Today the Assistant Treasurer, Chris Bowen MP, announced that the Government will extend the capital gains tax (CGT) main residence exemption for compulsory acquisitions (and certain other involuntary events) relating to part of a taxpayer's main residence.
This will ensure that taxpayers do not pay CGT on compulsory acquisitions of part of their main residence and that taxpayers are not worse off as a result of a compulsory acquisition, compared to if the compulsory event had not occurred.
Initial consultation will be undertaken on the design of these amendments - a consultation paper providing further information about this proposal is available on the Treasury website.
Later, an exposure draft of the legislation will also be released for consultation on the Treasury website.
The changes will apply to CGT events that happen after the date of Royal Assent.
Taxpayers will also have the option to apply the changes from the 2004-05 income year to the date of Royal Assent.
19 March 2009
CANBERRA