Clarification of the tax treatment of native title payments
On 28 June 2013, legislation was enacted to clarify that:
- a payment or non-cash benefit provided under the Native Title Act 1993, or under an agreement made under an Australian law to the extent that that payment or benefit relates to native title, will not be subject to income tax
- there are no CGT (capital gains tax) implications resulting from the transfer of native title rights (or the right to a native title benefit) to an Indigenous holding entity or Indigenous person, or from the creation of certain trusts
- any capital gain or capital loss made from surrendering or cancelling such rights are disregarded.
The measures will apply to payments or non-cash benefits provided on or after 1 July 2008. They will also apply to CGT events happening on or after that date.
These amendments will remove the longstanding uncertainty about the income tax treatment of these payments and benefits by confirming they are not subject to income tax (including CGT).
For more information, refer to the following media release:
- joint media release no 118/2013External Link issued on 26 June 2013 by the then Assistant Treasurer; Minister for Families, Community Services and Indigenous Affairs; and the Attorney-General and Minister for Emergency Management.
Legislation and supporting material
The following legislation received royal assent on 28 June 2013 and 29 June 2013:
We accepted tax returns as lodged up until enactment of the legislation on 28 June 2013. Now that the new law is enacted, taxpayers will need to review their positions back to the 2008–09 income year. Those taxpayers who:
End of attention
- have returned income from a native title benefit can seek amendments – interest on overpayment will be paid
- have not returned income from a native title benefit do not need to do anything more.