In a tax integrity measure announced in the budget papers, partners who undertake Everett assignments will no longer be able to access small business CGT concessions from 7:30pm on 8 May 2018.
According to budget papers, “some taxpayers, including large partnerships, are able to inappropriately access these concessions in relation to their assignment of a right to the future income of a partnership to an entity, without giving that entity any role in the partnership”.
Speaking to Accountants Daily, CPA Australia head of policy, Paul Drum, said the tax integrity measure brings perspective to an issue that has been under the spotlight in recent times.
“I think the budget has shed some light on the primary concern of the ATO and the government regarding assigning of rights to future income and that is the misuse of the interaction of assigning future rights and CGT,” said Mr Drum.
“When Everett’s case was decided, CGT wasn't even invented - it was decided some years before CGT was even introduced into Australia so there has always been concern that there was a disconnect, that they didn't mesh the way parliament would have intended if Parliament had actually contemplated it.”
There will be no changes to the small business CGT concessions which will continue to be available to eligible small businesses with an aggregated annual turnover of less than $2 million or net assets of less than $6 million.
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.