"Limited CGT roll-over will assist super funds in a net capital loss position seeking to merge with other funds by preserving the CGT offsetting value of any net capital loss," Minister Sherry said. The roll-over will preserve the value of these capital losses in the receiving super fund – allowing them to be offset against capital gains in the future.
Any capital gains that may be realised under such a merger would continue to be taxable. However, as capital gains and losses are calculated on an asset-by-asset basis, providing an optional roll-over will allow the transferring fund to choose not to disregard capital losses realised under the merger to offset against any realised capital gains.
Consultation will be undertaken on these amendments. Treasury will initially release a consultation paper on its website in January 2009.
For a copy of the Minister's media release, No 2008/101, 23 December 2008, go here.