Changes to tax law announced today will allow an automatic capital gains tax (CGT) roll-over for eligible financial service providers moving to the Financial Services Reform (FSR) regime.
The Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, announced the amendments to the CGT provisions of the Income Tax Assessment Act 1997 at the Financial Planners Association luncheon in Sydney today.
"Financial service providers replacing an existing intangible asset, such as a statutory licence or right to income, with another intangible asset should be eligible for the CGT roll-over during the transitional phase to the FSR regime," Senator Coonan said.
"The Government is committed to doing all things reasonably necessary to encourage and assist the industry during this transitional period.
"Industry raised concerns about the tax consequences of moving to the new regime and the Government has responded by removing potential CGT impediments during the transitional period.
"We are encouraging people to move into the FSR regime without fear of tax consequences.
"The FSR is designed to create a regulatory framework to provide a more consistent treatment of financial services and financial products.
"This amendment is just one of the measures the Government has put in place to ensure a smooth transition to the new regime.
"We will be developing legislation to implement the proposed amendment with industry and introducing the change as soon as practicable."
The CGT roll-over will apply during the whole FSR transition period from 11 March 2002 to 11 March 2004.