Monthly Archives: February 2017

*Re Hefner and FCT – non-commercial losses cannot be off-set against other income under the discretion [31]

The AAT has held it was not appropriate to exercise the non-commercial losses discretion in the taxpayer’s favour to allow losses from a cattle stud to be offset against other income of the taxpayer. The taxpayer is an engineer. He earns in excess of $250,000 a year from his engineering work. In 2009, he established…

Re Matthews and FCT – AAT has no jurisdiction to hear taxpayer’s claim for review of BAS liabilities [33]

The AAT has held that it did not have jurisdiction to consider a taxpayer’s application for review of the ATO’s ‘re-raising’ of the taxpayer’s debts for unpaid PAYG instalments, GST and GIC. In December 2011, the ATO informed the taxpayer that, as a result of the lodgment of his tax return for the year ended 30 June 2011, a…

*Derrin Brothers Properties Limited v DCT – Wickenby: No grounds to appeal decision to refuse to grant stay of summary judgment [25]

The Federal Court has dismissed a taxpayer’s application for leave to appeal from the decision in DCT v Hua Wang Bank Berhad (No 3) & Ors [2012] FCA 594 in which the Federal Court refused to grant the taxpayer a stay of enforcement of a summary judgment obtained by the Commissioner against the taxpayer for…

*Indian taxpayer a ‘resident’ despite absences from Australia – but he and his wife did own a house here and she and their adult children lived here [30]

The AAT has held that a taxpayer had not discharged his burden of proving that an assessment was excessive, and effectively held that he was an Australian “resident” in the 2011 income year. The facts were as follows. The taxpayer is an engineer and was born in India and remains an Indian citizen. He came…

*Taxpayer’s appeal dismissed as ‘share awards’ treated as Div 13E Qualifying Rights that vested just before the GFC – 25% penalty upheld too [27]

The AAT has affirmed the Commissioner’s views and held that employee share scheme awards received by a taxpayer should be treated as qualifying rights and therefore assessable, and that penalties imposed by the Commissioner should be upheld. The taxpayer was at all material times a senior officer in the Australian subsidiary of a large multi-national…

*Hua Wang Bank Berhad & Ors v DCT – Taxpayers refused appeal from GIC decision [24]

The Federal Court has dismissed 4 taxpayers’ applications for leave to appeal from the 21 December 2012 decision of Perram J in DCT v Hua Wang Bank Berhad (No 4) [2012] FCA 1482. In that decision, the taxpayers were unsuccessful in their applications for the GIC component of an earlier summary judgment against them to be dismissed. That…

*Capping of self-education expense deductions from 1 July 2014: Treasury paper released [15]

The Government has released a Discussion Paper seeking comments on its proposal to introduce a $2,000 cap on tax deduction claims for work-related self-education expenses per person from 1 July 2014. The proposal was announced by the Treasurer on 13 April 2013 “as part of a package of reforms to make a down-payment on the National Plan for School…

Tax Newsletter FCT v Crown Insurance (Vanuatu) – High Court refuses Commissioner leave to appeal decision that insurance income did not have an Australian source [21]

The High Court has dismissed the Commissioner’s application for special leave to appeal against the decision of the Full Federal Court in FCT v Crown Insurance Services Ltd [2012] FCAFC 153. The Full Federal Court had dismissed the Commissioner’s appeal from a 2011 AAT decision that held that insurance premium income derived by a non-resident…

Employee share schemes: details of Govt review [18]

On 12 June 2013, the Government released Advancing Australia as a Digital Economy: Update to the National Digital Economy Strategy. A copy of the update is available on the National Broadband Network website. As part of this process, the Government announced that it would review the policy settings around employee share schemes (ESS). Treasury announced on Tues…

*Preventing “dividend washing”: Discussion Paper released by Treasury [14]

The Government Mon 3.6.2013, released a Discussion Paper on Preventing dividend washing. In the 2013-14 Federal Budget on 14 May 2013, the Government announced reforms to close, with effect from 1 July 2013, a loophole it said currently enabled sophisticated investors to engage in so-called “dividend washing”. The Government said this was a process that allowed sophisticated investors to…