Product Ruling

PR 2020/1A1 - Addendum

Income tax: tax consequences of investing in equities using Bell Geared Equities Investment (2019 Product Brochure)

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Addendum

This Addendum is a public ruling for the purposes of the Taxation Administration Act 1953. It amends Product Ruling PR 2020/1 to incorporate the application of subsections 82KZM(1A) and 82KZMA(2A) of the Income Tax Assessment Act 1936.

PR 2020/1 is amended as follows:

1. Paragraph 15

(a) In subparagraph (i), after the words 'small business entity', insert ', or an entity covered by subsection 82KZMA(2A) of the ITAA 1936¹,'.

(b) After the second instance of 'ITAA 1936' in subparagraph (i), insert new footnote 1:

¹ On 1 January 2021, subsection 82KZMA(2A) was inserted into the ITAA 1936, applicable in relation to expenditure incurred on or after 1 July 2020. All references in this Product Ruling to 'an entity covered by subsection 82KZMA(2A) of the ITAA 1936' or to 'a medium business entity' only apply from 1 July 2020.

2. Paragraph 29

After the words 'whether the investor is a small', insert 'or medium'.

3. Paragraph 36

(a) In the heading, after the words 'prepaid expenditure incurred by certain small', insert 'and medium'.

(b) Omit the wording of the first dot point; substitute:

•

a small business entity, or an entity covered by subsection 82KZM(1A) of the ITAA 1936², for the year of income that has not chosen to apply section 82KZMD of the ITAA 1936 to the expenditure, or

(c) After the first instance of 'ITAA 1936' in the first dot point, insert new footnote 2:

² On 1 January 2021, subsection 82KZM(1A) was inserted into the ITAA 1936, applicable in relation to expenditure incurred on or after 1 July 2020. All references in this Product Ruling to 'an entity covered by subsection 82KZM(1A) of the ITAA 1936' only apply from 1 July 2020. An entity is covered by subsection 82KZM(1A) of the ITAA 1936 for the expenditure year if the entity is not a small business entity for that year but would be a small business entity for that year if each reference in section 328-110 to $10 million (as noted in paragraph 30 of this Product Ruling) were instead a reference to $50 million.

4. Paragraph 39

(a) In the heading, after the words 'prepaid non-business expenditure incurred by non-individual and non-small', insert 'and medium'.

(b) Omit the wording of the paragraph; substitute:

Sections 82KZMA and 82KZMD of the ITAA 1936 set the amount and timing of deductions for expenditure incurred by an investor (other than a small business entity or an entity covered by subsection 82KZMA(2A) of the ITAA 1936³, for the year of income that has not chosen to apply section 82KZMD to the expenditure) that is not an individual and does not incur the expenditure in carrying on a business.

(c) After the second instance of 'ITAA 1936', insert new footnote 3:

³ An entity is covered by subsection 82KZMA(2A) of the ITAA 1936 for the expenditure year if the entity is not a small business entity for that year but would be a small business entity for that year if each reference in section 328-110 to $10 million (as noted in paragraph 30 of this Product Ruling) were instead a reference to $50 million.

5. Paragraph 49

(a) Omit:

Substitute:

This Addendum applies before and after the date of issue.

Commissioner of Taxation
18 October 2023

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References

ATO references:
NO 1-Z17L13M

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