Monthly Archives: July 2017

LCG 2017/D6 – ATO’s guidance on the new ‘similar’ business rule for carrying forward company tax and capital losses under the ‘innovation’ Bill passing through Parliament

On Friday 21.7.17, the ATO released draft Law Companion Guideline LCG 2017/D6. It deals with The business continuity test – carrying on a similar business. The draft Guideline describes how the Commissioner will apply amendments to be made by the Treasury Laws Amendment (2017 Enterprise Incentives No 1) Bill 2017. The Bill was passed by…

IGT has extended the time for making submissions on its investigation into fraud control in the ATO (until 4 Aug 2017)

The Inspector-General of Taxation (IGT) has extended to 4 August the due date for submissions on the IGT review into the ATO’s fraud control management. The IGT said current and former ATO staff are welcome to approach the IGT in confidence regarding submissions – tel: (02) 8239 2110 or email: afcm@igt.gov.au. At the request of the Senate…

Tax Administration Act – exposure draft of ‘re-landscaped’ regulations released for feedback – substance is not meant to change

On Monday 31.7.17, Treasury released an Exposure Draft of the Taxation Administration Regulations 2017. They would remake and improve the existing 1976 tax admin regulations using simpler language and removing duplicate or redundant provisions. The changes are not intended to alter the current meaning or operation of the existing regulations but are necessary as the current regs are due…

Adult Beneficiaries of ‘discretionary trusts’ will be taxed at a minimum rate of 30% under a Labor Government – avoiding the bulk of income splitting without grasping the nettle of taxing (all) trusts as companies

On 30 July 2017, the Labor party announced it would (in Government) introduce a standard minimum 30 per cent tax rate for discretionary trust distributions to mature beneficiaries (people over the age of 18). Individuals and businesses use trusts for a range of legitimate reasons, such as asset protection (for which ‘discretionary’ trusts are particularly…

Taxpayers appeal in Normanby Finance (loan shams); Sunraysia Harvesting (PAYGw avoidance) and Peter Sleiman Investments (Default Assessments) and the Commissioner appealed in Hacon (Private Ruling Request declined)

LOANS were SHAMS: The taxpayers have applied for special leave to appeal to the High Court against the Full Federal Court decision in FCT v Normandy Finance and Investments Asia Pty Ltd & Ors [2016] FCAFC 180. In a majority decision, the Full Federal Court had allowed the Commissioner’s appeal and found that it was not…

OECD & G20 release report on ‘Branch Mismatches’ – where different jurisdictions have different rules for recognising branches or allocating profits between them (similar issues to ‘Hybrid Mismatches’)

27/07/2017 – Today, the OECD released a report ‘Branch Mis-matches’: Neutralising the Effects of Branch Mismatch Arrangements (BEPS Action 2). This is similar to the ‘Hybrid Mismatches’ dealt with in October 2015, when the OECD published a report on Neutralising the Effects of Hybrid Mismatch Arrangements (OECD, 2015). This was as part of the final BEPS…

Nelson v FCT – trustee taxpayer failed to injunct s353-10 notices, to give sworn evidence, because she failed to establish a prima facie case that the interviews would imperil the integrity of an imminent Part IVC appeal against s100A assessments (relating to gifted trust income entitlements) – s14ZYA notice given to determine the trustee’s objection within 60 days

The Federal Court has refused the taxpayers’ application for interlocutory injunctive relief concerning the issue of notices by a Deputy Commissioner requiring them to attend closed-door interviews in relation to an unresolved objection under s353-10 of the TAA, Schedule 1 (the old s264 of the ITAA36). The Commissioner issued original assessments to the Trustee of…

ACNC revokes charity status of 3 organisations: African Australian Network Limited; Global Helping Hands Foundation – Australia; Immigrant Womens’ Health Information Service Inc. for reasons it can’t state because of its secrecy obligations

On 20 July 2017, the Australian Charities and Not-for-profits Commission (ACNC) has announced that it has revoked the charity status of the following 3 organisations following investigations into their activities and operations: African Australian Network Limited (ABN: 33158042696) – has been operating since September 2013 and is based in Victoria. Global Helping Hands Foundation – Australia (ABN:…

Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017 & related SCG Bill – an exposure draft of legislation to increase accountability of superannuation funds – especially poorly performing ‘MySuper’ funds and to stop salary sacrificed super counting towards the employers SGC mandatory minimum level of employer super contributions

On 24 July 2017, the Government released draft legislation proposing a package of measures aimed at improving accountability and member outcomes in the superannuation system. The legislation will amend the Superannuation Industry (Supervision) Act 1993, the Corporations Act 2001, and the Financial Sector (Collection of Data) Act 2001 to modernise the superannuation system. The amendments will…

CR 2017/44: scrip-for-scrip roll-over; CR 2017/45: returns of share capital; CR 2017 2017/46: demerger roll-over

Three Class Rulings were released by the ATO on Wed 26.7.2017: CR 2017/44 – scrip-for-scrip roll-over: acquisition of units in Centuria Urban REIT by Centuria Metropolitan REIT. It provides that unit holders who made a capital gain from disposing of their Centuria Urban REIT units to the responsible entity of Centuria Metropolitan REIT can choose scrip-for-scrip…