Taxation Laws Amendment Act (No. 2) 1993 (18 of 1993)

PART 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 6   General investment allowance

Subdivision A   Insertion of new Subdivision

23   After Subdivision B of Division 3 of Part III of the Principal Act the following Subdivision is inserted

"Subdivision BA-General investment allowance Object

(Object to provide tax incentive)

"82AR.(1) The object of this Subdivision is to provide a tax incentive for investment in plant or articles before 1 July 1994.

(Incentive called general investment allowance)

"(2) The tax incentive takes the form of an allowable deduction, which may be referred to as general investment allowance.

How to work out entitlement etc. to general investment allowance

"82AS. The entitlement to general investment allowance, and other features of the new tax incentive, are worked out by applying the provisions of Subdivision B with some changes, which are set out below.

Change to main deduction provision

"82AT. The most important change is that, for the purposes of this Subdivision, subsection 82AB (1) (which is the main deduction provision) is to be replaced by the following:

'(1) Subject to this Subdivision, if:

(a) after 8 February 1993, a taxpayer incurs expenditure of a capital nature in respect of the acquisition or construction by the taxpayer of a new unit of eligible property to which this Subdivision applies; and

(b) the expenditure was $3,000 or more; and

(c) the expenditure was incurred:

(i) in respect of a unit of property acquired by the taxpayer under a contract entered into after 8 February 1993 and before 1 July 1994; or

(ii) in respect of a unit of property that was constructed by the taxpayer, where the construction commenced after 8 February 1993 and before 1 July 1994; and

(d) the unit of property was first used or installed ready for use before 1 July 1995;

a deduction equal to 10% of the expenditure is allowable to the taxpayer for the first year of income during which that unit was either used for the purpose of producing assessable income or installed ready for use for that purpose.'.

Changes to dates

(2 dates to be changed)

"82AU.(1) For the purposes of this Subdivision, references in provisions of Subdivision B to dates must also be changed as follows:

(a) references to 26 February 1992 become references to 8 February 1993;

(b) references to 27 February 1992 become references to 9 February 1993.

(Location of 26 February 1992 references)

"(2) The references to 26 February 1992 are in paragraphs 82AHA (3) (a), (4) (a), (5) (d) and (6) (d).

(Location of 27 February 1992 references)

"(3) The references to 27 February 1992 are in the following provisions:

(a) paragraph 82AA (1) (b);

(b) paragraph 82AB (7) (d);

(c) subsection 82AB (8);

(d) subsection 82AF (4);

(e) paragraphs 82AL (1) (a) and (2) (a).

Change to section 82AC (limitation of deduction in case of leased property)

"82AV.(1) Paragraph 82AC (a) refers to 'deductions allowable under this Subdivision or Subdivision BA'.

"(2) For the purposes of this Subdivision, the paragraph must be taken to refer to deductions allowable under either Subdivision B or Subdivision BA.

Changes to section 82AD (transfer of deductions)

(Section sets out changes to s. 82AD)

"82AW.(1) Section 82AD allows a lessor to transfer the benefit of a deduction to a lessee by lodging a declaration and statement with the Commissioner. The section is to be changed as follows for the purposes of this Subdivision.

(Declaration to be lodged with lessee instead of Commissioner)

"(2) The declaration and statement must be lodged with the lessee instead of with the Commissioner.

(Different paragraph 82AD (2) (a) date)

"(3) For the purpose of working out under section 82AD the prescribed date before which the declaration and statement must be lodged, paragraph 82AD (2) (a) is to be replaced by the following:

'(a) if the agreement for the lease was entered into before 5 May 1993-8 June 1993; or'.

Subdivision B object not applicable

"82AX. Section 82AAAA (which states the object of Subdivision B) does not apply for the purposes of this Subdivision.".