The Tax and Superannuation Laws Amendment (2014 Measures No 6) Bill 2014 received Royal Assent on 12 December 2014 as Act No 133 of 2014. It had passed all stages without amendment.
The Bill contains amendments relating to:
▪ extending the existing CGT business restructure roll-overs. The Bill amends the ITAA 1997 to extend the existing CGT business restructure roll-overs available where a member of a company or unit trust can defer the income tax consequences of transactions that occur in the course of a business restructure. In particular, the amendments will permit taxpayers to apply the roll-overs in Subdiv 124-G (exchange of shares for shares in interposed company) and Subdiv 124-H (exchange of units for shares in interposed company) in circumstances where they held the relevant shares or units as revenue assets or trading stock;
▪ ensuring that foreign pension funds can access the managed investment trust (MIT) withholding tax regime and the associated lower rate of withholding tax on income from certain Australian investments;
▪ exemption for certain US Government defence entities. The amendment will provide an exemption from Australian tax on income derived by certain entities engaged by the Government of the United States of America in connection with Force Posture Initiatives in Australia (ie defence cooperation initiatives); and
▪ fuel tax credits and grants – enable fuel tax credit and grant claimants to claim the higher rate of fuel tax credits.
[LTN 242, 15/12/14]
Extract from EM to Schedule 1 of the No. 6 Bill –
Removing tax impediments to certain business restructures
Schedule 1 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to extend the existing business restructure roll-overs available where a member of a company or unitholder in a unit trust can defer the income tax consequences of transactions that occur in the course of a business restructure.
In particular, the amendments permit taxpayers to apply the roll-overs in circumstances where they held the relevant shares or units as revenue assets or trading stock.
The amendments also consolidate the separate but effectively identical business restructure roll-overs for shares and units in a unit trust into a single set of provisions.
The amendments also make a number of technical changes to provisions of the ITAA 1997 to:
• allow roll-overs for trusts transferring all their assets to a trust or company to apply where the new trust or company holds rights needed to facilitate the transfer;
• address a technical defect in the operation of the business restructure roll-overs in relation to revenue assets; and
• clarify that the business restructure roll-overs only apply where the new asset has the same character (as a revenue asset or trading stock) as the original asset.
Date of effect: The amendments extending the business restructure roll-overs in relation to revenue assets and trading stock have effect from:
• 7.30 pm on 8 May 2012 (by legal time in the Australian Capital Territory) for shares; and
• 7.30 pm on 10 May 2011 for unitholders in a unit trust who exchange their units for shares in a company.
The amendments relating to roll-overs where trusts transfer assets apply to transfers:
- after 1 November 2008 for transfers between trusts; and
- from 7.30 pm on 10 May 2011 for transfers from trusts to companies.
The technical amendment to the provisions in the business restructure roll-over for revenue assets applies from 7.30 pm on 8 May 2012.
Finally, the amendments introducing the same character rules for assets acquired in a business restructure apply from 7.30 pm on 8 May 2012.
Proposal announced: The technical amendments to the revenue asset roll-overs and to certain capital gains tax trust restructure roll-overs were announced on 10 May 2011 as part of the 2011-12 Budget.
The amendments providing revenue asset and trading stock roll-overs where interest holders exchange their units in a unit trust for shares in a company were announced in the 2011-12 Mid-Year Economic and Fiscal Outlook on 29 November 2011.
The amendments broadening the existing revenue asset and trading stock roll-overs that apply where interest holders exchange their shares in a company for shares in another company and introducing the same character rule were announced on 8 May 2012 as part of the 2012-13 Budget.
On 14 December 2013, in a media release titled Integrity restored to Australia’s tax system, the Assistant Treasurer announced the Government intended to proceed with all of the components of this measure.