• Announced by the government

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    These changes were announced by the government during the year but they had not become law when this guide was finalised.

    Capital gains tax relief for compulsory acquisitions of part of a main residence

    On 19 March 2009, the government announced it will seek an amendment to the law so that the CGT main residence exemption can apply in certain circumstances to the compulsory acquisitions of and certain other involuntary events in relation to part of a taxpayer's main residence.

    The amendments will ensure taxpayers do not pay CGT on compulsory acquisitions of part of their main residence and they are not better or worse off as a result of a compulsory acquisition.

    The changes will apply to CGT events that happen after the date of royal assent. Taxpayers can also apply the changes from the 2004-05 income year to the date of royal assent.

    Capital gains tax - recognition of termination and exit fees in a capital gain or capital loss calculation

    The government announced on 27 February 2009 its intention to allow termination and exit fees to be recognised when calculating a capital gain or capital loss on an asset by including these costs in the asset's cost base. The intention is for this change to apply to CGT events that happen on and after 1 July 2008 for all CGT assets.

    Capital gains tax relief for transformation of water rights

    The government announced on 27 February 2009 that it will provide CGT rollover relief for irrigators who transform their entitlement to water under an irrigation right held against an irrigation infrastructure operator into an individual water entitlement.

    This rollover will assist the transformation arrangements allowed under the new water market rules by deferring the CGT consequences of the transformation for irrigators until they subsequently deal with their individually held water entitlement. The intention is for this change to apply to CGT events that happen on and after 1 July 2008.

    Demutualisation of friendly societies

    On 24 October 2008, the Assistant Treasurer announced changes to the tax law to provide relief from CGT for policy holders of friendly societies, including joint health and life insurers, which demutualise to for-profit entities.

    The announcement proposed that the changes to the law would take effect from 1 July 2008.

    Extension of small business concessions

    The government announced in the 2008 Budget that it would increase access to the small business CGT concessions for businesses with turnover of less than $2 million via the small business entity test concession. This would apply to:

    • taxpayers owning a CGT asset used in a business by a related entity
    • an individual partner who owns a CGT asset (not an interest in an asset of the partnership) used in the partnership business.

    For more information, refer to Capital gains tax (CGT) concessions for small business - overview.

    Last modified: 09 Mar 2010QC 27956