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10 Jun 11 NTLG CGT & Losses Subcommittee

On Wednesday 8 July 2011 Mark Molesworth FTIA (BDO) and Tax Counsel Deepti Paton ATIA attended a meeting of the NTLG CGT & Losses Subcommittee.

At this meeting, participants discussed a number of issues, including:

  • The current status of the proposed legislative amendments in relation to the taxation treatment of earnouts, instalment warrants and the COT to companies that have classes of shares on issue.
  • The ATO’s new Capital Gains Tax Small Business Concession Tool. This tool will go live on on 20 June and is intended to assist users in navigating the small business CGT concessions in terms of eligibility and consequence.
  • The ATO gave members a CGT and Losses compliance report. The ATO told members that in the coming income year, the ATO will be focussing its compliance efforts on:
      • Capital losses than are being misclassified as revenue losses.
      • The use of rollovers, especially where a non-resident entity is involved.
      • Share disposals by individuals (checking that any capital gains are appropriately calculated and included).
      • Ensuring proper use of the main residence exemption, or ensuring appropriate apportioning of the gain when a main residence becomes an investment property.
      • Compliance with Division 855.
      • Dealings with pre-CGT assets.
      • Application of the CGT discount and small business CGT concessions.
      • Correct application of the relevant available fraction to transferred losses.
  • Potential anomalies in the operation of the small business 15 year exemption.  
  • The application of section 23AH in relation to unit trusts.

Members who would like further detail in relation to the above are encouraged to contact us at Tax Policy.

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