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This is a Bill, not an Act. For current law, see the Acts databases.
2002
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Taxation
Laws Amendment Bill (No. 6) 2002
No.
, 2002
(Treasury)
A
Bill for an Act to amend the law relating to taxation, and for related
purposes
Contents
Income Tax Assessment Act
1936 3
Income Tax Assessment Act
1997 7
Part 1—Exempt income of friendly
societies 8
Income Tax Assessment Act
1997 8
Part 2—Deductions for friendly
societies 9
Income Tax Assessment Act
1997 9
Part 3—Assessment of income from certain
policies 11
Income Tax Assessment Act
1936 11
Income Tax Assessment Act
1997 11
Part 4—Definition 13
Income Tax Assessment Act
1997 13
A Bill for an Act to amend the law relating to taxation,
and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Taxation Laws Amendment Act (No. 6)
2002.
(1) Each provision of this Act specified in column 1 of the table
commences, or is taken to have commenced, on the day or at the time specified in
column 2 of the table.
|
Commencement information |
||
|---|---|---|
|
Column 1 |
Column 2 |
Column 3 |
|
Provision(s) |
Commencement |
Date/Details |
|
1. Sections 1 to 3 and anything in this Act not elsewhere covered by
this table |
The day on which this Act receives the Royal Assent |
|
|
2. Schedule 1 |
29 August 2001 |
|
|
3. Schedule 2 |
The day on which this Act receives the Royal Assent |
|
|
4. Schedule 3 |
The day on which this Act receives the Royal Assent |
|
Note: This table relates only to the provisions of this Act
as originally passed by 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 is for additional information that is not part
of this Act. This information may be included in any published version of this
Act.
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repealed as set out in the applicable items in the Schedule concerned, and any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.
Income Tax Assessment Act
1936
1 Subsection 128A(1)
Insert:
ADI means a body corporate that is an ADI (authorised
deposit-taking institution) for the purposes of the Banking Act
1959.
2 Subsection 128A(1)
Insert:
foreign bank means a non-resident company that carries on a
banking business.
3 Subsection 128A(1)
Insert:
nostro account means an account that:
(a) an ADI holds with a foreign bank and maintains for the sole purpose of
settling international transactions; and
(b) operates on the basis that:
(i) amounts deposited in the account are held in the account for no more
than 10 days; and
(ii) amounts advanced by way of an overdraft on the account are repaid
within 10 days.
4 After paragraph
128B(3)(gb)
Insert:
(gc) income that consists of interest derived on a nostro account by a
non-resident that is a foreign bank; or
5 After subsection 128F(1A)
Insert:
(1B) If:
(a) some or all of the transfer price (within the meaning of
section 128AA) of a debenture is taken under that section to be income that
consists of interest; and
(b) the issue of the debenture satisfies the public offer test set out in
subsection (3) or (4);
this section applies to the interest.
Note: Subsection (6) does not apply to the interest
because that subsection deals only with interest paid on a debenture by the
issuing company.
6 Subsection 128F(5)
Repeal the subsection, substitute:
Issues that always fail the public offer test
(5) The issue of a debenture by a company does not satisfy the
public offer test if, at the time of the issue, the company knew, or had
reasonable grounds to suspect, that:
(a) the debenture, or an interest in the debenture, was being, or would
be, acquired either directly or indirectly by an associate of the company;
and
(b) either:
(i) the associate is a non-resident and the debenture or interest was not
being, or would not be, acquired by the associate in carrying on a business in
Australia at or through a permanent establishment of the associate in Australia;
or
(ii) the associate is a resident of Australia and the debenture or
interest was being, or would be, acquired by the associate in carrying on a
business in a country outside Australia at or through a permanent establishment
of the associate in that country; and
(c) the debenture or interest was not being, or would not be, acquired by
the associate in the capacity of:
(i) a dealer, manager or underwriter in relation to the placement of the
debenture; or
(ii) a clearing house, custodian, funds manager or responsible entity of a
registered scheme.
7 Subsection 128F(6)
Repeal the subsection, substitute:
No exemption for interest paid to certain associates of the issuing
company
(6) This section does not apply to interest paid by the company to a
person in respect of the debenture if, at the time of the payment, the company
knows, or has reasonable grounds to suspect, that:
(a) the person is an associate of the company; and
(b) either:
(i) the associate is a non-resident and the payment is not received by the
associate in respect of a debenture that the associate acquired in carrying on a
business in Australia at or through a permanent establishment of the associate
in Australia; or
(ii) the associate is a resident of Australia and the payment is received
by the associate in respect of a debenture that the associate acquired in
carrying on a business in a country outside Australia at or through a permanent
establishment of the associate in that country; and
(c) the associate does not receive the payment in the capacity of a
clearing house, paying agent, custodian, funds manager or responsible entity of
a registered scheme.
8 Subsection 128F(9)
Insert:
registered scheme has the same meaning as in the
Corporations Act 2001.
9 Subsection 128F(9)
Insert:
responsible entity, of a registered scheme, has the same
meaning as in the Corporations Act 2001.
10 Application
(1) The amendment made by item 4 applies to income that consists of
interest derived on or after 29 August 2001.
(2) The amendment made by item 5 applies to an amount of the transfer
price of a debenture that is, on or after 29 August 2001, deemed by
section 128AA to be income that consists of interest.
(3) The amendment made by item 6 applies to the issue of a debenture
by a company on or after 29 August 2001.
(4) The amendment made by item 7 applies to interest paid on or after
29 August 2001 by a company in respect of a debenture.
Income Tax Assessment Act
1997
1 At the end of
section 118-37
Add:
(4) A *capital gain or
*capital loss you make from a payment you
receive is disregarded if:
(a) you are an *Australian resident;
and
(b) you receive the payment:
(i) under the program known as the “German Forced Labour
Compensation Programme”; and
(ii) from the Foundation known as “Remembrance, Responsibility and
Future” or any of the Foundation’s partner organisations;
and
(c) the payment is in the nature of compensation for:
(i) any wrong or injury; or
(ii) any loss of, or damage to, property;
that you, or another person, suffered as a result of injustices committed
during the National Socialist period.
2 Application of amendment
The amendment of the Income Tax Assessment Act 1997 made by this
Schedule applies to assessments for the 2001-2002 income year and later income
years.
Part 1—Exempt
income of friendly societies
Income Tax Assessment Act
1997
1 Subparagraph
320-35(1)(f)(ii)
Repeal the subparagraph, substitute:
(ii) amounts received on or after 1 January 2003 that are
attributable to income bonds or funeral policies issued before 1 January
2003; and
(iii) amounts received on or after 1 January 2003 that are
attributable to scholarship plans issued before 1 January 2003 and that
would have been exempt from income tax if they had been received before
1 July 2001.
2 Application
The amendment made by this Part applies to an assessment for the income
year including 1 January 2003 or a later income year.
Part 2—Deductions
for friendly societies
Income Tax Assessment Act
1997
3 Section 320-110
Omit “30 November 1999”, substitute
“31 December 2002”.
4 At the end of
section 320-110
Add:
(2) This section has effect despite subsection 320-80(3).
5 After
section 320-110
Insert:
(1) A *life insurance company that is a
*friendly society can deduct the amount of a
benefit provided in the income year by the company under a
*funeral policy issued after 31 December
2002, reduced by so much of the sum of the amounts deducted or deductible by the
company under section 320-75 for any income year as is reasonably related
to the benefit.
(2) This section has effect despite subsection 320-80(3).
(1) A *life insurance company that is a
*friendly society can deduct the amount of a
benefit it provides in the income year and on or after 1 January
2003:
(a) under a *scholarship plan covered by
subsection (2) or (3); and
(b) to, or on behalf of, a person nominated in the plan as a beneficiary
whose education is to be helped by the benefit;
reduced by so much of the sum of the amounts deducted or deductible by the
company under section 320-75 for any income year as is reasonably related
to the benefit.
(2) This subsection covers a *scholarship
plan issued by the *life insurance company
after 31 December 2002.
(3) This subsection covers a *scholarship
plan if:
(a) the plan was issued by the *life
insurance company before 1 January 2003; and
(b) no amount received by the company on or after 1 January 2003 and
attributable to the plan is *exempt income of
the company under paragraph 320-35(1)(f).
(4) This section has effect despite subsection 320-80(3).
6 Application
The amendments made by this Part apply to an assessment for the income year
including 1 January 2003 or a later income year.
Part 3—Assessment
of income from certain policies
Income Tax Assessment Act
1936
7 Subsection 26AH(1) (at the end of the
definition of eligible policy)
Add “, other than a funeral policy (as defined in the Income Tax
Assessment Act 1997) issued on or after 1 January
2003”.
Income Tax Assessment Act
1997
8 Section 10-5 (after table item headed
“franked dividends”)
Insert:
|
funeral policy |
|
|
|
benefit under |
15-55 |
|
9 Section 10-5 (after table item headed
“schemes”)
Insert:
|
scholarship plan |
|
|
|
benefit under |
15-60 |
|
10 At the end of
Division 15
Add:
(1) Your assessable income includes the amount of a benefit provided to
you by a *life insurance company under a
*funeral policy issued after 31 December
2002 to pay for the funeral of the insured person, reduced by:
(a) the amount of the premium or premiums of the policy that is reasonably
related to the benefit; and
(b) the amount of the fees and charges included in the company’s
assessable income for any income year under paragraph 320-15(k) that is
reasonably related to the benefit.
(2) This section does not apply if the benefit is included in your
assessable income as:
(a) *ordinary income under
section 6-5; or
(b) *statutory income under a section of
this Act other than this section.
(1) Your assessable income includes the amount of a benefit provided to
you, or on your behalf, by a *life insurance
company under a *scholarship plan covered by
subsection (2) or (3), reduced by the amount worked out under
subsection (4), if:
(a) the benefit is provided on or after 1 January 2003; and
(b) you are nominated in the plan as a beneficiary whose education is to
be helped by the benefit.
(2) This subsection covers a *scholarship
plan issued by the *life insurance company
after 31 December 2002.
(3) This subsection covers a *scholarship
plan if:
(a) the plan was issued by the *life
insurance company before 1 January 2003; and
(b) no amount received by the company on or after 1 January 2003 and
attributable to the plan is *exempt income of
the company under paragraph 320-35(1)(f).
(4) The amount of the reduction is the sum of:
(a) the amount of the premium or premiums of the plan that is reasonably
related to the benefit; and
(b) the amount of the fees and charges included in the company’s
assessable income for any income year under paragraph 320-15(k) that is
reasonably related to the benefit.
11 Application
The amendments made by this Part apply to an assessment for the income year
including 1 January 2003 or a later income year.
Income Tax Assessment Act
1997
12 Subsection 995-1(1) (definition of
scholarship plan)
Repeal the definition, substitute:
scholarship plan means a
*life insurance policy that:
(a) is issued by a *friendly society for
the sole purpose of providing benefits to help in the education of nominated
beneficiaries; and
(b) is not being used, and has never been used, as security for borrowing
or raising money; and
(c) if it is issued on or after 1 January 2003—contains a
provision prohibiting use of the policy as security for borrowing or raising
money.
13 Application
The definition of scholarship plan in subsection 995-1(1) of
the Income Tax Assessment Act 1997 as amended by this Part applies on and
after 1 January 2003.