Today the Government is announcing that the Income Tax Assessment Act 1997 will be amended, for asset transfers from 11 November 1999, to include a new capital gains tax (CGT) rollover. The new CGT rollover will be consistent with existing CGT rollover provisions, and will facilitate the transfer of assets from a fixed trust to a company, thereby increasing the commercial flexibility available in selecting an appropriate business form for the needs of business.
In broad terms, the new CGT rollover will be available where:
- a fixed trust transfers all of its assets to a company and then ceases to exist;
- the company is, or is similar to, a shelf company at the time of transfer;
- the beneficiaries hold shares in the company in the same proportion as they held interests in the fixed trust; and
- the fixed trust and company agree to the CGT rollover.
Legislation to implement this measure will be introduced into Parliament in early 2002.