9th Oct 2024, 4:00 PM – Representatives Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 - Consideration in Detail - Unrealised gains

The majority voted against amendments introduced by Wentworth MP Allegra Spender (Independent), which means they failed.

What do these amendments do?

Ms Spender explained that:

... the amendments that I have put forward are, firstly, around allowing a greater time period in which to pay, given that people are being taxed on unrealised gains. Because these gains are unrealised, they relate to assets that have not been sold, or realised, and people may not have the cash to pay this. We should not be forcing people, or pushing people, to be paying tax on income that they haven't earned in a time period that is unreasonable—currently at 84 days.

My second amendment speaks to my concern about the impact on the venture sector and whether the government has adequately assessed that. I have put in my amendment that a review should be done on the impact of this sort of change on the venture and technology sector in particular.

Finally, I'm also calling for this legislation to acknowledge, and to try and give some confidence to, the people the member for North Sydney identified, by saying that this is not going to set a precedent for taxing unrealised gains in other parts of the economy.

Amendment text

(1) Page 3 (after line 8), after clause 3, insert:

4 Review of Schedule 1

(1) The Minister must cause an independent review of Schedule 1 to be conducted as soon as practicable after this Act receives the Royal Assent.

(2) The review must include a review of the impact, or potential impact, of Schedule 1 on the startup and high-growth sector.

(3) The persons who conduct the review must:

(a) consult with the public in conducting the review; and

(b) give the Minister a written report of the review in sufficient time to enable the Minister to comply with subsection (4).

(4) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament before 1 July 2025.

(2) Schedule 1, item 15, page 7 (line 11), before "The object", insert "(1)".

(3) Schedule 1, item 15, page 7 (after line 14), at the end of section 296-5, add:

(2) The Parliament intends that the approach in this Division of taxing unrealised gains is not to be used in the design or policy considerations of future amendments of this Act.

(4) Schedule 1, item 15, page 21 (after line 10), at the end of section 296-205, add:

Deferring when tax is payable

(3) Despite subsection (1), your *assessed Division 296 tax for the income year is due and payable at the end of the later day applying under the scheme mentioned in subsection (4) if, under the scheme:

(a) you choose for the scheme to apply for the income year; and

(b) you satisfy the conditions for the scheme to apply for the income year.

(4) The regulations must prescribe a scheme that allows entities to defer their assessed Division 296 tax for an income year if the conditions provided for in the scheme are met.

(5) Without limiting subsection (4), the scheme must provide for:

(a) the length of the deferral, which must be for at least 5 years; and

(b) how an entity may choose for the scheme to apply for an income year; and

(c) any conditions that must be met for the scheme to so apply; and

(d) whether tax payable under the scheme can be paid in instalments; and

(e) whether a separate choice needs to be made, and conditions need to be met again, for each income year that an entity wishes the scheme to apply.