21 Jun 07 2007 Measures No 4 Bill and related Bills introducedOn 21 June 2007, Tax Laws Amendment (2007 Measures No 4) Bill 2007 was introduced into the House of Representatives. The following is extracted from the Explanatory Memorandum.
SCHEDULE 1 to the Bill amends the income tax law to abolish foreign loss and foreign tax credit quarantining and to streamline the remaining foreign tax credit rules. This is achieved by repealing the existing foreign loss and foreign tax credit quarantining rules and replacing them with new simplified foreign income tax offset rules. Further, certain taxpayers operating within the foreign investment fund rules will be given the option to calculate attributable income using the controlled foreign company rules. These changes will apply to income years beginning on or after the 1 July following Royal Assent. This measure was announced in the Treasurer’s Press Release No. 044 of 10 May 2005.
SCHEDULE 2 to the Bill amends the ITAA 1997 to provide a CGT roll-over for membership interests in medical defence organisations (MDOs). These amendments apply to CGT events that happen on or after 14 February 2007.
SCHEDULE 3 to the Bill amends the borrowing restriction contained in the Superannuation Industry (Supervision) Act 1993 to allow superannuation funds to invest in instalment warrants of a limited recourse nature over any asset a fund would be permitted to invest in directly. These amendments will apply from the day this Bill receives Royal Assent. This measure was announced in the Minister for Revenue and Assistant Treasurer’s Press Releases No. 078 of 3 November 2006 and No. 066 of 22 May 2007.
SCHEDULE 4 to the Bill amends the ITAA 1936 so that trustees of closely held trusts are not required to report to the Commissioner of Taxation the details of the ultimate beneficiaries of trust income. Instead, trustees of closely held trusts may be required to report the details of trustee beneficiaries that are presently entitled to certain income of the trust and tax-preferred amounts. Where the trustee of the closely held trust fails to correctly identify the trustee beneficiaries within the specified period, the trustee is liable for trustee beneficiary non-disclosure tax (in respect of the share of net income) at the rate of 46.5%, imposed by Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 1) 2007 and . Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 2) 2007, both of which Bills were also introduced into the House of Representatives on 21 June 2007. For tax-preferred amounts such a failure may produce offences under the TAA 1953.
The amendments in Schedule 4 will apply to the first income year starting on or after the day on which the Bill receives Royal Assent and later income years. This measure was announced in the Treasurer’s Press Release No. 039 of 9 May 2006.
SCHEDULE 5 to the Bill amends various Acts to assist in the smooth transition to the Simplified Superannuation regime. This Schedule limits strategies which could circumvent the minimum drawdown requirements for account-based pensions, facilitates the provision of TFNs to superannuation and retirement savings account (RSA) providers, and revises the application provision for small business capital gains tax relief under the regime. These amendments have not previously been announced.
SCHEDULE 6 to the Bill amends the ITAA 1997 to update the list of deductible gift recipients.
SCHEDULE 7 to the Bill makes technical corrections and other minor amendments to the taxation laws.
SCHEDULE 8 to the Bill amends the trust loss regime in Schedule 2F to the ITAA 1936 to allow family trust elections and interposed entity elections to be revoked or varied in certain limited circumstances and to broaden the definition of ‘family’. The changes take effect from the start of the income year in which the Bill receives Royal Assent. This measure was announced in the 2006-07 Budget and the Treasurer’s Press Release No. 039 of 9 May 2006.
For a copy of Tax Laws Amendment (2007 Measures No 4) Bill 2007, go here
For a copy of Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 1) 2007, go here
For a copy of Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No 2) 2007, go here
For a copy of the Explanatory Memorandum, go here