Bills Digest No. 222 1997-98
Taxation Laws Amendment (Film Licensed Investment Company) Bill 1998
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
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the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Contact Officer and Copyright Details
Taxation Laws Amendment (Film Licensed Investment Company)
Bill 1998
Date Introduced: 14
May 1998
House: House of Representatives
Portfolio: Treasury
Commencement: On
the same day as the proposed Film Licensed Investment Company Act 1998
commences
To allow a deduction for funds spent
on acquiring shares in Film Licensed Investment Companies (FLIC).
Refer to the Digest for the Film Licensed Investment
Company Bill 1998.
Schedule 1 of the Bill will insert a new Subdivision
375-H into the Income Tax Assessment Act 1997 that will allow deductions
in respect of shares issued in FLICs.
Proposed section 375-855 will allow a deduction
for funds paid in acquiring shares in a FLIC while a licence is in force
for the FLIC. The deduction will be available in the year of payment if
the shares are issued in that year or, if the shares are issued in a later
year, in the year that the shares are issued (proposed section 375-860).
The ability to claim such a deduction will be lost if:
- the Arts Minister determines that the concession should be removed
under proposed section 32 of the Film Licensed Investment Company Bill
1998
- the Commissioner is satisfied that the FLIC has breached a condition
of its license, the Arts Minister has been notified of the breach and
within 6 months after giving the notice the Arts Minister has not made
a decision regarding the breach (proposed section 375-865).
Proposed subsection 375-865(4) makes it clear
that if an entitlement to the deduction is lost after the deduction has
already been allowed the taxpayer's assessment may be amended to disallow
the deduction.
If the investment is made by a partnership, the deduction
is to be allocated amongst the partners according to any agreement between
the partners on the payment for the shares or, if no such agreement exists,
according to the partners interest in the profit or loss of the partnership
(proposed section 375-875).
FLICs will not be able to transfer a tax or capital loss
to another company during a year for which a license is in force. Similarly,
another company will not be able to transfer such a loss to a FLIC while
the FLICs licence is in force (proposed section 375-875).
If a FLIC spends concessional capital (ie. capital which
is raised by the issue of shares while a license is in force) the FLIC
will not be able to claim a deduction for the expenditure (this will prevent
double deduction for such funds)(proposed section 375-880).
Chris Field
1 June 1998
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1998
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Published by the Department of the Parliamentary Library, 1998.
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