Monthly Archives: March 2018

Product Ruling PR 2018/4 – Perpetual WealthFocus Fund; on electing into the ‘Attribution Managed Investment Trust (AMIT) regime – ‘single unit’ structure respected for CGT purposes

On 21.3.2018, the ATO issued a product ruling and an addendum to a 2015 product ruling, for the Perpetual WealthFocus Investment Advantage Fund. This was prompted by the Fund electing into  the Attribution Managed Investment Trust (AMIT) regime from the 2017-18 income year under Part 3-25 of the ITAA97 (Divisions 275 & 276). The fund…

Promoter of ‘tax exploitation’ R&D tax schemes ordered to pay $4.25m in civil penalties and give undertakings

On 21 March 2018, the ATO website advised that the Federal Court had ordered a Queensland company to pay a $4.25 million penalty to the Commissioner of Taxation for its promotion of tax exploitation schemes. These are the civil penalties provisions for prevention of ‘tax exploitation schemes’ in Div 290 of the TAA1 (and in particular…

Immediate 20% write-off for assets over $20,000 proposed by Labor, with remaining 80% depreciated from the first year – not Div 43 capital works, R&D items or passenger cars

On 13 March 2018, the Opposition Leader: Bill Shorten announced that, if elected, his Government would introduce legislation to permit an immediate 20% tax deduction, for any new eligible asset worth more than $20,000. This would be available to all businesses (and they call it the ‘Australian Investment Guarantee’). The scope and key design features…

Common Reporting Standard (CRS) avoidance – OECD adopts tax disclosure rules for advisors as an ‘anti-avoidance’ approach

As part of its BEPS (Base Erosion and Profit Shifting) initiative, the OECD/G20 adopted an action item to exchange information about foreign bank accounts (and the like), in a ‘common’ format, or standard (‘Common Resporting Standard’ or ‘CRS’). As the CRS reporting, and automatic exchange, of information, about offshore financial accounts, becomes a reality, in…

LLUN v CofT – AAT finds that a string of tax haven transactions created tax liabilities – Funding for Deregistered Vanuatu company; NZ capital gain; Rollover of NZ Welfare Fund into Samoan Super Fund, including a ‘guest appearance’ by Hua Wang Bank Berhad

The AAT has found against a Mr Taxpayer and Mrs Taxpayer on a range of issues traversing many of the world’s tax havens, including: Samoa and the now notorious Hua Wang Bank Berhad. Before trying to relate this story, the following ‘preliminary observations’ of Deputy President Frost, might set the scene. 94. One remarkable aspect of…

MWYS and CofT – Profits within a ‘dual listed’ structure, were only CFC attributable, on purchases from the Australian side of the structure because the dual-listed companies were not CFC ‘associates’

The AAT has decided that only part (not all) of the profits, of a Swiss company, should have been attributed to the Taxpayer, under the CFC provisions (as “tainted sales income”), despite Swiss Co being 100% (indirectly) owned by the Taxpayer and a UK company, under a dual-listed company (DLC) arrangement. The AAT attempted to keep…

Capital Gains Tax (CGT) withholding regime – ATO updates its webpage on ‘clearance certificates’ for trustees

The information on the ATO website, on Capital gains withholding clearance certificate application online form and instructions – for Australian residents, has been updated by the ATO. It notes that, if a corporate trustee does not have a TFN, an attachment can be included to provide the details of the relevant trust. The updated page, on…