Commonwealth Consolidated Acts

TAX LAWS AMENDMENT (2004 MEASURES NO. 2) ACT 2004 - SCHEDULE 12

Part   1 -- Amendments applying from the 2000 - 2001 income year

Income Tax Assessment Act 1997

1   Subsection 87 - 60(3)

Repeal the subsection, substitute:

Matters about which the Commissioner must be satisfied

  (3)   The Commissioner must not make the determination unless satisfied that, in the income year during which the determination first has effect, or is taken to have first had effect, the conditions in one or more of subsections   ( 3A), (3B) and (5) are met.

First alternative--results, employment or business premises test met or reasonably expected to be met

  (3A)   The conditions in this subsection are that:

  (a)   the individual could reasonably be expected to meet, or met, the results test under section   87 - 18, the employment test under section   87 - 25, the business premises test under section   87 - 30 or more than one of those tests; and

  (b)   the individual's * personal services income could reasonably be expected to be, or was, from the individual conducting activities that met one or more of those tests.

Second alternative--unusual circumstances prevented one of the personal services business tests from being met

  (3B)   The conditions in this subsection are that:

  (a)   but for unusual circumstances applying to the individual in that year, the individual could reasonably have been expected to meet, or would have met, at least one of the 4 * personal services business tests; and

  (b)   the individual's * personal services income could reasonably be expected to be, or was, from the individual conducting activities that met one or more of those tests.

2   Subsection 87 - 60(4)

Omit " subparagraph   ( 3)(a)(ii)", substitute " paragraph   ( 3B)(a)".

3   Subsection 87 - 60(4)

Omit "that subparagraph", substitute "that paragraph".

4   At the end of section   87 - 60

Add:

Third alternative--unrelated clients test was met but 80% or more of income from same source because of unusual circumstances

  (5)   The conditions in this subsection are that:

  (a)   the individual could reasonably be expected to meet, or met, the unrelated clients test under section   87 - 20; and

  (b)   because of unusual circumstances applying to the individual in the income year, 80% or more of the individual's * personal services income (not including income mentioned in subsection 87 - 15(4)) could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its * associates); and

  (c)   the individual's personal services income could reasonably be expected to be, or was, from the individual conducting activities that met the unrelated clients test under section   87 - 20.

5   Subsection 87 - 65(3)

Repeal the subsection, substitute:

Matters about which the Commissioner must be satisfied

  (3)   The Commissioner must not make the determination unless satisfied that, in the income year during which the determination first has effect, or is taken to have first had effect, the conditions in one or more of subsections   ( 3A), (3B) and (5) are met.

First alternative----results, employment or business premises test met or reasonably expected to be met

  (3A)   The conditions in this subsection are that:

  (a)   the entity could reasonably be expected to meet, or met, the results test under section   87 - 18, the employment test under section   87 - 25, the business premises test under section   87 - 30 or more than one of those tests; and

  (b)   the individual's * personal services income included in the entity's * ordinary income or * statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.

Second alternative--unusual circumstances prevented one of the personal services business tests from being met

  (3B)   The conditions in this subsection are that:

  (a)   but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, at least one of the 4 * personal services business tests; and

  (b)   the individual's * personal services income included in the entity's * ordinary income or * statutory income could reasonably be expected to be, or was, from the entity conducting activities that met one or more of those tests.

6   Subsection 87 - 65(4)

Omit " subparagraph   ( 3)(a)(ii)", substitute " paragraph   ( 3B)(a)".

7   Subsection 87 - 65(4)

Omit "that subparagraph", substitute "that paragraph".

8   At the end of section   87 - 65

Add:

Third alternative--unrelated clients test was met but 80% or more of income from same source because of unusual circumstances

  (5)   The conditions in this subsection are that:

  (a)   the entity could reasonably be expected to meet, or met, the unrelated clients test under section   87 - 20; and

  (b)   because of unusual circumstances applying to the entity in the income year, 80% or more of the individual's * personal services income (not including income mentioned in subsection 87 - 15(4)) included in the entity's * ordinary income or * statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its * associates); and

  (c)   the individual's personal services income included in the entity's ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section   87 - 20.

9   Application

The amendments made by this Part apply to assessments for the 2000 - 2001 income year and each subsequent income year.

Part   2 -- Amendments applying from the income year after the income year in which this Act receives the Royal Assent

Income Tax Assessment Act 1997

10   Subsection 87 - 60(3)

Omit "and (5)", substitute ", (5) and (6)".

11   Paragraph 87 - 60(3B)(a)

Omit "at least one of the 4 * personal services business tests", substitute "the results test under section   87 - 18, the employment test under section   87 - 25, the business premises test under section   87 - 30 or more than one of those tests".

Note:   The heading to subsection 87 - 60(3B) is replaced by the heading " Second alternative--unusual circumstances prevented the results, employment or business premises test from being met ".

12   At the end of section   87 - 60

Add:

Fourth alternative--unrelated clients test not met because of unusual circumstances

  (6)   The conditions in this subsection are that:

  (a)   but for unusual circumstances applying to the individual in that year, the individual could reasonably have been expected to meet, or would have met, the unrelated clients test under section   87 - 20; and

  (b)   if 80% or more of the individual's * personal services income (not including income mentioned in subsection 87 - 15(4)) could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its * associates)--that is the case only because of unusual circumstances applying to the individual in the income year; and

  (c)   the individual's personal services income could reasonably be expected to be, or was, from the individual conducting activities that met the unrelated clients test under section   87 - 20.

13   Subsection 87 - 65(3)

Omit "and (5)", substitute ", (5) and (6)".

14   Paragraph 87 - 65(3B)(a)

Omit "at least one of the 4 * personal services business tests", substitute "the results test under section   87 - 18, the employment test under section   87 - 25, the business premises test under section   87 - 30 or more than one of those tests".

Note:   The heading to subsection 87 - 65(3B) is replaced by the heading " Second alternative--unusual circumstances prevented the results, employment or business premises test from being met ".

15   At the end of section   87 - 65

Add:

Fourth alternative--unrelated clients test not met because of unusual circumstances

  (6)   The conditions in this subsection are that:

  (a)   but for unusual circumstances applying to the entity in that year, the entity could reasonably have been expected to meet, or would have met, the unrelated clients test under section   87 - 20; and

  (b)   if 80% or more of the individual's * personal services income (not including income mentioned in subsection 87 - 15(4)) included in the entity's * ordinary income or * statutory income could reasonably have been expected to be, or would have been, income from the same entity (or one entity and its * associates)--that is the case only because of unusual circumstances applying to the entity in the income year; and

  (c)   the individual's personal services income included in the entity's ordinary income or statutory income could reasonably be expected to be, or was, from the entity conducting activities that met the unrelated clients test under section   87 - 20.

16   Application

The amendments made by this Part apply to assessments for the income year after the income year in which this Act receives the Royal Assent and each subsequent income year.

Notes to the Tax Laws Amendment (2004 Measures No. 2) Act 2004

Note 1

The Tax Laws Amendment (2004 Measures No.   2) Act 2004 as shown in this compilation comprises Act No.   83 , 20 04 amended as indicated in the Tables below.

Table of Acts

(a)   Subsection 2(1) (item   22 ) of the Tax Laws Amendment (2004 Measures No.   7) Act 2005 provides as follows:

  (1)   Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

(b)   Subsection 2(1) (item   23) of the Tax Laws Amendment (2006 Measures No.   2) Act 2006 provides as follows:

  (1)   Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Table of Amendments