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Exposure Draft - Tightening the Non-Commercial Loan Rules and Explanatory Material


Monday, 4 January 2010

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The Assistant Treasurer, Senator the Hon Nick Sherry, has released for public consultation the Government's exposure draft legislation and explanatory material, on changes to tighten the non-commercial loan rules in Division 7A of the Income Tax Assessment Act 1936, as announced in the 2009-10 Budget.

The exposure draft legislation proposes changes that will prevent shareholders and their associates from avoiding tax on distributions and benefits they receive from private companies.

Broadly, the changes will extend the meaning of payment to include a lease, licence or other right to use an asset (other than a transfer of property which is already covered).

The changes will also make a number of other technical amendments to strengthen the non-commercial loan rules to ensure that they operate in accordance with their original policy intent and that they cannot be circumvented by the use of a corporate limited partnership.

Making a submission

Interested parties are invited to comment on the exposure draft legislation and explanatory material. While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment. Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

Closing date for submissions: Monday, 1 February 2010

Address written submissions to:
General Manager
Business Tax Division
The Treasury
Langton Crescent

Email: SBTR@treasury.gov.au

Fax: (02) 6263 4466

Documents Available:

Acrobat (PDF) documents

 Acrobat (PDF)

Consultation Summary  33.23kb
Exposure Draft - Tightening the Non-Commercial Loan Rules  53.00kb
Explanatory Memorandum - Tightening the Non-Commercial Loan Rules  104.02kb

Microsoft Word (RTF) documents

 Microsoft Word (RTF)

Consultation Summary  821.56kb
Exposure Draft - Tightening the Non-Commercial Loan Rules  257.99kb
Explanatory Memorandum - Tightening the Non-Commercial Loan Rules  426.76kb

Related Items:

Submissions: Exposure Draft - Tightening the Non-Commercial Loan Rules and Explanatory Material - 19/03/2010
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