29 Sep 10
GST, CGT, TOFA and other amendments: Tax Laws Amendment (2010 Measures No 4) Bill 2010
This Bill was introduced into the House of Representatives on Wednesday 29 September 2010. It amends taxation legislation in the following areas:
- GST amendments to third party payment adjustment provisions: The Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure the third party payment adjustment provisions operate appropriately where there are third party payments relating to a supply by the payer that is not taxable or a supply to the payee that is GST-free, not connected with Australia or subject to a refund under the Tourist Refund Scheme. These amendments take effect from 1 July 2010.
- CGT treatment of water entitlements and termination fees: the Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to provide a CGT roll-over for taxpayers who replace an entitlement to water with one or more different entitlements. It will also allow taxpayers to include any termination fees they incur in relation to an asset in the asset’s cost base. The water entitlement roll-over applies to CGT events that happen in the 2005-06 and later income years. However, taxpayers will be able to choose whether they obtain the roll-over if the relevant transactions qualifying for the roll-over happen in the period from the 2005-06 income year to the day on which the amending Bill receives the Royal Assent.
- Taxation of financial arrangements: the Bill amends Div 230 of the ITAA 1997 and the consequential and transitional provisions inserted by the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 to make minor policy refinements and technical amendments and corrections to the provisions. The Bill will also extend the transitional arrangements relating to the application of the debt/equity rules made by the New Business Tax System (Debt and Equity) Act 2001 to 1 July 2010 for Upper Tier 2 instruments issued before 1 July 2001. These amendments apply for income years commencing on or after 1 July 2010, unless a taxpayer elects to apply Div 230 for income years commencing on or after 1 July 2009.
- Foreign currency gains and losses: the Bill amends Div 775 of the ITAA 1997 to extend the scope of a number of compliance cost-saving measures, and to make technical amendments to ensure that the provisions operate as intended. These amendments apply from 17 December 2003.
- Scrip for scrip alignment: the Bill amends the ITAA 1997 to make it easier for takeovers and mergers regulated by the Corporations Act 2001 to qualify for the CGT scrip for scrip roll-over. These amendments apply to CGT events that happen on or after 6 January 2010.
- Medical expenses tax offset claim threshold: the Bill amends the Income Tax Assessment Act 1936 to increase the threshold above which a taxpayer may claim the medical expenses tax offset and commence annually indexing the threshold to the consumer price index. These amendments apply to the income year starting on or after 1 July 2010.
- Deductible gift recipients: the Bill amends the ITAA 1997 to update the list of deductible gift recipients to make two entities deductible gift recipients, extend the period of listing of one entity and change the name of another entity. The changes generally apply to gifts received after the day the organisation is notified of its specific listing or changes to its specific listing.
- Extending gift deductibility to volunteer fire brigades: the Bill widens the accessibility of tax deductible donations to all entities providing volunteer based emergency services, including volunteer fire brigades. This measure also extends DGR status to all state and territory government bodies that coordinate volunteer fire brigades and State Emergency Services. These amendments will commence from the date of Royal Assent to the Bill.
For the full texts of the Bill and its Explanatory Memorandum, go here