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The Issues Log

Issue: LP 10(1), LE 4(2)

Submission Number	116
Submitter	Deloitte
Section / Provision Income Tax Act 2007	LP 10 (1)
Section / Provision Income Tax Act 2004	LE 4(2)
Date Received	16/07/2009
Description of issue	Section LP 10(1) of the Income Tax Act 2007 (ITA ‘07) provides the formula for the calculation of the annual total deduction that a supplementary dividend holding company can allocate to an income year. Under the ITA ‘04 the maximum deduction is limited to the amount of income. Under the ITA ‘07 the maximum deduction is not limited to the amount of income and the inclusion of the “company’s income” in the formula can actually increase the deduction available.
Section / Provision Income Tax Act 1994	The formula under EQ 1(1) is the same as the ITA ‘04.
Status	Finalised
Outcome	The Panel concludes an unintended legislative change arises in respect of section LP 10(1) of the Income Tax Act 2007. That the Income Tax Act 2007 be amended retrospectively to limit the amount of the maximum deduction available to the amount of the company’s income and a savings provision for deductions claimed in tax returns filed prior to 28^th October 2009.

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