Monthly Archives: September 2018

Re Narumon Pty Ltd – Extension of a superannuation binding death benefit nomination (BDBN) by Powers of Attorney was binding but ‘conflicted’ change slightly benefiting a donee precluded under Attorneys legislation

The Supreme Court of Queensland has ruled that a member’s 2013 superannuation ‘binding death benefit nomination’ (BDBN), was validly confirmed and extended, in 2016 by the donees of an enduring power of attorney (Power of Attorney). However an attempt to further amend (slightly) the beneficiaries under the DBDN, failed as it benefited one of the…

McGlinn v CofT – Non-commercial loss matter referred back to the ATO – ‘similar’ horse breading ‘business activities’ carried on sequentially confuses Commissioner

On 24 August 2018, the Federal Court (recently appointed Steward J) set aside an ATO decision, in a non-commercial loss matter, and referred it back to the ATO for re-determination. The ‘non-commercial loss’ provisions are found in Div 35 of the ITAA97 and are designed to prevent individuals deducting losses, from a ‘business activity‘, against other income,…

Qld: Revenue and Other Legislation Amendment Bill introduced – charitable institution registration requirements, extend primary production transfer duty concession, Land Tax and deceased estates

On 22.8.2018, the Queensland Government introduced the Revenue and Other Legislation Amendment Bill 2018 into their Legislative Assembly (which, in Queensland, is the only House of Parliament). On the same day it was referred to their Economics and Governance Committee. The Bill will amend the Duties Act 2001, Duties Regulation 2013 and the Taxation Administration Act…

Suspected promotion and facilitation of phoenix activities and tax schemes – ‘public examinations’ commenced, in the Federal Court, in relation to a group of entities connected to pre-insolvency advisor Philip Whiteman

On 27.8.2018, the ATO announced on its website that ‘public examinations’ commenced, in the Federal Court, in relation to a group of entities connected to pre-insolvency advisor Philip Whiteman. The examinations will look at the suspected promotion and facilitation of phoenix activities and tax schemes. Deputy Commissioner Will Day confirmed that more than 45 service providers,…

Sunlea Enterprises Pty Ltd v CofT – Input tax credits denied for belatedly invoiced “unrecouped project costs” – as insufficient evidence of any ‘acquisition’, of payment, of the thing supplied being taxable; and the invoice was not a ‘tax invoice’

The AAT has decided that the trustee of a unit trust was not entitled to input tax credits, as there was insufficient evidence of a creditable acquisition and the relevant invoices did not comply with the requirements of a tax invoice for GST purposes. The facts included the following. In December 2004, the then trustee of the…

Greig v CofT – Taxpayer appeals to Full Federal Court on the deductibility of $11.85m of share losses and legal fees based on the ‘profit making undertaking or scheme’ head of income (gone ‘pear shaped’)

The taxpayer has appealed to the Full Federal Court against the decision of Thawley J in Greig v CofT [2018] FCA 1084. The Federal Court had held that the taxpayer was not entitled to a deduction under s 8-1 of the ITAA 1997 for share losses of $11.85m and legal fees. The taxpayer had argued that the…

Illegal phoenix activity – Coy assets sold for $20k, resold for $176k, spent on private liabilities, $1m deficiency on liquidation – 1 suspended jail term, one good behaviour bond, both banned for 5 years as directors

Allan Raad of Wentworthville, NSW and his brother-in-law Yousef Joseph Bazouni of Sandringham, NSW, have been convicted and sentenced in the Downing Centre District Court after pleading guilty to ASIC charges concerning a breach of director’s duties and the fraudulent removal of company assets. ASIC had alleged that on 2 July 2011 in Sydney, NSW…

LCR 2018/D7 – Draft ‘Companion Ruling’ for the recently passed 80% passive income cap for ‘base rate entities’ taxed at the new lower corporate tax rate (currently 27.5%)

On Fri 24.8.2018, the ATO released Draft Law Companion Ruling LCR 2018/D7 which considers the Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Act 2018, after the Bill passed both houses (on 23.8.2018) and ahead of it obtaining Royal Assent (on 31.8.2018) – see related Tax Technical Article. This law implements the 80% passive income…

Mangat v CofT – Doctor’s Options to subscribe for IVF shares not acquired at least 12 months before cancellation – 50% CGT discount not available

The AAT has confirmed that a taxpayer was not entitled to a discount capital gain in relation to the cancellation of 150,000 shares that were held by her in a company pursuant to an employee share scheme (ESS). At issue was the required 12 months, since ‘acquisition’, for CGT purposes, had gone by, when the…

PCG 2018/D7 – GST: Draft defacto ‘safe-harbour’ guidance for ‘Australian Inbound Tour Operators’ to self assess GST as either an ‘agent’ or as a ‘principal’ (as the results are radically different)

On Thur 23.8.2018, the ATO issued Draft Practical Compliance Guideline PCG 2018/D7, proposing an administrative ‘safe harbour’, for Australian in-bound’ Tour Operators, who must decide whether they operate has an agent or as principal, when self-assessing their GST. The defacto ‘safe harbour’ is created by the Commissioner giving guidance about when he will NOT apply…