Government Announcements
CGT roll-over relief: water rights
27.02.2009
The Assistant Treasurer announced on 27 February 2009 that CGT roll-over relief is to be provided for irrigators who transform their entitlement to water under an irrigation right held against an irrigation infrastructure operator into an individual water entitlement.
The roll-over is to apply to CGT events that happen on and after 1 July 2008 and will facilitate transformation arrangements allowed under the new water market rules that will be made under the Water Act 2007 by deferring the CGT consequences of the transformation for irrigators until they subsequently deal with their individually held water entitlement.
The roll-over will not be available where the entitlement to water under an irrigation right against an irrigation infrastructure operator is transformed into the hands of a third party (rather than the irrigator).
Termination and exit fees
The Government will also allow termination and exit fees to be recognised when calculating a capital gain or capital loss on an asset by including these costs in the asset’s cost base. This change, which is also to apply to CGT events that happen on and after 1 July 2008, is to be available for all assets and not just those relating to the irrigation industry.
Text of media release
For the text of the Assistant Treasurer’s media release, click here. The media release has a link to a consultation paper that has been prepared by Treasury.
