INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 2 - Income  

Subdivision A - Assessable income generally  

SECTION 26AF   ASSESSABLE INCOME TO INCLUDE VALUE OF BENEFITS RECEIVED FROM OR IN CONNECTION WITH FORMER PARAGRAPH 23(ja) FUNDS OR FORMER SECTION 23FB FUNDS  

26AF(1)   [Unauthorised payment of benefits]  

Where:


(a) in a year of income and after 19 August 1980, a taxpayer receives or obtains a benefit of any kind out of, or attributable to assets of, a paragraph 23(ja) fund or a section 23FB fund;


(aa) if the fund is an exempt fund within the meaning of section 26AFB (as in force just before the commencement of Schedule 1 to the Superannuation Legislation Amendment (Simplification) Act 2007 ) - the benefit was received or obtained by the taxpayer before the proclaimed superannuation standards day;


(b) the benefit is received or obtained otherwise than in accordance with approved terms and conditions applicable to the fund at the time when the benefit is received or obtained; and


(c) the Commissioner is satisfied that the taxpayer received or obtained the benefit:


(i) by reason that the taxpayer was, or had been, a member of the fund;

(ii) by reason that the taxpayer was, or had been, a dependant of a person who was, or had been, a member of the fund; or

(iii) by reason that the taxpayer was, or had been, associated with a person who was, or had been, a member of the fund;

the assessable income of the taxpayer of the year of income shall include the amount or value of that benefit.

26AF(2)   [Transfer of right to receive benefit]  

Where, in a year of income and after 19 August 1980, a taxpayer receives valuable consideration in respect of the transfer by the taxpayer to another person (whether by assignment, by declaration of trust or by any other means) of a right (whether vested or contingent) to receive a benefit from a fund, being a paragraph 23(ja) fund or a section 23FB fund and not being an exempt fund within the meaning of section 26AFB (as in force just before the commencement of Schedule 1 to the Superannuation Legislation Amendment (Simplification) Act 2007 ), the assessable income of the taxpayer of the year of income shall include the amount or value of that consideration.

26AF(3)   [Definitions]  

In this section:

approved terms and conditions
, in relation to a fund, means:


(a) in the case of a paragraph 23(ja) fund - terms and conditions approved by the Commissioner under subparagraph 23(ja)(ii) as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987 ; or


(b) in the case of a section 23FB fund - terms and conditions approved by the Commissioner under subsection 23FB(2) as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987 .

paragraph 23(ja) fund
means a fund the income of which of any year of income is or has been exempt from tax by virtue of paragraph 23(ja) as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987 or would, but for the provisions of section 121C as in force at any time before the commencement of section 21 of the Taxation Laws Amendment Act 1985 and Division 9C, be, or have been, exempt from tax by virtue of that paragraph.

section 23FB fund
means:


(a) a fund the income of which of any year of income is or has been exempt from tax by virtue of section 23FB as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 4) 1987 or would, but for the provisions of Division 9C, be, or have been, exempt from tax by virtue of that section; and


(b) a fund that was a section 79 fund for the purposes of this section as in force at any time before the commencement of the Income Tax Assessment Amendment Act (No. 3) 1984.

26AF(4)   [Continued application of former s 23(ja) and 23FB]  

For the purposes of this section, where either of the following paragraphs applies in relation to an exempt fund within the meaning of section 26AFB of this Act (as in force just before the commencement of Schedule 1 to the Superannuation Legislation Amendment (Simplification) Act 2007 ) in relation to the year of income of the fund commencing on 1 July 1986 or a subsequent year of income:


(a) the year of income ended before the proclaimed superannuation standards day and the income of the fund of the year of income would, but for the amendments made by the Taxation Laws Amendment Act (No. 4) 1987 , have been exempt from tax under paragraph 23(ja) or section 23FB of this Act, as in force at any time before the commencement of section 1 of that Act;


(b) the proclaimed superannuation standards day occurred during the year of income and, if the year of income had ended on the proclaimed superannuation standards day, the income of the fund of the year of income would have been exempt from tax under paragraph 23(ja) or section 23FB of this Act, as in force at any time before the commencement of section 1 of that Act;

paragraph 23(ja) or section 23FB of this Act, as in force immediately before the commencement of section 1 of that Act, shall be taken to have continued to apply in relation to the fund in relation to the year of income of the fund.


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