Tax Laws Amendment (2006 Measures No. 7) Act 2007 (55 of 2007)

Schedule 1   Small business relief for CGT events

Income Tax Assessment Act 1997

55   Section 152-325

Repeal the section, substitute:

152-325 Company or trust conditions

Company or trust to make payments

(1) A company or trust must make a payment to at least one of its *CGT concession stakeholders if:

(a) the company or trust makes a choice under this Subdivision to disregard a *capital gain from *CGT event J2, J5 or J6; or

(b) the company or trust receives an amount of *capital proceeds from a *CGT event for which it makes a choice under this Subdivision.

(2) If the company or trust receives the *capital proceeds from the CGT event in instalments, subsection (1) applies to each instalment in succession (up to the relevant *CGT exempt amount).

Amount and timing of payments

(3) If a payment is made to more than one *CGT concession stakeholder, the amount of each such payment is to be worked out by reference to each individual’s percentage (see subsection 152-315(5)) of the relevant *CGT exempt amount.

(4) The payment must be made by:

(a) if paragraph (1)(a) applies - 7 days after the company or trust makes the choice; and

(b) otherwise - the later of:

(i) 7 days after the company or trust makes the choice; and

(ii) 7 days after the company or trust receives an amount of *capital proceeds from the *CGT event.

(5) The amount of the payment, or the sum of the amounts of the payments, required to be made under this section must be equal to the lesser of:

(a) either:

(i) if paragraph (1)(a) applies - the amount of the *capital gain from the *CGT event that the company or trust disregarded; or

(ii) otherwise - the amount of *capital proceeds received; and

(b) the relevant *CGT exempt amount.

Payments may be joint or separate

(6) If this section requires the company or trust to make 2 or more payments to a single *CGT concession stakeholder (whether or not by the same time), the company or trust may meet that requirement by making one payment or by making separate payments.

Payment taken to be for termination of employment or ETP

(7) This Act applies to a payment as if the payment:

(a) for a *CGT concession stakeholder who is an employee of the company or trust - were made in consequence of the termination of employment of the stakeholder; or

(b) for another CGT concession stakeholder - were an *eligible termination payment.

Note: For the rules about eligible termination payments, see Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936.

(8) If a *CGT concession stakeholder is under 55 just before receiving a payment under this section, an amount equal to that payment must be rolled over (within the meaning of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936) except by being paid as mentioned in paragraph 27A(12)(c) of that Act.

Note: Paragraph 27A(12)(c) of the Income Tax Assessment Act 1936 deals with payments to life companies to purchase certain annuities.