TD 2018/D6 – the ‘debt/equity’ rules operate on the ‘arm’s length conditions’ deemed to exist, for the purpose of determining if a ‘transfer pricing benefit’ arises under Subdivision 815-B

On Wed 31 Oct 2018, the ATO issued Draft Determination TD 2018/D6, which considers the interaction between the debt/equity rules and Australia’s transfer pricing rules. The ATO’s preliminary view is that the debt/equity rules (in Div 974 of the ITAA97) cannot limit the operation of the transfer pricing rules( in Subdiv 815-B). The transfer pricing…

TD 2018/15 – the CGT consequences of granting an easement, profit à prendre or licence over an asset – CGT event D1 (not A1) – limited cost base, no 50% discount, no main residence exemption, no pre-CGT exemption

On Wed 31.10.2018, the ATO issued Taxation Determination TD 2018/15 on the CGT consequences of granting an easement, profit à prendre or licence over an asset. In the Commissioner’s view, CGT-event D1 happens (under s104-35 of the ITAA97) when the right is created, rather than it being a s104-10 CGT-event A1 for a partial disposal…

TR 2018/7 – Employee Remuneration Trust (non-Div 83A ESS interests) – employer deduction on contribution; employee tax on benefits; tax effect on trustee; FBT; Div 7A deemed dividends; 13-month pre-payment rule

On Wed 31.10.2018, the ATO issued Taxation Ruling TR 2018/7 on employee remuneration trust (ERT) arrangements that operate outside the employee share scheme rules in Div 83A of ITAA97 (which includes beneficial interests in employer shares held through trusts). The Ruling finalises draft Taxation Ruling TR 2017/D5. This ruling is about arrangements established to facilitate the provision of…

Comprehensive Income Product for Retirement (CIPRs) – start date deferred to 1 July 2022 and account balance threshold increased from $50k to $100k

In a media released Wed 31.10.2018, the Assistant Treasurer, Stuart Robert, said the Government will defer, to 1 July 2022, the start date for superannuation funds to offer a Comprehensive Income Product for Retirement (CIPR). In addition, the Government will increase the threshold superannuation balance for offering a CIPR from $50,000 to $100,000. INNOVATIVE INCOME STREAMS: Mr Robert…

Minister announces changes to the superannuation law – relating to the way ‘market-linked pensions’ are treated under the $1.6m ‘transfer balance cap’ rules & keeping rolled over death benefits tax free

On 30 Oct 2018, the Government has announced that it will amend the superannuation tax law to address some minor, but important issues, as part of the ongoing implementation of the July 2017 super reforms. In a speech to the Alliance for a Fairer Retirement System, the Assistant Treasurer, Stuart Robert, said the new measures will: Market-linked…

Australian Financial Complaints Authority (AFCA) opening for business as of Thursday 1 November 2018 – replacing the Financial Ombudsman Service (FOS) and Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT)

The Australian Financial Complaints Authority (AFCA) opening for business as of Thursday 1 November 2018. This is the new one-stop shop for financial dispute resolution, delivering free, fast and binding services for all financial complaints, whether they be related to banks, credit providers, insurance companies or superannuation funds. AFCA will replace the Financial Ombudsman Service…

ASIC disqualifies two separate Queensland SMSF auditors – breach of ‘independence requirements’ auditing their own funds, the fund of an immediate family member and the fund of a close family member

On Tuesday 30 October 2018, ASIC announced that it had disqualified two separate self-managed superannuation funds (SMSF) auditors: John Gilliland and Douglas Coghlan, both of Queensland, for breaching independence requirements. ASIC found both Mr Gilliland and Mr Coghlan had separately breached auditor independence requirements in auditing their own funds, the fund of an immediate family member…

The Tax Practitioners Board’s 2017/18 Annual Report – revealing growth in total registrations since inception and overall complaints numbers and outcomes

The Tax Practitioners Board (TPB) released its 2017/18 Annual Report under s60–130(1) of the Tax AgentServices Act 2009. Amongst the things it reports on, are the following. The TPB has been in operation, 8 years (since 1 March, 2018). By 30 June 2018 the registered tax practitioner population had tripled to 77,749 (since the beginning),…

UK Budget 2018: BEPS and other corporate tax measures – PE changes, Hybrid Mismatches, Diverted Profits Tax, Non-UK companies with UK property businesses and Hybrid Capital Instruments

On 29 October 2018, the UK Chancellor of the Exchequer, Philip Hammond, handed down the 2018 UK Budget and announced a range of tax measures. While the headline measure was the proposed 2% digital services tax on large digital firms from April 2020 (see related Tax Technical Article), the UK Government also announced a range of corporate…