M o r g a n’ s   T a x   M o n t h

– February 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in February 2014 and which aims at being of relevance to tax lawyers.*

F John Morgan
A member of the Victorian Bar (www.FJMtax.com)

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Tax and Superannuation Laws Amendment (2014 Measures No 1) Bill 2014 introduced – medical expense offset phase out; super penalties; more DGRs [1]

Farm Management Deposits scheme amendments: draft legislation released [2]

Senate hearing on R&D Bill – transcript of hearing and submissions released [3]

Tax-free bonus payments for long-term unemployed staying in work: Bill introduced [4]

 

Announcements

*Australia/Korea Free Trade Agreement: text released ahead of signature [5]

*Third party reporting regime and compliance: Treasury discussion paper [6]

*OECD releases new single global standard for automatic exchange of tax information – some new domestic law will be necessary [7]

G20 progress on global tax plan: automatic information exchange will start by the end of 2015; Anti-BEPS measures will progress [8]

*Australia and US sign FATCA agreement in substance [9]

*Cost of financial advice should be tax deductible: Institute of Public Accountants [10]

 

 

CASES AND APPEALS

High Court

*Milne v The Queen – Wickenby case: taxpayer wins appeal against conviction for money laundering (but dishonest gain offence remains) [11]

*SCCASP Holdings as trustee for the H&R Super Fund v FCT – High Court refused taxpayers leave to appeal decision that capital gain was ‘special income’ [12]

*FCT v Fabig – High Court refused taxpayer leave to appeal decision of Full Federal Court that CGT ‘scrip for scrip’ relief was not available to her [13]

 

Full Federal Court

 

Federal Court

*FCT v Barossa Vines Ltd – ‘Promoter Penalties’ imposed for MIS “materially different” from product ruling [14]

*Task Technology Pty Ltd v FCT – Software licensing fees were royalties [15]

*Nelson v FCT – Court confirms no business of primary production being carried on – activities preparatory [16]

*Blank v FCT – Amount received for termination of right to participate in profit plan assessable as income [17]

*Australian Building Systems Pty Ltd v FCT – Liquidators not subject to retention and payment obligations from property proceeds [18]

Haritos v FCT – Appeal from $20m default assessment – lack of procedural fairness grounds “incompetent” (really seeking further merits review) [19]

 

Federal Circuit Court

 

Administrative Appeals Tribunal (AAT)

 

Other Courts & Tribunals.

Gray v FCT – No fine or conviction recorded for non-lodgment of returns [20]

 

Appeals

*Palermo v Palermo [No 2] – the losing brother appeals decision that businesses were not carried on in partnership [21]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

*Parliamentary Trustee of the Parliamentary Contributory Superannuation Fund v FCT – superannuation contributions surcharge tax is constitutionally valid for State MPs [22]

 

Rulings

 

Determinations

*TD 2014/1 – Dividend access share arrangement a likely Pt IVA scheme [23]

 

Class Rulings & Product Rulings

CR 2014/15 – Mobile phone receipt for donations to Vision Australia Ltd [244]

CR 2014/16-21 – Incentive plan; early retirement schemes; FITO; payment agreement; training grant [25]

CR 2014/22-23 – ANZ Capital notes; WA Government support scheme [26]

PR 2014/2-3 – Portion of Annuity of ‘deductible amount’ assessable; Sandalwood Project – Commissioner will allow ‘non-commercial losses’ [27]

 

ATO Interpretive Decisions (ATOIDs)

CGT: discharge of debt and changed method of accounting: ATO ID [28]

 

Practice Statements

PS LA 2014/1 – Penalties for failure to comply with Ancillary Fund Guidelines [29]

 

Tax Alerts

Other Commissioner news or statements

ATO encourages tax agents lodging by paper to lodge electronically [30]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)

*Refunding excess GST – changes from previous lapsed Bill: draft legislation released (new Division 142) [31]

 

Cases (GST)

Re Cartesian Capital Pty Ltd and FCT – penalty for claiming input tax credits without tax invoices – mostly affirmed [32]

*Re Swanbat Pty Ltd and FCT – Commissioner discontinues his appeal the decision setting aside his assessment under s105-55 of the TAA1 [33]

 

Rulings & Other things (GST)

*GSTD 2014/2 – GST: consideration paid for the call option is not included in the cost of land under the margin scheme provision in s75-10(2) [34]

*Interment fees in Victorian cemeteries ruled GST-free [35]

*MT 2010/1 Addendum to Ruling GST refund restrictions – for 2012 legislation introducing ‘self-assessment’ provisions [36]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)

Tax and Superannuation Laws Amendment (2014 Measures No 1) Bill 2014 introduced – penalties for early release promoters; SMSF trustee directions and penalties [37]

Superannuation Div 293 tax and defined benefit contributions: Regs amended [38]

*Superannuation rates and thresholds increased for 2014-15 [39]

Actuaries’ submission that they ought to be exempt from regulation under the Tax Agent Services Act in relation to certain superannuation related services [40]

 

Cases (Super)

Liwszyc v FCT – Excess super contributions tax: late BPay not “special circumstances” [41]

 

Rulings & Other things (Super)

ASFA warns that legislation mandating the transfer of larger (inactive) balances to the Tax Office may leave members without life insurance [42]

ASFA submissions: SMSF borrowings; s 290-170 deduction notice; fund expenses [43]

SMSF auditor annual statements – first ones were issued on 1 February 2014 [44]

SMSF investment and growth trends from younger generations: SPAA study [45]

Penalty for failing SMSF residency test too severe, says leading practitioner [46]

Members travelling overseas can’t contribute to their SMSFs under current legislation: Assistant Treasurer asked whether he’ll review that at SPAA Q&A [47]

SMSF borrowing arrangements: SPAA proposes best practice guide [48]

SMSF trustees should rectify contraventions as soon as possible, says ATO [49]

SMSF emerging issues; auditors; support for SMSF sector: ATO speech at SPAA Conference [50]

ASIC says minimum account balances will not be prescribed for financial advice in relation to establishing a SMSF [51]

ASIC focus areas for 2014 include – SMSF one-stop shops and misleading advertising [52]

Tax Office SMSF News: contributions reporting; pensions; etc [53]

 

CARBON TAX & EMISSIONS REDUCTION FUND

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

 

AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR

ACNC will accept financial reports submitted to State and Territory governments [54]

 

 

BOARD OF TAXATION

 

 

EXTERNAL SUPERVISORS – IGoT; OMBUDSMAN, JCPAA & ANAO

IGT reports released on refund delays, ATO data matching, and compliance risk assessments [55]

Tax Inspector-General calls for submissions for new work program [56]

Australian National Audit Office report finds improvements needed in ATO complaints handling processes [57]

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

FPA prepares financial planners for Tax Agent Services Act compliance [58]

Tax practitioner PI insurance will be their focus this year: Tax Practitioners Board Chair [59]

 

 

STATE TAXES

Legislation & Announcements (State)

Vic: State Taxation Legislation Amendment Bill introduced: congestion levy, gaming arrangements, changes to Fire Services Levy [60]

 

Cases (State)

NSW stamp duty: Bondi Beachside Pty Ltd & Ors v Chief Comr of State Revenue – taxpayers win appeal against additional mortgage duty assessment [61]

NSW land tax: Haddad v Chief Comr of State Revenue – principal place of residence exemption – taxpayer loses appeal [62]

NSW land tax: Frank Zakis Pty Ltd atf Frank Zakis Family Trust v Chief Comr for State Revenue – trustee was “owner” on taxing date [63]

 

Rulings & Other (State)

 

OTHER DEVELOPMENTS

The Reserve Bank Board decided to leave the cash rate unchanged at 2.5% [64]

Time to assess Age Pension eligibility – Financial Services Commission [65]

Financial Planning Association says proposed FoFA changes to safe harbor requirements for duty to act in best interests of investors can be trimmed without harm [66]

Financial Planning Association (FPA) welcomes FoFA changes but says they could be improved [67]

BCA calls for comprehensive tax reform [68]

 

 

 

THE END
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NB: I have gathered these articles from various sources for the purposes of study and teaching and I have acknowledged the sources. None of this publication should reproduced in breach of copyright belonging to the acknowledged source. The headings to the articles are often mine (and shouldn’t necessarily be attributed to the publisher).

Source Abbreviations: ‘EDTN’ = Electronic Daily Tax News, published by CCH; ‘LTN’ = Latest Tax News published by Thomsons; and ‘Taxvine’ is the weekly publication by the Tax Institute of Australia; Greenfields = Greenfields Financial Services; TaxBar = Melbourne Tax Bar Association Newsletter at www.vicbar.com.au / Members / Bar Associations / Tax

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