The Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016 has been introduced in the House of Representatives. The Bill proposes to amend ITAA 1997 to allow primary producers to access income-tax averaging 10 income years after choosing to opt out, instead of that opt-out choice being permanent.

If a primary producer wants to opt out again, they may still do so, but that choice to opt out is effective for 10 income years. After the 10-year opt-out period has ended, primary producers are effectively treated as new primary producers in applying the basic conditions.

The averaging adjustment applies again to a taxpayer's assessment where the following conditions are satisfied:

  • income-tax averaging has not applied to the taxpayer because they permanently opted out 10 or more income years ago;
  • the taxpayer has been carrying on a primary production business for two income years in a row; and
  • their basic taxable income in the first year (after the 10-year opt-out period has passed) is less than or equal to their basic taxable income in the following year.

If these basic conditions are not met, an averaging adjustment will not be made until they are met in a later income year.

This change would apply to the 2016–2017 income year and later income years.

Other amendments

The Bill also proposes the following amendments.

Remedial power for Commissioner

The Bill proposes to amend Sch 1 to the TAA by inserting a new Div 370 to establish a remedial power for the Commissioner of Taxation. This is intended to allow for more timely resolution of certain unforeseen or unintended outcomes in the taxation and superannuation laws. The power would allow the Commissioner to make, by disallowable legislative instrument, one or more modifications to the operation of a taxation law to ensure the law can be administered to achieve its intended purpose or object. This measure would commence on the day after Royal Assent, and would allow the Commissioner to make legislative instruments from that date to modify the operation of a taxation law.

Luxury car tax relief: cars for display

The Bill would amend the A New Tax System (Luxury Car Tax) Act 1999 to provide relief from luxury car tax (LCT) to certain public institutions that import or acquire luxury cars for the sole purpose of public display. The changes would apply to public museums, galleries and libraries that are registered for GST and that have been endorsed as deductible gift recipients (DGRs). The amendments would apply for luxury cars that are imported or acquired from the day after the Bill receives Royal Assent.

Source: Tax and Superannuation Laws Amendment (2016 Measures No 2) Bill 2016, still before the House of Representatives at the time of publication, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;page=0;query=BillId%3Ar5685%20Recstruct%3Abillhome.