*Re CZRS and FCT – Employer’s lump sum paid for negotiated resignation was fully assessable as an ETP and was not a ‘bona fide redundancy payment’ [16]

Tax Month - February 2015

The AAT has concluded that a lump sum payment received by an individual taxpayer was an employment termination payment (ETP) under s 82-130(1) of the ITAA 1997 and was not a genuine redundancy payment under s 83-175 of the ITAA 1997. As a result, the AAT affirmed the taxpayer was liable to income tax on the full…

LHRC & Ors v DCT (No 4) – but taxpayers obtain “confidentiality orders” re parties’ identities, documents, etc [14]

Tax Month - February 2015

In a [decision related to the (No. 3) case above], the Federal Court granted the [same] taxpayers’ application for “confidential[ity] orders” in relation to the identity of the parties, the contents of any documents filed or tendered in the proceedings and the non-disclosure of the transcript of any hearing in the proceedings to anyone other…

*LHRC & Ors v DCT (No 3) – Wickenby case: Evidence from ACC examination can be used by ATO in s 264 interview [13]

Tax Month - February 2015

The Federal Court has dismissed a taxpayer’s application to prevent ATO officers who were to conduct an interview of him under s 264 of the ITAA 1936 from using evidence he had previously given in an examination by the Australian Crime Commission (ACC) in relation to a Project Wickenby investigation. The taxpayer, a director of an…

*Rio Tinto Services Ltd v FCT – Taxpayer fails to get ‘input tax credits’ for provision of remote area residences to mining staff [12]

Tax Month - February 2015

In a test case decision handed down [on Thursday 19.2.2015], the Federal Court has dismissed a taxpayer’s appeal concerning its entitlement to input tax credits (ITCs) for certain acquisitions relating to mining accommodation in WA. The taxpayer, Rio Tinto Services Ltd, is the representative member for the Rio Tinto Ltd GST group, which includes Hamersley…

*Financial Synergy Holdings Pty Ltd v FCT – Consolidation: ACA for shares with deemed pre-CGT acquisition date under rollover is their market value on 19.9.85 (not at ‘joining time’) [11]

Tax Month - February 2015

The Federal Court has held that for the purposes of determining the “allocable cost amount” (or cost base) of an asset that came to be owned by a consolidated group on consolidation – in circumstances where the asset was originally a pre-CGT asset that had been subject to a roll-over that preserved its pre-CGT status…

*Krok v FCT – privilege in legal advice impliedly waived by disclosing its ‘gist’ for forensic advantage which otherwise could not be tested [10]

Tax Month - February 2015

The Federal Court has found that a taxpayer had impliedly waived his right to legal professional privilege in relation to legal advice he had obtained, which he partially disclosed in sworn affidavits to support his appeal against assessments raised by the Commissioner. The assessments related to offshore transactions involving tax havens and the creation of…

*FCT v Arnold (No 2) – Tax promoter penalties of $1.5m imposed – 92.5% of cost purchase price of donated pharmaceuticals delayed 50 years at low interest [9]

Tax Month - February 2015

The Federal Court has found that a promoter of a scheme, involving the purchase and donation [of] pharmaceuticals to charities with foreign operations, engaged in conduct that resulted in himself, and 2 other entities being a promoter of a tax exploitation scheme. As a result, civil penalties totalling id=”mce_marker”.5m were imposed. The Court said the…

*SPI Powernet (now AusNet Transmission Group) gets special leave to appeal decision that purchase related payment was ‘capital’ in nature [8]

Tax Month - February 2015

The ATO advises that the High Court will hear the appeal by AusNet Transmission Group Pty Ltd (formerly SPI Powernet Pty Ltd) on 9 April 2015. The appeal concerns the deductibility under 8-1 of the Tax Act of a payment under the Electricity Industry Act 1993 by AusNet as holder of a licence to transmit…

Corporate tax compliance issues investigated by Senate Committee – ATO submission identifies risks: transfer pricing, thin cap, stateless income etc [7]

Tax Month - February 2015

The Senate Economics References Committee is conducting an inquiry into corporate tax avoidance. The Committee is looking at tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia. It is due to report by the first sitting day in June 2015 ie 1 June 2015. The Committee has received many submissions, including from…