The Government on Wed 20.3.2013, released for consultation an exposure draft legislation and explanatory material concerning 2 sets of CGT changes covering scrip-for-scrip rollover and small business concessions. The changes have been combined into one set of amendments.
In the 2011-12 Budget, the Government announced that certain integrity rules in the CGT small business concessions and the scrip-for-scrip roll-over would apply to life insurance companies, super funds and trusts in the same way that they apply to other types of entities. These amendments are proposed to have effect for CGT events happening after 7:30pm (AEST) on 10 May 2011.
Following exposure draft consultation, the Government announced in the 2012-13 Budget that the law would look-through certain asset holding arrangements for the purpose of these integrity rules (and the CGT provisions more generally) and treat the underlying entity as the owner of the asset. The proposed amendments are designed to ensure that the small business connected entity test and the scrip-for-scrip roll-over stakeholder tests apply on the basis of who owns relevant interests in an entity, rather than who benefits from the interests. In particular, the changes are designed to ensure that absolutely entitled beneficiaries, bankrupt individuals, companies in liquidation and security providers are the owners of relevant assets. That is, under the changes, the nominal owners will be looked through to the underlying owners of such assets.
The changes also propose amendments to the wine equalisation tax provisions to ensure that a wine producer cannot access an additional amount of wine equalisation tax rebate by dividing their businesses into separate entities. The main changes are proposed to apply at the option of taxpayers from the 2008-09 income year and automatically from Royal Assent of the Bill. The consequential amendments to the Wine Equalisation Tax Act 1999 would apply from the first financial year after the legislative amendments receive Royal Assent.
COMMENTS are due by 10 April 2013.
[LTN 54, 20/3/13]