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  • Introduction

    Attention

    Warning:

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

    End of attention

    This guide will help you complete:

    If you sold or otherwise disposed of shares, or units in a unit trust (including a managed fund), in 2007–08, read part A of this guide, then work through part B.

    If you received a distribution of a capital gain from a managed fund in 2007–08, read part A of this guide, then work through part C.

    Managed funds include property trusts, share trusts, equity trusts, growth trusts, imputation trusts and balanced trusts.

    Small business CGT concessions

    If you are involved in the sale of shares or units for a small business, you may wish to read Small business CGT concessions.

    Investments in foreign hybrids

    A foreign hybrid is an entity that was taxed in Australia as a company but taxed overseas as a partnership. This can include a limited partnership, a limited liability partnership and a United States limited liability company.

    If you have an investment in a foreign hybrid (referred to as being a member of a foreign hybrid), you are treated for Australian tax purposes as having an interest in each asset of the partnership.

    As a consequence, any capital gain or capital loss made with respect to a foreign hybrid or its assets is taken to be made by the member. More information is available on our website.

    General value shifting regime

    If you own shares in a company or units (or other fixed interests) in a trust and value has been shifted in or out of your shares or units, you may be affected by value shifting rules. Generally, the rules only affect individuals who control the company or trust, or individuals who are related to individuals or entities that control the company or trust.

    For more information, see General value shifting regime: who it affects.

    Forestry managed investment schemes

    The law has been changed to provide for specific CGT rules where secondary investors or subsequent participants hold forestry managed investment scheme (FMIS) interests on capital account. These new rules apply to FMIS interests sold or disposed of in the 2007–08 income year and later income years.

    For more information, see the Guide to capital gains tax 2008.

    2008 budget announcements

    Cancellation of interests in widely held entities

    The government announced that it will legislate to allow taxpayers to calculate their capital gains or losses using the actual proceeds received, where shares or units in widely held entities are cancelled or surrendered. This will take effect from the 2007–08 income year.

    Demutualisation of health insurers

    The government announced that it will legislate to provide relief from CGT for policy holders of health insurers who receive shares when their insurer demutualises, with effect from 1 July 2007.

    At the time of printing these instructions, the above two measures had not become law.

    Removal of double taxation for employee share schemes

    The government announced that it will legislate to remove double taxation that arises in relation to certain employee share schemes that use employee share trusts. The changes are intended to apply in relation to CGT events occurring from 7.30pm Australian Eastern Standard Time on 13 May 2008.

    For more information, visit our website at www.ato.gov.au or phone the Business Infoline (see More information).

    Last modified: 22 Jul 2020QC 27924