Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 4) 1987 No. 138 of 1987 - SECT 26

26. Sections 121C, 121CA, 121CB and 121CC of the Principal Act are repealed
and the following sections are substituted: Assessment of investment income of
certain ineligible superannuation funds

"121CC. (1) This section applies in relation to a fund that is an ineligible
superannuation fund in relation to a year of income if:

   (a)  if the proclaimed superannuation standards day occurred before the
        year of income:

        (i)    at a time during the year of income when the fund was in
               existence, there were in force regulations for the purposes of
               subsection 7 (1) of the
               Occupational Superannuation Standards Act 1987 prescribing
               relevant investment standards applicable to the fund;

        (ii)   the Commissioner is not satisfied that, at all times during the
               year of income when the fund was in existence and there were in
               force regulations for the purposes of subsection 7 (1) of the
               Occupational Superannuation  Standards Act 1987 prescribing
               relevant investment standards applicable to the fund, the fund
               complied with those standards; and

        (iii)  the Commissioner is satisfied that, at all times during the
               year of income when the fund was in existence and there were in
               force regulations for the purposes of subsection 7 (1) of the
               Occupational Superannuation Standards  Act 1987 prescribing
               standards applicable to the fund, the fund complied with all of
               those standards other than the relevant investment standards;

   (b)  if the proclaimed superannuation standards day occurred during the
        year of income:

        (i)    at a time during so much of the year of income as occurred
               after that day when the fund was in existence, there were in
               force regulations for the purposes of subsection 7 (1) of the
               Occupational Superannuation Standards  Act 1987 prescribing
               relevant investment standards applicable to the fund;

        (ii)   the Commissioner is not satisfied that, at all times during so
               much of the year of income as occurred after that day when the
               fund was in existence and there were in force regulations for
               the purposes of subsection 7 (1) of the
               Occupational Superannuation Standards Act 1987 prescribing
               relevant investment standards applicable to the fund, the fund
               complied with those standards; and

        (iii)  the Commissioner is satisfied that:

                (A)  at all times during so much of the year of income as
                     occurred after that day when the fund was in existence
                     and there were in force regulations for the purposes of
                     subsection 7 (1) of the Occupational Superannuation 
                     Standards Act 1987 prescribing standards applicable to
                     the fund, the fund complied with all of those standards
                     other than the relevant investment standards; and

                (B)  if the year of income had ended on that day and sections
                     23F, 23FB, 121C and 121CC, as in force immediately before
                     the commencement of this section, had not been repealed
                     by the Taxation Laws Amendment Act (No. 4)  1987 ,
                     section 121CC, as so in force, would have applied in
                     relation to the fund in relation to the year of income;
                     or

   (c)  if the proclaimed superannuation standards day occurred after the year
        of income-the Commissioner is satisfied that if sections 23F, 23FB,
        121C and 121CC, as in force immediately before the commencement of
        this section, had not been repealed by the
        Taxation Laws Amendment Act (No. 4) 1987, section 121CC, as so in
        force, would have applied in relation to the fund in relation to the
        year of income.

"(2) The trustee of a fund to which this section applies in relation to a year
of income shall be assessed and is liable to pay tax, at the rate declared by
the Parliament for the purposes of this subsection, on the investment income
of the fund of the year of income.

"(3) The trustee of a fund to which this section applies in relation to a year
of income shall be assessed and is liable to pay tax, at the rate declared by
the Parliament for the purposes of this subsection, upon so much of the
ineligible income derived by the fund in the year of income as remains after
deducting from the ineligible income any losses and outgoings incurred by the
fund to the extent to which the losses and outgoings are incurred in gaining
or producing that income and are not of a private or capital nature.

"(4) A reference in this section to relevant investment standards is a
reference to such of the standards prescribed by regulations in force for the
purposes of subsection 7 (1) of the Occupational Superannuation Standards Act 
1987 as are prescribed for the purposes of this section by regulations made
under this Act. Assessment of private company dividend income and non-arm's
length income of superannuation funds to which section 23FC applies

"121D. The trustee of a fund to which section 23FC applies in relation to a
year of income shall be assessed and is liable to pay tax, at the rate
declared by the Parliament for the purposes of this section, upon so much of
the income derived by the fund in the year of income (other than income that
is exempt from tax by virtue of section 23FC) as remains after deducting from
the first-mentioned income any losses and outgoings incurred by the fund to
the extent to which the losses and outgoings are incurred in gaining or
producing that income and are not of a private or capital nature.".