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NTLG CGT & Losses sub-committee

Mark Molesworth FTIA (BDO Kendalls) and Tax Counsel Deepti Paton ATIA attended a meeting of the NTLG Losses & CGT Sub-committee on Wednesday 10 November 2010.

At the meeting, the group addressed a number of technical issues including whether dividends form ineligible proceeds in applying scrip for scrip rollover, the treatment of unrealised net losses in respect of trading stock on a subsidiary's exit from a consolidated group, the application of the associate rules in the context of Division 855 and the determination of an entity's small business direct participation percentage where the relevant shares are held jointly.

A number of these issues were identified as being suitable for submission to the TIES system. The Taxation Institute will be consulting with other professional associations in drafting these submissions to Treasury with a view to affecting legislative change.

The ATO also gave the group an update on compliance issues and areas of concern in relation to the application of the CGT rules and utilisation of losses.