House of Representatives

Income Tax Assessment Amendment Bill 1982

Income Tax Assessment Amendment Act 1982

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. John Howard, M.P.)

General outline

The Bill will amend the income tax law to:

·
revise the provisions that empower the Commissioner of Taxation to counter arrangements that reduce Australian tax through the shifting of profits out of Australia;
·
introduce new zone allowance arrangements, as announced in the 1981-82 Budget Speech, details of which were announced on 15 November 1981, and which are to apply from 1 November 1981;
·
remedy a defect that allows avoidance of tax on profits from short-term transactions in property by selling off shares in a company or an interest in a trust estate that holds the property, instead of selling the property itself (proposal announced on 10 September 1981);
·
ensure that allowances received by Defence Force personnel serving overseas continue to receive parallel tax treatment to similar allowances received by civilians;
·
give effect to the 1981-82 Budget proposal to grant accelerated rates of depreciation for plant and equipment used in the production of basic iron and steel products (details announced on 30 October 1981);
·
grant income tax deductions for gifts of the value of $2 or more -

·
made after 5 February 1982 to the R.S.P.C.A. (proposal announced on 5 February 1981); or
·
made during the 1981-82 financial year to the Help Poland Live Appeal (proposal announced on 18 February 1981), the Australian Red Cross Poland Appeal and the World Vision of Australia Poland Emergency Appeal.

·
prevent unintended benefits being secured in respect of gifts made under the taxation incentives for the arts scheme (proposal announced on 14 October 1981);
·
formalise procedures for the appointment of valuers under the taxation incentives for the arts scheme;
·
close possible loopholes in the measures introduced in 1980 for taxing the income of trust estates and of dependent children; and
·
ensure that medical expenses are treated as rebatable amounts where payment is made to a company or other unqualified employer of a legally qualified practitioner who renders eligible medical services.


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