TAX LAWS AMENDMENT (2009 MEASURES NO. 6) BILL 2009

i Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Abolishing trust cloning and providing a CGT

roll-over for certain trusts

Part 1--Removing trust cloning exception

Income Tax Assessment Act 1997

Part 2--Roll-over for certain trusts

Income Tax Assessment Act 1997

Part 3--Other amendments

A New Tax System (Goods and Services Tax) Act 1999

Income Tax Assessment Act 1997

Schedule 2--Loss relief for merging superannuation funds

Part 1--Main amendment

Income Tax Assessment Act 1997

Part 2--Other amendments

Income Tax Assessment Act 1997

Part 3--Application provision

Part 4--Repeals

Income Tax Assessment Act 1997

Part 5--Savings

Schedule 3--Exempt annuity business of life insurance

companies

Part 1--Amendments applying from 30 June 2000

Division 1--Amendment of the Income Tax Assessment Act 1997

Division 2--Consequential amendment

Tax Laws Amendment (2006 Measures No. 2) Act 2006

Part 2--Amendments applying from the 2007-08 income year

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 ii

Division 1--Amendment of the Income Tax Assessment Act 1997

Division 2--Consequential amendments

Superannuation Legislation Amendment (Simplification) Act 2007

Part 3--Application provision

Schedule 4--Deductible gift recipients

Part 1--Amendments commencing on 4 June 2009

Income Tax Assessment Act 1997

Part 2--Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

Part 3--Application provision

Schedule 5--North Western Queensland floods

Part 1--Main amendments

Income Tax Assessment Act 1936

Income Tax Assessment Act 1997

Part 2--Sunsetting on 1 July 2011

Income Tax Assessment Act 1997

Part 3--Application provision

Schedule 6--Spirit blending

Excise Act 1901

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 1

A Bill for an Act to amend the law relating to

taxation, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Tax Laws Amendment (2009

Measures No. 6) 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.

2 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

4. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1

The day this Act receives the Royal Assent.

3. Schedule 2,

Parts 1, 2 and 3

The day after this Act receives the Royal

Assent.

4. Schedule 2,

Parts 4 and 5

1 July 2013.

1 July 2013

5. Schedule 3,

Part 1, Division 1

Immediately after the commencement of

item 57 of Schedule 1 to the Tax Laws

Amendment (2004 Measures No. 2) Act

2004.

30 June 2000

6. Schedule 3,

Part 1, Division 2

Immediately after the commencement of

item 214 of Schedule 7 to the Tax Laws

Amendment (2006 Measures No. 2) Act

2006.

22 June 2006

7. Schedule 3,

Part 2, Division 1

At the same time as Schedule 1 to the

Superannuation Legislation Amendment

(Simplification) Act 2007 commences.

15 March 2007

8. Schedule 3,

Part 2, Division 2

Immediately after the start of the day on

which the Superannuation Legislation

Amendment (Simplification) Act 2007

received the Royal Assent.

15 March 2007

9. Schedule 3,

Part 3

The day this Act receives the Royal Assent.

10. Schedule 4,

Part 1

4 June 2009.

4 June 2009

11. Schedule 4,

Parts 2 and 3

The day this Act receives the Royal Assent.

12. Schedule 5,

Part 1

25 February 2009.

25 February

2009

13. Schedule 5,

Part 2

Immediately before the commencement of

item 5 of Schedule 5 to the Tax Laws

Amendment (2008 Measures No. 6) Act

2009.

1 July 2011

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 3

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

14. Schedule 5,

Part 3

The day this Act receives the Royal Assent.

15. Schedule 6

The day this Act receives the Royal Assent.

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 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 1 Removing trust cloning exception

4 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Schedule 1--Abolishing trust cloning and

providing a CGT roll-over for certain

trusts

Part 1--Removing trust cloning exception

Income Tax Assessment Act 1997

1 Subsection 104-55(5)

Repeal the subsection, substitute:

Exceptions

(5)

CGT event E1 does not happen if you are the sole beneficiary of

the trust and:

(a) you are absolutely entitled to the asset as against the trustee

(disregarding any legal disability); and

(b) the trust is not a unit trust.

2 Subsection 104-60(5)

Repeal the subsection, substitute:

Exceptions

(5)

CGT event E2 does not happen if you are the sole beneficiary of

the trust and:

(a) you are absolutely entitled to the asset as against the trustee

(disregarding any legal disability); and

(b) the trust is not a unit trust.

3 Application provision

The amendments made by this Part apply to CGT events happening on

or after 1 November 2008.

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 5

Part 2--Roll-over for certain trusts

Income Tax Assessment Act 1997

4 Subsection 40-340(1) (at the end of the table)

Add:

Disposal of asset between

certain trusts

The trustees of the trusts choose to obtain a

roll-over under Subdivision 126-G in relation

to the disposal.

5 Section 109-55 (after table item 8F)

Insert:

You hold a membership

interest in the receiving trust

involved in a roll-over under

Subdivision 126-G

when you acquired the

corresponding

membership interest in

the transferring trust

involved in the

roll-over

section 115-30

6 After section 112-54

Insert:

112-54A Transfer of assets between certain trusts

Transfer of assets between certain trusts

Item

In this situation:

Element affected:

See sections:

There is a roll-over under

Subdivision 126-G relating

to the transfer of a CGT

asset between certain trusts

First element of cost base

and reduced cost base of

the CGT asset

126-240

There is a roll-over under

Subdivision 126-G relating

to the transfer of a CGT

asset between certain trusts

Cost base and reduced

cost base of membership

interests in each trust

126-245 and

126-250

7 Section 112-150 (at the end of the table)

Add:

Transfer of a CGT asset between certain trusts

Subdivision 126-G

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

6 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

8 Subsection 115-30(1) (at the end of the table)

Add:

CGT asset that:

(a) is a

membership interest in the

receiving trust involved in a roll-over

under Subdivision 126-G; and

(b) is held by the acquirer just after the

transfer time for the roll-over

(a) when the acquirer

acquired

the corresponding

membership interest (or

membership interests) in the

transferring trust involved in

the roll-over; or

(b) if the roll-over asset for the

roll-over has been involved

in an unbroken series of

roll-overs under

Subdivision 126-G--when

the acquirer acquired the

corresponding membership

interest (or membership

interests) in the transferring

trust involved in the first

roll-over in the series

9 At the end of Division 126

Add:

Subdivision 126-G--Transfer of assets between certain trusts

Guide to Subdivision 126-G

126-215 What this Subdivision is about

Roll-overs may be available when CGT assets are transferred

between certain trusts.

Table of sections

Operative provisions

126-220 Object of this Subdivision

126-225 When a roll-over may be chosen

126-230 Beneficiaries' entitlements not be discretionary etc.

126-235 Exceptions

for

roll-over

126-240 Consequences for the trusts

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 7

126-245 Consequences for beneficiaries--general approach for working out cost

base etc.

126-250 Consequences for beneficiaries--other approach for working out cost base

etc.

126-255 No other cost base etc. adjustment for beneficiaries

126-260 Giving information to beneficiaries

Operative provisions

126-220 Object of this Subdivision

The object of this Subdivision is to ensure that CGT considerations

are not an impediment to the restructure of trusts, whilst ensuring

that subsequent changes to the manner and extent to which

beneficiaries can benefit from the trusts are subject to appropriate

tax consequences.

126-225 When a roll-over may be chosen

(1) A roll-over may be chosen for a

CGT asset (the roll-over asset) if:

(a) the trustee of a trust (the transferring trust):

(i) creates a trust (the receiving trust), by declaration or

settlement, over one or more CGT assets that include

the roll-over asset; or

(ii) transfers the roll-over asset to an existing trust (the

receiving trust);

at a particular time (the transfer time); and

(b) if subparagraph (a)(ii) applies--the receiving trust has no

CGT assets, other than small amounts of cash or debt, just

before the transfer time; and

(i) each of the trusts has the same beneficiaries; and

(ii) the receiving trust has the same

classes of

membership

interests that the transferring trust had just before, and

has just after, the transfer time; and

(iii) the sum of the

market values of each beneficiary's

membership interests of a particular class in both trusts

is substantially the same as the sum of the market

values, just before the transfer time, of the beneficiary's

membership interests of that class in both trusts; and

(d) the requirement in section 126-230 is met; and

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

8 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(e) the exceptions in section 126-235 do not apply.

Exception if other roll-over assets already transferred

(2) However, paragraph (1)(b) does not apply if:

(a) the roll-over asset is transferred to the receiving trust under

arrangement; and

(b) the roll-over asset was an asset of the transferring trust just

before the arrangement was made; and

(i) is an asset for which a roll-over was obtained under this

Subdivision for the trusts; and

(ii) is an asset over which the receiving trust was created, or

was transferred by the transferring trust to the receiving

trust under the arrangement; and

(d) the transfer time is in the income year for the transferring

trust that includes the earliest transfer time (the start time) for

the assets covered by paragraph (c).

Obtaining the roll-over

(3) The roll-over only happens if both the trustee of the transferring

trust and the trustee of the receiving trust choose to obtain it.

126-230 Beneficiaries' entitlements not be discretionary etc.

(1) The conditions in subsections (2) and (3) must be met:

(a) if subsection 126-225(2) applies--at all times during the

period:

(i) starting at the start time; and

(ii) ending at the transfer time; and

(b) otherwise--at the transfer time.

CGT event E4 is capable of happening

(2) The first condition is met at a particular time if, at that time,

CGT

event E4 is capable of happening to all of the

membership

interests in each of the trusts.

Note:

A roll-over cannot be chosen if either trust is a discretionary trust.

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 9

Beneficiaries' entitlements not discretionary

(3) The second condition is met at a particular time if, at that time, the

manner or extent to which each beneficiary of each trust can

benefit from the trust is not capable of being significantly affected

by the exercise, or non-exercise, of a power.

(4) However, if both trusts are

managed investment trusts, disregard a

power if the power's existence at that time does not significantly

affect the

market value at that time of each

membership interest

in each of the trusts.

126-235 Exceptions for roll-over

Foreign trusts

(1) An exception applies for a

CGT asset if:

(a) the receiving trust is a

foreign trust for CGT purposes for the

income year that includes the transfer time; and

(b) the roll-over asset is not

taxable Australian property just

after the transfer time.

Corporate unit trusts and public trading trusts

(2) Another exception applies if either trust is a trust to which

section 102K or 102S of the Income Tax Assessment Act 1936

applies for the income year that includes the transfer time.

Choices

(3) Another exception applies if, just after the transfer time:

(a) a choice (however described) under a provision of a

taxation

law is in force for either of the trusts in relation to particular

circumstances; and

(b) the same choice (however described) under that provision for

the other trust in relation to those circumstances (a mirror

choice) is not also in force; and

ongoing effect on the calculation of an entity's

net income,

or taxable income, for:

(i) the entity's income year that includes the transfer time;

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

10 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(ii) a later income year.

(4) However, the exception in subsection (3) does not apply if:

(a) the other trust makes a mirror choice before the first time

after the transfer time when the absence of the mirror choice

would affect the calculation of an entity's

net income, or

taxable income, for an income year; or

(b) it would not be reasonable for subsection (3) to apply.

Note:

For paragraph (a), the other trust must still be able, under the relevant

provision of the taxation law, to make the mirror choice.

(5) If, just after the transfer time:

(a) a choice (however described) referred to in paragraph (3)(a)

is in force for either of the trusts (the first choice); and

(b) a provision of a

taxation law:

(i) prevents the revocation or variation of that choice; or

(ii) sets out a consequence for an entity if that choice is

revoked or varied;

that provision is taken to apply for a mirror choice, in force for the

other trust at or after that time, in a way corresponding to the way

in which it applies for the first choice.

Note:

For example, if the provision sets out consequences that flow from the

revocation of the first choice, then those consequences will also flow

if the mirror choice is revoked.

126-240 Consequences for the trusts

Disregard any capital gain or loss

(1) If the roll-over is chosen, disregard any

capital gain or

capital

loss the trustee of the transferring trust makes from:

(a) creating the receiving trust over the roll-over asset; or

(b) transferring the roll-over asset to the receiving trust;

at the transfer time.

Adjust roll-over asset's cost base and reduced cost base

(2) If the roll-over is chosen:

(a) the first element of the roll-over asset's

cost base, in the

hands of the receiving trust, is its cost base just before the

transfer time; and

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 11

(b) the first element of the roll-over asset's

reduced cost base is

worked out similarly.

Any pre-transfer losses of receiving trust cannot be utilised

(3) If the roll-over is chosen:

(a)

any

net capital loss of the receiving trust for an income year

ending before the transfer time cannot be applied after the

transfer time to reduce an amount of that trust's

capital

gains; and

(b) the sum of the receiving trust's

capital losses for the income

year that includes the transfer time (the transfer year) is

reduced by an amount equal to any net capital loss that the

trust would have had for that year had that year ended just

before the transfer time; and

(c)

any

tax loss of the receiving trust for an income year ending

before the transfer time cannot be deducted after the transfer

time from an amount of that trust's assessable income or

net

exempt income; and

(d) the sum of the receiving trust's deductions for the transfer

year is reduced by an amount equal to any tax loss that the

trust would have had for that year had that year ended just

before the transfer time.

References in this subsection to the transfer time are to be read as

references to the start time if subsection 126-225(2) applies.

Note:

Subsection 126-225(2) applies if the roll-over asset is transferred to

the receiving trust after an earlier roll-over under this Subdivision, for

another asset, was obtained for the trusts.

Pre-CGT assets

(4)

If:

(a) the roll-over is chosen; and

(b) the transferring trust last

acquired the roll-over asset before

20 September 1985;

the receiving trust is taken to have acquired it before that day.

126-245 Consequences for beneficiaries--general approach for

working out cost base etc.

(1) If the roll-over is chosen, each of the following:

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

12 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(a)

the

cost base and

reduced cost base of each of a

beneficiary's

membership interests in each trust;

(b) the time each of the beneficiary's membership interests in the

receiving trust is treated as having been

acquired;

is adjusted under this section for the transfer time unless the

beneficiary has chosen for them to be adjusted under

section 126-250.

Note:

The beneficiary can choose for these things to be adjusted once for

several consecutive transfer times (for multiple roll-over assets) if the

beneficiary owned the interests at all of those times (see

section 126-250).

First element of cost base of interests in transferring trust

(2) The first element of the

cost base, just after the transfer time, of

each of the beneficiary's

membership interests in the transferring

trust is an amount equal to such proportion of the interest's cost

base just before the transfer time as is reasonable having regard to:

(a)

the

market value of the interest just after the transfer time, or

a reasonable approximation of that market value; and

(b) the market value of the interest just before the transfer time,

or a reasonable approximation of that market value.

First element of cost base of interests in receiving trust

(3) The first element of the

cost base, just after the transfer time, of

each of the beneficiary's

membership interests in the receiving

trust is such amount so that the sum of:

(a) the cost base, just before the transfer time, of that

membership interest in the receiving trust; and

(b) if, just after the transfer time, that interest in the receiving

trust corresponds to at least one of the beneficiary's

membership interests in the transferring trust--the cost base,

just before the transfer time, of each of those corresponding

membership interests in the transferring trust; and

trust corresponds to a proportion of one of the beneficiary's

membership interests in the transferring trust--that

proportion of the cost base, just before the transfer time, of

that corresponding membership interest in the transferring

trust;

reasonably approximates:

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 13

(d) if paragraph (b) applies--the sum of the cost bases, just after

the transfer time, of each of the interests referred to in

paragraphs (a) and (b); and

(e) if paragraph (c) applies--the sum of:

(i) the cost base, just after the transfer time, of the interest

referred to in paragraph (a); and

(ii) the proportion of the cost base, just after the transfer

time, of the interest referred to in paragraph (c).

First element of reduced cost base of interests in each trust

(4) The first element of the

reduced cost base, just after the transfer

time, of each of the beneficiary's

membership interests in each

trust is worked out similarly.

Time of acquisition for interests in the receiving trust

(5) Each of the beneficiary's

membership interests in the receiving

trust is treated as having been

acquired just after the transfer time.

Time of acquisition for pre-CGT interests in the receiving trust

(6) However, if one or more of the beneficiary's

membership interests

in the transferring trust were

pre-CGT assets just before the

transfer time, the beneficiary is treated as having

acquired before

20 September 1985 its interests in the receiving trust that

correspond to those interests in the transferring trust.

126-250 Consequences for beneficiaries--other approach for

working out cost base etc.

(1) This section applies if the beneficiary owns one or more

membership interests in the transferring trust at all times during

the period:

(a) starting just before this time (the starting time):

(i) the transfer time; or

(ii) the transfer time for an asset referred to in paragraph

126-225(2)(c) (assuming subsection 126-225(2)

applies); and

(b) ending just after this time (the ending time):

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

14 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(i) the transfer time (assuming this is not also the starting

time); or

(ii) a later time in the transfer year that is the transfer time

for another asset for which a roll-over is obtained under

this Subdivision for the trusts.

Note:

Subsection 126-225(2) applies if the roll-over asset is transferred to

the receiving trust after an earlier roll-over under this Subdivision, for

another asset, was obtained for the trusts.

(2) The beneficiary may choose for each of the following:

(a)

the

cost base and

reduced cost base of each of those

membership interests and of the beneficiary's corresponding

membership interests in the receiving trust;

(b) the time each of those corresponding interests in the

receiving trust is treated as having been

acquired;

to be adjusted under subsection (3) for the period.

(3) For each of the interests referred to in subsection (2), subsections

126-245(2), (3), (4), (5) and (6) apply as if:

(a) references in those subsections to just before the transfer time

were references to just before the starting time; and

(b) references in those subsections to just after the transfer time

were references to just after the ending time.

126-255 No other cost base etc. adjustment for beneficiaries

If a beneficiary of the trusts makes adjustments under

section 126-245 or 126-250 to the

cost base and

reduced cost

base of the beneficiary's

membership interests in relation to the

CGT event that is:

(a) the creation of the receiving trust over the roll-over asset; or

(b) the transfer of the roll-over asset to the receiving trust;

no other adjustment is to be made under this Act to those cost

bases and reduced cost bases because of something that happens in

relation to that event.

Note:

This section prevents the general value shifting regime from applying

in relation to the event because sections 126-245 and 126-250 deal

with any value shift that might occur.

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 15

126-260 Giving information to beneficiaries

Beneficiaries must be given particulars of the roll-over

(1) If the roll-over is chosen, the trustee of the transferring trust must,

within 3 months after the end of the transfer year, send written

notice of the particulars set out in subsection (2) to each of the

trust's beneficiaries:

(a) by post to the address most recently notified by the

beneficiary as the beneficiary's address; or

(b) by any other means notified by the beneficiary for receiving

correspondence from the trust.

Note:

The trustee may also notify beneficiaries of other details of the

roll-over.

The particulars that must be given

(2) The particulars are as follows:

(a) the roll-over asset's transfer time;

(b) sufficient information to enable a beneficiary to work out

which of the beneficiary's

membership interests in the

receiving trust correspond to each of the beneficiary's

membership interests in the transferring trust;

(c)

the

market value of each of the membership interests held by

the beneficiary in the transferring trust just after the roll-over

asset's transfer time, or a reasonable approximation of that

market value;

(d) the market value of each of the membership interests held by

the beneficiary in the transferring trust just before the

roll-over asset's transfer time, or a reasonable approximation

of that market value.

Offence

(3) A trustee commits an offence if the trustee contravenes

subsection (1).

Penalty: 30 penalty units.

(4) An offence against subsection (3) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 2 Roll-over for certain trusts

16 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

If the transferring trust has multiple trustees

(5) If the transferring trust has 2 or more trustees, the obligation

imposed by subsection (1) is imposed on each of the trustees, but

may be discharged by any of the trustees.

Note:

Each of the trustees commits an offence against subsection (3) if none

of them discharges the obligation imposed by subsection (1).

(6) In a prosecution of a trustee for an offence against subsection (3)

for an act or omission contravening subsection (1), it is a defence if

the trustee proves that the trustee:

(a) did not aid, abet, counsel or procure the act or omission; and

(b) was not in any way knowingly concerned in, or party to, the

act or omission (whether directly or indirectly and whether

by any act or omission of the trustee).

Note:

A defendant bears a legal burden in relation to the matters in

subsection (6): see section 13.4 of the Criminal Code.

Obligations of beneficiary unaffected if not notified of roll-over

(7) A failure by a trustee to comply with subsection (1) does not affect

the application of section 126-245 to the beneficiary.

10 Subsection 995-1(1) (definition of class) (second

occurring)

After "company", insert "or trust".

11 Application provision

The amendments made by items 4 to 9 apply to CGT events happening

on or after 1 November 2008.

12 Transitional: time for making mirror choices

(1)

Subsection 126-235(3) of the Income Tax Assessment Act 1997 does not

apply if the other trust makes a mirror choice under a provision of a

taxation law by:

(a) 6 months after the day this Act receives the Royal Assent; or

(b) a later day allowed by the Commissioner of Taxation.

Note:

For this item to have effect, the other trust must still be able, under that provision of the

taxation law, to make the mirror choice.

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Roll-over for certain trusts Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 17

(2)

This item has effect in addition to subsection 126-235(4) of the Income

Tax Assessment Act 1997.

13 Transitional: deadline for giving information to

beneficiaries

(1)

This item applies in relation to a roll-over chosen under

Subdivision 126-G of the Income Tax Assessment Act 1997 if the

transfer year for the roll-over is the transferring trust's 2008-09 income

year.

(2)

Subsection 126-260(1) of that Act has effect, in relation to the roll-over,

as if the reference in that subsection to 3 months after the end of the

transfer year were a reference to 6 months after the day this Act

receives the Royal Assent.

Schedule 1 Abolishing trust cloning and providing a CGT roll-over for certain trusts

Part 3 Other amendments

18 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Part 3--Other amendments

A New Tax System (Goods and Services Tax) Act 1999

14 Subsection 184-1(2) (note)

Omit "Note", substitute "Note 1".

15 At the end of subsection 184-1(2)

Add:

Note 2:

The entity that is the trustee of a trust or fund does not change merely

because of a change in the person who is the trustee of the trust or

fund, or persons who are the trustees of the trust or fund.

Income Tax Assessment Act 1997

16 Subsection 104-10(2)

Repeal the subsection, substitute:

(2)

You

dispose of a

CGT asset if a change of ownership occurs from

you to another entity, whether because of some act or event or by

operation of law. However, a change of ownership does not occur

if you stop being the legal owner of the asset but continue to be its

beneficial owner.

Note:

A change in the trustee of a trust does not constitute a change in the

entity that is the trustee of the trust (see subsection 960-100(2)). This

means that CGT event A1 will not happen merely because of a change

in the trustee.

17 At the end of subsection 104-55(1)

Add:

Note:

A change in the trustee of a trust does not constitute a change in the

entity that is the trustee of the trust (see subsection 960-100(2)). This

means that CGT event E1 will not happen merely because of a change

in the trustee.

18 At the end of subsection 104-60(1)

Add:

Note:

A change in the trustee of a trust does not constitute a change in the

entity that is the trustee of the trust (see subsection 960-100(2)). This

means that CGT event E2 will not happen merely because of a change

in the trustee.

Abolishing trust cloning and providing a CGT roll-over for certain trusts Schedule 1

Other amendments Part 3

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 19

19 Subsection 960-100(2) (note)

Omit "Note", substitute "Note 1".

20 At the end of subsection 960-100(2)

Add:

Note 2:

The entity that is the trustee of a trust or fund does not change merely

because of a change in the person who is the trustee of the trust or

fund, or persons who are the trustees of the trust or fund.

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

20 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Schedule 2--Loss relief for merging

superannuation funds

Part 1--Main amendment

Income Tax Assessment Act 1997

1 At the end of Part 3-30

Add:

Division 310--Loss relief for merging superannuation

funds

Table of Subdivisions

Guide to Division 310

310-A Object of this Division

310-B Choice to transfer losses

310-C Consequences of choosing to transfer losses

310-D Choice for assets roll-over

310-E Consequences of choosing assets roll-over

310-F Choices

Guide to Division 310

310-1 What this Division is about

This Division sets out special rules for certain merging

superannuation funds. These rules relate to the transfer of losses,

the treatment of CGT events related to the merger and the

treatment of assets related to the merger.

Note 1:

This Division applies only to mergers happening between

24 December 2008 and 30 June 2011 (see Part 3 of Schedule 2 to the

Tax Laws Amendment (2009 Measures No. 6) Act 2009).

Note 2:

This Division and associated provisions will be repealed on 1 July

2013 (see Parts 4 and 5 of that Schedule).

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 21

Operative provisions

Subdivision 310-A--Object of this Division

310-5 Object

The main object of this Division is to facilitate the consolidation of

the superannuation industry by allowing certain merging

superannuation funds to retain the value, for income tax purposes,

of certain losses that might otherwise cease to be able to be utilised

as a result of the merger.

Subdivision 310-B--Choice to transfer losses

Table of sections

310-10

Original fund's assets extend beyond life insurance policies and units in

pooled superannuation trusts

310-15

Original fund's assets include a complying superannuation/FHSA life

insurance policy

310-20

Original fund's assets include units in a pooled superannuation trust

310-10 Original fund's assets extend beyond life insurance policies

and units in pooled superannuation trusts

(1) A trustee of:

(a)

complying superannuation fund (the transferring entity or

the original fund); or

(b)

complying approved deposit fund (the transferring entity

or the original fund);

can choose to transfer losses if an

arrangement is made for which

the conditions in this section are satisfied.

Transferring entity's assets include other assets

(2) The first condition is satisfied if, just before the

arrangement was

made, the transferring entity's assets included assets other than:

(a)

complying superannuation/FHSA life insurance policy; or

(b) units in a

pooled superannuation trust.

Note:

Other entities may also choose under this Subdivision to transfer

losses, for the same arrangement, if the transferring entity holds a

complying superannuation/FHSA life insurance policy or units in a

pooled superannuation trust.

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

22 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Original fund's members transfer to a continuing fund

(3) The second condition is satisfied if, under the

arrangement:

(a) the transferring entity ceases to have any members (within

the meaning of the Superannuation Industry (Supervision)

Act 1993) at a particular time (the completion time); and

(b) the individuals who cease to be members (within the meaning

of that Act) of the transferring entity become members

(within the meaning of that Act) of one or more

complying

superannuation funds (the continuing funds).

Continuing funds will usually not be able to be small funds

(4) The third condition is satisfied if either:

(a) none of the continuing funds was a

small superannuation

fund, and all existed, just before the

arrangement was made;

(b) the following subparagraphs apply:

(i) only one of the continuing funds either was a small

superannuation fund, or did not exist, just before the

arrangement was made;

(ii) under the arrangement, a

complying superannuation

fund or

complying approved deposit fund, other than

the original fund, ceases to have any members (within

the meaning of the Superannuation Industry

(Supervision) Act 1993);

(iii) under the arrangement, the individuals who cease to be

members (within the meaning of that Act) of that other

fund become members (within the meaning of that Act)

of the continuing fund;

(iv) either the other fund or the original fund was not a small

superannuation fund just before the arrangement was

made;

(v) the continuing fund is not a small superannuation fund

just after the earliest time when both the other fund and

the original fund cease to have any members (within the

meaning of that Act).

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 23

Ignore members who cannot transfer to a continuing fund

(5) For the purposes of subsections (3) and (4), ignore an individual

who remains a member of a

complying superannuation fund or

complying approved deposit fund because of circumstances

beyond the control of the trustee of that fund.

310-15 Original fund's assets include a complying

superannuation/FHSA life insurance policy

(1)

life insurance company (the transferring entity) can choose to

transfer losses if an

arrangement is made for which the conditions

in this section are satisfied.

Original fund holds a complying superannuation/FHSA life

insurance policy

(2) The first condition is satisfied if, just before the

arrangement was

made, a

complying superannuation/FHSA life insurance policy

issued by the transferring entity was held by:

(a)

complying superannuation fund (the original fund); or

(b)

complying approved deposit fund (the original fund).

Note:

Other entities may also choose under this Subdivision to transfer

losses, for the same arrangement, if the original fund holds other

assets.

Original fund's members transfer to a continuing fund

(3) The second condition is satisfied if, under the

arrangement:

(a) the original fund ceases to have any members (within the

meaning of the Superannuation Industry (Supervision) Act

1993) at a particular time (the completion time); and

(b) the individuals who cease to be members (within the meaning

of that Act) of the original fund become members (within the

meaning of that Act) of one or more

complying

superannuation funds (the continuing funds).

Continuing funds will usually not be able to be small funds

(4) The third condition is satisfied if either:

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

24 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(a) none of the continuing funds was a

small superannuation

fund, and all existed, just before the

arrangement was made;

(b) the following subparagraphs apply:

(i) only one of the continuing funds either was a small

superannuation fund, or did not exist, just before the

arrangement was made;

(ii) under the arrangement, a

complying superannuation

fund or

complying approved deposit fund, other than

the original fund, ceases to have any members (within

the meaning of the Superannuation Industry

(Supervision) Act 1993);

(iii) under the arrangement, the individuals who cease to be

members (within the meaning of that Act) of that other

fund become members (within the meaning of that Act)

of the continuing fund;

(iv) either the other fund or the original fund was not a small

superannuation fund just before the arrangement was

made;

(v) the continuing fund is not a small superannuation fund

just after the earliest time when both the other fund and

the original fund cease to have any members (within the

meaning of that Act).

Ignore members who cannot transfer to a continuing fund

(5) For the purposes of subsections (3) and (4), ignore an individual

who remains a member of a

complying superannuation fund or

complying approved deposit fund because of circumstances

beyond the control of the trustee of that fund.

310-20 Original fund's assets include units in a pooled

superannuation trust

(1) A trustee of a

pooled superannuation trust (the transferring entity)

can choose to transfer losses if an

arrangement is made for which

the conditions in this section are satisfied.

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 25

Units in the trust were held by the original fund

(2) The first condition is satisfied if, just before the

arrangement was

made, units in the transferring entity were held by:

(a)

complying superannuation fund (the original fund); or

(b)

complying approved deposit fund (the original fund).

Note:

Other entities may also choose under this Subdivision to transfer

losses, for the same arrangement, if the original fund holds other

assets.

Original fund's members transfer to a continuing fund

(3) The second condition is satisfied if, under the

arrangement:

(a) the original fund ceases to have any members (within the

meaning of the Superannuation Industry (Supervision) Act

1993) at a particular time (the completion time); and

(b) the individuals who cease to be members (within the meaning

of that Act) of the original fund become members (within the

meaning of that Act) of one or more

complying

superannuation funds (the continuing funds).

Continuing funds will usually not be able to be small funds

(4) The third condition is satisfied if either:

(a) none of the continuing funds was a

small superannuation

fund, and all existed, just before the

arrangement was made;

(b) the following subparagraphs apply:

(i) only one of the continuing funds either was a small

superannuation fund, or did not exist, just before the

arrangement was made;

(ii) under the arrangement, a

complying superannuation

fund or

complying approved deposit fund, other than

the original fund, ceases to have any members (within

the meaning of the Superannuation Industry

(Supervision) Act 1993);

(iii) under the arrangement, the individuals who cease to be

members (within the meaning of that Act) of that other

fund become members (within the meaning of that Act)

of the continuing fund;

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

26 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(iv) either the other fund or the original fund was not a small

superannuation fund just before the arrangement was

made;

(v) the continuing fund is not a small superannuation fund

just after the earliest time when both the other fund and

the original fund cease to have any members (within the

meaning of that Act).

Ignore members who cannot transfer to a continuing fund

(5) For the purposes of subsections (3) and (4), ignore an individual

who remains a member of a

complying superannuation fund or

complying approved deposit fund because of circumstances

beyond the control of the trustee of that fund.

Subdivision 310-C--Consequences of choosing to transfer

losses

Table of sections

310-25

Who losses can be transferred to

310-30

Losses that can be transferred

310-35

Effect of transferring a net capital loss

310-40

Effect of transferring a tax loss

310-25 Who losses can be transferred to

An entity choosing under Subdivision 310-B to transfer losses can

choose to transfer any or all of the transferring entity's losses set

out in section 310-30, in whole or in part, to one or more of the

following entities (a receiving entity):

(a) a continuing fund for the choice;

(b)

pooled superannuation trust in which units are held by a

continuing fund for the choice just after the completion time;

(c)

life insurance company with which a

complying

superannuation/FHSA life insurance policy is held by a

continuing fund for the choice just after the completion time.

310-30 Losses that can be transferred

(1) The transferring entity's losses that can be transferred are:

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 27

(a) any of its

net capital losses for income years earlier than the

income year for the transferring entity that includes the

completion time (the transfer year), to the extent that it was

not

utilised before the completion time (an earlier year net

capital loss); and

(b) any net capital loss it would have made for the transfer year

were the transfer year to have ended at the completion time (a

transfer year net capital loss); and

tax losses for income years earlier than the transfer

year, to the extent that it was not utilised before the

completion time (an earlier year tax loss); and

(d) any tax loss it would have incurred for the transfer year were

the transfer year to have ended at the completion time (a

transfer year tax loss);

worked out subject to the modifications set out in this section.

Note:

If the entity choosing to transfer losses also chooses an asset roll-over

under Subdivision 310-D for the same arrangement, none of the

transfer events for the roll-over will contribute towards a loss

transferred under this Subdivision (see subsections 310-55(1),

310-60(3), 310-65(1) and 310-70(1)).

(2) For a choice under section 310-15 (life insurance companies), work

out those losses by only considering the following to the extent that

they relate to assets reasonably attributable to a

complying

superannuation/FHSA life insurance policy issued by the

transferring entity and held by the original fund:

(a)

capital gains from

complying superannuation/FHSA assets;

(b)

capital losses from complying superannuation/FHSA assets;

complying superannuation/FHSA assets);

(d) deductions covered by subsection 320-137(4) (about

complying superannuation/FHSA assets).

(3) For a choice under section 310-20 (pooled superannuation trusts),

work out those losses by only considering

capital gains,

capital

losses, assessable income and deductions to the extent that they

relate to assets reasonably attributable to units in the transferring

entity held by the original fund.

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

28 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

310-35 Effect of transferring a net capital loss

(1) To the extent that an earlier year net capital loss is transferred to a

receiving entity:

(a) the transferring entity is taken not to have made the loss for

that earlier income year; and

(b) an amount equal to the transferred amount is taken to be:

(i) if the receiving entity is a

life insurance company--a

capital loss from

complying superannuation/FHSA

assets made by the receiving entity for that earlier year;

and

(ii) otherwise--a capital loss made by the receiving entity

for that earlier year.

(2) To the extent that a transfer year net capital loss is transferred to a

receiving entity:

(a) if the transferring entity is a

life insurance company--the

sum of the transferring entity's

capital losses from

complying superannuation/FHSA assets for the transfer year

is reduced by an amount equal to the transferred amount; and

(b) if the transferring entity is not a life insurance company--the

sum of the transferring entity's capital losses for the transfer

year is reduced by an amount equal to the transferred

amount; and

amount equal to the transferred amount is taken to be a

capital loss from complying superannuation/FHSA assets

made by the receiving entity for the transfer year; and

(d) if the receiving entity is not a life insurance company--an

amount equal to the transferred amount is taken to be a

capital loss made by the receiving entity for the transfer year.

310-40 Effect of transferring a tax loss

(1) To the extent that an earlier year tax loss is transferred to a

receiving entity:

(a) the transferring entity is taken not to have incurred the loss

for that earlier income year; and

(b) an amount equal to the transferred amount is taken to be:

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 29

(i) if the receiving entity is a

life insurance company--a

tax loss of the

complying superannuation/FHSA class

incurred by the receiving entity for that earlier year; and

(ii) otherwise--a tax loss incurred by the receiving entity

for that earlier year.

(2) To the extent that a transfer year tax loss is transferred to a

receiving entity:

(a) if the transferring entity is a

life insurance company--the

sum of the transferring entity's deductions covered by

subsection 320-137(4) (about complying

superannuation/FHSA assets) for the transfer year is reduced

by an amount equal to the transferred amount; and

(b) if the transferring entity is not a life insurance company--the

sum of the transferring entity's deductions for the transfer

year is reduced by an amount equal to the transferred

amount; and

amount equal to the transferred amount is taken to be a

tax

loss of the

complying superannuation/FHSA class incurred

by the receiving entity for the transfer year; and

(d) if the receiving entity is not a life insurance company--an

amount equal to the transferred amount is taken to be a tax

loss incurred by the receiving entity for the transfer year.

Subdivision 310-D--Choice for assets roll-over

Table of sections

310-45

Choosing the assets roll-over

310-50

Choosing the form of the assets roll-over

310-45 Choosing the assets roll-over

(1) An entity can choose a roll-over under this Subdivision if:

(a) the entity makes or could make a choice under

Subdivision 310-B (the losses choice) to transfer the losses of

an entity (the transferring entity); and

(b) the conditions in this section are satisfied for the

arrangement to which the losses choice relates.

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

30 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(2) The first condition is that, under the

arrangement, one or more

CGT events (the transfer events) happen in relation to the

following assets (the original assets) of the transferring entity with

the result that it ceases to own those assets:

(a) for a losses choice under section 310-10 (original funds)--all

of its

CGT assets;

(b) for a losses choice under section 310-15 (life insurance

companies)--all of its CGT assets reasonably attributable to

the

complying superannuation/FHSA life insurance policy

held by the original fund for the losses choice just before the

arrangement was made;

superannuation trusts)--all of its CGT assets reasonably

attributable to the units in that entity held by the original fund

for the losses choice just before the arrangement was made.

(3) The second condition is that the transfer events all happen in the

income year (the transfer year) for the transferring entity that

includes the completion time for the losses choice.

(4) The third condition is that, for each transfer event, an asset (the

received asset) becomes an asset of one of the following (the

receiving entity) as a result of the event:

(a) a continuing fund for the losses choice;

(b)

pooled superannuation trust in which units are held by a

continuing fund for the losses choice just after the completion

time;

(c)

life insurance company with which a

complying

superannuation/FHSA life insurance policy is held by a

continuing fund for the losses choice just after the completion

time.

(5) For the purposes of subsection (2), ignore any

CGT assets retained

by the transferring entity:

(a) to pay its existing or expected debts relating to the

arrangement; or

(b) to meet its liabilities relating to individuals who have

remained members (within the meaning of the

Superannuation Industry (Supervision) Act 1993) of the

original fund because of circumstances beyond the control of

the trustee of that fund.

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 31

310-50 Choosing the form of the assets roll-over

(1) For those of the original assets that are not

revenue assets, the

form of the roll-over is worked out as follows:

Method statement

Step 1. For the transfer events relating to those original assets:

(a)

add up any

capital losses of the transferring entity

for the events; and

(b)

subtract

any

capital gains of the transferring entity

for the events.

Step 2. If the result of step 1 is more than zero, the entity

choosing the roll-over can choose either section 310-55

(global asset approach) or 310-60 (individual asset

approach) to apply to those assets and the corresponding

received assets.

Step 3. Otherwise, section 310-60 (individual asset approach)

applies to those original assets and the corresponding

received assets.

(2) For those of the original assets that are

revenue assets, the form of

the roll-over is worked out as follows:

Method statement

Step 1. For the transfer events relating to those original assets:

(a)

add up any amounts the transferring entity would

be able to deduct as a result of the events; and

(b)

subtract any amounts that would be included in the

transferring entity's assessable income as a result

of the events.

Step 2. If the result of step 1 is more than zero, the entity

choosing the roll-over can choose either section 310-65

(global asset approach) or 310-70 (individual asset

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

32 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

approach) to apply to those assets and the corresponding

received assets.

Step 3. Otherwise, section 310-70 (individual asset approach)

applies to those original assets and the corresponding

received assets.

Subdivision 310-E--Consequences of choosing assets roll-over

Table of sections

310-55

CGT assets--if global asset approach chosen

310-60

CGT assets--individual asset approach

310-65

Revenue assets--if global asset approach chosen

310-70

Revenue assets--individual asset approach

310-75

Further consequences for roll-overs involving life insurance companies

310-55 CGT assets--if global asset approach chosen

Consequences for transferring entity

(1) For each of the original assets to which this section applies, the

transferring entity's

capital proceeds from the relevant transfer

event are taken to be an amount equal to:

(a) if, apart from this subsection, the event would result in a

capital gain--the asset's

cost base just before the event; or

(b) if, apart from this subsection, the event would result in a

capital loss--the asset's

reduced cost base just before the

event.

Note:

This section only applies if it is chosen to apply under subsection

310-50(1).

Consequences for receiving entity

(2) For each of the received assets to which this section applies, the

first element of the

cost base of the asset (in the hands of the

receiving entity) is taken to be an amount equal to the cost base of

the corresponding original asset just before the relevant transfer

event.

(3) For each of the received assets to which this section applies, the

first element of the

reduced cost base of the asset (in the hands of

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 33

the receiving entity) is taken to be an amount equal to the reduced

cost base of the corresponding original asset just before the

relevant transfer event.

310-60 CGT assets--individual asset approach

Consequences for transferring entity

(1) The transferring entity may disregard any

capital loss for a

transfer event relating to an original asset to which this section

applies.

Note:

This section does not apply if section 310-55 (global asset approach)

is chosen to apply under subsection 310-50(1).

(2) Subsections (3), (4) and (5) apply if under subsection (1) the

transferring entity disregards a

capital loss for a transfer event

relating to an original asset.

(3) The transferring entity's

capital proceeds from the transfer event

are taken to be an amount equal to the

reduced cost base of the

original asset just before the event.

Consequences for receiving entity

(4) The first element of the

cost base of the corresponding received

asset (in the hands of the receiving entity) is taken to be an amount

equal to the cost base of the original asset just before the event.

(5) The first element of the

reduced cost base of the corresponding

received asset (in the hands of the receiving entity) is taken to be

an amount equal to the reduced cost base of the original asset just

before the event.

310-65 Revenue assets--if global asset approach chosen

Consequences for transferring entity

(1) For each of the original assets to which this section applies, the

transferring entity's gross proceeds for the relevant transfer event

are taken to be the amount (the deemed proceeds) the transferring

entity would need to have received in order to have a nil profit and

nil loss for the event.

Schedule 2 Loss relief for merging superannuation funds

Part 1 Main amendment

34 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Note:

This section only applies if it is chosen to apply under subsection

310-50(2).

Consequences for receiving entity

(2) For each of the received assets to which this section applies, the

receiving entity is taken, for the purposes of this Act, to have paid

an amount for that asset at the time of the transfer event that is

equal to the deemed proceeds for the corresponding original asset.

310-70 Revenue assets--individual asset approach

Consequences for transferring entity

(1) If the transferring entity incurs a

tax loss for a transfer event

relating to an original asset to which this section applies, the entity

choosing the roll-over can choose for the transferring entity's gross

proceeds for the event to be taken to be the amount (the deemed

proceeds) the transferring entity would need to have received in

order to have a nil profit and nil loss for the event.

Note:

This section does not apply if section 310-65 (global asset approach)

is chosen to apply under subsection 310-50(2).

Consequences for receiving entity

(2) If a choice is made under subsection (1), the receiving entity is

taken to have paid an amount for the corresponding received asset

at the time of the transfer event that is equal to the deemed

proceeds for the event.

310-75 Further consequences for roll-overs involving life insurance

companies

(1) Section 320-200 (about consequences of transferring assets to or

from a complying superannuation/FHSA asset pool) does not apply

for a transfer event for the roll-over if either the transferring entity

or the receiving entity is a

life insurance company.

(2) If the receiving entity for the roll-over is a

life insurance

company, each received asset of that entity is taken:

(a) to be a

complying superannuation/FHSA asset of that entity;

and

(b) not to be, in whole or in part, a

life insurance premium.

Loss relief for merging superannuation funds Schedule 2

Main amendment Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 35

Subdivision 310-F--Choices

Table of sections

310-85 Choices

310-85 Choices

(1) A choice under this Division must be made:

(a) by the day the transferring entity's

income tax return is

lodged for the transfer year for the entity; or

(b) within a further time allowed by the Commissioner.

(2) The way the transferring entity's

income tax return is prepared is

sufficient evidence of the making of the choice.

Schedule 2 Loss relief for merging superannuation funds

Part 2 Other amendments

36 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Part 2--Other amendments

Income Tax Assessment Act 1997

2 Subsection 40-340(1) (at the end of the table)

Add:

Disposal of asset as part of

merger of superannuation

funds

The transferor chooses a roll-over under

Subdivision 310-D in relation to the disposal.

3 Section 112-97 (at the end of the table)

Add:

An entity chooses a roll-over

under Subdivision 310-D and

the entity chooses

section 310-55 to apply to

assets

First element of cost base

and reduced cost base

section 310-55

An entity chooses a roll-over

under Subdivision 310-D, but

the entity does not choose

section 310-55 to apply to

assets

First element of cost base

and reduced cost base

section 310-60

4 Subsection 115-30(1) (at the end of the table)

Add:

CGT asset that the acquirer

acquired

as a received asset for a roll-over under

Subdivision 310-D

(a) when the transferring entity

for the roll-over acquired the

corresponding original asset

for the roll-over; or

(b) if that original asset (or any

asset corresponding to it) has

been involved in an

unbroken series of

roll-overs--when the entity

that owned the applicable

asset before the first

roll-over in the series

acquired it

5 Section 116-25 (table item dealing with CGT event A1)

Repeal the item, substitute:

Loss relief for merging superannuation funds Schedule 2

Other amendments Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 37

Disposal of a CGT

asset

1, 2, 3, 4, 5, 6

If the

disposal is because

another entity exercises an

option: see section 116-65

If the disposal is of

or an interest in a trust: see

section 116-80

If the disposal is a gift for

which a section 30-212

valuation is obtained: see

section 116-100

If a roll-over under

Subdivision 310-D applies:

see section 116-110

6 Section 116-25 (table item dealing with CGT event C2)

Omit "and 116-80", substitute ", 116-80 and 116-110".

7 Section 116-25 (table item dealing with CGT event E2)

Repeal the item, substitute:

Transferring a CGT

asset to a trust

1, 2, 3, 4, 5, 6

If a roll-over under

Subdivision 310-D applies:

see section 116-110

8 At the end of Division 116

Add:

116-110 Roll-overs for merging superannuation funds

If a roll-over is chosen under Subdivision 310-D in relation to

CGT event A1, C2 or E2, the

capital proceeds of the transferring

entity (within the meaning of that Division) from the event are the

amount worked out under subsection 310-55(1) or 310-60(3).

9 At the end of section 290-170

Add:

Application to merging superannuation funds

(5)

If:

(a) after making your contribution, a choice is made under

Subdivision 310-B in relation to the

superannuation fund

Schedule 2 Loss relief for merging superannuation funds

Part 2 Other amendments

38 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

(the original fund), another superannuation fund (the

continuing fund) and an

arrangement; and

(b) under the arrangement, you became a member (within the

meaning of the Superannuation Industry (Supervision) Act

1993) of the continuing fund; and

the contribution while you were a member (within the

meaning of the Superannuation Industry (Supervision) Act

1993) of the original fund;

then subsections (1) to (4), and section 290-180, apply as if:

(d) references in those provisions to the fund were references to

the continuing fund; and

(e) references in those provisions to the trustee were references

to the trustee of the continuing fund.

10 At the end of section 290-180

Add:

Application to merging superannuation funds

(5)

If:

(a) after a valid notice is given, a choice is made under

Subdivision 310-B in relation to the

superannuation fund

(the original fund), another superannuation fund (the

continuing fund) and an

arrangement; and

(b) under the arrangement, you became a member (within the

meaning of the Superannuation Industry (Supervision) Act

1993) of the continuing fund; and

member (within the meaning of the Superannuation Industry

(Supervision) Act 1993) of the original fund;

then subsections (2) and (3A) apply as if:

(d) the reference in subsection (3A) to the fund were a reference

to the continuing fund; and

(e) references in those subsections to the trustee were references

to the trustee of the continuing fund.

Loss relief for merging superannuation funds Schedule 2

Application provision Part 3

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 39

Part 3--Application provision

11 Application provision

The amendments made by Parts 1 and 2 of this Schedule apply in

relation to a transferring entity and a receiving entity if:

(a) the condition in subsection 310-10(3), 310-15(3) or

310-20(3) of the Income Tax Assessment Act 1997 (as

amended by this Schedule) for those entities is satisfied; and

(b) all the transfer events (if any) referred to in subsection

310-45(2) of that Act for those entities happen;

during the period starting on 24 December 2008 and ending at the end

of 30 June 2011.

Note 1: The effect of paragraph (a) is that all of the members of the original fund will need to

become members of a continuing fund during this period.

Note 2: The effect of paragraph (b) is that the transferring fund needs to cease to hold all

relevant assets during this period.

Schedule 2 Loss relief for merging superannuation funds

Part 4 Repeals

40 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Part 4--Repeals

Income Tax Assessment Act 1997

12 Subsection 40-340(1) (table item 6)

Repeal the item.

13 Section 112-97 (table items 33 and 34)

Repeal the items.

14 Subsection 115-30(1) (table item 10)

Repeal the item.

15 Section 116-25 (table item dealing with CGT event A1)

Omit "If a roll-over under Subdivision 310-D applies: see

section 116-110".

16 Section 116-25 (table item dealing with CGT event C2)

Omit ", 116-80 and 116-110", substitute "and 116-80".

17 Section 116-25 (table item dealing with CGT event E2)

Omit "If a roll-over under Subdivision 310-D applies: see

section 116-110", substitute "None".

18 Section 116-110

Repeal the section.

19 Subsection 290-170(5)

Repeal the subsection.

20 Subsection 290-180(5)

Repeal the subsection.

21 Division 310

Repeal the Division.

Loss relief for merging superannuation funds Schedule 2

Savings Part 5

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 41

Part 5--Savings

22 Object

The object of this Part is to ensure that, despite the repeals made by

Part 4, the full legal and administrative consequences of:

(a) any act done or omitted to be done; or

(b) any state of affairs existing; or

before such a repeal, can continue to arise and flow, directly or

indirectly, through an indefinite number of steps, even if some or all of

those steps are taken after the repeal.

23 Making and amending assessments, and doing other

things, in relation to past matters

Even though a provision is repealed by Part 4, the repeal is disregarded

for the purpose of doing any of the following under any Act or

legislative instrument (within the meaning of the Legislative

Instruments Act 2003):

(a) making or amending an assessment;

(b) exercising any right or power, performing any obligation or

duty or doing any other thing (including under a provision

that is itself repealed);

in relation to any act done or omitted to be done, any state of affairs

existing, or any period ending, before the repeal.

24 Saving of provisions about effect of assessments

If a provision or part of a provision that is repealed by Part 4 affects an

assessment, the repeal is disregarded in relation to assessments made,

before or after the repeal, in relation to any act done or omitted to be

done, any state of affairs existing, or any period ending, before the

repeal.

25 Repeals disregarded for the purposes of dependent

provisions

If the operation of a provision (the subject provision) of any Act or

legislative instrument (within the meaning of the Legislative

Instruments Act 2003) made under any Act depends to any extent on a

provision that is repealed by Part 4 of this Schedule, the repeal is

disregarded so far as it affects the operation of the subject provision.

Exempt annuity business of life insurance companies Schedule 3

Amendments applying from 30 June 2000 Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 43

Schedule 3--Exempt annuity business of life

insurance companies

Part 1--Amendments applying from 30 June 2000

Division 1--Amendment of the Income Tax Assessment

Act 1997

1 Subparagraphs 320-246(1)(e)(ii) and (iii)

Omit "the conditions in subsections (3), (4) and (5)", substitute

"whichever of the conditions in subsection (3) are applicable".

2 Subsections 320-246(3) to (5)

Repeal the subsections, substitute:

(3) The following table sets out the conditions mentioned in

subparagraphs (1)(e)(ii) and (iii):

Annuity conditions

Item Column

The condition in column 2 applies

in the following circumstances ...

Column 2

The condition is that ...

there is a residual capital value

(within the meaning of section 27A

of the Income Tax Assessment Act

1936) in relation to the

immediate

annuity.

the contract under which the annuity

is payable does not permit the

residual capital value to exceed the

annuity's purchase price (within the

meaning of that section).

the contract under which the

immediate annuity is payable

provides that the annuity is payable

until the end of a term of years

certain.

the contract does not permit the total

of the amounts paid for the annuity's

commutation (whether in whole or

in part) to exceed the annuity's

reduced purchase price (within the

meaning of that section).

the contract under which the

immediate annuity is payable:

(a) provides that the annuity is

payable until the later of:

(i) the death of a person (or

the death of the last of 2

the contract does not permit the total

of the commutation payments that

may become payable before the end

of the term of years certain to

exceed the annuity's reduced

purchase price (within the meaning

Schedule 3 Exempt annuity business of life insurance companies

Part 1 Amendments applying from 30 June 2000

44 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Annuity conditions

Item Column

The condition in column 2 applies

in the following circumstances ...

Column 2

The condition is that ...

or more persons to die); or

(ii) the end of a term of years

certain; and

(b) permits one or more amounts

(commutation payments) to

become payable before the end

of the term of years certain for

the annuity's commutation

(whether in whole or in part).

of that section).

all circumstances.

there is no unreasonable deferral of

the payments of the

immediate

annuity, having regard to:

(a) to the extent to which the

payments depend on the returns

of the investment of the assets of

the

life insurance company

paying the annuity--when the

payments are made and when

those returns are

derived; and

(b) to the extent to which the

payments do not depend on those

returns--the relative sizes of the

annual totals of the payments

from year to year; and

Division 2--Consequential amendment

Tax Laws Amendment (2006 Measures No. 2) Act 2006

3 Item 214 of Schedule 7 (table item 30)

Repeal the item.

Exempt annuity business of life insurance companies Schedule 3

Amendments applying from the 2007-08 income year Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 45

Part 2--Amendments applying from the 2007-08

income year

Division 1--Amendment of the Income Tax Assessment

Act 1997

4 Subparagraphs 320-246(1)(e)(i) to (iii)

Repeal the subparagraphs, substitute:

(i) was purchased on or before 9 December 1987; or

(ii)

superannuation income stream; or

(iii) satisfies whichever of the conditions in subsection (3)

are applicable; or

5 Subsection 320-246(3)

Omit "subparagraphs (1)(e)(ii) and (iii)", substitute

"subparagraph (1)(e)(iii)".

6 Subsection 320-246(3) (cell at table item 1, column 1)

Omit "section 27A", substitute "section 27H".

7 Subsection 320-246(3) (cell at table item 2, column 2)

Omit "reduced purchase price (within the meaning of that section)",

substitute "purchase price (within the meaning of that section), reduced

by the sum of the deductible amounts excluded from assessable income

under that section".

8 Subsection 320-246(3) (cell at table item 3, column 2)

Omit "reduced purchase price (within the meaning of that section)",

substitute "purchase price (within the meaning of that section), reduced

by the sum of the deductible amounts excluded from assessable income

under that section".

Division 2--Consequential amendments

Superannuation Legislation Amendment (Simplification) Act

2007

9 Items 237, 238, 239 and 241 of Schedule 1

Exempt annuity business of life insurance companies Schedule 3

Application provision Part 3

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 47

Part 3--Application provision

11 Application of Part 2 amendments

The amendments made by Division 1 of Part 2 of this Schedule apply

to:

(a) the 2007-08 income year; and

(b) later income years.

12 Effect of repeal

To avoid doubt, the following provisions are taken never to have had

effect:

(a) item 30 of the table in item 214 of Schedule 7 to the Tax

Laws Amendment (2006 Measures No. 2) Act 2006;

(b) items 237, 238, 239 and 241 of Schedule 1, and item 51 of

Schedule 3, to the Superannuation Legislation Amendment

(Simplification) Act 2007.

Note 1: The provision mentioned in paragraph (a) is repealed by Division 2 of Part 1 of this

Schedule.

Note 2: The provisions mentioned in paragraph (b) are repealed by Division 2 of Part 2 of this

Schedule.

Schedule 4 Deductible gift recipients

Part 1 Amendments commencing on 4 June 2009

48 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Schedule 4--Deductible gift recipients

Part 1--Amendments commencing on 4 June 2009

Income Tax Assessment Act 1997

1 Subsection 30-25(2) (table item 2.2.21)

Omit "Dymocks Literacy Foundation Limited", substitute "Dymocks

Children's Charities Limited".

2 Section 30-315 (table item 45A)

Omit "Dymocks Literacy Foundation Limited", substitute "Dymocks

Children's Charities Limited".

Deductible gift recipients Schedule 4

Amendments commencing on Royal Assent Part 2

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 49

Part 2--Amendments commencing on Royal Assent

Income Tax Assessment Act 1997

3 Subsection 30-40(2) (at the end of the table)

Add:

3.2.12

The Green Institute Limited

the gift must be made

after 23 June 2009

3.2.13

United States Studies Centre

the gift must be made

after 26 July 2009

4 Section 30-315 (after table item 53)

Insert:

53AA

Green Institute Limited

item 3.2.12

5 Section 30-315 (after table item 118A)

Insert:

118B

United States Studies Centre

item 3.2.13

North Western Queensland floods Schedule 5

Main amendments Part 1

Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009 51

Schedule 5--North Western Queensland

floods

Part 1--Main amendments

Income Tax Assessment Act 1936

1 Subsection 159J(6) (after paragraph (bb) of the definition of

separate net income)

Insert:

(bc) does not include an ex-gratia payment from the

Commonwealth known as Income Recovery Subsidy for the

North Western Queensland floods of January and February

2009; and

Income Tax Assessment Act 1997

2 Section 11-15 (table item headed "welfare")

After:

Income Recovery Subsidy for the North Queensland

floods of January and February 2009 ............................

51-30

Insert:

Income Recovery Subsidy for the North Western

Queensland floods of January and February 2009 .........

51-30

3 Section 51-30 (at the end of the table)

Add:

5.4 an

individual

receipt of an ex-gratia

payment from the

Commonwealth

known as Income

Recovery Subsidy for

the North Western

Queensland floods of

January and February

2009

the payment

the payment must

be claimed:

(a) after

24 February

2009; and

(b) before

13 April 2009

Schedule 6 Spirit blending

54 Tax Laws Amendment (2009 Measures No. 6) Bill 2009 No. , 2009

Schedule 6--Spirit blending

Excise Act 1901

1 At the end of Part VIIAA

Add:

77FM Spirit blending is to be treated as manufacture

(1) Subject to subsection (2), for greater certainty so far as concerns

the application of the provisions of this Act, spirit blending to

produce spirit is taken to constitute the manufacture of that spirit.

(2) For the purposes of this Act, spirit blending to produce spirit is

taken not to constitute the manufacture of that spirit if the spirit

blending occurred in circumstances specified in an instrument

under subsection (3).

(3) The CEO may, by legislative instrument, specify circumstances for

the purposes of subsection (2).

(4) Subsection (1) does not imply that, in the absence of such a

provision, the blending of substances (whether spirit or not) would

not constitute the manufacture of the substance produced by the

blending.

Commonwealth of Australia Bills

TAX LAWS AMENDMENT (2009 MEASURES NO. 6) BILL 2009