House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. P.J. Keating MP.)

GENERAL OUTLINE

This Bill will amend :

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the Income Tax Assessment Act 1936 -

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to repeal a number of provisions that are no longer operative and make other changes consequential upon those repeals.

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to tax gains and allow a deduction for losses on the disposal or redemption of traditional securities, such transactions to be excluded from the capital gains and losses provisions;

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to broaden the exemption from the capital gains and capital losses provisions for a taxpayer's sole or principal residence to include any legal or equitable estate or interest in a dwelling or a licence or right to occupy a dwelling (proposal announced on 22 November 1988);

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to exempt from income tax periodical payments of maintenance (currently only exempt when received by a wife or former wife) received by a spouse, former spouse, de facto spouse, former de facto spouse or by or on behalf of a child;

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to deny a deduction (currently only denied for a male taxpayer) for expenditure or payments in respect of maintenance by a taxpayer of his or her spouse, de facto spouse or a family member under 16 years of age;

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to make consequential amendments to the provisions taxing the unearned income of minors following a change to the Social Security Act 1947 to replace the "handicapped child's allowance" with a "child disability allowance";

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to increase from $260 to $262 the rebate of tax (and increase the income level above which it shades out) available to single taxpayers wholly or mainly dependent on social security unemployment, sickness or special benefits, Formal Training Allowances or certain Commonwealth educational allowances for the 1988-89 and subsequent income years;

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to allow income tax deductions for gifts to :

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the Australian Ireland Fund;

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funds for the relief of persons affected by recent earthquakes in the Armenian Soviet Socialist Republic (proposal announced on 16 December 1988);

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to correct a technical deficiency in relation to the grant of tax sparing by regulations under the foreign tax credit system;

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the Taxation Administration Act 1953 -

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to permit the Commissioner of Taxation to provide certain law enforcement agencies with taxation information and to restrict the use that may be made of the information;

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to permit the Commissioner of Taxation to disclose information acquired under a taxation law to the Comptroller-General of Customs;

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the Fringe Benefits Tax Assessment Act 1986 -

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to correct a minor technical error in the Taxation Laws Amendment Act (No.4) 1988 in provisions relating to remote area housing benefits;

The Bill will also repeal :

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the Income Tax (Drought Bonds) Act 1969;

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the Loan (Drought Bonds) Act 1969;

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the Taxation of Loans Act 1923,

and make consequential amendments to other Acts.