Disallow deductions against rebatable benefits

EXPOSURE DRAFT

Commencement information	
Column 1	Column 2	Column 3	
Provision(s)	Commencement	Date/Details	
1.  Schedule 1	The day this Act receives the Royal Assent.		
2.  			
Schedule 1—Disallow deductions against rebatable benefits
  
Income Tax Assessment Act 1997
1  Section 12‑5 (after table item headed “rates and land taxes”)
Insert:
rebatable benefits		
no deduction for 		26‑19	
2  Before section 26‑20
Insert:
26‑19  Rebatable benefits
	(1)	You cannot deduct under this Act a loss or outgoing to the extent that the loss or outgoing is incurred in gaining or producing a rebatable benefit (within the meaning of section 160AAA of the Income Tax Assessment Act 1936).
	(2)	To the extent that you use property in gaining or producing a rebatable benefit, your use of the property is taken not to be for the *purpose of producing assessable income if subsection (1) would stop you deducting a loss or outgoing if you incurred it in the income year in gaining or producing the rebatable benefit.
Note:	Under some provisions of this Act, in order to deduct an amount for your property, you must have used the property for the purpose of producing assessable income.
3  Subsection 995‑1(1) (note at the end of the definition of purpose of producing assessable income)
Omit “Section 32‑15 (about using property in providing entertainment) treats”, substitute “Sections 26‑19 (about using property in gaining or producing rebatable benefits) and 32‑15 (about using property in providing entertainment) treat”.
4  Application of amendments
The amendments made by this Schedule apply to assessments for the 2011‑12 income year and later income years.