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Legislation

Tax Telegraph, May 2013

LegislationStrengthening the small business concessions and the scrip for scrip roll over

The Government has released ED legislation and explanatory material in respect of two measures:

  • To ensure that the small business connected entity test and the scrip for scrip roll-over stakeholder tests apply on the basis of who owns relevant interests in an entity, rather than who benefits from the interests. This will result in the tests applying to interests owned by life insurance companies, superannuation funds and trusts in the same way that they apply to interests owned by other types of entities
  • For these integrity rules and the capital gains tax (CGT) provisions more generally, absolutely entitled beneficiaries, bankrupt individuals, companies in liquidation and security providers (underlying entities) are treated as the owners of relevant assets. This ensures that the underlying entity, rather than the holding entity, is considered in the connected entity and stakeholders tests and that all CGT consequences in respect of those assets rest with the underlying owner, rather than with the holding entity.

Submissions on the ED were due on 10 April 2013.

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