The Assistant Treasurer, the Hon Bill Shorten MP, has today announced an extension to the proposed income tax look-through treatment to cover instalment warrants and receipts over direct and indirect interests in listed securities, as well as unlisted securities in widely held entities and bundles of these assets.
"The Government has decided to broaden the look-through treatment of instalment warrants for income tax purposes beyond single exchange traded securities in response to consultation with industry," said the Assistant Treasurer.
The Government previously announced changes to the income tax laws to confirm the practice of treating an investor in an instalment warrant over a listed security as the owner of the security for income tax purposes.
"On a strict interpretation of the law, without these changes, investors who buy, for example, instalment warrants over unlisted securities in widely held entities, would have to pay capital gains tax when they pay their last instalment."
"These changes will benefit a greater number of instalment warrant investors by confirming there is no capital gains tax applicable at the time the last instalment is paid for instalment warrants over these types of assets."
As the Government previously announced, a superannuation trustee who enters into a limited recourse borrowing arrangement, as permitted under the Superannuation Industry (Supervision) Act 1993, will be treated as the owner of the asset for income tax purposes.
Legislation giving effect to these changes will be introduced as soon as practicable. Exposure draft legislation and explanatory material will be released for consultation early this year on the Treasury website www.treasury.gov.au.
Consistent with the previous announcement, these changes to expand the scope of the look-through treatment will apply to income assessments for the 2007-08 and later income years.