Australia’s Assistant Treasurer, Nick Sherry, has released, for public consultation, exposure draft legislation to extend the capital gains tax (CGT) main residence exemption for compulsory acquisitions of land or structures that are adjacent to a taxpayer's main residence.
An Australian taxpayer will be able to disregard a capital gain or a capital loss where there is a compulsory acquisition, or similar arrangement, of adjacent land or an adjacent structure that is part of the taxpayer's main residence, where the dwelling is not also being compulsorily acquired.
"This legislation will ensure capital gains and losses from the compulsory acquisition of land that is adjacent to a taxpayer's main residence are CGT exempt," Nick Sherry said. "Because of the main residence exemption, home owners are already CGT exempt if their dwellings are compulsorily acquired and this measure will ensure any adjacent land or structure is treated in the same way."
"It corrects an inappropriate outcome to ensure home owners will not be made worse off by such compulsory acquisitions compared with the tax outcome that would apply if the dwelling were also being acquired," he added.
To ensure consistency with the existing main residence CGT exemption, limits will apply to the area of land that can be covered under the new exemption. The present CGT main residence exemption disregards any capital gain or capital loss that arises from the disposal or other realisation of a taxpayer’s dwelling and adjacent land up to a total of two hectares, provided the adjacent land is used primarily for private or domestic purposes.
The CGT exemption would apply to CGT events happening on or after the day which the amending Act receives Royal Assent. However, taxpayers would be able to choose to apply the provisions to CGT events that have happened since the beginning of the 2004/2005 income year until the day before Royal Assent.
The consultation period on the exposure draft legislation closes on July 14, 2010.
A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.aspTags: tax | law | real-estate | legislation | capital gains tax (CGT) | Australia
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment