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Div 770 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.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Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within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(a) making or amending an assessment (including under a provision that is itself repealed or amended);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right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);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-B repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.

Subdiv 770-B 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 770-105 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014. S 770-105 formerly read:

SECTION 770-105 Modified operation of Subdivision 707-C of the 1997 Act for foreign loss component  
770-105(1)
This section affects the way in which one or more tax losses in a bundle of losses transferred under Subdivision 707-A of the 1997 Act can be utilised by the transferee in an income year if:

(a) one or more of the tax losses has a foreign loss component (regardless whether at the time of transfer the bundle included a tax loss having a foreign loss component or an overall foreign loss in respect of a class of income (within the meaning of former section 160AFD of the 1936 Act)); and

(b) section 770-30 limits the amount of the foreign loss component that the transferee can deduct in the income year.

770-105(2)
Subdivision 707-C of the 1997 Act does not limit the utilisation of the foreign loss component for the income year.

Note:

This means that the available fraction does not apply to the foreign loss component of a tax loss in the first 4 years after commencement. Instead, the deduction limit in section 770-30 applies.

770-105(3)
For the purposes of working out under Subdivision 707-C of the 1997 Act how much of the tax losses in the bundle the transferee can utilise in the income year, section 707-310 of the 1997 Act has effect as if the first reference in paragraph (3)(b) of that section to the transferee's losses included a reference to the sum of the amounts of the foreign loss components for all loss parcels in the income year.

Note:

This affects the limit that Subdivision 707-C of that Act sets on utilising other tax losses in the bundle (because that limit depends on the transferee's income and gains remaining after utilisation of losses that have not been transferred under Subdivision 707-A of that Act): see subsection 707-310(3) of that Act.

S 770-105 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.