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This is a Bill, not an Act. For current law, see the Acts databases.
1998-99
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
New Business
Tax System (Income Tax Rates) Bill (No. 2)
1999
No. ,
1999
(Treasury)
A Bill
for an Act to implement the New Business Tax System by amending income tax
rates, and for related purposes
ISBN: 0642
425272
Contents
Part
1—Amendments 3
Income Tax Rates Act
1986 3
Part
2—Application 6
Part 3—Transitional
provisions 7
A Bill for an Act to implement the New Business Tax
System by amending income tax rates, and for related
purposes
The Parliament of Australia enacts:
This Act may be cited as the New Business Tax System (Income Tax
Rates) Act (No. 2) 1999.
This Act commences on the day on which it receives the Royal
Assent.
Each Act that is specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule concerned, and any
other item in a Schedule to this Act has effect according to its
terms.
Section 170 of the Income Tax Assessment Act 1936 does not prevent
the amendment of an assessment made before the commencement of this section for
the purposes of giving effect to this Act.
1 Subsection 3(1) (definition of capital
gains amount)
Repeal the definition.
2 Subsection 3(1) (definition of capital
gains component)
Repeal the definition.
3 Subsection 3(1) (definition of eligible
part)
Repeal the definition, substitute:
eligible part, in relation to the special income component of
the taxable income of a taxpayer, means so much of the special
income component as is eligible taxable income for the purposes of Division 6AA
of Part III of the Assessment Act.
4 Subsection 3(1) (definition of reduced
share)
Repeal the definition.
5 Subsection 3(1) (definition of special
income component)
Repeal the definition, substitute:
special income component, in relation to a taxable income for
which there is an abnormal income amount, means:
(a) so much of the taxable income as does not exceed the abnormal income
amount; or
(b) if the sum (the component sum) of:
(i) the abnormal income amount; and
(ii) the EC part of the taxable income;
is more than the taxable income—the abnormal income amount, reduced
by the amount by which the component sum exceeds the taxable income.
6 Subsection 20F(2)
Repeal the subsection.
Note: The heading to section 20F is altered by omitting
“or capital gains component”.
7 Subsection 20F(2A)
Repeal the subsection.
8 Subsection 20F(3) (definition of section
20F rate adjustment)
Repeal the definition, substitute:
section 20F rate adjustment means the rate worked out using
the formula:
9 Subsection 20F(3) (definition of share of
net income)
Repeal the definition.
10 Schedule 12 (clause 1 of Part
I)
Omit “and that share does not consist of or include a capital gains
component”.
11 Schedule 12 (clause 2 of Part
I)
Omit “and that share does not consist of or include a capital gains
component”.
12 Schedule 12 (clause 3 of Part
I)
Repeal the clause.
13 Schedule 12 (clause 1 of Part
II)
Omit “and that share does not consist of or include a capital gains
component”.
14 Schedule 12 (clause 2 of Part
II)
Omit “and that share does not consist of or include a capital gains
component”.
15 Schedule 12 (clause 3 of Part
II)
Repeal the clause.
16 Application of
amendments
The amendments made by this Schedule apply in relation to the 1999-2000
year of income and later years of income.
Part
3—Transitional
provisions
17 Overview of Part
(1) This Part provides for your basic income tax liability for the
1999-2000 income year to be reduced in certain circumstances if you have made a
capital gain from a CGT event before the start time.
(2) The purpose of this Part is to ensure, as far as is practicable, that
the income tax payable in relation to capital gains from CGT events before the
start time is the same as it would have been if capital gains tax averaging had
not been removed.
18 Part is a special provision for working out
your basic income tax liability
(1) This Part is a special provision that applies (as mentioned in
paragraph (b) of step 2 of subsection 4-10(3) of the Income Tax Assessment
Act 1997) to working out your basic income tax liability on your taxable
income.
(2) This Part is to be applied after any other special provisions that
apply to you.
19 When this Part applies
Only applies for 1999-2000 income
year
(1) This Part only applies for the 1999-2000 income year.
Only applies to individuals and certain
trustees
(2) This Part only applies to you if you are:
(a) an individual and your assessable income included a net capital gain;
or
(b) a trustee of a trust estate and, apart from the amendments made by
this Act, clause 3 of Part I or clause 3 of Part II of Schedule 12 to the
Income Tax Rates Act 1986 would have applied in working out your basic
income tax liability; or
(c) a trustee of a trust estate and Schedule 10 to the Income Tax Rates
Act 1986 applied in working out your basic tax liability and, apart from the
amendments made by this Act, the share of the net income of the trust estate
referred to in that Schedule would consist of, or include, a capital gains
component.
Only applies if capital gain made before the
start time
(3) This Part does not apply to you unless you made a capital gain as a
result of a CGT event that happened during the income year and before the start
time and the capital gain is not disregarded.
20 Meaning of start time
In this Part:
start time means 11.45 am, by legal time in the Australian
Capital Territory, on 21 September 1999.
21 Working out if you are entitled to a
reduction
You are entitled to a reduction to your basic income tax liability if the
following amounts are both greater than zero:
(a) your gross adjustment amount under item 22;
(b) your pre-announcement net capital gain amount worked out under item
23.
The amount of the reduction is worked out under item 24.
22 Working out the gross adjustment
amount
Work out your gross adjustment amount as follows:
Method statement
Step 1. Work out the amount that would have been your basic income
tax liability for the income year if the amendments made by:
(a) Schedules 8 and 9 to the New Business Tax System (Integrity and
Other Measures) Act 1999; and
(b) Schedule 1 to the New Business Tax System (Capital Gains Tax) Act
1999;
had not been made.
Step 2. Work out the amount that would have been your basic income
tax liability for the income year if the amendments made by:
(a) Schedules 8 and 9 to the New Business Tax System (Integrity and
Other Measures) Act 1999; and
(b) Schedule 1 to the New Business Tax System (Capital Gains Tax) Act
1999; and
(c) Part 1 of this Schedule;
had not been made.
Step 3. Subtract the amount worked out under step 2 from the amount
worked out under step 1. The result is the gross adjustment
amount.
If the result is zero or negative, you are not entitled to any
reduction.
23 Working out your net capital gain
amounts
Working out your pre-announcement net capital
gain amount
(1) Your pre-announcement net capital gain amount is the
amount that would have been your modified net capital gain amount if any capital
gains or capital losses arising after the start time were disregarded.
Working out your modified net capital gain
amount
(2) Your modified net capital gain amount is the amount that
would have been your net capital gain for the income year if:
(a) the amendments made by:
(i) Schedules 8 and 9 to the New Business Tax System (Integrity and
Other Measures) Act 1999; and
(ii) Schedule 1 to the New Business Tax System (Capital Gains Tax) Act
1999;
had not been made; and
(b) you did not have any unapplied net capital losses from previous income
years; and
(c) any capital gains or losses that are:
(i) part of the special income component and eligible taxable income for
the purposes of Division 6AA of Part III of the Assessment Act; and
(ii) part of the capital gains component and net income to which Division
6AA of Part III of the Assessment Act applies;
were disregarded.
24 Working out the amount of your
reduction
(1) The amount of the reduction in your basic income tax liability is
worked out using the formula:
Working out your capital gain adjustment
percentage
(2) Your capital gain adjustment percentage is the percentage
worked out using the following formula:
25 Choices
If:
(a) the calculation of an amount under this Part could be affected by a
choice or election that you could make under the Income Tax Assessment Act
1936 or the Income Tax Assessment Act 1997; and
(b) apart from the operation of this Part, you would not need to have made
that choice or election;
you may calculate the amount for the purpose of this Part as if you had
made the election or choice.
26 Income from trust
estates
To avoid doubt, if your assessable income includes a share of the net
income of a trust estate, the assumptions and other adjustments required by this
Part are taken, for the purpose of the operation of this Part to you, to have
applied in relation to the calculation of the net income of the trust.
27 Interpretation
Expressions used in this Act that are defined in the Income Tax
Assessment Act 1997 have the same meaning as in that Act.