In a joint media release issued on 2 December 2009, the Assistant Treasurer, Senator Nick Sherry, and the Minister for Climate Change and Water, Senator Penny Wong, announced that the Government will provide a CGT roll-over for water entitlements and water allocations.
The Government previously announced CGT relief for irrigators who transform their entitlement to water under an irrigation right into an individual water entitlement. Now this CGT roll-over will apply more broadly to any capital gains or losses arising directly from the ending of an irrigator's water entitlement and the issuing to the irrigator of a replacement water entitlement. The roll-over will cover a broader range of transactions - including pre transformation transactions. The roll over will also be available when water entitlements are unbundled.
This roll over will provide certainty for operators who are making changes to their arrangements with their member irrigators to ensure compliance with the Water Market Rules 2009.
This roll over will apply to CGT events that happen after Royal Assent. Once the amending legislation receives Royal Assent, taxpayers will also have the option to apply the roll over to CGT events that happen from the 2005 06 income year to the date of Royal Assent.
The Government intends to consult on draft legislation before introducing the amending legislation into Parliament.
For a copy of the media release, No 2009/102, 2 December 2009, go here