Shareholder tax burden on capital gains eases from today: Nick Sherry

SHAREHOLDERS will find it easier to defer capital gains tax during company takeovers and mergers from today.

THE Australian government today changed the tax law to make it easier for shareholders to defer capital gains tax during company takeovers and mergers, Assistant Treasurer Nick Sherry said.

The new law better aligns the capital gains tax for "scrip for scrip rollover" requirements, with the Corporations Act 2001 to make it easier for takeovers and mergers regulated by the Act to qualify for the rollover, he said.

The scrip for scrip rollover is an important measure that ensures capital gains tax is not an obstacle to takeovers or mergers, and allows investors who exchange shares in one company for shares in another to defer the realisation of any capital gains from the trade, Mr Sherry said in a statement.

But as the law now stands, the scrip for scrip rollover might not be available to shareholders even though the takeover or merger has been approved under the Corporations Act 2001, he said.

The change, to be effective from today, will increase the scope of scrip for scrip rollover and allow a simpler and better financial transition for shareholders, he said.