Yearly Archives: 2018

Douglass v CofT – Taxpayer appeals AAT decision that that the PSI rules to fully assess him on the remuneration for his work – despite being derived by a partnership with his wife

The taxpayer has appealed to the Federal Court against the decision in Douglass v CofT [2008] AATA 3729. The AAT had ruled that income received for engineering services was subject to the personal services income (PSI) rules, as the partnership business did not pass the “results test” in s87-18 of the ITAA97 (ie principally that at…

Employee Share Schemes (ESS) – Treasurer proposes the $5k tax free salary sacrifice limit be doubled to $10k and an extension of the Div 83A ESS tax regime to ‘contribution plans’

The Treasurer and Minister for Small Business made a joint announcement on 13 November 2018 that the Government was proposing to improve the ’employee share scheme’ (ESS) regime in a number of ways (referring primarily to the taxation regime in Div 83A in the ITAA97). The most important part of the announcement was that the…

Caratti v CofT – Taxpayers fail to get orders restraining the Commissioner from commencing recovery action – because taxpayers breached deed by not producing security in time

Two taxpayers (Caratti & Bazzo) have failed to convince the Federal Court that it should make orders preventing the Commissioner taking recovery action while their challenge to the tax assessments remained on foot. The taxpayers argued that the ATO was bound by the terms of a deed agreed by the parties under which the ATO…

DCT v Doyle – Taxpayer fails to stay recovery of $14m tax debt – merits of objections unclear and no extreme hardship (no defence as tax debts ‘conclusively payable under tax law)

A taxpayer has been unsuccessful in seeking a stay of proceedings brought by the ATO to recover a $14m tax liability pending a determination of the objections to the assessments. The facts were these. The taxpayer did not lodge income tax returns for the years ending 30 June 2008 to 30 June 2010 as she contended that she was…

Vic payroll tax: Nationwide Towing & Transport Pty Ltd v Comr of State Revenue – no payroll tax on payments to subcontractors, to provide ‘roadside assistance’ to stranded RACV members under the ‘relevant contractor’ provisions

The Victorian Supreme Court has held that payments, for ‘roadside assistance’, that RACV contracted out, to the Taxpayer, which it then subcontracted, were not subject to payroll tax, under the ‘relevant contractor’ provisions. In summary, the facts were these: The Royal Automobile Club of Victoria (RACV) provided ‘roadside assistance’ to its Roadside Members – with varying…

Ham v Tax Practitioners Board – The Court agreed with the AAT and TPB that it was correct not to re-register the former tax agent – not a ‘fit and proper person’ because of ‘actual dishonesty’ to a long standing client and friend, without remorse

The Federal Court has dismissed an applicant’s appeal against a decision to deny his tax agent registration renewal application on the basis that he was not a fit and proper person. The Applicant/Appellant/Former Tax Agent had been involved in legal action, in which equitable fraud was found to have occurred. The facts are recited at…

Mavris v CofT – AAT’s decision, partly infavour of the Taxpayer (on LCT) was not invalidated by his death after the hearing and submissions – no statutory basis and pointless

The AAT has decided that it had the jurisdiction to make a decision even though the applicant died before the publication of the decision. The taxpayer had been partially successful in avoiding ‘Luxury Car Tax’ (LCT) in the earlier decision of Mavris v CofT [2018] AATA 1825, and the Commissioner wanted to treat the decision…

Labor’s negative gearing restrictions – TTI digs into detail and reveals it applies to all investment types, but on an aggregate basis – total investment deductions capped at total investment income

On 8 Nov 18, The Tax Institute (TTI) issued a media release, providing detail about the Labor Party’s negative gearing restriction on investments. The bad news is that the proposed limitation on negative gearing deductions will apply to all investment types (not just real estate with a new constructions exemption). The good news is that this…

FBT – the ‘Grinch who stole Christmas’? It’s that time of year again…

The ATO reminds taxpayers that, if you’re involved in the administration of fringe benefits tax (FBT) for your organisation, be sure to plan ahead and consider the FBT implications of providing Christmas parties and gifts. When planning your Christmas party list and checking it twice, consider: how much it costs where and when it is…

3Bears Childcare Centre Pty Ltd v DCT – Taxpayer sought to review Registrar’s decision not to set aside the ATO’s Statutory Demand but failed as the original application was too late

The Federal Court has dismissed an application by a company seeking to review a Registrar’s decision refusing to set aside a statutory demand to pay $538,685. The Statutory Demand had been issued the Deputy Commissioner of Taxation (DCoT), in respect of liabilities claimed to be owing, for running balance account deficit debts and unpaid superannuation…