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On 4 December 2014, Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014 was introduced into the House of Representatives.

The following is extracted from the Explanatory Memorandum.

SCHEDULE 1 to the Bill amends the ITAA 1997 and the Taxation Administration Act 1953 (TAA 1953) to make the taxation treatment of individuals with excess non-concessional superannuation contributions fairer.

The amendments allow a choice for individuals to release from superannuation an amount equal to their superannuation contributions in excess of the non-concessional contributions cap (cap) plus 85 % of an associated earnings amount, with the full earnings amount included in the individual’s assessable income and taxed at the individual’s marginal tax rate. The individual will be entitled to a non-refundable tax-offset equal to 15% of the associated earnings amount.

These amendments apply in the 2013 14 and later financial years. 

SCHEDULE 2 to the Bill amends the Inspector-General of Taxation Act 2003 by transferring the tax investigative and complaint handling function of the Commonwealth Ombudsman to the Inspector-General of Taxation (Inspector-General) and merging that function with the Inspector-General’s existing function of conducting systemic reviews. This provides taxpayers with a specialised complaint handling process for taxation matters and aligns the systemic review role of the Inspector-General with the correlative powers and functions of the Ombudsman. SCHEDULE 2 to the Bill commences the later of the 14th day after the Bill receives Royal Assent or 1 May 2015.

SCHEDULE 3 to the Bill amends the ITAA 1997 to ensure that:

  • a CGT exemption is available to certain trustees and beneficiaries who receive compensation or damages;
  • a CGT exemption is available to trustees of complying superannuation entities for insurance policies relating to illness or injury; and
  • the CGT primary code rule applies to capital gains and capital losses that are disregarded by complying superannuation entities arising from injury and illness insurance policies, life insurance policies and annuity instruments.

The amendments apply to the 2005 06 income year and later income years.

SCHEDULE 4 to the Bill amends the ITAA 1997 and Income Tax (Transitional Provisions) Act 1997 to ensure that individuals whose superannuation benefits are involuntarily transferred from one superannuation plan to another plan without their request or consent are not disadvantaged through the transfer. SCHEDULE 4 to this Bill will also amend the TAA 1953 to remove the need for a roll-over benefit statement to be provided to an individual whose superannuation benefits are involuntarily transferred.

This measure applies from 1 July 2015.

SCHEDULE 5 to the Bill amends the TAA 1953 to allow taxation officers to record or disclose protected information to support or enforce a proceeds of crime order. It also clarifies that all orders relating to unexplained wealth made under a state or territory law are included in the definition of ‘proceeds of crime order’. This measure applies to disclosures made on or after the date of Royal Assent.

SCHEDULE 6 to the Bill and the Excess Exploration Credit Tax Bill 2014 (introduced into the House on the same day) introduce an exploration development incentive by amending the ITAA 1997 and other tax legislation to provide a tax incentive to encourage investment in small mineral exploration companies undertaking greenfields mineral exploration in Australia.  Australian resident investors of these companies will receive a tax incentive where the companies choose to give up a portion of their losses relating to their exploration expenditure in an income year.

The total value of the tax incentives available to taxpayers in respect of expenditure in an income year is restricted to $25 million for greenfields minerals expenditure incurred by eligible companies in 2014-15, $35 million for greenfields minerals expenditure incurred in 2015-16 and $40 million for greenfields minerals expenditure incurred in 2016 17.

The incentive is not available for expenditure incurred in income years after 2016-17.

This measure applies to expenditure in the 2014-15, 2015 16 and 2016 17 income years, allowing the distribution of exploration credits in the 2015-16, 2016-17 and 2017-18 income years.

SCHEDULE 7 to the Bill makes a number of miscellaneous amendments to the taxation and superannuation laws. These amendments are part of the Government’s commitment to the care and maintenance of the taxation and superannuation systems. These amendments include style changes, the repeal of redundant provisions, the correction of anomalous outcomes and corrections to previous amending Acts.

These amendments have various application dates that are explained in detail in this explanatory memorandum. While some of these amendments have retrospective application, taxpayers should not be adversely impacted.

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