indirectly from a
        dividend paid by a company, being a private company in relation to the
        year of income of the company in which the dividend was paid, shall be
        deemed to have been a dividend paid to the fund:

   (c)  if paragraph (a) applies-in the year of income of the fund and after
        29 October 1987; or

   (d)  if paragraph (b) applies-in the year of income of the fund; by the
        company.

"(4) Income (other than a dividend to which subsection (2) applies) derived by
a fund:

   (a)  if the fund is a former paragraph 23 (ja) fund in relation to the year
        of income of the fund in which the income was derived-in a year of
        income of the fund and after 29 October 1987; or

   (b)  in any other case-in a year of income of the fund; from a transaction
        is not exempt from tax by virtue of subsection (1) if the parties to
        the transaction were not dealing with each other at arm's length in
        relation to the transaction and that income is greater than the income
        that might have been expected to have been derived by the fund from
        the transaction if those parties had been dealing with each other at
        arm's length in relation to the transaction.

"(5) A reference in subsection (4) to a transaction includes a reference to a
series of transactions.

"(6) In determining, for the purposes of subsection (3) or (4), whether income
was derived by a fund after 29 October 1987, income that:

   (a)  is included in the assessable income of the fund under subsection 92
        (1) or Division 6; or

   (b)  is derived by the fund during, but not at a particular time during, a
        year of income; shall be taken to have been derived by the fund at
        such time, or at such times and in such proportions, as the
        Commissioner considers reasonable having regard to:

   (c)  where paragraph (a) applies in respect of a partnership or a trust
        estate-the time, or the times, when income was derived by the
        partnership or by the trustee of the trust estate, as the case may be;
        and

   (d)  in any case-any relevant matters.

"(7) For the purposes of this section, a fund is a former paragraph 23 (ja)
fund in relation to a year of income if, and only if:

   (a)  the year of income ended before the proclaimed superannuation
        standards day and the income of the fund of the year of income would,
        but for the amendments made by the
        Taxation Laws Amendment Act (No. 4) 1987, have been exempt from tax
        under paragraph 23 (ja) of this Act as in force immediately before the
        commencement of section 1 of that Act; or

   (b)  the proclaimed superannuation standards day occurred during the year
        of income and, if the year of income had ended on the proclaimed
        superannuation standards day, the income of the fund of the year of
        income would have been exempt from tax under paragraph 23 (ja) of this
        Act as in force immediately before the commencement of section 1 of
        that Act. Exemption of income of certain approved deposit funds

"23FD. (1) Subject to this section, the income derived during a year of income
by a fund is exempt from income tax if:

   (a)  the Insurance and Superannuation Commissioner has given a notice in
        relation to the fund under section 14 of the Occupational
        Superannuation Standards Act 1987 stating that the Insurance and
        Superannuation Commissioner is satisfied that the fund satisfied the
        approved deposit fund conditions in relation to the year of income; or

   (b)  the Insurance and Superannuation Commissioner has given a notice in
        relation to the fund under section 15 of the Occupational
        Superannuation Standards Act 1987 stating that the Insurance and
        Superannuation Commissioner is satisfied that the fund should be
        treated as if it had satisfied the approved deposit fund conditions in
        relation to the year of income.

"(2) A dividend paid after 12 January 1987 to a fund by a company that is a
private company in relation to the year of income of the company in which the
dividend was paid is not exempt from tax by virtue of subsection (1) unless
the Commissioner is of the opinion that it would be reasonable to exempt the
dividend from tax, having regard to:

   (a)  the paid-up value of the shares in that company that are assets of the
        fund;

   (b)  the cost to the fund of the shares on which the dividend was paid by
        the company;

   (c)  the rate of the dividend paid to the fund by the company on the shares
        in the company that are assets of the fund;

   (d)  whether the company has paid a dividend on other shares in the company
        and, if so, the rate of that dividend;

   (e)  whether any shares have been issued by the company to the fund in
        satisfaction of, or of a part of, a dividend paid by the company and,
        if so, the circumstances of the issue of those shares; and

   (f)  any other matters that the Commissioner considers relevant.

"(3) For the purposes of subsection (2), income that, in the opinion of the
Commissioner, was derived after 12 January 1987 by a fund indirectly from a
dividend paid by a company, being a private company in relation to the year of
income of the company in which the dividend was paid, shall be deemed to have
been a dividend paid after that date to the fund by the company.

"(4) Income (other than a dividend to which subsection (2) applies) derived
after 12 January 1987 by a fund from a transaction is not exempt from tax by
virtue of subsection (1) if the parties to the transaction were not dealing
with each other at arm's length in relation to the transaction and that income
is greater than the income that might have been expected to have been derived
by the fund from the transaction if those parties had been dealing with each
other at arm's length in relation to the transaction.

"(5) A reference in subsection (4) to a transaction includes a reference to a
series of transactions.

"(6) In determining, for the purposes of subsection (3) or (4), whether income
was derived by a fund after 12 January 1987, income that:

   (a)  is included in the assessable income of the fund under subsection 92
        (1) or Division 6; or

   (b)  is derived by the fund during, but not at a particular time during, a
        year of income; shall be taken to have been derived by the fund at
        such time, or at such times and in such proportions, as the
        Commissioner considers reasonable having regard to:

   (c)  where paragraph (a) applies in respect of a partnership or a trust
        estate-the time, or the times, when income was derived by the
        partnership or by the trustee of the trust estate, as the case may be;
        and

   (d)  in any case-any relevant matters.".