Superannuation Legislation Amendment (Simplification) Act 2007 (15 of 2007)

Schedule 1   Consequential amendments etc.

Part 2   Other consequential amendments etc.

Income Tax (Transitional Provisions) Act 1997

266   Before Subdivision 295-I

Insert:

Subdivision 295-B - Modifications of the Income Tax Assessment Act 1997 for 30 June 1988 assets

Table of sections

295-75 Application of Subdivision

295-80 Meaning of 30 June 1988 asset

295-85 Cost base of 30 June 1988 asset

295-90 Market value of stock exchange listed assets

295-95 Adjustment of cost base as at 30 June 1988 - return of capital

295-100 Exercise of rights

295-75 Application of Subdivision

This Subdivision applies to an entity that is the trustee of a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust.

295-80 Meaning of 30 June 1988 asset

For the purposes of this Subdivision, an asset is a 30 June 1988 asset of a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust if the entity owned it at the end of 30 June 1988.

Note: Section 295-90 of the Income Tax Assessment Act 1997 treats these assets as having been acquired on 30 June 1988.

295-85 Cost base of 30 June 1988 asset

(1) The first element of the cost base of each 30 June 1988 asset of the entity's is the greater of the asset's market value (at the end of 30 June 1988) and its cost base (on that day).

(2) The first element of the reduced cost base of each 30 June 1988 asset of the entity's is the lesser of the asset's market value (at the end of 30 June 1988) and its cost base (on that day).

295-90 Market value of stock exchange listed assets

(1) If:

(a) a 30 June 1988 asset of the entity's was listed on an Australian stock exchange on 30 June 1988; and

(b) on that day, identical assets were:

(i) computer traded on a national market; or

(ii) traded on a State capital city market;

the market value of the asset as at the end of 30 June 1988 is the average of the highest and lowest trade prices for identical assets recorded on 30 June 1988 in whichever of the following markets is applicable:

(c) if, on that date, identical assets were computer traded on a national market - that national market;

(d) if, on that date, there was a State capital city market (other than the Sydney market) that recorded a higher volume of trading than the Sydney market in identical assets - that State capital city market;

(e) in any other case - the Sydney market.

(2) For the purposes of this section, an asset is taken to have been listed on an Australian stock exchange on 30 June 1988 if, and only if, on that day the asset had the status of having been granted official quotation by a securities exchange within the meaning of the former Securities Industry Act 1980 or the law of a State or Territory corresponding to that former Act.

295-95 Adjustment of cost base as at 30 June 1988 - return of capital

(1) If:

(a) 30 June 1988 assets of the entity's consist of shares in a company; and

(b) at any time during the period commencing at the time when the shares were acquired and ending at the end of 30 June 1988, the company paid an amount that was not a dividend to the entity in respect of the shares;

the cost base to the entity of the shares as at 30 June 1988 is reduced by that amount.

(2) If:

(a) a 30 June 1988 asset of the entity's consists of an interest or unit in a trust; and

(b) at any time during the period commencing at the time when the interest or unit was acquired and ending at the end of 30 June 1988, the trustee of the trust paid an amount to the entity in respect of the interest or unit, being:

(i) in a case where the entity was exempt from tax for the year of income in which the payment was made - an amount that, if the entity had not been exempt from tax, would not have been the entity's assessable income; or

(ii) in any other case - an amount that would not have been the entity's assessable income;

the cost base to the entity of the interest or unit as at 30 June 1988 is reduced by so much of the amount as is not attributable to a deduction allowed under former Division 10C or 10D of the Income Tax Assessment Act 1936.

295-100 Exercise of rights

(1) Despite section 130-40 of the Income Tax Assessment Act 1997, the modifications in subsections (2) and (3) of this section apply if an entity exercises rights or options as mentioned in that section to acquire:

(a) shares in a company, or options to acquire shares in a company; or

(b) units in a unit trust, or options to acquire units in a unit trust;

and those rights or options are 30 June 1988 assets of the entity.

(2) The first element of the cost base of the shares, units or options is the sum of:

(a) the amount paid to exercise the rights or options; and

(b) the greater of the market value of the rights or options (at the end of 30 June 1988) and the cost base of the rights or options (on that day).

(3) The first element of the reduced cost base of the shares, units or options is the sum of:

(a) the amount paid to exercise the rights or options; and

(b) the lesser of the market value of the rights or options (at the end of 30 June 1988) and the cost base of the rights or options (on that day).

(4) The payment referred to in subsection (2) or (3) can include giving property. To the extent that the payment does, use the market value of the property in working out the amount of the payment.

(5) For indexation purposes, the amount referred to in paragraph (2)(b) is taken to have been incurred on 30 June 1988.

Subdivision 295-C - Notices relating to contributions

Table of sections

295-190 Deductions for personal contributions

295-190 Deductions for personal contributions

(1) A notice given under subsection 82AAT(1A) or (1CB) of the Income Tax Assessment Act 1936 in relation to the 2006-07 income year or an earlier year has effect, after 1 July 2007, as if it were a notice under section 290-170 of the Income Tax Assessment Act 1997.

(2) A notice given under subsection 82AAT(1C) or (1CD) of the Income Tax Assessment Act 1936 in relation to the 2006-07 income year or an earlier year has effect, after 1 July 2007, as if it were a notice under section 290-180 of the Income Tax Assessment Act 1997.

Subdivision 295-F - Exempt income

Table of sections

295-390 Fixed interest complying ADFs - exemption of income attributable to certain 25 May 1988 deposits

295-390 Fixed interest complying ADFs - exemption of income attributable to certain 25 May 1988 deposits

(1) A proportion of the ordinary income and statutory income of a continuously complying fixed interest ADF of an income year that would otherwise be assessable income is exempt from income tax under this section. The proportion is worked out under subsection (3).

(2) Subsection (1) does not apply to:

(a) non-arm's length income; or

(b) amounts included in assessable income under Subdivision 295-C of the Income Tax Assessment Act 1997.

(3) The proportion is:

Aggregate of current 25 May balances / Aggregate current balance

where:

Aggregate current balance is the total amount deposited with the fund (together with accumulated earnings), as at the reckoning time in relation to the income year.

Aggregate of current 25 May balances is the aggregate of the current 25 May balances of eligible depositors, as at the reckoning time in relation to the income year.

(4) A choice for the purposes of the definition of reckoning time in subsection (5) must be made on or before the date of lodgment of the income tax return of the ADF for the income year to which the choice relates, or before a later day allowed by the Commissioner.

(5) In this section:

continuously complying fixed interest ADF , in relation to an income year (the current year ), means a fund that is a fixed interest complying ADF in relation to each of the following years:

(a) the current year;

(b) the income year in which 1 July 1988 occurred;

(c) each income year later than the year mentioned in paragraph (b) and earlier than the current year.

current 25 May balance , in relation to an eligible depositor as at the reckoning time, is the balance as at that time determined by varying the original 25 May balance, in accordance with the following rules, during the period from 26 May 1988 to the reckoning time:

(a) the balance from time to time is not to exceed the original 25 May balance and is not to be less than nil;

(b) subject to paragraph (a), an amount deposited with the ADF by the depositor before 1 September 1989 is to be added to the balance;

(c) subject to paragraph (a), an amount repaid to the depositor from the ADF is to be deducted from the balance.

eligible depositor , in relation to an ADF, means:

(a) a depositor whose 55th birthday occurred on or before 25 May 1988; or

(b) a depositor whose 50th birthday occurred on or before 25 May 1988 and who, on or before that day, made a deposit with the ADF that consisted wholly or partly of the roll-over (as defined in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936 as in force on that day) of an eligible termination payment as so defined, being an eligible termination payment that included a concessional component (as so defined).

fixed interest complying ADF , in relation to a year of income, means a complying ADF where both of the following conditions are satisfied:

(a) not less than 90% of the amount that, apart from this section, would be the assessable income of the ADF of the income year (other than non-arm's length income or amounts included in assessable income under Subdivision 295-C of the Income Tax Assessment Act 1997) consists of any one or more of the following:

(i) interest or a payment in the nature of interest;

(ii) any profit arising on the disposal, redemption, cancellation or maturity of a CGT asset referred to in paragraph 295-85(3)(b) of the Income Tax Assessment Act 1997;

(iii) an amount included in assessable income under Division 16E of Part III of the Income Tax Assessment Act 1936;

(b) at no time during the year of income did the assets of the fund consist of or include any of the following:

(i) units in a PST;

(ii) virtual PST life insurance policies (as defined in the Income Tax Assessment Act 1997) issued by a life insurance company.

original 25 May balance , in relation to an eligible depositor, means the amount of the deposits (together with accumulated earnings) standing to the credit of the depositor as at the end of 25 May 1988.

reckoning time , in relation to an ADF in relation to an income year, means the beginning of the income year, or such other time during the income year as the ADF chooses in accordance with subsection (4).

(6) This section does not apply to an ADF in relation to an income year unless the whole of the benefit that would accrue to the ADF from the application of this section in relation to the income year has been, or can reasonably expected to be, passed on to eligible depositors.

Subdivision 295-G - Deductions

Table of sections

295-465 Deductions for insurance premiums

295-465 Deductions for insurance premiums

An election made by the trustee of a complying superannuation fund under subsection 279(4) of the Income Tax Assessment Act 1936 that had effect for the income year of the fund in which 30 June 2007 occurs continues to have effect as if it had been made under section 295-465 of the Income Tax Assessment Act 1997.