Commonwealth of Australia Explanatory Memoranda

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TAX LAWS AMENDMENT (2006 MEASURES NO. 4) BILL 2006

                                2004-2005-2006



     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA



                                   SENATE




       TAX LAWS AMENDMENT (2006 MEASURES No. 4) BILL 2006




          SUPPLEMENTARY EXPLANATORY MEMORANDUM

               Amendment to be moved on behalf of the Government



                          (Circulated by authority of the
                      Treasurer, the Hon Peter Costello MP)




Explanation of Amendment 1

         1.1       The amendment provides for a cost base of market value for
         certain assets that would not have been subject to Australia's capital gains
         tax regime prior to this measure being introduced. It ensures that all such
         assets held by foreign residents on 10 May 2005, and which are
         subsequently subject to Australia's capital gains tax regime, receive a cost
         base of market value as at that date.

         1.2        The amendment has no financial impact. [Amendment 1]