Income Tax (Transitional Provisions) Act 1997

Chapter 4 inserted by No 162 of 2001.

Part 4-5 inserted by No 162 of 2001.

Div 770 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.

Div 770 inserted by No 143 of 2007 , s 3 and Sch 1 item 5, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. No 143 of 2007 , s 3 and Sch 1 Part 6 contains the following savings provisions:

Part 6 - Savings provisions

Object  
225
The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of:

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

(b) any state of affairs existing; or

(c) any period ending;

before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies.

Making and amending assessments, and doing other things, in relation to past matters  
226
Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003 ):

(a) making or amending an assessment (including under a provision that is itself repealed or amended);

(b) exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);

in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.

Example:

For the 2006-07 income year, Smart Investor Pty Ltd, an Australian resident private investment company, has assessable foreign income in the passive income class on which it has paid foreign tax for which it wishes to claim a foreign tax credit. The company also has a tax loss for the year from its Australian investments. When it lodges its tax return for the year it does not elect to claim a deduction for any of the tax loss under section 79DA of the ITAA 1936, because the Australian tax payable on its passive foreign income equals the foreign tax it has paid.

In 2009 the amount of foreign tax payable in respect of some foreign rental income it had included in its return for the 2006-07 year is reduced and Smart Investor receives a refund of the difference in foreign tax. Smart Investor Pty Ltd then applies to be able to make an election under section 79DA , that is, after the Tax Laws Amendment (2007 Measures No. 4) Act 2007 (which repeals section 79DA ) receives Royal Assent. The Commissioner allows Smart Investor to submit an election to claim a deduction for so much of its 2006-07 tax loss as to reduce the amount of Australian tax payable on its 2006-07 assessable foreign income to the revised foreign tax paid, by the end of 2009.

Despite the repeal of section 79DA , item 226 allows the Commissioner to permit an election to be lodged after the return for 2006-07 has been lodged, and to amend Smart Investor's assessment for that year, because these actions relate to a thing done, and period ending, before the repeal of section 79DA applies.

Subdiv 770-D repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.

Subdiv 770-D inserted by No 143 of 2007 , s 3 and Sch 1 item 5, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under Div 770 heading.

S 770-220 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014. S 770-220 formerly read:

SECTION 770-220 Converting excess foreign tax credits into pre-commencement excess foreign income tax  
770-220(1)
You have pre-commencement excess foreign income tax from an income year if:

(a) you have excess foreign tax credits in relation to a class of foreign income from an earlier income year under former section 160AFE of the Income Tax Assessment Act 1936 (the 1936 Act ); and

(b) the earlier income year is one of the most recent 5 income years ending before the first income year starting on or after the first 1 July that occurs after the day on which the Tax Laws Amendment (2007 Measures No. 4) Act 2007 receives the Royal Assent; and

(c) the credits have not already been applied under former section 160AFE of the 1936 Act.

Note:

For the classes of income, see former subsections 160AF(7) and 160AFE(5) of the 1936 Act.

Former section 160AFE of the 1936 Act determined whether an entity had excess foreign tax credits for an income year and whether it could use them to increase the foreign tax credit amount in a later income year. Under the former foreign tax credit system, the excess credits were worked out and, where applicable, applied to increase the foreign tax credit amount in relation to each of the classes of income listed in former subsection 160AF(7) .

770-220(2)
The amount of your pre-commencement excess foreign income tax from an income year is the sum of the amounts set out in the table in subsection (3) for that year.

770-220(3)
Column 2 of the following table specifies the class of income to which the excess foreign tax credits covered by subsection (1) relate. Column 3 sets the amount of pre-commencement excess foreign income tax from that income year generated by those excess foreign tax credits.

Conversion of excess foreign tax credits into pre-commencement excess foreign income tax for an income year
Item	Excess foreign tax credits covered by subsection (1) relating to this class of income referred to in former subsection 160AF(7) of the 1936 Act	Pre-commencement excess foreign income tax generated
1	Passive income	The amount of those excess foreign tax credits
2	Offshore banking income	The amount of those excess foreign tax credits multiplied by the eligible fraction (within the meaning of section 121EG of the 1936 Act)
3	An amount included in assessable income under section 305-70 of the 1997 Act (which is about the assessability of lump sums received from foreign superannuation funds)	The amount of those excess foreign tax credits
4	Other income	(a) For a company - the amount of those excess foreign tax credits, as reduced under section 770-225; or (b) For an entity other than a company - the amount of those excess foreign tax credits

Note:

Section 121EG of the 1936 Act applies the eligible fraction to assessable OB income, allowable OB deductions and foreign income tax paid on assessable OB income.

S 770-220 inserted by No 143 of 2007 , s 3 and Sch 1 item 5, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under Div 770 heading.