The Government today introduced Tax Laws Amendment (2008 Measures No. 4) Bill 2008 to implement a number of improvements to Australia's taxation system, including the following:
Demutualisation of private health insurers
The Bill provides relief from capital gains tax (CGT) for private health insurance policyholders when their insurer demutualises to a for profit insurer.
The amendments ensure that policyholders who receive shares in the insurer or a cash payment will not be subject to CGT at the time they receive the shares or cash payment.
The changes will provide certainty to policy holders of health insurers that demutualise.
Family trusts
The Bill reverses two of the family trust changes introduced by the previous government in the Tax Laws Amendment (2007 Measures No. 4) Act 2007.
The amendments restore the previous definition of 'family' in the family trust election rules by limiting lineal descendants to children or grandchildren of the test individual or of the test individual's spouse.
The amendments also prevent family trusts from making a variation to the test individual specified in a family trust election (other than specifically in relation to the 2007-08 income year or in the case of a marriage breakdown).
Minor amendments
The Bill also implements various minor amendments to the law and also some general improvements of a minor nature as part of the Government's commitment to the care and maintenance of the tax system.