Taxation Laws Amendment Act (No. 4) 1994 (181 of 1994)
Schedule 2 AMENDMENTS RELATING TO POOLED DEVELOPMENT FUNDS
Part 2 INCOME TAX ASSESSMENT ACT 1936
23 After section 124ZR
Insert the following Subdivisions:
"Subdivision B - Components of the taxable income of PDFs Definitions
"124ZS. In this Subdivision:
'non-CGT assessable income' means an amount included in assessable income otherwise than under Part IIIA or Subdivision C of this Division;
'SME investment' means an investment other than an unregulated investment;
Note: 'SME' stands for small and medium enterprises.
'unregulated investment' has the same meaning as in the Pooled Development Funds Act 1992.
SME assessable income
"124ZT. (1) A company's SME assessable income of a year of income is the sum of:
(a) so much of the company's non-CGT assessable income of the year of income as was derived:
(i) from, or from the disposal of, an SME investment of the company; and
(ii) at a time when the company was a PDF; and
(b) any assessable income allocated to the company's SME assessable income under section 124ZZB.
Note: Section 124ZZB deals with capital gains etc.
When assessable income derived
"(2) For the purposes of paragraph (1)(a), if an amount is derived by a company during, but not at a particular time during, a year of income, the amount is taken to have been derived by the company on the last day of the year of income.
SME income component
Full-year PDFs
"124ZU. (1) The SME income component of a year of income of a company that is a PDF throughout the year of income is so much of the company's taxable income of the year of income as does not exceed the amount (if any) remaining after deducting from the company's SME assessable income of the year of income any deductions allowable to the company in relation to the year of income.
Part-year PDFs
"(2) The SME income component of a year of income of a company that becomes a PDF during the year of income and is still a PDF at the end of the year of income is so much of the company's adjusted taxable income of the year of income as does not exceed the amount (if any) remaining after deducting from the company's SME assessable income of the year of income any deductions where both of the following conditions are satisfied:
(a) the deductions were allowable to the company in relation to the year of income;
(b) the deductions were taken into account in working out the company's PDF component of the year of income. For this purpose, 'adjusted taxable income' means so much of the company's taxable income of the year of income as does not exceed its PDF component of the year of income.
Unregulated investment component
Full-year PDFs
"124ZV. (1) The unregulated investment component of a year of income of a company that is a PDF throughout the year of income is the amount (if any) remaining after deducting from the company's taxable income of the year of income the company's SME income component of the year of income.
Part-year PDFs
"(2) The unregulated investment component of a year of income of a company that becomes a PDF during the year of income and is still a PDF at the end of the year of income is the amount (if any) remaining after deducting from the company's adjusted taxable income of the year of income the company's SME income component of the year of income. For this purpose, 'adjusted taxable income' means so much of the company's taxable income of the year of income as does not exceed its PDF component of the year of income.
"Subdivision C - Adjustments of the tax treatment of capital gains and capital losses of PDFs
Definitions
"124ZW. In this Subdivision:
'class', in relation to assessable income, means a class specified in section 124ZY;
'company' does not include a company in a capacity of trustee;
'non-CGT assessable income' means an amount included in assessable income otherwise than under Part IIIA or this Subdivision;
'ordinary 160Z gain amount', in relation to the disposal of an asset, means any capital gain that would (apart from this Subdivision) be deemed for the purposes of Part IIIA to have accrued in respect of the disposal of the asset;
'ordinary 160Z loss amount', in relation to a disposal of an asset, means any capital loss that would (apart from this Subdivision) be deemed for the purposes of Part IIIA to have been incurred in respect of the disposal of the asset;
'overall 160Z gain', in relation to a class of assessable income, means:
(a) the amount by which the total ordinary 160Z gain amount for that class exceeds the total ordinary 160Z loss amount for that class; or
(b) if an amount has been applied under subsection 124ZZB(2) in reduction of an overall 160Z gain previously calculated under this definition - the amount by which that previous overall 160Z gain exceeds the amount so applied under that subsection;
'overall 160Z loss', in relation to a class of assessable income, means the amount by which the total ordinary 160Z gain amount for that class is less than the total ordinary 160Z loss amount for that class;
'prior year Part IIIA loss', in relation to a year of income (the 'loss year'), means the amount (if any) by which the sum of:
(a) the total of the overall 160Z losses for all the classes of assessable income for the loss year; and
(b) any prior year Part IIIA loss calculated under this definition for the year of income immediately preceding the loss year;
exceeds the total of the overall 160Z gains (before any application of section 124ZZB) for all the classes of assessable income;
'residual overall 160Z gain' means so much of an overall 160Z gain as remains after the application of subsection 124ZZB(2);
'SME assessable income' has the meaning given by Subdivision B;
'SME investment' means an investment other than an unregulated investment;
'total ordinary 160Z gain amount', in relation to a class of assessable income, means the total of so much of any ordinary 160Z gains amounts as has been allocated to that class under section 124ZZA;
'total ordinary 160Z loss amount', in relation to a class of assessable income, means the total of so much of any ordinary 160Z loss amounts as has been allocated that class under section 124ZZA;
'unregulated investment' has the same meaning as in the Pooled Development Funds Act 1992.
Companies to which this Subdivision applies
"124ZX. This Subdivision applies to a company in relation to a year of income if:
(a) the company is a PDF throughout the year of income; or
(b) the company becomes a PDF during the year of income and is still a PDF at the end of the year of income.
Classes of assessable income
Classes
"124ZY. (1) The classes of assessable income of the company are as follows:
(a) SME assessable income (see section 124ZT);
(b) other assessable income (see subsection (2)).
Other assessable income
"(2) The company's other assessable income of the year of income is the sum of:
(a) so much of the company's non-CGT assessable income of the year of income as is not included in the company's SME assessable income of the year of income; and
(b) any assessable income allocated to the company's other assessable income under section 124ZZB.
Section 160ZO does not apply
"124ZZ. Nothing is to be included in the company's assessable income of the year of income under section 160ZO.
Allocation of gain amounts and loss amounts to classes of assessable income
Disposals of SME investments
"124ZZA. (1) If:
(a) there is an ordinary 160Z gain amount, or an ordinary 160Z loss amount, in respect of a disposal of an SME investment of the company; and
(b) the company was a PDF at the time of the disposal;
the ordinary 160Z gain amount or ordinary 160Z loss amount, as the case may be, is taken into account in determining the overall 160Z gain or overall 160Z loss for the class known as SME assessable income.
Disposals of assets other than SME investments
"(2) If:
(a) there is an ordinary 160Z gain amount, or an ordinary 160Z loss amount, in respect of a disposal of an asset of the company; and
(b) subsection (1) does not apply to the disposal;
the ordinary 160Z gain amount or the ordinary 160Z loss amount, as the case may be, is taken into account in determining the overall 160Z gain or overall 160Z loss for the class known as other assessable income.
Assessable income etc. in relation to 160Z gain amounts
Assessable income after reduction of overall 160Z gain
"124ZZB. (1) The assessable income of each class includes the amount (if any) that is left over after the overall 160Z gain for that class has been reduced in accordance with this section.
Reduction - overall 160Z loss
"(2) If there is an overall 160Z loss for a particular class of assessable income, the loss is to be applied in reduction of overall 160Z gains for the remaining class.
Reduction - prior year Part IIIA loss
"(3) Any prior year Part IIIA loss for the immediately preceding year of income is to be applied in reduction of residual overall 160Z gains for the classes of assessable income in the following order:
(a) SME assessable income;
(b) other assessable income.
References to section 160ZO
"124ZZC. A reference in section 51AAA to an amount included in assessable income under section 160ZO includes a reference to an amount included in assessable income under subsection
124ZZB(1).
Net capital loss not to be incurred
"124ZZD. For the purposes of Part IIIA, the company is taken not to have incurred any net capital loss in respect of the year of income under section 160ZC.".