Income Tax Assessment Act 1936

Part XI repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. No 114 of 2010, Sch 1 item 95 contains the following saving provisions:

95 Saving of regulations relating to stock exchanges  
95
Despite the repeal of the definition of approved stock exchange in section 470 of the Income Tax Assessment Act 1936 by item 37 of this Schedule, regulations made for the purposes of that definition that were in force immediately before this item commences continue in force on and after that commencement as if those regulations had been made for the purposes of the definition of approved stock exchange in the Income Tax Assessment Act 1997 as inserted by item 81 of this Schedule. 96 Saving of elections relating to foreign hybrids  
96
Despite the repeal of subsection 485AA(1) of the Income Tax Assessment Act 1936 by item 37 of this Schedule, elections made under that subsection continue to have effect on and after the commencement of this Schedule as if that repeal had not happened.

Part XI inserted by No 190 of 1992.

Div 18 repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.

Subdiv D repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading.

S 559A repealed by No 114 of 2010, s 3 and Sch 1 item 37, applicable in relation to the 2010-11 year of income for a taxpayer and later years of income. For saving provisions, see note under Part XI heading. S 559A formerly read:

SECTION 559A CHOICE TO WORK OUT NOTIONAL INCOME AND NOTIONAL DEDUCTIONS UNDER PART X  
559A(1)
The taxpayer may choose to work out the notional income and notional deductions of the FIF in accordance with subsection (3) if:

(a) the FIF is a foreign company; and

(b) the taxpayer ' s attribution percentage in relation to the FIF is 10% or more at the end of the relevant period; and

(c) if the taxpayer has previously made a choice under this subsection in relation to the FIF in relation to a notional accounting period of the FIF - the taxpayer has made such a choice in relation to the FIF in relation to every notional accounting period of the FIF (if any) occurring between:

(i) the end of the notional accounting period of the FIF for which the taxpayer first made such a choice in relation to the FIF; and

(ii) the start of the relevant period.

559A(2)
For the purposes of this section:

(a) treat the FIF as a FIF that is a CFC; and

(b) treat the taxpayer as an attributable taxpayer in relation to the FIF throughout the relevant period; and

(c) treat the relevant period as the statutory accounting period of the FIF.

Main rule - work out notional income and notional deductions under Part X, etc

559A(3)
For the purposes of working out the notional income and notional deductions of the FIF of the relevant period:

(a) treat that notional income as the FIF ' s notional assessable income worked out under Part X for the relevant period; and

(b) treat those notional deductions as the FIF ' s notional allowable deductions worked out under Part X for the relevant period; and

(c) if the taxpayer is an AFI entity at a particular time in the relevant period - treat the FIF as an AFI subsidiary at that time.

559A(4)
In working out the FIF ' s notional allowable deductions for the purposes of paragraph (3)(b):

(a) disregard sections 429 and 431 (which deal with losses); and

(b) instead, include notional deductions (if any) from the notional income of the FIF of the relevant period worked out under section 572 (which deals with notional deductions for calculated losses for prior periods).

559A(5)
For the purposes of subsection (3), treat the FIF ' s commencing day mentioned in Subdivision C of Division 7 of Part X as the first day of the period over which, apart from this section, the profits or gains of a capital nature derived by the FIF during the relevant period would be determined.

Application of sections 575 to 579

559A(6)
For the purposes of subsection (3), apply sections 575 to 579 in relation to a taxpayer (the actual taxpayer ), subject to the rules in subsections (7) and (8).

559A(7)
If the actual taxpayer has made a choice under subsection (1) in relation to a FIF (the first-tier FIF ), in working out the first-tier FIF ' s notional assessable income for the purposes of paragraph (3)(a):

(a) disregard paragraphs 384(2)(ca) and 385(2)(ca) (which deal with amounts included in notional assessable income under Part XI ); and

(b) instead, include in that notional assessable income the first-tier FIF ' s notional income worked out under section 576 .

559A(8)
If the taxpayer mentioned in paragraphs (1)(b) and (3)(c) is the first-tier FIF mentioned in section 576 (because of the effect of section 576 on this section):

(a) treat the references in those paragraphs to the taxpayer as references to the actual taxpayer (and not to the first-tier FIF); and

(b) if, as a result of paragraph (a), the actual taxpayer has made a choice under subsection (1) in relation to a FIF (the second-tier FIF ) - in working out the second-tier FIF ' s notional assessable income for the purposes of paragraph (3)(a):

(i) disregard paragraphs 384(2)(ca) and 385(2)(ca) (which deal with amounts included in notional assessable income under Part XI ); and

(ii) instead, include in that notional assessable income the second-tier FIF ' s notional income worked out under section 579 .

Note:

The actual taxpayer cannot make a choice under subsection (1) in relation to a third-tier FIF, because the calculation method is not available in respect of a third-tier FIF (see subparagraph 579(b)(ii) ).

Definitions

559A(9)
In this section:

AFI entity
has the same meaning as in section 326 .

AFI subsidiary
has the same meaning as in Part X (see section 326 ).

attributable taxpayer
has the same meaning as in Part X (see section 361 ).

attribution percentage
has the same meaning as in Part X (see section 362 ).

notional allowable deductions
has the same meaning as in Part X (see section 382 ).

notional assessable income
has the same meaning as in Part X (see section 382 ).

S 559A inserted by No 143 of 2007 , s 3 and Sch 1 item 3, 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 Pt 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.