Commonwealth Consolidated Acts Commonwealth Consolidated Acts
1 Section 43 - 105 (link note)
Repeal the link note, substitute:
43 - 110 Application of subsection 43 - 75(3)
Subsection 43 - 75(3) of the Income Tax Assessment Act 1997 does not apply to capital works being a hotel building or an apartment building begun before 1 July 1997.
[The next Part is Part 2 - 15 . ]
2 Section 70 - 10
Repeal the section, substitute:
(1) This section explains how to account for your disposal of an item during or after the 1997 - 98 income year if:
(a) just before that income year, the item was an item of your trading stock, as defined in subsection 6(1) of the Income Tax Assessment Act 1936 as in force at that time; and
(b) at no time since that time has the item been an item of your trading stock, as defined in section 70 - 10 of the Income Tax Assessment Act 1997 .
Example: This section applies to an item you produced, manufactured, acquired or purchased before 1997 - 98 for manufacture, sale or exchange, but have not held for that purpose at any time since just before the start of that year.
If the disposal is outside the ordinary course of business
(2) If:
(a) the disposal occurred on or after 1 July 1997; and
(b) subsection 36(1) of the Income Tax Assessment Act 1936 (dealing with disposals of trading stock outside the ordinary course of business) would have applied to the disposal if it had occurred before 1 July 1997;
sections 70 - 90 and 70 - 95 of the Income Tax Assessment Act 1997 (dealing with disposals of trading stock outside the ordinary course of business) apply to your disposal of the item as if it were an item of your trading stock (as defined in section 70 - 10 of the Income Tax Assessment Act 1997 ).
Note: This ensures that your assessable income includes the market value of the item on the day of disposal. This counters your deduction under the Income Tax Assessment Act 1936 for your expenditure to acquire the item as trading stock.
Additional rule for early balancers
(3) If the disposal occurred before 1 July 1997, then, for the purposes of subsection 36(1) of the Income Tax Assessment Act 1936 (dealing with disposals of trading stock outside the ordinary course of business), the item is taken to have been, at the time of the disposal, trading stock as defined in section 70 - 10 of the Income Tax Assessment Act 1997 .
Note: See the note to subsection (2).
Deduction for closing value at end of 1996 - 97
(4) If:
(a) subsection 36(1) of the Income Tax Assessment Act 1936 applies to the disposal, or would have if it had occurred before 1 July 1997; and
(b) the item's value was taken into account at the end of the 1996 - 97 income year under Subdivision B (Trading stock) of Division 2 of Part III of the Income Tax Assessment Act 1936 ;
you can deduct for the income year of the disposal the item's value as so taken into account.
Note: This deduction offsets the effect of the item's value not having been taken into account under Subdivision 70 - C of the Income Tax Assessment Act 1997 at the start of the income year of the disposal.
3 Section 70 - 20 (link note)
Repeal the link note, substitute:
[The next section is section 70 - 35 . ]
70 - 35 Transitional provision for partnerships with live stock
(1) This section affects the calculation of a partner's share in a partnership's net income or partnership loss for the 1997 - 98 income year if the partnership has live stock that is trading stock on hand at the start of that income year.
(2) Calculate the amount of each partner's share as if the net income or partnership loss were worked out using:
(a) the value of the live stock at the start of the 1997 - 98 income year worked out under subsection 70 - 40(1) on the basis of its value taken into account at the end of the 1996 - 97 income year for the purposes of working out that partner's share of the partnership's net income or partnership loss for the 1996 - 97 income year; and
(b) the value of the live stock at the end of the 1997 - 98 income year elected by the partnership (and not the partner) under Subdivision 70 - C of the Income Tax Assessment Act 1997 .
Note 1: The value of the live stock at the end of the 1996 - 97 income year depended on the choices made by the partner, not the partnership. (See section 93 of the Income Tax Assessment Act 1936 , which does not apply to assessments for the 1997 - 98 income year.)
Note 2: Choices made by the partnership under Division 385 of the Income Tax Assessment Act 1997 may affect the value of the live stock under Subdivision 70 - C of that Act.
4 Section 70 - 55 (link note)
Repeal the link note, substitute:
(3) For the purposes of Subdivision 70 - C of the Income Tax Assessment Act 1997 , the cost of an animal acquired by a partnership by natural increase before the 1997 - 98 income year depends on whether its cost price has been used in working out the share of a partner in the partnership's net income or partnership loss for an earlier income year:
(a) if it has, the cost is that cost price, or the lowest of those cost prices if more than one cost price was used to work out the respective shares of partners;
(b) if it has not, the cost is the minimum cost price prescribed for the purposes of section 34 of the Income Tax Assessment Act 1936 for that class of animal for the time when the animal was acquired, or the animal's actual cost price if no minimum was prescribed.
Note 1: Section 93 of the Income Tax Assessment Act 1936 allowed each partner to choose the cost price of an animal for working out the partner's share of the partnership's net income or partnership loss for income years before the 1997 - 98 income year.
Note 2: Section 34 of the Income Tax Assessment Act 1936 provides for the valuation of live stock acquired by natural increase before the 1997 - 98 income year.
[The next section is section 70 - 70 . ]
5 Section 330 - 20
Omit "exceeds", substitute "does not exceed".
6 Application
The amendments made by this Schedule apply to assessments for the 1997 - 98 income year and later income years.