Monthly Archives: February 2017

TD 2014/22-24 – Consolidation, rights to future income and residual tax cost setting rules [34]

The ATO on 17.12.2014, released Taxation Determinations TD 2014/22, TD 2014/23 & TR 2014/24 on the consolidation changes introduced by Pt 4 Sch 3 of the Tax Laws Amendment (2012 Measures No 2) Act 2012 (rights to future income (RTFI) and residual tax cost setting rules), which are relevant in ascertaining whether the pre-rules, interim rules, or prospective rules…

*TD 2014/25-28 & GSTR 2014/3 – Bitcoin – income tax; CGT, trading stock, foreign currency; GST and FBT treatment [33]

The ATO on Wed 17.12.2014, issued the following Taxation Determinations: TD 2014/25 – It states that Bitcoin is not a “foreign currency” for the purposes of Div 775 of the ITAA 1997. TD 2014/26 – It says that Bitcoin is a “CGT asset” for the purposes of s 108-5(1) of the ITAA 1997. TD 2014/27 – It indicates that when held for the purpose…

*TD 2014/21 – Interest in shares requiring shareholder approval are not “indeterminate rights” for employee share scheme purposes [32]

This TD issued on Wed 3.12.2014, states that where a right to acquire a beneficial interest in a share is granted subject to shareholder approval and an employee acquires only a right to have the matter put to the shareholders and nothing more, that right is not an “indeterminate right” within the meaning of s 83A-340(1)…

*TR 2014/8 – Transfer pricing documentation requirements [31]

This Ruling, released on Wed 17.12.2014, sets out the Commissioner’s views on the transfer pricing documentation an entity should have kept in order to meet the requirements of Subdiv 284-E to the Taxation Administration Act 1953. An undocumented transfer pricing treatment, if ultimately found to be incorrect, is taken to be not reasonably arguable, and…

*TR 2014/7 – Foreign Income Tax Offset (FITO): source of hedging transactions – source of hedging transactions for the purpose of the s770-75 FITO limit [30]

This Ruling, released on Wed 10.12.2014, deals with the application of s770-75 of the ITAA 1997 (foreign income tax offset (FITO) limit) to an Australian resident taxpayer deriving gains and losses from foreign currency hedging transactions undertaken to mitigate the foreign currency fluctuation risk attached to the market value of a portfolio of assets. Broadly,…

*Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v DCT – Cayman Island liquidators re Aust tax debt [29]

The ATO has released a Decision Impact Statement on the Full Federal Court’s decision in Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v DCT [2014] FCAFC 57. In that case, Cayman Island liquidators were unsuccessful in seeking to defeat a Deputy Commissioner of Taxation’s claim to recover a…

*Re Agius and FCT – taxpayer appeals decision that whilst he was non-resident, he had Australian source income [28]

A taxpayer has appealed to the Federal Court against the decision in AAT Case [2014] AATA 854, Re Agius and FCT. In that case, the AAT held the taxpayer was not a resident of Australia for the years in question, but he did derive Australian-sourced income. [LTN 242, 15/12/14]

*SPI PowerNet Pty Ltd v FCT – the High Court did not give leave to appeal the disallowance of deductions for payments on acquisition of power grid [27]

The taxpayer has lodged an application for special leave to appeal to the High Court against the decision of the Full Federal Court in SPI PowerNet Pty Ltd v FCT [2014] FCAFC 36. The majority of the Full Court (Davies J dissenting) had dismissed the taxpayer’s appeal and held that payments it made to the State…

*DCT v Keane – Director penalty: DCT obtains summary judgment [26]

A Deputy Commissioner of Taxation has been successful before the Qld District Court in seeking summary judgment against an individual for a director penalty arising from unpaid PAYG liabilities of a company. The individual did not contest most of the material facts relied upon by the Deputy Commissioner. He accepted that the company failed to…

*Re Pettiford and FCT – CGT: alleged construction costs were not included in cost base of property because they were not actually incurred [25]

The AAT has dismissed a taxpayer’s application that he was entitled to include in the cost base of a Queensland property construction costs of id=”mce_marker”78,000 he incurred under a contract he entered with his own company. However, the AAT found the taxpayer’s claims lacked substance for several reasons including the following. The construction contract was…