Footnotes

Chapter 1 - Introduction

[1]        Selection of Bills Committee, Report No. 18 of 2009, 26 November 2009. Appendix 5.

[2]        The Hon. Dr Craig Emerson MP, Second Reading Speech, House of Representatives Hansard, Wednesday 25 November 2009, p. 6.

[3]        Tax Laws Amendment (2009 Measures No. 6) Bill 2009, Explanatory Memorandum, pp 7 – 10.

Chapter 2 - Schedule 1 – Removal of capital gains tax trust cloning exception and provision of limited fixed trust roll-over

[1]        Explanatory Memorandum, Tax Laws Amendment (2009 Measures No. 6) Bill 2009, para 1.107, p. 37.

[2]        These provisions are referred to as the 'trust cloning' exceptions as there is no change in the beneficiaries and there is no difference in the terms of the trusts.

[3]        Subsection 104-55(5) of the ITAA 1997. 

[4]        Subsection 104-60(5) of the ITAA 1997.

[5]        Explanatory Memorandum, p. 11.

[6]        Explanatory Memorandum, p. 12.

[7]        New subdivision 126-G will be titled 'Transfers of assets between certain trusts'. (Division 126 of which subdivision 126-G will be a part, is titled 'Same asset roll-overs'.)

[8]        Explanatory Memorandum, paras 1.18 – 1.19, p. 14.

[9]        Explanatory Memorandum, para 1.31, p.17, para 1.27 p. 16 and p. 12.

[10]      Explanatory Memorandum, pp 12, 16.

[11]      Explanatory Memorandum, paras 1.66 – 1.68, p. 26.

[12]      Explanatory Memorandum, para 1.51, p. 22.

[13]      Explanatory Memorandum, para 1.52, p. 23.

[14]      Generally, the 'mirror choice' is required to be in force just after the transfer time - Explanatory Memorandum, para 1.56, p. 24.

[15]      Explanatory Memorandum, paras 1.53 – 1.55, p. 23.

[16]      Explanatory Memorandum, para 1.74, p. 28.

[17]      Explanatory Memorandum, para 1.75, p. 28.

[18]      Explanatory Memorandum, para 1.77, p. 28.

[19]      Explanatory Memorandum, para 1.76, p. 28.

[20]      Explanatory Memorandum, paras 1.78 – 1.80, p. 29.

[21]      Explanatory Memorandum, para 1.86. p. 30.

[22]      Explanatory Memorandum, paras 1.95 – 1.96, pp 33 – 34.

[23]      To calculate any CGT discount, the ownership period of the beneficiary's membership interests in the receiving trust will include the period of ownership of the member's interests in the transferring trust. Explanatory Memorandum, para 1.97, p. 34.

[24]      Explanatory Memorandum, para 1.101, p. 36.

[25]      Explanatory Memorandum, para 1.104, p. 37.

[26]      Explanatory Memorandum, para 1.102, p. 36.

[27]      Explanatory Memorandum, paras 1.103 – 1.106, p. 37.

[28]      Explanatory Memorandum, paras 1.108 – 1.109, pp 37 – 38.

[29]      The Hon. Chris Bowen MP, Government abolishes trust cloning tax concession, Media release No. 092, 31 October 2008.

[30]      The Hon. Chris Bowen MP, Government abolishes trust cloning tax concession, Media release No. 092, 31 October 2008.

[31]      Australian Government, Department of the Treasury, Abolishing the capital gains tax (CGT) trust cloning exception and providing a roll-over for fixed trusts, Summary of Consultation Process, December 2009.

[32]      The Hon. Chris Bowen MP, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Government acts to reduce compliance costs and improve the tax law (Attachment F), Media Release No. 048, 12 May 2009.

[33]      Blake Dawson, Submission 3, 18 December 2009, pp 1 – 2.

[34]      Blake Dawson, Submission 3, 18 December 2009, p. 3.

[35]      Explanatory Memorandum, p. 15.

[36]      The need to tighten the trust cloning exception to CGT events E1 and E2 was acknowledged by the accounting industry who, in their submission to Treasury advised that they considered it too wide and needing to be narrowed to protect the CGT base. Source: The Institute of Chartered Accountants in Australia, Submission to the Treasury on exposure draft – abolishing the capital gains tax trust cloning exception and providing a roll-over relief for fixed trusts, 6 October 2009, Appendix 1, p. 4.

Chapter 3 - Schedule 2 – Loss relief for merging superannuation funds

[1]        Explanatory Memorandum, para 2.1, p. 39.

[2]        Explanatory Memorandum, para 2.3, p. 39.

[3]        Capital gains that arise as a result of mergers do not have the same negative impact on the value of the members' benefits as they are not extinguished and therefore do not present the same challenges to mergers. Explanatory Memorandum, para 2.9, p. 40.

[4]        Explanatory Memorandum, para 2.8, p. 40.

[5]        Tax Laws Amendment (2009 Measures No. 6) Bill 2009, item 3, p. 21.

[6]        Mercer (Australia) Pty Ltd, Submission 2, p. 1.

[7]        ING, Submission 5, p.1.

[8]        AXA Australia, Submission 7, p. 1.

[9]        The Association of Superannuation Funds of Australia Limited (ASFA), Submission 8, p. 1.

[10]      Australian Government, The Treasury, Loss relief for superannuation funds that merge – Summary of consultation process, 2009, p. 1.

[11]      Explanatory Memorandum, para 2.113, p. 65.

[12]      Senator The Hon. Nick Sherry, Minister for Superannuation and Corporate Law, Optional CGT loss roll over for complying super funds, Media Release 23 December 2008.

[13]      Australian Government, The Treasury, Loss relief for superannuation funds that merge – Summary of consultation process, 2009, p. 1.

[14]      Mercer, Submission 2, p. 2.

[15]      AXA Australia, Submission 7, p. 4.

[16]      Approved deposit fund is defined in section 10 of the SIS Act as meaning 'a fund that : (a) is an indefinitely continuing fund; and (b) is maintained by an RSE licensee that is a constitutional corporation; and (c) is maintained solely for approved purposes.' A registrable superannuation entity (RSE) licensee means a regulated superannuation fund, or an approved deposit fund, or a pooled superannuation trust, but does NOT include a self managed superannuation fund (SMSF).

[17]      Explanatory Memorandum, para 2.13, p. 42.

[18]      Explanatory Memorandum, para 2.14, p. 42.

[19]      Explanatory Memorandum, para 2.16, p. 42.

[20]      Explanatory Memorandum, p. 64.

[21]      Explanatory Memorandum, p. 43.

[22]      There will be limited exceptions to this to cover those circumstances where members cannot be transferred to the continuing fund. Explanatory Memorandum, paras 2.24 – 2.25, p. 44.

[23]      This requires that a continuing fund have at least five members. As a result the continuing fund cannot be an SMSF or a small APRA fund (refer to EM paras 2.27 – 2.31, p. 46). This condition is consistent with the policy intent of the measure to enable consolidation within the superannuation industry.

[24]      Deloitte Touche Tohmatsu Ltd, Submission 4, pp 1 – 2.

[25]      A pooled superannuation trust (PST) is defined in section 48 of the Superannuation Industry (Supervision) Act 1993 as: a unit trust, (a) the trustee of which is a constitutional corporation; and (b) that, under the regulations is a unit trust to which this definition applies.

[26]      Explanatory Memorandum, para 2.34, p. 47.

[27]      Tax Laws Amendment (2009 Measures No. 6) Bill 2009, proposed subsection 310-15(1).

[28]      Explanatory Memorandum, p. 47.

[29]      Explanatory Memorandum, para 2.39, p. 48.

[30]      Explanatory Memorandum, para 2.40, p. 48.

[31]      Proposed subsections 310-10(3), 310-10(4), 310-15(3), 310-15(4), 310-20(3) and 310-20(4) of Tax Laws Amendment (2009 Measures No. 6) Bill 2009 set out these requirements concerning members transferring to the continuing fund and the size of the continuing fund.

[32]      Explanatory Memorandum, para 2.45, p. 48.

[33]      Explanatory Memorandum, para 2.46, p. 49.

[34]      Explanatory Memorandum, para 2.51, p. 50.

[35]      Explanatory Memorandum, para 2.55, p. 50.

[36]      It is noted that the Schedule 2 of the bill will include an amendment to ensure that roll-over involving depreciating assets automatically qualify for roll-over relief pursuant to section      40-340 of the ITAA 1997.

[37]      Explanatory Memorandum, paras 2.62 – 2.67, pp 51 – 53.

[38]      Explanatory Memorandum, para 2.69, p. 54.

[39]      Mallesons Stephen Jaques, Submission 9, p. 2.

[40]      Explanatory Memorandum, para 2.13, p. 42.

[41]      ASFA, Submission 8, pp 1 – 2. Mercer, Submission 2, p. 2.

[42]      Australian Government, The Treasury, Loss relief for superannuation funds that merge – Summary of consultation process, 2009, p. 2.

[43]      Explanatory Memorandum, p. 56.

[44]      Explanatory Memorandum, paras 2.81 – 2.82, p. 56.

[45]      Explanatory Memorandum, p. 57.

[46]      Explanatory Memorandum, paras 2.96 – 2.97, p. 61.

[47]      Explanatory Memorandum, p. 57.

[48]      Explanatory Memorandum, para 2.88, p. 58.

[49]      Explanatory Memorandum, para 2.88, p. 58.

[50]      Explanatory Memorandum, para 2.89, p. 58.

[51]      Explanatory Memorandum, paras 2.99 - 2.100, p. 62.

[52]      Explanatory Memorandum, p. 66.

[53]      AXA Australia, Submission 7, pp 5 – 6.

[54]      Explanatory Memorandum, pp 57, 60.

[55]      Tax Laws Amendment (2009 Measures No. 6) Bill 2009, item 3, p. 2.

Chapter 4 - The remaining schedules of the bill

[1]        Explanatory Memorandum, p. 67.

[2]        According to section 995-1 of the ITAA 1997, the term annuity is defined as including an annuity within the meaning of the Superannuation Industry (Supervision) Act 1993 (the SISA defines annuity as including a benefit provided by a life insurance company or registered organisation); or a pension, within the meaning of the Retirement Saving Accounts Act 1997.

[3]        Non-assessable non-exempt income is defined in section 6-23 of the ITAA 1997 as being: an amount of ordinary or statutory income that this Act or another Commonwealth law states is not assessable income and it is not exempt income.

[4]        Explanatory Memorandum, para 3.3, p. 67.

[5]        Explanatory Memorandum, p. 68.

[6]        Annuity conditions are designed to prevent excessive deferral of tax on income derived by life insurance companies that relate to immediate annuity policies – Explanatory Memorandum, para 3.26, p. 72.

[7]        The Hon Chris Bowen MP, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Media Release No. 092, 31 October 2008.

[8]        Treasury Discussion Paper, Life insurance companies: Exempt life insurance policies, 2009, p. 1.

[9]        Treasury Discussion Paper, Life insurance companies: Exempt life insurance policies, 2009, p. 1. 

[10]      Explanatory Memorandum, p. 77.

[11]      Explanatory Memorandum, p. 77.

[12]      Explanatory Memorandum, p. 77.

[13]      Explanatory Memorandum, p. 78.

[14]      Explanatory Memorandum, para 4.6, p. 78.

[15]      Explanatory Memorandum, Table 4.1, p. 78.

[16]      Explanatory Memorandum, para 4.7, p. 78.

[17]      Explanatory Memorandum, Table 4.1, p. 78.

[18]      Explanatory Memorandum, Table 4.2, p. 78.

[19]      Including the payment in the calculation of separate net income may adversely impact the ability of these same taxpayers to access other tax offsets.

[20]      Explanatory Memorandum, p. 79.

[21]      Explanatory Memorandum, p. 81.

[22]      Explanatory Memorandum, paras 5.6 – 5.7, p. 79.

[23]      Explanatory Memorandum, p. 83.

[24]      Explanatory Memorandum, para 6.6, p. 84.

[25]      Importers mix the imported high strength neutral spirit with domestic stocks – this transfers the spirit into the excise system and extinguishes any customs liability with the exception of any value component that is required to be paid at the time of a transaction. Explanatory Memorandum, para 6.5, p. 83.

[26]      Explanatory Memorandum, para 6.8, p. 84.

[27]      Explanatory Memorandum, para 6.10, p. 85.