(g) if the payment is of a kind referred to in paragraph 365(1)(e) and, apart from this section, an amount would be included in the taxpayer’s assessable income, of the year of income referred to in that paragraph, under section 99B in respect of the trust property referred to in that paragraph—that amount is not assessable income, and is not exempt income, to the extent of the debit.
(2) This section is to be disregarded for the purposes of applying any other provision of this Act to determine allowable deductions.
(3) In this section:
attribution account payment has the same meaning as in Part X.
attribution debit has the same meaning as in Part X.
company has the same meaning as in Part X.
trust has the same meaning as in Part X, but does not include a trust covered by subsection 371(7).
23AK Amounts paid out of attributed foreign investment fund income not assessable
When this section applies
(1) This section applies if:
(a) either:
(i) a FIF attribution account payment of a kind referred to in former paragraph 603(1)(a), (b), (c), (d), (f), (g) or (h) is made to a taxpayer (other than a partnership or taxpayer in the capacity of trustee of a trust); or
(ii) a FIF attribution account payment of a kind referred to in former paragraph 603(1)(e) is made to a taxpayer; and
(b) on the making of the payment, a post FIF abolition debit arises, for the FIF attribution account entity making the payment, in relation to the taxpayer.
Post FIF abolition debit arises
(2) A post FIF abolition debit arises for a FIF attribution account entity (the eligible entity) in relation to a taxpayer if:
(a) the eligible entity makes a FIF attribution account payment to the taxpayer or to a FIF attribution account entity; and
(b) immediately before the eligible entity makes the FIF attribution account payment, there is a post FIF abolition surplus for the eligible entity in relation to the taxpayer.
Amount of post FIF abolition debit
(3) The amount of the post FIF abolition debit is the lesser of:
(a) the post FIF abolition surplus; and
(b) whichever of the following is applicable:
(i) if the attribution account payment is made to the taxpayer—the FIF attribution account payment;
(ii) in any other case—the taxpayer’s FIF attribution account percentage (for the FIF attribution account entity to which the payment is made) of the FIF attribution account payment;
reduced by any attribution debit that arises under section 372 for the entity in relation to the taxpayer as a result of the making of the payment.
(4) The post FIF abolition debit arises when the FIF attribution account payment is made.
When a post FIF abolition surplus exists
(5) A post FIF abolition surplus for a FIF attribution account entity in relation to a taxpayer exists at a particular time (the relevant time) if the sum of:
(a) the entity’s total FIF attribution credits (within the meaning of former section 605) that arose before the commencement of Schedule 1 to the Tax Laws Amendment (Foreign Source Income Deferral) Act (No. 1) 2010; and
(b) the entity’s total post FIF abolition credits arising before the relevant time in relation to the taxpayer;
exceeds the sum of:
(c) the entity’s total FIF attribution debits (within the meaning of former section 606) that arose before that commencement in relation to the taxpayer; and
(d) the entity’s total post FIF abolition debits arising before the relevant time in relation to the taxpayer.
Post FIF abolition credit arises
(6) A post FIF abolition credit arises for a FIF attribution account entity (the eligible entity) in relation to a taxpayer if a FIF attribution account payment that requires a post FIF abolition debit for another entity in relation to the taxpayer is made to the eligible entity.
Amount of post FIF abolition credit
(7) The amount of the post FIF abolition credit is equal to the amount of the post FIF abolition debit for the other entity.
When the post FIF abolition credit arises
(8) The post FIF abolition credit arises when the FIF attribution account payment referred to in subsection (6) is made.
Effect of this section applying
(9) If this section applies, the following provisions have effect:
(a) if the payment is of a kind referred to in former paragraph 603(1)(a) or (b)—the payment is not assessable income, and is not exempt income, to the extent of the debit;
(b) if the payment is of a kind referred to in former paragraph 603(1)(c) and, apart from this section, an amount would be included in the taxpayer’s assessable income under section 92 in respect of an individual interest in the net income of the partnership of the year of income referred to in that paragraph—that amount is not assessable income, and is not exempt income, to the extent of the debit;
(c) if the payment is of a kind referred to in former paragraph 603(1)(d) and, apart from this section, an amount would be included in the taxpayer’s assessable income under section 97, 98A or 100 in respect of a share of the net income of the trust of the year of income referred to in that paragraph—that amount is not assessable income, and is not exempt income, to the extent of the debit;
(d) if the payment is of a kind referred to in former paragraph 603(1)(d) and, apart from this section, an amount would be assessable to the trustee of the trust referred to in that paragraph under section 98 in respect of a share of the net income of the trust of the year of income referred to in that paragraph—that amount is not so assessable to the extent of the debit;
(e) if the payment is of a kind referred to in former paragraph 603(1)(e)—the payment is not, to the extent of the debit, assessable to the taxpayer as mentioned in that paragraph;
(f) if the payment is of a kind referred to in former paragraph 603(1)(f) and, apart from this section, an amount would be included in the taxpayer’s assessable income, of the year of income referred to in that paragraph, under section 99B in respect of the trust property referred to in that paragraph—that amount is not assessable income, and is not exempt income, to the extent of the debit;
(g) if the payment is of a kind referred to in former paragraph 603(1)(g)—the payment is not assessable income, and is not exempt income, to the extent of the debit;
(h) if the payment is of a kind referred to in former paragraph 603(1)(h)—the payment is not assessable income, and is not exempt income, to the extent of the debit.
(10) This section is to be disregarded for the purposes of applying any other provision of this Act to determine allowable deductions.
(11) In this section:
FIF attribution account entity has the same meaning as in former Part XI.
FIF attribution account payment has the same meaning as in former Part XI.
FIF attribution account percentage has the same meaning as in former Part XI.
trust has the same meaning as in former Part XI, but does not include a trust covered by former subsection 605(11).
23B Reduction of disposal consideration if FIF attributed income not distributed
(1) If:
(a) it is necessary, for the purposes of applying a provision of this Act in the assessment of a taxpayer for a year of income, to take into account:
(i) the amount of consideration received, entitled to be received or taken to have been received, by the taxpayer in respect of the disposal of an asset; or
(ii) the capital proceeds from a CGT event happening in relation to a CGT asset;
being an asset that is an interest in a FIF attribution account entity; and
(b) immediately before the disposal or CGT event takes place there is a post FIF abolition surplus for the FIF attribution account entity in relation to the taxpayer;
then, for the purposes of this Act:
(c) the consideration or capital proceeds that, apart from this section, would be taken into account under the provision referred to in paragraph (a) in respect of the disposal or CGT event is taken to be reduced by so much of the amount of the post FIF abolition surplus as does not exceed the consideration or capital proceeds; and
(d) a post FIF abolition debit arises at the time of the disposal or the CGT event under this paragraph, in relation to the taxpayer, for the FIF attribution account entity; and
(e) the amount of the post FIF abolition debit is equal to so much of the surplus as is taken into account under paragraph (c).
(2) For the purposes of paragraph (1)(c), if the disposal of the asset or the CGT event causes the taxpayer’s FIF attribution account percentage for the FIF attribution account entity to be reduced by a proportion, then only that proportion of the post FIF abolition surplus for the entity is to be taken into account under that paragraph.
(3) In this section:
FIF attribution account entity has the same meaning as in former Part XI.
FIF attribution account percentage has the same meaning as in former Part XI.
23G Exemption of interest received by credit unions
(1) In this section:
credit union means a company in relation to which the following conditions are satisfied:
(a) the company is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959;
(b) the company has a consent under section 66 of that Act that allows it to assume or use the expression “credit union” or “credit society”, or another expression (whether or not in English) that is of like import to either of those expressions.
(2) Income derived during a year of income by a credit union that is an approved credit union in relation to that year of income, being interest paid to the credit union by members of the credit union not being companies in respect of loans made to those members, is exempt from income tax.
(2A) Subsection (2) does not apply to a credit union in relation to a year of income if:
(a) the credit union is a recognised medium credit union in relation to the year of income; or
(b) the credit union is a recognised large credit union in relation to the year of income.
(3) For the purposes of this section, a credit union is an approved credit union in relation to a year of income if, and only if, the Commissioner is satisfied that:
(a) during that year of income the credit union did not enter into any transactions of a kind not ordinarily entered into by a company of a kind referred to in paragraph (a) of the definition of credit union in subsection (1); and
(b) by comparison with the profits of other credit unions for that year of income and the amounts transferred by those credit unions out of those profits to reserves, and after making due allowance for differences in the numbers of transactions entered into by other credit unions and the first‑mentioned credit union and the amounts to which the respective transactions related, the profit of the first‑mentioned credit union for that year of income was not excessive and the first‑mentioned credit union did not transfer an unreasonable part of that profit to a reserve.
(4) In determining for the purposes of paragraph (3)(a) whether any transactions entered into by a credit union during a year of income were transactions of a kind referred to in that paragraph, the Commissioner may have regard to:
(a) the circumstances in which, and the terms and conditions upon which, during that year of income:
(i) moneys were lent to, invested with, or otherwise obtained by, the credit union;
(ii) moneys were lent or otherwise made available by the credit union to its members or to other persons; and
(iii) moneys were invested by the credit union;
(b) the nature of the connexion (if any) between:
(i) the credit union or any of its members and any of the persons by whom moneys were lent to, invested with, or otherwise made available to, the credit union during that year of income;
(ii) the credit union or any of its members and any of the persons who owed moneys to the credit union at any time during that year of income; or
(iii) any of the persons by whom moneys were lent to, invested with, or otherwise made available to, the credit union during that year of income and any of the persons who owed moneys to the credit union at any time during that year of income; and
(c) any other relevant matters.
23K Substitution of certain securities
(1) In this section:
central borrowing authority means:
(a) the New South Wales Treasury Corporation;
(b) the Victorian Public Authorities Finance Agency;
(c) the Victoria Transport Borrowing Agency;
(d) the Queensland Government Development Authority;
(e) the Treasurer of the State of Western Australia;
(f) the South Australian Government Financing Authority;
(g) the Local Government Finance Authority of South Australia;
(h) any other public authority of a State, being a public authority that is empowered to issue securities in the manner referred to in paragraph (2)(a).
public authority includes a Minister of the Crown in right of a State, a municipal corporation and any other local government body.
security means stock, a bond or debenture, or any other document evidencing the indebtedness of a person, whether or not the debt is secured.
(2) For the purposes of this section, a person shall be taken to have issued a security (in this subsection referred to as the substituted security) to a taxpayer in substitution for another security (in this subsection referred to as the original security) held by the taxpayer if and only if:
(a) the substituted security was issued by the person to the taxpayer in exchange for the surrender or transfer of, or otherwise in replacement or substitution for, the original security; and
(b) the terms and conditions provided for by the substituted security were identical in all material respects to those provided for by the original security.
(3) Where:
(a) but for this subsection, a person would be taken to have issued a security (in this subsection referred to as the substituted security) to a taxpayer in substitution for another security (in this subsection referred to as the original security) held by the taxpayer; and
(b) either or both of the following conditions is or are satisfied:
(i) an amount was payable by the taxpayer by way of consideration for the issue of the substituted security; or
(ii) an amount was payable to the taxpayer by way of consideration for the surrender, transfer, replacement or substitution of the original security;
the person shall not be taken for the purposes of this section to have issued the substituted security in substitution for the original security.
(4) Where:
(a) under terms and conditions provided for by a security, the day on which interest is payable in respect of a period is different from that on which interest is payable in respect of the same period under another security; and
(b) the terms and conditions provided for by the securities are otherwise identical in all material respects;
the following provisions have effect:
(c) if the days on which the interest is payable are separated by an interval not exceeding 31 days—the terms and conditions provided for by the 2 securities shall, for the purposes of paragraph (2)(b), be taken to be identical in all material respects; and
(d) in any other case—the terms and conditions provided for by the 2 securities shall, for the purposes of paragraph (2)(b), be taken not to be identical in all material respects.
(5) Where, on or after 8 August 1984, a central borrowing authority issued or issues a security (in this subsection referred to as the substituted security) to a taxpayer in substitution for another security (in this subsection referred to as the original security) held by the taxpayer that was issued by a public authority other than the central borrowing authority:
(a) the substituted security shall, for the purposes of this Act, be deemed to be a continuation of the original security on the terms and conditions provided for by the substituted security; and
(b) no amount shall, in respect of the issue of the substituted security or the surrender, transfer, replacement or substitution of the original security, be included in, allowable as a deduction from or taken into account in ascertaining any amount included in or allowable as a deduction from, the assessable income of any taxpayer in respect of any year of income.
23L Certain benefits in the nature of income not assessable
(1) Income derived by a taxpayer by way of the provision of a fringe benefit is not assessable income and is not exempt income of the taxpayer.
(1A) Income derived by a taxpayer by way of the provision of a benefit (other than a benefit to which section 15‑70 of the Income Tax Assessment Act 1997 applies) that, but for paragraph (g) of the definition of fringe benefit in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986, would be a fringe benefit is exempt income of the taxpayer.
(2) Where:
(a) in a year of income, a taxpayer derives income consisting of one or more non‑cash business benefits (within the meaning of section 21A); and
(b) the total amount that is applicable under section 21A in respect of those benefits does not exceed $300;
the income is exempt income.
Division 1AB—Certain State/Territory bodies exempt from income tax
Subdivision A—Exemption for certain State/Territory bodies
24AK Key principle
A body that is a State/Territory body (an STB) is exempt from income tax under this Division unless it is an excluded STB. There are 5 different ways in which a body can be an STB.
24AL Diagram—guide to work out if body is exempt under this Division
The following diagram is a guide to help work out whether a body is exempt from income tax under this Division:
Diagram showing how to work out if a State/Territory body is exempt from income tax under this Division