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Government Bill spares retirement villages from double tax threat

  • February 28, 2018

Government Bill spares retirement villages from double tax threat

On 15 February 2018, the Federal Government introduced new laws into the House of Representatives designed to improve the integrity of the tax consolidation regime.

Following advocacy by the Retirement Living Council’s Tax Committee with Treasury, retirement village operator taxpayers can be assured they won’t be paying tax twice once the law is enacted.

Government had originally proposed that an owner (who is in a tax consolidated group) of a retirement village acquired through a company acquisition would have paid tax on the resident loan liabilities.

These loan liabilities were already taxed when initially received from incoming residents, so this would have amounted to double taxation. 

 Retirement village residence contracts and services contracts are excluded from the new law.

 The Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018 contains various changes to tax laws stemming from the 2013 and subsequent Federal Budgets.