Monthly Archives: April 2016

Innovation Agenda: Easier access to company losses – draft legislation adding a ‘similar’ business test to the ‘same business test’ to satisfy a ‘business continuity test’

On 6 April 2016, the Government has released a draft of the Tax and Superannuation Laws Amendment (2016 National Innovation and Science Agenda) Bill 2016, to implement its December 2015 Innovation Agenda measure to allow increased access to company tax losses. On 7 December 2015, the Government announced a package of measures designed to incentivise and reward innovation as part of its…

PCG 2016/5 – SMSFs and arm’s length loan terms for related party Limited Recourse Borrowing Arrangements: ATO auditing “safe harbour” terms

The Tax Office on Wed 6.4.2016, issued Practical Compliance Guideline PCG 2016/5 setting out the Commissioner’s “safe harbour” terms on which SMSF trustees may structure related-party LRBAs consistent with an arm’s length dealing. The ATO generally takes the view that a SMSF may derive non-arm’s length income (taxable at 47%) if the terms of a LRBA are not consistent with…

TR 2016/D1 – Commercial websites – tax treatment: s8-1 general deductions; capital allowances (inc. ‘in-house software’); small business entities; capital gains tax; ‘black hole’ write-offs

This Draft Ruling, issued on Wed 6.4.2016, sets out the deductibility of expenditure incurred in acquiring, developing, maintaining, or modifying a website for use in carry on a business. It covers expenditure in acquiring, developing, maintaining and modifying a website. The Draft also covers the deductibility of content migration and social media accounts. Generally, it…

Fischer & Ors v Nemeske Pty Ltd & Ors – distribution of capital from asset revaluation reserve was a valid exercise of the trustee’s discretion and recoverable, including in law as a ‘debt’

On 6 April 2016, the High Court, by majority, dismissed an appeal from the Court of Appeal of the Supreme Court of New South Wales. The High Court held that a trustee had validly exercised a power to “advance” and “apply” trust capital or income by creating a debt reflecting the value of shares held by…

SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd – NSW Supreme Court ‘rectifies’ contract to make the price ‘plus GST’ despite contract saying it was ‘inclusive of GST’

In SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 362 the Supreme Court found that a Contract of Sale should be rectified to reflect the common intention of the parties that the purchase price was to be exclusive of GST. The decision is another example of the difficulties that can arise where real estate is…

NSW land tax: Metricon Qld Pty Limited v Chief Comr of State Revenue (No 2) – exempt because the dominant [current] use was primary production, despite ultimate use would be property development

A taxpayer has been successful before the Supreme Court of NSW in having land tax assessments for the 5 land tax years set aside on the basis that the primary production use of the lands in question was “the dominant use” of the lands, except for one parcel in one land tax year. The taxpayer…

DCT v Rablin; DCT v Shaw – summary judgment given for directors’ penalties of $1.7m

The Qld Supreme Court has granted a Deputy Commissioner’s application for summary judgment for directors’ penalties totalling almost $1.7m against 2 directors of a company. The amounts claimed by the Deputy Commissioner were for penalties imposed on the directors in respect of amounts withheld by the company in respect of PAYG tax from payments made…

The ‘Panamanian law firm’ leaks – ATO confirms it has received a large number of documents, identifying over 800 individual taxpayers, who they are now investigating

On Monday 4 April 2016, the ATO released a statement confirming that it has ‘recently’ received a ‘data’ in relation to a a ‘Panamanian law firm’ which has come from ‘a release of data by transparency or media organisations in Australia and overseas’. They do not identify the actual ‘organisations’ who released this data or what it…