Capital gains tax - exemption for incentives related to renewable resources

On 14 December 2013, the Assistant Treasurer announced that this measure will not proceed.

As originally announced in the 2011-2012 Federal Budget, this measure was intended to exempt from capital gains tax (CGT) any gains or losses arising from a right to a financial incentive, granted to taxpayers under an Australian Government (Commonwealth, State or Territory) scheme, that encouraged them to:

  • acquire renewable resource assets (for instance, photovoltaic solar cells or solar hot water systems), or
  • agree to preserve a part of Australia's environmental amenity (for instance, for refraining from removing remnant vegetation).

This measure would have turned off the income tax recoupment rules and provided appropriate depreciation consequences for taxpayers that realised such rights.

This measure was to apply to income tax assessments for the 2007-08 income year and later income years.

Administrative treatment

The ATO will accept tax returns as lodged during the period up until the day the protection measure was passed by Parliament. The protection for these taxpayers became law on 30 June 2014.

Assessments now need to be reviewed to determine whether legislative protection is applicable or amendments to assessments are required.

Protection for taxpayers

Parliament has enacted legislation to provide protection for taxpayers who under-assessed their tax position on the basis of announced changes that will no longer proceed. Taxpayers who paid additional tax by following announced changes that will no longer proceed will be entitled to a refund.

Information on how the protection works and which previous announcements are protected is available at Protection for anticipation of certain discontinued announcements.

Find out more

For more information please refer to:

Protection for anticipation of certain discontinued announcements

Tax and Superannuation Laws Amendment (2014 Measures No.2) Act 2014External Link

The 2011-12 Budget - Federal Budget Paper No 2 - Part 1 Revenue measuresExternal Link

Treasury's proposals paper - Minor amendments to the capital gains tax lawExternal Link. Submissions are invited and the closing date is 22 July 2011.

    Last modified: 16 Oct 2015QC 24503