Commonwealth: Crown Debts (Priority) Act 1981 (Cth)

Crown Debts (Priority) Act 1981 Act No. 93 of 1981 as amended This compilation was prepared on 26 September 2006 taking into account amendments up to Act No. 101 of 2006 The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section Prepared by the Office of Legislative Drafting and Publishing, Attorney‑General's Department, Canberra Contents 1 Short title [see Note 1] 2 Commencement [see Note 1] 3 Crown subject to State and Territory laws with respect to priority 4 Certain rights of the Crown not affected Notes An Act relating to the priority of Crown debts 1 Short title [see Note 1] This Act may be cited as the Crown Debts (Priority) Act 1981. 2 Commencement [see Note 1] This Act shall come into operation on the day on which the Companies Act 1981 comes into operation. 3 Crown subject to State and Territory laws with respect to priority Notwithstanding any prerogative right or privilege of the Crown in right of the Commonwealth, the Crown in right of the Commonwealth is subject to any provision of a law of a State or Territory: (a) relating to the order in which debts or liabilities of a body (whether corporate or unincorporate) are to be paid or discharged; (b) relating to the avoidance of preferences received by creditors of a body (whether corporate or unincorporate); or (c) relating to the effect on creditors or members of a body (whether corporate or unincorporate) of a compromise or arrangement between the body and another person or other persons. 4 Certain rights of the Crown not affected Nothing in section 3, or in the Corporations Act 2001 affects the operation of former subsections 221YHJ(3), (4) and (5) or 221YHZD(3), (4) and (5) or former section 221YU of the Income Tax Assessment Act 1936 or of section 32 of the Life Insurance Policy Holders' Protection Levies Collection Act 1991. Note: The provisions of the Income Tax Assessment Act 1936 referred to do not apply to liabilities arising after 30 June 1993. Notes to the Crown Debts (Priority) Act 1981 Note 1 The Crown Debts (Priority) Act 1981 as shown in this compilation comprises Act No. 93, 1981 amended as indicated in the Tables below. For application, saving or transitional provisions made by the Corporations (Repeals, Consequentials and Transitionals) Act 2001, see Act No. 55, 2001. All relevant information pertaining to application, saving or transitional provisions prior to 14 September 2006 is not included in this compilation. For subsequent information see Table A. Table of Acts Act Number Date Date of commencement Application, saving or transitional provisions and year of Assent Crown Debts (Priority) Act 1981 93, 1981 18 June 1981 1 July 1982 (see s. 2 and Gazette 1982, No. S124) Income Tax (Payments for Work) (Consequential Amendments) Act 1983 18, 1983 14 June 1983 14 June 1983 (see s. 2) — Taxation Laws Amendment Act (No. 4) 1986 154, 1986 18 Dec 1986 S. 8(c): 10 June 1986 — Part II (ss. 3–6), ss. 8(a), 9, 10 and 11: 1 Jan 1987 Ss. 26(b), (c), 28, 40, 49(3) and (7): 1 Jan 1987 (see s. 2 (4)) S. 55: 1 Mar 1987 (see Gazette 1987, No. S32) Remainder: 18 Dec 1986 Corporations Legislation Amendment Act 1990 110, 1990 18 Dec 1990 S. 18: 1 Jan 1991 (see Gazette 1990, No. S335) (a) — Corporations Legislation Amendment Act 1991 110, 1991 27 June 1991 Part 5 (ss. 12, 13): 1 Jan 1991 (b) — Life Insurance Policy Holders' Protection Levies Collection Act 1991 3, 1992 6 Jan 1992 6 Jan 1992 — Insolvency (Tax Priorities) Legislation Amendment Act 1993 32, 1993 16 June 1993 Ss. 6, 7, 9, 11, 13, 15 and Part 5 (ss. 29, 30): 1 June 1993 — Part 4 (ss. 20–28): 1 July 1993 Remainder: Royal Assent as amended by Statute Law Revision Act 1996 43, 1996 25 Oct 1996 Schedule 3 (item 32): 16 June 1993 (c) — Taxation Laws Amendment Act (No. 3) 1995 170, 1995 16 Dec 1995 Schedule 2 (items 61, 64): Royal Assent (d) Sch. 2 (item 64) Corporations (Repeals, Consequentials and Transitionals) Act 2001 55, 2001 28 June 2001 Ss. 4–14 and Schedule 3 (item 151): 15 July 2001 (see Gazette 2001, No. S285) (e) Ss. 4–14 [see Note 1] Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 101, 2006 14 Sept 2006 Schedule 2 (items 44, 45) and Schedule 6 (items 1, 6–11): Royal Assent Sch. 6 (items 1, 6–11) [see Table A] (a) The Crown Debts (Priority) Act 1981 was amended by subsection 18(2) only of the Corporations Legislation Amendment Act 1990, subsection 2(2) of which provides as follows: (2) The remaining provisions of this Act commence on a day or days to be fixed by Proclamation. (b) The Crown Debts (Priority) Act 1981 was amended by Part 5 (sections 12 and 13) only of the Corporations Legislation Amendment Act 1991, subsection 2(9) of which provides as follows: (9) Part 5 is taken to have commenced on 1 January 1991. (c) The Insolvency (Tax Priorities) Legislation Amendment Act 1993 was amended by Schedule 3 (item 32) only of the Statute Law Revision Act 1996, subsection 2(3) of which provides as follows: (3) Each item in Schedule 3 is taken to have commenced when the Act containing the provision amended by the item received the Royal Assent. (d) The Crown Debts (Priority) Act 1981 was amended by the Taxation Laws Amendment Act (No. 3) 1995, subsection 2(1) of which provides as follows: (1) Subject to subsection (2), this Act commences on the day on which it receives the Royal Assent. (e) The Crown Debts (Priority) Act 1981 was amended by Schedule 3 (item 151) only of the Corporations (Repeals, Consequentials and Transitionals) Act 2001, subsection 2(3) of which provides as follows: (3) Subject to subsections (4) to (10), Schedule 3 commences, or is taken to have commenced, at the same time as the Corporations Act 2001. Table of Amendments ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted Provision affected How affected S. 4.................... am. No. 18, 1983; No. 154, 1986; No. 110, 1990; No. 110, 1991; No. 3, 1992; No. 32, 1993 (as am. by No. 43, 1996); No. 170, 1995; No. 55, 2001; No. 101, 2006 Table A Application, saving or transitional provisions Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 (No. 101, 2006) Schedule 6 1 Application of Schedule 1 and 2 amendments Except as mentioned in items 2 and 3, the repeals and amendments made by Schedules 1 and 2 apply: (a) so far as they affect assessments—to assessments for the 2006‑07 income year and all later income years; and (b) otherwise—to acts done or omitted to be done, or states of affairs existing, after the commencement of the repeals and amendments. 6 Object The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of: (a) any act done or omitted to be done; or (b) any state of affairs existing; or (c) any period ending; before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies. 7 Making and amending assessments, and doing other things, in relation to past matters Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003): (a) making or amending an assessment (including under a provision that is itself repealed or amended); (b) exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended); in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies. Example 1: On 31 July 1999, Greg Ltd lodged its annual return under former section 160ARE of the Income Tax Assessment Act 1936. The return stated that the company had a credit on its franking account and that no franking deficit tax was payable for the 1998‑99 franking year. Under former section 160ARH of that Act, the Commissioner was taken to have made an assessment consistent with the return. Following an audit undertaken after the repeal of Part IIIAA of that Act, the Commissioner concludes that Greg Ltd fraudulently overfranked dividends it paid during the 1998‑99 franking year, and had a franking account deficit for that franking year. As a result, the Commissioner considers that franking deficit tax and a penalty by way of additional tax are payable. The Commissioner can amend the assessment under former section 160ARN of that Act, because item 7 of this Schedule disregards the repeal of that section for the purposes of making an assessment in relation to the 1998‑99 franking year. Item 7 will also disregard the repeal of Division 11 of former Part IIIAA to the extent necessary for the Commissioner to assess Greg Ltd's liability to a penalty by way of additional tax. Despite the repeal of sections 160ARU and 160ARV, item 9 will ensure that the general interest charge will accrue on the unpaid franking deficit tax and penalty until they are paid. Item 7 will also preserve Greg Ltd's right, under former section 160ART of that Act, to object against the Commissioner's amended assessment (including the penalty), since the objection is the exercise of a right in relation to a franking year that ended before the repeal of Part IIIAA. Example 2: During the 1997‑98 income year, Duffy Property Ltd withheld amounts from its employees' wages as required by former Divisions 1AAA and 2 of Part VI of the Income Tax Assessment Act 1936. The company failed to notify the Commissioner of those amounts, and failed to remit them to the Commissioner. Following an audit undertaken after the repeal of those Divisions, the Commissioner discovers that the withheld amounts have not been remitted. The company's records are incomplete and the Commissioner is unable to completely ascertain the extent of its liability for the withheld amounts. Under section 222AGA of that Act, the Commissioner makes an estimate of the liability. Item 7 will disregard the repeal of section 220AAZA of that Act (which empowered the Commissioner to recover the amount of the estimate). Even though the estimate is made after the repeal, it relates to amounts withheld before the repeal. 8 Saving of provisions about effect of assessments If a provision or part of a provision that is repealed or amended by this Act deals with the effect of an assessment, the repeal or amendment is disregarded in relation to assessments made, before or after the repeal or amendment applies, in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies. 9 Saving of provisions about general interest charge, failure to notify penalty or late reconciliation statement penalty If: (a) a provision or part of a provision that is repealed or amended by this Act provides for the payment of: (i) general interest charge, failure to notify penalty or late reconciliation statement penalty (all within the meaning of the Income Tax Assessment Act 1936); or (ii) interest under the Taxation (Interest on Overpayments and Early Payments) Act 1983; and (b) in a particular case, the period in respect of which the charge, penalty or interest is payable (whether under the provision or under the Taxation Administration Act 1953) has not begun, or has begun but not ended, when the provision is repealed or amended; then, despite the repeal or amendment, the provision or part continues to apply in the particular case until the end of the period. 10 Repeals disregarded for the purposes of dependent provisions If the operation of a provision (the subject provision) of any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003) made under any Act depends to any extent on an Act, or a provision of an Act, that is repealed by this Act, the repeal is disregarded so far as it affects the operation of the subject provision. 11 Schedule does not limit operation of section 8 of the Acts Interpretation Act 1901 This Schedule does not limit the operation of section 8 of the Acts Interpretation Act 1901.