Commonwealth: Tax Laws Amendment (2009 Measures No. 2) Act 2009 (Cth)

Tax Laws Amendment (2009 Measures No. 2) Act 2009 No. 42, 2009 as amended Compilation start date: 28 June 2013 Includes amendments up to: Act No. 84, 2013 About this compilation This compilation This is a compilation of the Tax Laws Amendment (2009 Measures No. 2) Act 2009 as in force on 28 June 2013. It includes any commenced amendment affecting the legislation to that date. This compilation was prepared on 20 September 2013. The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of each amended provision. Uncommenced amendments The effect of uncommenced amendments is not reflected in the text of the compiled law but the text of the amendments is included in the endnotes. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Modifications If a provision of the compiled law is affected by a modification that is in force, details are included in the endnotes. Provisions ceasing to have effect If a provision of the compiled law has expired or otherwise ceased to have effect in accordance with a provision of the law, details are included in the endnotes. Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Tax treatment of payments under financial claims scheme Banking Act 1959 First Home Saver Accounts Act 2008 Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Income Tax (Transitional Provisions) Act 1997 Insurance Act 1973 Taxation Administration Act 1953 Schedule 2—CGT concessions for small business Part 1—Main amendments Income Tax Assessment Act 1997 Part 2—Other amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Tax Laws Amendment (2008 Measures No. 6) Act 2009 Part 3—Application provisions Schedule 3—Tax benefits and capital gains tax Income Tax Assessment Act 1997 Schedule 4—National Urban Water and Desalination Plan Part 1—Main amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Taxation (Interest on Overpayments and Early Payments) Act 1983 Schedule 5—Deductible gift recipients Part 1—Amendments commencing on Royal Assent Income Tax Assessment Act 1997 Part 2—Other amendments Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 Part 3—Application provision Schedule 6—ABN changes Part 1—Amendments commencing on Royal Assent A New Tax System (Australian Business Number) Act 1999 Product Grants and Benefits Administration Act 2000 Taxation Administration Act 1953 Part 2—Amendments commencing on Proclamation A New Tax System (Australian Business Number) Act 1999 Schedule 7—Fuel tax Part 1—Fuel Tax Act 2006 Part 2—Fuel Tax (Consequential and Transitional Provisions) Act 2006 Part 3—Application provisions Schedule 8—Government grants for businesses in relation to 2009 Victorian bushfires Part 1—Amendments commencing on Royal Assent Income Tax Assessment Act 1997 Part 2—Sunsetting on 1 July 2011 Income Tax Assessment Act 1997 Part 3—Application provision Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history Endnote 5—Uncommenced amendments [none] Endnote 6—Modifications [none] Endnote 7—Misdescribed amendments [none] Endnote 8—Miscellaneous [none] An Act to amend the law relating to taxation, and for related purposes 1 Short title This Act may be cited as the Tax Laws Amendment (2009 Measures No. 2) Act 2009. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 23 June 2009 2. Schedule 1 The day on which this Act receives the Royal Assent. 23 June 2009 3. Schedule 2, item 1 Immediately after the commencement of item 3 of Schedule 4 to the Tax Laws Amendment (Small Business) Act 2007. 21 June 2007 4. Schedule 2, items 2 to 39 The day on which this Act receives the Royal Assent. 23 June 2009 5. Schedule 2, item 40 Immediately before the commencement of item 52 of Schedule 4 to the Tax Laws Amendment (2008 Measures No. 6) Act 2009. 26 March 2009 6. Schedule 2, Part 3 The day on which this Act receives the Royal Assent. 23 June 2009 7. Schedule 3 1 July 2009. 1 July 2009 8. Schedule 4, Part 1 The day on which this Act receives the Royal Assent. 23 June 2009 9. Schedule 4, Part 2 1 July 2014. 1 July 2014 10. Schedule 5, Part 1 The day on which this Act receives the Royal Assent. 23 June 2009 11. Schedule 5, Part 2 Immediately before the commencement of Schedule 3 to the Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006. 1 January 2008 12. Schedule 5, Part 3 The day on which this Act receives the Royal Assent. 23 June 2009 13. Schedule 6, Part 1 The day on which this Act receives the Royal Assent. 23 June 2009 14. Schedule 6, Part 2 A single day to be fixed by Proclamation. 5 April 2010 However, if any of the provision(s) do not commence within the period of 12 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. (see F2010L00629) 15. Schedule 7 1 July 2009. 1 July 2009 16. Schedule 8, Part 1 The day on which this Act receives the Royal Assent. 23 June 2009 17. Schedule 8, Part 2 1 July 2011. 1 July 2011 18. Schedule 8, Part 3 The day on which this Act receives the Royal Assent. 23 June 2009 Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Tax treatment of payments under financial claims scheme Banking Act 1959 1 After section 16AH Insert: 16AHA Giving information about payments in a financial year (1) This section applies if one or more amounts are paid to, or applied for the benefit of, one or more account‑holders in a financial year to meet (wholly or partly) the account‑holders' entitlements under this Subdivision. Giving each account‑holder an annual statement (2) Within 14 days after the end of the financial year, APRA must give each of those account‑holders a statement about the amounts paid to, or applied for the benefit of, the account‑holder in the financial year. The statement must: (a) be in the approved form; and (b) name the account‑holder; and (c) state the account‑holder's tax file number, if APRA knows it; and (d) state the total of the amounts and the total of the amounts (if any) withheld from them under the Taxation Administration Act 1953; and (e) specify the financial year to which the statement relates. Giving the Commissioner of Taxation an annual report (3) Within 4 months after the end of the financial year, APRA must give the Commissioner a report in the approved form about all the amounts described in subsection (1). Provisions about statements and reports in approved forms (4) Division 388 in Schedule 1 to the Taxation Administration Act 1953 applies as if this section were a taxation law for the purposes of that Act. Note: That Division sets out rules about approved forms and when they can be given. This section does not limit the Taxation Administration Act 1953 (5) Subsection (4) does not limit the operation of the Taxation Administration Act 1953 in relation to APRA. 2 Application of section 16AHA Section 16AHA of the Banking Act 1959 applies in relation to amounts paid or applied before, on or after the commencement of the section. 3 After paragraph 16AK(4)(e) Insert: (ea) preparing or giving a statement or report required by section 16AHA; (eb) complying with an obligation under a law relating to taxation; First Home Saver Accounts Act 2008 4 At the end of subsection 15(1) Add: Note: If the person has or had an entitlement arise under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 in relation to an FHSA, section 128A of this Act affects this section. 5 At the end of subsection 19(3) Add: Note: Section 128A prevents this section from applying to the opening of an FHSA on a person's behalf by APRA or a liquidator under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959. 6 At the end of subsection 20(5) Add: Note: Section 128A extends the operation of this section in relation to an FHSA opened on a person's behalf by APRA or a liquidator under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959. 7 Subsection 31(1) (note) Omit "Note:", substitute "Note 1:". 8 At the end of subsection 31(1) Add: Note 2: If an entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 arises in connection with the FHSA, this section does not prevent a payment from the FHSA connected with the right to be paid that section 16AI of that Act gives APRA in relation to the FHSA (see section 128A of this Act). 9 After section 128 Insert: 128A Special provisions applying if financial claims scheme entitlements arise in relation to FHSAs Application (1) This section applies if an entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 arises in connection with an FHSA (the old FHSA) held by a person. Some contributions treated as transfers from old FHSA (2) If a contribution to another FHSA is made for the purposes of: (a) meeting the entitlement (wholly or partly); or (b) paying a distribution attributable to the old FHSA from the liquidation of the provider of the old FHSA; this Act applies as if the contribution were by way of a transfer from the old FHSA to the other FHSA. Note: The effects of this include the contribution being covered by paragraph 11(3)(a), so that the contribution is not a personal FHSA contribution, does not count against the limit on contributions set by section 27 and does not count for working out the amount of a Government FHSA contribution for the person under section 38. Old FHSA does not affect whether person meets FHSA eligibility requirements (3) For the purposes of determining whether the person meets the FHSA eligibility requirements after the entitlement arises, disregard the old FHSA for the purposes of paragraphs 15(1)(e) and (f). Note: This ensures that the holding and closure of the old FHSA after the entitlement arises cannot prevent the person from meeting the FHSA eligibility requirements. Opening of new FHSA to meet entitlement (4) Subsection 19(1) does not apply to the opening of an FHSA: (a) under section 16AH of the Banking Act 1959 for the purposes of meeting the entitlement (wholly or partly); or (b) under section 16AR of that Act for the purposes of paying a distribution attributable to the old FHSA from the liquidation of the provider of the old FHSA. Note: A defendant in a prosecution for an offence against section 19 bears an evidential burden in relation to the matter in subsection (4) of this section: see subsection 13.3(3) of the Criminal Code. Notice of person not meeting the FHSA eligibility requirements (5) If: (a) an FHSA (the new FHSA) is opened: (i) under section 16AH of the Banking Act 1959 for the purposes of meeting the entitlement (wholly or partly); or (ii) under section 16AR of that Act for the purposes of paying a distribution attributable to the old FHSA from the liquidation of the provider of the old FHSA; and (b) before the new FHSA was opened, circumstances arose resulting in the person not meeting the FHSA eligibility requirements; and (c) after the opening of the new FHSA, the person continues not to meet the FHSA eligibility requirements; section 20 applies to the person as the holder of the new FHSA in relation to the provider of the new FHSA, but so as to require the person to give notice within 30 days after notice is sent to the person of the opening of the new FHSA. Payment connected with right given to APRA by the Banking Act 1959 (6) Nothing in this Act or the regulations prevents the provider of the old FHSA from paying an amount out of the FHSA in connection with a right to be paid an amount by the provider that APRA had in connection with the old FHSA because of section 16AI of the Banking Act 1959. Note: Section 16AI of the Banking Act 1959 gives APRA the right (or part of the right) the holder of the old FHSA had to be paid an amount by the provider of the old FHSA in connection with the old FHSA. 10 Application The amendments of the First Home Saver Accounts Act 2008 made by this Schedule apply in relation to entitlements arising under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 after 17 October 2008. Note: Division 2AA of Part II of the Banking Act 1959 commenced on 18 October 2008. Income Tax Assessment Act 1936 11 At the end of subsection 393‑15(3) in Schedule 2G Add: Note: Section 393‑80 affects the unrecouped FMD deduction of a new deposit linked to an old farm management deposit in relation to which there arose an entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959. 12 At the end of subsection 393‑15(4) in Schedule 2G Add: Note 3: Section 393‑85 limits the operation of subsection (4) of this section if: (a) the farm management deposit is with an ADI that becomes a declared ADI under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959; and (b) an amount equal to the deposit has not been paid to you as an entitlement under that Division, or in liquidation of the ADI, by the end of the year of income. 13 Section 393‑25 in Schedule 2G Insert: ADI has the same meaning as in the Banking Act 1959. 14 Section 393‑25 in Schedule 2G (paragraph (a) of the definition of financial institution) Omit "(authorised deposit‑taking institution) for the purposes of the Banking Act 1959". 15 At the end of Division 393 in Schedule 2G Add: Subdivision 393‑D—Special rules relating to financial claims scheme for account‑holders with insolvent ADIs Guide to Subdivision 393‑D 393‑75 What this Subdivision is about A deposit (the new deposit) arising from: (a) an entitlement under Division 2AA of Part II of the Banking Act 1959 relating to a farm management deposit with an ADI; or (b) a distribution from liquidation of the ADI that is attributable to a farm management deposit; is treated as a transfer of the farm management deposit that does not give rise to new assessable income or deductions. Table of sections Operative provisions 393‑80 Farm management deposits arising from farm management deposits with ADIs subject to financial claims scheme 393‑85 Repayment if owner of farm management deposit with insolvent ADI is bankrupt, dies or ceases to be a primary producer Operative provisions 393‑80 Farm management deposits arising from farm management deposits with ADIs subject to financial claims scheme Application (1) This section applies if an entitlement arises under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 in connection with an account containing a farm management deposit (the old farm management deposit) with an ADI (the old ADI) and either: (a) an amount (the new deposit) is deposited into one of the following to meet, in whole or part, so much of the entitlement as relates to the old farm management deposit: (i) an existing account for a farm management deposit; (ii) an account established under section 16AH of that Act for the purposes of meeting (wholly or partly) the entitlement; or (b) an amount (also the new deposit) is deposited by a liquidator of the old ADI into one of the following as so much of a distribution from the liquidation of the old ADI as relates to the old farm management deposit: (i) an existing account for a farm management deposit; (ii) an account established under section 16AR of that Act for the payment of the distribution. Note: If an amount is deposited in connection with an account with the old ADI containing 2 or more old farm management deposits, the amount is to be apportioned between each old farm management deposit, so that so much of the amount as is attributable to a particular old farm management deposit is regarded as a distinct new deposit relating to that old farm management deposit. New deposit is a farm management deposit (2) This Division (except this section) applies to the new deposit as if it were a transfer of the old farm management deposit in accordance with a requirement of the agreement for the old farm management deposit as mentioned in subsection 393‑40(5). To avoid doubt, this Division applies in that way as if the amount transferred were the amount of the new deposit, even if that is more or less than the amount of the old farm management deposit. Note 1: The effects of this include the following: (a) the applicable depositing day for the old farm management deposit is maintained under paragraph 393‑37(7)(c) or (d) for the new deposit (which affects whether a withdrawal of the new deposit prevents it from being a farm management deposit); (b) the new deposit is not regarded as a repayment of the old farm management deposit that is assessable income (see subsection 393‑50(5)); (c) the making of the new deposit does not give rise to a deduction (see subsection 393‑50(5)). Note 2: Also, the unrecouped FMD deduction in respect of the new deposit is the same as the unrecouped FMD deduction in respect of the old farm management deposit (see subsection 393‑50(5)), unless subsection (6) or (7) of this section applies because the new deposit is less than the old farm management deposit. (3) Subsection 393‑35(5) does not apply in relation to either of the following to prevent it from being a farm management deposit: (a) the new deposit; (b) a deposit made later directly by the transfer of the new deposit in accordance with a requirement of the agreement for the new deposit as mentioned in subsection 393‑40(5). Note: This means that the new deposit, or a deposit made as a direct result of the transfer of the new deposit, can be a farm management deposit (despite subsection 393‑45(1)) even if it is less than $1,000. (4) For the purposes of subsection 393‑35(7), disregard the old farm management deposit in determining whether a deposit made after the entitlement arises is a farm management deposit. Note: This means that a deposit made with a financial institution other than the old ADI after the entitlement arises can be a farm management deposit (despite subsection 393‑45(1)) even though the owner of the deposit still has the old farm management deposit with the old ADI. (5) Subsection 393‑35(7) does not apply to the new deposit to prevent it from being a farm management deposit. Note: This ensures that the new deposit can be a farm management deposit (despite subsection 393‑45(1)) even though the owner of the new deposit has other farm management deposits with other financial institutions when the new deposit is made. Unrecouped FMD deduction for new deposit less than old farm management deposit (6) Despite subsection (2) and paragraph 393‑50(5)(c), if the new deposit is less than the old farm management deposit at the time (the declaration time) the old ADI became a declared ADI under the Banking Act 1959, the unrecouped FMD deduction in respect of the new deposit is the amount worked out using the formula: Note: The new deposit could be less than the old farm management deposit if the entitlement is paid in instalments (each of which will be a separate new deposit). (7) However, if the amount worked out under subsection (6) is more than the difference (if any) between: (a) the unrecouped FMD deduction in respect of the old farm management deposit just before the declaration time; and (b) the total of the amounts worked out under all previous applications of subsection (6) in relation to that old farm management deposit; the unrecouped FMD deduction in respect of the new deposit is equal to the difference (if any). Note: This ensures that when new deposits linked to the old farm management deposit are repaid, the total amount included in assessable income will not exceed the unrecouped FMD deduction in respect of the old farm management deposit. Relationship with other provisions (8) This section has effect despite Division 253 of the Income Tax Assessment Act 1997 (which is about tax treatment of entitlements under the financial claims scheme for insolvent ADIs). 393‑85 Repayment if owner of farm management deposit with insolvent ADI dies, is bankrupt or ceases to be a primary producer (1) This section applies if: (a) you are the owner of a farm management deposit with an ADI that becomes repayable during a year of income in accordance with a requirement of the agreement concerned to the effect mentioned in subsection 393‑40(3) (which covers death, bankruptcy and ceasing to be a primary producer); and (b) during the year of income the ADI becomes a declared ADI under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959; and (c) at the end of the year of income, you have either or both of the following: (i) an unmet entitlement under that Division connected with the account for the farm management deposit; (ii) an unmet claim against the ADI, or an unpaid debt owed to you by the ADI, in the winding up of the ADI that is a claim or debt that is connected with the account for the farm management deposit. (2) Subsection 393‑15(4) does not apply in relation to so much of the farm management deposit as is equal to the sum of the amounts described in subparagraphs (1)(c)(i) and (ii). 16 Application The amendments of Schedule 2G to the Income Tax Assessment Act 1936 made by this Schedule apply to assessments for the year of income including 18 October 2008 and later years of income. Note: Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 commenced on 18 October 2008. Income Tax Assessment Act 1997 17 At the end of subsection 104‑10(5) Add: Note 4: A capital gain or loss you make because of section 16AI of the Banking Act 1959 is disregarded: see section 253‑10 of this Act. Section 16AI of the Banking Act 1959: (a) reduces your right to be paid an amount by an ADI in connection with an account to the extent of your entitlement under Division 2AA of Part II of that Act to be paid an amount by APRA; and (b) provides that, to the extent of the reduction, the right becomes a right of APRA. Note 5: A capital gain or loss you make because, under section 62ZZL of the Insurance Act 1973, you dispose of a CGT asset consisting of your rights against a general insurance company to APRA is disregarded: see section 322‑30 of this Act. 18 At the end of subsection 104‑25(5) Add: Note 7: A capital gain or loss you make from the meeting of your entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 or Part VC (Financial claims scheme for account‑holders with insolvent general insurers) of the Insurance Act 1973 is disregarded: see sections 253‑10 and 322‑30 of this Act. 19 Section 112‑97 (at the end of the table) Add: 31 An entitlement arises under Division 2AA of Part II of the Banking Act 1959 in connection with an account‑holder's account with an ADI The total cost base, and reduced cost base, of the entitlement and of the remainder (if any) of the right to be paid by the ADI in connection with the account Section 253‑15 20 At the end of Part 3‑10 Add: Division 253—Financial claims scheme for account‑holders with insolvent ADIs Table of Subdivisions 253‑A Tax treatment of entitlements under financial claims scheme Subdivision 253‑A—Tax treatment of entitlements under financial claims scheme Guide to Subdivision 253‑A 253‑1 What this Subdivision is about This Act applies to a payment of an entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 as if the payment were made by the ADI under the agreement for the account concerned. Special rules prevent the arising and payment of such an entitlement from creating inappropriate capital gains or losses affecting assessable income. Table of sections Operative provisions 253‑5 Payment of entitlement under financial claims scheme treated as payment from ADI 253‑10 Disposal of rights against ADI to APRA and meeting of financial claims scheme entitlement have no CGT effects 253‑15 Cost base of financial claims scheme entitlement and any remaining part of account that gave rise to entitlement Operative provisions 253‑5 Payment of entitlement under financial claims scheme treated as payment from ADI (1) This Act applies to you as if an amount paid to you, or applied for your benefit, to meet your entitlement under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 connected with an account with an *ADI had been paid to you by the ADI under the terms and conditions of the agreement for keeping the account. Note: This section has effect subject to more detailed provisions about: (a) entitlements relating to retirement savings accounts (see section 306‑25); and (b) entitlements relating to farm management deposits (see Subdivision 393‑D in Schedule 2G to the Income Tax Assessment Act 1936). (2) To avoid doubt, subsection (1) does not affect the operation of Part 2‑5 in Schedule 1 to the Taxation Administration Act 1953. Note: Division 21 in Schedule 1 to the Taxation Administration Act 1953 contains special provisions about how Part 2‑5 in that Schedule operates in relation to the meeting of entitlements under Division 2AA of Part II of the Banking Act 1959. 253‑10 Disposal of rights against ADI to APRA and meeting of financial claims scheme entitlement have no CGT effects Disregard a *capital gain or *capital loss you make: (a) because of the operation of section 16AI of the Banking Act 1959; or (b) because your entitlement under Subdivision C of Division 2AA of Part II of that Act is met. Note: Section 16AI of the Banking Act 1959 reduces the right of an account‑holder who has a protected account with a declared ADI to be paid an amount by the ADI, by the account‑holder's entitlement under Subdivision C of Division 2AA of Part II of that Act to be paid an amount by APRA in connection with the account. 253‑15 Cost base of financial claims scheme entitlement and any remaining part of account that gave rise to entitlement (1) This section applies if an entitlement arises under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 in connection with an account‑holder's account with an *ADI. (2) The *cost base and *reduced cost base of the *CGT asset consisting of the entitlement are each the amount of the entitlement. (3) The *cost base of the *CGT asset representing the part (if any) of the account‑holder's right to be paid an amount by the *ADI in connection with the account that remains after the reduction of that right by section 16AI of the Banking Act 1959 (by the amount of the entitlement) is the difference (if any) between: (a) the cost base of the right as it was immediately before the reduction; and (b) the amount of the entitlement. The *reduced cost base is worked out similarly. (4) This section has effect despite: (a) Division 110 (Cost base and reduced cost base); and (b) subsections 112‑30(2), (3), (4) and (5) (which are about apportioning a *cost base if a *CGT event happens to only part of a *CGT asset). 21 At the end of Division 306 Add: 306‑25 Payments connected with financial claims scheme to RSAs (1) This section applies if: (a) a person is the holder of an *RSA (the old RSA) of which an *ADI is the *RSA provider; and (b) an entitlement of the person arises under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 in connection with the old RSA; and (c) either: (i) the entitlement, so far as it relates to the old RSA, is met wholly or partly by the making of a payment to another RSA (the new RSA) that the person is the holder of (whether or not the new RSA was established under section 16AH of the Banking Act 1959); or (ii) a liquidator of the ADI pays a distribution from the liquidation of the ADI, so far as the distribution is attributable to the old RSA, to another RSA (also the new RSA) that the person is the holder of (whether or not the new RSA was established under section 16AR of the Banking Act 1959). (2) This Part (except this section), and the other provisions of this Act (except this section) so far as they relate to this Part, apply in relation to the payment to the new RSA as if: (a) the payment were made from the old RSA to the new RSA; and (b) the entity that made the payment (rather than the *ADI) were the *RSA provider of the old RSA. Note: The effects of this include: (a) the payment is a superannuation member benefit of the person (because of sections 307‑5 and 307‑15); and (b) the payment is a superannuation lump sum under Subdivision 307‑B (unless regulations prevent this); and (c) the payment is a roll‑over superannuation benefit under section 306‑10 (unless regulations prevent this); and (d) reporting obligations (such as those in section 390‑10 in Schedule 1 to the Taxation Administration Act 1953) apply to the entity that made the payment as if it were the RSA provider of the old RSA. (3) However, for the purposes of section 307‑125, determine the *value of the *superannuation interest, and the amount of each of the *tax free component and the *taxable component of the interest: (a) when the entitlement arose; or (b) if a *superannuation income stream benefit had been paid from the old RSA before that time—at the time the relevant *superannuation income stream commenced. (4) Subsection (3) has effect despite: (a) subsection 307‑125(3) (as it applies because of subsection (2) of this section); and (b) paragraph 307‑125(3)(a) of the Income Tax (Transitional Provisions) Act 1997. (5) This section has effect despite: (a) Division 253; and (b) Division 21 in Schedule 1 to the Taxation Administration Act 1953. 22 Application (1) Section 306‑25 of the Income Tax Assessment Act 1997 applies in relation to entitlements arising under Division 2AA (Financial claims scheme for account‑holders with insolvent ADIs) of Part II of the Banking Act 1959 after 17 October 2008. Note: Division 2AA of Part II of the Banking Act 1959 commenced on 18 October 2008. (2) However, this item does not: (a) require a person to do anything the person would have been required by Division 390 in Schedule 1 to the Taxation Administration Act 1953 to do before the commencement of this item had section 306‑25 of the Income Tax Assessment Act 1997 commenced on 18 October 2008; or (b) make a person liable to a criminal or administrative penalty for an omission occurring before the commencement of this item. 23 Division 322 (heading) Repeal the heading, substitute: Division 322—Assistance for policyholders with insolvent general insurers 24 At the end of section 322‑1 Add "and deals with the tax treatment of entitlements under Part VC (Financial claims scheme for policyholders with insolvent general insurers) of the Insurance Act 1973". 25 Group heading before section 322‑5 Repeal the heading, substitute: Subdivision 322‑A—HIH rescue package 26 At the end of Division 322 Add: Subdivision 322‑B—Tax treatment of entitlements under financial claims scheme Guide to Subdivision 322‑B 322‑20 What this Subdivision is about This Act applies to a payment of an entitlement under Part VC (Financial claims scheme for policyholders with insolvent general insurers) of the Insurance Act 1973 as if the payment were made by the insurer under the insurance policy concerned. Disregard a capital gain or loss from: (a) the disposal to APRA under that Part of rights against the insurer under an insurance policy; or (b) the payment of an entitlement under that Part. Table of sections Operative provisions 322‑25 Payment of entitlement under financial claims scheme treated as payment from insurer 322‑30 Disposal of rights against insurer to APRA and meeting of financial claims scheme entitlement have no CGT effects Operative provisions 322‑25 Payment of entitlement under financial claims scheme treated as payment from insurer (1) This Act applies to you as if an amount paid to you, or applied for your benefit, to meet your entitlement under Part VC (Financial claims scheme for policyholders with insolvent general insurers) of the Insurance Act 1973 relating to a *general insurance policy issued by a *general insurance company had been paid to you by the company under the terms and conditions of the policy. (2) To avoid doubt, subsection (1) does not affect the operation of Part 2‑5 in Schedule 1 to the Taxation Administration Act 1953. Note: Division 21 in Schedule 1 to the Taxation Administration Act 1953 contains special provisions about how Part 2‑5 in that Schedule operates in relation to the meeting of entitlements under Part VC of the Insurance Act 1973. 322‑30 Disposal of rights against insurer to APRA and meeting of financial claims scheme entitlement have no CGT effects Disregard a *capital gain or *capital loss you make because: (a) under section 62ZZL of the Insurance Act 1973, you *dispose of a *CGT asset consisting of your rights against a *general insurance company to *APRA; or (b) your entitlement under Division 3 of Part VC of that Act is met. Note 1: Section 62ZZL of the Insurance Act 1973 causes you to cease to be the owner, and APRA to become the owner, of rights against a general insurance company relating to a general insurance policy when your entitlement arises under Part VC of that Act in relation to the policy. Note 2: Division 3 of Part VC of the Insurance Act 1973 entitles persons with valid claims based on general insurance policies issued by certain general insurance companies that have since become insolvent to be paid the amount of those claims by APRA. Income Tax (Transitional Provisions) Act 1997 27 At the end of Part 3‑10 Add: Division 253—Financial claims scheme for account‑holders with insolvent ADIs Table of Subdivisions 253‑A Tax treatment of entitlements under financial claims scheme Subdivision 253‑A—Tax treatment of entitlements under financial claims scheme Table of sections 253‑5 Application of section 253‑5 of the Income Tax Assessment Act 1997 253‑10 Application of sections 253‑10 and 253‑15 of the Income Tax Assessment Act 1997 253‑5 Application of section 253‑5 of the Income Tax Assessment Act 1997 Section 253‑5 of the Income Tax Assessment Act 1997 applies to amounts paid or applied before, on or after the commencement of that section to meet entitlements arising under Division 2AA of Part II of the Banking Act 1959 after 17 October 2008. Note: Division 2AA of Part II of the Banking Act 1959 commenced on 18 October 2008. 253‑10 Application of sections 253‑10 and 253‑15 of the Income Tax Assessment Act 1997 Sections 253‑10 and 253‑15 of the Income Tax Assessment Act 1997 apply to CGT events happening after 17 October 2008. 28 Part 3‑35 (heading) Repeal the heading, substitute: Part 3‑35—Insurance business 29 At the end of Part 3‑35 Add: Division 322—Assistance for policyholders with insolvent general insurers Table of Subdivisions 322‑B Tax treatment of entitlements under financial claims scheme Subdivision 322‑B—Tax treatment of entitlements under financial claims scheme Table of sections 322‑25 Application of section 322‑25 of the Income Tax Assessment Act 1997 322‑30 Application of section 322‑30 of the Income Tax Assessment Act 1997 322‑25 Application of section 322‑25 of the Income Tax Assessment Act 1997 Section 322‑25 of the Income Tax Assessment Act 1997 applies to amounts paid or applied before, on or after the commencement of that section to meet entitlements arising under Part VC of the Insurance Act 1973 after 17 October 2008. Note: Part VC of the Insurance Act 1973 commenced on 18 October 2008. 322‑30 Application of section 322‑30 of the Income Tax Assessment Act 1997 Section 322‑30 of the Income Tax Assessment Act 1997 applies to CGT events happening after 17 October 2008. Insurance Act 1973 30 After section 62ZZK Insert: 62ZZKA Giving information about payments in a financial year (1) This section applies if one or more amounts are paid to, or applied for the benefit of, one or more persons (the recipients) in a financial year to meet (wholly or partly) the recipients' entitlements under this Division. Giving each recipient an annual statement (2) Within 14 days after the end of the financial year, APRA must give each of the recipients a statement about the amounts paid to, or applied for the benefit of, the recipient in the financial year. The statement must: (a) be in the approved form; and (b) name the recipient; and (c) state the recipient's tax file number, if APRA knows it; and (d) state the total of the amounts and the total of the amounts (if any) withheld from them under the Taxation Administration Act 1953; and (e) specify the financial year to which the statement relates. Giving the Commissioner of Taxation an annual report (3) Within 4 months after the end of the financial year, APRA must give the Commissioner a report in the approved form about all the amounts described in subsection (1). Provisions about statements and reports in approved forms (4) Division 388 in Schedule 1 to the Taxation Administration Act 1953 applies as if this section were a taxation law for the purposes of that Act. Note: That Division sets out rules about approved forms and when they can be given. This section does not limit the Taxation Administration Act 1953 (5) Subsection (4) does not limit the operation of the Taxation Administration Act 1953 in relation to APRA. 31 Application of section 62ZZKA Section 62ZZKA of the Insurance Act 1973 applies in relation to amounts paid or applied before, on or after the commencement of the section. 32 At the end of subsection 62ZZM(1) Add "under the terms and conditions of the policy". 33 After paragraph 62ZZP(4)(d) Insert: (da) preparing or giving a statement or report required by section 62ZZKA; (db) complying with an obligation under a law relating to taxation; Taxation Administration Act 1953 34 At the end of Part 2‑5 in Schedule 1 Add: Division 21—Entitlements relating to insolvent ADIs and general insurers Table of Subdivisions Guide to Division 21 21‑A Treatment of some payments by APRA Guide to Division 21 21‑1 What this Division is about This Part applies in relation to a payment by APRA under: (a) Division 2AA of Part II of the Banking Act 1959 applying in relation to an account with an ADI; or (b) Part VC of the Insurance Act 1973 applying in relation to a general insurance policy issued by a general insurance company; in a way corresponding to the way this Part would have applied if the payment had been made by the ADI or company in connection with the account or policy. Subdivision 21‑A—Treatment of some payments by APRA Table of sections 21‑5 APRA treated like ADI or general insurance company 21‑5 APRA treated like ADI or general insurance company (1) This section applies if: (a) an entity's entitlement under Division 2AA of Part II of the Banking Act 1959 to be paid an amount by *APRA in connection with the entity's account with an *ADI is met wholly or partly; or (b) an entity's entitlement under Part VC of the Insurance Act 1973 to be paid an amount in connection with a *general insurance policy issued by a *general insurance company is met wholly or partly. Note 1: Division 2AA of Part II of the Banking Act 1959 entitles entities that have certain accounts with certain insolvent ADIs to be paid amounts by APRA worked out by reference to the balance of those accounts. Note 2: Part VC of the Insurance Act 1973 entitles entities with valid claims against certain insolvent general insurance companies under certain general insurance policies issued by those companies to be paid amounts by APRA. (2) This Part applies in relation to *APRA and the meeting of the entitlement in a way corresponding to the way in which this Part would have applied in relation to the *ADI or *general insurance company doing, in connection with the account or policy, whatever was done in meeting the entitlement. Example: APRA (or APRA's agent or delegate) pays an entity an amount of the entity's entitlement relating to an account with an ADI. This Part applies in relation to APRA and the payment in a way corresponding to the way in which this Part would have applied in relation to the ADI had the ADI made a payment at that time of that amount under the arrangements for keeping the account. 35 Application of Division 21 in Schedule 1 to the Taxation Administration Act 1953 (1) Division 21 in Schedule 1 to the Taxation Administration Act 1953 applies in relation to things done before, on or after the commencement of the Division to meet entitlements arising after 17 October 2008 under the following provisions: (a) Division 2AA of Part II of the Banking Act 1959; (b) Part VC of the Insurance Act 1973. Note: Division 2AA of Part II of the Banking Act 1959 and Part VC of the Insurance Act 1973 commenced on 18 October 2008. (2) However, this item does not: (a) require APRA to do anything APRA would have been required by Part 2‑5 in Schedule 1 to the Taxation Administration Act 1953 to do before the commencement of this item had Division 21 in that Schedule commenced on 18 October 2008; or (b) make APRA liable to a criminal or administrative penalty for an omission occurring before the commencement of this item. Schedule 2—CGT concessions for small business Part 1—Main amendments Income Tax Assessment Act 1997 1 Subparagraph 152‑10(1)(c)(iii) After "asset is an", insert "interest in an". 2 At the end of paragraph 152‑10(1)(c) (before the note) Add: (iv) the conditions mentioned in subsection (1A) or (1B) are satisfied in relation to the CGT asset in the income year; 3 Paragraph 152‑10(1)(c) (note) Repeal the note, substitute: Note: For determining whether an entity is a small business entity, see Subdivision 328‑C (as affected by section 152‑48). 4 After subsection 152‑10(1) Insert: Passively held assets—affiliates and entities connected with you (1A) The conditions in this subsection are satisfied in relation to the *CGT asset in the income year if: (a) your *affiliate, or an entity that is *connected with you, is a *small business entity for the income year; and (b) you do not carry on a *business in the income year (other than in partnership); and (c) if you carry on a business in partnership—the CGT asset is not an interest in an asset of the partnership; and (d) in any case—the small business entity referred to in paragraph (a) is the entity that, at a time in the income year, carries on the business (as referred to in subparagraph 152‑40(1)(a)(ii) or (iii) or paragraph 152‑40(1)(b)) in relation to the CGT asset. Note 1: For determining whether an entity is a small business entity, see Subdivision 328‑C (as affected by section 152‑48). Note 2: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5). Passively held assets—partnerships (1B) The conditions in this subsection are satisfied in relation to the *CGT asset in the income year if: (a) you are a partner in a partnership in the income year; and (b) the partnership is a *small business entity for the income year; and (c) you do not carry on a *business in the income year (other than in partnership); and (d) the CGT asset is not an interest in an asset of the partnership; and (e) the business you carry on as a partner in the partnership referred to in paragraph (a) is the business that you, at a time in the income year, carry on (as referred to in subparagraph 152‑40(1)(a)(i) or paragraph 152‑40(1)(b)) in relation to the CGT asset. Note 1: For determining whether an entity is a small business entity, see Subdivision 328‑C (as affected by section 152‑48). Note 2: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5). 5 Before subsection 152‑10(2) Insert: Additional basic conditions for shares in a company or interests in a trust 6 Before subsection 152‑10(3) Insert: Extra conditions for some concessions 7 Before subsection 152‑10(4) Insert: Special rules for certain CGT events 8 Paragraphs 152‑40(1)(a) and (b) Repeal the paragraphs, substitute: (a) you own the asset (whether the asset is tangible or intangible) and it is used, or held ready for use, in the course of carrying on a *business that is carried on (whether alone or in partnership) by: (i) you; or (ii) your *affiliate; or (iii) another entity that is *connected with you; or (b) if the asset is an intangible asset—you own it and it is inherently connected with a business that is carried on (whether alone or in partnership) by you, your affiliate, or another entity that is connected with you. 9 Subsection 152‑40(1) (note 2) Omit "subparagraph (1)(a)(ii)", substitute "subparagraph (1)(a)(iii)". 10 At the end of subsection 152‑40(1) Add: Note 3: An example of an asset that is inherently connected with a business is goodwill or the benefit of a restrictive covenant. Note 4: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5). 11 Subsection 152‑40(1A) Repeal the subsection. 12 Subsection 152‑40(2) Omit "or (1A)". 13 Subsection 152‑42(1) Omit "subparagraph 152‑40(1)(a)(ii)", substitute "subparagraph 152‑40(1)(a)(iii)". 14 After section 152‑45 Insert: Treatment of passively held CGT assets 152‑47 Spouses or children taken to be affiliates for certain passively held CGT assets (1) This section applies if: (a) one entity (the asset owner) owns a *CGT asset (whether the asset is tangible or intangible); and (b) either: (i) the asset is used, or held ready for use, in the course of carrying on a *business in an income year by another entity (the business entity); or (ii) the asset is inherently connected with a business that is carried on in an income year by another entity (the business entity); and (c) the business entity is not (apart from this section) an *affiliate of, or *connected with, the asset owner. (2) For the purposes of this Subdivision, in determining whether the business entity is an *affiliate of, or is *connected with, the asset owner, take the following to be affiliates of an individual: (a) a *spouse of the individual; (b) a *child of the individual, being a child who is under 18 years. (3) If an entity is an *affiliate of, or *connected with, another entity as a result of subsection (2), then the *spouse or *child mentioned in that subsection is, in addition, taken to be an affiliate of the individual for the purposes of this Subdivision, and for the purposes of sections 328‑110 to 328‑125 to the extent that they relate to this Subdivision. Example: The spouse or child mentioned in subsection (2) is taken to be an affiliate of the individual for the purposes of working out which entities are affiliates of or connected with entities under section 152‑48. (4) To avoid doubt, subsection (2) applies: (a) for the purposes of reducing or disregarding, under this Division, any *capital gain from any *CGT asset; but (b) only while: (i) a *spouse remains a spouse; or (ii) a *child remains a child who is under 18 years. 152‑48 Working out an entity's aggregated turnover for passively held CGT assets (1) This section applies for the purposes of section 328‑115 to determine whether an entity (the test entity) is a *small business entity for the purposes of subsection 152‑10(1A) or (1B). (2) An entity (the deemed entity) is taken to be an *affiliate of, or *connected with, the test entity (as the case requires) if: (a) the deemed entity is an affiliate of, or connected with, the entity that owns the *CGT asset referred to in subsection 152‑10(1A) or (1B); and (b) the deemed entity is not (apart from this section) an affiliate of, or connected with, the test entity. (3) If: (a) the entity that owns the *CGT asset referred to in subsection 152‑10(1B) is a partner in 2 or more partnerships; and (b) the asset is: (i) used, or held ready for use, in the course of carrying on a *business that is carried on by at least 2 of those partnerships; or (ii) inherently connected with businesses that are carried on by at least 2 of those partnerships; then, each partnership referred to in paragraph (b) that is not (apart from this section) *connected with the test entity is taken to be connected with the test entity. 152‑49 Businesses that are winding up (1) This section applies to an entity in an income year (the CGT event year) if: (a) a *business that the entity previously carried on (including in partnership) is being wound up in that year; and (b) either: (i) the asset was used, or held ready for use, in the course of carrying on the business at a time in the income year in which the business stopped being carried on; or (ii) if the asset is an intangible asset—the asset was inherently connected with the business that was carried on at a time in the income year in which the business stopped being carried on. (2) For the purposes of paragraphs 152‑40(1)(a) and (b) as they apply for the purposes of paragraphs 152‑10(1A)(d) and (1B)(e): (a) the entity is taken to carry on the *business at a time in the CGT event year; and (b) either: (i) the *CGT asset is taken to be used, or held ready for use, in the course of carrying on the business at that time; or (ii) if the asset is an intangible asset—the CGT asset is taken to be inherently connected with the business at that time. Note: The entity might also be taken to be a small business entity in the CGT event year (see subsection 328‑110(5)). 15 At the end of subsection 328‑115(1) Add: Note: For small business relief purposes, additional entities may be treated as being connected with you or your affiliate under section 152‑48. 16 At the end of section 328‑130 (before the example) Add: Note: For small business relief purposes, a spouse or a child under 18 years may also be an affiliate under section 152‑47. Part 2—Other amendments Income Tax Assessment Act 1936 17 At the end of subsection 109(1) Add: Note: This section does not apply to an amount if the amount is paid to a CGT concession stakeholder under subsection 152‑325(1) of the Income Tax Assessment Act 1997 (see subsection 152‑325(11)). 18 Subsection 109C(1) (note 1) Repeal the note, substitute: Note 1: Some payments do not give rise to dividends under Subdivision D. This section also does not give rise to a dividend if the amount is paid to a CGT concession stakeholder under subsection 152‑325(1) of the Income Tax Assessment Act 1997 (see subsection 152‑325(11)). Income Tax Assessment Act 1997 19 Section 11‑55 (after table item headed "bonds") Insert: capital gains tax payments made by an interposed entity in relation to the small business retirement exemption 152‑310(3) 20 At the end of subsection 104‑197(1) Add: Note: You do not have to satisfy the basic conditions in Subdivision 152‑A for the gain in relation to CGT event J5 (see subsection 152‑305(4)). 21 At the end of subsection 104‑198(1) Add: Note: You do not have to satisfy the basic conditions in Subdivision 152‑A for the gain in relation to CGT event J6 (see subsection 152‑305(4)). 22 Section 152‑5 Omit: There are limitations on the availability of the small business concessions for CGT events J2, J5 and J6. Substitute: There are limitations on the availability of the small business concessions for CGT events J2, J5 and J6. You do not need to satisfy the basic conditions for the retirement exemption in relation to CGT events J5 and J6. 23 Subsection 152‑10(4) (note) Omit "Note", substitute "Note 1". 24 At the end of subsection 152‑10(4) Add: Note 2: This Subdivision does not apply to CGT events J5 and J6 in relation to the retirement exemption (see subsection 152‑305(4)). 25 Paragraph 152‑20(2)(a) After "first‑mentioned entity" (second occurring), insert ", but include any liabilities related to any such shares, units or interests". 26 Paragraph 152‑40(4)(e) Omit "in the course of carrying on the *business mentioned in subsection (1)", substitute "by you". 27 After subsection 152‑40(4) Insert: (4A) For the purposes of paragraph (4)(e), in determining the main use of an asset: (a) disregard any personal use or enjoyment of the asset by you; and (b) treat any use by your *affiliate, or an entity that is *connected with you, as your use. 28 Group heading before section 152‑80 Repeal the heading, substitute: CGT event happens to asset or interest within 2 years of an individual's death 29 Section 152‑80 (heading) Repeal the heading, substitute: 152‑80 CGT event happens to an asset or interest within 2 years of individual's death 30 Paragraphs 152‑80(1)(a) and (b) Repeal the paragraphs, substitute: (a) a *CGT asset: (i) forms part of the estate of a deceased individual; or (ii) was owned by joint tenants and one of them dies; and (b) any of the following applies: (i) the asset devolves to the individual's *legal personal representative; (ii) the asset *passes to a beneficiary of the individual; (iii) an interest in the asset is *acquired by the surviving joint tenant or tenants (as the case may be) as mentioned in section 128‑50; (iv) the asset devolves to a trustee of a trust established by the will of the individual; and 31 Paragraph 152‑80(1)(c) Omit "the individual", substitute "the deceased individual referred to in subparagraph (a)(i) or (ii)". 32 Subsection 152‑80(2) Repeal the subsection, substitute: (2) A person mentioned in subsection (2A) is entitled to reduce or disregard a *capital gain under this Division in the same way as the deceased individual would have been entitled to as if: (a) paragraph 152‑105(d) only required the deceased individual to have been 55 or over, or permanently incapacitated, at the time of the *CGT event referred to in paragraph (1)(c) of this section; and (b) paragraph 152‑305(1)(b) did not apply. (2A) The following persons (as the case requires) are entitled to reduce or disregard a *capital gain under this Division in accordance with subsection (2): (a) the *legal personal representative of the individual; (b) the beneficiary of the individual; (c) the surviving joint tenant or tenants; (d) the trustee or a beneficiary of the trust. 33 Section 152‑300 Omit: You may choose not to apply the concession in section 152‑205 (small business 50% reduction) before this one. For an additional concession, see also Subdivision 152‑E (small business roll‑over). Substitute: You may choose not to apply the concession in section 152‑205 (small business 50% reduction) before this one. For an additional concession, see also Subdivision 152‑E (small business roll‑over). You do not need to satisfy the basic conditions for this exemption in relation to CGT events J5 and J6. 34 After subsection 152‑305(1) Insert: (1A) If you receive the *capital proceeds from the *CGT event in instalments, paragraphs (1)(b) and (c) apply to each instalment in succession (up to the asset's *CGT exempt amount). 35 At the end of section 152‑305 Add: (4) Paragraphs (1)(a) and (2)(a) do not apply if the *capital gain arose from *CGT event J5 or J6. 36 Subsection 152‑310(3) Repeal the subsection, substitute: Additional consequences in relation to interposed entities (3) If: (a) an entity (the paying entity) receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with section 152‑325; and (b) the paying entity passes on the payment to the *CGT concession stakeholder or another interposed entity; then: (c) the payment cannot be deducted from the paying entity's assessable income; and (d) the payment received by the paying entity is not assessable income and is not *exempt income. 37 Subsection 152‑325(1) After "payment", insert "(whether directly or indirectly through one or more interposed entities)". 38 Subsection 152‑325(9) Repeal the subsection, substitute: Payments are not dividends or frankable distributions (9) Subsection (10) applies if: (a) a company makes a payment to comply with subsection (1) to: (i) a *CGT concession stakeholder; or (ii) an interposed entity, in relation to a CGT concession stakeholder; or (b) both of the following apply: (i) an interposed entity receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with subsection (1), in relation to a CGT concession stakeholder; (ii) the interposed entity passes on the payment to the CGT concession stakeholder or another interposed entity. (10) This Act applies to the payment, to the extent that it is less than or equal to the amount mentioned in subsection (3) for the stakeholder, as if: (a) it were not a *dividend; and (b) it were not a *frankable distribution. (11) Subsection (10) applies in relation to the payment despite section 109 and Division 7A of Part III of the Income Tax Assessment Act 1936. 39 At the end of section 328‑110 Add: Partners in a partnership (6) A person who is a partner in a partnership in an income year is not, in his or her capacity as a partner, a small business entity for the income year. Tax Laws Amendment (2008 Measures No. 6) Act 2009 40 Item 52 of Schedule 4 (table item 8) Repeal the table item. Part 3—Application provisions 41 Application of amendments made by Part 1 (1) The amendments made by Part 1 of this Schedule apply to CGT events (other than CGT events to which subitem (2) applies) happening in the 2007‑08 income year and later income years. (2) Subitem (1) does not apply in relation to a CGT event (the excluded event) if: (a) the excluded event happens in relation to a CGT asset before the day on which the Bill for this Act is introduced into the Parliament; and (b) an entity makes a capital gain from the excluded event; and (c) the basic conditions in Subdivision 152‑A of the Income Tax Assessment Act 1997 (as in force immediately before Part 1 of this Schedule commences) are satisfied for the gain; and (d) the basic conditions would not be satisfied for the gain if: (i) subsection 152‑40(1A) of that Act (as in force immediately before Part 1 of this Schedule commences) did not apply to the entity; or (ii) section 152‑47 of that Act (as in force immediately after Part 1 of this Schedu