On 21 June 2007, the Tax Laws Amendment (2007 Measures No. 4) Bill 2007 and related bills were introduced into Parliament. These bills contain amendments relating to family trust elections, abolition of foreign loss and foreign tax credit quarantining, the ultimate beneficiary reporting rules and other measures. 
 
The Minister for Revenue and Assistant Treasurer's press release on these Bills is here.  
 
The proposed measures include:

• Amendments to the trust loss provisions to allow family trust elections to be varied or revoked in a broader range of circumstances as well as expanding the definition of family to include lineal descendants. Distributions to former spouses, widows/widowers and former step-children will be exempt from family trust distribution tax.  
   
  Members will recall the Institute's advocacy campaign on family trust elections, in particular, the submission lodged on 16 November 2004 - a copy of which is available here. The above changes, which were announced in last year's Federal Budget (see the Treasurer's press release No. 039 on 9 May 2006), only reflect a small part of our submission. We will continue to work on the remainder to achieve desired outcome.
 
 

• Amending the ultimate beneficiary reporting rules so that trustees of closely held trusts will no longer be required to trace income through interposed trusts to the ultimate beneficiary and report those details to the ATO. These measures were also announced in last year's Federal Budget
 
 
The Institute had been involved in confidential consultation with Treasury in the design of the proposed measures relating to the ultimate beneficiary reporting rules.  
 

• Removing foreign loss and foreign tax credit quarantining and streamline the remaining foreign tax credit rules - new simplified foreign income tax offset rules will replace the existing rules. The Bill also contains transitional rules dealing with existing foreign losses and credits as well as a mechanism to provide relief from economic double taxation arising from transfer pricing adjustments. These amendments give effect to the government's announcement in the 2005/06 Federal Budget.
 
 
The Institute is pleased to see these amendments finally being introduced, following a series of confidential consultation with Treasury spanning over two years. Whilst these amendments provide some improvements to the foreign loss and foreign tax credit measures, there are aspects of these amendments that are not so favourable. For example, the ongoing ability to carry forward excess foreign tax credits has been removed. However, at least partly due to our lobbying efforts, a transitional rule has been included to allow the carrying forward of excess foreign tax pertaining to the five years prior to the commencement of the new rules.

• Capital gains tax roll-over for membership interests in companies limited by guarantee that are also medical defence organisations.
 

• Allowing superannuation funds to invest in limited recourse instalment warrants. This follows from the Minister's announcement on 22 May 2007.