House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

General outline and financial impact

Improving the integrity of the scrip for scrip roll-over

Schedule 1 to this Bill makes amendments to improve the integrity of the scrip for scrip roll-over in Subdivision 124-M of the Income Tax Assessment Act 1997.

Date of effect: These amendments apply in relation to capital gains tax events that occur after 7:30pm (Australian Eastern Standard Time) on 8 May 2012.

Proposal announced: These proposals were announced in the 2012-13 Budget.

Financial impact: There is an unquantifiable but potentially large revenue protection associated with these amendments.

Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 1, paragraphs 1.50 to 1.53.

Compliance cost impact: Low.

Exemption of income earned in overseas employment

Schedule 2 amends the income tax law by removing an income tax exemption which applied to employees of an Australian government agency who work overseas for not less than 91 continuous days in the delivery of Official Development Assistance. These employees will no longer be able to claim an income tax exemption on the income they earn while overseas.

Date of effect: This measure applies from1 July 2016.

Proposal announced: This measure was announced in the 2015-16 Budget.

Financial impact: This measure has a revenue implication of $6.7 million over the forward estimates.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.8 to 2.11.

Compliance cost impact: Nil.

Small lost member account threshold

Schedule 3 to this Bill amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 to increase the account balance threshold below which small lost member accounts will be required to be transferred to the Commissioner of Taxation (Commissioner).

Date of effect: Item 1 of Schedule 3 to this Bill applies from 31 December 2015 and item 2 of Schedule 3 to this Bill applies from 31 December 2016.

Proposal announced: This measure was first announced in the 2013-14 Budget and modified in the August 2013 Economic Statement. On 6 November 2013, the Government announced that it would enact the measure.

Financial impact: This measure is estimated to have a total fiscal impact of $483.9 million over the forward estimates period comprising:

Human rights implications: This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.18 to 3.23.

Compliance cost impact: Minor.