Taxation Laws Amendment Act 1994 (56 of 1994)
Part 3 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936
Division 7 Heritage conservation rebate
51 Insertion of new Subdivision
After Subdivision AAC of Division 17 of Part III of the Principal Act, the following Subdivision is inserted:
"Subdivision AAD-Heritage conservation rebate
Object
"159U. The object of this Subdivision is to provide a rebate of tax for expenditure on certain conservation work on heritage listed buildings and structures.
Outline of Subdivision
"159UA. The following is a simplified outline of this Subdivision:
A: General
1. The Subdivision provides for rebates of tax for approved expenditure on certain conservation work on heritage listed buildings and structures. The expenditure must be at least $5,000. The entitlement to the rebate is set out in section 159UQ (taxpayers other than partnerships or trustees), section 159UR (partnerships), section 159US (trust estates) and section 159UT (corporate unit trusts and public trading trusts).
2. The Subdivision also contains a provision (subsection 159UU(1)) ensuring that deductions are not obtained for amounts for which there is an entitlement to a rebate.
3. Obtaining a rebate is a 2 step process.
B: Step 1-provisional certificate
1. The taxpayer applies for a provisional certificate (section 159UG)
2. The Minister then determines whether a provisional certificate is to be issued to the taxpayer and, if it is, issues the certificate (sections 159UJ and 159UK). The certificate specifies the maximum amount of expenditure that will be eligible for a rebate. In making his or her decision, the Minister will take into account criteria and procedures that he or she issues (sections 159UF and 159UJ).
3. The total of the amounts specified in certificates that the Minister approves in a financial year is not to exceed a limit set by the Minister (section 159UD). As a result, not all applications that may otherwise have been approved will be able to be approved, and some taxpayers may get approval for only part of the expenditure that they will incur.
C: Step 2-final certificate
1. When a taxpayer who has been issued with a provisional certificate finishes the work, the taxpayer may apply for a final certificate (section 159UM). The work must be completed, and the final certificate applied for, while the provisional certificate is in force.
2. If the work is to the standard specified in the provisional certificate (section 159UO) and the expenditure is at least $5,000 (section 159UM), the taxpayer will be issued with a final certificate.
Definitions
"159UB. In this Subdivision:
'Crown lease' means a lease granted by the Crown under a statutory law of the Commonwealth, a State or a Territory;
'eligible heritage conservation works expenditure' has the meaning given by paragraph 159UO(1)(b);
'final certificate' means a certificate issued under section 159UO;
'heritage conservation works' means works for the purpose of the conservation, maintenance, preservation, restoration, reconstruction, or adaptation, of a building, or other structure, where the building or structure:
(a) is of cultural significance; and
(b) is listed in a heritage register declared in writing by the Minister to be a recognised heritage register;
'maximum approval limit' has the meaning given by section 159UD;
'Minister' means the Minister for Communications and the Arts;
'provisional certificate' means a certificate issued under section 159UJ;
'provisional certificate criteria' means criteria determined under section 159UF;
'provisional certificate procedures' means procedures determined under section 159UF;
'qualifying expenditure limit' means an amount specified under paragraph 159UK(d);
'recognised heritage body' means a body declared in writing by the Minister to be a recognised heritage body;
'Secretary' means the Secretary to the Department of Communications and the Arts.
Expenditure does not include expenditure on plant or articles
"159UC. In this Subdivision, 'expenditure' does not include expenditure on plant or articles within the meaning of section 54.
Minister must set maximum approval limit
"159UD.(1) The Minister must, by written notice, specify an amount as the maximum approval limit for each financial year in respect of applications for provisional certificates.
"(2) The maximum approval limit for a financial year must be specified before the Minister issues any provisional certificates in that financial year.
"(3) The Minister must not, under paragraph 159UK(d), specify a qualifying expenditure limit that would cause the maximum approval limit for that financial year to be exceeded.
Minister may set closing date for applications
"159UE.(1) The Minister may, by notice published in the Gazette, specify a day as the closing day for applications for provisional certificates in relation to a financial year.
"(2) The day specified in the notice must be at least 21 days after the day on which the notice is published in the Gazette.
"(3) The Minister may, but need not, consider an application given to the Minister after the day specified in the notice.
Provisional certificate criteria and procedures
"159UF. (1) The Minister must, in writing, determine provisional certificate criteria to be applied, and provisional certificate procedures to be complied with, by the Minister in deciding:
(a) whether to issue provisional certificates; and
(b) how much to specify in provisional certificates as qualifying expenditure limits in respect of expenditure proposed to be incurred on heritage conservation works, so that each amount specified is at least $5,000 and that the total specified in respect of a financial year does not exceed the maximum approval limit for the year; and
(c) the standards to state in provisional certificates in order for the works to qualify for the issue of final certificates.
"(2) The criteria or procedures may require the Minister, in issuing provisional certificates, to take into account:
(a) specified heritage conservation criteria; or
(b) recommendations of recognised heritage bodies; or
(c) any other factors.
Application for provisional certificate
"159UG. (1) A taxpayer may apply for a provisional certificate in relation to expenditure that the taxpayer proposes to incur on heritage conservation works.
"(2) An application may only be made if the taxpayer, either alone or with another person or persons:
(a) holds a freehold interest in the land on which the building or structure concerned is situated; or
(b) holds a Crown lease over the land on which the building or structure concerned is situated.
Form etc. of application
"159UH. An application for a provisional certificate must:
(a) be in a form approved in writing by the Minister; and
(b) specify the amount of expenditure that the taxpayer proposes to incur on the works; and
(c) be given to the Minister; and
(d) be accompanied by such other information as the Minister, by written notice, requires.
Minister may request further information
"159UI. (1) The Minister may, in writing, ask a taxpayer to provide additional information for the purpose of determining the taxpayer's application.
"(2) The Minister does not have to consider, or further consider, the taxpayer's application until the additional information has been provided.
Issue of provisional certificate
"159UJ.(1) If the Minister is satisfied that:
(a) the application complies with the requirements of sections 159UG and 159UH; and
(b) the provisional certificate procedures have been complied with; and
(c) the issue of a provisional certificate would be in accordance with the provisional certificate criteria; and
(d) in accordance with the provisional certificate criteria, an amount would be specified in the provisional certificate as the qualifying expenditure limit;
the Minister must notify the taxpayer in accordance with subsection (2).
"(2) The Minister must notify the taxpayer in writing that a provisional certificate will be issued if the taxpayer:
(a) pays to the Minister the prescribed fee (if any); and
(b) gives the Minister a statement, signed by the taxpayer, that the taxpayer has obtained all building and other approvals that are necessary to enable the work to be lawfully carried out.
"(3) If the taxpayer pays the fee (if any) and gives the Minister the statement, the Minister must issue the provisional certificate to the taxpayer.
"(4) If the Minister is not satisfied of the matters in subsection (1), the Minister must notify the taxpayer, in writing, that the Minister refuses to issue the certificate.
Contents of provisional certificate
"159UK. The provisional certificate must:
(a) state the taxpayer's name; and
(b) describe the heritage conservation works that the taxpayer proposes to carry out in relation to the building or structure; and
(c) specify the standard to which the works must be completed in order to qualify for the issue of a final certificate; and
(d) specify, in accordance with the provisional certificate criteria, the qualifying expenditure limit in respect of the works.
When provisional certificate in force
"159UL.(1) A provisional certificate is in force from the time of issue until the earliest of the following happens:
(a) the taxpayer disposes of his or her interest in the property; or
(b) the taxpayer dies or, being a partnership, company or trust, is dissolved or otherwise terminated; or
(c) 24 months elapse from the date of the issue of the provisional certificate without the Minister granting an extension under subsection (2); or
(d) an extension under subsection (2) expires; or
(e) a final certificate is issued in respect of the work.
"(2) The Minister may, on written application by a taxpayer to whom a provisional certificate has been issued, extend the period under paragraph (1)(c) in relation to the certificate from 24 months to 27 months.
"(3) An application for an extension must be given to the Minister before the end of the period of 23 months starting when the provisional certificate is issued.
Application for final certificate
"159UM. (1) The taxpayer may apply to the Minister for a final certificate, if the taxpayer has:
(a) completed the heritage conservation works covered by the provisional certificate, to the standard specified in the provisional certificate, while the provisional certificate was in force; and
(b) incurred expenditure of at least $5,000 during the period in carrying out the works.
"(2) The application must:
(a) be in a form approved in writing by the Minister; and
(b) specify the amount of expenditure incurred by the taxpayer during the period in carrying out the works; and
(c) be given to the Minister while the provisional certificate is in force; and
(d) be accompanied by such other information as the Minister, by written notice, requires.
Person dying-application for final certificate
"159UN. (1) If:
(a) an individual who holds a provisional certificate, or who is a partner in a partnership that holds a provisional certificate, dies; and
(b) within 3 months after the death, a person mentioned in subsection (2) makes a written application to the Minister for a final certificate;
for the purposes of this Subdivision, the application is taken to have been made immediately before the death.
"(2) The application may only be made by:
(a) in any case-an executor, administrator or other personal representative of the individual; or
(b) if a partnership holds the provisional certificate-one of the surviving partners.
Final certificate
"159UO.(1) If the Minister is satisfied that the requirements of section 159UM are satisfied in relation to a provisional certificate, the Minister must issue the taxpayer with a final certificate:
(a) stating the taxpayer's name; and
(b) specifying an amount, being so much of the amount specified by the taxpayer under paragraph 159UM(2)(b) as does not exceed the qualifying expenditure limit in the provisional certificate, as the eligible heritage conservation works expenditure in respect of the heritage conservation works.
"(2) If the Minister is not satisfied that the requirements of section 159UM are satisfied in relation to a provisional certificate, the Minister must notify the taxpayer, in writing, that the Minister refuses to issue the final certificate.
Transactions between persons not at arm's length
"159UP. If:
(a) a taxpayer applies to the Minister for a final certificate; and
(b) the Minister considers that the taxpayer and another party, or parties, to any transaction involving the incurring of any of the expenditure mentioned in the application were not dealing with each other at arm's length in relation to the transaction; and
(c) the Minister considers that the amount of the expenditure exceeds the amount that would have been incurred if the parties had been dealing with each other at arm's length in relation to the transaction;
the Minister must, for the purposes of section 159UO, disregard the excess.
Heritage conservation rebate
"159UQ. If a taxpayer, other than a partnership or trustee, is issued with a final certificate that specifies an amount of eligible heritage conservation works expenditure, the taxpayer is entitled to a rebate of tax in the taxpayer's assessment for the year of income in which the taxpayer applied for the final certificate equal to 20% of the eligible heritage conservation works expenditure.
Heritage conservation rebate-partnerships
"159UR. If:
(a) a partnership is issued with a final certificate that specifies an amount of eligible heritage conservation works expenditure; and
(b) the partnership has net income for the year of income in which the partnership applied for the final certificate;
each partner is entitled to a rebate of tax in the partner's assessment for the year of income equal to:
20% * Eligible heritage conservation works expenditure * (Partner's individual interest in the net income of the partnership of the year of income / Net income of the partnership of the year of income)
Heritage conservation rebate-trust estates
"159US.(1) This section applies if:
(a) the trustee of a trust estate is issued with a final certificate that specifies an amount of eligible heritage conservation works expenditure; and
(b) the trust estate has net income for the year of income in which the trustee applied for the final certificate; and
(c) the trust estate is not a corporate unit trust (within the meaning of section 102J), or a public trading trust (within the meaning of section 102R) in relation to the year of income.
"(2) If a share of the net income of the trust estate is included, under section 97, in the assessable income of a beneficiary of the trust estate of the year of income, the beneficiary is entitled to a rebate of tax in the beneficiary's assessment for the year of income equal to:
20% * Eligible heritage conservation works expenditure * (Beneficiary’s share of the net income of the trust estate of the year of income / Net income of the trust estate of the year of income)
"(3) If the trustee is liable to be assessed under section 98 in respect of a share, or shares, of the net income of the trust estate of the year of income, the trustee is entitled, in respect of each such share, to a rebate of tax in the trustee's assessment for the year of income equal to:
20% * Eligible heritage conservation works expenditure * (Share of the net income of the trust estate of the year of income / Net income of the trust estate of the year of income)
"(4) If the trustee is liable to be assessed under section 99 or 99A in respect of the net income, or a part of the net income, of the trust estate of the year of income, the trustee is entitled to a rebate of tax in the trustee's assessment for the year of income equal to:
20% * Eligible heritage conservation works expenditure * (Net income, or part of the net income, of the trust estate of the year of income / Net income of the trust estate of the year of income)
Heritage conservation rebate-corporate unit trusts and public trading trusts
"159UT. If the trustee of a corporate unit trust (within the meaning of section 102J), or a public trading trust (within the meaning of section 102R), in relation to a year of income in which the trustee applies for a final certificate is issued with the final certificate, the trustee is entitled to a rebate of tax in the trustee's assessment for the year of income equal to 20% of the eligible heritage conservation works expenditure specified in the certificate.
No deduction allowed in respect of work covered by a certificate
"159UU.(1) If:
(a) while a provisional certificate is in force, expenditure is incurred by a taxpayer in carrying out heritage conservation works that are covered by the certificate; and
(b) apart from this subsection, a deduction or deductions would be allowable from the taxpayer's assessable income of one or more years of income in relation to that expenditure;
the deduction is, or the deductions are, only allowable in respect of so much of the expenditure as exceeds the greater of nil and the amount worked out using the formula:
Qualifying expenditure limit specified in the provisional certificate - Total expenditure previously incurred by the taxpayer in relation to the works while the certificate was in force
"(2) If a provisional certificate ceases to be in force and either:
(a) the taxpayer did not apply for a final certificate in respect of the works while the certificate was in force; or
(b) the Minister notifies the taxpayer that the Minister refuses to issue a final certificate and:
(i) the time for making an application under section 159UV for review of the refusal decision has expired without an application being made; or
(ii) an application under section 159UV for review of the refusal decision has been made and the Tribunal has dismissed the application or affirmed the Minister's decision; then:
(c) a deduction, equal to the total amount of deductions not allowed because of subsection (1) for the year of income in which the provisional certificate ceases to be in force, and all prior years of income, is allowable from the taxpayer's assessable income of the year of income in which the provisional certificate ceases to be in force; and
(d) the amount of any deduction not allowable because of subsection (1) that would have been allowable for a later year of income is allowable for that later year of income.
Review of final certificate decision
"159UV.(1) Applications may be made to the Tribunal for review of a decision of the Minister:
(a) refusing to issue a final certificate; or
(b) specifying a particular amount as the amount of the eligible heritage conservation works expenditure in a final certificate.
"(2) If the Minister makes a decision covered by subsection (1) and gives written notice of the decision to the taxpayer, that notice must:
(a) in all cases-include a statement to the effect that, subject to the Administrative Appeals Tribunal Act 1975, application may be made to the Tribunal, by or on behalf of any person whose interests are affected by the decision, for review of the decision; and
(b) except where subsection 28(4) of that Act applies-include a statement to the effect that a request may be made under section 28 of that Act by or on behalf of such a person for a statement:
(i) setting out the findings on material questions of fact; and
(ii) referring to the evidence or other material on which those findings were based; and
(iii) giving the reasons for the decision.
"(3) A failure to comply with the requirements of subsection (2) in relation to a decision does not affect the validity of the decision.
Provision of information to recognised heritage bodies
"159UW. (1) In spite of section 16, if the Minister considers that it would assist in determining whether to issue a provisional certificate or final certificate in relation to any heritage conservation works, the Minister may give information about the works, that was provided under section 159UG or 159UI, to a recognised heritage body for the purpose of enabling that body to provide advice to the Minister in relation to the works.
"(2) In spite of section 16, if the Minister considers that it would assist in determining whether to issue a final certificate in relation to any heritage conservation works, the Minister may give a copy of the provisional certificate in relation to the works, or information about the works, that was provided under section 159UM, to a recognised heritage body for the purpose of enabling that body to provide advice to the Minister in relation to the issue of the final certificate in relation to the works.
"(3) Any person who is given information under this section, and any person or employee under his or her control, is subject to the same rights, privileges, obligations and liabilities, under subsections 16(2) and (3) in relation to that information, as if he or she were an officer within the meaning of section 16.
Delegation by Minister
"159UX. The Minister may, by written notice, delegate to the Secretary, or to a person holding or performing the duties of a Senior Executive Service office in the Minister's Department, all or any of the Minister's powers under this Subdivision other than:
(a) the Minister's power to make declarations for the purposes of the definition of 'heritage conservation works' or 'recognised heritage body' in section 159UB; and
(b) the Minister's powers under sections 159UD, 159UE and 159UF. In this section 'Senior Executive Service office' has the same meaning as in the Public Service Act 1922.
Disallowable instruments
"159UY. The following are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901:
(a) a declaration by the Minister for the purposes of the definition of 'heritage conservation works' or 'recognised heritage body' in section 159UB;
(b) a notice by the Minister under section 159UD;
(c) provisional certificate criteria and provisional certificate procedures issued by the Minister under section 159UF.".