Monthly Archives: March 2017

*TR 2012/1 – Tax treatment of retail premiums paid to non-participating shareholders on rights issues and the like – a dividend [R2]

This Ruling, issued on Wed 25.1.2012, states the Commissioner’s view regarding the tax treatment of retail premiums paid to non-participating shareholders in companies for amounts subscribed for shares. Broadly, these schemes involve a company granting rights to its existing shareholders that allow them to subscribe for new shares at an amount (“offer price”). For shareholders…

*GE Capital Finance Australasia Pty Limited and GE Capital Australia v Commissioner of Taxation [R1]

From March 2003 until 26 May 2004, the GE Capital Corporation (GECC) group undertook extensive planning for a potential initial public offering (IPO) of its global lenders’ mortgage insurance businesses. In Australia, the businesses were conducted by two wholly owned subsidiaries of GE Capital Australia (GECA), GE Mortgage Insurance Pty Ltd (Old GEMI) and its…

Mitsui & Co (Australia) Ltd v FCT – taxpayer appeals Federal Court’s decision that expenditure on a single mining right can’t be apportioned between amortizable and deductible expenditure [C11]

The taxpayer has appealed to the Full Federal Court against the decision of Siopis J in Mitsui & Co (Australia) Ltd v FCT [2011] FCA 1423. The Federal Court had dismissed the taxpayer’s appeal and upheld the Commissioner’s disallowance of a deduction made in respect of the part of the consideration the taxpayer attributed to a petroleum production field.…

*On Call Interpreters and Translators Agency Pty Ltd v FCT (No 3) – taxpayer withdraws appeal – translators remain SGC ‘employees’ [C10]

Thomson Reuters understands that the taxpayer has discontinued its appeal to the Full Federal Court from the decision of Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v FCT (No 3) [2011] FCA 366. In that decision, which now stands, the Federal Court held that interpreters engaged by a business to provide…

*Mills v FCT – taxpayer seeks leave to appeal to the High Court against the decision that the CBA’s Pearls V Securities constituted franking benefit avoidance [C9]

The taxpayer has lodged an application for special leave to appeal to the High Court against the decision of the Full Federal Court in Mills v FCT [2011] FCAFC 158. The Full Federal Court had (by majority) confirmed that the “imputation benefit” scheme provisions in s 177EA of the ITAA 1936 applied to cancel franking…

*Re Crown Insurance Services Ltd and FCT – Commissioner appeals (like a dog that won’t give up its bone) the AAT decision that the Vanuatu insurance company was neither resident, nor had any Australian source income [C8]

The Commissioner has appealed to the Federal Court against the decision in AAT Case [2011] AATA 847, Re Crown Insurance Services Ltd and FCT. The AAT had held that an insurance company (the taxpayer) incorporated in Vanuatu neither carried on a business in Australia nor had its central management and control in Australia, and therefore,…

*Re Bell and FCT – CGT: maximum net asset value test failed – liability of family trust to make distribution not related to any assets and can’t be counted [C7]

The AAT has ruled that a taxpayer failed the maximum net asset value test for the purposes of accessing the CGT small business concessions in relation to a capital gain of over $6m made by a family trust to which he was presently entitled from the trust’s sale of units in related unit trusts. The…

Pre-Paid Professional Administration Ltd v FCT – Assessability of admin fees: Extension to file appeal refused [C3]

The Federal Court has refused a taxpayer an extension of time to file and serve a notice of appeal against the 2008 decision of Heerey J in Pre Paid Professional Administration Ltd v DCT (2008) 73 ATR 779. Heerey J had held that amounts held by the taxpayer were assessable administration fees and were not…

Taxpayer proves software license fee expenditure incurred [C6]

A taxpayer has managed to satisfy the AAT that he incurred expenditure in acquiring software under licence. The taxpayer claimed deductions for the software licence fees in the 2004 and 2005 income years. The fees, which totalled just over $305,000, were paid to a resident of South Africa. The Commissioner disallowed the deductions on the…

*Re Ohl & ACN 104 950 156 Pty Ltd and FCT – Failure to lodge returns: 75% penalties affirmed [C5]

The AAT has affirmed a 75% shortfall penalty imposed on 2 taxpayers in relation to failing to lodge their income tax returns on time for the 2005 income tax year. The taxpayers were an individual and a company which had the individual as its sole director and secretary. For the year ended 30 June 2005,…