16 February 2011
On January 6 2010, the Australian Government's Treasury Department announced its intention to reform tax law to make it easier for shareholders to defer certain capital gains made when the companies they invested in were taken over or merged with another company.
The alignment with the Corporations Act will make it easier for takeovers and mergers to qualify for the scrip-for-scrip rollover.
The legislation has now received Royal Assent and that means that taxpayers should be reviewing their assessments. if you've chosen rollover relief that is in accordance with the changes, then you'll not need to do anything more. However, if you did not seek rollover relief, then you can seek an amendment and if there is a reduction in your liability, then you may have interest on the overpayment paid.
If you choose to anticipate rollover relief, but do not satisfy the changes, you'll need to seek an amendment.
Any interest accrued will be remitted to the base rate up to the date that the law is enacted and in the cases outlined above, no tax shortfall penalties will apply. Should any interest in excess of the base rate accruing after the enactment date will be remitted where the taxpayer seeks to amend assessments within a reasonable time frame.
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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.