Inserts for
Tax Laws Amendment (2013 Measures No. 1) Bill 2013: Strengthening scrip for scrip roll‑over, small business and other concessions

EXPOSURE DRAFT

Commencement information	
Column 1	Column 2	Column 3	
Provision(s)	Commencement	Date/Details	
1.  Section 4	The day this Act receives the Royal Assent.		
2.  Schedule 1	The day after this Act receives the Royal Assent.		
3.  			

4  Amendment of assessments
	(1)	Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment if:
	(a)	the assessment was made before the commencement of Part 1 or 2 of Schedule 1 to this Act; and
	(b)	the amendment is made within 2 years after that commencement; and
	(c)	the amendment is made for the purpose of giving effect to that Part.
	(2)	Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment if:
	(a)	the assessment was made before the commencement of subitem 19(2) of Schedule 1 to this Act; and
	(b)	the amendment is made within 2 years after that commencement; and
	(c)	the amendment is made for the purpose of giving effect to a choice made under that subitem.
Note:	Schedule 1 to this Act deals with the scrip for scrip roll‑over, small business entity and other concessions.
Schedule 1—Strengthening scrip for scrip roll‑over, small business entity and other concessions
Part 1—Scrip for scrip roll‑over
Income Tax Assessment Act 1997
1  Paragraphs 124‑783(6)(b) and (c)
Omit “for their own benefit”.
2  Subsection 124‑783(6) (note)
Repeal the note.
3  Subsection 124‑783(7)
Omit “for their own benefit”.
4  Paragraphs 124‑783(9)(b) and (c) and (10)(a) and (b)
Omit “for their own benefit”.
5  Application of amendments
The amendments made by this Part apply in relation to CGT events happening after 7:30 pm (by legal time in the Australian Capital Territory) on 10 May 2011.
6  Previous interpretation preserved
To avoid doubt, the amendments of the Income Tax Assessment Act 1997 made by this Part do not affect by implication the interpretation of that Act before the amendments.
Part 2—Meaning of connected with an entity
Income Tax Assessment Act 1997
7  Paragraphs 328‑125(2)(a) and (b)
Omit “beneficially own, or have the right to acquire the beneficial”, substitute “own, or have the right to acquire the”.
8  Paragraph 328‑125(8)(e)
Omit “beneficially”.
9  Application of amendments
The amendments made by this Part apply:
	(a)	to the extent the amendments affect the A New Tax System (Wine Equalisation Tax) Act 1999—in relation to financial years commencing on or after the commencement of this item; and
	(b)	to the extent the amendments affect Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 (about capital gains and losses)—in relation to CGT events happening after 7:30 pm (by legal time in the Australian Capital Territory) on 10 May 2011; and
	(c)	otherwise—in relation to the 2011‑12 income year and later income years.
10  Previous interpretation preserved
To avoid doubt, the amendments of the Income Tax Assessment Act 1997 made by this Part do not affect by implication the interpretation of that Act before the amendments.
Part 3—Entity making the gain or loss
Income Tax Assessment Act 1997
11  Subsection 104‑10(7)
Repeal the subsection.
12  Subsection 106‑30(1)
After “Part and Part 3‑3”, insert “(about capital gains and losses) and Subdivision 328‑C (What is a small business entity)”.
13  Subsection 106‑30(2)
Omit “Part and Part 3‑3”, substitute “Part, Part 3‑3 and Subdivision 328‑C”.
14  Subsection 106‑30(2)
Omit “it had been done by the individual”, substitute “the act had been done by the individual (instead of by the trustee etc.)”.
15  At the end of section 106‑30
Add:
Example:	A CGT asset of an individual vests in a trustee because of the bankruptcy of the individual. No CGT event happens as a result of the vesting.
	The trustee later sells the CGT asset. Any capital gain or loss is made by the individual, not the trustee.
16  Section 106‑35
Repeal the section, substitute:
106‑35  Effect of liquidation
	(1)	For the purposes of this Part and Part 3‑3 (about capital gains and losses) and Subdivision 328‑C (What is a small business entity), the vesting of a company’s *CGT assets in a liquidator, or the holder of a similar office under a *foreign law, is ignored.
	(2)	This Part, Part 3‑3 and Subdivision 328‑C apply to an act done by a liquidator of a company, or the holder of a similar office under a *foreign law, as if the act had been done by the company (instead of by the liquidator etc.).
Example:	Ben, a liquidator of a company, sells a CGT asset of the company. Any capital gain or loss is made by the company, not by Ben.
17  Subdivisions 106‑C and 106‑D
Repeal the Subdivisions, substitute:
Subdivision 106‑C—Absolutely entitled beneficiaries
Table of sections
106‑50	Absolutely entitled beneficiaries
106‑50  Absolutely entitled beneficiaries
	(1)	For the purposes of this Part and Part 3‑3 (about capital gains and losses) and Subdivision 328‑C (What is a small business entity), from just after the time you become absolutely entitled to a *CGT asset as against the trustee of a trust (disregarding any legal disability), the asset is treated as being your asset (instead of being an asset of the trust).
	(2)	This Part, Part 3‑3 and Subdivision 328‑C apply, from just after the time you become absolutely entitled to a *CGT asset as against the trustee of a trust (disregarding any legal disability), to an act done in relation to the asset by the trustee as if the act had been done by you (instead of by the trustee).
Example:	An individual becomes absolutely entitled to a CGT asset of a trust. The trustee later sells the asset. Any capital gain or loss from the sale is made by the individual, not the trustee.
Subdivision 106‑D—Security holders
Table of sections
106‑60	Effect of assets being held by security holders
106‑60  Effect of assets being held by security holders
	(1)	For the purposes of this Part and Part 3‑3 (about capital gains and losses) and Subdivision 328‑C (What is a small business entity), the vesting in an entity of a *CGT asset over which the entity holds a security, charge or encumbrance is ignored.
	(2)	However, for the purposes of this Part, Part 3‑3 and Subdivision 328‑C, the *CGT asset is treated as vesting in the entity at a later time if, at that time, the entity, while continuing to hold the asset, ceases to hold a security, charge or encumbrance over the asset.
	(3)	This Part, Part 3‑3 and Subdivision 328‑C apply to an act done by an entity (or an *agent of the entity) in relation to a *CGT asset over which the entity holds a security, charge or encumbrance as if the act had been done by the person who provided the security (instead of by the entity).
Example:	A CGT asset of a borrower vests in a lender as security for a loan. No CGT event happens as a result of the vesting.
	If the borrower fails to make payments on the loan and the lender sells the CGT asset under the security arrangement, any capital gain or loss is made by the borrower, not the lender.
18  At the end of section 328‑105
Add:
	Note 1:	See Subdivision 106‑B if a CGT asset of yours is vested in a trustee in bankruptcy or a liquidator.
	Note 2:	See Subdivision 106‑C if you are absolutely entitled to a CGT asset as against the trustee of a trust.
	Note 3:	See Subdivision 106‑D if you provided security over an asset to another entity.
19  Application of amendments
(1)	The amendments made by this Part apply:
	(a)	to the extent the amendments affect the A New Tax System (Wine Equalisation Tax) Act 1999—in relation to financial years commencing on or after the commencement of this item; and
	(b)	to the extent the amendments affect Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 (about capital gains and losses)—in relation to CGT events happening on or after the commencement of this item; and
	(c)	otherwise—in relation to income years commencing on or after the commencement of this item.
(2)	An entity may choose to have the amendments also apply, in relation to the entity:
	(a)	to the extent the amendments affect Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997—in relation to CGT events happening during the 2008‑09 income year and later income years; and
	(b)	other than to the extent the amendments affect those Parts or the A New Tax System (Wine Equalisation Tax) Act 1999—in relation to the 2008‑09 income year and later income years.