M o r g a n’ s    T a x    M o n t h

– March 2012 Developments –

This is a collection of developments in Australian tax law and practice that occurred in March 2012 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 Laws Amendment (2012 Measures No 1) Bill 2012 introduced: Anti-Anstis measures; removing trading stock exception to CGT as primary code for super funds; phasing out dependant spouse rebate [A1]

*Tax and Superannuation Laws Amendment (2012 Measures No 1) Bill 2012 – withholding GST refunds; refund of excess super contributions; and reporting of Super contributions [A2]

*Tax Laws Amendment (2011 Measures No 9) Bill 2011 is now law [A3]

*Company tax rate reduction from 30 to 29% – small companies from 2012-13 and others from 2013-14 – draft legislation released [A4]

Corporations Amendment (Phoenixing and Other Measures) Bill 2012 – Submissions to Treasury On Exposure Draft giving ASIC discretion to wind up company [A5]

Payment summary deferral re employment termination payments and departing super payments [A6]

Means test private health insurance rebate in 2012-13 year – Bills passed all stages and await Royal Assent [A7]

*Transfer pricing legislation released as exposure draft [A8]

*Major shipping reforms and tax incentives: Bills introduced to commence on 1 July 2012 [A9]

*Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012 – received Royal Assent [A10]

 

Announcements

*Government proposes amendments to Pt IVA that would have retrospective effect back to schemes entered into on or after 1 March 2012 [A11]

*New Charities Commission – start date deferred by 3 months to 1 October 2012 [A12]

*New Assistant Treasurer announced – David Bradbury [A13]

*Investment manager regime: 2nd draft legislation released [A14]

CGT trust cloning – Treasury releases documents under FOI [A15]

Treasury’s Forward Work Program for Tax Measures [A16]

*Treasurer flags possible “carry-back losses regime” with a cap [A17]

Loss carry-back regime and timeframe for reform proposals: ICAA expresses concern [A18]

 

 

CASES AND APPEALS

High Court

*FCT v Bargwanna – High Court finds charitable fund not entitled to be endorsed as a tax exempt entity as the trustees invested its funds in an interest off-set account linked to their own personal borrowings [C1]

 

Full Federal Court

Screen Australia v EME Productions No 1 Pty Ltd – AAT overruled Screen Aust and allowed EME a Producer tax offset affirmed on the basis that its film series was a ‘documentary’ which the Full Court affirmed [C2]

*FCT v Futuris Corporation Limited – Full Court confirms that Pt IVA does not apply to value shifting scheme – no tax benefit [C3]

*Consolidated Media Holdings Limited v FCT – Appeal allowed: consideration for off-market share buy-back was a rebateable dividend [C4]

 

Federal Court

*Australia and New Zealand Banking Group Limited v Konza – Section 264 notices served on Australian bank, about clients of their Vanuatu subsidiaries, held to be valid [C5]

Kolya v Tax Practitioners Board – No error of law in decision to refuse to grant tax agent registration – not a ‘fit and proper’ person [C6]

*Healey v FCT – Trust agreed to buy shares and took a transfer 18 months later just prior to on-selling –No CGT discount as E2 event more specific than A1 and market value cost base (at later E2 time) not established [C7]

*Market Nominees Pty Ltd v FCT – Existing fixed charge over debt has priority over later garnishee notice [C8]

 

Federal Magistrates Court

 

Administrative Appeals Tribunal (AAT)

Re Kalafatis and FCT – AAT hearing on assessability of a capital gain, deferred pending Supreme Court proceedings challenging transfers of land [C9]

*AAT Case [2012] AATA 142 – Employee correct that he had ‘rights’ to options to acquire shares in his employer on starting work, not later on issue of the options (under old provisions) [C10]

AAT Case [2012] AATA 174 – Rental property deductions: Commissioner’s decision partly affirmed [C11]

*Re Munnery and FCT – “Preservation payment” not part of cost base of shares acquired under ESS [C12]

AAT Case [2012] AATA 178 – Supermarket business fails to prove assessments for 10 years excessive [C13]

Re Sobel Investments Pty Ltd and FCT – Expenses in buying, maintaining and selling properties not established in response to default assessments [C14]

 

Other Courts

*DCT v Karas and Ors – Taxpayers obtain variation of freezing orders to allow payment of legal fees [C15]

Milne v R – Appeal against conviction and jail sentence for tax fraud dismissed [C16]

*Hansen Yuncken Pty Ltd v Ian James Ericson trading as Flea’s Concreting & Anor – Garnishee notice only gives charge over debt (while it exists) which does not follow the funds when paid into court [C17]

 

Appeals

FCT v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund – breach of enforceable undertaking to pay amount to member [C18]

 

 

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

*Newton case – Workers were employees for SGC purposes [R1]

*Leighton v FCT – ATO accepts that it was the non-resident companies who derived income from the sale of the shares held as trading stock (and the nominee held the proceeds from that sale, not income) [R2]

 

Rulings

*TR 2012/D1 – Meaning of “income of the trust estate” in s97(1)(a) ITAA36 [R3]

 

Determinations

*TD 2012/1 – Pt IVA and investment loan interest payment arrangement – ATO tries to apply Hart to two loans [R4]

*TD 2012/3-7 – FBT rates, thresholds and other amounts for 2012-13 [R5]

TD 2012/D3 – New Zealand citizens with Special Category Visas and “temporary resident” [R6]

 

Class Rulings

CR 2012/15-17 – Return of capital; AFP personnel; demerger [R7]

Rulings CR 2012/18-21 – Incentive plan; GST; health professionals, early retirement scheme [R8]

 

ATO Interpretive Decisions (ATOIDs)

 

Practice Statements

 

Tax Alerts

TA 2012/1 – Non-disclosure of foreign source income [R9]

 

Other Commissioner news

FBT return lodgment extension to 25 June 2012 (but payments are still due 28 May) [R10]

*GIC and SIC rates released for April – June 2012 quarter (11.37% & 7.37%) [R11]

*Project Wickenby results update released by ATO (as at 31.1.12) [R12]

ATO releases its annual prosecution figures 2011 [R13]

*Australian Business Register (ABR) – now amalgamated with state business names registers and also upgraded for tax agents to make applications [R14]

 

 

GST DEVELOPMENTS

Legislation (GST)

*Indirect Tax Laws Amendment (Assessment) Bill 2012 – self-assessment for GST – passes all stages [G1]

 

Cases (GST)

 

Rulings & Other things (GST)

*GSTD 2012/3 – Adjustments for M&A-related acquisitions [G2]

GST classification of food and beverage items – Draft Practice Statement [G3]

*GSTR 2006/5 Addendum – meaning of Commonwealth, State or Territory may include local government [G4]

*PS LA 2012/1 (GA) – GST and bad debt adjustments for an incapacitated entity on paying a dividend to creditors of less than 100 cents in the dollar [G5]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation (Super)

Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 – Parliamentary reporting date extended [Su1]

*Superannuation – intra-fund consolidation on inactive accounts under $1,000 – draft legislation released [Su2]

*Superannuation Guarantee (Administration) Amendment Act 2012 – gets Royal Assent [Su3]

 

Cases (Super)

*Re Tran and FCT – Excess contributions tax: no “special circumstances” [Su4]

*Re Mason and FCT – SMSF payment in breach of release conditions – and taxed at ordinary rates [Su5]

*Re Peaker and FCT – Excess super contributions tax affirmed; no special circumstances [Su6]

*Re Leckie and FCT – Super excess contributions tax affirmed; no “special circumstances” [Su7]

*Re Naude and FCT – Excess contributions tax upheld: no discretion to reallocate [Su8]

*Re Chantrell and FCT – Super excess contributions tax – “late” electronic funds transfer not a “special circumstance” [Su9]

Re Baker and FCT – Residency: member of a superannuation scheme [Su10]

 

Rulings (Super)

 

Announcements etc (Super)

*MySuper Bills: Parliamentary Committee report released [Su11]

 

 

CARBON TAX.

 

 

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

Mining tax and related Bills: Senate Committee recommends Bills be passed – but Coalition Senators publish a dissenting report [M1]

*Mining tax and related Bills await Royal Assent [M2]

Submission to Treasury on Misc amendments to Mining Tax Laws – by Mining Council of Australia [M3]

 

 

BOARD OF TAXATION

 

 

INSPECTOR-GENERAL OF TAXATION

*IGoT’s report into ATO’s administration of Class Rulings released – ATO agrees with 6 of the 8 recommendations

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

 

 

STATE TAXES

Legislation (State)

State Revenue Legislation Amendment Bill 2012 – introduced in the NSW Legislative Assembly [St1]

 

Cases (State)

*Chief Comr of State Revenue v Centro (CPL) Limited – Taxpayer denied leave to appeal to High Court – 300 year lease can be disregarded for dutiable value of reversion [St2]

ALH Group Property Holdings Pty Ltd v Chief Comr of State Revenue – NSW stamp duty: deed effected novation of contract – taxpayer wins High Court appeal [St3]

Lo v Chief Comr of State Revenue (RD) – NSW land tax: principal place of residence land tax exemption – taxpayer loses appeal [St4]

Conder Tower Pty Ltd & Lend Lease Development Pty Ltd cases – Vic stamp duty: additional amounts “consideration for” dutiable transaction [St5]

 

Rulings (State)

WA stamp duty: home concessions; refunds, etc – Circular issued [St6]

 

Other (State)

 

 

OTHER DEVELOPMENTS

*Commonwealth Ombudsman Annual Report 2010-11 tabled – 43% increase in complaints about the ATO – due largely to botched change program [O1]

*FoFA start date to be “voluntary” until 1 July 2013 – Minister announces [O2]

*Unexplained wealth and tax laws: Law Enforcement Committee report [O3]

*UK Budget 2012-13 [O4]

 

 

THE END

 

*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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