Greenwoods & Freehills Weekly Tax Highlights 22.6.12

Scrip for scrip roll-over and the small business entity provisions - proposals paper

The Government has released a proposals paper dealing with certain the proposed amendments to the scrip for scrip roll-over and the small business entity provisions . The Government announced in the 2012-13 Budget that it would make several changes to support the effective operation of theand 2011-12 Budgets. measure providing greater consistency in the application of the scrip for scrip roll-over and small business concessions. In particular, the 2012-13 Budgetproposed amendments measure will  regardensure that the provisions concerninginteraction between the provisions concerning absolutely entitled beneficiaries, security providers and companies in liquidation interact appropriately with the CGT provisions generally and with the connected entity test in the small business entity provisions. The This Proposals Paper sets out, in broad terms, how the measure may be implemented and will form the basis of consultation on the policy design of this measure. closing date for submissions is Wednesday, 18 July 2012.

Business Tax Working Group Consultation

Appeals Update

 Healey v Commissioner of Taxation [2012] FCA 269 (23 March 2012): The taxpayer has appealed to the Full Federal Court. The Federal Court had held that a beneficiary of a trust was assessable on a capital gain of $14m to which she was presently entitled. The capital gain arose from the sale of shares the trust had previously acquired under a "transfer agreement". The Court also held that the taxpayer was not entitled to the CGT 50% discount because the trust had acquired the shares within 12 months of their sale pursuant to the acquisition rules that apply for CGT event E2 on the transfer of an asset to a trust.

Progress of legislation

Royal Assent has been granted to the following Bills:  ; Tax Laws Amendment (Shipping Reforms) Bill 2012; and Shipping Reform (Tax Incentives) Bill 2012.

Tax Laws Amendment 2012 Measures No.1 Bill 2012 and Tax and Superannuation Laws Amendment (2012 Measures No. 1) Bill 2012 have both passed through the Senate and now await Royal Assent.

Tax Laws Amendment (Cross-Border Profit Transfer Pricing) (No. 1) Bill has passed the House of Representatives and now moves on to the Senate.

The Government has removed the MIT withholding provisions from Tax Laws Amendment (2012 Measures No. 2) Bill 2012 . The amended Bill has passed the House of Representatives and now moves on to the Senate. The MIT provisions were subsequently reintroduced to the House of Representatives as Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012 and will be debated in Parliament during the week ending 30.6.12.