INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision A - Assessable income generally  

SECTION 26BA   DOUBLE WOOL CLIPS  

26BA(1)    

26BA(1A)   [No election from 1997/98 income year onwards]  

A taxpayer cannot make an election under subsection (3) relating to the 1997-98 year of income or a later year of income. However, this does not limit the effect of paragraph (6)(b) or subsection (7) in relation to an election that relates to the 1996-97 year of income.

Note:

Subdivision 385-G (Double wool clips) of the Income Tax Assessment Act 1997 provides for elections for the 1997-98 year of income and later years of income.

26BA(2)   [Double wool clips]  

Where -

(a) during a year of income, a taxpayer carried on a business of primary production in Australia;

(b) the assessable income of the taxpayer of that year of income includes -

(i) proceeds of the sale of wool that was shorn in that year of income from sheep being assets of that business;

(ii) proceeds of the sale of wool that was shorn in the last preceding year of income from sheep being assets of that business but was on hand at the beginning of the first-mentioned year of income and the value of which is taken into account for the purposes of section 28 at the beginning of the first-mentioned year of income at its cost price; or

(iii) an amount in respect of wool shorn in the last preceding year of income, being an amount included in the assessable income of the taxpayer of the first-mentioned year of income by reason of the operation of this section;

(c) by reason of fire, drought or flood in an area in Australia in which the taxpayer carried on that business, another shearing of any sheep being assets of that business took place at a time earlier than the time at which, but for the fire, drought or flood, that shearing would ordinarily have taken place; and

(d) the assessable income of the taxpayer of the first-mentioned year of income includes proceeds of the sale of wool that was shorn at that other shearing,

the succeeding subsections of this section have effect.

26BA(3)   [Election]  

The taxpayer may elect that this section shall apply in relation to the profit on the sale of the wool that was shorn at that other shearing and the proceeds of the sale of which are included in the assessable income of the taxpayer of the year of income first referred to in subsection (2) (in the succeeding subsections of this section referred to as ``the year of income to which the election relates'' ).

26BA(4)   [Election by partner]  

Where any sheep were assets of a partnership and, if the sheep had been owned by a partner in the partnership, that partner would be entitled to make an election under subsection (3) in relation to the profit on the sale of wool shorn from the sheep, that partner may make an election under that subsection in relation to the part of the profit on the sale of the wool that is included in his individual interest in the net income of the partnership.

26BA(5)   [Election by trustee or by presently entitled beneficiary]  

Where any sheep referred to in paragraph (2)(c) were assets of a business carried on by the trustee of a trust estate -

(a) the trustee may make an election under subsection (3) in relation only to the part of the profit on sale of the wool that is included in the net income of the trust estate in respect of which the trustee is liable to be assessed and to pay tax under the provisions of Division 6; and

(b) any beneficiary in the trust estate who -

(i) is not under a legal disability;

(ii) is presently entitled to a share of the net income of the trust estate, being a share that includes a part of the profit on the sale of the wool; and

(iii) would, if the sheep had been owned by him, be entitled to make an election under subsection (3) in relation to the profit on the sale of the wool,

may make an election under subsection (3) in relation to that part of that profit.

26BA(6)   [Effect of election]  

Where a taxpayer makes an election under subsection (3) -

(a) the assessable income of the taxpayer of the year of income to which the election relates shall be reduced by an amount equal to the profit on the sale of the wool, or the part of the profit on the sale of the wool, to which his election relates; and

(b) there shall be included in the assessable income of the taxpayer of the next succeeding year of income an amount equal to that profit or that part of that profit, and the amount so included shall, for the purposes of this Act, be deemed to be derived by the taxpayer during that succeeding year of income from the carrying on by him in Australia, during that year of income, of a business of primary production.

26BA(7)   [Deceased taxpayer]  

Where a taxpayer, other than a trustee, who would have been entitled to make an election under subsection (3) in relation to a year of income has died before the end of that year of income, the election may be made by the trustee of his estate and, where such an election is made, paragraph (6)(b) does not apply but there shall be included in the assessable income of the estate of the deceased taxpayer of the next succeeding year of income an amount equal to the profit on the sale of the wool, or the part of the profit on the sale of the wool, to which the election relates, and, for the purposes of this Act, the amount so included shall be deemed to be derived by the trustee during that next succeeding year of income from the carrying on by him in Australia, during that year of income, of a business of primary production and shall be deemed to be income to which no beneficiary is presently entitled.

26BA(8)   [Conditions re election]  

An election under subsection (3) must be made on or before the date of lodgment of the return of income of the taxpayer to which the election relates, or, if the taxpayer has died and the election is made under subsection (7) by the trustee of his estate, the date of lodgment of the return of income of the deceased taxpayer of the year of income to which the income relates, or on or before such later date as the Commissioner allows.

26BA(9)   [Profit on sale of wool]  

In this section, a reference to the profit on the sale of any wool shall be read as a reference to the amount remaining after deducting from the proceeds of the sale of the wool the expenses directly attributable to the shearing and sale of the wool that were incurred by the taxpayer in the year of income in which those proceeds were included in the assessable income of the taxpayer.

26BA(10)   [Amendment of assessment]  

Notwithstanding anything in any other provision of this Act, the Commissioner may amend an assessment for the purpose of giving effect to this section.