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On 9 May 2006, as part of the Budget, the Government announced the following changes.
Small business CGT concessions
Amendments will be made to simplify and improve access to the concessions. These amendments are:
- changes to the maximum net asset value test, the active asset test, the 15-year exemption, the small business rollover and how the concessions apply to partnerships
- replacing the current 50% controlling individual test with a more generous 20% significant individual test, which can be satisfied either directly or through one or more interposed entities
The Government's intention is that these changes will apply to CGT events that happen from the 2006-07 income year. For more information, see the Treasurer's press release number 038/2006.
Two other amendments which will:
- increase the net asset threshold for the small business CGT concessions from $5 million to $6 million, and
- allow STS taxpayers access to the concessions without having to satisfy the net asset threshold.
are intended to apply for CGT events that happen from the 2007-08 income year. For more information, see the Treasurer's press release number 039/2006.
Employee share schemes - stapled securities
Currently the employee share scheme and CGT rules only apply to ordinary shares or rights to acquire ordinary shares. This measure will extend the rules to include stapled securities where an ordinary share in an ASX listed company and another security, such as a unit in a unit trust, are contractually bound together so that they cannot be sold separately.
The Government's intention is that the changes will apply from the 2006-07 income year.
A new type of investment vehicle called an early stage venture capital limited partnership (ESVCLP) will be introduced and tax concessions will apply to it, including flow-through tax treatment and tax exemption for revenue and capital income received by its domestic and foreign partners.
The introduction of the ESVCLP will progressively replace the existing pooled development fund program which will be closed to new registration after 31 December 2006.
A tax deduction will be allowed for the donation of small parcels of publicly listed shares held for at least 12 months and valued at $5,000 or less (there is no change to the CGT treatment: a capital gain or capital loss will continue to arise on donated shares).
The Government's intention is that the changes will apply from the first income year after the date of Royal Assent of the amending legislation.
Last modified: 06 Oct 2009QC 18504