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29 Mar 07 2007 Measures No 2 Bill 2007 introduced

On 29 March 2007, Tax Laws Amendment (2007 Measures No 2) Bill 2007 was introduced into the House of Representatives. The following is extracted from the Explanatory Memorandum.

SCHEDULE 1 to the Bill amends the provisions of ITAA 1997 relating to depreciating assets under the uniform capital allowance system. These amendments will more closely align the decline in value deductions for mining, quarrying and prospecting rights with that for other depreciating assets. These amendments apply to assessments for the income year in which 1 July 2001 occurred, and to later income years. This measure was announced in the Minister for Revenue and Assistant Treasurer’s Press Release No 021 of 9 May 2006: see 2006 TAXVINE No 16 (14) (9 May 2006).

SCHEDULE 2 to the Bill changes the taxation treatment of boating activities. These changes allow taxpayers who cannot demonstrate that they are carrying on a business using a boat to claim deductions for boating expenses up to the level of their boating income. These amendments apply to the first income year starting on or after the day on which this Bill receives Royal Assent, and to later income years. This measure was announced in the Minister for Revenue and Assistant Treasurer’s Press Release No. 022 of 9 May 2006: see 2006 TAXVINE No 16 (25) (9 May 2006).

SCHEDULE 3 to the Bill amends the provisions of ITAA 1936 relating to expenditure on research and development (R&D). These amendments clarify and make 10 technical amendments to the provisions for the premium incremental concession and the refundable R&D tax offset. These amendments are technical in nature and have various dates of effect. This measure was announced on 9 May 2006 in the 2006-07 Budget.

SCHEDULE 4 to the Bill amends ITAA 1997 to allow a tax deduction for donations of publicly listed shares, to eligible deductible gift recipients, acquired more than 12 months before gifting and valued at $5,000 or less. This measure applies in an income year commencing on or after the date of Royal Assent. This measure was announced in the Minister for Revenue and Assistant Treasurer’s Press Release No. 019 of 9 May 2006: see 2006 TAXVINE No 16 (27) (9 May 2006).

SCHEDULE 5 to the Bill amends the ITAA 1997 to update the list of deductible gift recipients (DGRs).

SCHEDULE 6 to the Bill amends the ITAA 1997 to extend the eligibility for tax deductions for contributions to DGRs, where an associated minor benefit is received for an eligible fund-raising event. These amendments apply to contributions made on or after 1 January 2007. These amendments were announced jointly by the Minister for Revenue and Assistant Treasurer and the Minister for Families, Community Services and Indigenous Affairs, in Press Release No. 086 of 1 December 2006: see 2006 TAXVINE No 47 (14) (8 December 2006).

SCHEDULE 7 to the Bill addresses a defect in the definitions of ‘exempt entity’ in ITAA 1997 and ‘excepted trust’ in ITAA 1936. It also corrects some minor technical errors in Division 58 of the ITAA 1997. These amendments apply from 1 July 2005. Transitional rules ensure that taxpayers are not retrospectively disadvantaged. The proposal was not previously announced.

SCHEDULE 8 to the Bill amends the venture capital regime by:

- relaxing the eligibility requirements for concessional taxation treatment for foreign residents investing in venture capital limited partnerships and Australian venture capital funds of funds; and

- providing taxation concessions for Australian residents and foreign residents investing in early stage venture capital activities through a new investment vehicle called an early stage venture capital limited partnership.

Parts 1 to 4 apply to the 2007-08 income year and all later years. Part 5 applies from the commencement of the Venture Capital Act 2002. This measure was announced in the Treasurer’s Press Release No. 37 of 9 May 2006: see 2006 TAXVINE No 16 (26) (9 May 2006).

For a copy of Tax Laws Amendment (2007 Measures No 2) Bill 2007, go here

For a copy of the EM, go here

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