House of Representatives

Explanatory Memorandum

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

GENERAL OUTLINE

This Bill will amend:

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the Income Tax Assessment Act 1936 -

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to extend rollover relief (that is, deferral of liability) from tax on capital gains to additional kinds of business reorganisations, and to make technical amendments to the existing rollover provisions (proposal announced on 28 January 1988);

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to exclude from the substantiation rules expense claims that do not exceed the amount of a reasonable allowance for food, drink and other incidentals in respect of overseas travel by an employee;

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to ensure that expenses in respect of hire cars are not treated as car expenses for the purposes of the substantiation rules but, as appropriate, are treated as employment-related expenses or travel expenses;

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to provide that fuel and oil expenses for motor vehicles other than cars may be verified other than by receipt; and

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to facilitate the reimbursement of an employer's fringe benefits tax liability without income tax consequences (proposal announced 29 October 1987);

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the Fringe Benefits Tax Assessment Act 1986

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to permit an employer who meets the reasonable food, drink and incidental expenses of overseas travel by an employee to reduce the taxable value of the relevant fringe benefit without obtaining, from the employee, documentary evidence of those expenses;

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to extend the 50% remote area holiday travel concession to transport 'allowances' paid to employees' dependants (proposal announced on 25 April 1987);

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to exempt certain compassionate travel benefits from the scope of the fringe benefits tax;

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to prevent a reduction in the taxable value of certain fringe benefits where an outlay is not deductible in the year in which it is incurred by operation of the foreign tax credit system as relating to foreign losses;

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to reduce requirements for the provision of information in respect of car fringe benefits in fringe benefits tax return forms; and

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to confirm that the cents-per-kilometre rate applying to cars for a fringe benefits tax year of tax is the rate applying in the comparable income tax year.