(bf) a hydrogen production tax offset being allowable to the taxpayer in relation to a year of income where the whole or a part of the offset would not have been allowable, or might reasonably be expected not to have been allowable, to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out;
and, for the purposes of this Part, the amount of the tax benefit shall be taken to be:
(c) in a case to which paragraph (a) applies—the amount referred to in that paragraph; and
(d) in a case to which paragraph (b) applies—the amount of the whole of the deduction or of the part of the deduction, as the case may be, referred to in that paragraph; and
(e) in a case to which paragraph (ba) applies—the amount of the whole of the capital loss or of the part of the capital loss, as the case may be, referred to in that paragraph; and
(ea) in a case where paragraph (baa) applies—the amount of the whole of the loss carry back tax offset or of the part of the loss carry back tax offset, as the case may be, referred to in that paragraph; and
(f) in a case where paragraph (bb) applies—the amount of the whole of the foreign income tax offset or of the part of the foreign income tax offset, as the case may be, referred to in that paragraph; and
(faa) in a case where paragraph (bbaa) applies—the amount of the whole of the innovation tax offset or of the part of the innovation tax offset, as the case may be, referred to in that paragraph; and
(fa) in a case where paragraph (bba) applies—the amount of the whole of the exploration credit or of the part of the exploration credit, as the case may be, referred to in that paragraph; and
(g) in a case to which paragraph (bc) applies—the amount referred to in that paragraph; and
(h) in a case to which paragraph (bd) applies—the amount of the whole of the offset or of the part of the offset, as the case may be, referred to in that paragraph; and
(i) in a case to which paragraph (be) applies—the amount of the whole of the CMPTI tax offset or of the part of the CMPTI tax offset, as the case may be, referred to in that paragraph; or
(j) in a case to which paragraph (bf) applies—the amount of the whole of the hydrogen production tax offset or of the part of the hydrogen production tax offset, as the case may be, referred to in that paragraph.
(2) A reference in this Part to the obtaining by a taxpayer of a tax benefit in connection with a scheme shall be read as not including a reference to:
(a) the assessable income of the taxpayer of a year of income not including an amount that would have been included, or might reasonably be expected to have been included, in the assessable income of the taxpayer of that year of income if the scheme had not been entered into or carried out where:
(i) the non‑inclusion of the amount in the assessable income of the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option (expressly provided for by this Act or the Income Tax Assessment Act 1997) by any person, except one under Subdivision 126‑B, 170‑B or 960‑D of the Income Tax Assessment Act 1997; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(b) a deduction being allowable to the taxpayer in relation to a year of income the whole or a part of which would not have been, or might reasonably be expected not to have been, allowable to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out where:
(i) the allowance of the deduction to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act or the Income Tax Assessment Act 1997, except one under Subdivision 960‑D of the Income Tax Assessment Act 1997; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(c) a capital loss being incurred by the taxpayer during a year of income the whole or part of which would not have been, or might reasonably be expected not to have been, incurred by the taxpayer during the year of income if the scheme had not been entered into or carried out where:
(i) the incurring of the capital loss by the taxpayer is attributable to the making of a declaration, agreement, choice, election or selection, the giving of a notice or the exercise of an option (expressly provided for by this Act or the Income Tax Assessment Act 1997) by any person, except one under Subdivision 126‑B, 170‑B or 960‑D of the Income Tax Assessment Act 1997; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, notice or option to be made, given or exercised, as the case may be; or
(ca) a loss carry back tax offset being allowable to the taxpayer the whole or a part of which would not have been, or might reasonably be expected not to have been, allowable to the taxpayer if the scheme had not been entered into or carried out, where:
(i) the allowance of the loss carry back tax offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(d) a foreign income tax offset being allowable to the taxpayer the whole or a part of which would not have been, or might reasonably be expected not to have been, allowable to the taxpayer if the scheme had not been entered into or carried out, where:
(i) the allowance of the foreign income tax offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(e) an innovation tax offset being allowable to the taxpayer the whole or a part of which would not have been, or might reasonably be expected not to have been, allowable to the taxpayer if the scheme had not been entered into or carried out, where:
(i) the allowance of the innovation tax offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(f) a refundable R&D tax offset, or a non‑refundable R&D tax offset, being allowable to the taxpayer in relation to a year of income the whole or a part of which offset would not have been, or might reasonably be expected not to have been, allowable to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out, where:
(i) the allowance of the offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(g) a CMPTI tax offset being allowable to the taxpayer in relation to a year of income the whole or a part of which offset would not have been, or might reasonably be expected not to have been, allowable to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out, where:
(i) the allowance of the offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be; or
(h) a hydrogen production tax offset being allowable to the taxpayer in relation to a year of income the whole or a part of which offset would not have been, or might reasonably be expected not to have been, allowable to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out, where:
(i) the allowance of the offset to the taxpayer is attributable to the making of a declaration, agreement, election, selection or choice, the giving of a notice or the exercise of an option by any person, being a declaration, agreement, election, selection, choice, notice or option expressly provided for by this Act; and
(ii) the scheme was not entered into or carried out by any person for the purpose of creating any circumstance or state of affairs the existence of which is necessary to enable the declaration, agreement, election, selection, choice, notice or option to be made, given or exercised, as the case may be.
(2A) A reference in this Part to the obtaining by a taxpayer of a tax benefit in connection with a scheme is to be read as not including a reference to:
(a) the assessable income of the taxpayer of a year of income not including an amount that would have been included, or might reasonably be expected to have been included, in the assessable income of the taxpayer of that year of income if the scheme had not been entered into or carried out where:
(i) the non‑inclusion of the amount in the assessable income of the taxpayer is attributable to the making of a choice under Subdivision 126‑B of the Income Tax Assessment Act 1997 or an agreement under Subdivision 170‑B of that Act; and
(ii) the scheme consisted solely of the making of the agreement or election; or
(b) a capital loss being incurred by the taxpayer during a year of income the whole or part of which would not have been, or might reasonably be expected not to have been, incurred by the taxpayer during the year of income if the scheme had not been entered into or carried out where:
(i) the incurring of the capital loss by the taxpayer is attributable to the making of a choice under Subdivision 126‑B of the Income Tax Assessment Act 1997 or an agreement under Subdivision 170‑B of that Act; and
(ii) the scheme consisted solely of the making of the agreement or election; or
(c) an exploration credit being issued to the taxpayer the whole or a part of which would not have been, or might reasonably be expected not to have been, issued to the taxpayer if the scheme had not been entered into or carried out, where:
(i) the issuing of the exploration credit to the taxpayer is attributable to the making of a choice under Division 418 of the Income Tax Assessment Act 1997; and
(ii) the scheme consisted solely of the making of the choice.
(3) For the purposes of subparagraph (2)(a)(i), (b)(i), (c)(i), (ca)(i), (d)(i), (e)(i), (f)(i), (g)(i) or (h)(i) or (2A)(a)(i), (b)(i) or (c)(i):
(a) the non‑inclusion of an amount in the assessable income of a taxpayer; or
(b) the allowance of a deduction to a taxpayer; or
(c) the incurring of a capital loss by a taxpayer; or
(ca) the allowance of a foreign income tax offset to a taxpayer; or
(caa) the allowance of an innovation tax offset to a taxpayer; or
(cab) the allowance of a loss carry back tax offset to a taxpayer; or
(cb) the issuing of an exploration credit to a taxpayer; or
(cc) the allowance of a refundable R&D tax offset, or a non‑refundable R&D tax offset, to a taxpayer; or
(cd) the allowance of a CMPTI tax offset to a taxpayer; or
(ce) the allowance of a hydrogen production tax offset to a taxpayer;
is taken to be attributable to the making of a declaration, election, agreement or selection, the giving of a notice or the exercise of an option where, if the declaration, election, agreement, selection, notice or option had not been made, given or exercised, as the case may be:
(d) the amount would have been included in that assessable income; or
(e) the deduction would not have been allowable; or
(f) the capital loss would not have been incurred; or
(fa) the loss carry back tax offset would not have been allowable; or
(g) the foreign income tax offset would not have been allowable; or
(ga) the innovation tax offset would not have been allowable; or
(h) the exploration credit would not have been issued; or
(i) the refundable R&D tax offset, or non‑refundable R&D tax offset, would not have been allowable; or
(j) the CMPTI tax offset would not have been allowable; or
(k) the hydrogen production tax offset would not have been allowable.
(4) To avoid doubt, paragraph (1)(a) applies to a scheme if:
(a) an amount of income is not included in the assessable income of the taxpayer of a year of income; and
(b) an amount would have been included, or might reasonably be expected to have been included, in the assessable income if the scheme had not been entered into or carried out; and
(c) instead, the taxpayer or any other taxpayer makes a discount capital gain (within the meaning of the Income Tax Assessment Act 1997) for that or any other year of income.
(5) Subsection (4) does not limit the generality of any other provision of this Part.
177CB The bases for identifying tax benefits
(1) This section applies to deciding, under section 177C, whether any of the following (tax effects) would have occurred, or might reasonably be expected to have occurred, if a scheme had not been entered into or carried out:
(a) an amount being included in the assessable income of the taxpayer;
(b) the whole or a part of a deduction not being allowable to the taxpayer;
(c) the whole or a part of a capital loss not being incurred by the taxpayer;
(ca) the whole or a part of a loss carry back tax offset not being allowable to the taxpayer;
(d) the whole or a part of a foreign income tax offset not being allowable to the taxpayer;
(daa) the whole or a part of an innovation tax offset not being allowable to the taxpayer;
(da) the whole or a part of an exploration credit not being issued to the taxpayer;
(e) the taxpayer being liable to pay withholding tax on an amount;
(f) the whole or a part of a refundable R&D tax offset, or of a non‑refundable tax offset, not being allowable to the taxpayer;
(g) the whole or a part of a CMPTI tax offset not being allowable to the taxpayer;
(h) the whole or a part of a hydrogen production tax offset not being allowable to the taxpayer.
(2) A decision that a tax effect would have occurred if the scheme had not been entered into or carried out must be based on a postulate that comprises only the events or circumstances that actually happened or existed (other than those that form part of the scheme).
(3) A decision that a tax effect might reasonably be expected to have occurred if the scheme had not been entered into or carried out must be based on a postulate that is a reasonable alternative to entering into or carrying out the scheme.
(4) In determining for the purposes of subsection (3) whether a postulate is such a reasonable alternative:
(a) have particular regard to:
(i) the substance of the scheme; and
(ii) any result or consequence for the taxpayer that is or would be achieved by the scheme (other than a result in relation to the operation of this Act); but
(b) disregard any result in relation to the operation of this Act that would be achieved by the postulate for any person (whether or not a party to the scheme).
(5) Subsection (4) applies in relation to the scheme as if references in that subsection to the operation of this Act included references to the operation of any foreign law relating to taxation:
(a) if this Part applies to the scheme because of section 177DA or 177J; or