Re DHDF and FCT – Taxpayer subject to Div 293 tax on super contributions because arrears of income paid pushed him over the $300,000 income threshold (compensation not derived in the arrears years)

Tax Month - November 2016

The AAT has confirmed that a taxpayer was liable to pay the additional 15% tax under Div 293 of the ITAA 1997. Div 293 imposes an extra 15% tax (a total of 30%), on a contributor, in respect of concessional (deductible) superannuation contributions made for the benefit of that individual, if their annual income is above the…

Blank v Commissioner of Taxation – USD 160,033,328, paid in 20 instalments, under a Glencore Profit Participation Plan, was held to be assessable as ‘ordinary income’ (and not a capital gain)

Tax Month - November 2016

On Wed 9 Nov 2016, the High Court unanimously dismissed an appeal from a decision of the Full Court of the Federal Court of Australia [2015] FCAFC 154. The High Court held that a lump sum paid to a taxpayer, in instalments, pursuant, after the termination of his employment, pursuant to to an incentive profit…

Superannuation reform bills – ‘objectives’ of superannuation; the $1.6m cap; lower $25k cap; 5 year ‘catch up’; lower Div 293 threshold to $250k; remove the 10% employment income rule; remove TRIS & ‘anti-detriment’ etc.

Tax Month - November 2016

The 3 following superannuation Bills were introduced into the House of Reps on Wed 9.11.2016, 2 of which have received Royal Assent as noted below. Superannuation (Objective) Bill 2016 (Referred to Committee (10/11/2016): Senate Economics Legislation Committee; Report due 14/02/2017). Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016 (Royal Assent on 29 Nov 2016 as…

What ‘justified trust’ means to the ATO and how they use it to reduce the ‘gap’ between what they do collect and what they should (hoping to encourage voluntary compliance)

Tax Month - November 2016

On 8 November 2016, the ATO put the following article on its website on the (I think) deliberately ambiguous notion of ‘justifiable trust’. It is ambiguous in that it is dressed up as the public having ‘justified trust’ in the ATO (that there is no ‘gap’ between what they do collect and what they ought).…

Re Tomker Pty Ltd (In Liquidation) – the 4 year rule in s105-50 affects the existence of an unpaid GST debt, not just recovery – effect of this in insolvent trading action against a director

Tax Month - November 2016

This case effectively holds that the 4 year limit, on the Commissioner of Taxation recovering unpaid GST, extinguishes the liability itself, rather than just barring recovery. [The 4 year limit is to be found in s105-50(1) of the Taxation Administration Act 1953 First Schedule (‘TAA1’).] The issue arose in the context of a liquidator pursuing…

Working holiday makers (backpackers) – Commissioner clarifies current practices whilst awaiting new laws: generally non-resident as they move around and 32.5% tax applies from $1

Tax Month - November 2016

With a number of media reports circulating in relation to the tax treatment for working holiday makers and the tax that they pay, the ATO has sought to make clear the tax arrangements in place. Tax Commissioner Chris Jordan said the amount of tax that a working holiday maker may pay will depend on their residency status for…

Collective investment vehicle non-resident withholding taxes – Consultation Paper November 2016

Tax Articles

Collective investment vehicle non-resident withholding taxes Consultation Paper November 2016 (copy from Australian Federal Treasury website – consultation) NOTES TO PARTICIPANTS The proposals outlined in this paper have not received Government approval and are obviously not yet law. As a consequence, this paper is merely a guide as to how the proposals might operate. CONTENTS…

Review of non-resident withholding tax for investors in CIV’s – consultation paper released: proposed changes include a 5% uniform WHT for all investors or only those in the ‘Asia Region Fund Passport’ countries.

Tax Month - November 2016

On Thur 3.11.2016, the Government released a consultation paper on collective investment vehicle (CIV) non-resident withholding taxes as announced by the Minister for Financial Services on 4 May 2016 as part of the 2016/17 Federal Budget. The proposals for change centre on a uniform 5% withholding tax rate for investors in Managed Investment Trusts (MIT’s)…

Tas: Taxation and Related Legislation (Miscellaneous Amendments) Bill receives Royal Assent: harmonizing payroll tax for owner-drivers; duty on vesting property and general land tax free threshold for sports clubs

Tax Month - November 2016

The Taxation and Related Legislation (Miscellaneous Amendments) Bill 2016 (Tas) received Royal Assent on 31 October 2016 as Act No 43 of 2016 (after being introduced on 28 August 2016). It had passed all stages without amendment and amends the following Tasmanian Acts: the Payroll Tax Act 2008; the Duties Act 2001; the Land Tax Act 2000;…

CR 2016/84 – Centuria Capital Ltd creates a new stapled share and unit structure by selling key assets to a new unit trust and making an ‘in-specie’ distribution of the units to shareholders to be ‘stapled’

Tax Month - November 2016

On Wed 2.11.2016, the ATO issued Class Ruling: CR 2016/84, relating to an in-specie distribution by Centuria Capital Limited of units in a newly created trust, to be stapled to its shares. It was a fairly ‘plain vanilla’ restructure and the ruling confirms that all the difficult provisions don’t apply and a fairly ‘plain vanilla’…