Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)CHANGE OF TITLE - TAX LAW IMPROVEMENT BILL (No. 1) 1998 - SENATE - Explanatory Memorandum.
Chapter 2.14 - Record keeping
Overview
This segment covers the rules for keeping records dealt with in Division 121.
Part A summarises these rules.
Part B explains the changes to the 1936 Act.
Part C explains why some provisions of the 1936 Act have not been rewritten.
A. Summary of the new law
Division 121 sets out the requirements for making and retaining records that are relevant to determining CGT liability.
Records must be kept of acts, transactions, events or circumstances that can reasonably be expected to be relevant to working out whether there is a capital gain or loss from a CGT event. [section121-20]
The records must contain the detail relevant to working out the capital gain or loss. Records are to be in English or, if they are in electronic form, they must be readily accessible and convertible into English. [section121-20]
Generally, records must be retained for fiveyears after the last CGT event to which they relate. [section121-25]
Records do not need to be kept if an exclusion applies. [section121-30]
B. Discussion of changes
Section 121-20 What records you must keep
State the record-keeping requirements in terms relevant to CGT events.
Under the 1936 Act the focus of the record-keeping provisions is on the asset disposed of. In the rewritten law, the record-keeping focus is on matters that are relevant to working out whether a capital gain or loss is made, in relation to a CGT event.
C. Provisions of the old law that have not been rewritten
The existing record-keeping provisions in section 160ZZU of the 1936 Act that are specific to the transferee of an asset have been incorporated in the general CGT record-keeping provision (section 121-20).
The record keeping provisions in sections 160ZZPI and 160ZZPIA of the 1936 Act have not been rewritten as these sections have limited prospective application.