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16 Nov 12 NTLG CGT & Losses Sub-committee Meeting

On Wednesday, 14 November 2012, Mark Molesworth CTA (BDO) and Tax Counsel, Stephanie Caredes CTA attended a meeting of the NTLG CGT & Losses Sub-committee. At this meeting, participants discussed a number of issues, including:

  • The ATO’s CGT and Losses Compliance Report including the areas of focus for compliance in the range of market segments. The ATO noted the following in particular: 
    • Data matching will continue to be used for property and share disposals made by individuals. There will be two webinars held in November for individuals in relation to tax issues arising when buying or selling a rental property. See link for details.
    • Data matching is also a focus for micro enterprises as well as issues with entities properly determining their eligibility for small business concessions. There will also be a direct mail education campaign in February 2013 altering taxpayers who applied the active asset rollover two years ago to review their obligations.
    • For the SME AND Large Business markets, there is a particular focus on losses, the application of Division 855 of the Income Tax Assessment Act 1997 (Cth) and valuation issues, particularly in relation to mining information. The ATO also noted the withdrawal of TR 98/3 in July 2012. The ATO is concerned that there appears to be a very low level of compliance with Division 855 by non-resident taxpayers
    • In the SME market the ATO is concerned about the use of back to back rollovers to defer CGT. Members asked for further details about the aspects of such transactions that the ATO considers to be high risk.
    • Some audits are likely to occur of self-managed superannuation funds which are in partial pension phase to ensure tax losses (current and carried forward) are being correctly calculated.
  • Members sought the ATO’s view in relation to whether double taxation arises on the surrender of remainder interests in a trust.
  • Members also sought the ATO’s view in relation to the interaction between the Continuity of Ownership and Same Business tests and Division 243 of the Income Tax Assessment Act 1997 (Cth).

Members who seek additional information in relation to any of the above are encouraged to contact us at Tax Policy.