The Minister for Revenue and Assistant Treasurer, Peter Dutton, announced today that the Government will introduce legislation into the Parliament to amend the capital gains tax (CGT) provisions in the Income Tax Assessment Act 1997 that apply to holders of statutory licences.
Mr Dutton said “The amendment will allow a partial CGT roll‑over where a statutory licence ends and is replaced by one or more new licences and the licensee is offered non‑licence capital proceeds such as money. Partial roll‑over will be available to the extent that the original licence is replaced by a new statutory licence or licences.
“Where the statutory licence was acquired post-CGT, the CGT 50 per cent discount may apply as may the CGT small business concessions to reduce the capital gain. Partial roll-over allows a pre-CGT licence holder to retain pre-CGT status for the new licence,” Mr Dutton said.
The amendment will apply to CGT events that happen in the 2006-07 income year and later income years.
Currently statutory licence holders are subject to tax on the entire capital gain where their licence ends and is replaced by a new licence or licences and they are also offered other capital proceeds. Licence holders who receive only a new licence or licences that renew or extend their existing licence are able, under the current provisions, to roll over a capital gain from the ending of the licence.
The amendment will have particular application to the Achieving Sustainable Groundwater Entitlements program. The amendment will ensure that licence holders who are also offered a cash payment under this program will obtain a partial CGT roll‑over where the access licence (and any other new licences) replaces the original bore licence.
Legislation giving effect to this announcement will be introduced as soon as practicable.