Monthly Archives: August 2016

FCT v Donoghue – use of privileged documents in raising assessments held to not be conscious maladministration causing jurisdictional error for the relevant ‘conclusively’ provision: s175

On 29 July 2016, the ATO issued Decision Impact Statement on the decision in FCT v Donoghue [2015] FCAFC 183, which reversed the decisions of Logan J in Donoghue v FCT [2015] FCA 235 and Donoghue v FCT [2015] FCA 291. This statement outlines the ATO’s response to this case, which involved the ATO using privileged documents, from a third party, without the use of…

Phoenix Taskforce executed 6 search warrants in the Gold Coast in the course of investigating illegally leaving tax debts behind and starting again in a new vehicle

On 29 July the ATO said that six search warrants were executed yesterday (Thurs 28 July 2016) as part of a cross-agency investigation into alleged illegal ‘phoenix’ activity on the Gold Coast. The operation stems from the work of the members of the multi-agency Phoenix Taskforce who are collaborating to help stamp out illegal phoenix…

Re Rowntree and FCT – taxpayer appeals AAT decision assessing him on $3m of $4m loans under Div 7A and 50% shortfall penalties

A taxpayer has appealed to the Federal Court against the decision of the AAT in Re Rowntree and FCT [2016] AATA 420. The matter was complex but resulted in alleged loans of over $4m being made by various companies (directly or indirectly) to a taxpayer. The AAT affirmed the Commissioner’s objection decision, that$3m of the payments were…

CR 2016/55 – Searoad (Queenscliff – Sorrento) Ferries Early Retirement Scheme is an ‘early retirement scheme’ under s83-170

On Wed 27.7.2016, the ATO issued the Class Ruling CR 2016/55 (Searoad Ferries Early Retirement Scheme). It applies from 27 July 2016 to 30 September 2016. [LTN 143, 27/7/16] Extract from Class Ruling Scheme 9. The Company operates the Sorrento-Queenscliff vehicle and passenger ferry service. In 2011, the Company began to fundamentally change its business from being a public transport service…

TD 2016/15 – airport lounge membership fees for employees are deductible (and not entertainment or a recreational club)

On Wed 27.7.2016, the ATO issued a TD 2016/15 saying that  states that an employer taxpayer is entitled to a deduction under s 8-1 of the ITAA 1997 for annual fees incurred on an airport lounge membership for use by its employees, where that membership is provided because of the employment relationship. In coming to this conclusion…

TD 2016/14 – A general deduction is allowed for gifts to clients of a business (query whether it be aimed at getting future income)

On Wed 27.7.2016, the ATO released TD 2016/14 stating that a taxpayer who carries on a business is entitled to a general deduction under s8-1 of the ITAA 1997 for an outgoing incurred on a gift made to a former or current client if the gift is characterised as being made for the purpose of producing…

Murray Goulburn milk supply support package – various tax implications

Murray Goulburn have announced they have paid their suppliers $5.49 per kg of milk solid (kgms) supplied for the 2016 financial year. This means milk suppliers may have been overpaid by up to $0.74 per kgms supplied in the 2016 financial year under the milk supply support package. Suppliers have two options to ‘repay’ any amounts…

Shord v FCT – taxpayer who worked overseas appeals Fed Crt decision that he was resident, not entitled to s23AG exemption and not entitled to foreign tax credits

The taxpayer in Shord v FCT [2016] FCA 761, has appealed that decision to the Full Federal Court. In the earlier decision, the Federal Court dismissed the taxpayer’s appeal against an AAT decision (Re Shord and FCT [2015] AATA 355) which had held that, during the relevant periods, he was a resident of Australia, was not engaged in…

WA land tax: Caratti and Comr of State Revenue – private residential property exemption refused to an executor as the beneficiary did not have the necessary ‘right under the will’ to live there

An individual has been unsuccessful before the WA State Administrative Tribunal in seeking the private residential property land tax exemption under either ss 22 or 23A of the Land Tax Assessment Act 2002 (WA). The taxpayer’s wife, who was the owner of the subject property, passed away in 2012. Since then, the taxpayer and one of their…

Re SHTX and Tax Practitioners Board – Board’s decision to terminate an agent’s registration for 3 years replaced with a caution, remedial education and practice restrictions until education is completed

The AAT has decided to replace the Tax Practitioner Board’s decision to terminate the tax agent registration of an applicant with a written caution and a specific education course requirement (among other things) after taking into account the history of the applicant’s personal and health problems. The AAT heard the applicant’s small tax practice in…