On 25 Nov 2021, the Government introduced theCorporate Collective Investment Vehicle Framework and Other Measures Bill 2021, into the Federal Parliament (the Lower House). Its centrepiece is a new ‘Corporate Collective Investment Vehicle’ which will have a ‘flow through’ tax regime, piggy backing on the AMIT regime. It will also extend the ‘loss carry back’ provisions; remove a deferred taxing point for ESSs; and insert a ‘Retirement Income Covenant’ for non-SMSF super funds.
The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021, introduced in the House of Reps on 25 November 2021, proposes the following amendments:
- Corporate collective investment vehicles (CCIVs): the Bill will amend the ITAA 1997 and Corporations Act 2001 to establish the tax and regulatory frameworks for CCIVs as a new type of a company limited by shares that is used for funds management. The amendments will give effect to the core CCIV tax framework to ensure that the CCIV is taxed on a flow-through basis, with the objective that the general tax treatment of CCIVs and their members align with the existing tax treatment of AMITs (and their members) – Schedules 1 – 5 to the Bill. DATE OF EFFECT: 1 July 2022. (See related TT article.)
- Loss carry back extension: the Bill will extend the loss carry back rules by 12 months, allowing eligible corporate tax entities to claim a loss carry back tax offset in the 2022-23 income year (in Schedule 6 to the Bill).
- Employee share schemes: cessation of employment will be removed as a taxing point for ESS interests which are subject to deferred taxation – in Schedule 10 to the Bill. DATE OF EFFECT: This measure will apply to ESS interests for which the ESS deferred taxing point occurs on or after the beginning of the financial year starting after assent to the Bill.
- Retirement income covenant: the SIS Act will be amended to include a new retirement income covenant that will require trustees of RSEs to develop a retirement income strategy for beneficiaries who are retired or are approaching retirement. DATE OF EFFECT: 1 July 2022 – in Schedule 9 to the Bill. (See related TT article.)
- DGRs: the list of deductible gift recipients will be amended to include the Greek Orthodox Community of New South Wales Ltd, Australian Associated Press Ltd, Virtual War Memorial Limited and SU Australia Ministries Limited. The DGR listing will also be extended for Cambridge Australia Scholarships Limited and Foundation 1901 Limited, while the listing will be removed for the East African Fund Limited (with the fund remaining endorsed as a DGR under another category) – in Schedule 7 to the Bill.
- Minor amendments: the Bill will make a number of miscellaneous and technical amendments to various Treasury laws, including tax amendments in relation to the Seasonal Labour Mobility Program tax regime, working holiday makers, and the disclosure of TFNs to certain registrars – in Schedule 8 to the Bill.
[APH: Current Bills Summary, Bill, Expl Memo]
[Tax Month – November 2021 – Previous 2021] 28.11.21