The government has introduced legislation into parliament to disregard capital gains and capital losses made on certain disposals by Australian companies of their shares in foreign companies with underlying active businesses. The proposed legislation will also reduce attributable income arising from certain CGT events happening to shares owned by a controlled foreign company (CFC) in a foreign company.
The changes will only apply if:
- the company held a direct voting percentage in the foreign company of at least 10%, and
- the shares were held by the company for a continuous period of at least 12 months in the two years before the CGT event.
It is intended that the changes apply to CGT events happening on or after 1 April 2004. For more information call the Tax Reform Infoline on 13 24 78.