Aligning the CGT scrip for scrip roll-over

On 6 January 2010, the then Assistant Treasurer, Senator Nick Sherry, announced the government's intention to reform the tax law relating to the requirements for the scrip for scrip roll-over for takeovers and mergers approved under the Corporations Act 2001.

The new laws will better align the capital gains tax scrip for scrip roll-over requirements in subdivision 124-M of the Income Tax Assessment Act 1997 with the Corporations Act 2001. This will make it easier for takeovers and mergers regulated by the Corporations Act to qualify for the roll-over.

Media release

For more information, refer to:

• the Assistant Treasurer's media release number 004/2010
• the Assistant Treasurer's media release number 070/2010.

Legislation and supporting material

Tax Laws Amendment (2010 Measures No.4) Act 2010 received royal assent on 7 December 2010. The explanatory memorandum is also available.

Administrative treatment

As the legislation has now received royal assent taxpayers should review their assessments as follows:

• Those taxpayers who chose roll-over relief which accords with the changes do not need to do anything more.
• Those taxpayers who did not choose roll-over relief can seek amendments and if a reduction in liability results, interest on overpayment will be paid.
• Those 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.