Senate

Tax Law Improvement Bill 1997

Supplementary Explanatory Memorandum

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

General outline and financial impact

The amendments, and the requests for amendments, will make the following changes to the Tax Law Improvement Bill 1997 ( the Bill ):

Requests 1 to 12 (Trading stock - change of use)

Proposal: To introduce specific rules for assets:

·
that are converted into trading stock from another use or purpose; and
·
that are taken from trading stock for another use or purpose.

Application: 1997-98 (and later) income years.

Financial impact: A revenue gain of approximately $30 million in 1998-99 and $25 million in each later income year.

Compliance cost impact: A small reduction in compliance costs.

Amendment 1 (Deductions for tax-related expenses)

Proposal: To ensure that the rewrite of the law allowing a deduction for expenditure on managing a taxpayers tax affairs correctly reflects the existing law.

Application: 1997-98 (and later) income years.

Financial impact: None.

Compliance cost impact: None.

Amendments 2 to 17 (Exempt income - education and training payments)

Proposal: To remove from the Bill the rewrite of the exempt income provisions dealing with education and training payments that are to be amended by the Taxation Laws Amendment Act (No. 1) 1997

Application: 1997-98 (and later) income years.

Financial impact: None.

Compliance cost impact: None.


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