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Tax Law Improvement Bill 1997

Tax Law Improvement Act 1997

Explanatory Memorandum

(Circulated by authority of the Treasurer,the Hon. Peter Costello, MP)

THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE House of Representatives TO THE BILL AS INTRODUCED

Chapter 13 - Dictionary

This chapter summarises how the proposed new law deals with definitions and the changes this Bill will make to the Dictionary of defined terms contained in the 1997 Act.

Overview of this chapter

This chapter covers the definitions that the Tax Law Improvement Bill 1997 will add to the 1997 Act.

Part A of this chapter summarises how you can locate the definitions in the new law.

Part B explains how the Bill will incorporate definitions in the law.

Part C lists the new definitions and explains any changes from the definitions in the existing law.

A. Summary of how the definitions can be located

The Dictionary, located at the end of the 1997 Act (in Chapter 6), is the central reference point for locating the meaning of defined terms used in the new law.

All defined terms are listed in section 995-1. Each entry in that section either:

•
sets out a defined term and its definition; or
•
directs the reader to where the term is defined.

The detail of the definitions is signposted in many cases. These are where it is more convenient and helpful to readers to place the definition where it is most relevant.

All defined terms (except a small number of common terms) will be identified by the symbol *, which will precede the term the first time it is used in each subsection.

Chapter 12 of the Explanatory Memorandum to the 1997 Act has a more detailed explanation of how the new law deals with definitions.

B. How this Bill incorporates new definitions in the law

The rewritten provisions that this Bill will insert into the 1997 Act, use many terms that are not yet defined in that Act.

Definitions of those terms will be included in the Dictionary by consequential amendments to subsection 995-1(1). The consequential amendments are contained in Part 2 of Schedules 2 to 12 of this Bill.

C. Discussion of the definitions

This Part of the chapter lists all the definitions that the Bill will add to the 1997 Act.

If there is a change in the use of a term, or a new term has been used, the list directs readers to the subject chapter that explains the change or new term. The explanations are included in Part E (consequential amendments) of each subject chapter.

Part B of each subject chapter also discusses any changes to the law caused by adopting a definition already in the 1997 Act (eg. using a standard definition instead of a slightly different one in the old law).

In the following explanations:

No change means that the term and its meaning from the 1936 Act are unchanged, although the words may have been changed to use a clearer or simpler style.

New label , previously ' [word or expression] ' means that a concept called ' [word or expression] ' in the 1936 Act has been given a new label in the 1997 Act.

New term means that the term is not defined in the 1936 Act.

Revised definition means that there has been substantive change in the meaning of the term appearing in the 1997 Act compared with the 1936 Act.

abnormal income No change.
Aboriginal No change.
accrued leave transfer payment No change.
approved management plan New term, explained in Chapter 11 of this Explanatory Memorandum.
approved occupational clothing guidelines No change.
artwork New label, previously eligible artwork .
assessable recoupment New term, explained in Chapter 3 of this Explanatory Memorandum.
associated government entity New term, explained in Chapter 8 of this Explanatory Memorandum.
Australian government agency New term, explained in Chapter 9 of this Explanatory Memorandum.
balancing adjustment event New term, explained in Chapter 8 of this Explanatory Memorandum.
bereavement subdivision No change.
business meeting New term, explained in Chapter 7 of this Explanatory Memorandum.
car depreciation limit New label, previously motor vehicle depreciation limit .
child No change.
closing balance No change.
connecting power to land or upgrading the connection New term, explained in Chapter 11 of this Explanatory Memorandum.
consideration receivable on the disposal of a leased car. The amount receivable under an insurance policy if a leased car is lost or destroyed is added to the list of things that are consideration receivable. Explained in Chapter 4 of this Explanatory Memorandum.
consideration receivable for trading stock changing hands. No change.
cost of a unit of plant for depreciation purposes. There is no change to the general concept of cost. However the rules are clarified and some new rules added. The changes are explained in Chapter 8 of this Explanatory Memorandum.
cost of an item of trading stock New label, previously cost price . A minor difference for live stock acquired by natural increase is explained in Chapter 10 of this Explanatory Memorandum.
cultural organisation No change.
current year Revised definition, explained in Chapter 3 of this Explanatory Memorandum.
design No change.
diminishing value method New term, explained in Chapter 8 of this Explanatory Memorandum.
diminishing value rate New label, previously annual depreciation percentage .
dining facility New label, previously eligible dining facility .
disease No change.
disentitling event New term, explained in Chapter 10 of this Explanatory Memorandum.
disposal year New label, previously the terms the year to which the election relates, the year of income in which the live stock were disposed of and the year of income in which the live stock died or was destroyed or disposed of .
distributing body No change.
effective life No change.
entertainment New label, previously provision of entertainment .
environmental organisation New term, explained in Chapter 6 of this Explanatory Memorandum.
exempt Australian government agency Revised definition. It covers those Australian government agencies that are exempt from income tax. The term was introduced by the 1997 Act and defined by reference to provisions in the 1936 Act. Some of those provisions have been rewritten in this Bill. The revised definition refers directly to rewritten provisions contained in this Bill. This will cause no change to the law. Explained in Chapter 9 of this Explanatory Memorandum.
FIF No change.
foreign investment fund No change.
forestry road New label, previously access road .
friendly society No change.
friendly society dispensary No change.
fringe benefit In the 1936 Act where the term fringe benefit appears, it is stated to have the meaning it has in the Fringe Benefits Tax Assessment Act 1986 . Here, it is formally defined to have the same meaning.
goes for at least 4 hours New term, explained in Chapter 7 of this Explanatory Memorandum.
horse opening value New label, previously opening value .
horse reduction amount New label, previously reduction amount .
Industry Secretary No change.
in-house dining facility No change.
installed ready for use New term, explained in Chapter 8 of this Explanatory Memorandum.
landcare operation New term, explained in Chapter 11 of this Explanatory Memorandum.
legal practitioner New term, explained in Chapter 5 of this Explanatory Memorandum.
leisure facility Revised definition. Explained in Chapter 5 of this Explanatory Memorandum.
live stock No change.
member of the Forces New term, explained in Chapter 9 of this Explanatory Memorandum.
metering point New term, explained in Chapter 11 of this Explanatory Memorandum.
mining payment No change.
non-compulsory New term, explained in Chapter 5 of this Explanatory Memorandum.
non-compulsory uniform No change.
notional depreciation amount New term, explained in Chapter 8 of this Explanatory Memorandum.
notional depreciation for a lease period New label, previously the amount of depreciation that is deemed in accordance with subsection 26AAB(6) to have been allowable to the lessee in respect of the unit of property, in respect of the period of the relevant lease agreement .
notional income No change.
notional written down value New label, previously notional amount .
occupation specific clothing No change.
opening balance No change.
ordinary payment New term, explained in Chapter 9 of this Explanatory Memorandum.
pension age No change.
period of the loan New term, explained in Chapter 5 of this Explanatory Memorandum.
plant The 1997 Act currently refers to the definition in section 54 of the 1936 Act. The Bill replaces the section 54 definition with a new definition in the 1997 Act. Explained in Chapter 8 of this Explanatory Memorandum.
pool No change.
previous recoupment law New term, explained in Chapter 3 of this Explanatory Memorandum.
primary production business New label, previously business of primary production , explained in Chapter 10 of this Explanatory Memorandum.
prime cost method New term, explained in Chapter 8 of this Explanatory Memorandum.
prime cost rate New term, explained in Chapter 8 of this Explanatory Memorandum.
proceeds of the disposal or death New label, previously three separate terms: proceeds of the sale of the live stock, proceeds of the disposal of the live stock and proceeds of the death of the live stock .
proceeds of the sale of 2 wool clips New term, explained in Chapter 10 of this Explanatory Memorandum.
profit on the disposal of a leased car New term, explained in Chapter 4 of this Explanatory Memorandum.
protective clothing No change.
provide a fringe benefit New label. In the 1936 Act the terms provide and fringe benefit are defined by reference to section 136(1) of the Fringe Benefits Tax Assessment Act 1986 . The new label results in no change to the law.
quasi-owner New term, explained in Chapter 8 of this Explanatory Memorandum.
recognised tax adviser New label, previously recognised professional tax adviser .
recoupment New term, explained in Chapter 3 of this Explanatory Memorandum.
recreational club New label, previously club as defined in subsection 51AB(1) of the 1936 Act. The defined term club in the 1997 Act will be repealed. That word will now take its ordinary meaning. This results in no change to the law.
reduction amount New label, previously the amount applicable in relation to the animal .
registered tax agent No change.
related entity New label, previously associated person .
roll-over event New term, explained in Chapter 8 of this Explanatory Memorandum.
royalty No change.
seminar No change.
Senior Executive Service office No change.
supplementary amount No change.
tax free amount No change.
tax profit on the disposal or death New label, previously four separate terms: profit on the disposal of the live stock , profit on the death of the live stock , profit arising in respect of the death of the live stock and profit arising in respect of the disposal of the live stock .
termination value The Bill adds to the table of termination values contained in section 995-1 of the 1997 Act. Explained in Chapters 8 and 11 of this Explanatory Memorandum.
timber mill building New definition, explained in Chapter 11 of this Explanatory Memorandum.
timber operation No change.
trading stock No change.
undeducted cost New term, explained in Chapter 8 of this Explanatory Memorandum.
uniform New label, previously a component of non-compulsory uniform/wardrobe .
unused tax profit on the disposal or death New label, previously reduced profit on the disposal or death of the live stock .
value of an item of trading stock New term, explained in Chapter 10 of this Explanatory Memorandum.
water facility New term, explained in Chapter 11 of this Explanatory Memorandum.
written down value An addition to the table of written down values contained in section 995-1 of the 1997 Act. Explained in Chapter 8 of this Explanatory Memorandum.


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