Commonwealth: Taxation Laws Amendment Act (No. 4) 1994 (Cth)

Taxation Laws Amendment Act (No. 4) 1994 Act No. 181 of 1994 as amended This compilation was prepared on 16 September 2010 taking into account amendments up to Act No. 75 of 2010 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 TABLE OF PROVISIONS Section 1. Short title [see Note 1] 2. Commencement [see Note 1] 3. Schedules SCHEDULE 1 AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 PART 1 - MINING AND PETROLEUM CASH BIDDING PART 2 - CHILDREN'S INCOME PART 3 - DIVIDEND IMPUTATION PART 4 - RETURN OF DEDUCTED SUPERANNUATION CONTRIBUTIONS PART 5 - CREDIT UNIONS SCHEDULE 2 AMENDMENTS RELATING TO POOLED DEVELOPMENT FUNDS PART 1 - INCOME TAX RATES ACT 1986 PART 2 - INCOME TAX ASSESSMENT ACT 1936 SCHEDULE 3 AMENDMENTS RELATING TO SUPERANNUATION PART 1 - FRINGE BENEFITS TAX ASSESSMENT ACT 1986 PART 2 - INCOME TAX ASSESSMENT ACT 1936 Division 1 - Resident and non-resident superannuation funds Division 2 - Residency assumptions relating to superannuation funds, approved deposit funds and pooled superannuation trusts Division 3 - Non-complying superannuation funds that were previously complying superannuation funds Division 4 - Resident superannuation funds that were previously non-resident superannuation funds Division 5 - Withholding tax exemptions for certain interest, dividend and royalty income of overseas superannuation funds Division 6 - Deductions to employers etc. for certain contributions made to non-complying superannuation funds Division 7 - Definition of taxable contributions Division 8 - Deductions for taxable contributions to certain entities Division 9 - Cost of collecting non-taxable contributions by non-resident superannuation funds Division 10 - Lump sum payments made in consequence of the termination of overseas projects or overseas employment Division 11 - Lump sum payments made from resident non-complying superannuation funds Division 12 - Lump sum payments from certain non-resident superannuation funds Division 13 - To make certain amendments to Subdivision AA of Division 2 of Part III in consequence of the amendments made by Divisions 11 and 12 Division 14 - Pension or annuity paid from non-complying superannuation fund Division 15 - Roll-over annuities bought from life assurance companies Division 16 - Amounts paid by Part IX entities that are subject to tax under Part XI Division 17 - Assessments PART 3 - INCOME TAX ACT 1986 PART 4 - SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 Division 1 - Amendments relating to the residency of superannuation funds and approved deposit funds Division 2 - Amendments relating to contraventions that are taken into account in determining "complying superannuation fund" status Division 3 - Amendments relating to the equal representation rules PART 5 - SUPERANNUATION GUARANTEE (ADMINISTRATION) ACT 1992 SCHEDULE 4 AMENDMENTS RELATING TO RESEARCH AND DEVELOPMENT ACTIVITIES PART 1 - INDUSTRY RESEARCH AND DEVELOPMENT ACT 1986 PART 2 - INCOME TAX ASSESSMENT ACT 1936 SCHEDULE 5 AMENDMENTS RELATING TO PAYMENT OF INTEREST ON OVERPAYMENTS AND EARLY PAYMENTS PART 1 - OBJECT PART 2 - TAXATION (INTEREST ON OVERPAYMENTS) ACT 1983 PART 3 - OTHER ACTS Division 1 - Income Tax Assessment Act 1936 Division 2 - Fringe Benefits Tax Assessment Act 1986 Division 3 - Superannuation Guarantee (Administration) Act 1992 Division 4 - Training Guarantee (Administration) Act 1990 Division 5 - Australian Capital Territory Taxation (Administration) Act 1969 Division 6 - Freedom of Information Act 1982 Division 7 - Pay-roll Tax (Territories) Assessment Act 1971 Division 8 - Petroleum Resource Rent Tax Assessment Act 1987 Division 9 - Swimming Pools Tax Refund Act 1992 PART 4 - APPLICATION AND TRANSITIONAL SCHEDULE 6 AMENDMENTS OF THE DEVELOPMENT ALLOWANCE AUTHORITY ACT 1992 TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - LONG TITLE An Act to amend the law relating to taxation TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - SECT 1 Short title [see Note 1] 1. This Act may be cited as the Taxation Laws Amendment Act (No. 4) 1994. TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - SECT 2 Commencement [see Note 1] 2. (1) Subject to subsection (2), this Act commences on the day on which it receives the Royal Assent. (2) Part 3 of Schedule 1, apart from item 86 of that Schedule, is taken to have commenced on 13 October 1994. TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - SECT 3 Schedules 3. The Acts specified in the Schedules to this Act are amended in accordance with the applicable items in the Schedules, and the other items in the Schedules have effect according to their terms. TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - SCHEDULE 1 SCHEDULE 1 Section 3 AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936 PART 1 - MINING AND PETROLEUM CASH BIDDING 1. Object The object of this Part is: (a) to provide for deductibility of cash bidding payments to acquire exploration or prospecting authorities and mining authorities; and (b) to extend to on-shore areas the coverage of the existing provisions relating to deductibility of cash bidding payments to acquire petroleum exploration permits and production licences. 2. Paragraphs 122A(1)(a),(b) and (c): Add at the end "or". 3. After paragraph 122A(1)(d): Insert: "(da) expenditure that the taxpayer is taken to have incurred by section 122BA; or". 4. Subsection 122B(1): Add at the end "that has not been the subject of an agreement made under subsection 122BA(5)". 5. After section 122B: Insert: Allowable capital expenditure in respect of cash bidding payments to acquire exploration or prospecting authorities or mining authorities Summary of section "122BA. (1) This section provides for certain exploration or prospecting cash bidding payments and mining cash bidding payments to be capital expenditure incurred by a taxpayer for the purposes of this Division. Mining cash bidding payments "(2) Each mining cash bidding payment paid by a taxpayer is, for the purposes of this Division, expenditure of a capital nature incurred by the taxpayer: (a) if the amount is paid before the grant of the mining authority concerned-at the time of the grant; and (b) in any other case-at the time the payment is made. Exploration or prospecting cash bidding payments made when mining authority has been granted "(3) If: (a) a taxpayer makes an exploration or prospecting cash bidding payment in relation to the grant of an exploration or prospecting authority; and (b) the payment is made at or after the time of the grant of a mining authority that is related to the exploration or prospecting authority; the amount of the payment is, for the purposes of this Division, expenditure of a capital nature incurred by the taxpayer at the time of payment. Exploration or prospecting cash bidding payments made before mining authority has been granted "(4) If: (a) a mining authority is granted; and (b) it is the first or only mining authority that is related to a particular cash bidding exploration or prospecting authority; and (c) immediately before the grant of the mining authority a taxpayer who has a qualifying interest or qualifying interests in relation to the exploration or prospecting authority also has an entitlement to an eligible cash bidding amount in relation to the exploration or prospecting authority; the taxpayer is taken for the purposes of this Division to have incurred, at the time the mining authority is granted, expenditure of a capital nature in relation to the qualifying interest or qualifying interests of an amount equal to the eligible cash bidding amount. Transfer of entitlement to an eligible cash bidding amount "(5) If: (a) at any time before the grant of the first or only mining authority that is related to a cash bidding exploration or prospecting authority, a person (the 'purchaser') incurs expenditure in acquiring a qualifying interest in relation to the exploration or prospecting authority from another person (the 'vendor'); and (b) the vendor has an entitlement to an eligible cash bidding amount in relation to the exploration or prospecting authority; the purchaser and vendor may agree to transfer to the purchaser so much of the vendor's entitlement to the eligible cash bidding amount as is specified in the agreement. Form and content of agreement "(6) An agreement under subsection (5) must: (a) be in writing signed by or on behalf of the vendor and the purchaser; and (b) specify as the amount of the entitlement that is to be transferred to the purchaser an amount that does not exceed: (i) the expenditure incurred by the purchaser in acquiring the qualifying interest in relation to the exploration or prospecting authority; reduced by: (ii) any amount of that expenditure specified in an agreement previously made under subsection 122B(1) in relation to the acquisition; and (c) be made not later than 2 months after the end of the year of income of the purchaser in which the acquisition occurred, or within such further time as the Commissioner allows. Definition of entitlement to an "eligible cash bidding amount" "(7) If at a particular time (the 'test time'): (a) a person is the holder of a qualifying interest or qualifying interests in relation to a cash bidding exploration or prospecting authority; and (b) the sum of: (i) if the exploration or prospecting authority was granted to the person (whether or not the person holds the authority at the test time) - the exploration or prospecting cash bidding payment, or the sum of the exploration or prospecting cash bidding payments, paid before the test time in relation to the grant of the authority; and (ii) in any case - all amounts (if any) specified in agreements made (including at a time after the test time) under subsection (5) in relation to the acquisition by the person of qualifying interests in relation to the authority before the test time; exceeds: (iii) the sum of all amounts (if any) specified in agreements made (including at a time after the test time) under subsection (5) in relation to the acquisition from the person of qualifying interests in relation to the authority before the test time; the person is taken to have at the test time in relation to the authority an entitlement to an 'eligible cash bidding amount' equal to the amount of the excess referred to in paragraph (b). When a mining authority is "related" to an exploration or prospecting authority "(8) A mining authority is 'related' to an exploration or prospecting authority if: (a) because of the grant of the mining authority, the exploration or prospecting authority ceases to be in force in respect of the whole or part of the area in respect of which the mining authority is granted; or (b) because of the grant of the mining authority, a retention authority that is related to the exploration or prospecting authority ceases to be in force in respect of the whole or part of the area in respect of which the mining authority is granted. When a retention authority is "related" to an exploration or prospecting authority "(9) A retention authority is 'related' to an exploration or prospecting authority if, because of the grant of the retention authority, the exploration or prospecting authority ceases to be in force in respect of the whole or part of the area in respect of which the retention authority is granted. Effect of renewal of authority "(10) If an exploration or prospecting authority (the 'original authority') or a retention authority (also the 'original authority') is renewed, the renewed authority is taken to be a continuation of the original authority, even if the renewal is not granted in respect of all of the area in respect of which the original authority was granted. Definition of "qualifying interest" "(11) A person has a 'qualifying interest' in relation to an exploration or prospecting authority if the person is the holder of, or of an interest in, the authority or a retention authority that is related to it. Definitions "(12) In this section: 'cash bidding exploration or prospecting authority' means an exploration or prospecting authority in respect of which an exploration or prospecting cash bidding payment is or was made; 'exploration or prospecting authority' means any permit, licence, lease or other authority (other than a mining authority) that: (a) is granted under a law of the Commonwealth, a State, a Territory or a foreign country; and (b) authorises exploration or prospecting for minerals other than petroleum, whether or not it also authorises other things; 'exploration or prospecting cash bidding payment' means an amount paid for the grant of an exploration or prospecting authority, if: (a) the authority was auctioned or tendered for, or was granted to a person who responded to a public invitation to apply for it within a specified period or by a specified day; and (b) the amount is not an application fee or a deposit, except to the extent that the amount is applied in payment for the grant of the exploration or prospecting authority; and (c) the amount is incurred in carrying on prescribed mining operations or for the purpose of exploring or prospecting for minerals obtainable by prescribed mining operations; 'mining authority' means any permit, licence, lease or other authority that: (a) is granted under a law of the Commonwealth, a State, a Territory or a foreign country; and (b) authorises the carrying on of mining operations for the extraction (other than merely by taking samples) of minerals other than petroleum from their natural site, whether or not it also authorises other things; 'mining cash bidding payment' means an amount paid for the grant of a mining authority, where: (a) the mining authority was auctioned or tendered for, or was granted to a person who responded to a public invitation to apply for it within a specified period or by a specified day; and (b) the amount is not an application fee or a deposit, except to the extent that the amount is applied in payment for the grant of the mining authority; and (c) the amount is incurred in carrying on prescribed mining operations or for the purpose of exploring or prospecting for minerals obtainable by prescribed mining operations; 'retention authority' means any permit, licence, lease or other authority in relation to an area (other than a mining authority) that: (a) is granted under a law of the Commonwealth, a State, a Territory or a foreign country; and (b) is only permitted to be granted to a person who is the holder of, or of an interest in, an exploration or prospecting authority, or a retention authority, in relation to the area.". 6. After paragraph 122JAA(4)(d): Insert: "(da) if: (i) the property is a qualifying interest in relation to a cash bidding exploration permit (within the meaning of section 122BA); and (ii) immediately before the disposal, the transferor had an entitlement to an eligible cash bidding amount (within the meaning of that section) in relation to that permit; the following were the case: (iii) an agreement under section 122BA in respect of the acquisition of the property had been made by the transferor and the transferee; and (iv) the amount specified in the agreement were equal to the whole of the transferor's entitlement to the eligible cash bidding amount; and". 7. Paragraphs 124ABA(5)(a) and (b): Omit the paragraphs, substitute: "(a) a production licence is related to an exploration permit if: (i) because of the grant of the production licence, the exploration permit ceases to be in force in respect of: (A) in the case of a production licence under Part III of the Petroleum Act - the block or blocks in respect of which the production licence is granted; or (B) in any other case - the whole or part of the area in respect of which the production licence is granted; or (ii) because of the grant of the production licence, a retention lease that is related to the exploration permit ceases to be in force in respect of: (A) in the case of a production licence under Part III of the Petroleum Act - a block or blocks in respect of which a production licence is granted; or (B) in any other case - the whole or part of the area in respect of which the production licence is granted; (b) a retention lease is related to an exploration permit if, because of the grant of the retention lease, the exploration permit ceases to be in force in respect of: (i) in the case of a retention lease under Part III of the Petroleum Act - the block or blocks in respect of which the retention lease is granted; or (ii) in any other case - the whole or part of the area in respect of which the retention lease is granted;". 8. Paragraph 124ABA(5)(c): After "blocks", insert "or other area". 9. Subsection 124ABA(6) (definition of "licence cash bidding payment"): Add at the end: "; or (c) an amount paid for the grant of a production licence (other than one granted under Part III of the Petroleum Act), if: (i) the licence was auctioned or tendered for, or was granted to a person who responded to a public invitation to apply for it within a specified period or by a specified day; and (ii) the amount is not an application fee or a deposit, except to the extent that the amount is applied in payment for the grant of the production licence; and (iii) the amount is incurred in carrying on prescribed petroleum operations or for the purpose of exploring or prospecting for petroleum obtainable by prescribed petroleum operations;". 10. Subsection 124ABA(6) (definition of "permit cash bidding payment"): Add at the end: "; or (c) an amount paid for the grant of an exploration permit (other than one issued under Part III of the Petroleum Act), if: (i) the permit was auctioned or tendered for, or was granted to a person who responded to a public invitation to apply for it within a specified period or by a specified day; and (ii) the amount is not an application fee or a deposit, except to the extent that the amount is applied in payment for the grant of the exploration permit; and (iii) the amount is incurred in carrying on prescribed petroleum operations or for the purpose of exploring or prospecting for petroleum obtainable by prescribed petroleum operations;". 11. Subsection 124ABA(6) (definitions of "exploration permit", "production licence" and "retention lease"): Omit the definitions, substitute respectively the following definitions: "'exploration permit' means: (a) an exploration permit for petroleum under Part III of the Petroleum Act; or (b) any permit, licence, lease or other authority (other than a production licence) that: (i) is granted under a law of the Commonwealth, a State, a Territory or a foreign country (other than a law of a foreign country declared by the regulations as mentioned in paragraph (7)(a)); and (ii) authorises exploration or prospecting for petroleum, whether or not it also authorises other things; 'production licence' means: (a) a production licence for petroleum under Part III of the Petroleum Act; or (b) any permit, licence, lease or other authority that: (i) is granted under a law of the Commonwealth, a State, a Territory or a foreign country (other than a law of a foreign country declared by the regulations as mentioned in paragraph (7)(a)); and (ii) authorises the carrying on of mining operations for the extraction (other than merely by taking samples) of petroleum from its natural site, whether or not it also authorises other things; 'retention lease' means: (a) a retention lease under Part III of the Petroleum Act; or (b) any permit, licence (other than a production licence), lease or authority in relation to an area that: (i) is granted under a law of the Commonwealth, a State, a Territory or a foreign country (other than a law of a foreign country declared by the regulations as mentioned in paragraph (7)(a)); and (ii) is only permitted to be granted to a person who is the holder of, or of an interest in, an exploration permit, or retention lease, in relation to the area.". 12. Subsection 170(10): Omit "subsection 122JD(2)", substitute "122BA(7) or 122JD(2)". 13. Application (1) The amendments made by items 2 to 6 and 12 apply to exploration or prospecting cash bidding payments and mining cash bidding payments made on or after 1 July 1993. (2) The amendments made by items 7 to 11 apply to licence cash bidding payments and permit cash bidding payments made on or after 13 October 1994. PART 2 - CHILDREN'S INCOME 14. Object The object of this Part is: (a) to replace provisions in Division 6AA of Part III of the Income Tax Assessment Act 1936 relating to transfers of property on family breakdown; and (b) to clarify certain anti-avoidance provisions in that Division. 15. Subparagraph 102AE(2)(b)(viii): Omit the subparagraph, substitute: "(viii) as the result of a family breakdown (see section 102AGA);". 16. Subsection 102AE(6): Omit the subsection, substitute: "(6) Subject to subsection (7), if any 2 or more parties to: (a) the derivation of the excepted assessable income mentioned in subsection (2); or (b) any act or transaction directly or indirectly connected with the derivation of that excepted assessable income; were not dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction, the excepted assessable income is only so much (if any) of that income as would have been derived if they had been dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction.". 17. Subparagraph 102AG(2)(c)(viii): Omit the subparagraph, substitute: "(viii) as the result of a family breakdown (see section 102AGA);". 18. After subsection 102AG(2): Insert: "(2A) Paragraph (2)(c) or subparagraph (2)(d)(ii) does not apply unless the beneficiary of the trust concerned will, under the terms of the trust, acquire the trust property (other than as a trustee) when the trust ends.". 19. Subsection 102AG(3): Omit the subsection, substitute: "(3) Subject to subsection (4), if any 2 or more parties to: (a) the derivation of the excepted trust income mentioned in subsection (2); or (b) any act or transaction directly or indirectly connected with the derivation of that excepted trust income; were not dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction, the excepted trust income is only so much (if any) of that income as would have been derived if they had been dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction.". 20. After section 102AG: Insert the following section: Transfer of property as the result of a family breakdown "102AGA. (1) For the purposes of subparagraph 102AE(2)(b)(viii) or 102AG(2)(c)(viii), the transfer of property (the 'subject property') by a person (the 'transferor'): (a) to the minor mentioned in subparagraph 102AE(2)(b)(viii); or (b) to the trustee mentioned in subparagraph 102AG(2)(c)(viii) for the benefit of the beneficiary mentioned in that subparagraph; is 'as the result of a family breakdown' if the requirements of subsection (2) or (3) of this section are met. "(2) The transfer will be as the result of a family breakdown if: (a) a person ceases to live with another person as the spouse of that person on a genuine domestic basis (whether or not legally married to that person); and (b) at least one of the persons: (i) is the natural parent; or (ii) is the adoptive parent; or (iii) is the step-parent; or (iv) has legal custody or guardianship; of the minor or the beneficiary; and (c) an order, determination or assessment of a court, person or body (whether or not in Australia) is made wholly or partly because the person has ceased to live as the spouse of the other person on a genuine domestic basis; and (d) the effect of the order, determination or assessment is that a person (whether one of the spouses, the transferor or any other person) becomes subject to a legal obligation to maintain, transfer property to, or do some other thing for the benefit of, the minor or beneficiary or one of the spouses; and (e) the transferor transfers the subject property to the minor, or to the trustee for the benefit of the beneficiary, in giving effect to the legal obligation (including in discharging the legal obligation if it falls on someone else, and whether or not the legal obligation could have been given effect in some other way). "(3) The transfer will also be as a result of a family breakdown if: (a) when the minor or beneficiary is born, his or her natural parents are not living together as spouses on a genuine domestic basis (whether or not legally married); and (b) an order, determination or assessment of a court, person or body (whether or not in Australia) is made wholly or partly because the natural parents are not living together as mentioned in paragraph (a); and (c) the effect of the order, determination or assessment is that a person (whether one of the natural parents, the transferor or any other person) becomes subject to a legal obligation to maintain, transfer property to, or do some other thing for the benefit of, the minor or beneficiary or one of the natural parents of the minor or beneficiary; and (d) the transferor transfers the subject property to the minor, or to the trustee for the benefit of the beneficiary, in giving effect to the legal obligation (including in discharging the legal obligation if it falls on someone else, and whether or not the legal obligation could have been given effect in some other way).". 21. Application (1) The amendments made by items 15, 17 and 20 apply in relation to the year of income that commenced on 1 July 1979 and in relation to all later years of income. (2) The amendments made by items 16, 18 and 19 apply in relation to income derived on or after 7 March 1994. PART 3 - DIVIDEND IMPUTATION 22. Object The object of this Part is: (a) to amend the provisions of Part IIIAA (the dividend imputation provisions) of the Income Tax Assessment Act 1936 to take account of the revised company tax instalment system; and (b) to ensure, through the introduction of deficit deferral tax, that the amended provisions can not be used to defer franking deficit tax; and (c) to make a transitional amendment that is consequential upon the change in the general company tax rate from 39% to 33%. 23. Section 160APA (before subparagraph (a)(ia) of the definition of "applicable general company tax rate"): Insert: "(iaa) the paying of an instalment by a company in respect of a year of income under section 221AZK; (iab) the making of any other payment by a company in respect of a year of income under Division 1C of Part VI; (iac) the payment of a refund to a company in respect of a year of income under Division 1C of Part VI; (iad) the payment of a refund to a company of an amount paid by the company in respect of a year of income where the refund is covered by section 160APY or 160APYA; (iae) the crediting by the Commissioner of an amount paid by a company in respect of a year of income where the crediting is covered by section 160APYA;". 24. Section 160APA (paragraph (b) of the definition of "applicable general company tax rate"): Omit "for a franking year", substitute "or class A deficit deferral tax". 25. Section 160APA (paragraph (ba) of the definition of "applicable general company tax rate"): Omit "for a franking year", substitute "or class B deficit deferral tax". 26. Section 160APA (definition of "franking assessment"): Add at the end: "or (c) a deficit deferral tax assessment;". 27. Section 160APA (after paragraph (a) of the definition of "termination time"): Insert: "(aa) in relation to the payment of a company tax instalment in respect of a year of income - the earlier of: (i) the time at which the company receives an amount as a refund of that payment under section 221AZL or 221AZQ; and (ii) whichever of the following is applicable: (A) if the company is required to make a payment under section 221AZT in respect of the year of income - the day on which that payment is made; (B) in any other case - the day that would have been applicable under paragraph 166A(2)(b) if the company had been required to make such a payment under section 221AZT; or". 28. Section 160APA (sub-subparagraph (b)(ii)(B) of the definition of "termination time"): Omit "166A(a)(i)", substitute "166A(1)(a)(i)". 29. Section 160APA (paragraph (c) of the definition of "termination time"): After "paragraph (a)", insert ", (aa)". 30. Section 160APA: Insert: "'class A deficit deferral tax' means tax payable in accordance with section 160AQJA; 'class B deficit deferral tax' means tax payable in accordance with section 160AQJB; 'company tax instalment' means an instalment, or other amount, payable under Division 1C of Part VI; 'deficit deferral amount' means a class A deficit deferral amount (see subsection 160AQJA(2)) or a class B deficit deferral amount (see subsection 160AQJB(2)); 'deficit deferral tax' means class A deficit deferral tax or class B deficit deferral tax; 'deficit deferral tax assessment' means the ascertainment, under section 160ARHA or 160ARK, of deficit deferral tax payable by a company;". 31. After section 160APL: Insert: Payment of company tax instalment "160APM. If a company tax instalment payable by a company under section 221AZK is paid on a particular day, a class B franking credit of the company equal to the adjusted amount in relation to the amount paid arises on that day. Payment of additional amount on upwards estimate "160APMAA. If an amount payable by a company under subsection 221AZR(1) is paid on a particular day, a class B franking credit of the company equal to the adjusted amount in relation to the amount paid arises on that day. Deficit deferral amount Class A deficit deferral amount "160APMAB. (1) If a company receives a refund in relation to which a class A deficit deferral amount arises (see subsection 160AQJA(2)) on a particular day, a class A franking credit of the company equal to the adjusted amount in relation to the class A deficit deferral tax payable in relation to the refund (see subsection 160AQJA(3)) arises on that day. Class B deficit deferral amount "(2) If a company receives a refund in relation to which a class B deficit deferral amount arises (see subsection 160AQJB(2)) on a particular day, a class B franking credit of the company equal to the adjusted amount in relation to the class B deficit deferral tax payable in relation to the refund (see subsection 160AQJB(3)) arises on that day.". 32. Paragraph 160APMD(b): After "section" insert "160APM, 160APMAA,". 33. After section 160APV: Insert: Life assurance companies - credit reducing section 160APY or 160APYA debit "160APVA. (1) If: (a) on a particular day, a class B franking debit of a life assurance company arises under section 160APY in relation to a refund received by the company in respect of an instalment for a year of income (the 'current year of income'); and (b) a notice of an original company tax assessment for the current year of income has not been served, or been taken to have been served, on the company on or before that day; then a class B franking credit of the company worked out under subsection (2) of this section arises on that day. "(2) The amount of the franking credit is equal to the adjusted amount in relation to the amount calculated for the current year of income using the formula: Statutory x Amount x ( Preceding - Non-fund ) factor refunded ( year's component of ) ( company preceding year's ) ( tax company tax ) ( Preceding year's company tax ) where: 'Statutory factor' means 1.0; Note: Statutory factor is used and modified in section 160AQCN. 'Preceding year's company tax' means the company tax assessed to the company for the year of income (the 'preceding year of income') that immediately preceded the current year of income; 'Non-fund component of preceding year's company tax' means so much of the company tax assessed to the company for the preceding year of income as is attributable to the non-fund component. "(3) If: (a) on a particular day, a class B franking debit of a life assurance company arises: (i) under section 160APY in relation to a refund received by the company in respect of an instalment for a year of income (the 'current year of income'); or (ii) under section 160APYA in relation to a refund received by the company, or an amount credited against a liability of the company, in respect of an instalment for a year of income (also the 'current year of income'); and (b) either: (i) before that day, a notice of an original company tax assessment for the current year of income has been served, or is taken to have been served, on the company; or (ii) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company; then a class B franking credit of the company worked out under subsection (4) of this section arises on the later of the particular day and the day on which the notice is served or taken to be served. "(4) The amount of the franking credit is equal to the adjusted amount in relation to the amount calculated using the formula: Statutory x Amount x ( Current - Non-fund ) factor refunded ( year's component of ) or ( company current year's ) credited ( tax company tax ) ( Current year's company tax ) where: 'Statutory factor' means 1.0; Note: Statutory factor is used and modified in section 160AQCN. 'Current year's company tax' means the company tax assessed to the company for the current year of income; 'Non-fund component of current year's company tax' means so much of the company tax assessed to the company for the current year of income as is attributable to the non-fund component. Life assurance companies-credit reversing subsection 160AQCCA(1) debit "160APVB. If: (a) on a particular day, a class B franking debit of a life assurance company arises under subsection 160AQCCA(1) in relation to: (i) an instalment that the company is required to pay under section 221AZK in respect of a year of income (the 'current year of income'); or (ii) an amount that the company is required to pay under subsection 221AZR(1) in respect of a year of income (also the 'current year of income'); and (b) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company; then a class B franking credit of the company equal to the amount of the class B franking debit arises on the day on which the notice is served, or taken to be served.". 34. Before paragraph 160APVH(1)(a): Insert: "(aa) subsection 160AQCCA(1); (ab) subsection 160AQCCA(3);". 35. Paragraph 160APVH(3)(a): After "paragraph", insert "(aa) or". 36. After section 160APXA: Insert: Refunds of company tax instalment "160APY. If a company receives an amount as a refund under subsection 221AZL(2) or 221AZQ(1), a class B franking debit of the company equal to the adjusted amount in relation to the amount received arises on the day on which the company receives the amount. Refunds of company tax "160APYA. If: (a) a company makes a payment covered by section 160APM or 160APMAA; and (b) either: (i) the company receives an amount as a refund of that payment (not being a refund covered by section 160APY); or (ii) the Commissioner credits the payment under paragraph 221AZM(1)(b) or (c) against a liability of the company; and (c) the amount refunded or credited, as the case may be, is not attributable to a reduction of company tax covered by section 160APZ; then a class B franking debit of the company equal to the adjusted amount in relation to the amount received or credited arises on the day on which the company receives the refund, or on the day on which that payment is credited.". 37. Subparagraph 160APYBB(b)(ii): After "1B", insert "or 1C". 38. After section 160AQCC: Insert: Life assurance companies - debit reducing section 160APM or 160APMAA credit "160AQCCA. (1) If: (a) on a particular day, a class B franking credit of a life assurance company arises: (i) under section 160APM in relation to an instalment that the company is required to pay under section 221AZK in respect of a year of income (also the 'current year of income'); or (ii) under section 160APMAA in relation to an amount that the company is required to pay under subsection 221AZR(1) in respect of a year of income (also the 'current year of income'); and (b) a notice of an original company tax assessment for the current year of income has not been served, or been taken to have been served, on the company on or before that day; then a class B franking debit of the company worked out under subsection (2) of this section arises on that day. "(2) The amount of the franking debit is equal to the adjusted amount in relation to the amount calculated for the current year of income using the formula: Statutory x Amount x ( Preceding - Non-fund ) factor paid ( year's component of ) ( company preceding year's ) ( tax company tax ) ( Preceding year's company tax ) where: 'Statutory factor' means 1.0; Note: Statutory factor is used and modified in section 160APVH. 'Preceding year's company tax' means the company tax assessed to the company for the year of income (the 'preceding year of income') that immediately preceded the current year of income; 'Non-fund component of preceding year's company tax' means so much of the company tax assessed to the company for the preceding year of income as is attributable to the non-fund component. "(3) If: (a) on a particular day, a class B franking credit of a life assurance company arises under: (i) section 160APM in relation to an instalment that the company is required to pay under section 221AZK in respect of a year of income (the 'current year of income'); or (ii) under section 160APMAA in relation to an amount that the company is required to pay under subsection 221AZR(1) in respect of a year of income (also the 'current year of income'); and (b) either: (i) before that day, a notice of an original company tax assessment for the current year of income has been served, or is taken to have been served, on the company; or (ii) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company; then a class B franking debit of the company worked out under subsection (4) of this section arises on the later of the particular day and the day on which the notice is served or taken to be served. "(4) The amount of the franking debit is equal to the adjusted amount in relation to the amount calculated using the formula: Statutory x Amount x ( Current - Non-fund ) factor paid ( year's component of ) ( company current year's ) ( tax company tax ) ( Current year's company tax ) where 'Statutory factor' means 1.0; Note: Statutory factor is used and modified in section 160APVH. 'Current year's company tax' means the company tax assessed to the company for the current year of income; 'Non-fund component of current year's company tax' means so much of the company tax assessed to the company for the current year of income as is attributable to the non-fund component. Life assurance companies - debit reversing subsection 160APVA(1) credit "160AQCCB. If: (a) on a particular day, a class B franking credit of a life assurance company arises under subsection 160APVA(1) in relation to a refund received by the company in respect of an instalment for a year of income (the 'current year of income'); and (b) on or after that day, a notice of an original company tax assessment for the current year of income is served, or taken to be served, on the company; then a class B franking debit of the company equal to the amount of the class B franking credit arises on the day on which the notice is served, or taken to be served.". 39. Before paragraph 160AQCN(1)(a): Insert: "(aa) subsection 160APVA(1); (ab) subsection 160APVA(3);". 40. After subsection 160AQCN(2): Insert: "(2A) If: (a) on a particular day, a class A franking credit of a company arises under subsection 160APVH(1) because of paragraph (aa) of that subsection in relation to a company tax instalment in respect of a year of income; and (b) on or after that day, a notice of an original company tax assessment for the year of income is served, or taken to be served, on the company; then a class A franking debit of the company equal to the amount of the class A franking credit arises on the day on which the notice is served or taken to be served.". 41. After paragraph 160AQD(1)(b): Insert: "or (ba) has paid a company tax instalment;". 42. Paragraph 160AQD(1)(c): After "tax", insert "or the company tax instalment". 43. After subsection 160AQD(1A): Insert: "(1B) An estimated class A debit in relation to a company tax instalment must relate to the refund of that instalment under section 221AZL or 221AZQ.". 44. After paragraph 160AQDA(1)(b): Insert: "or (ba) has paid a company tax instalment;". 45. Paragraph 160AQDA(1)(c): After "tax", insert "or the company tax instalment". 46. After subsection 160AQDA(2): Insert: "(2A) An estimated class B debit in relation to a company tax instalment must relate to the refund of that instalment under section 221AZL or 221AZQ.". 47. After Subdivision B of Division 5 of Part IIIAA: Insert: "Subdivision BA - Deficit deferral tax Class A deficit deferral tax Situation that gives rise to liability "160AQJA. (1) If: (a) during a franking year (the 'first franking year') a life assurance company pays one or more instalments under section 221AZK for a year of income; and (b) at a particular time during the next franking year (the 'second franking year') the company receives a refund of the whole or a part of the instalment, or one or more of the instalments, under section 221AZL or 221AZQ; and (c) assuming that the refund, together with any previous refund of one or more instalments, for the year of income, had been received by the company on the last day of the first franking year, the company would have had a class A franking deficit, or an increased class A franking deficit, at the end of the first franking year; a class A deficit deferral amount (defined in subsection (2)) arises in relation to the company and the refund. Class A deficit deferral amount "(2) The 'class A deficit deferral amount' is the amount of the class A franking deficit, or the amount of the increase in the class A franking deficit, referred to in paragraph (1)(c). Amount of class A deficit deferral tax "(3) If a class A deficit deferral amount arises in relation to a company and a refund, the company is liable to pay class A deficit deferral tax in relation to the refund. The amount of the tax is the gross class A deficit deferral amount (see subsection (4)) reduced by any class A deficit deferral tax already payable by the company in relation to refunds received in the second franking year. Gross class A deficit deferral amount "(4) The 'gross class A deficit deferral amount' is worked out using the following formula: ( Class A deficit x 39 ) ( deferral amount 61 ) Additional amounts taken to be part of instalment "(5) If an amount is paid under subsection 221AZR(1) in the same year as the instalment mentioned in that subsection, then, for the purposes of this section, the amount is to be treated as being part of the instalment. Class B deficit deferral tax Situation that gives rise to liability "160AQJB. (1) If: (a) during a franking year (the 'first franking year') a company pays one or more instalments under section 221AZK for a year of income; and (b) at a particular time during the next franking year (the 'second franking year') the company receives a refund of the whole or a part of the instalment, or one or more of the instalments, under section 221AZL or 221AZQ; and (c) assuming that the refund, together with any previous refund of one or more instalments for the year of income, had been received by the company on the last day of the first franking year, the company would have had a class B franking deficit, or an increased class B franking deficit, at the end of the first franking year; a class B deficit deferral amount (defined in subsection (2)) arises in relation to the company and the refund. Class B deficit deferral amount "(2) The 'class B deficit deferral amount' is the amount of the class B franking deficit, or the amount of the increase in the class B franking deficit, referred to in paragraph (1)(c). Amount of class B deficit deferral tax "(3) If a class B deficit deferral amount arises in relation to a company and a refund, the company is liable to pay class B deficit deferral tax in relation to the refund. The amount of the tax is the gross class B deficit deferral amount (see subsection (4)) reduced by any class B deficit deferral tax already payable by the company in relation to refunds received in the second franking year. Gross class B deficit deferral amount "(4) The 'gross class B deficit deferral amount' is worked out using the following formula: ( Class B deficit x 33 ) ( deferral amount 67 ) Additional amounts taken to be part of instalment "(5) If an amount is paid under subsection 221AZR(1) in the same year as the instalment mentioned in that subsection, then, for the purposes of this section, the amount is to be treated as being part of the instalment.". 48. Heading to Subdivision C of Division 5 of Part IIIAA: After "Deficit Tax", insert "and Deficit Deferral Tax". 49. Paragraph 160AQK(1)(a): Omit the paragraph, substitute: "(a) a company has become liable to pay: (i) class A franking deficit tax for a franking year; or (ii) class B franking deficit tax for a franking year; or (iii) class A deficit deferral tax in relation to the refund of one or more instalments paid during a franking year; or (iv) class B deficit deferral tax in relation to the refund of one or more instalments paid during a franking year; or any combination of these taxes in respect of the same franking year; and". 50. Paragraph 160AQK(1)(c): Omit "and the class B franking deficit tax", substitute ", the class B franking deficit tax, the class A deficit deferral tax and the class B deficit deferral tax". 51. After section 160ARE: Insert: Deficit deferral tax returns "160AREA. If a class A deficit deferral amount (see subsection 160AQJA(2)) or a class B deficit deferral amount (see subsection 160AQJB(2)) arises in relation to a company in relation to a refund, the company must lodge a return in relation to the deficit deferral amount within 14 days after receiving the refund.". 52. Paragraph 160ARH(1)(a): Omit "under this Part", substitute "under section 160ARE or 160ARF". 53. After section 160ARH: Insert: Deficit deferral tax return taken to be an assessment "160ARHA. If, at a particular time (the 'return time'), a return (the 'deficit deferral tax return') under section 160AREA is lodged by a company, the following provisions have effect: (a) the Commissioner is taken, at the return time, to have made an assessment (the 'deficit deferral tax assessment') of any deficit deferral tax payable by the company, being the amount as specified in the deficit deferral tax return; (b) the deficit deferral tax return is taken to be a notice of the deficit deferral tax assessment and to be signed by the Commissioner; (c) the notice of the deficit deferral tax assessment is taken to have been served on the company at the return time.". 54. Section 160ARK: Add at the end: "(3) If a company has not lodged a return in relation to a deficit deferral amount within the time specified in section 160AREA, the Commissioner may make an assessment of deficit deferral tax payable by the company in relation to the deficit deferral amount.". 55. Subsection 160ARN(8): Add at the end "or a deficit deferral tax assessment.". 56. Section 160ARR: Insert ", deficit deferral tax" after "franking deficit tax". 57. After section 160ARU: Insert: Due date for payment of deficit deferral tax "160ARUA. Deficit deferral tax assessed in relation to a refund becomes due and payable, or is taken to have become due and payable, 14 days after the refund is received.". 58. Subsection 160ARW(1): Insert ", deficit deferral tax" after "franking deficit tax". 59. Subsection 160ARXA(1) (definition of "franking tax law"): After "tax", insert "or deficit deferral tax". 60. Subsection 160ARXA(1) (definitions of "franking tax shortfall" and "proper franking tax"): Omit the definitions, substitute: "'franking tax shortfall' means: (a) in relation to a company and a franking year: (i) the class A franking tax shortfall in relation to the company and the franking year; or (ii) the class B franking tax shortfall in relation to the company and the franking year; and (b) in relation to a company and a refund: (i) the class A deficit deferral tax shortfall in relation to the company and the refund; or (ii) the class B deficit deferral tax shortfall in relation to the company and the refund; 'proper franking tax' means: (a) in relation to a company and a franking year: (i) the class A proper franking tax in relation to the company and the franking year; or (ii) the class B proper franking tax in relation to the company and the franking year; and (b) in relation to a company and a refund: (i) the proper class A deficit deferral tax in relation to the company and the refund; or (ii) the proper class B deficit deferral tax in relation to the company and the refund;". 61. Subsection 160ARXA(1): Insert: "'class A deficit deferral tax shortfall', in relation to a company and a refund, means any amount by which the company's class A statement deficit deferral tax for that refund at the time at which it was lowest is less than the company's class A proper deficit deferral tax for that refund; 'class B deficit deferral tax shortfall', in relation to a company and a refund, means any amount by which the company's class B statement deficit deferral tax for that refund at the time at which it was lowest is less than the company's class B proper deficit deferral tax for that refund; 'class A proper deficit deferral tax', in relation to a company and a refund, means the class A deficit deferral tax properly payable by the company in relation to the refund; 'class B proper deficit deferral tax', in relation to a company and a refund, means the class B deficit deferral tax properly payable by the company in relation to the refund; 'class A statement deficit deferral tax', in relation to a company, a refund, and a time, means the class A deficit deferral tax that would have been payable by the company in relation to the refund if the tax were assessed at that time taking into account taxation statements by the company; 'class B statement deficit deferral tax', in relation to a company, a refund and a time, means the class B deficit deferral tax that would have been payable by the company in relation to the refund if the tax were assessed at that time taking into account taxation statements by the company; 'deficit deferral tax shortfall', in relation to a company and a refund, means class A deficit deferral tax shortfall or class B deficit deferral tax shortfall; 'statement deficit deferral tax', in relation to a company and a refund, means class A statement deficit deferral tax or class B statement deficit deferral tax;". 62. Section 160ARXC: Add at the end "or 2 or more refunds". 63. After section 160ARX: Insert: Class A deficit deferral tax-penalty "160ARYA. A company is liable to pay, by way of penalty, additional tax equal to 30% of the class A deficit deferral tax that is payable by the company in relation to a refund if the class A deficit deferral amount that arises under subsection 160AQJA(2) in relation to the refund is greater than 10% of the amount worked out using the following formula: Total of class A - ( 0.2 x 61 The amount of the ) franking credits ( ---------- refunds referred ) that arose in the ( 39 to in paragraph ) first franking year ( 160AQJA(1)(c) ) Class B deficit deferral tax-penalty "160ARYB. A company is liable to pay, by way of penalty, additional tax equal to 30% of the class B deficit deferral tax that is payable by the company in relation to a refund if the class B deficit deferral amount that arises under subsection 160AQJB(2) in relation to the refund is greater than the amount worked out using the following formula: 0.1 x ( Total of class B - The adjusted amount ) ( franking credits in relation to refunds ) ( that arose in the referred to in paragraph ) ( first franking year 160AQJB(1)(c) )". 64. Section 160ARZ: Add at the end: "(2) If a company refuses or fails to furnish, when and as required under this Act to do so, a return, or any information, relating to a refund, being a return relating to or information relating to, or to the affairs of, the company, the company is liable to pay, by way of penalty, additional tax equal to double any deficit deferral tax payable in relation to the refund.". 65. Paragraph 160ARZA(a): After "a franking year", insert "or a refund". 66. Paragraph 160ARZB(a): After "a franking year", insert "or a refund". 67. Paragraph 160ARZC(a): After "a franking year", insert "or a refund". 68. Paragraph 160ARZD(1)(a): After "a franking year", insert "or a refund". 69. Sub-subparagraph 160ARZD(1)(c)(ii)(B): Omit "and". 70. After sub-subparagraph 160ARZD(1)(c)(ii)(B): Insert: "(C) if the shortfall is a class A deficit deferral tax shortfall - the class A deficit deferral tax that would have been payable by the company in relation to that refund if the tax were assessed on the basis of the company's return under section 160AREA in relation to that refund; (D) if the shortfall is a class B deficit deferral tax shortfall - the class B deficit deferral tax that would have been payable by the company in relation to that refund if the tax were assessed on the basis of the company's return under section 160AREA in relation to that refund; and". 71. Paragraph 160ARZE(1)(a): After "a franking year", insert "or a refund". 72. Paragraph 160ARZE(1)(b): After "the year", insert ", or the refund,". 73. Paragraph 160ARZF(a): After "a franking year", insert "or a refund". 74. Paragraph 160ARZF(b): After "the year", insert ", or the refund,". 75. Paragraph 160ARZF(c): After "the year", insert ", or the refund,". 76. Paragraph 160ARZG(a): After "a franking year", insert "or a refund". 77. Subparagraph 160ARZI(b)(ii): After "the franking year", insert ", or the company's statement deficit deferral tax in relation to the refund,". 78. Subparagraph 160ARZI(b)(iii): Omit "year of income", substitute "franking year or refund,". 79. Subparagraph 160ARZI(b)(iv): After "franking year", insert "or refund". 80. Paragraph 160ARZJ(a): After "a franking year", insert "or a refund". 81. Paragraph 160ARZJ(b): After "the year", insert ", or the refund,". 82. Paragraph 160ARZK(a): After "a franking year", insert "or a refund". 83. Paragraph 160ARZK(b): After "the year", insert ", or the refund,". 84. Section 160ARZL: After "a year", insert "or a refund". 85. Section 160ARZL: After "that year", insert ", or that refund,". 86. Transitional - modification of dividend imputation provisions resulting from reduction in the company tax rate (1) If, after 17 February 1994, any of the following events occurs: (a) a company makes a payment of tax, other than an initial payment under section 221AP of the Principal Act, in respect of the 1993-94 year of income during the 1993-94 franking year of the company; or (b) a company receives a refund under Division 1B of Part VI of the Principal Act in respect of an amount to which paragraph (a) applies; or (c) a company receives a refund of an amount to which paragraph (a) applies where the refund is covered by section 160APYBA of the Principal Act; or (d) the Commissioner applies an amount paid by a company and the application is covered by section 160APYBA of the Principal Act in respect of an amount to which paragraph (a) applies; or (e) an amendment is made to an assessment of the company tax payable by a company for the 1993-94 year of income that was made before the end of the 1993-94 franking year of the company, other than an amendment where: (i) the assessment was made on or before 17 February 1994; and (ii) the amendment effects a reduction in the liability of the company; or (f) an amount is calculated, as a result of an event covered by a preceding paragraph, using a formula in any of the following provisions: (i) section 160APVBA or 160APVD of the Principal Act; (ii) sections 160AQCE to 160AQCK (inclusive) of the Principal Act; then in applying Part IIIAA of the Principal Act in relation to the event, despite paragraphs (a) and (aa) of the definition of "applicable general company tax rate" in section 160APA of that Act, a reference to the general company tax rate is, and is taken to have always been, a reference to 39%. (2) If subitem (1) would result in a company having a franking deficit, or an increased franking deficit, at the end of the 1993-94 franking year, subitem (1) does not apply in relation to the company, but: (a) the class A franking account balance of the company at the start of the 1994-95 franking year is taken to be nil; and (b) a class A franking debit of the company equal to the amount of the franking deficit, or the amount of the increase in the franking deficit, arises on the day when this item commences. (3) In this item: "Principal Act" means the Income Tax Assessment Act 1936; "1993-94 franking year", in relation to a company, means: (a) if a franking year of the company: (i) is covered by paragraph (a) or (b) of the definition of "franking year" in section 160APA of the Principal Act; and (ii) begins after 31 December 1992 and before 1 July 1993; that franking year; or (b) if a franking year of the company: (i) is covered by paragraph (c) of that definition; and (ii) begins on 1 July 1993; that franking year. "1994-95 franking year", in relation to a company, means the franking year of the company immediately following the 1993-94 franking year. PART 4 - RETURN OF DEDUCTED SUPERANNUATION CONTRIBUTIONS 87. Section 82AAQ: Add at the end: "(2) If: (a) a taxpayer has, under this Act or the previous Act, been allowed in an assessment in respect of income of any year of income a deduction in respect of an amount set apart or paid as or to a fund (the 'original fund') for the purpose of making provision for superannuation benefits for, or for dependants of, an employee; and (b) either: (i) a person (the 'recipient') other than the taxpayer receives in the year of income a payment or benefit from the original fund or a successor fund of the original fund, other than in the capacity as a member of the fund; or (ii) the taxpayer (also the 'recipient') receives in the year of income a payment or benefit from a successor fund of the original fund, other than in the capacity as a member of the fund; and (c) the making of the payment or providing of the benefit reasonably represents the return to any extent of the amount, or earnings on the amount, set apart or paid as mentioned in paragraph (a); the amount of the payment, or value of the benefit, is, to the extent that it reasonably represents the return as mentioned in paragraph (c), included in the recipient's assessable income of the year of income. "(3) A fund that provides superannuation benefits (the 'test fund') is a 'successor fund' of the original fund if: (a) the original fund, or any other fund that is a successor fund of the original fund because of another application of this subsection, has transferred any of its assets to the test fund; or (b) an eligible termination payment (within the meaning of section 27A) made in relation to a member of: (i) the original fund; or (ii) any other fund that is a successor fund of the original fund because of another application of this subsection; is, because of the payment of an amount to the test fund, taken to be rolled-over within the meaning of that section.". 88. Application The amendment made by this Part applies to payments or benefits received on or after 1 July 1988. PART 5 - CREDIT UNIONS 89. Subsection 6H(5): Omit the subsection, substitute: "(5) For the purposes of this section, the notional taxable income of a credit union of a year of income is the amount that would be its taxable income of the year of income if: (a) section 23G did not apply to income derived by it in the 1994-95 year of income or any later year of income; and (b) Division 9 of Part III had not been enacted.". 90. Application The amendment made by this Part applies to assessments in respect of income of the 1994-95 year of income and of all later years of income. TAXATION LAWS AMENDMENT ACT (No. 4) 1994 No. 181 of 1994 - SCHEDULE 2 SCHEDULE 2 Section 3 AMENDMENTS RELATING TO POOLED DEVELOPMENT FUNDS PART 1 - INCOME TAX RATES ACT 1986 1. Object The object of this Part is to reduce the rate of tax payable by a pooled development fund ("PDF") in respect of its "SME income component" from 25% to 15%. The "SME income component" is based on income derived by the PDF from investments in certain small and medium enterprises. 2. Subsection 3(1): Insert: "'SME income component' has the same meaning as in Subdivision B of Division 10E of Part III of the Assessment Act; 'unregulated investment component' has the same meaning as in Subdivision B of Division 10E of Part III of the Assessment Act.". 3. Subsections 23(4C) and (4D): Omit the subsections, substitute: "(4C) The rates of tax in respect of the taxable income of a company that becomes a PDF during a year of income and is still a PDF at the end of the year of income are: (a) in respect of the SME income component - 15%; and (b) in respect of the unregulated investment component - 25%; and (c) in respect of so much of the taxable income as exceeds the PDF component - 33%. "(4D) The rates of tax in respect of the taxable income of a company that is a PDF throughout the year of income are: (a) in respect of the SME income component - 15%; and (b) in respect of the unregulated investment component - 25%.". 4. Application The amendments made by this Part apply to assessments in resp