Document ID: chunk:federal_register_of_legislation:C2004A04149:body:0:p20
Version: federal_register_of_legislation:C2004A04149
Segment Type: other
Provision Reference: 
Character Range: 55094–57833

(c)     that cannot be realised before maturity; and

  (d)     the return on which is not payable before maturity; and

    (e)     the amount paid on whose maturity is to be applied to the expenses of the funeral of a member of the couple.".

Paragraph 13 (1) (c):

  After "pensions" insert "by way of compensation".

Paragraph 13 (1) (d):

  After "pension" insert "by way of compensation".

Subsection 13 (2):

  After "pensions" insert "by way of compensation".

Before Division 8 of Part III:

  Insert:

"Division 8aa—Ordinary income test—ordinary income concept

Ordinary income is generally total gross income (not net income after deductions) from all sources

"45a. (1) A person's ordinary income is to be worked out by adding together the person's ordinary income from all sources.

Note: for 'ordinary income' see subsection 5h (1).

  "(2) A person's ordinary income consists of:

     (a)     the person's ordinary income as defined in subsection 5h (1); and

     (b)     amounts that are taken to be ordinary income of the person under section 45b (trading stock) or under Division 8 (investment income), Division 8a (money held or invested at low interest rate), Division 8b (money on loan) or Division 8c (deprived assets).

"(3) Subject to sections 45b, 45c and 45d, a person's ordinary income is the person's gross ordinary income without any deduction.
SCHEDULE 3—continued

Ordinary income from a business—treatment of trading stock

  "45b. (1) If:

  (a)     a person carries on a business; and

    (b)     the value of all the business' trading stock on hand at the end of a tax year is greater than the value of all the business' trading stock on hand at the beginning of that tax year;

the person's ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values.

  "(2) If:

  (a)     a person carries on a business; and

    (b)     the value of all the business' trading stock on hand at the end of a tax year is greater than the value of all business' trading stock at the beginning of that tax year;

the person's ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values.

Permissible reductions—business income

"45c. (1) Subject to subsections (2) and (3) and section 45d, if a person carries on a business, the person's ordinary income from the business is to be reduced by:

    (a)     losses and outgoings that related to the business and are allowable deductions for the purposes of section 51 of the Income Tax Assessment Act; and

    (b)     depreciation that relates to the business and is an allowable deduction for the purposes of subsection 54 (1)