NO.111

Today

the Government is releasing for public comment an exposure draft of legislation to allow

wholly owned groups of companies and trusts to opt to be treated as a single consolidated

entity for income tax purposes.

The legislation will implement the Government’s policy, which was announced in A

New Tax System, of providing wholly owned groups with increased flexibility and

reduced compliance costs. The consolidation regime will begin from 1 July 2001.

There has been ongoing consultation on the detail of the consolidation regime. The

release of exposure draft legislation provides the opportunity for additional comment on

the proposed law. It further demonstrates the Government’s commitment to a high level

of community involvement in the implementation of its tax reform agenda.

The legislation contained in the exposure draft covers:

• the formation of a consolidated group;

• the circumstances in which losses can be brought in and utilised in a consolidated

  group;

• the treatment of cost bases of assets in a consolidated group; and

• the removal of certain grouping provisions.

The draft explanatory statement which accompanies the exposure draft outlines the areas

where further legislation is being developed to complete the Government’s announced

policy.

The exposure draft and accompanying explanatory statement can be obtained from the

Treasury internet site (www.treasury.gov.au) under ‘What’s New’.

Comments on the exposure draft should be received by 2 February 2001 and should be sent

to:

Assistant Commissioner

Law Design and Development (Consolidation)

P O Box 900

Civic Square ACT 2608

or can be emailed to consolidation@ato.gov.au.

Submissions will be treated as public unless the author indicates to the contrary.

Submissions lodged electronically will be published on the Treasury website.

More information on the exposure draft legislation can be obtained by calling the

Treasury Tax Reform Help Line on 13 63 20.

CANBERRA

8 December 2000

Contact: Irene Sim (ATO)

(02) 6216 1838

Bill Stock (Treasury)

(02) 6216 1013

Jonathan Rollings (ATO)

(02) 6216 2004