Bill setting the regulatory and fiscal framework for Collective Company Placement Bodies (CCIV), extending the loss carryforward rules by 12 months, modifying the deductible provisions of the recipients of donations, making various and technical changes to various laws portfolio, inserting a new pact that requires CSR administrators to develop a retirement income strategy for beneficiaries who are retired or approaching retirement, and to remove termination as a point of Taxation for the interest of employee stock ownership plans subject to deferred tax was introduced in parliament.
Collective company investment vehicles
Annexes 1 to 5 of the bill establish the regulatory and fiscal frameworks of CCIVs.
Schedules 1 to 4 of the bill amend the Business and Financial Services Act to create a CCIV as a new type of limited liability company used for fund management. A CCIV is an umbrella vehicle made up of one or more compartments and managed by its sole administrator.
Annex 5 of the bill amends the tax law to specify the tax regime of the CCIV. The changes give effect to the CCIV’s basic tax framework to ensure that CCIV is taxed on a flow-through basis, with the aim that the general tax treatment of CCIVs and their members aligns with the current tax treatment of AMITs ( and their members). .
Schedules 1, 2, 3 and 5 of the bill will begin on July 1, 2022.
Schedule 4 of the bill only begins on July 1, 2022 if the 2021 Corporations Amendment Act (Meetings and Documents) entered into force before that date, otherwise it will not begin.
The intention to create a CCIV regime was first announced in the 2016 budget as part of the Ten-Year Business Tax Plan.
In May 2021, the government announced that the project would apply with a start date of July 1, 2022. Annexes 1 to 5 of the bill fully implement the measure included in the 2021 budget.
Extension of the temporary loss carryforward
Schedule 6 of the bill amends the Income Tax Act to extend the 12-month loss carryforward rules, allowing qualifying corporate tax entities to claim loss carryforward tax compensation during l revenue year 2022-2023.
This measure will apply to contributions established during the 2020-2021 revenue year, the 2021-2022 revenue year and the 2022-2023 revenue year.
Annex 6 of the bill fully implements the measure Temporary extension of the carryback of losses from the 2021 budget.
Recipients of deductible gifts
• specifically list the Greek Orthodox Community of New South Wales Ltd, Australian Associated Press Ltd, Virtual War Memorial Ltd and SU Australia Ministries Ltd as recipients of deductible gifts;
• expand the specific lists of recipients of deductible gifts from Cambridge Australia Scholarships Ltd and Foundation 1901 Ltd; and
• remove the specific list of the recipient of the deductible gift from East African Fund Ltd (the fund remaining endorsed as the recipient of the deductible gift in another category).
The changes apply to donations made on or after July 1, 2019 to the Greek Orthodox Community of New South Wales Ltd.
The changes apply to donations made on or after July 1, 2021 and before July 1, 2026 to Australian Associated Press Ltd and Virtual War Memorial Ltd.
The changes apply to donations made on or after July 1, 2021 and before July 1, 2023 to SU Australia Ministries Ltd.
The changes extend the registration period for Cambridge Australia Scholarships Ltd to apply to donations made on or after July 1, 2021 and before July 1, 2026.
The changes extend the listing period of the 1901 SA Foundation so that it applies to donations made from September 1, 2021 and before September 1, 2026.
The changes to remove the list of recipients of deductible gifts from East African Fund Ltd are effective on the first day of the quarter following Royal Assent.
Annex 7 of the bill fully implements the Philanthropy measure – updates to the list of recipients of deductible donations specifically listed in the 2021 budget; and partially implements the Philanthropy measure – updates to the list of recipients of deductible donations specifically listed in the 2019-2020 Mid-Year Economic and Financial Outlook.
Minor and technical changes
Schedule 8 of the bill makes a number of various and technical changes to various treasury portfolio laws. The changes are part of the government’s continued commitment to the care and maintenance of the Treasury portfolio legislation.
The Amendments make minor and technical changes to correct typographical and numbering errors, repeal inoperative provisions, eliminate administrative inefficiencies, remedy unintended outcomes, and ensure that the law gives effect to the original policy intent.
This measure was announced on September 24, 2021.
Retirement income commitment
Schedule 9 of the bill amends the SIS Act to insert a new clause that requires CSR trustees to develop a retirement income strategy for beneficiaries who are retired or approaching retirement.
Amendments to Schedule 9 of the bill introducing a retirement income clause begin the day after Royal Assent. This start allows Trustees to take steps to gather information in order to formulate their retirement income strategy which will be publicly available on July 1, 2022. Trustees will not be required to give effect to all components of their strategy. by July 1, 2022 as the implementation of the strategy will be an ongoing process.
Schedule 9 of the bill partially implements Budget 2018’s More Choices, Longer Life – Comprehensive Retirement Income Products measure.
Employee share ownership plans: eliminate termination of employment as a tax point
Schedule 10 of the bill amends the ITAA 1997 remove termination of employment as a tax point for SSE interests subject to deferred tax.
This measure will apply to interests of the ESS for which the deferred tax point of the ESS occurs from the beginning of the fiscal year beginning after Royal Assent, or if this bill receives Royal Assent on July 1 – to interest of the SSE for which the SSE tax point is deferred occurs as of July 1.
Schedule 10 of the bill partially implements the Employee Stock Purchase Plans measure – removing termination of employment as a tax point and reducing red tape in the 2021 budget.
Source: Bill of 2021 on the framework of collective investment vehicles and other measures, Australian Parliament website, November 25, 2021, accessed November 25, 2021.