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CGT - Mature Adult or Unruly Adolescent?


The Australian capital gains tax is approaching its 20th birthday. This paper reflects on why the CGT provisions were introduced and considers how they have impacted upon taxpayers and tax practitioners. It argues that there has been progress in removing some of the inconsistencies and anomalies in the CGT regime, but that a number of problems still exist. The paper explores a variety of technical areas that are still problematic, including issues surrounding the grandfathered status of pre-CGT assets, technical difficulties with the operation of the small business concessions, and problems relating to the application of the CGT provisions to trusts.

The causes of these technical difficulties lie in inappropriate policy selection, poor or incomplete legislative drafting, poor implementation and administration of the provisions and 'legislative layering' - whereby new policy and legislation is superimposed upon an existing framework that is insufficiently robust or compatible.

Technical solutions can be attempted, but ultimately, the paper argues, the remedy to many of the technical problems does not lie in ad hoc and reactive fixes, but in a more principled approach to the design of the CGT regime.

This paper was also presented on 17 March 2005 at the 20th National Convention in Perth.

Author profile:

Author Photo - Christopher Evans
Prof Christopher Evans
Chris is Professor of Taxation and former Head of the Australian School of Taxation (Atax) at UNSW Australia. He specialises in comparative taxation, capital and wealth taxation, tax law and administration, tax policy and reform. His PhD from UNSW was a comparative study of the operating costs of taxing capital gains. He also holds a master’s degree in European Political Integration from Leicester University and a Bachelor’s honours degree in Economics from London University, as well as postgraduate educational qualifications from Leeds University. He has researched and published extensively in taxation, and is a co-author of Australian Taxation Law and Cooper & Evans on CGT. He is General Editor of Australian Tax Review and Editorial Board member of other journals. He has served on a number of governmental and professional body committees and working parties in Australia and overseas, including the UK’s Mirrlees Committee and the HMRC International Panel on tax administration. Current at 04 July 2014 Click here to expand/collapse more articles by Chris EVANS.

This was presented at 20th National Convention: Tax Unmasked.

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