Taxation Laws Amendment Act (No. 2) 1995 (169 of 1995)

Schedule 3   VARIOUS AMENDMENTS OF THE INCOME TAX ASSESSMENT ACT 1936

Part 7   SUPERANNUATION AND UNDEDUCTED PURCHASE PRICE

42   After section 27A

Insert:

Undeducted purchase price-interpretation

Annuities and superannuation pensions to which this section applies

"27AAAA.(1) For the purposes of sub-subparagraph (a)(ii)(C) of the

definition of undeducted purchase price in subsection 27A(1), this

section applies to an annuity or superannuation pension if:

(a) the annuity or superannuation pension has one or more underlying

commutation ETPs (see subsection (3)); and

(b) for each of the underlying commutation ETPs that is an original

underlying commutation ETP (see subsection (5)), the commencement day

(see subsection (6)) was before 1 July 1994.

Meaning of commutation ETP

"(2) An ETP is a commutation ETP if it is covered by any of

paragraphs (d), (e), (f), (g), (h) or (j) of the definition of

eligible termination payment in subsection 27A(1).

Meaning of underlying commutation ETP

"(3) A commutation ETP is an underlying commutation ETP of an

annuity or superannuation pension (the current annuity or pension) if:

(a) the purchase price of the current annuity or pension consists

only of one or more rolled-over amounts, where at least one

rolled-over amount is the whole or part of the commutation ETP and any

other rolled-over amount is the whole or part of another commutation

ETP; or

(b) the following apply:

(i) the purchase price of another annuity or pension consists only

of one or more rolled-over amounts, where at least one rolled-over

amount is the whole or part of the commutation ETP and any other

rolled-over amount is the whole or part of another commutation ETP;

(ii) that other annuity or pension gave rise (see subsection (4)) to

another commutation ETP that, by one or more other applications of

this subsection, is an underlying commutation ETP of the current

annuity or pension.

When an annuity or superannuation pension gives rise to a commutation

ETP

"(4) An annuity or superannuation pension gives rise to a

commutation ETP if:

(a) the commutation ETP results from the commutation of the whole or

part of the annuity or superannuation pension; or

(b) the commutation ETP is a payment of the residual capital value

of the annuity or superannuation pension.

Meaning of original underlying commutation ETP

"(5) An underlying commutation ETP is an original underlying

commutation ETP if the annuity or superannuation pension that gave

rise to it has no underlying commutation ETP.

Meaning of commencement day

"(6) The commencement day of an annuity or superannuation pension is

the first day of the period to which the first payment of the annuity

or superannuation pension relates.".