Published on 01 Nov 99
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The Government has announced its response to the Review of Business Taxation, chaired by Mr John Ralph. The Treasurer, Mr Costello, announced that the Government would be "improving incentives to save and invest by introducing an international competiitive capital gains tax regime". The proposed changes represent a significant alteration to the taxation of capital gains : to qualify for the effective reduction in tax rates, individuals and superannuation funds must hold the relevant asset for at least 1 year; most of the concessions are limited to individuals; the effective reduction of the tax rate on capital gains by taxing only half the capital gains realised by individuals, and two thirds of the gains realised by superannuation funds, must be balanced against the removal of indexation; there is a significant disencentive for trustees of trusts to hold assets that may give rise to capital gains; the introduction of the scrip-for-scrip rollover relief is most welcome.