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Div 770 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.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Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within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(a) making or amending an assessment (including under a provision that is itself repealed or amended);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right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);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-A repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.

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 770-1 repealed by No 143 of 2007 , s 3 and Sch 1 item 227, effective 30 June 2014.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

SECTION 770-1 Converting a past foreign loss into a tax loss  
770-1(1)
Subject to subsection (4), the Income Tax Assessment Act 1936 (the 1936 Act ), the Income Tax Assessment Act 1997 (the 1997 Act ) and this Act operate for the purposes of the income years mentioned in subsection (3) as if an entity that has a convertible foreign loss for an earlier income year under section 770-5 had a tax loss for the earlier year equal to:

(a) the amount (if any) that would have been the entity ' s tax loss for the earlier year under section 36-10 , 165-70 , 175-35 or 701-30 of the 1997 Act (about deducting past tax losses); plus

(b) the amount of the entity ' s convertible foreign loss for the earlier year.

Note 1:

This is instead of an amount of tax loss worked out under section 36-10 , 165-70 , 175-35 or 701-30 of the 1997 Act.

Note 2:

This section does not affect the amount (if any) of an entity ' s taxable income for the year. An entity may be taken to have a tax loss for a year under this section, but also have a taxable income for the year.

Note 3:

This section has an expanded operation for consolidated groups: see section 770-90 .

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History

S 770-1(1) amended by No 88 of 2009, s 3 and Sch 5 item 259, by substituting " Subject to subsection (4), the Income Tax Assessment Act 1936 " for " The Income Tax Assessment Act 1936 " , applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after 1 July 2008.

770-1(2)
The earlier year is taken for those purposes to be a loss year for the entity if the entity would not otherwise have a tax loss for that year.

770-1(3)
The income years are:

(a) the first income year starting on or after the first 1 July that occurs after the day on which the Tax Laws Amendment (2007 Measures No. 4) Act 2007 receives the Royal Assent (the commencement year ); and

(b) later income years.

770-1(4)
A reference in section 90 of the 1936 Act to deductions allowable under Division 36 of the 1997 Act does not include a reference to deductions in respect of the foreign loss component of the tax loss.

Note:

For foreign loss component , see section 770-25 .

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History

S 770-1(4) inserted by No 88 of 2009, s 3 and Sch 5 item 260, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after 1 July 2008.

S 770-1 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 .