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22 Oct 09 2009 Budget Measures No 2 Bill and TFN Withholding Tax (ESS) Bill introduced

On 21 October 2009, Tax Laws Amendment (2009 Budget Measures No 2) Bill 2009 and Income Tax (TFN Withholding Tax (ESS)) Bill 2009 were introduced into the House of Representatives. The following is an extract from the Explanatory Memorandum.

SCHEDULE 1 to the Bill and the Income Tax (TFN Withholding Tax (ESS)) Bill 2009 reform the taxation of employee share schemes by:

  • replacing the current Division 13A of Part III of the Income Tax Assessment Act 1936;
  • inserting a new Division 83A into ITAA 1997 dealing with employee share schemes; and
  • inserting a new Subdivision 14-C in Schedule 1 to the Taxation Administration Act 1953 (TAA 1953) dealing with the employee share scheme withholding tax, and a new Division 392 in Schedule 1 to the TAA 1953 dealing with employee share scheme reporting.

The changes apply to shares, rights and stapled securities acquired on and after 1 July 2009. In order to simplify the law and improve the interaction of the employee share scheme rules with other areas of the law, shares, rights and stapled securities acquired before this time will also be brought within the new rules. However, transitional arrangements will be provided to ensure the effect of the existing law is maintained for securities acquired before 1 July 2009.

In a media release issued on 21 October 2009, the Assistant Treasurer, Senator Nick Sherry, announced the introduction into Parliament of the Bill to reform the taxation of employee share schemes, an integrity measure contained in the 2009-10 Budget which he said will deliver a $135 million boost to the Budget bottom line. For a copy of the Assistant Treasurer's media release, No 2009/076, 21 October 2009, go here


SCHEDULE 2 to the Bill amends ITAA 1997 to tighten the application of the non-commercial losses rules in relation to individuals with an adjusted taxable income of $250,000 or more. These amendments will prevent high income individuals from offsetting deductions from non-commercial business activities against their salary, wage or other income. These amendments apply to the 2009-10 income year and later income years.

In a media release issued on 21 October 2009, the Assistant Treasurer, Senator Nick Sherry, highlighted that the Bill gives effect to the changes to the non-commercial losses rules announced in the 2009-10 Budget, which he said is expected to deliver $700 million in revenue. For a copy of the Assistant Treasurer's media release, No 2009/075, 21 October 2009, go here


SCHEDULE 3 to the Bill amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 to require superannuation providers to transfer the balance of a lost member’s account to the Commissioner of Taxation (Commissioner) where: the balance of the account is less than $200; or the account has been inactive for a period of five years and the provider is satisfied it will never be possible to pay an amount to the member. These amendments apply in relation to the last unclaimed money day occurring before 1 July 2010 and later unclaimed money days.


For a copy of Tax Laws Amendment (2009 Budget Measures No 2) Bill 2009, go here

For a copy of Income Tax (TFN Withholding Tax (ESS)) Bill 2009, go here

For a copy of the Explanatory Memorandum, go here

 


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