Daily Archives: February 22, 2017

TD 2013/1 – Interest is deductible on a full recourse loan used to pay the interest on another capital protected borrowing [39]

This TD, issued on Wed 23.1.2013, states that where a taxpayer enters into a limited recourse loan (investment loan) which is made under a capital protected borrowing for the purposes of Div 247 of the ITAA 1997, and a full recourse loan (interest loan) is entered into solely to fund an amount of prepaid interest on…

TR 2013/1 – Australia’s tax treaties: meaning of “employer” for short-term visits [38]

This Ruling, issued on Wed 30.1.2013, provides the Commissioner’s view on the meaning of “employer” in the general exclusion provision provided under the Income from Employment Article (or equivalent), of Australia’s tax treaties (short-term visit exception). It also outlines the approach taken in determining who the employer is for the purposes of the short-term visit…

Re Waldeck and FCT – All penalties remitted for claiming PAYG withholding credits – “based on the facts in this particular case…” [37]

The ATO on Fri 18.1.2013, released a Decision Impact Statement on the following case: AAT Case [2012] AATA 848, Re Waldeck and FCT – In this case, the AAT remitted in full a 25% penalty imposed on a taxpayer for claiming PAYG withholding credits in his tax returns which were not withheld by his employer…

FCT v Visy Industries USA Pty Ltd – conclusion that the indemnity fee was deductible was ‘open on the facts…’ [36]

The ATO on Fri 18.1.2013, released a Decision Impact Statement on the following case: FCT v Visy Industries USA Pty Ltd [2012] FCAFC 106 – In this case, the Full Federal Court dismissed the Commissioner’s appeal and confirmed that the taxpayer was entitled to a deduction under s 8-1 of the ITAA 1997 for an “indemnity…

*Mills v FCT – DIS on High Court’s decision that s177EA (Part IVA) doesn’t apply to deny franking credits on PEARLS issued for Tier 1 Capital [35]

The ATO on Mon 21.1.2013, issued a Decision Impact Statement on the High Court’s decision in Mills v FCT [2012] HCA 51. In that decision, the High Court unanimously allowed the taxpayer’s appeal and set aside the Commissioner’s determination that no franking credit was to arise in respect of distributions made on certain securities issued…

*Taxpayer seeks leave to appeal Binetter v DCT to the High Court – re: validity of a s264 notice [34]

The taxpayer has applied for special leave to appeal to the High Court against the Full Federal Court decision in Binetter v DCT [2012] FCAFC 126. The Full Federal Court had dismissed the taxpayer’s appeal from part of the judgment of Robertson J in Binetter v DCT (No 3) [2012] FCA 704 concerning the validity of…

*Re Gem Plant Hire Pty Ltd ATF The Condello Family Trust and FCT – Commissioner appeals decision to allow fuel tax credits [33]

The Commissioner has lodged a notice of appeal to the Federal Court against the decision in AAT Case [2012] AATA 852, Re Gem Plant Hire Pty Ltd ATF The Condello Family Trust and FCT. The AAT had set aside the Commissioner’s objection decisions to disallow a taxpayer’s claims for fuel tax credits, and allowed the…

*Re Hancox and FCT – taxpayer appeals decision that he had a living away from home allowance not a travel allowance and couldn’t deduct expenses [32]

The taxpayer has lodged a notice of appeal to the Federal Court against the decision in AAT Case [2012] AATA 836, Re Hancox and FCT. The AAT had held that the taxpayer was in receipt of a living-away-from-home allowance (LAFHA) and not a travel allowance, and therefore disallowed deductions claimed against the allowance. [LTN 2,…

*R (on the application of Prudential plc and Anor) v Special Commissioner of Income Tax and Anor – Legal professional privilege in the UK does not extend to accountants’ advice [26]

In a major decision, the UK Court of Appeal has found that legal professional privilege does not attach to legal advice given by accountants. The appeal concerned the scope of legal advice privilege. The Court noted that legal advice privilege applies to all communications passing between a client and its lawyers, acting in their professional…

*R v Jo – Conviction for dishonestly evading tax upheld – correct to reject “no case to answer”; stripped of sham not deductible remuneration; rejected argument that director can’t aid and abet his company [27]

In a complex case, the Court of Appeal of the Supreme Court of Queensland has unanimously rejected a taxpayer’s appeal against his conviction for 9 offences of dishonesty evading tax under schemes involving payments of some $1.6m over a 5-year period. The schemes operated through related companies the taxpayer controlled by which deductions were claimed…