Amendments to scrip for scrip roll-over and the small business concessions

The government announced in the 2011-12 Budget that it will ensure the scrip for scrip roll-over integrity provisions that apply to individuals and companies also apply to trusts, superannuation funds and life insurance companies. The government will also amend the small business tax concessions so that trusts will not be able to avoid being treated as connected entities for the purpose of testing eligibility for the concessions on the basis that the trusts do not own assets for their own benefit. These measures will have effect for capital gains tax events happening after 7.30pm (AEST) on 10 May 2011.

This proposal is not yet law.

Administrative treatment If a taxpayer lodges a return in accordance with the existing law once the legislation is enacted, they should seek an amendment to adjust their return as appropriate. Interest on overpayments will be payable on any amendment that results in a refund. If a taxpayer chooses to anticipate the changes, we will not be undertaking any specific compliance activity at this time. If a taxpayer anticipates the change correctly, they will not need to take any further action once the legislation is enacted. If a taxpayer does not anticipate the changes correctly, they will need to seek an amendment of their earlier assessment. If a taxpayer acted reasonably in anticipating this change, there will be no tax shortfall penalty and, if they then actively seek to amend their return within a reasonable time, we will remit the GIC attributable to the amendment to nil. Otherwise the full GIC will run from the date the change becomes law.

More information Further information can be found in the Budget Papers.