Alan Griffin (Bruce, Australian Labor Party, Minister for Veterans' Affairs) Share this | Hansard source

Firstly, I thank those members who contributed to this debate on the Tax Laws Amendment (2009 Measures No. 6) Bill 2009. Schedule 1 of the bill abolishes the exception to capital gains tax events E1 and E2, widely known as the trust cloning exception. This is consistent with the policy principle of taxing capital gains that arise where there is a change in ownership of an asset. This schedule also provides a limited CGT rollover for the transfer of assets between fixed trusts with the same beneficiaries, each of which has the same interests in each trust. This ensures that CGT considerations are not an undue impediment to the restructure of those trusts whilst ensuring that subsequent changes to the manner and extent to which beneficiaries can benefit from the trust are subject to appropriate tax consequences.

Schedule 2 amends the tax law to remove significant income tax impediments to mergers between complying superannuation funds by permitting eligible entities to roll over capital losses and revenue losses under the merger and to transfer previously realised capital losses and revenue losses. This preserves the offsetting value of the losses, thereby removing a potential barrier to superannuation fund consolidation. The loss relief will be available for complying superannuation funds that merge with another complying superannuation fund with five or more members. This assists in maintaining a robust and safe superannuation sector. This measure has a limited period of application from 24 December 2008 until 30 June 2011.

Schedule 3 amends the Income Tax Assessment Act 1997 to clarify the operation of the income tax law for life insurance companies that conduct immediate annuity business. Life insurance companies are exempt from tax on income derived in respect of immediate annuity policies that satisfy the annuity conditions. These conditions are designed to prevent the unreasonable deferral of income. The amendments clarify the circumstances in which the annuity conditions apply. This ensures that the annuity conditions in the 1997 tax act are consistent with the former annuity conditions in the 1936 tax act. Immediate annuity policies offered by life insurance companies often provide for superannuation income streams. The amendments ensure that the annuity conditions do not apply to superannuation income streams so that life insurance companies are taxed on this business in the same way as all other superannuation income stream providers.

Schedule 4 amends the Income Tax Assessment Act 1997 to make certain organisations deductible gift recipients. Taxpayers can claim an income tax deduction for gifs to organisations that are deductible gift recipients. This schedule makes the Green Institute and United States Studies Centre deductible gift recipients. It also changes the name of one organisation currently listed in the act from Dymocks Literacy Foundation Ltd to Dymocks Children’s Charities Ltd. Making these organisations deductible gift recipients will assist them to attract public support for their activities.

Schedule 5 makes the income recovery subsidy payments for the north-western Queensland floods of January and February 2009 income tax exempt. These payments were designed to provide immediate financial assistance to persons affected by the flooding in north-western Queensland in January and February of this year. They were made available to Australian resident employees, small business persons and farmers over 16 years of age who experienced a loss of income as a direct result of the north-western Queensland floods in January and February 2009. Recipients must also have derived an income from, or resided in, the affected area within the designated time period.

Schedule 6 makes it clear that when imported high-strength spirits are blended with domestically produced high-strength spirits the blends will remain free of duty under the concessional spirit scheme. This ensures the status quo is maintained. I commend this bill to the House.

Question agreed to.

Bill read a second time.

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