• 2008 budget announcements

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    Extension of small business concessions

    The Government announced that it will legislate to increase access to the small business CGT concessions for:

    • taxpayers owning a CGT asset used in a business by a related entity, and
    • partners owning a CGT asset used in a partnership business.

    These changes 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 (ESS) 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 ato.gov.au or phone the Business Infoline on 13 28 66.

    Modification of the scrip-for-scrip rollover provisions for corporate restructures

    The Government announced that it will legislate to modify the scrip-for-scrip CGT rollover provisions to ensure that, for corporate restructures, the acquiring entity's cost base of shares in the target entity reflects the tax costs of the target entity's net assets. The cost base will be used in determining the value of the target entity's assets in consolidation if the target entity subsequently joins the acquiring entity's consolidated group.

    Last modified: 06 Oct 2009QC 27921