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19 Nov 07 Australian property trusts: Div 6C and CGT rollover relief amendments

Tax Laws Amendment (2007 Measures No 5) Act 2007 received Royal Assent on 25 September 2007. It included a measure that will allow certain stapled entities, such as Australian listed property trusts, to restructure with an interposed head without taxation consequences. CGT rollover will be provided to investors in a stapled group where a unit trust has been interposed between investors in the stapled group and stapled entities. The amendments apply from the 2006-07 income year.

Taxpayers were previously advised that the ATO would not allocate resources to enforce compliance with the existing law until the proposal had been enacted.

The ATO now advises that as the legislation has received Royal Assent, taxpayers should review what actions they have taken and where appropriate seek amendments. Where taxpayers acted reasonably and followed the ATO’s advice, there will be no tax shortfall penalty and, if they then actively seek to amend their return or activity statement within a reasonable time, we will remit the GIC or SIC to nil. Otherwise the full interest will apply from the date of enactment (subject to the 28 day rule which applies to indirect tax law changes). A complete explanation of the Tax Office policy on penalties and interest is contained in Law Administration Practice Statement PS LA 2007/11.

For a copy of the ATO advice, go here

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