Commonwealth: Taxation Laws Amendment Act (No. 3) 2000 (Cth)

Taxation Laws Amendment Act (No. 3) 2000 No. 66, 2000 Taxation Laws Amendment Act (No. 3) 2000 No. 66, 2000 An Act to amend the law relating to taxation, and for related purposes Contents 1 Short title................................... 2 Commencement............................... 3 Schedule(s).................................. Schedule 1—Restructuring of certain managed investment schemes Income Tax (Transitional Provisions) Act 1997 Schedule 2—Film licensed investment companies Film Licensed Investment Company Act 1998 Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Schedule 3—Income tax deductions for gifts etc. Income Tax Assessment Act 1997 Schedule 4—Cyclones Elaine and Vance Trust Account Schedule 5—Mining and quarrying: balancing adjustments Income Tax Assessment Act 1997 Schedule 6—Transfer of interest in petroleum projects Petroleum Resource Rent Tax Assessment Act 1987 Taxation Laws Amendment Act (No. 3) 2000 No. 66, 2000 An Act to amend the law relating to taxation, and for related purposes [Assented to 22 June 2000] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Taxation Laws Amendment Act (No. 3) 2000. 2 Commencement (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent. (2) Schedule 1 is taken to have commenced immediately after the Taxation Laws Amendment Act (No. 7) 1999 received the Royal Assent. (3) Schedule 2 is taken to have commenced on 7 December 1998. 3 Schedule(s) Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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—Restructuring of certain managed investment schemes Income Tax (Transitional Provisions) Act 1997 1 Subsection 960‑105(2) Repeal the subsection, substitute: (2) If this Subdivision applies to an entity under subsection (1) because of a particular change referred to in that subsection, it also applies because of the change to a member of the entity, in relation to the member's interests in the entity, if the member was a member immediately before, and immediately after, the change was made. 2 Paragraphs 960‑110(c) and (d) Repeal the paragraphs, substitute: (c) the beneficial ownership of the interests in the entity of a member of the entity to whom, because of a particular change, this Subdivision applies in relation to those interests is taken not to have altered as a result of the change; and (d) without limiting by implication any other effect of the above paragraphs: (i) the changes are taken not to have resulted in a CGT event in respect of the entity; and (ii) in so far as this Subdivision applies to a member of the entity because of a particular change, the change is taken not to have resulted in a CGT event in respect of the member in relation to the member's interests in the entity. Schedule 2—Film licensed investment companies Film Licensed Investment Company Act 1998 1 Paragraph 15(e) Omit "memorandum and articles of association provide", substitute "constitution provides". Income Tax Assessment Act 1936 2 Section 160APA (after paragraph (ba) of the definition of frankable dividend) Insert: or (bb) an amount that is taken to be a dividend under section 375‑872 of the Income Tax Assessment Act 1997 (which is about film licensed investment companies); Income Tax Assessment Act 1997 3 After section 375‑870 Insert (before the group heading): 375‑872 Distribution of FLIC concessional capital is instead taken to be a dividend (1) For the purposes of this Act, an amount that a *FLIC pays to you by way of distribution of *FLIC concessional capital, on a liquidation or a share buy back or other return of capital, is instead taken to be a dividend that the FLIC pays to you out of profits the FLIC derived from sources in Australia. Dividend cannot exceed amount of deductions (2) Subsection (1) does not apply to the extent that the total of the payments the *FLIC makes by way of such distribution of *FLIC concessional capital in respect of particular *shares exceeds the total of the deductions under section 375‑855 for the shares (whether it was you or a previous owner of the shares who got the deductions). FLIC must comply with Corporations Law rules about dividends (3) Subsection (1) applies only if the requirements of the Corporations Law (except section 254T) relating to declaring and paying a *dividend are satisfied (as well as any requirements relating to the distribution). Inter‑corporate rebate not denied by sections 46G to 46M (4) Sections 46G to 46M of the Income Tax Assessment Act 1936 do not apply to a payment that is taken to be a dividend under this section. Note: Those sections might otherwise reduce or deny a rebate under section 46 or 46A of that Act in some cases. 4 Subsection 995‑1(1) (at the end of the definition of dividend) Add "and section 375‑872 of this Act". Schedule 3—Income tax deductions for gifts etc. Income Tax Assessment Act 1997 1 Subsection 30‑45(2) (at the end of the table) Add: 4.2.18 The Linton Trust the gift must be made after 2 December 1998 and before 3 December 2000 2 Subsection 30‑50(2) (table item dealing with The National Nurses' Memorial Trust) Omit "4 September 1999", substitute "4 January 2000". 3 Subsection 30‑315(2) (after table topic 67) Insert: 67A Linton Trust 4.2.18 4 Section 50‑40 (at the end of table item 8.2) Add: ; (g) aquacultural resources; (h) fishing resources 5 Application of amendment The amendment made by item 4 applies to assessments for the 1999‑2000 income year and later income years. Schedule 4—Cyclones Elaine and Vance Trust Account 1 Exemption of grants paid from fund Any amount of ordinary income or statutory income that is paid directly to you, by way of grant of assistance for business recovery, from the Cyclones Elaine and Vance Trust Account is exempt from tax under the Income Tax Assessment Act 1997. Note: This exemption does not apply to amounts paid to a third party. 2 Amounts are excluded exempt income Income that is exempt under item 1 is also excluded exempt income for the purposes of the Income Tax Assessment Act 1997. Note: Subsection 36‑20(3) of the Income Tax Assessment Act 1997 contains the general definition of excluded exempt income. 3 No capital gain to arise as a result of grant If a CGT event relates to a right to receive a grant of assistance for business recovery from the Cyclones Elaine and Vance Trust Account, you do not make a capital gain under Part 3‑1 or 3‑3 of the Income Tax Assessment Act 1997 in respect of that grant. Example: CGT event C1 (see section 104‑20) deals with the loss or destruction of a CGT asset. 4 Application This Schedule applies only in relation to assessments for the 1998‑99 and 1999‑2000 income years. Schedule 5—Mining and quarrying: balancing adjustments Income Tax Assessment Act 1997 1 Section 330‑495 Repeal the section, substitute: 330‑495 Meaning of written down value (1) The written down value is the total of your capital expenditure in respect of the property that you have not deducted under Subdivision 330‑A, 330‑C or 330‑H or a corresponding previous law, and cannot so deduct for this income year, but would have been able to deduct under such a provision for this or a future income year had the event that necessitated the balancing adjustment not happened. Note: If you dispose of part of an interest in property, section 330‑500 tells you what the written down value in respect of that part is. (2) But if the balancing adjustment is required because of subsection 330‑480(2), the written down value is the total of your capital expenditure in respect of the property that you could have deducted (apart from the effect of the *excess deduction rules) under any of those provisions for any income year, had the event that necessitated the balancing adjustment not happened. 2 Application of amendment The amendment made by this Schedule applies to a balancing adjustment if the event that necessitates the adjustment happens after 4.00 pm, by legal time in the Australian Capital Territory, on 3 December 1998. Schedule 6—Transfer of interest in petroleum projects Petroleum Resource Rent Tax Assessment Act 1987 1 Before subsection 48(1) Insert: (1A) This section applies if: (a) at a particular time (the transfer time) a person (the vendor) enters into a transaction in relation to a petroleum project; and (b) the transaction has the effect of transferring to another person or persons (the purchasers): (i) the whole of the vendor's entitlement to derive, after the transaction, assessable receipts in relation to the project; and (ii) any property held by the vendor that is being used in relation to the project; and (c) the purchasers give consideration for the entitlement and property. The transaction may occur at any time (even before the vendor's first year of tax in relation to the project). 2 Subsection 48(1) Omit all the words before paragraph (a), substitute: (1) For the purposes of this Act (including this section): 3 Application The amendments made by this Schedule apply to transactions entered into after this Schedule commences. [Minister's second reading speech made in— House of Representatives on 14 October 1999 Senate on 9 May 2000] (197/99)