Whitby Land Company Pty Ltd (Trustee) v. Deputy Commissioner of Taxation – Decision Impact Statement – alternative assessments on beneficiaries and the trustee (under both s98 & s99A) held valid – not ‘tentative’

Tax Month - December 2017

Précis The case deals with the validity of ‘alternative assessments’ – whether ‘tentative’ or not – upholding established law and the Commissioner’s practices. This was in the context of assessing a trust’s income. Brief summary of facts The applicant was the trustee of a discretionary trust. Because the Commissioner had insufficient information to determine whether…

Vic: State Taxation Acts Further Amendment Bill passed – payroll exemption for ‘for profit’ training organisations; absentee owner surcharge – extra exemption; foreign purchaser extra duty for first home owner

Tax Month - December 2017

On 14 December 2017, 4 amendments were made to the State Taxation Acts Further Amendment Bill 2017 in the Legislative Council. They concern inserting a definition of “business day”, and other minor amendments. The Legislative Assembly subsequently agreed to those amendments, so the bill has passed both houses. The Bill contains various amendments including: to the Payroll Tax…

ATO suspends its audit ‘guidance’ on professional firm structures that are ‘too effective’ in income splitting – partnerships of discretionary trusts and Everett assignments

Tax Month - December 2017

On 14 December 2017, the ATO announced that it was suspending its 2015 ‘Assessing the Risk: Allocation of profits within professional firms guidelines’ and ‘Everett Assignment web material’ – saying that it was to be reviewed in 2017. It says that: “In reviewing the guidelines we have become aware they are being misinterpreted in relation to arrangements that go…

Lewski v. Commissioner of Taxation – ‘Decision Impact Statement’ following beneficiary escaping amended assessments

Tax Month - December 2017

On 14 December 2017, the Commissioner issued the following Decision Impact Statement about the Full Federal Court decision of Lewski v Commissioner of Taxation [2017] FCAFC 145. This is an important decision on both when an amount is ‘incurred’, for general deduction purposes, and also on the effect of making income distribution resolutions on an…

Lewski v CofT – Amended assessments to discretionary beneficiary overturned by the Full Federal Court – an overview

Tax Articles

The Full Federal Court handed down its judgement in Lewski v Commissioner of Taxation [2017] FCAFC 145 on 18 September 2017, overturning the AAT’s decision, in : Re TVKS and FCT [2016] AATA 1010. The Court set aside the Commissioner’s amended assessments to Mrs Lewski of $10.1m in the 2006 year and $3.1m in the 2007 year. There were…

Mercer Superannuation (Australia) Limited v Billinghurst – Trustee’s duty is to member (not retiring employer) – ‘transfer value’ of of defined pension benefit as ‘indexed’ – SCT decision upheld

Tax Month - December 2017

The Full Federal Court has dismissed an appeal by a trustee of a superannuation fund in relation to the lump sum equivalent value of a lifetime pension to be paid to a defined benefit member upon the termination of an employer-sponsored superannuation plan. The respondent (Mr Billinghurst) had commenced receiving a lifetime pension of $98,780pa…

DCT v Arico (No 2) – Victorian Supreme Court refused stay of collection proceedings for $2.1m in unpaid tax and refused to vary freezing orders to allow borrowings for legal fees (not full or frank disclosure about assets)

Tax Month - December 2017

In a lengthy decision handed down on Tue 12.12.2017, the Victorian Supreme Court has refused husband and wife taxpayers an application to stay judgment against them for outstanding tax assessments totalling over $2 million. The Deputy Commissioner of Taxation (DCT) sought judgment against the first defendant in the sum of $1.061 million and against the second…

GST-free status of certain tertiary courses continued by Minister making a 2017 under the definition of ‘education course’ in the GST Act

Tax Month - December 2017

The Minister for Social Services registered a A New Tax System (Goods and Services Tax) (Tertiary Courses) Determination 2017 on Mon 11.12.2017 on the Federal Register of Legislation. Section 38‑85 of the GST Act provides that the supply of an education course and administrative services directly related to the supply of such a course (if they are supplied…

SA: Foreign Investor Surcharge (on transfer duty) – increased from 4% to 7% from 1 January 2018

Tax Month - December 2017

The Stamp Duties (Foreign Ownership Surcharge) Amendment Bill 2017 has now passed all stages of the SA Parliament without amendment and awaits Royal Assent. The Bill amends the Stamp Duties Act 1923 (SA) to introduce the Foreign Investor Surcharge, which was originally included in the defeated Budget Measures Bill 2017, and increase it from 4%…