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Contact Officer and Copyright Details
Taxation Laws Amendment (Film Licensed
Investment Company) Bill 1998
Date Introduced: 11 November 1998
House: House of Representatives
Commencement: On the same day as the
proposed Film Licensed Investment Company Act 1998 commences
To allow a
deduction for funds spent on acquiring shares in Film Licensed
Investment Companies (FLIC).
The Bill was previously introduced into the
House of Representatives on 14 May 1998. It was received by the
Senate on 22 June 1998 and referred to the Environment, Recreation,
Communications and the Arts Legislation Committee. Before the
committee report was finalised, Parliament was prorogued and the
Bill then lapsed. The Bill is written in exactly the same terms as
the previous Bill.
For more background, refer to the Digest for the
Film Licensed Investment Company Bill 1998.
Schedule 1 of the Bill will
insert a new Subdivision 375-H into the Income Tax Assessment
Act 1997 that will allow deductions in respect of shares
issued in FLICs.
Proposed section 375-855 will
allow a deduction for funds paid in acquiring shares in a FLIC
while a licence is in force for the FLIC. The deduction will be
available in the year of payment if the shares are issued in that
year or, if the shares are issued in a later year, in the year that
the shares are issued (proposed section
The ability to claim such a deduction will be
- the Arts Minister determines that the concession should be
removed under proposed section 32 of the Film Licensed Investment
Company Bill 1998
- the Commissioner is satisfied that the FLIC has breached a
condition of its license, the Arts Minister has been notified of
the breach and within 6 months after giving the notice the Arts
Minister has not made a decision regarding the breach
(proposed section 375-865).
Proposed subsection 375-865(4)
makes it clear that if an entitlement to the deduction is lost
after the deduction has already been allowed, the taxpayer's
assessment may be amended to disallow the deduction.
If the investment is made by a partnership, the
deduction is to be allocated amongst the partners according to any
agreement between the partners on the payment for the shares or, if
no such agreement exists, according to the partners interest in the
profit or loss of the partnership (proposed section
FLICs will not be able to transfer a tax or
capital loss to another company during a year for which a license
is in force. Similarly, another company will not be able to
transfer such a loss to a FLIC while the FLICs licence is in force
(proposed section 375-875).
If a FLIC spends concessional capital (ie.
capital which is raised by the issue of shares while a license is
in force) the FLIC will not be able to claim a deduction for the
expenditure (this will prevent double deduction for such
funds)(proposed section 375-880).
Chris Field and Mary Anne Neilsen
25 November 1998
Bills Digest Service
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© Commonwealth of Australia 1998
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