MEDIA RELEASE (AU)

CA ANZ welcomes the Government's decision to lift the small business Capital Gains Tax (CGT) turnover threshold from $2 million to $10 million, a long standing recommendation of CA ANZ and the Board of Taxation, opening a concession to a wider group of active businesses and giving them more flexibility and support when making major financial decisions.

“Raising the threshold will give more genuinely active small businesses access to an important CGT concession. These businesses are the lifeblood of our economy, and this change will make a real difference,” CA ANZ Tax Leader, Susan Franks said.

“This update makes the CGT system more workable, and ensures concessions reach the operators they were designed to support."

Legislative certainty and trust treatment welcomed

CA ANZ supports the decision to unwind the proposed expansion of ministerial powers, ensuring that key definitions are embedded directly in legislation.

“It is important that key elements of the tax system, such as the definition of a new residential dwelling, are clearly set out in legislation, rather than being left to future determination. This provides greater certainty for taxpayers and those administering the system," Ms Franks said.

Additionally, CA ANZ welcomes confirmation that testamentary discretionary trusts will be excluded from the proposed 30 per cent minimum tax on distributions.

“These structures are established for legitimate testamentary purposes, and it is appropriate that they are treated differently. This is an area where the Government has clearly responded to stakeholder feedback.”

Outstanding issues for the final legislation

Ms Franks said CA ANZ looks forward to reviewing further detail on the proposed ‘innovative business’ tax concession but emphasised that several critical issues raised by CA ANZ during their appearance at the recent Senate inquiry process remain unresolved.

“To ensure the CGT framework operates fairly and effectively, further refinements are needed in the final legislation," Ms Franks said.

“We’re focused on three practical improvements: fixing the ordering rules for capital losses, ensuring fair access to indexation for people who’ve spent time overseas, and looking at indexation for companies so the system is consistent and fair."

“These targeted changes are practical, achievable and would help ensure the system delivers equitable outcomes across the tax base."