Monthly Archives: October 2016

NSW: duty and land tax surcharges on ‘foreign persons’ – ruling adopting the extensions to the definition of ‘foreign person’ set out in the Foreign Acquistions and Takeovers Act 1975

The 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the purchase of residential real estate by foreign persons from 21 June 2016. The surcharge is in addition to the duty payable on the purchase of residential property. Foreign persons will no longer be entitled to the 12 month deferral for the…

Treasury Laws Amendment (Income Tax Relief) Bill 2016 – increasing the threshold for the 32.5% rate to $87,000 – Senate Committee recommends that it be passed and it is ultimately enacted

The Treasury Laws Amendment (Income Tax Relief) Bill 2016 proposes to amend the Income Tax Rates Act 1986 to increase the third personal income tax threshold so that the rate of tax payable on taxable incomes from $80,001 to $87,000 for individuals is 32.5%. On 10.10.16, the Bill passed the House of Reps without amendment…

Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 (phased company tax rate reduction) – senate committee recommends passing it but Labor dissent recommends limiting reduction to $2m turnover

On 10.10.16, the Senate Economics Legislation Committee tabled its report recommending that the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 be passed. However, in a dissenting report, Labor Senators proposed the following amendments to the Bill: only reduce the company tax rate to 27.5% for businesses with a turnover of less than $2m (the…

Tas: Duties Amendment (Motor Vehicle Industry Red Tape Reduction) Bill 2016 receives Royal Assent – broadening the permitted use of ‘demonstrator’ vehicles under the exemption

The Duties Amendment (Motor Vehicle Industry Red Tape Reduction) Bill 2016 (Tas) on 7 October 2016 received Royal Assent as Act No 34 of 2016. The Bill was introduced on 31 May 2016 and had passed all stages without amendment. The Bill amends the Duties Act 2001 (Tas) to broaden the permitted use of demonstrator vehicles under the duty…

Re ZDCW and FCT – Tax debt release refused because of non-essential assets, taxpayer mortgages given to his wife after first application and wife withdrawing her offer to contribute in the second application

A taxpayer has been unsuccessful before the AAT in seeking to be released from his tax debts under s 340-5 of Sch 1 to the TAA. The facts are summarized below and are set out in greater detail below in the extract from the Tribunal’s reasons. In 2006, the taxpayer was diagnosed with Parkinson’s disease and was…

Financial Synergy Holdings Pty Ltd v FCT – High Court refuses Commissioner leave to appeal – time for determining the market value of acquiring a pre-CGT asset remains its actual not deemed (pre-CGT) time

The High Court has refused the Commissioner special leave to appeal against the decision in Financial Synergy Holdings Pty Ltd v FCT [2016] FCAFC 31. The Full Federal Court had unanimously allowed the taxpayer’s appeal and held that for the purposes of determining the “allocable cost amount” (or cost base) of an asset that came…

Debt- Equity rules – draft legislation to implement the Board of Taxation’s recommendations to aggregate schemes when they are interdependent and designed to operate together (giving integrity rules more certainty)

On 10 October 2016, the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP released Exposure Draft legislation and explanatory material to provide greater certainty in relation to integrity rules regarding the taxation of debt and equity. Australia’s tax rules classify financing arrangements as debt (with deductible interest) or equity according to their…

Re Edwards and FCT – Lump sum payment for arrears in workers’ compensation paid to a policeman assessable in year of receipt but eligible for smoothing tax offset

The AAT has confirmed that a lump sum payment made by Comcare to a former Australian Federal Police officer for arrears of workers’ compensation was assessable in its year of receipt, and not over the income years to which it related. In doing so the AAT confirmed that the “appropriate” accounting method for the taxpayer,…

DCT v Acimovic – Commissioner succeeds in application for rectification of consent order for debt owed of $612,103

A Deputy Commissioner has been successful, before the District Court of Queensland, in rectifying a consent order previously made by a registrar  in respect of a $600,000 debt owed by a taxpayer under s666 of the Uniform Civil Procedure Rules (Qld) (“the Rules”). The Court held that the consent order should never have been made…

PR 2016/8 – Investment in Luxembourg umbrella managed fund investing in Australian companies

The ATO on Wed 5.10.2016, released Product Ruling PR 2016/8 (Tax consequences of investing in Wellington Management Funds (Luxembourg)). It applies to Australian residents who are accepted to participate in the scheme on or after 1 July 2016 and on or before 30 June 2019. [LTN 192, 5/10/16] Extract from ruling Ruling Subject to paragraph 3 of this Product…