Board of Taxation to launch review into CGT rollover provisions

Assistant Treasurer Michael Sukkar has announced that the Board of Taxation will be undertaking a review into CGT rollover provisions with a view to simplify existing rollovers.

The current law allows certain CGT events to occur without crystallising liabilities to tax in circumstances where it is considered appropriate for the CGT liability to be deferred until a later time.

Over time, the provisions catering for these circumstances have multiplied to the point where navigating the law is difficult.

The board will now identify and evaluate opportunities to rationalise the existing CGT rollovers and associated provisions into a simplified set that have a substantially similar practical effect, but are easier to use and interpret.

It will pay attention to two main categories of rollovers, namely, rollovers where there is no change in underlying economic ownership after the CGT event and rollovers where the disposal is involuntary.

If the board comes to the view that the system would benefit from additional categories of rollovers, then it may suggest these as options for the government to consider.

The board has been asked to report to government by 30 November 2020. Thus far, it has established a working group for the review, comprising Craig Yaxley (chair), Ann-Maree Wolff and Mark Pizzacalla, representatives from the tax profession, academia, Treasury and the ATO.

The board will undertake a number of consultation activities for this review and, in due course, the working group will publish a consultation guide to provide further detail.

A series of ‘in-person’ roundtable consultations will be held on the following dates in 2020:

• Melbourne – Thursday, 20 February 2020.
• Sydney – Thursday, 26 March 2020.
• Perth – Date TBC
• Brisbane – Thursday, 30 April 2020.