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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TAX LAWS AMENDMENT (2011 MEASURES No. 2) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Chapter 1 Deductible gift recipients ................................................ 7
Chapter 2 Self managed superannuation fund investment
in collectables and personal use assets ..................... 11
Chapter 3 Superannuation -- tax file number amendments......... 17
Chapter 4 Exempting Australian taxes, fees and charges
from the goods and services tax ................................. 25
Chapter 5 Miscellaneous amendments ........................................ 37
Index ..................................................................................................... 77
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
APRA Australian Prudential Regulation Authority
AEI Australian Educational International
ATO Australian Taxation Office
CGT capital gains tax
Commissioner Commissioner of Taxation
DGR deductible gift recipient
GST goods and services tax
GST Act A New Tax System (Goods and Services
Tax) Act 1999
ITAA 1997 Income Tax Assessment Act 1997
RSA retirement savings account
RSA Act Retirement Savings Accounts Act 1997
SIS Act Superannuation Industry (Supervision)
Act 1993
SMSF self managed superannuation fund
TAA 1953 Taxation Administration Act 1953
TFNs tax file numbers
TIES Tax Issues Entry System
1
General outline and financial impact
Deductible gift recipients
Schedule 1 to this Bill amends the Income Tax Assessment Act 1997 to
update the list of deductible gift recipients (DGRs) to make two entities
DGRs, and change the name of another entity.
Date of effect: For the Charlie Perkins Trust for Children & Students, and
the Roberta Sykes Indigenous Education Foundation the amendments
apply to gifts made after 2 August 2010. The name change to Girl Guides
Australia applies from 1 January 2011.
Proposal announced: The listing of Charlie Perkins Trust for Children &
Students, and the Roberta Sykes Indigenous Education Foundation as
DGRs was announced in the 2010-11 Mid-Year Economic and Fiscal
Outlook.
Financial impact: This measure will have the following revenue
implications:
Organisation 2010-11 2011-12 2012-13 2013-14
Charlie Perkins
Trust for Children -$0.005m -$0.03m -$0.03m -$0.03m
& Students
Roberta Sykes
Indigenous
-$0.004m -$0.02m -$0.02m -$0.02m
Education
Foundation
Total -$0.01m -$0.05m -$0.05m -$0.05m
Compliance cost impact: Nil.
3
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Self managed superannuation fund investment in collectables
and personal use assets
Schedule 2 to this Bill amends the Superannuation Industry (Supervision)
Act 1993 (SIS Act) to permit the regulations to impose rules on self
managed superannuation fund (SMSF) trustees that make, hold or realise
investments involving collectables or personal use assets. These
amendments apply in relation to investments made by an SMSF before, on
or after 1 July 2011. The regulations may specify that the amendments
apply to only some of these investments. The regulations may prescribe
penalties for non-compliance with the rules set out in the regulations, not
exceeding 10 penalty units.
This Schedule also amends the SIS Act to remove a reference to a
provision that was repealed on 24 September 2007.
Date of effect: 1 July 2011.
Proposal announced: This proposal was announced as a Government
election commitment and titled `New Standards for Storing Collectables
and Personal Use Assets Held by Self Managed Superannuation Funds'
on 30 July 2010.
Financial impact: Nil.
Compliance cost impact: Nil.
Superannuation -- tax file number amendments
Schedule 3 to this Bill amends the Superannuation Industry (Supervision)
Act 1993 and the Retirement Savings Accounts Act 1997 to allow
superannuation fund trustees and retirement savings account providers to
use tax file numbers (TFNs):
· as a method of locating member accounts; and
· to facilitate the consolidation of multiple member accounts.
Date of effect: 1 July 2011 for the amendments to use TFNs to locate
accounts, and 1 January 2012 or a date to be proclaimed for the
consolidation amendments.
Proposal announced: This measure was announced in the Assistant
Treasurer and Minister for Financial Services and Superannuation's
Media Release No. 024 of 16 December 2010.
4
General outline and financial impact
Financial impact: Nil.
Compliance cost impact: Low.
Exempting Australian taxes, fees and charges from the goods
and services tax
Schedule 4 to this Bill amends:
· the A New Tax System (Goods and Services Tax) Act 1999
(GST Act) to replace the current mechanism for ensuring
Australian taxes, and certain Australian fees and charges are
not subject to the goods and services tax with specific
legislative exemptions;
· the GST Act to allow for the making of regulations to treat an
Australian tax, or an Australian fee or charge in a particular
way; and
· the A New Tax System (Luxury Car Tax) Act 1999 to account
for changes being made to the GST Act.
Date of effect: These amendments apply from 1 July 2011.
Proposal announced: This measure was announced in the 2010-11
Budget.
Financial impact: Nil.
Compliance cost impact: These amendments are expected to result in a
low overall compliance cost impact, comprised of a low implementation
impact and a low decrease in ongoing compliance.
Miscellaneous amendments
Schedule 5 to this Bill makes technical corrections and other minor and
miscellaneous amendments to the taxation laws. These amendments are
part of the Government's commitment to the care and maintenance of the
tax system.
Date of effect: These amendments commence from Royal Assent unless
otherwise stated in this explanatory memorandum.
5
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Proposal announced: These amendments were all foreshadowed by their
release in draft form on the Treasury website on 28 January 2011.
Financial impact: The amendment to allow the nomination of controllers
of discretionary trusts for the purposes of capital gains tax small business
concessions (Part 19, comprising items 91 to 105) is expected to result in
a small cost to revenue (with an upper bound of $10 million per annum).
The other amendments are expected to have nil to minimal revenue
impacts.
Compliance cost impact: Nil to low.
6
Chapter 1
Deductible gift recipients
Outline of chapter
1.1 Schedule 1 to this Bill amends the Income Tax Assessment
Act 1997 (ITAA 1997) to update the list of deductible gift recipients
(DGRs) by changing the name of one entity and making two entities
deductible gift recipients.
Context of amendments
1.2 The income tax law allows taxpayers who make gifts of $2 or
more to DGRs to claim income tax deductions. To be a DGR, an
organisation must fall within one of the general categories set out in
Division 30 of the ITAA 1997, or be listed by name in that Division.
1.3 DGR status assists eligible funds and organisations to attract
public support for their activities.
Summary of new law
1.4 These amendments add the Charlie Perkins Trust for Children &
Students, and the Roberta Sykes Indigenous Education Foundation to the
list of specifically listed DGRs, and change the name of a currently listed
DGR from `Guides Australia Incorporated' to `Girl Guides Australia'.
Detailed explanation of new law
Charlie Perkins Trust for Children & Students (ABN 24 869 741 764)
1.5 Schedule 1 allows taxpayers to claim a deduction for gifts made
to the Charlie Perkins Trust for Children & Students after 2 August 2010
and before 2 August 2013. [Schedule 1, item 4, item 2.2.39 in the table in
subsection 30-25(2)]
1.6 The purpose of the Charlie Perkins Trust for Children &
Students is to advance the education of Aboriginal and Torres Strait
7
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Islander people through the provision of scholarships to Indigenous
Australians for study at overseas institutions, such as Oxford and
Cambridge University.
1.7 It is a condition of the listing that the fund meets the
requirements of the scholarship general DGR category, except for the
provisions requiring that it must be provided by an Australian higher
education provider and not target a predetermined section of the
community. Also, as a condition of listing, that the Australian
Educational International (AEI) raise no objections to the institutions to
which the scholarship fund seeks to send scholars, and that the fund
advise the Australian Government annually on those institutions to which
scholars have been sent in a given year.
Roberta Sykes Indigenous Education Foundation (ABN 99 950 620 671)
1.8 This Schedule allows taxpayers to claim a deduction for gifts
made to the Roberta Sykes Indigenous Education Foundation after
2 August 2010 and before 2 August 2013. [Schedule 1, item 4, item 2.2.40 in
the table in subsection 30-25(2)]
1.9 The Roberta Sykes Indigenous Education Foundation works to
advance the education and life opportunities for Aboriginal and Torres
Strait Islanders, and provides additional assistance to female Indigenous
scholars undertaking programs overseas, such as assisting with the cost of
relocating families and partners.
1.10 It is a condition of the listing that the fund meets the
requirements of the scholarship general DGR category, except for the
provisions requiring that it must be provided by an Australian higher
education provider and not target a predetermined section of the
community. Also, as a condition of listing, that the AEI raise no
objections to the institutions to which the scholarship fund seeks to send
scholars, and that the fund advise the Australian Government annually on
those institutions to which scholars have been sent in a given year.
Girl Guides Australia (ABN 62 477 364 942)
1.11 This Schedule also changes the name of `Guides Australia
Incorporated' to `Girl Guides Australia'. [Schedule 1, items 1 and 2,
items 10.2.2 and 10.2.3 in the table in section 30-90]
1.12 The purpose and operation of the organisation has not changed.
8
Deductible gift recipients
Consequential amendments
1.13 Changes have been made to update the index in Division 30 of
the ITAA 1997 to add Charlie Perkins Trust for Children & Students and
the Roberta Sykes Indigenous Education Foundation. [Schedule 1, items 5
and 6, items 30A and 97AA in the table in section 30-315].
1.14 Changes have been made to update the index in Division 30 to
reflect the change in name to Girl Guides Australia. [Schedule 1, item 3,
item 53A in the table in section 30-315]
9
Chapter 2
Self managed superannuation fund
investment in collectables and personal
use assets
Outline of chapter
2.1 Schedule 2 to this Bill amends the Superannuation Industry
(Supervision) Act 1993 (SIS Act) to permit the regulations to impose rules
on self managed superannuation fund (SMSF) investment in collectables
and personal use assets.
2.2 Schedule 2 also amends the SIS Act to remove a reference to a
provision that was repealed on 24 September 2007.
2.3 This measure will have effect from 1 July 2011.
2.4 All legislative references in this chapter are to the SIS Act unless
otherwise stated.
Context of amendments
2.5 Superannuation funds, including SMSFs, are generally free to
invest in any asset they choose. However, taxation concessions are
provided to superannuation savings with the objective of providing
individuals with better income in retirement. Consequently, there are
some rules on superannuation investments. The aim of these rules is to
ensure that superannuation savings are accumulated for retirement income
purposes, not current day benefit or estate planning.
2.6 These rules include that investments must be consistent with the
sole purpose test in section 62 of the SIS Act, which, broadly, requires
that superannuation funds must be maintained for the sole purpose of
providing retirement income to members or, in the event of a member's
death, to the member's dependants or legal personal representative.
Although the sole purpose test covers all operations of the fund, in terms
of investment this means that investments must be made solely for
retirement income purposes.
11
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
2.7 In May 2009, the Government announced a review into the
governance, efficiency, structure and operation of Australia's
superannuation system. The Super System Review had the goal of
ensuring that the superannuation system operates in the most cost
effective manner and in the best interests of all its members.
2.8 The Super System Review's final report was released on
5 July 2010. The report made a number of recommendations regarding
SMSFs, one of which was that SMSF investment in collectables and
personal use assets should be prohibited and that existing SMSF holdings
of these assets should be disposed of within five years.
2.9 The Super System Review panel found that investments in
collectables and personal use assets pose issues in relation to the
application of the sole purpose test. They argued that these investments
lend themselves to personal enjoyment and therefore can involve current
day benefits being derived by those using or accessing the assets. The
panel argued that these assets should not be regarded as investments that
build retirement savings and consequently should not be available to
SMSFs.
2.10 An SMSF is a superannuation entity that has less than five
members, all of whom are trustees of the fund or directors of the corporate
trustee. A key characteristic of an SMSF is that all members are involved
in the decision-making process and control the management of the fund.
2.11 SMSFs are subject to compliance-based regulation by the
Australian Taxation Office (ATO), unlike most other superannuation
funds which are subject to prudential regulation by the Australian
Prudential Regulation Authority (APRA). SMSFs are subject to a less
onerous prudential regime than APRA-regulated entities on the basis that
all members of SMSFs are in a position to protect their own interests.
2.12 Given the closely-held nature of SMSFs, members have direct
control over the investment of their superannuation savings and have the
capacity to invest their money for their own current day benefit. The
same risk does not exist in APRA-regulated funds, because the members
in these funds have minimal control over investment decisions and are
unlikely to receive any current day benefit from an investment.
2.13 It is extremely difficult for the ATO to determine the true
purpose for which an investment in a collectable or personal use asset is
made, particularly where the asset is `stored' in premises owned by the
SMSF trustee. As such, there are insufficient regulatory tools available to
prevent SMSF investment in collectables and personal use assets giving
rise to current day benefits for SMSF members.
12
Self managed superannuation fund investment in collectables and personal use assets
2.14 On 30 July 2010, the Government announced, as an election
commitment, that it does not support the Super System Review
recommendation to prohibit SMSF investment in collectables and
personal use assets, in recognition that collectables can be a legitimate
investment for some SMSF trustees. However, the Government also
announced that it would tighten the legislative standards applying to
SMSF investment in collectables and personal use assets to ensure that
such investments do not give rise to current day benefit for SMSF
trustees.
Summary of new law
2.15 Schedule 2 amends the SIS Act to permit the regulations to
impose rules on SMSF trustees that make, hold or realise investments
involving collectables or personal use assets. Assets considered to be
collectables and personal use assets are listed in the provisions.
2.16 This Schedule also amends the SIS Act to remove a reference to
a provision that was repealed on 24 September 2007.
Comparison of key features of new law and current law
New law Current law
SMSF trustees must comply with any SMSF trustees must comply with
rules set by the regulations in relation to legislative rules which apply to all SMSF
investments in collectables and personal investments.
use assets, in addition to the rules that also
apply to other asset classes.
There is no reference to subsection 376(6) There is a reference to subsection 376(6)
in paragraph 353(1)(d). in paragraph 353(1)(d).
Detailed explanation of new law
2.17 Currently, SMSF trustees may invest in a broad range of assets,
provided the investments are permitted by the fund's trust deed and are in
accordance with its investment strategy. The trustees must also comply
with legislative rules, regardless of the asset class in which they invest.
These amendments to the SIS Act provide for specific legislative rules to
be applied solely to SMSF investments involving collectables and
personal use assets.
13
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
2.18 Part 7 of the SIS Act sets out rules that apply only to regulated
superannuation funds.
2.19 A new section is inserted into Part 7 to allow the regulations to
prescribe rules that specifically relate to investments by an SMSF
involving assets that are:
· artwork (within the meaning of the Income Tax Assessment
Act 1997);
· jewellery;
· antiques;
· artefacts;
· coins or medallions;
· postage stamps or first day covers;
· rare folios, manuscripts or books;
· memorabilia;
· wine;
· cars;
· recreational boats;
· memberships of sporting or social clubs; or
· assets of a particular kind, if assets of that kind are ordinarily
used or kept mainly for personal use or enjoyment (not
including land).
[Schedule 2, item 1, section 62A]
2.20 This measure applies not only where the asset is the primary
investment but also where the asset is attached to an investment or is a
related benefit of an investment.
14
Self managed superannuation fund investment in collectables and personal use assets
Example 2.1
Jemma is a trustee of an SMSF. As trustee of her SMSF, Jemma
makes an investment in XYZ Golf Club. By making the investment,
Jemma receives a complimentary membership. Although the
membership is not the primary investment, Jemma must comply with
regulations made for the purpose of section 62A of the SIS Act in
relation to the membership.
2.21 `Self managed superannuation fund' is defined in section 17A of
the SIS Act.
2.22 Section 62A does not override section 62 of the SIS Act, which
sets out the sole purpose test. Investments to which this measure applies
need to comply with both section 62 and section 62A.
2.23 The rules that the regulations may prescribe can relate to the
making, holding and realising an investment. In other words, the rules
may be in relation to how the asset is acquired, stored and used while in
the SMSF, and disposed of. [Schedule 2, item 1, section 62A]
2.24 The regulations may prescribe penalties for non-compliance
with the rules set out in the regulations. The penalties cannot exceed
10 penalty units. This is consistent with paragraph 353(1)(d) of the
SIS Act, which provides that the regulations may prescribe penalties not
exceeding 10 penalty units in respect of offences against the regulations.
[Schedule 2, item 1, section 62A, note]
2.25 Matters relating to offences against the rules will be set out in
the regulations. Including the offence with the rules will ensure
transparency and simplicity, and will assist with interpretation.
Minor amendment
2.26 Paragraph 353(1)(d) is amended to remove the reference to
subsection 376(6). Subsection 376(6) was repealed on
24 September 2007 by item 55 of Schedule 1 to the Financial Sector
Legislation Amendment (Simplifying Regulation and Review) Act 2007.
[Schedule 2, item 2, paragraph 353(1)(d)]
Application provisions
2.27 These amendments apply in relation to investments made by an
SMSF before, on or after 1 July 2011. [Schedule 2, item 3]
15
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
2.28 The regulations may specify that the amendments apply to only
some of these investments. This will allow the five-year transitional
period, announced by the Government as part of its election commitment,
to be included in the regulations. [Schedule 2, item 3]
16
Chapter 3
Superannuation -- tax file number
amendments
Outline of chapter
3.1 Schedule 3 to this Bill amends the Superannuation Industry
(Supervision) Act 1993 (SIS Act) and the Retirement Savings Accounts
Act 1997 (RSA Act) to allow superannuation fund trustees and retirement
savings account (RSA) providers respectively to use tax file numbers
(TFNs) to locate member accounts and to facilitate the consolidation of
multiple member accounts.
Context of amendments
Current law
3.2 A TFN is a unique number issued by the Australian Taxation
Office (ATO) for each taxpayer, which allows the ATO to match details
of income disclosed in a taxpayer's return with details of a person's
income received from other sources. TFNs are used by the ATO as a
primary identifier of an individual for the purposes of the administration
of taxation and superannuation laws administered by the Commissioner of
Taxation (Commissioner).
3.3 There are current laws which allow use of TFNs in the
superannuation industry. These laws apply to trustees of regulated
superannuation funds, approved deposit funds, RSAs, exempt public
sector superannuation schemes, and employers.
3.4 The collection of TFNs by superannuation funds is authorised
under Part 25A of the SIS Act. This Act provides clear limitations on the
use of TFNs and also outlines details of the recording and destruction of
TFN records.
3.5 If the superannuation fund trustee or RSA provider is not
provided with a member's TFN for superannuation purposes, the
superannuation fund trustee or RSA provider is required to seek the
member's TFN within 30 days of the person becoming a fund member.
However, it is not compulsory for the member to quote their TFN.
17
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
3.6 However, where a TFN is not provided, member contributions
may not be accepted, and there may be adverse taxation consequences.
For example, if a TFN is not quoted and the fund receives employer
contributions for that member, additional income tax is payable by the
fund which will generally reduce the member's benefit in the fund.
3.7 Superannuation fund trustees and RSA providers currently use
TFNs primarily for the purpose of calculating the amount of tax which
will be deducted from the member's benefit when paid. In most cases,
where a TFN is quoted, tax will be deducted at normal, concessional rates.
3.8 Currently, TFNs may only be used by a superannuation fund
trustee or RSA provider to locate, in the fund's records, member accounts
provided other methods are used first and only if the other methods are
insufficient. It is an offence for the superannuation fund trustee or RSA
provider to contravene this part of the Act.
3.9 Superannuation fund trustees and RSA providers are not
currently permitted to use TFNs for the purpose of locating multiple
accounts held by the same person in order to consolidate the accounts,
whether in the same superannuation fund, RSA, or across multiple
superannuation funds.
3.10 TFN use by superannuation funds is governed by the Privacy
Act 1988 and the Taxation Administration Act 1953 (TAA 1953) to ensure
member privacy is protected and to prevent unauthorised use of TFNs.
Summary of new law
3.11 Schedule 3 amends the SIS Act and the RSA Act to allow
superannuation fund trustees and RSA providers respectively to use TFNs
to locate member accounts and to facilitate the consolidation of multiple
accounts held by the same person.
3.12 This measure was announced in the Assistant Treasurer and
Minister for Financial Services and Superannuation's Media Release
No. 024 of 16 December 2010.
18
Superannuation -- tax file number amendments
Comparison of key features of new law and current law
New law Current law
TFNs may be used by superannuation TFNs may only be used by a
fund trustees and RSA providers to superannuation fund trustee or RSA
locate member accounts. provider to locate, in the fund's or
provider's records, member accounts
provided other methods are used first
and only if the other methods are
insufficient or to confirm the
identification of amounts resulting
from the use of the other information.
TFNs may be used by superannuation TFNs cannot be used by the
fund trustees and RSA providers to superannuation fund trustee or RSA
facilitate account consolidation provider in the first instance for
account consolidation purposes.
Detailed explanation of new law
3.13 These amendments will allow superannuation fund trustees and
RSA providers to use TFNs to locate member accounts. [Schedule 3, item 2,
section 137A of the RSA Act; item 12, section 299LA of the SIS Act]
3.14 The new laws will cover TFNs regardless of whether they are
provided to the superannuation fund by the member, the member's
employer or the Commissioner in accordance with the SIS Act and the
RSA Act provisions.
3.15 The new law does not impose any compulsory obligations on
superannuation fund trustees and RSA providers.
3.16 The new law will allow superannuation fund trustees and RSA
providers to use TFNs to locate a member's account details. However the
law will not allow the fund to use TFNs to replace their existing account
numbers. The aim of the law is to remove the impediment for funds to
use other search methods before TFNs are used. It will not replace
existing account identification methods (such as account or membership
numbers). This ensures that the amendment operates in accordance with
National Privacy Principle 7. [Schedule 3, item 2, subsection 137A(3) of the
RSA Act; item 12, subsection 299LA(3) of the SIS Act]
3.17 These amendments will also allow superannuation fund trustees
and RSA providers to use TFNs to facilitate the consolidation of multiple
accounts held by the same person in the same superannuation fund and
across multiple superannuation funds, provided the requirements of the
19
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
regulations are met (see paragraph 3.24). [Schedule 3, item 2,
subsection 137A(2) of the RSA Act; item 12, subsection 299LA(2) of the SIS Act]
Example 3.1: Consolidation within a fund
Rhonda is not aware she has two superannuation accounts with
Fund A. Fund A is permitted to match Rhonda's TFN and consolidate
the two accounts provided the conditions in the regulations are met.
The regulations, may for example, provide conditions relating to
member consent and other procedures that superannuation fund
trustees must follow before consolidating accounts.
Example 3.2: Consolidation between funds
Stephen holds a superannuation account with Fund A and suspects he
may hold an account in Fund B. The regulations may provide
conditions relating to member consent and other procedures that
superannuation fund trustees must follow before consolidating
accounts. Provided Stephen consents to the consolidation and the
other conditions in the regulations are met, the fund may use the TFN
to facilitate the consolidation of the accounts.
3.18 All of these amendments will apply to eligible superannuation
entities, regulated exempt public sector superannuation schemes (as
defined under section 299W of the SIS Act), and RSAs.
Safeguarding member privacy
3.19 This Schedule will not alter an individual's right to choose not
to quote their TFN and there will not be additional consequences for not
quoting a TFN. However, the current consequences for failing to quote a
TFN will remain.
Example 3.3: Non-quotation of a TFN
Vincci has not quoted her TFN to her superannuation fund. In
accordance with the conditions in the regulations, her fund has advised
that it will match TFNs in its records to locate multiple accounts. The
fund provides Vincci the opportunity to provide her TFN before the
matching occurs, however Vincci decides not to quote her TFN. As
her fund does not have her TFN in relation to this account, the fund
will not be able to match any additional accounts she may have using
this method. In addition, her fund may be liable for extra income tax
on no-TFN contributions made for her which it may deduct from her
account. Further, her fund will not be able to accept member
contributions from her.
3.20 Sections 8WA and 8WB of the existing TAA 1953 will
provide for a penalty for the unauthorised use or recording of TFNs. The
20
Superannuation -- tax file number amendments
penalty is currently 100 penalty units (currently $11,000), or
imprisonment for two years, or both. [Schedule 3, items 2 and 16, note in
subsection 137A(2) of the RSA Act; items 12 and 17, note in subsection 299LA(2) of the
SIS Act]
3.21 Binding TFN Guidelines, issued under section 17 of the Privacy
Act 1988, protect the privacy of natural persons by regulating the
collection, storage, use, disclosure, security and disposal of TFN
information. In addition, the National Privacy Principles, contained in
Schedule 3 to the Privacy Act 1988, govern the collection, use and
disclosure of personal information and the use of agency identifiers.
3.22 TFN Guideline 1.1 states that `The TFN is not to be used as a
national identification system by whatever means.' Guideline 1.2 states
that `The rights of individuals under taxation, assistance agency or
superannuation law to choose not to quote a TFN shall be respected.'
3.23 These amendments are consistent with the Privacy Act 1988, the
National Privacy Principles and the TFN Guidelines. The reasons
include:
· superannuation funds will not be able to use TFNs to replace
member account numbers;
· use of TFNs for the purposes outlined in the legislation is a
limited extension of the current TFN use rather than a new
application;
· the increased use of TFNs has been authorised by amending
the superannuation law as referenced under the TFN
Guidelines;
· the increased use of TFNs will be safeguarded by regulations
that ensure member identity is protected and member consent
is obtained where appropriate;
· the law does not alter an individual's right to choose not to
quote a TFN; and
· superannuation funds are not obliged to increase their TFN
use.
Regulation changes
3.24 In addition to the legislation, regulations will also be made to
specify additional requirements that must be met. In relation to account
consolidation, these will cover requirements for member consent and
21
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
other procedures that superannuation fund trustees and RSA providers
must follow before consolidating accounts. [Schedule 3, items 2 and 16,
subsection 137A(2) of the RSA Act; items 12 and 17, subsection 299LA(2) of the
SIS Act]
3.25 The details of these regulations will be finalised following
consultation with relevant stakeholders.
Application and transitional provisions
3.26 The amendments relating to account location will apply from
1 July 2011. The amendments relating to consolidation will apply from
1 January 2012 or a date as proclaimed and both amendments will apply
to the use of TFNs on or after commencement whether the TFN was
quoted before, on or after the commencement of this Schedule. [Schedule 3,
items 13 and 18]
3.27 The proclamation provision has been included to allow time for
consultation on the regulations relating to the legislation. The regulations
will contain necessary safeguards and processes and it is important that
industry is given sufficient time to consider these changes. Given the
importance of these regulations, the Government has included a
proclamation provision to ensure that the legislation and the
accompanying regulations commence operation as close to the same time
as possible.
3.28 Transitional provisions relating to the regulations are included to
ensure that any regulations which were made under Schedule 3, Part 1
continue to have effect when Schedule 3, Part 2 repeals and replaces the
relevant provisions. [Schedule 3, item 19]
3.29 Safeguards are in place to ensure that fund members and RSA
holders who have previously provided a TFN are not disadvantaged by the
change, including strong penalties for the misuse of TFNs. In addition,
superannuation providers are not obliged to increase their use of TFNs
and members can still decide not to provide their TFN to their
superannuation provider.
Consequential amendments
3.30 Several amendments are required to repeal the previous TFN
provisions. [Schedule 3, item 1, subsections 137(4) and (5) of the RSA Act; items 3, 6,
8 and 10, subsections 299H(4) and (5), 299J(4) and (5), 299K(4) and (5) and 299L(4)
and (5) of the SIS Act]
22
Superannuation -- tax file number amendments
3.31 Several amendments are required to remove references to the
previous uses of TFNs from the applicable offences and strict liability
sections of the SIS Act. [Schedule 3, items 4, 5, 7, 9 and 11, subsections 299H(6)
and (7), 299J(6) and (7), 299K(6) and (7), 299L(6) and (7) of the SIS Act]
3.32 The definitions of `eligible superannuation entity' and `regulated
exempt public sector superannuation scheme' are added to the RSA Act.
[Schedule 3, items 14 and 15, section 16 of the RSA Act]
23
Chapter 4
Exempting Australian taxes, fees and
charges from the goods and services tax
Outline of chapter
4.1 Schedule 4 to this Bill amends:
· the A New Tax System (Goods and Services Tax) Act 1999
(GST Act) to replace the current mechanism for ensuring
Australian taxes, and certain Australian fees and charges are
not subject to the goods and services tax (GST) with specific
legislative exemptions;
· the GST Act to allow for the making of regulations to treat an
Australian tax, or an Australian fee or charge to be treated in
a particular way; and
· the A New Tax System (Luxury Car Tax) Act 1999 to account
for changes being made to the GST Act.
Context of amendments
4.2 This Schedule implements the Government's decision to replace
the current mechanism for ensuring Australian taxes, fees and charges are
not subject to GST with a `self assessment' mechanism, announced in the
2010-11 Budget on 11 May 2010.
4.3 The GST Act operates by treating a payment, or the discharging
of a liability to make such a payment, of any Australian tax, fee or charge
(other than GST) to be consideration for a supply that the Australian
government agency makes to the payer in return for that payment
(subsection 81-5(1) of the GST Act). This ensures that all Australian
taxes, fees and charges are potentially subject to GST regardless of
whether they are connected with a supply under the GST basic rules.
4.4 However, the GST Act then allows the Commonwealth
Treasurer to specify by legislative instrument (a Determination), that the
payment, or discharging of the liability to make such a payment, of any
Australian tax, fee or charge is not the provision of consideration
(subsection 81-5(2) of the GST Act). The effect of this is that taxes, fees
25
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
and charges included in the Determination are not consideration for a
taxable supply and therefore not subject to GST.
4.5 The Determination is updated twice a year in accordance with an
administrative process that involves the agreement of the GST
Administration Sub-Committee of the Ministerial Council for Federal
Financial Relations and the formal agreement of the state and territory
Treasurers. The Determination is registered as a legislative instrument
and is subject to scrutiny by the Senate Regulations and Ordinances
Committee.
4.6 When the GST was introduced, the Commonwealth, states and
territories agreed that the GST would apply to the commercial activities of
government at all levels and that the non-commercial activities of
government would be outside the scope of the GST.
4.7 Accordingly, under the Intergovernmental Agreement on
Federal Financial Relations the parties agreed that Division 81 of the
GST Act will exempt Australian taxes, fees and charges from GST in
accordance with the following principles:
· taxes that are in the nature of a compulsory impost for
general purposes and compulsory charges by the way of fines
or penalties will be exempt from GST; and
· regulatory charges that do not relate to particular goods or
services will be exempt from GST, including:
- fees and charges levied on specific industries and used to
finance particular regulatory or other activities in the
government sector; and
- licences, permits and certifications that are required by
government prior to undertaking a general activity.
4.8 The current Determination is the A New Tax System (Goods
and Services Tax) (Exempt taxes, fees and charges) Determination 2011
(No. 1).
4.9 The Determination has grown to over 680 pages and its making
involves a lengthy process that places an administrative burden on all
levels of government. This amendment will reduce administrative costs
by removing the need to list items in a Determination and undertake a
twice yearly exhaustive process of updating the Determination. It will
also provide increased certainty by allowing government entities to treat
eligible items as exempt from the time that they are introduced rather than
some later time when they are listed in a Determination.
26
Exempting Australian taxes, fees and charges from the goods and services tax
Summary of new law
Exempting Australian taxes or Australian fees and charges from the GST
4.10 Schedule 4 repeals and replaces Division 81 of the GST Act to
allow entities to self assess the GST treatment of a payment of an
Australian tax or an Australian fee or charge in accordance with certain
principles. Under these amendments, government agencies will no longer
need to have an Australian tax or certain categories of Australian fees or
charges listed on the Determination in order for those taxes, fees or
charges to not be subject to GST.
4.11 In addition, the amendments allow for regulations to be made to
treat an Australian tax, or any Australian fee or charge in a particular way
that will determine if the amount paid, or the discharging of a liability to
make such payment, is subject to GST.
4.12 Those Australian taxes, fees and charges currently not subject to
GST under the A New Tax System (Goods and Services Tax) (Exempt
taxes, fees and charges) Determination 2011 (No. 1) will remain not
subject to GST until 1 July 2012 and thereafter will be assessed under the
changes made in this Schedule.
4.13 The GST treatment of all new Australian taxes or Australian
fees or charges that are not currently entered on the A New Tax System
(Goods and Services Tax) (Exempt taxes, fees and charges) Determination
2011 (No. 1) will be self assessed under the changes made by this
Schedule with effect from 1 July 2011. Those Australian taxes or
Australian fees and charges that are not covered by the changes made by
this Schedule and meet the requirements of section 9-5 of the GST Act
will be taxable supplies, unless excluded by regulation.
27
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Comparison of key features of new law and current law
New law Current law
The payment, or the discharging of a The payment of any Australian tax,
liability to make such a payment, of fee or charge is treated in the first
an Australian tax is not treated as the instance as the provision of
provision of consideration. Such a consideration for a supply, which
payment will not be subject to GST. may be a taxable supply.
However, regulations can be made to However, an Australian tax, fee or
treat the payment of a tax, or of a charge is not treated as consideration
kind of tax, as consideration for a for a supply if it is included in a
supply made by the entity to which legislative instrument made by the
the tax is payable, in which case it Commonwealth Treasurer, in which
will be subject to GST. case it is not subject to GST.
A payment, or the discharging of a The fact that a supply is not
liability to make such a payment, of connected with Australia does not
certain categories of Australian fees stop the supply being a taxable supply
or charges is not treated as the in connection with the payment of an
provision of consideration. Such a Australian tax, fee or charge.
payment will not be subject to GST.
However, regulations can be made to
treat the payment of any Australian
fee or charge, or of a kind of
payment, as consideration for a
supply made by the entity to which
the fee or charge is payable, in which
case it may be subject to GST.
The payment, or the discharging of a
liability to make such a payment, of
an Australian tax or an Australian fee
or charge that is not exempted by a
specific provision within Division 81,
including by regulation made under
that Division, may be consideration
for a taxable supply if the
requirements of section 9-5 of the
GST Act are met.
Regulations that are made under
Division 81 can be expressed to take
effect from a date before the
regulations are registered under the
Legislative Instruments Act 2003.
Detailed explanation of new law
4.14 Schedule 4 repeals and replaces Division 81 of the GST Act to
allow government agencies to self assess the GST treatment of any
28
Exempting Australian taxes, fees and charges from the goods and services tax
Australian tax or any Australian fee or charge imposed under an
Australian law and payable to the agency, in accordance with certain
principles.
4.15 Under these amendments, an `Australian tax' or an `Australian
fee or charge' (as defined in the GST Act) will no longer be treated as the
provision of consideration for a supply at first instance. Government
agencies will no longer need to have an Australian tax, fee or charge listed
on a Determination made by the Commonwealth Treasurer as a
prerequisite for it not to be subject to GST.
4.16 Under these amendments, the payment of an Australian tax will
not be treated as the provision of consideration and therefore any supply
to which it relates will not attract GST. Furthermore, an Australian fee or
charge of a kind to which subsections 81-10(4) and (5) apply will not be
treated as the provision of consideration (for a supply) and also will not
attract GST.
4.17 However, a regulation can be made with the effect of treating
payments, or the discharging of a liability to make such payments, of an
Australian tax or of an Australian fee or charge, as the provision of
consideration for a supply. The GST treatment of the supply to which the
tax, fee or charge relates may be a taxable supply.
4.18 The changes also provide for the making of regulations, where
necessary, that will allow for the payment of an Australian fee or charge,
or the discharging of a liability to make such a payment, to not be the
provision of consideration and therefore any supply to which it relates will
not be subject to GST.
4.19 It is not intended that the payment of a fine or penalty imposed
under an Australian law and payable to an Australian government agency
be subject to GST. Application of the GST basic rules should ensure that
such payments are not subject to GST, therefore they are not addressed by
these amendments.
Australian taxes
4.20 Taxes are imposed as part of the general revenue raising
activities of government and should not be subject to GST. Generally,
taxes are not considered to be associated with a supply and are not subject
to GST under the GST basic rules. However, given the expansive
definition of `supply' and `consideration' contained within the GST Act,
these amendments ensure all payments of taxes imposed under an
Australian law will not be subject to GST at first instance.
29
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
4.21 The payment of an Australian tax, or the discharging of a
liability to make such a payment, will not be treated as the provision of
consideration (for any supply). Therefore, a supply (if any) will not be a
taxable supply as the supply has not been made for consideration in
accordance with paragraph 9-5(a) of the GST Act. Consequently, an
Australian tax, imposed under an Australian law, will not attract GST.
[Schedule 4, item 2, subsection 81-5(1)]
4.22 Examples of Australian taxes imposed under an Australian law
include: income tax, stamp duty, fringe benefits tax, payroll tax, the
Medicare Levy, local government `ordinary rates' and various industry
levies.
4.23 These amendments allow for a payment, or the discharging of a
liability to make such a payment, of an Australian tax, or of a kind, that is
not treated as the provision of consideration under subsection 81-5(1) of
the GST Act, to be treated, by way of regulation, as the provision of
consideration to the entity to which the tax is payable for a supply made
by that entity to the payer. Therefore, the supply will be a taxable supply
if all of the requirements of section 9-5 of the GST Act are satisfied.
[Schedule 4, item 2, subsections 81-5(2) and (3)]
4.24 The abovementioned regulation-making power allows for
circumstances where, for policy reasons, the Government considers that
GST should apply to a payment that falls within the definition of an
`Australian tax'.
4.25 Any regulations would be made through procedures agreed to by
the Commonwealth and the states and territories, in accordance with the
A New Tax System (Managing the GST Rate and Base) Act 1999. The
agreed procedures involve consultation and agreement between the
Commonwealth and the states and territories on changes made to the
GST base, through the GST Administration Sub-Committee of the
Ministerial Council for Federal Financial Relations. Following
consultation, any proposed regulation would require the unanimous
agreement of the members of the Ministerial Council for Federal Financial
Relations.
Australian fees and charges
4.26 These amendments ensure that a payment or the discharging of a
liability to make such a payment, for certain categories of Australian fees
or charges will not be treated as the provision of consideration and
therefore, any supply to which the payment relates will not be subject to
GST. A supply to which a payment, or the discharging of a liability to
make such a payment, relates will not be subject to GST to the extent the
payment is for a fee or charge covered by subsection 81-10(1) of the
30
Exempting Australian taxes, fees and charges from the goods and services tax
GST Act. For a supply to which a fee or charge relates not to be subject
to GST, the fee or charge must be imposed under an Australian law and be
payable to an Australian government agency. [Schedule 4, item 2,
subsection 81-10(1)]
4.27 To the extent a payment, or the discharging of a liability to make
such a payment, is a payment or discharge of an Australian fee or charge
that relates to, or relates to the application for, the provision, amendment
or retention under an Australian law, of a permission, exemption,
authority or licence, it will not be treated as the provision of consideration.
Therefore, any supply to which the fee or charge relates will not be
subject to GST. A fee or charge in relation to the provision, amendment
or retention of a permission, exemption, authority or licence (however
described) includes but is not limited to:
· application fees, licences, permits and certifications that are
required by government prior to undertaking an occupation
(for example, medical and legal professionals' right of
practice licences, pilots' licences, heavy vehicle drivers'
licences and adjustments to such licences); and
· regulatory charges imposed to undertake an activity (for
example, compulsory testing fees for regulatory purposes,
compulsory inspection fees for regulatory purposes, a permit
for restaurants to occupy the footpath, and a licence for an
event to close roads).
4.28 As noted, this exemption applies to an Australian fee or charge
imposed in relation to, or to the application for, the retention of a
permission, exemption, authority or licence. An example of such a fee
would be a periodic compulsory inspection fee, made under an Australian
law and payable to an Australian government agency, for the retention of
a permit. In such cases, the inspection fee is directly related to the
retention of the permission (the permit) and would not be subject to GST.
In cases where the inspection fee is payable to a private entity (not an
Australian government agency) then subsection 81-10(4) of the GST Act
will not apply and the supply will be taxable provided it meets the
requirements of section 9-5 of the GST Act. [Schedule 4, item 2,
subsection 81-10(4)]
4.29 The payment of an Australian fee or charge, to an Australian
government agency, in relation to the lodgment of, or access to,
documents provided under an Australian law will not be treated as the
provision of consideration. Therefore, the supply to which the fee or
charge relates will not be subject to GST. Examples of such fees and
charges, payable to Australian government agencies, are those that are
paid in order to obtain information from a government agency under
31
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
relevant freedom of information legislation, searches and extracts from
registers, copies of official documents, registration fees and lodgment fees
for property transfers, deeds, plans and instruments.
4.30 It is intended that consideration that is provided for commercial
sales of information supplied by Australian government agencies,
including supplies of books by a government bookshop, be subject to GST
at first instance. It is also intended that consideration that is provided for
supplies made under commercial arrangements, including the hire of
government assets (such as recreation halls, office space, conference
centres and equipment), be subject to GST at first instance. [Schedule 4,
item 2, subsection 81-10(5)]
4.31 These amendments allow for a payment, or discharging of a
liability to make such a payment, of any Australian fee or charge, or a fee
or charge of a specified kind, (including fees and charges that have not
been treated as the provision of consideration due to the application of
subsection 81-10(1)) to be treated, by way of regulation, as the provision
of consideration for a supply made by the entity to which the fee or charge
is payable. This supply will be a taxable supply if the requirements of
section 9-5 of the GST Act are met. [Schedule 4, item 2, subsections 81-10(2)
and (3)]
4.32 The abovementioned regulation-making power allows for
circumstances where, for policy reasons, the Government considers that
GST should apply to the payment, or discharging of a liability to make
such a payment, of an Australian fee or charge.
4.33 These amendments allow for the payment of any Australian fee
or charge, or the discharging of a liability to make such a payment, to be
treated as not the provision of consideration and therefore, any supply to
which the fee or charge relates will not be subject to GST. This power is
to apply in circumstances where an Australian fee or charge is not
otherwise covered by subsections 81-10(4) and (5) of the GST Act, and
for policy reasons, the Government considers that GST should not apply.
This will also assist with the correcting of unintended consequences that
may arise as a result of the operation of the new provisions inserted by
these amendments. [Schedule 4, item 2, section 81-15]
4.34 These amendments have effect despite the operation of
section 9-15 which otherwise defines, for GST purposes, what constitutes
consideration. [Schedule 4, item 2, section 81-20]
4.35 Any regulations would be made through procedures agreed to by
the Commonwealth and the states and territories, in accordance with the
A New Tax System (Managing the GST Rate and Base) Act 1999. The
agreed procedures involve consultation and agreement between the
32
Exempting Australian taxes, fees and charges from the goods and services tax
Commonwealth and the states and territories on all changes made to the
GST base, through the GST Administration Sub-Committee of the
Ministerial Council for Federal Financial Relations. Following
consultation, any proposed regulation would require the unanimous
agreement of the members of the Ministerial Council for Federal Financial
Relations.
4.36 The changes also allow for a regulation that is made under these
amendments to be expressed as taking effect from a date before the
regulations are registered under the Legislative Instruments Act 2003.
This is despite the operation of subsection 12(2) of that Act which
otherwise limits the commencement date of regulations in certain
circumstances. This would for instance, allow for the desired GST
treatment for a payment, or discharging of the liability to make such a
payment, to be achieved where a new Australian tax or Australian fee or
charge is imposed under an Australian law before regulations can be made
to provide for the desired treatment. [Schedule 4, item 2, section 81-25]
Application and transitional provisions
4.37 These amendments will apply in relation to Australian taxes or
Australian fees or charges that are imposed under an Australian law on or
after 1 July 2011.
4.38 However, under these amendments, the A New Tax System
(Goods and Services Tax)(Exempt taxes, fees and charges) Determination
2011 (No. 1) which lists all Australian taxes, fees and charges that are not
treated as consideration, and thus supplies to which they relate are not
subject to GST, is to be grandfathered for one year. Thus, taxes, fees and
charges that are imposed prior to 1 July 2012 and are currently listed in
the Determination will not `be subject to GST' for the transitional period
(until 1 July 2012), after which any supplies to which they relate will be
assessed against the provisions set out in these amendments. [Schedule 4,
item 16]
4.39 This transitional arrangement will allow for Australian
government agencies to reconcile the current taxes, fees and charges listed
in the A New Tax System (Goods and Services Tax)(Exempt taxes, fees
and charges) Determination 2011 (No. 1) with these amendments.
4.40 Any taxes, fees or charges that are currently listed in the A New
Tax System (Goods and Services Tax)(Exempt taxes, fees and charges)
Determination 2011 (No. 1) that become subject to GST (in relation to a
supply) under these amendments will attract GST if they are imposed
under an Australian law on or after 1 July 2012 (provided they satisfy the
33
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
requirements of section 9-5 of the GST Act and are not otherwise treated,
by way of regulation, as not being subject to GST).
Consequential amendments
4.41 As a consequence of the amendments under this Schedule 4:
· Subsection 82-10(3) of the GST Act, which refers to the
previous subsection 81-5(1), is amended to refer to the new
provisions inserted by this Schedule [Schedule 4, item 3,
subsection 82-10(3)].
· Subparagraph 117-5(1)(ba)(i) of the GST Act, which refers
to the previous subsection 81-5(2), is amended to refer to the
new provisions inserted by this Schedule [Schedule 4, item 4,
subparagraph 117-5(1)(ba)(i)].
· The definition of `Australian tax, fee or charge' has been
repealed from section 195-1 of the GST Act. Definitions for
`Australian tax' and for `Australian fee and charge' have
been inserted into section 195-1 of the GST Act and
references to the previous definition have been amended to
refer to the new definitions. Consequentially, previous
references to the former definition have been amended to
make reference to the new definitions in section 27-1,
paragraph 5-20(1)(b) and paragraph 5-20(6)(b) of the A New
Tax System (Luxury Car Tax) Act 1999 [Schedule 4, items 5 to 8,
section 195-1, GST Act; items 11 to 13, section 27-1,
paragraphs 5-20(1)(b) and 5-20(6)(b) of the A New Tax System (Luxury
Car Tax) Act 1999].
· A reference to the previous provisions repealed by this
Schedule in section 195-1 (note at the end of the definition of
`taxable supply') and in section 195-1 (note at the end of the
definition of `connected with Australia') has been removed
[Schedule 4, item 10, section 195-1].
· A reference to the previous provisions repealed by this
Schedule in section 195-1 (note at the end of the definition of
`consideration') has been amended to refer to the new
provisions inserted by this Schedule [Schedule 4, item 9,
section 195-1].
· A reference to the previous provisions repealed by this
Schedule in subparagraph 13-20(2)(ba)(i) was amended to
34
Exempting Australian taxes, fees and charges from the goods and services tax
refer to the new provisions inserted by this Schedule
[Schedule 4, item 1, subparagraph 13-20(2)(ba)(i)].
· The note in the previous section 81-1 has been amended to
reflect the new provisions inserted by this Schedule
[Schedule 4, item 2, section 81-1].
35
Chapter 5
Miscellaneous amendments
Outline of chapter
5.1 Schedule 5 makes various miscellaneous amendments to the
taxation laws.
Context of amendments
5.2 These amendments seek to ensure the taxation law operates as
intended by correcting technical or drafting defects, removing anomalies,
and addressing unintended outcomes. The miscellaneous amendments are
part of the Government's commitment to the care and maintenance of the
taxation laws.
5.3 Miscellaneous amendment packages include addressing issues
raised through the Tax Issues Entry System (TIES). The TIES website
(www.ties.gov.au), which the Australian Taxation Office (ATO) and
Treasury jointly operate, provides a way for tax professionals and the
general public to raise issues relating to the care and maintenance of the
tax system. The relevant parts of the explanatory memorandum identify
TIES issues.
Summary of new law
5.4 The issues these miscellaneous amendments deal with include:
· correcting grammatical, referencing and asterisking errors;
· ensuring that provisions are consistent with the original
policy intent; and
· repealing inoperative provisions.
5.5 The table below lists the titles of the various parts of this
Schedule.
37
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part Title
1 A New Tax System (Goods and Services Tax) Act 1999
2 Approved worker entitlement funds
3 Confidentiality of taxpayer information
4 Employee share schemes
5 General interest charge
6 Deductible gift recipients
7 Section 23AB of the Income Tax Assessment Act 1936
8 Definitions and signposts to related material
9 Repeal of redundant reference to Papua New Guinea
10 Repeal of redundant references to franking
11 Correction of cross-reference in provision about dividend streaming
etc.
12 Minor changes to provisions about concessional rebates
13 Fixing outdated references to Medicare levy
14 Repeal of references to previously repealed provision
15 Correction of asterisking of reference to tax debts
16 Repeal of outdated provisions about exemption from income tax
17 Correction of asterisking of references to quarter
18 Inclusion of Commissioner's discretion to extend main residence
exemption from CGT
19 Nomination of controllers of discretionary trust
20 Definitions mainly relevant to Subdivision 165-F of the Income Tax
Assessment Act 1997
21 Removal of definition from imputation provisions
22 Correction of outdated references to virtual PST assets
23 Repeal of spent provisions about land transport facilities borrowings
24 Prevention of double counting for direct value shifts
25 Ineligible income tax remission decisions
26 Correction of references to chains of fixed trusts
27 Gender-specific language
28 Misdescribed amendments
29 References to Schedules
30 References to taxation laws
31 Other amendments
38
Miscellaneous amendments
5.6 More significant amendments include:
· providing the Commissioner of Taxation (Commissioner)
with a discretion to extend the main residence exemption
from CGT (Part 18, comprising items 93 and 94). (This issue
was identified through TIES issue 0056-2009); and
· allowing the nomination of controllers of discretionary trusts
for the purposes of the CGT small business concessions
(Part 19, comprising items 95 to 109). (This issue was
identified through TIES issue 0059-2009).
5.7 All of the amendments in this Schedule commence from the date
of Royal Assent unless otherwise stated.
Detailed explanation of new law
Part 1 -- A New Tax System (Goods and Services Tax) Act 1999
Table 5.1: Part 1 --A New Tax System (Goods and
Services Tax) Act 1999
Provision being amended What the amendment does
A New Tax System (Goods Gives effect to the suggestion made through
and Services Tax) Act 1999 TIES issue 0014-2010.
153-50(1)(d)(i) A technical amendment replacing the
[Item 1] reference to `agent's' with a reference to
`intermediary's', which was the intention of
the legislation.
A New Tax System (Goods Ensures that the definition of `member' is
and Services Tax) Act 1999 grammatically correct. The definition uses
195-1(definition of the word `means' in the opening line and
`member'), and paragraph (b) then has the words `has the meaning' in
of that definition [Items 2 and paragraphs (a) and (c).
3]
39
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 2 -- Approved worker entitlement funds
Table 5.2: Part 2 -- Approved worker entitlement funds
Provision being amended What the amendment does
Fringe Benefits Tax Replaces the current approval arrangements
Assessment Act 1986 with provisions that allow the Commissioner
58PB(2) and (3) to endorse a fund as an approved worker
58PB(4) entitlement fund or an entity endorsed to
58PC operate the fund when satisfied that it meets
[Items 4 to 8] the legislative requirements without the need
for the Governor-General to make a
regulation. The new arrangements will apply
Income Tax Assessment from the day after this Bill receives Royal
Act 1997 Assent. Existing funds will be given a
126-130(2)(b) six-month period to obtain an Australian
[Item 9] Business Number. The Australian Business
Registrar will be required to enter a fund or
Taxation Administration entity as an endorsed fund or entity on the
Act 1953 Australian Business Register. The Registrar
will have 18 months from the commencement
426-5(ba) in Schedule 1 date to make the changes to accommodate
426-55 in Schedule 1 these amendments.
(paragraph (b) of the note)
426-65(ba) and (bb) in
Schedule 1
[Items 10 to 14]
Part 3 -- Confidentiality of taxpayer information
Table 5.3: Part 3 -- Confidentiality of taxpayer
information
Provision being amended What the amendment does
Income Tax Assessment Repeals the definitions of `Employment
Act 1936 Department' and `Employment Minister' to
6(1) reflect the fact that these terms are now being
[Items 15 to 17] defined in the ITAA 1997. The definition of
`Employment Secretary' is also amended so
that it links into the appropriate ITAA 1997
definitions.
Income Tax Assessment Inserts the definitions of `Employment
Act 1997 Department', `Employment Minister' and
995-1(1) `Employment Secretary'.
[Items 18 to 20]
40
Miscellaneous amendments
Provision being amended What the amendment does
Taxation Administration Supplements the reference to `Education
Act 1953 Secretary' with a reference to `Employment
355-65(2) in Schedule 1 (cell Secretary'. This clarifies that disclosure
in item 4 in the table, column under this provision can be made to the
headed `The record is made Education/Employment Secretary in each
for or the disclosure is to ...') separate capacity.
[Item 21]
355-65(2) in Schedule 1 (cell Supplements the reference to the `Families
in item 6 in the table, column Secretary' to include a reference to the `Chief
headed `The record is made Executive Officer of Centrelink'. This
for or the disclosure is to ...') recognises the reality that disclosures made to
[Items 22 and 24] the Family Assistance Office for the purpose
of administering family tax benefit payments
are made to Centrelink Officers. An
amendment contingent on the Human
Services Legislation Amendment Act 2011 is
made to replace the reference of `Chief
Executive Officer of Centrelink' with `Chief
Executive Centrelink' (within the meaning of
the Human Services (Centrelink) Act 1997)'.
355-65(5) in Schedule 1 Replaces the words `or residential address
(paragraph (b) of the cell in information' with `residential address
the table, column headed `and information or spousal information'.
the record or disclosure ...')
[Item 23]
Part 4 -- Employee share schemes
5.8 These amendments make some miscellaneous changes to ensure
recent reforms to the taxation of employee share schemes, introduced in
the Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009,
apply as intended.
5.9 An employee share scheme provides employees with a financial
interest in the company they work for through the distribution of shares
in that company. Employee share schemes are concessionally taxed to
align the interests of employees with their employer.
41
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Table 5.4: Part 4 --Employee share schemes --
Amendments to the Income Tax Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Ensures that any capital gain or loss made by
Act 1997 an employee share trust is disregarded if it
104-75(6)(note) arises as a result of a beneficiary of the trust
104-85(6) becoming absolutely entitled to an employee
130-90(1A) share scheme share, or as a result of a
130-90(2) disposal of an employee share scheme share
[Items 25 to 29] or right to a beneficiary.
An employee share trust is a trust which
obtains employee share scheme interests in a
company, and provides them on behalf of
employers to employees of that company or
their associates, or carries out activities
incidental to the holding and providing of
employee share scheme interests (for
example, bookkeeping, passing on dividends
or opening and closing employee accounts).
Use of an employee share trust is a common
feature of employee share schemes, and
provides a convenient mechanism for issuing
shares that may later be forfeited.
An employee share trust should not have to
include capital gains or losses made when
providing shares or rights to shares in the
trust to a beneficiary as a part of the operation
of an employee share scheme in their
assessable income (subject to certain integrity
rules).
This is appropriate because any gain is
subsequently used to provide remuneration to
employees and taxing these would otherwise
require the provision of an additional
deduction to employers to offset that
additional remuneration, which would
unnecessarily increase the complexity of the
tax system. Further, without this rule, the
employee share trust may derive assessable
income greater than the deduction provided to
the employer (who claims a deduction equal
to the amounts contributed value of the
interest at the time the employee share trust
acquired it).
Capital gains or losses are not disregarded if
the employee share trust itself makes a cash
profit from the transaction.
42
Miscellaneous amendments
Provision being amended What the amendment does
Consistent with the current law, the gains or
losses will not be disregarded if the employee
acquires the share for more than its cost base
in the hands of the employee share trust. This
is to ensure that there are no untaxed capital
gains in the trust which are not embedded
(and taxed) in the value of the right to the
share to the employee.
The omission of this new provision at the
time the employee share scheme reforms
were introduced was unintended. The change
does not disadvantage any taxpayer.
The amendment applies from 1 July 2009,
from when the reforms to employee share
schemes applied.
Table 5.5: Part 4 --Employee share schemes --
Amendments to the Income Tax (Transitional Provisions)
Act 1997
Provision being amended What the amendment does
Income Tax (Transitional Ensures that shares or rights acquired while
Provisions) Act 1997 an individual is undertaking employment
83A-5 (2A) outside Australia prior to 1 July 2009, which
[Item 30] would have been qualifying shares or rights
under the previous employee share scheme
rules, are transitioned to the new employee
share scheme rules, regardless of whether the
period of employment that relates to Australia
is served after the old rules were repealed.
Under the previous employee share scheme
rules, taxpayers who acquire employee shares
or rights while employed offshore, and then
later become Australian employees while still
engaged in employment or service that is
relevant to the acquisition of the shares or
rights, would have been subject to the
employee share scheme provisions at the
point of becoming an Australian employee.
Such taxpayers (inbound taxpayers) would
have either been assessed in the year of
becoming a relevant employee for the first
time or at a cessation time for qualifying
shares or rights where the relevant election is
not made. If assessed in the year of income
in which the taxpayer becomes an employee
in Australia, the discount will still be valued
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Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
as at acquisition.
Interests will be transitioned into the new
rules if:
· the interest was acquired before
1 July 2009;
· at the pre-1 July 2009 time, the old
employee share scheme rules did not
apply in relation to the interest because
it was acquired while engaged in
foreign service, and the taxpayer in
question was not yet an employee;
· after 1 July 2009, the old rules would
have applied in relation to the interest
if they were still in force, because the
taxpayer in question became an
employee (within the meaning of the
old rules); and
· at the time the taxpayer became an
employee, the cessation time under the
previous law would not yet have
occurred.
Unlike taxpayers who came to Australia
pre-1 July 2009, the taxpayers to whom this
provision applies will not be able to make an
election to be taxed upfront in the year that
they arrive in Australia.
This provision clarifies how the transitional
rules apply to shares acquired before
1 July 2009. The need for this transitional
provision was not identified prior to the
passage of the principal reforms.
The amendment applies from 1 July 2009,
consistent with the application of the reforms
to employee share schemes.
Income Tax (Transitional Ensures that the Commissioner can amend an
Provisions) Act 1997 income tax assessment at any time for the
83A-15 (3) purposes of taxing an employment benefit
[Item 31] which becomes an employee share scheme
interest.
The employee share scheme reforms
introduced a new concept of `indeterminate
rights'.
Indeterminate rights are rights to employment
benefits acquired by employees where at the
time the right is acquired it may be unclear
44
Miscellaneous amendments
Provision being amended What the amendment does
whether the right will result in receipt of an
employee share scheme interest (for example,
the employer has a discretion to provide
shares or cash) or it may be unclear how
many employee share scheme interests will
be received. The new law provides that if a
right acquired before 1 July 2009 becomes a
right to acquire a beneficial interest in a share
on or after 1 July 2009, the previous rules are
taken to have applied as if the right had
always been a right to acquire the beneficial
interest in the share.
Based on the treatment of a right as an
employee share scheme interest from the time
of acquisition, the taxing point for the right
under the employee share scheme rules may
have occurred in an income year before the
nature of the right became clear.
If a taxpayer acquired a right prior to
1 July 2009, which only clearly became a
right to acquire a beneficial interest in a share
in a company after 1 July 2009, then that
taxpayer will be assessable under the
previous rules, in an earlier year, where:
· an election made under the former rules
covers the right (the election may have
been made in an earlier year in respect of
other shares or rights acquired during the
year or the Commissioner may allow a
later election to be made in relation to the
indeterminate right);
· the indeterminate right did not meet the
qualifying conditions under the former
rules; or
· the indeterminate right is a qualifying
right and a cessation event (ceasing
employment) occurs before 1 July 2009.
When the nature of the right to an
employment benefit as an employee share
scheme interest becomes clear, the
Commissioner may amend an employee's
income tax assessment for the income year in
which the taxing point for the employee share
scheme interest occurred (based on the
treatment of the right as an employee share
scheme interest from the time of its
acquisition). The Commissioner can amend
an assessment relating to an employee share
45
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
scheme at anytime, for the purposes of taxing
an employment benefit which becomes an
employee share scheme interest.
The omission of this transitional provision at
the time the employee share scheme reforms
were introduced was an oversight. The
explanatory memorandum clearly explained
that this outcome was intended.
The amendment applies from 1 July 2009,
consistent with the application of the reforms
to employee share schemes.
Income Tax (Transitional Ensures that all employee share scheme
Provisions) Act 1997 shares or rights that would have been
Part 3-3 Division 125 disregarded from the CGT demerger
section 125-75 ownership tests before the commencement of
[Item 32] the amending Act (Tax Laws Amendment
(2009 Budget Measures No. 2) Act 2009) can
continue to be disregarded.
Division 125 of the ITAA 1997 provides
`CGT roll-over' demerger relief rules for
certain company demerger events. Generally,
for the roll-over to be available, each owner's
interest in the new demerged company has to
be proportional to their interest in the parent
company.
Shares or rights acquired under employee
share schemes are often subject to unique
contractual arrangements that may make
satisfying this proportional ownership rule
difficult. For instance, a particular scheme
might provide for the issue of shares in the
employer in the future (with no provisions to
take account of possible demergers).
Moreover, there is no policy incentive to
align the interests of parent company
employees with the interests of a demerged
entity. For these reasons, employee share
scheme interests are generally disregarded for
these ownership tests.
Before 1 July 2009, the law provided that
shares or rights acquired under an employee
share scheme were disregarded for the
purposes of the CGT demerger relief rules.
Specifically, this carve-out applied to
`qualifying shares or rights' acquired under
the previous employee share scheme tax
provisions. Shares or rights that would meet
46
Miscellaneous amendments
Provision being amended What the amendment does
this test if not for being in a trust were also
disregarded.
The amending Act repealed these provisions,
and replaced them with updated provisions
reflecting new terminology. The amending
Act provided that shares or rights acquired
under previous taxing regimes, and over
which tax was deferred to the 2009-10
income year or later, were transitioned into
the new regime. This meant that transitioned
shares and rights were intentionally carved
out from the demerger ownership tests.
However, shares or rights acquired under
previous tax regimes over which tax was
payable in a previous income year did not
need to be transitioned.
The previous regimes continue to apply to
these shares or rights, and the carve-out does
not capture them. This amendment ensures
that all employee share scheme shares or
rights that would have been disregarded from
the CGT demerger ownership tests before the
commencement of the amending Act continue
to be disregarded.
The amendment applies from 1 July 2009,
consistent with the application of the reforms
to employee share schemes.
Table 5.6: Part 4 --Employee share schemes --
Amendments to the Taxation Administration Act 1953
Provision being amended What the amendment does
Income Tax Assessment Renumbers section 130-100 that was inserted
Act 1997 by item 40 of Schedule 1 to the Tax Laws
130-97 Amendment (2009 Budget Measures No. 2)
[Item 33] Act 2009) as section 130-97.
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Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 5 -- General interest charge
Table 5.7: Part 5 -- General interest charge
Provision being amended What the amendment does
Taxation Administration Provides an index of provisions of the laws
Act 1953 dealing with references that make a person
8AAB(1) liable to general interest charge.
8AAB(4) and (5)
[Items 34 and 35]
Part 6 -- Deductible gift recipients
Table 5.8: Part 6 -- Deductible gift recipients
Provision being amended What the amendment does
Income Tax Assessment Amends the specific listing of the following
Act 1997 deductible gift recipients (DGRs) listing to
30-20(2) (cell in item 1.2.4 in reflect a name change of the listed
the table headed `Fund, organisation from the `College of
authority or institution') Radiologists in Australasia' to `The Royal
[Item 37] Australian and New Zealand College of
Radiologists'.
Income Tax Assessment Deems the following specifically listed
Act 1997 DGRs, which are eligible for endorsement
30-20(2) (cell in item 1.2.16 in under the general categories, to have been
the table headed `Fund, endorsed by the Commissioner as DGRs
authority or institution') under the general categories on the same day
30-65 (cell in item 7.2.4 in the as the specific listing is repealed, but does
table headed `Fund, authority not prevent the Commissioner from
or institution') revoking that endorsement at a later time:
30-20(2) (items 1.2.2, 1.2.3, · Breast Cancer Network Australia; and
1.2.4, 1.2.11 and 1.2.15 in the · Indigenous Community Volunteers
table) Limited.
30-25(2) (items 2.2.15 and Repeals and updates the specific listings of
2.2.19 in the table) the following DGRs where: the
30-40(2) (item 3.2.3 in the organisations no longer exist for the
table) purposes for which they were listed; or the
organisations were listed for a limited time
30- 45(2) (items 4.2.5 and and that time has expired, or the
4.2.15 in the table) organisations have ceased to exist, or have
30-50(2) (items 5.5.16, 5.2.24, merged with other DGR eligible
5.2.25 and 5.2.27 in the table) organisations:
30-65 (items 7.2.1, 7.2.2 and · Australian College of Occupational
7.2.4 in the table) Medicine;
48
Miscellaneous amendments
Provision being amended What the amendment does
30-80(2) (items 9.2.2, 9.2.15, · Australian Council for Children and
9.2.16 and 9.2.20 in the table) Youth Organisations Inc;
30-90 (item 10.2.6 in the table) · Australian Games Uniform Company
30-105 (items 13.2.4, 13.2.5, Limited;
13.2.6, 13.2.11, 13.2.12, · Australian Postgraduate Federation in
13.2.13 and 13.2.14 in the Medicine;
table) · Australian National Travel Association;
30-315 (items 5, 19, 20AA, 21, · Australian Red Cross Society--US 2005
21A, 24, 25, 25C, 26, 28AAA, Hurricane Relief Appeal;
28A, 28AB, 31A, 34, 38,
· Australian Regional Council of Royal
45AA, 49A, 50A, 60A, 61, 81,
College of Obstetricians and
83, 86F, 91, 105B, 112AFA,
Gynaecologists;
112AG, 112BA, 121C, and
127AA in the table) · Bowral Vietnam Memorial Walk Trust
[Items 36 to 54] Incorporated;
Tax Laws Amendment · Business Against Domestic Violence
(Repeal of Inoperative Reserve;
Provisions) Act 2006 · City of Onkaparinga Memorial Gardens
Item 15 of Schedule 3 Association Incorporated;
(heading) · Commonwealth (for gifts made for the
[Items 55 and 56] purposes of research in the Australian
Antarctic Territory);
· Constitutional Centenary Foundation
Incorporated;
· Dunn and Lewis Youth Development
Foundation Limited;
· Foundation for Gambling Studies;
· Industrial Design Council of Australia;
· Nonprofit Australia Ltd;
· Pearl Watson Foundation Limited;
· Point Nepean Community Trust;
· Productivity Promotion Council of
Australia;
· St Mary's Cathedral Restoration Appeal
Incorporated;
· St Michael's Church Restoration Fund;
· St Paul's Cathedral Restoration Fund;
· The Finding Sydney Foundation;
· The Salvation Army Hurricane Katrina
Relief Appeal;
· The Vietnam War Memorial of Victoria
Incorporated; and
· World Youth Day 2008 Trust.
49
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
All organisations affected have been
consulted and none have objected.
The specific listings of `Commonwealth'
enabled gifts for the purposes of research in
the Australian Antarctic Territory, but the
Commonwealth no longer accesses DGR
support under that listing as DGR support
was established under other programs.
Amends the specific listing of the following
deductible gift recipients (DGRs) listing to
reflect a name change of the listed
organisation from the `College of
Radiologists in Australasia' to `The Royal
Australian and New Zealand College of
Radiologists'.
Deems the following specifically listed
DGRs, which are eligible for endorsement
under the general categories, to have been
endorsed by the Commissioner as DGRs
under the general categories on the same day
as the specific listing is repealed, but does
not prevent the Commissioner from
revoking that endorsement at a later time:
· Breast Cancer Network Australia; and
· Indigenous Community Volunteers
Limited.
Repeals and updates the specific listings of
the following DGRs where: the
organisations no longer exist for the
purposes for which they were listed; or the
organisations were listed for a limited time
and that time has expired, or the
organisations have ceased to exist, or have
merged with other DGR eligible
organisations:
· Australian College of Occupational
Medicine;
· Australian Council for Children and
Youth Organisations Inc;
· Australian Games Uniform Company
Limited;
· Australian Postgraduate Federation in
Medicine;
· Australian National Travel Association;
· Australian Red Cross Society--US 2005
Hurricane Relief Appeal;
50
Miscellaneous amendments
Provision being amended What the amendment does
· Australian Regional Council of Royal
College of Obstetricians and
Gynaecologists;
· Bowral Vietnam Memorial Walk Trust
Incorporated;
· Business Against Domestic Violence
Reserve;
· City of Onkaparinga Memorial Gardens
Association Incorporated;
· Commonwealth (for gifts made for the
purposes of research in the Australian
Antarctic Territory);
· Constitutional Centenary Foundation
Incorporated;
· Dunn and Lewis Youth Development
Foundation Limited;
· Foundation for Gambling Studies;
· Industrial Design Council of Australia;
· Nonprofit Australia Ltd;
· Pearl Watson Foundation Limited;
· Point Nepean Community Trust;
· Productivity Promotion Council of
Australia;
· St Mary's Cathedral Restoration Appeal
Incorporated;
· St Michael's Church Restoration Fund;
· St Paul's Cathedral Restoration Fund;
· The Finding Sydney Foundation;
· The Salvation Army Hurricane Katrina
Relief Appeal;
· The Vietnam War Memorial of Victoria
Incorporated; and
· World Youth Day 2008 Trust.
All organisations affected have been
consulted and none have objected.
The specific listings of `Commonwealth'
enabled gifts for the purposes of research in
the Australian Antarctic Territory, but the
Commonwealth no longer accesses DGR
support under that listing as DGR support
was established under other programs.
Amends the specific listing of the following
deductible gift recipients (DGRs) listing to
51
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
reflect a name change of the listed
organisation from the `College of
Radiologists in Australasia' to `The Royal
Australian and New Zealand College of
Radiologists'.
Part 7 -- Section 23AB of the Income Tax Assessment Act 1936
Table 5.9: Part 7 -- Section 23AB of the Income Tax
Assessment Act 1936
Provision being amended What the amendment does
Income Tax Assessment Adds conjunctions that had been omitted at
Act 1936 the end of some paragraphs.
23AB(5)(a)
23AB(7)(a)
23AB(10)(a)
[Items 57, 59 and 60]
23AB(7)
Corrects an ambiguity in the wording of the
[Item 58] provision, as the previous text did not
explicitly state that the rebate was to be
calculated as provided in the provision.
Part 8 -- Definitions and signposts to related material
Table 5.10: Part 8 -- Definitions and signposts to related
material
Provision being amended What the amendment does
Income Tax Assessment Inserts notes to refer to the additional
Act 1936 information contained in subsections 6(4) and
6(1) (at the end of the (6) relating to the definitions of `dividend'
definition of `dividend') and `permanent establishment' respectively.
6(1) (at the end of the
definition of `permanent
establishment')
[Items 61 and 62]
6(1) (definition of `RSA') Replaces the definitions of `RSA' and `RSA
6(1) (definition of `RSA provider' in the ITAA 1936 with a reference
provider') to the meanings given by subsection 995-1(1)
[Items 63 and 64] of the ITAA 1997.
52
Miscellaneous amendments
Part 9 -- Repeal of redundant reference to Papua New Guinea
Table 5.11: Part 9 -- Repeal of redundant reference to
Papua New Guinea
Provision being amended What the amendment does
Income Tax Assessment Repeals the reference to Papua New Guinea as
Act 1936 it is no longer required.
6AA(1)(d)
6AA(1)(e)
6AA(1)(f)
[Items 65 to 67]
Part 10 -- Repeal of redundant references to franking
Table 5.12: Part 10 -- Repeal of redundant references to
franking
Provision being amended What the amendment does
Income Tax Assessment Modifies paragraph 45C(3)(a) to replace a
Act 1936 redundant reference to `a class C franking
45C(3)(a) debit' with a reference to `a franking debit'.
[Items 68 and 69] This amendment will apply from 1 July 2002,
which is the time when class C franking
debits ceased to exist.
Repeals subsections 45C(5) and 45C(6).
Subsection 45C(5) is a transitional rule that is
45C(5) and (6) no longer required. Subsection 45C(6) refers
[Item 70] to definitions in Part IIIAA of the
ITAA 1936. Part IIIAA was previously
removed as an inoperative provision.
Under the simplified imputation system,
introduced from 1 July 2002, the way that
companies keep franking accounts changed
from a taxed income basis to a tax paid basis.
This removed the requirement for companies
to maintain different classes of franking
accounts. The amendments to update the
terminology in section 45C will have no
adverse impact on taxpayers as it confirms
existing practice and removes uncertainty.
53
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 11 -- Correction of cross-reference in provision about dividend
streaming etc.
Table 5.13: Part 11 -- Correction of cross-reference in
provision about dividend streaming etc.
Provision being amended What the amendment does
Income Tax Assessment Replaces an incorrect reference in
Act 1936 subsection 45D(2) to a determination made
45D(2) under paragraph 45D(1)(b) with a reference
[Items 71 and 72] to a determination made under section 45A.
Paragraph 45D(1)(b) was removed when the
demerger provisions were introduced in 2002.
However, a consequential amendment to
update subsection 45D(2) was overlooked.
This amendment will not have an adverse
impact on taxpayers, as it confirms existing
practice and removes uncertainty. Therefore
this amendment applies to determinations
made by the Commissioner on or after
24 October 2002.
Part 12 -- Minor changes to provisions about concessional rebates
Table 5.14: Part 12 -- Minor changes to provisions about
concessional rebates
Provision being amended What the amendment does
Income Tax Assessment Fixes duplication of the word `the'.
Act 1936
159J(1B)
[Item 73]
Part 13 -- Fixing outdated references to Medicare levy
Table 5.15: Part 13 -- Fixing outdated references to
Medicare levy
Provision being amended What the amendment does
Income Tax Assessment Repeals the redundant provision and updates
Act 1997 the note to subsection 3-5(1) to include the
3(1) correct references to the Medicare levy.
3-5(1)(note 1)
[Items 74 and 75]
54
Miscellaneous amendments
Part 14 -- Repeal of references to previously repealed provisions
Table 5.16: Part 14 -- Repeal of references to previously
repealed provisions
Provision being amended What the amendment does
Income Tax Assessment Removes the item referring to
Act 1997 section 23ADA, which was repealed by the
11-15 (item in the table Tax Laws Amendment (Repeal of Inoperative
headed `United Nations') Provisions) Act 2006.
[Item 76]
Clarifies that the reference should be `subject
830-75 to foreign tax'.
[Item 77]
Part 15 -- Correction of asterisking of reference to tax debts
Table 5.17: Part 15 -- Correction of asterisking of
reference to tax debts -- Amendments to the Income Tax
Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Corrects the asterisking of the reference to
Act 1997 `tax debts'.
25-5(7)
[Item 78]
Part 16 -- Repeal of outdated provisions about exemptions from income
tax
Table 5.18: Part 16 -- Repeal of outdated provisions
about exemptions from income tax
Provision being amended What the amendment does
Income Tax Assessment Repeals outdated provisions that covered
Act 1936 exemptions from income tax. The Phosphate
128B(3)(ab) Mining Company of Christmas Island
[Item 79] Limited no longer exists; the Australian Film
Finance Corporation Pty Limited was
deregistered and subsumed into Screen
Income Tax Assessment Australia; and the Commonwealth Games
Act 1997 Federation entitlement to tax exemptions
11-5 (item in the table headed expired on 1 July 2007. Therefore the
`film') provisions relating to these are inoperative
11-5 (item in the table headed and are being repealed.
`mining')
55
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
50-35 (item 7.1 in the table)
50-45 (heading)
50-45 (items 9.3 and 9.4 in the
table)
[Items 80 to 84]
Part 17 -- Correction of asterisking of references to quarter
Table 5.19: Part 17 -- Correction of asterisking of
references to quarter
Provision being amended What the amendment does
Income Tax Assessment Corrects the asterisking of the references to
Act 1997 `quarter'.
114-15(2)
114-15(3) steps 1 and 3 in the
method statement)
114-15(5) and (6)
114-20
[Items 85 to 88]
Part 18 -- Inclusion of Commissioner's discretion to extend main
residence exemption from CGT
Table 5.20: Part 18 -- Inclusion of Commissioner's
discretion to extend main residence exemption from CGT
Provision being amended What the amendment does
Income Tax Assessment Gives effect to the suggestion made through
Act 1997 TIES issue 0056-2009.
118-150(4)(a) Section 118-150 of the ITAA 1997 extends
[Items 89 and 90] the CGT main residence exemption to allow a
taxpayer to treat land as their main residence
for up to four years if they build, repair or
renovate a dwelling on the land that
subsequently becomes their main residence.
This amendment gives the Commissioner
discretion to extend this period where the
taxpayer does not build, repair or renovate a
dwelling and establish it as their main
residence within four years.
56
Miscellaneous amendments
Provision being amended What the amendment does
The Commissioner would be expected to
exercise the discretion in situations such as
the following:
· When the taxpayer is unable to build,
repair or renovate the dwelling within this
time period due to circumstances outside
their control. For example, the relevant
builder becomes bankrupt and is unable to
complete the building, repairs or
renovations.
· When the taxpayer is unable to build,
repair or renovate the dwelling due to
unforeseen circumstances arising during
this period. For example, the taxpayer or
a family member has a severe illness or
injury.
· When building, repairing or renovating
the dwelling within the four years would
impose a severe financial burden on the
taxpayer. For example, the taxpayer
would be required to incur an excessively
high level of debt relative to their income.
Consequently, the taxpayer may spend
time accumulating sufficient savings
(relative to their income) to build, repair
or renovate a reasonable dwelling relative
to their circumstances.
These examples are not exhaustive.
This amendment will apply in relation to
CGT events happening on or after Royal
Assent.
Part 19 -- Nomination of controllers of discretionary trust
5.10 These amendments give effect to the suggestion made through
TIES issue 0059-2009.
5.11 All references to legislative provisions in this Part are references
to the Income Tax Assessment Act 1997 unless otherwise stated.
5.12 Section 152-42 currently allows a trustee of a discretionary trust
to nominate up to four beneficiaries of the trust as controllers of the trust
for an income year in which the trustee did not make a distribution of
income or capital and the trust had a tax loss or no taxable income for that
year.
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Tax Laws Amendment (2011 Measures No. 2) Bill 2011
5.13 The result of nominating a beneficiary to be a controller of a
discretionary trust is that the beneficiary and discretionary trust are
connected entities for the income year but only for the purpose of
applying the definition of `active asset' in subparagraph 152-40(1)(a)(iii)
or paragraph 152-40(1)(b).
5.14 This allows a capital gain made on a passively held CGT asset
(that is, an asset that is owned by one entity and used in the business of an
affiliate of, or an entity connected with, the asset-owning entity) to qualify
for the small business CGT concessions via the maximum net asset value
test where the asset is:
· owned by a nominated beneficiary (or beneficiaries) or by an
entity connected with a nominated beneficiary; and
· used or held ready for use in the discretionary trust's
business.
5.15 However, where a beneficiary is a controller of a discretionary
trust only because of the nomination in section 152-42, this does not make
the beneficiary a controller of the trust for calculating the maximum net
asset value of the entity that owns the asset.
5.16 Currently, section 152-42 does not apply to
paragraph 152-10(1A)(a), which is part of the provisions that extend
access to the small business CGT concessions via the small business
entity test to passively-held assets.
5.17 This means that an entity that does not carry on a business (other
than as a partner in partnership) and that is not connected with a
discretionary trust cannot access the small business CGT concessions via
the small business entity test for a capital gain made on a CGT asset it
owned that was used in the business of the discretionary trust.
5.18 The amendments, which repeal section 152-42 with effect from
Royal Assent, introduce a new provision to allow a trustee of a
discretionary trust to nominate up to four beneficiaries of the trust as
controllers of the trust for an income year in which the trustee did not
make a distribution of income or capital and the trust had a tax loss or no
net income for that year. The nomination must be in writing and signed
by the trustee and by each nominated beneficiary. The proposed provision
relates to `net income' rather than `taxable income', which is used in
section 152-42. `Taxable income' is technically incorrect because, under
subsection 95(1) of the ITAA 1936, a trust has net income rather than
taxable income. [Schedule 5, items 99, 102 and subitem 105(2), sections 152-42 and
152-78 of the ITAA 1997]
58
Miscellaneous amendments
5.19 The amendments also extend the scope of the nomination so that
it applies for the purposes of Subdivision 152-A and for sections 328-110,
328-115 and 328-125 as they relate to that Subdivision. [Schedule 5,
item 102, subsection 152-78(1) of the ITAA 1997]
5.20 Where the trustee has made a nomination under the new
provision, its extended scope allows an entity that does not carry on a
business (other than as a partner in partnership) whose asset is used in the
trust's business to access the small business CGT concessions via the
small business entity test through the operation of subsection 152-10(1A).
5.21 The extended scope of a nomination also means that it applies
for determining whether one entity is connected with another entity for
calculating the maximum net asset value of the entity that owned the asset
or the aggregated turnover of the discretionary trust that used the asset in
its business.
5.22 Various notes in the legislation have been changed and new
notes inserted to indicate the location and effect of the amendments.
[Schedule 5, items 91 to 98, 100, 103 and 104, paragraph 152-1-(1)(c)(note),
subsection 152-10(1A)(note 1), subsection 152-10(1A)(note 2), section 152-15(note),
section 152-15, subsections 152-20(2) to (4), subsection 152-40(1)(note 2),
subsections 152-40(4) and (4A), 152-47(1) and 152-48(2), subsection 328-115(1)(note),
subsection 995-1(1)(note at the end of the definition of `connected with') of the
ITAA 1997]
5.23 For access to the small business CGT concessions generally, the
amendments apply in relation to CGT events that happen on or after the
day this Bill receives Royal Assent. [Schedule 5, paragraph (a) of
subitem 105(1)]
5.24 For access to the small business CGT concessions via the small
business entity test only, the amendments also apply in relation to CGT
events that happen before the day this Bill receives Royal Assent but after
the start of the 2007-08 income year. [Schedule 5, item 109, paragraph (b) of
subitem 105(1)]
5.25 The combination of the two application rules results in:
· the amendments applying, for access to the concessions via
the small business entity test, in relation to CGT events that
happen in the 2007-08 income year and later income years
(which aligns with the date of effect of the amendments that
extended access to the concessions via the small business
entity test to passively held assets); and
· taxpayers who accessed the concessions where a trustee
made a nomination under section 152-42 prior to Royal
Assent not being disadvantaged by the increased scope of the
59
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
new nomination, which includes determining whether one
entity is connected with another entity for calculating the
maximum net asset value of the entity that owned the
relevant asset.
5.26 The retrospective component of the amendments will be
beneficial to discretionary trust beneficiaries who, following the trustee of
the trust making a nomination, will have the opportunity to access the
small business CGT concessions via the small business entity test.
5.27 The small business CGT concessions require taxpayers to make
choices. For example, the small business retirement exemption and small
business roll-over are available only if the taxpayer chooses to obtain
them.
5.28 Subsection 103-25(1) limits the date for making a choice to the
day an entity lodges its income tax return for the income year in which the
relevant CGT event happened or a later date allowed by the
Commissioner.
5.29 Taxpayers who become eligible to make a choice under
Division 152 due to these amendments will have an extended period,
under a transitional rule, to make such a choice in relation to CGT events
happening before the day on which this Bill receives Royal Assent.
[Schedule 5, subitem 105(3)]
5.30 The time limit for an entity to make the choice it is eligible to
make as a result of these amendments is the latest of:
· the day the entity lodges its income tax return for the income
year in which the relevant CGT event happened;
· 12 months after the day this Bill receives Royal Assent; and
· a later day allowed by the Commissioner.
[Schedule 5, subitem 105(4)]
60
Miscellaneous amendments
Part 20 -- Definitions mainly relevant to Subdivision 165-F of the Income
Tax Assessment Act 1997
Table 5.21: Part 20 -- Definitions mainly relevant to
Subdivision 165-F of the Income Tax Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Inserts definitions of `control a non-fixed
Act 1997 trust', `excepted trust', fixed entitlement' and
115-50(2)(a), 3(a) and 4(a) `more than a 50% stake'
121-30(2) Corrects the asterisking of the references to
124-810(3)(a) `fixed entitlement', `fixed trust', `non-fixed
165-45(4)(note 2) trusts', `fixed entitlements', `family trusts',
165-215(2)(a)(i) `excepted trust', and `more than a 50% stake'.
165-215(2)(a)(ii) Repeals section 165-245 because the terms
165-215(2)(b)(i) that were contained in that section are now
165-215(3) defined in either the ITAA 1997 or the
165-215(4)(a) ITAA 1936 with cross references as required.
165-215(5) Section 165-245 is replaced and a new rule to
165-220(2)(a)(i) better explain the meaning of `holding fixed
165-220(2)(a)(ii) entitlements directly or indirectly when an
165-220(2)(b)(i) entity has fixed entitlement to income or
165-220(2)(b)(ii) capital of a company'.
165-220(3)
165-220(4)(a)
165-220(5)
165-225
165-230(2)(a)(i)
165-230(2)(a)(ii)
165-230(2)(b)(i)
165-230(2)(b)(ii)
165-230(3)
165-230(4)(a)
165-230(5)
165-235(3)
165-235(4)(a)
165-240(1)
165-245
207-130(6)(f)
[Items 106 to 138]
707-130(1)(note 1)
[Items 139 and 140]
Removes outdated cross-references to
995-1(1) (definition of
definitions.
`control of a non-fixed trust')
995-1(1) (definition of
`excepted trust')
995-1(1) (definition of `more
than a 50% stake')
995-1(1) (definition of `fixed
61
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendment does
entitlement')
[Items 141 to 145]
Taxation Administration Corrects the asterisking of references to `fixed
Act 1953 entitlement'.
45-287(1)(a) in Schedule 1
45-287(4)(a) in Schedule 1
[Items 146 and 147]
Part 21 -- Removal of definition from imputation provisions
Table 5.22: Removal of definition from imputation
provisions
Provision being amended What the amendment does
Income Tax Assessment Removes the definition of the term `differs
Act 1997 significantly' from the imputation provisions.
204-70
204-75(1) and (2)
204-80(1)
[Items 148 to 150]
62
Miscellaneous amendments
Part 22 -- Correction of outdated references to virtual PST assets
Table 5.23: Part 22 -- Correction of outdated references
to virtual PST assets
Provision being amended What the amendment does
Income Tax Assessment Gives effect to a suggestion made through
Act 1997 TIES issue 0057-2009.
320-141(2)(a)(i) Replaces outdated references in
320-141(2)(a)(ii) subsection 320-141(2) to `virtual PST assets'
[Items 151 to 153] with references to `complying
superannuation/FHSA assets'. This
amendment applies on and after
26 June 2008.
The concept of a `virtual PST asset' was
replaced with the concept of a `complying
superannuation/FHSA asset' when the first
home savers account amendments were
introduced in 2008. The amendments to
update the terminology in
subsection 320-141(2), which were sought by
taxpayers through the TIES system, will have
no adverse impact on taxpayers as they
confirm existing practice and remove
uncertainty.
63
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 23 -- Repeal of spent provision about land transport facilities
borrowings
Table 5.24: Part 23 -- Repeal of spent provision about land
transport facilities borrowing
Provision being amended What the amendment does
Income Tax Assessment Repeals the provisions that provided the basis
Act 1997 for the land transport facilities borrowings
13-1(item in the table headed scheme. That scheme provided tax offsets to
`land transport facilities resident financiers on interest received from
borrowings') eligible land transport infrastructure
250-60(3) borrowings provided that the borrower agreed
250-60(3)(d) to forego the tax deductibility of that interest.
250-60(3)(e) The scheme is no longer operative. Since
Division 396 2004 no new projects have been approved
995-1(1) (definition of `land under the scheme and no projects currently
transport facilities borrowings receive assistance under it.
agreement')
995-1(1) (definition of `land
transport facility')
995-1(1) (definition of `LTF
interest')
995-1(1) (definition of `related
facility')
[Items 154 to 162]
Part 24 -- Prevention of double counting for direct value shifts
Table 5.25: Part 24 -- Prevention of double counting for
direct value shifts
Provision being amended What the amendment does
Income Tax Assessment In certain circumstances, the direct value
Act 1997 shifting rules could apply where an amount is
725-250 already included in the adjustable value (such
725-255(2) as the cost base or reduced cost base) of an up
725-335(3) interest.
725-340(2) This could happen where, for example, a
[Items 163 to 167] shareholder makes a payment to another
shareholder for an impairment of their share
rights. This expenditure could qualify for
inclusion in the fourth element of the cost
base (and reduced cost base) of the paying
shareholder's shares.
Providing that all of the conditions under the
direct value shifting rules are satisfied, the
64
Miscellaneous amendments
Provision being amended What the amendment does
payer shareholder would also be able to make
an adjustment to increase the cost base of
their shares reflecting in whole or part the
increase in the market value of their interest.
This can duplicate the effect of the inclusion
of an amount in the fourth element of the cost
base.
This amendment will ensure that where an
amount is included in the adjustable value of
an up interest, the value will not adjust the
cost base of the up interest under the direct
value shifting rules.
This amendment applies in relation to
schemes entered into on or after Royal
Assent.
Part 25 -- Ineligible income tax remission decisions
Table 5.26: Part 25 -- Ineligible income tax remission
decisions
Provision being amended What the amendment does
Taxation Administration Moves the definition of `ineligible income tax
Act 1953 remission decision' from section 14ZQ to
2(1) subsection 2(1).
14ZQ (definition of Corrects an incorrect cross-reference, and
`ineligible income tax applies to determinations made on or after
remission decision') 1 April 2004.
14ZS(1)
14ZS(2)
14ZS(5)
[Items 168 to 172]
388-65(3A) in Schedule 1
[Items 431 and 432]
65
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 26 -- Correction of references to chains of fixed trusts
Table 5.27: Part 26 -- Correction of references to chains
of fixed trusts
Provision being amended What the amendment does
Income Tax Assessment Corrects the asterisking of the references to
Act 1997 `fixed trust' and `chains of fixed trusts'.
855-40(2)(b)(i) and (ii)
855-40(6)(b)
[Items 173 to 175]
Part 27 -- Gender-specific language
Table 5.28: Part 27 -- Gender-specific language
Provision being amended What the amendments do
Income Tax Assessment Ensures gender neutral references in the tax
Act 1936 law provisions.
6(1) (definition of `income
from personal exertion')
6(1) (paragraph (a) of the
definition of `income from
personal exertion')
6(1) (paragraph (e) of the
definition of' permanent
establishment')
6(1) (subparagraphs (a)(i) and
(ii) of the definition of
`resident')
6A
14(2)
23AA(2)
23AA(3)(a), (b) and (c) and
(6)(a)
23AB(2)
23AB(7)
23AB(7)(b)
23AB(11)
23AC(3)(a)(i)
23AC(3)(a)(i), (ii), (iii) and
(iv)
23AC(3)(b)(i)
23AC(3)(b)(ii)
23AF(11)
23AF(12)
23AF(18) (paragraph (a) of
the definition of `eligible
66
Miscellaneous amendments
Provision being amended What the amendments do
foreign remuneration')
24B(1) (paragraph (b) of the
definition of `prescribed
person')
24C(a)
24D(4)
24E(1)(b)
24E(4)(b)
24E(4)(c)
24G(1)(e)
25A(1)
25A(10)(a)
25A(11)(b)(i)
26AB(4)
26AG(3)(d) and (e)
26AG(4)
26AG(10)(f) and (g)
26AH(2)(b)
26AH(4)
26C(2)(b)(i)
27(1)
51AD(9)
51AD(20)(f)
52(1)
52A(3)(j)
73A(2)
73A(2)(b)
79A(1)
79A(2)(f)
79A(2A)
79A(3B)(c)
79A(3E)
79B(1)
79B(2)(b)
79B(5) and (5A)
82
82KL(8)
82L(1) (paragraph (b) of the
definition of `convertible
note')
82M(1)(b)
82P(2)(b) and (3)(b)
82R(2)
82SA(1)(d)(i)
82SA(1)(d)(vii)
82SA(1)(d)(viii)
94(2)(a)
94(9), (10), (10A) and (10B)
94(10C)(a)(i)(A)
95B
67
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Provision being amended What the amendments do
99A(3)(c)
99C(2)(e)
101
101A(1)
101A(2)
102(1)(a)
102(2)
102(2)(a) and (b)
102(3)
102A(4)(a)(i) and (b)(i)
102G(11)(a)
102G(11)(b) and (c)
103(2)
103A(5)(d)
103A(7)(a), (b) and (c)
120(2)
126(3)
128A(3)
128B(10) and (11)
129
130
131
134
135
136AF(1) and (3)
136AF(5)
142
143
147
148(2)
148(2)(b)
148(3)
148(3)
148(4)
148(5) and (8)
148(9)
148(9)(a)
148(9)(b)
152
155(1)
155(2)
156(1) (definition of `relevant
primary production
deductions')
156(5)
157(3)
157(4)
159H(a)
159J(1), (1A) and (1B)
159L(1) and (3)
68
Miscellaneous amendments
Provision being amended What the amendments do
159L(4)(a)
159M
159P(4) (paragraph (h) of the
definition of `
medical expenses')
160AAB(2), (3) and (6)
163
164
166
167
171(1)
177E(1)(c)
177F(1) and (3)
177F(6)
251R(4)
251S(2)
252(1)(c)
252(1)(g)
252(1)(i)
252A(3)
252A(6)
252A(12)
254(1)(a)
254(1)(b)
254(1)(c)
254(1)(d)
254(1)(e)
254(1)(f)
254(1)(g)
254(1)(h)
255(1)(a) and (b)
255(1)(c)
255(1)(d)
255(2)
257
262
263(1)
264(1)(a)
264(1)(b)
264(2)
[Items 176 to 367]
69
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Part 28 -- Misdescribed amendments
Table 5.29: Part 28 -- Misdescribed amendments --
Amendments to the Tax Laws Amendment (2010 Measures
No.1) Act 2010
Provision being amended What the amendment does
Tax Laws Amendment (2010 Corrects grammatical and other errors, such
Measures No. 1) Act 2010 as asterisking.
Item 105 of Schedule 5
Item 173 of Schedule 5
Item 201 of Schedule 5
Item 11 of Schedule 6
(heading)
[Items 368 to 371]
Table 5.30: Part 28 -- Misdescribed amendments --
Amendments to the Tax Laws Amendment (Transfer of
Provisions) Act 2010
Provision being amended What the amendment does
Tax Laws Amendment Repeals an item that amends provisions that
(Transfer of Provisions) have been repealed.
Act 2010
Item 16 of Schedule 2
[Item 372]
Part 29 -- References to Schedules
Table 5.31: Part 29 -- References to Schedules --
Amendments to the Family Trust Distribution Tax
(Primary Liability) Act 1998 and to the Family Trust
Distribution Tax (Secondary Liability) Act 1998
Provision being amended What the amendment does
Family Trust Distribution Corrects the wording of how to refer to a
Tax (Primary Liability) Schedule.
Act 1998
3
[Item 373]
Family Trust Distribution
Tax (Secondary Liability)
Act 1998
3
[Item 374]
70
Miscellaneous amendments
Table 5.32: Part 29 -- References to Schedules --
Amendments to the Fringe Benefits Tax Assessment
Act 1986
Provision being amended What the amendment does
Fringe Benefits Tax Corrects the wording of how to refer to a
Assessment Act 1986 Schedule.
136(1) (paragraph (q) of the
definition of `fringe benefit')
[Item 375]
Table 5.33: Part 29 -- References to Schedules --
Amendments to the Income Tax Assessment Act 1936
Provision being amended What the amendment does
Income Tax Assessment Corrects the wording of how to refer to a
Act 1936 Schedule.
95(1) (note at the end of the
definition of `net income')
102D(1) (note at the end of the
definition of `net income')
102M (note at the end of the
definition of `net income')
102UC(4) (definition of
`discretionary trust')
102UC(4) (paragraphs (a), (d)
and (e) of the definition of
`excluded trust')
102UC(4) (definition of `fixed
entitlement')
102UC(4) (definition of
`indirectly')
[Items 376 to 382]
71
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Table 5.34: Part 29 -- References to Schedules --
Amendments to the Income Tax Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Corrects the wording of how to refer to a
Act 1997 Schedule.
25-35(5) (cell in item 5 in the Updates a reference to the old Schedule 2J in
table, column headed `See:') the ITAA 1936, which has since been
36-25 rewritten into Subdivision 321-C in the
109-60 (cell in item 9 in the ITAA 1997.
table, column headed `See:')
109-60 (cell in item 10 in the
table, column headed `See:')
112-97 (cell in item 5A in the
table, column headed `See:')
112-97 (cell in item 20 in the
table, column headed `See:')
128-15(1) (note 2)
165-215(5)
165-220(5)
165-230(5)
180-10(1)
180-20(1)
230-460(7)
328-10(1) (cell in item 12 in
the table, column headed
`Provision')
328-110(4) (paragraph (a) of
the note)
995-1(1) (definition of `family
trust')
995-1(1) (paragraph (a) of the
definition of `income for
surcharge purposes')
995-1(1) (note 1 to paragraph
(a) of the definition of `tax
loss')
[Items 383 to 396]
72
Miscellaneous amendments
Table 5.35: Part 29 -- References to Schedules --
Amendments to the Income Tax (Transitional Provisions)
Act 1997
Provision being amended What the amendment does
Income Tax (Transitional Corrects the wording of how to refer to a
Provisions) Act 1997 Schedule.
40-285(2)(a)(ii)
[Item 397]
Table 5.36: Part 29 -- References to Schedules --
Amendments to the Medicare Levy Act 1986
Provision being amended What the amendment does
Medicare Levy Act 1986 Corrects the wording of how to refer to a
3(2A) Schedule.
[Item 398]
Table 5.37: Part 29 -- References to Schedules --
Amendments to the Superannuation Contributions Tax
(Assessment and Collection) Act 1997
Provision being amended What the amendment does
Superannuation Corrects the wording of how to refer to a
Contributions Tax Schedule.
(Assessment and Collection)
Act 1997
7A(3)(b) and (c)
7B(3)(b) and (c)
[Item 399]
Part 30 -- References to taxation laws
Table 5.38: Part 30 -- References to taxation laws --
Amendments to the Income Tax Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Inserts a definition of `Excise Act'.
Act 1997
995-1(1)
[Item 400]
73
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Table 5.39: Part 30 -- References to taxation laws --
Amendments to the Taxation Administration Act 1953
Provision being amended What the amendment does
Taxation Administration Clarifies the limiting of the definition of
Act 1953 `taxation law' so as to exclude `Excise Acts'.
2(1) (at the end of the
definition of `taxation law')
2(2)
284-75(1)(a) in Schedule 1
284-75(1) in Schedule 1 (note
1)
284-75(1) in Schedule 1 (note
2)
284-75(4)(a)(ii) in Schedule 1
284-75(4)(b) in Schedule 1
284-75(6)(d)(i) in Schedule 1
284-75(6)(d)(ii) in Schedule 1
284-80(1) in Schedule 1 (table
item 2)
284-90(1) in Schedule 1
(items 1, 2 and 3 in the table,
column headed `In this
situation:')
[Items 401 to 411]
Part 31 -- Other amendments
Table 5.40: Part 31 -- Other amendments --
Amendments to the Income Tax Assessment Act 1936
Provision being amended What the amendment does
Income Tax Assessment Corrects the numbering and ordering of items
Act 1936 in the table.
170(10AA) (items 24, 25, 30 Corrects a grammatical error.
and 35 in the table)
202DR(2)
[Items 412 and 413]
74
Miscellaneous amendments
Table 5.41: Part 31 -- Other amendments --
Amendments to the Income Tax Assessment Act 1997
Provision being amended What the amendment does
Income Tax Assessment Corrects typographical errors.
Act 1997 Repeals a provision that related to a
112-20(3) (note 1) corporation that no longer exists.
Subdivision H of Corrects an incorrect cross-reference.
Division 240 (heading)
376-170(4)(a)(i)
705-25(5)(c)(ii)
974-150(2)
[Items 414 to 418]
Table 5.42: Part 31 -- Other amendments --
Amendments to the Income Tax (Transitional Provisions)
Act 1997
Provision being amended What the amendment does
Income Tax (Transitional Repeals a spent provision.
Provisions) Act 1997
126-155
[Item 419]
Table 5.43: Part 31 -- Other amendments --
Amendments to the Superannuation Legislation
Amendment Act 2010
Provision being amended What the amendment does
Superannuation Legislation Corrects an incorrect cross-reference.
Amendment Act 2010
21(1) in Schedule 1
[Item 420]
Table 5.44: Part 31 -- Other amendments --
Amendments to the Taxation (Interest on Overpayments
and Early Payments) Act 1983
Provision being amended What the amendment does
Taxation (Interest on Corrects an incorrect cross-reference.
Overpayments and Early
Payments) Act 1983
3C (definition of `relevant
tax') (item 50 in the table)
[Item 423]
75
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Table 5.45: Part 31 -- Other amendments --
Amendments to the Taxation Administration Act 1953
Provision being amended What the amendment does
Taxation Administration Corrects an incorrect cross-reference, and
Act 1953 applies to determinations made on or after
2(1) 1 April 2004.
14ZQ (definition of
`ineligible income tax
remission decision')
14ZS(1)
14ZS(2)
14ZS(5)
388-65(3A) in Schedule 1
[Items 421 and 422]
Table 5.46: Part 31 -- Other amendments --
Amendments to the Tax Laws Amendment (2007
Measures No. 5) Act 2007
Provision being amended What the amendment does
Tax Laws Amendment (2007 Repeals a heading which refers to an Act that
Measures No. 5) Act 2007 is not being amended.
Part 2 of Schedule 12 (heading
relating to the Industrial
Research and Development
Incentives Act 1976)
[Item 424]
76
Index
Schedule 1: Deductible gift recipients
Bill reference Paragraph number
Items 1 and 2, items 10.2.2 and 10.2.3 in the table in section 30-90 1.11
Item 3, item 53A in the table in section 30-315 1.14
Item 4, item 2.2.39 in the table in subsection 30-25(2) 1.5
Item 4, item 2.2.40 in the table in subsection 30-25(2) 1.8
Items 5 and 6, items 30A and 97AA in the table in section 30-315 1.13
Schedule 2: Self managed superannuation funds
Bill reference Paragraph number
Item 1, section 62A 2.19, 2.23
Item 1, section 62A, note 2.24
Item 2, paragraph 353(1)(d) 2.26
Item 3 2.27, 2.28
Schedule 3: Use of TFNs for superannuation purposes
Bill reference Paragraph number
Item 1, subsections 137(4) and (5) of the RSA Act; items 3, 6, 8 and 3.30
10, subsections 299H(4) and (5), 299J(4) and (5), 299K(4) and (5)
and 299L(4) and (5) of the SIS Act
Item 2, section 137A of the RSA Act; item 12, section 299LA of the 3.13
SIS Act
Item 2, subsection 137A(2) of the RSA Act; item 12, 3.17
subsection 299LA(2) of the SIS Act
Item 2, subsection 137A(3) of the RSA Act; item 12, 3.16
subsection 299LA(3) of the SIS Act
Items 2 and 16, note in subsection 137A(2) of the RSA Act; items 12 3.20, 3.24
and 17, note in subsection 299LA(2) of the SIS Act
Items 4, 5, 7, 9 and 11, subsections 299H(6) and (7), 299J(6) and (7), 3.31
77
Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Bill reference Paragraph number
299K(6) and (7), 299L(6) and (7) of the SIS Act
Items 13 and 18 3.26
Items 14 and 15, section 16 of the RSA Act 3.32
Item 19 3.28
Schedule 4: GST: payments of taxes, fees and charges
Bill reference Paragraph number
Item 1, subparagraph 13-20(2)(ba)(i) 4.41
Item 2, section 81-1 4.41
Item 2, subsection 81-5(1) 4.21
Item 2, subsections 81-5(2) and (3) 4.23
Item 2, subsection 81-10(1) 4.26
Item 2, subsections 81-10(2) and (3) 4.31
Item 2, subsection 81-10(4) 4.28
Item 2, subsection 81-10(5) 4.30
Item 2, section 81-15 4.33
Item 2, section 81-20 4.34
Item 2, section 81-25 4.36
Item 3, subsection 82-10(3) 4.41
Item 4, subparagraph 117-5(1)(ba)(i) 4.41
Items 5 to 10, section 195-1 4.41
Items 11 to 15, section 27-1, paragraphs 5-20(1)(b) and 5-20(6)(b) of 4.41
the A New Tax System (Luxury Car Tax) Act 1999
Item 16 4.38
Schedule 5: Other amendments
Bill reference Table Page
Part 1 -- A New Tax System (Goods and Services Tax) 5.1 39
Act 1999
Part 2 -- Approved worker entitlement funds 5.2 40
Part 3 -- Confidentiality of taxpayer information 5.3 40 and 41
Part 4 -- Employee share schemes 5.4 to 5.6 42 to 47
Part 5 -- General interest charge 5.7 48
78
Index
Bill reference Table Page
Part 6 -- Deductible gift recipients 5.8 48 to 52
Part 7 -- Section 23AB of the Income Tax Assessment 5.9 52
Act 1936
Part 8 -- Definitions and signposts to related material 5.10 52
Part 9 -- Repeal of redundant reference to Papua New 5.11 53
Guinea
Part 10 -- Repeal of redundant references to franking 5.12 53
Part 11 -- Correction of cross-reference in provision 5.13 54
about dividend streaming etc.
Part 12 -- Minor changes to provisions about 5.14 54
concessional rebates
Part 13 -- Fixing outdated references to Medicare levy 5.15 54
Part 14 -- Repeal of references to previously repealed 5.16 55
provision
Part 15 -- Correction of asterisking of reference to tax 5.17 55
debts
Part 16 -- Repeal of outdated provisions about 5.18 55 and 56
exemption from income tax
Part 17 -- Correction of asterisking of references to 5.19 56
quarter
Part 18 -- Inclusion of Commissioner's discretion to 5.20 56 and 57
extend main residence exemption from CGT
Part 19 -- Nomination of controllers of discretionary no table 57 to 61
trust
Part 20 -- Definitions mainly relevant to Subdivision 5.21 61 and 62
165-F of the Income Tax Assessment Act 1997
Part 21 -- Removal of definition from imputation 5.22 62
provisions
Part 22 -- Correction of outdated references to virtual 5.23 63
PST assets
Part 23 -- Repeal of spent provisions about land 5.24 64
transport facilities borrowings
Part 24 -- Prevention of double counting for direct value 5.25 64 and 65
shifts
Part 25 -- Ineligible income tax remission decisions 5.26 65
Part 26 -- Correction of references to chains of fixed 5.27 66
trusts
Part 27 -- Gender-specific language 5.28 66 to 69
Part 28 -- Misdescribed amendments 5.29 and 70
5.30
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Tax Laws Amendment (2011 Measures No. 2) Bill 2011
Bill reference Table Page
Part 29 -- References to Schedules 5.31 to 5.37 70 to 73
Part 30 -- References to taxation laws 5.38 and 73 and 74
5.39
Part 31 -- Other amendments 5.40 to 5.46 74 to 76
80
81