Appendix 1: List of Submissions
- Mr Paul Ingram,
Minter Ellison Adelaide, on behalf of the fishing industry
No. 1a Mr Paul Ingram,
Minter Ellison Adelaide
No. 1b Mr Paul Ingram, Minter
Ellison Adelaide
Appendix 2: List of Witnesses Appearing Before the Committee
Wednesday, 20 September 2000, Canberra
Investment and
Financial Services Association (IFSA)
Mr Michael Barbour,
Controller Taxation, Westpac (member of IFSA’s Tax Working Group)
Mr Andrew Mills, Chief
Tax Counsel, MLC (adviser to IFSA)
Miss Lyn Ralph, Chief
Executive Office, Investment and Financial Services Association (IFSA)
Ms Raewyn Williams,
Taxation Manager, Barclays Global Investors (adviser to IFSA)
Australian Taxation
Office
Ms Sandra Peacock,
Acting First Assistant Commissioner, Law Integrity Team
Ms Margaret Haly,
Assistant Commissioner, Small Business
Ms Deborah Boyd,
Acting Assistant Commissioner, Business Tax Reform Implementation
Mr John Burge,
Executive Officer, Capital Gains Tax Segment, Large Business and International
Mr Andrew Lee,
Executive Officer, Small Business
Treasury
Mr Ron Foster, Acting
General Manager, Indirect Tax
Mr Paul McMahon,
Acting Manager, International Tax Unit
Minter Ellison,
Adelaide
Mr Paul Ingram, Senior Associate, Minter Ellison,
Adelaide.
Appendix 3: Details of Charities
TAXATION LAWS AMENDMENT BILL (No. 7) 2000
At the public hearing held by the Senate Economics
Legislation Committee on 20 September 2000 as part of its inquiry into Taxation
Laws Amendment Bill (No 7) 2000, Senator Conroy was interested to know some
further details regarding the activities of the Foundation for Gambling
Studies, The Global Foundation, the Mount Macedon Memorial Cross Restoration,
Development and Maintenance Trust Fund and the Foundation for Rural and
Regional Renewal Public Fund.
I am writing to provide further details as to the activities
of those organisations. Subsequent to the hearing further information was
requested regarding the names and addresses of the founders and current
management of the organisations. This information would be subject to the
provisions of the Privacy Act 1988 and as such it would not be
appropriate for this office to comment.
Should the Committee wish to pursue this information
directly with the organisations concerned, contact details have been provided
for each organisation.
Senator Conroy also sought further information regarding the
question of donations and other fundraising activities of the organisations.
Unfortunately this information is not available to the office. Again the
Committee may wish to pursue this information directly with the organisations.
We are also unable to determine how much money has been raised by these
organisations as the Australian Taxation Office does not keep records of these
details.
Foundation for Gambling Studies
The Foundation for Gambling Studies was established on 3
February 1999 to support independent research on gambling, which is a growing
industry in Australia. The Foundation’s activities include funding
scholarships and commissioning research. Reliable and independent research will
assist the Government and the community to develop policies relating to
gambling.
The Foundation will seek and consider applications to
finance students pursuing higher education and in undertaking research programs
at tertiary institutions. The Foundation will endeavour to provide full time
or part-time scholarships for successful applicants or meet the HECS
contributions of successful applicants and other educational expenses,
including travel, living away from home allowances, postage and printing costs
and other expenses considered to be appropriate.
The Foundation will also consider establishing either a
temporary or permanent presence in a tertiary institution in Queensland as a
Centre for the Foundation for Gambling Studies. The Foundation will be able to
provide, for the paid positions and infrastructure required by the Foundation
negotiated with the institution, while taking all necessary measures to ensure
that funds are not utilised for expenditure which may be available from other sources
within the institution in which the centre is established.
On 8 March 2000 the Assistant Treasurer announced in Press
Release No 10 that the Government intended to amend the Income Tax
Assessment Act 1997 (ITAA 1997) to allow deductions for gifts of $2 or more
to the Foundation for Gambling Studies.
Address: Foundation
for Gambling Studies
C/- Deacons,
Graham & James, Lawyers
GPO Box 407
BRISBANE QLD
4001
The Global Foundation
The Global Foundation is a non-profit organisation
established to promote and encourage Australia’s national development and
international orientation, with a particular focus on the nation’s centenary of
Federation. It is a citizens’ initiative which brings together the expertise
and influence of eminent people.
The Foundation enjoys bipartisan political support in
Australia. The Prime Minister formally launched the Foundation in May 1998,
with the full support of the leader of the Opposition. Some of the world’s
most influential leaders have visited Australia to participate in Foundation
projects for which they have been joined by many other prominent figures from
global business, government, academia and international affairs.
The Foundation acts as a catalyst and encourages
co-operation between interested parties, particularly government and the
private sector, for a wide range of nation-building initiatives and
international associations. It is strategic in its focus and provides support
and encouragement to programs commensurate with its aims which are undertaken
by organisations and institutions in Australia and around the world.
Some of the Foundation’s principal activities include:
- programs which promote educational, cultural and business links
between Australia and other countries;
- schemes or programs which develop links with institutions or
organisations which could provide facilities for students who wish to pursue
their education in Australia or abroad;
- co-operation with organisations involved in the promotion and
development of commerce, business and trade between Australia and other
countries; and
- establishment and maintenance of professional links and
encouraging affiliation with professional bodies, institutions and agencies of
Australia and other countries.
As a non-profit, non-government and non-partisan body, the
Global Foundation is supported by membership subscriptions, sponsorships,
grants and donations.
On 3 November 1999 the Assistant Treasurer announced in
Press Release No 50 that the Government intended to amend the ITAA 1997 to
allow deductions for gifts of $2 or more to The Global Foundation.
Address:
The Global Foundation
PO Box 1820
MELBOURNE
3000
Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust
Fund
The Mount Macedon Memorial Cross Restoration, Development
and Maintenance Trust Fund has been established to raise money for the ongoing
maintenance of the Mount Macedon Memorial Cross. The Cross was built in
1934-35 to commemorate the memory of those who served in the Great War, and is
considered to be one of the most significant war memorials in Victoria.
The Mount Macedon Memorial Cross is undoubtedly the second
most known and respected War Memorial in Victoria, attracting an increasing
number of visitors each year including many from interstate and overseas. The
Mount Macedon Memorial Cross Restoration, Development and Maintenance Trust
Fund is to raise money to finance the continued maintenance and restoration of
the memorial.
On 29 June 2000 the Treasurer announced in a Press Release
that the Government intended to amend the ITAA 1997 to extend deductions for
gifts of $2 or more to the Mount Macedon Memorial Cross Restoration,
Development and Maintenance Trust Fund.
Address:
Mount
Macedon Memorial Cross Restoration, Development and Maintenance Trust Fund
PO Box 175
MACEDON VIC
3440
Foundation for Rural and Regional Renewal Public Fund
The Foundation for Rural and Regional Renewal Public Fund
has been established to raise money for the purpose of providing a viable
social and economic future for Australia’s rural and regional communities. It
aims to encourage innovative collaboration between business, community and
government in philanthropic endeavours that will boost the economic and social
stocks of regional Australia. Its emphasis will be on economic development and
job creation.
The Foundation was announced by the Prime Minister, during
last year’s Regional Australia Summit. It has been injected with Federal
Government funding of $14.5 million and a further $1 million from the
nationally-renowned Sidney Myer Fund.
On 29 March 2000 the Assistant Treasurer and the Deputy
Prime Minister in a joint Media Release No 11 announced that the Government
intended to amend the ITAA 1997 to allow deductions for gifts of $2 or more to
the Foundation for Rural and Regional Renewal Public Fund.
Address:
Foundation for Rural and Regional Renewal Public Fund
44th Floor
55 Collins St
MELBOURNE
VIC 3000
I trust this information is of assistance to the Committee.
Yours sincerely
Mark
O’Connor
ASSISTANT
COMMISSIONER
LAW DESIGN
AND DEVELOPMENT
Appendix 4: Responses to Question on Notice
Treasury Response to Senator Conroy
Question
What take-up
rates were assumed in the original revenue estimations for the capital gains
tax (CGT) small business rollover relief and retirement exemption provisions.
How do these assumed take-up rates vary from the take-up rate assumed in the
costing for the 21 September 1999 CGT small business changes?
Answer
- The costing estimates undertaken on the original CGT retirement
exemption provision and the small business rollover relief provision assumed
take-up rates of 100%.
- The take-up rates assumed in the estimate for the 21 September
1999 CGT small business reforms are consistent with those estimates.
- Take-up rates are the proportion of individuals eligible for the
concession who take up that concession.
- A 100% take-up rate is a reasonable assumption because:
- small business taxpayers claim the concession when completing their tax
returns; and
- typically specialist advice is obtained when completing these tax returns.
Treasury Response to Senator Watson
Question
Will listed investment companies (LICs) be
disadvantaged in relation to the taxation of capital gains once the Collective
Investment Vehicle (CIV) regime commences?
Answer
- Under entity taxation, companies will lose the benefit of capital
gains tax (CGT) indexation from 30 September 1999, but will receive
the ongoing benefit of a lower company tax rate.
- Individual shareholders will
have access to refundable imputation credits; and will be able to access the CGT
discount on unrealised gains in LICs by selling shares.
Background
- LICs can restructure to
obtain flow-through tax treatment.
- The Government announced on 11 November 1999 the provision of
transitional rollover relief to facilitate restructuring of existing companies
to become unit trusts without tax consequences.
- The Government has also indicated that it will consult with the States
and Territories with the objective of removing any state tax obstacles to
entity restructuring and those consultations have commenced.
Appendix 5: Report of discussion between ATO and Mr Paul Ingram
At the public hearing held by the Senate Economics
Legislation Committee on 20 September 2000 as part of its inquiry into the
Taxation Laws Amendment Bill (No. 7) 2000, Ms Deborah Boyd of the
Australian Taxation Office agreed to discuss further with Mr Paul Ingram of
Minter Ellison in Adelaide the third item in his submission dated 19 September
2000 (reference: page E19 of the proof Hansard).
I am writing to confirm that Ms Boyd and I phoned Mr Ingram
following the hearing on 20 September 2000 and to inform you of the outcome of
that discussion. Please note that the relevant proposed amendment is item 4 of
Schedule 3 to the Bill (rather than item 3 of Schedule 3 as referred to in Mr
Ingram's submission).
Item 4 of Schedule 3 to the Bill proposes the amendment of
existing subsection 152-10(4) of the Income Tax Assessment Act 1997 to
allow capital gains deferred under the capital gains tax small business
rollover also to qualify for the small business retirement exemption. Mr Ingram
submitted that the amendment should go further and allow the deferred capital
gains to benefit from the capital gains tax discount and the other small
business concessions.
We confirmed to Mr Ingram that if a small business taxpayer
defers a capital gain from the disposal of an active asset by using the small
business rollover, the capital gain itself is ‘tagged’ to the replacement
asset. Unlike with other rollovers, the cost base of the replacement asset is not
reduced by the capital gain. The later disposal of the replacement asset gives
rise not only to the capital gain on the replacement asset itself but also to
the separate ‘tagged’ gain from the original asset.
At present, the taxpayer can again roll over the ‘tagged’
gain by acquiring another replacement active asset. The amendment proposed by
item 4 of Schedule 3 would also allow the taxpayer to benefit from the
retirement exemption for this gain as an alternative to rolling it over. The
‘tagged’ gain would already reflect the capital gains tax discount and the
small business 50% reduction if the taxpayer were eligible for them. It would
therefore not be appropriate to double up by allowing the taxpayer access to
these concessions for a second time.
This proposed amendment is supported by that proposed by
item 11 of Schedule 3, which would allow a taxpayer not to apply the small
business 50% reduction to a particular capital gain. As is explained in the
legislative note to proposed new section 152-220, making this choice might
allow a company or trust to make larger tax-free eligible termination payments
under the small business retirement exemption.
Mr Ingram accepted this explanation and agreed that the
amendment proposed by item 4 of Schedule 3 to the Bill is appropriate and
sufficient in its proposed scope.
I provided a draft of this letter to Mr Ingram. He is
satisfied that it accurately reflects the discussion that we had with him.
Yours sincerely
(John Burge)
EXECUTIVE
OFFICER
CAPITAL
GAINS TAX SEGMENT
LARGE
BUSINESS & INTERNATIONAL
[26 September 2000]
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