Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

by leave—I move government amendments (8) to (18) on sheet CG234:

(8)    Schedule 5, page 37 (after line 11), after item 3, insert:

3A Subsection 701-58(2)

After “(5A)”, insert “, (5C)”.

3B At the end of Division 701

Add:

701-90 Valuable right to future income treated as separate asset

        (1)    This subsection covers a valuable right (including a contingent right) to receive an amount for the performance of work or services or the provision of goods (other than ^*trading stock) if:

             (a)    the valuable right forms part of a contract or agreement; and

             (b)    the ^*market value of the valuable right (taking into account all the obligations and conditions relating to the right) is greater than nil.

        (2)    For the purposes of this Part, treat a valuable right covered by subsection (1) as a separate asset.

        (3)    For the purposes of this Part, if:

             (a)    a valuable right is treated as a separate asset under subsection (2); and

             (b)    the contract or agreement mentioned in paragraph (1)(a) also includes one or more other rights;

for the purposes of this Part, treat the contract or agreement (excluding the valuable right) as a separate asset.

        (4)    For the purposes of this Part:

             (a)    take into account all the obligations and conditions relating to a valuable right treated as a separate asset under subsection (2) in working out the ^*market value of that separate asset; and

             (b)    if a contract or agreement (excluding the valuable right) is treated as a separate asset under subsection (3)—take into account all the obligations and conditions relating to each right (other than the valuable right) that forms part of the contract or agreement in working out the market value of that separate asset.

(9)    Schedule 5, item 4, page 39 (lines 4 to 7), omit paragraph 716-405(2)(a), substitute:

             (a)    unless paragraph (b) applies—the amount determined under subsection (3A); or

(10)  Schedule 5, item 4, page 39 (after line 22), after subsection 716-405(3), insert:

     (3A)    For the purposes of paragraph (2)(a), the amount is the lesser of the following:

             (a)    the ^*unexpended tax cost setting amount for the asset for that income year;

             (b)    the unexpended tax cost setting amount for the asset for the first income year ending after the joining time, divided by the lesser of:

                   (i)    10; or

                  (ii)    if the contract or agreement giving rise to the valuable right mentioned in paragraph 716-410(a) is for a specified period—the number of days in that period that end after the joining time, divided by 365 and rounded upwards to the nearest whole number.

(11)  Schedule 5, item 4, page 40 (lines 23 and 24), omit paragraph 716-410(a), substitute:

             (a)    the asset is a valuable right covered by subsection 701-90(1); and

Note:       Such a valuable right is treated as a separate asset for the purposes of this Part (see subsection 701-90(2)).

(12)  Schedule 5, item 4, page 40 (lines 28 to 30), omit paragraph 716-410(c), substitute:

             (c)    it is reasonable to expect that an amount attributable to the asset will be included in the assessable income of the entity or any other entity after the joining time; and

             (d)    Division 230 does not apply in relation to the asset (disregarding section 230-455).

(13)  Schedule 5, item 8, page 43 (lines 12 to 14), omit paragraph (4)(a), substitute:

             (a)    on or before 30 June 2011; or

(14)  Schedule 5, item 84, page 66 (lines 2 and 3), omit “leaving entity” (wherever occurring), substitute “partnership”.

(15)  Schedule 5, page 86 (after line 18), after item 146, insert:

146A Section 715-230 (note 1)

Omit “a direct or indirect interest in a subsidiary member”, substitute “certain kinds of interests in a member”.

(16)  Schedule 5, page 86 (after line 28), after item 148, insert:

148A After section 715-260

Insert:

715-265 Head company does not have relevant equity or debt interest in a loss company if widely held top company does not have such an interest

        (1)    For the purposes of Subdivision 165-CD, treat the ^*head company of a ^*consolidated group as not having a relevant equity interest in a ^*loss company at a particular time if:

             (a)    the head company is an ^*eligible tier-1 company of a ^*top company at that time; and

             (b)    the top company is a ^*widely held company at that time; and

             (c)    because of subsections 165-115X(2A), (2B) and (2C), the top company does not have a relevant equity interest under section 165-115X in the loss company at that time.

        (2)    For the purposes of paragraph (1)(c), disregard the operation of subsection 701-1(1) (the single entity rule) in determining whether subsection 165-115X(2C) has the effect that the ^*top company has the relevant equity interest mentioned in that paragraph.

        (3)    For the purposes of Subdivision 165-CD, treat the ^*head company of a ^*consolidated group as not having a relevant debt interest in a ^*loss company at a particular time if:

             (a)    the head company is an ^*eligible tier-1 company of a ^*top company at that time; and

             (b)    the top company is a ^*widely held company at that time; and

             (c)    because of subsections 165-115Y(3A), (3B) and (3C), the top company does not have a relevant debt interest under section 165-115Y in the loss company at that time.

(17)  Schedule 5, page 87 (after line 11), after item 150, insert:

150A Section 715-450 (note)

Omit “a direct or indirect interest in a subsidiary member”, substitute “certain kinds of interests in a member”.

150B Subdivision 715-H (heading)

Repeal the heading, substitute:

Subdivision 715-H—Cancelling loss on realisation event for direct or indirect interest in a member of a consolidated group

150C Paragraph 715-610(2)(d)

Omit “a consolidated group.”, substitute “a consolidated group; or”.

150D At the end of subsection 715-610(2)

Add:

             (e)    all of these conditions are satisfied at that time:

                   (i)    the realised interest was an equity or loan interest, an ^*indirect equity or loan interest or an external indirect equity or loan interest, in the ^*head company of a consolidated group;

                  (ii)    the owner was not a member of the group;

                 (iii)    the head company was an ^*eligible tier-1 company of a ^*top company.

150E Subsection 715-610(3)

Omit “a ^*subsidiary member”, substitute “a member”.

150F Subsection 715-610(3)

Omit “the subsidiary member” (wherever occurring), substitute “the member”.

(18)  Schedule 5, item 193, page 102 (lines 20 and 21), omit the item, substitute:

193 Application provision

(1)    The amendments made by this Part apply in relation to a consolidated group or MEC group on or after:

             (a)    if the head company of the consolidated group (or the head company or provisional head company of the MEC group) makes a choice in accordance with subitems (2) and (3)—10 February 2010; or

             (b)    otherwise—1 July 2002.

(2)    A choice mentioned in paragraph (1)(a) must be made:

             (a)    on or before 30 June 2014; or

             (b)    within a further time allowed by the Commissioner.

(3)    A choice mentioned in paragraph (1)(a) must be made in writing.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.