The draft QWBA provides a comprehensive explanation of how the bright-line test and rollover relief provisions apply to transfers of residential land between associated persons on or after 1 July 2024. It clarifies that the bright-line test taxes the disposal of residential land if the bright-line end date is within 2 years of the start date unless exclusions apply.

Further, it confirms that rollover relief under the bright-line is available notwithstanding that the bright-line end date may be beyond the 2-year taxable period. The rollover relief provisions allow certain transfers between associated persons to be treated as a disposal and acquisition at the transferor’s cost, with the transferee’s bright-line start date matching the transferor’s.

The draft QWBA details the associated persons tests under sections YB 2 to YB 13, which must be met at the transfer date and for at least 2 years prior. It also covers transfers to trustees of trusts where all beneficiaries are associated with the transferor or are charitable organisations. Additionally, rollover relief can only be applied once in a 2-year period for transfers of residential land.

Overall, CA ANZ supports the publication of the QWBA. However, CA ANZ makes some recommendations to further enhance the clarity of the QWBA and assist taxpayers and practitioners in understanding and applying these provisions correctly.