Inserts for
Tax Laws Amendment (2009 Measures No. 5) Bill 2009: Taxation of financial arrangements

EXPOSURE DRAFT (01/09/2009)

4.  Schedule 2, Part 1	The day this Act receives the Royal Assent.		
5.  Schedule 2, Part 2	Immediately after the commencement of the provision(s) covered by table item 4.		

Schedule 2—Taxation of financial arrangements
Part 1—Amendment commencing on Royal Assent
Taxation Administration Act 1953
1  Subsection 45‑120(2B) in Schedule 1
Repeal the subsection (including the heading).
2  Application
The amendment made by this Part applies to you for the first applicable income year (within the meaning of item 102 of Schedule 1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009) and later income years.
3  Transitional
(1)	This item applies to you if:
	(a)	you are a quarterly payer who pays on the basis of instalment income at the end of the first instalment quarter ending after the commencement of this item; and
	(b)	an amount is included in your instalment income under subsection 45‑120(2B) in Schedule 1 of the Taxation Administration Act 1953 (disregarding the amendment made by this Part) for an instalment quarter starting on or after 1 July 2009 and ending before the commencement of this item.
(2)	For each instalment quarter mentioned in paragraph (1)(b), work out:
	(a)	your instalment income for the quarter (taking into account the amendment made by this Part); and
	(b)	your instalment income for the quarter (disregarding the amendment made by this Part).
(3)	Next:
	(a)	work out the total of every amount worked out under paragraph (2)(a); and
	(b)	work out the total of every amount worked out under paragraph (2)(b); and
	(c)	subtract the amount worked out under paragraph (b) of this subitem from the amount worked out under paragraph (a) of this subitem.
(4)	If the amount worked out under paragraph (3)(c) is more than nil, increase your instalment income for the first instalment quarter ending after the commencement of this item by that amount.
Part 2—Amendment commencing immediately after Royal Assent
Taxation Administration Act 1953
4  After subsection 45‑120(2A) in Schedule 1
Insert:
Net gains under Subdivision 250‑E of the Income Tax Assessment Act 1997 included in instalment income
	(2B)	Your instalment income for a period also includes the difference between:
	(a)	a gain (or gains) you make from a *financial arrangement to the extent to which it is (or they are):
	(i)	assessable under Subdivision 250‑E of the Income Tax Assessment Act 1997; and
	(ii)	reasonably attributable to that period; and
	(b)	a loss (or losses) you make from a financial arrangement to the extent to which it is (or they are):
	(i)	allowable to you as a deduction under Subdivision 250‑E of the Income Tax Assessment Act 1997; and
	(ii)	reasonably attributable to that period.
This is so only if the gain (or gains) referred to in paragraph (a) exceeds the loss (or losses) referred to in paragraph (b).
5  Application
The amendment made by this Part applies to you for the first applicable income year (within the meaning of item 102 of Schedule 1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009) and later income years.