Senate

Supplementary Explanatory Memorandum

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

Summary of proposed amendments

Amendments to the Bill are to be moved on behalf of the Government relating to:

•

allowing the intercorporate dividend rebate to a company that is the beneficial owner of shares that are registered in the name of a trustee;

•

the deferral of deductions for trading stock purchases involving prepayments measures;

•

the calculation of the effective life of second-hand plant for depreciation purposes;

•

an option for taxpayers to adopt depreciation rates published by the Commissioner of Taxation;

•

the allowance of deductions for the rehabilitation of sites where a taxpayer has conducted certain ancillary activities to their mining, quarrying or petroleum operations; and

•

the widely distributed finance share measures.

Dividend rebate for company beneficiaries

The effect of the amendments to the intercorporate dividend rebate provisions is that a company will be entitled to a rebate under sections 46 and 46A of the Principal Act on distributions of income attributable to dividends from a trust or partnership.

Deferral of deductions for trading stock purchases involving prepayments

This amendment will ensure that there is not an unintended mismatch of expenditure on stock intended to be used as trading stock and income derived in relation to the disposal of the stock before the stock becomes trading stock on hand.

Depreciation

Second-hand depreciable plant

The proposed change will ensure that the effective life of plant is always calculated as if the plant were new. While the life of second-hand plant is usually calculated on this basis, the amendment corrects an anomaly under which some second-hand plant would have an effective life calculated differently.

Commissioner's published depreciation rates

Under this amendment, taxpayers will be permitted to adopt rates of depreciation published by the Commissioner of Taxation in lieu of self-assessed rates, even where those rates are more generous than self-assessed rates.

Rehabilitation of mining, quarrying and petroleum sites

The proposed amendment will extend deductions for mine site rehabilitation to the sites of some activities which are not themselves exploration, prospecting, mining, quarrying or petroleum operations. These ancillary activities are among those given the same treatment as exploration, prospecting, mining, quarrying or petroleum operations under the mining provisions. They do not include providing housing or welfare facilities, or related works.

Petroleum miners, other miners and quarriers will benefit from the amendments.

Widely distributed finance shares

This amendment is to correct a technical deficiency in the Bill.