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The Government announced in the 2011-2012 Budget that amendments would be made to ensure that the roll-over for the exchange of shares in one company for shares in another company operates properly, so that there is a deferral of a profit or loss where the original shares are held on revenue account at the time of the exchange. This measure will have effect from 7.30pm AEST on 10 May 2011.

The ATO advises that, pending the enactment of this measure, the ATO will accept tax returns as lodged during the period up until enactment of the legislation.

After the new law is enacted, taxpayers will need to review their positions:

  • Taxpayers who chose roll-over relief which accords with the changes do not need to do anything more.
  • Taxpayers who did not choose roll-over relief can seek amendments. If a reduction in liability results, interest on overpayment will be paid.
  • Taxpayers who chose to anticipate the roll-over relief, but find that this does not accord with the changes, will need to seek amendments.

In these cases no tax shortfall penalties will be applied and any interest accrued will be remitted to the base interest rate up to the date of enactment of the law change. In addition, any interest in excess of the base rate accruing after the date of enactment will be remitted where taxpayers actively seek to amend assessments within a reasonable timeframe after enactment.

For more information go here