The Tax and Superannuation Laws Amendment (2015 Measures No 6) Bill 2015 has, Mon 22.2.2016, passed the Senate without amendment and, on 25.2.2016, received Royal Assent as Act No 10 of 2016.

The Bill contains the following amendments:

  • Amends the ITAA 1997 to change the CGT treatment of the sale and purchase of businesses involving certain earnout rights – rights to future payments linked to the performance of an asset or assets after sale. As a result of these amendments, capital gains and losses arising in respect of look-through earnout rights will be disregarded. Instead, payments received or paid under the earnout arrangements will affect the capital proceeds and cost base of the underlying asset or assets to which the earnout arrangement relates. DATE OF EFFECT: These amendments will apply from 24 April 2015.
  • Amends the TAA to introduce a new regime that imposes a 10% non-final CGT withholding obligation on the purchasers of certain Australian assets. The amendments will impose a 10% non-final withholding obligation on the purchasers of certain Australian assets where they acquire it from a relevant foreign resident. The obligation will apply to the acquisition of an asset that is: (i) TARP (taxable Australian real property); (ii) an indirect Australian real property interest; or (iii) an option or right to acquire such property or such an interest. The purpose of the regime is to assist in the collection of foreign residents’ CGT liabilities. DATE OF EFFECT: 1 July 2016.

[APH website] [LTN 34, 22/2/16] [LTN 37, 25/2/16] [See related TT article]