On 21 June 2018, Senator David Leyonhjelm of the Liberal Democratic Party Treasury proposed in the Senate that the amendments to the CGT small business concessions in the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018 (the Bill) apply, if passed, from 8 February 2018 (when the Bill was released in Exposure Draft form) rather than 1 July 2017 (as originally announced in the May 2017 Budget).
The Bill was released in draft on 8 February 2018 and contained changes announced in the May 2017 Budget to amend the small business CGT concessions in Division 152 of the Income Tax Assessment Act 1997. The changes announced in the May 2017 Budget were to have applied retrospectively from 1 July 2017. Broadly, the measures significantly reduce access to the small business CGT concessions for taxpayers disposing of ownership interests in companies and trusts. The House of Representatives passed the Bill on 10 May 2018 and the Bill is currently before the Senate.
If Senator Leyonhjelm’s proposed amendment is accepted, and the Bill is passed and assented to, taxpayers and their advisors will welcome a delayed start date of 8 February 2018. The changes in the Bill are more onerous than those announced in the May 2017 Budget and may impact transactions after 1 July 2017 but before the substantive detail of the changes were known on 8 February 2018.
Taxpayers who disposed of interests in companies and trusts and who relied on the current legislation to access the small business CGT concessions from 1 July 2017 to 8 February 2018 may have been ineligible under the proposed changes if the changes were to apply retrospectively from 1 July 2017.
Tax advisers should review all transactions affected by these rules.
We have previously reported on these changes here but note that the proposed provisions have continued to be altered over time. For more information please contact:
Neil Brydges
Special Counsel | Accredited specialist in Tax Law
Sladen Legal
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
nbrydges@sladen.com.au
Sam Campbell
Associate | Business Law
Sladen Legal
M +61 423 515 454 | T +61 3 9611 0135
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
scampbell@sladen.com.au
Kristy Merganovski
Associate
Sladen Legal
+61 3 9611 0116
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
kmerganovski@sladen.com.au
Kelvin Yuen
Lawyer
Sladen Legal
T +61 3 9611 0177
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
kyuen@sladen.com.au
