Hart v CofT – attempt to divert trust’s legal practice income through a ‘loss company’ failed – director assessed personally on a ‘present entitlement’ to the income and Part IVA applied – 50% penalties upheld too

Tax Month - May 2018

The Full Federal Court ruled that an attempt to divert law firm earnings (and related earnings) through a lost trust, were ineffective, partly on first principles (as he was ‘presently entitled’ under s97(1) of the ITAA36) and partly because our general anti-avoidance provisions (in Part IVA of the ITAA36) applied to justify the assessment. This case…

Whistleblowing and leaks: in the public interest (or not) – an American view giving perspective for Australia, while as our legislation makes its way through Parliament

Tax Articles

Whistleblowing and leaks – in the public interest (or not): an American view The following is an extract from an article by Michael Walzer, entitled ‘Just and Unjust Leaks’, which was published in the ‘Foreign Affairs’ publication (March/April 2018; Volume 97, Number 2; www.foreignaffairs.com). Abstract:   This US insight comes while the Australian Bill, for…

Stojic v DCT – director fails in action to ‘judicially review’ the Commissioner’s decision to refuse payment (of DPN liabilities) by instalments – no need to give director notice of a need for security

Tax Month - April 2018

The Federal Court has dismissed a director’s application, to judicially review the Commissioner’s decision, to refuse payment of his DPN liabilities, by instalments. The Commissioner has power to accept instalment arrangements, under s255-15(1) of Sch 1 to the Taxation Administration Act 1953 (TAA1). The Commissioner refused his request, on the basis that his proposal did not offer…

CofT v International Indigenous Football Foundation Australia Pty Ltd – ‘promotor penalties’ for R&D ‘tax exploitation schemes’ – company and director ‘contravened’ and $4.25m in civil penalties (interesting circumstances)

Tax Month - April 2018

In this case, the Court found the respondents had contravened the ‘promoter penalties’ provisions in Div 290 of the  s290-50 of the Taxation Administration Act 1953, Schedule 1 (TAA1) in helping clients obtain R&D tax offsets (under Division 355 of the Income Tax Assessment Act 1997 (ITAA97). I should say that it was not, an…

Stapled structures – Integrity measures package announced – with a detailed document

Tax Month - April 2018

On 27 March 2018 the Government announced a package of so called ‘integrity’ measures, for stapled structures, and other associated issues. The Commissioner and the Government like to help justify these measures by saying that they follows consultation, by Treasury over the past year. That doesn’t necessarily mean that the changes are good or even ameliorated.…

‘Stapled’ Company Share and Trust Unit arrangements (that avoid Div 6C corporate rate tax) – Integrity Measures Package – detailed announcement

Tax Articles

STAPLED STRUCTURES Details of integrity package March 2018 [Australian Government – Treasury: Measures announced 27 March 2018, Details of Measures; Related TT Tax Month Article] OVERVIEW A stapled structure is an arrangement where two or more entities that are commonly owned (at least one of which is a trust) are bound together, such that they…

MMFT v CofT – Taxpayer fails on 3 default assessments & the 75% ‘failure to lodge’ penalty – PSI, PAYGw, Rental Losses, Motor Vehicle deductions, flight deductions, phone/internet

Tax Month - April 2018

The AAT has held that a taxpayer had not discharged his onus of proof to demonstrate that default assessments for the 2008, 2009 and 2010 income years were excessive and the 75% penalties, for failure to lodge the returns, should not be remitted. The Taxpayer did not lodge income tax returns for the 2008, 2009…

SMSF auditor registration fee – proposed 18 fold increase, from 1 July 2018, as part of the AISC ‘fee for service’ changes

Tax Month - April 2018

Treasury consultation, on draft legislation, for ASIC to impose ‘fees-for-service’, commenced 11 April 2018 and runs to 1 May. There are a number of fees that affect superannuation auditors. SMSF  auditors –  The fee for applying for registration (as ASIC approved) is to increase from $107 to $1,927 from 1 July 2018 – an 18 fold increase (but…

DCT v Josway Hospitality Pty Ltd – Winding up order set aside because of s160(1) ‘doubt’ that the posted ‘statutory demand’ arrived – accountant’s affidavit pivotal

Tax Month - April 2018

The Federal Court has set aside an order for winding up of a company (due to unpaid tax debts) on the basis that the evidence presented created a reasonable doubt (for the purposes of s160 of the Evidence Act 1995) that the posted Statutory Demand arrived in the post. The facts were these: On 4 October…

Four Corners and Fairfax story of various alleged ATO abuses – one being an ATO whistle blower, his treatment, whether the new ‘whistleblower’ Bill would have helped

Tax Month - April 2018

You might have missed it, but the ABC ran an unfavourable story, about the ATO, in its ‘Four Corners’ program (aired Mon 9.4.18) and a related article on its website. There was more than one matter reported on, but the gist of the story is that the ATO can be heavy handed with small business,…