Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P. J. Keating M.P.)Main features of the amendments
A number of amendments to the Bill are to be moved on behalf of the Government. These further amendments relate to changes proposed by the Bill to the capital gains tax (CGT) provisions contained in Part IIIA of the Income Tax Assessment Act 1936. First, clause 59 of the Bill will be amended to tighten the deemed disposal rules which may apply following the "rollover" of an asset within a company group, where the transferor company is subsequently liquidated. This further amendment is necessary to ensure that tax deferral advantages cannot be obtained in some such cases.
The other significant amendments proposed relate to clause 61, which is intended to ensure that CGT timing advantages do not arise where assets are transferred between companies under common ownership. The further amendments now proposed are necessary to achieve the original anti-avoidance objectives of clause 61, and will extend the application of the new anti-avoidance provisions, particularly in situations where the assets transferred between commonly- owned companies were originally acquired before 20 September 1985.
The amendments to be moved on behalf of the Government have not previously been announced. Therefore, they will apply only from the date of introduction of the amendments.