PCG 2019/D3 – Thin cap: ATO ‘practical compliance guide’ to using the ‘arm’s length debt test’ – what is the ‘low risk’ approach to this high risk Div 820 approach?

Tax Month - August 2019

On 28.8.19, the ATO has issued Draft Practical Compliance Guideline PCG 2019/D3 to provide detailed guidance and a risk assessment framework on applying the the arm’s length debt test in the thin capitalisation rules. This followed the earlier release of Draft Ruling TR 2019/D2 on this test (titled: Income tax: thin capitalisation – the arm’s length debt test – on 5.4.19).…

Small Business Ombudsman is investigating the Government clawing back millions in R&D claims from small business (ATO offends Kate Carnell again)

Tax Month - August 2019

On 28 August 2019, the Australian Small Business and Family Enterprise Ombudsman: Kate Carnell put out a media release saying she is concerned by reports the government (the ATO) has clawed back $200 million, in the 2018 financial year, from businesses who have claimed the R&D Tax Incentive and has been investigating the impact of…

TD 2019/D5 – Early stage innovation companies – tax offset and CGT exemption: administration of ‘early stage’ $1m expenses incurred under early stage test

Tax Month - August 2019

On Wed 28.8.2019, the ATO issued Draft Taxation Determination TD 2019/D5 on what expenses are taken into account in determining whether a company meets the requirements of an early stage innovation company (ESIC). See below for further detail about the draft determination. FJM 28.8.19 [Tax Month – August 2019]

Burton v CofT – Only 50% of US CGT allowed as foreign tax offset as only 50% of Australian capital gain assessable & a majority said the DTA argument failed – appeal dismissed

Tax Month - August 2019

On appeal, the Full Federal Court has upheld (by majority) that a decision that a taxpayer was not entitled to a full foreign income tax offset (FITO) for US tax paid on the sale of investments, as only half the capital gain had been included in his assessable income although there was an ancillary DTA…

DCT v Pedley – DPN liability stands – no basis to say that company payments should have been applied company debts for which director was personally liable

Tax Month - August 2019

The Full Federal Court has dismissed an appeal against a decision confirming an ATO application for summary judgment in respect of a director penalty notice (DPN) liability of almost $160,000. There is an important lesson to be learnt here about whether the company should pay (rather than the director pay the DPN amount) and if…

Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 – require insurance, in superannuation funds, be provided on an opt-in basis for: (i) account balances less than $6,000; and (ii) members under 25 years old

Tax Month - July 2019

The Government introduced the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019  on 4 July 2019, to effect amendments that would require insurance, in superannuation funds, be provided on an opt-in basis for: (i) account balances less than $6,000; and (ii) members under 25 years old – commencing on on or after 1 October 2019. See related Tax Technical article…

‘Opt-in’ insurance in super funds for members under 25 or with sub $6,000 account balances – Senate Committee’s report tabled

Tax Month - August 2019

The Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 was  introduced on 4 July 2019 (and at the time of writing, had not progressed past that point). It proposes to require insurance within superannuation be provided on an opt-in basis for: (i) account balances less than $6,000; and (ii) members under 25 years old. On Tuesday 23.7.19, the…

Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2019 reintroduced – SGC opt out for some employers of multi-employer members; NALI provisions extended to non-arm’s length expenses and ‘Total Superannuation Balance’ to include LBRA balances in some cases

Tax Month - August 2019

The Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2019 was introduced in the House of Reps on Wed 24.7.2019 (and, at the time of writing, had not progressed pass first reading stage). It re-introduces measures in the similarly named  2018 Bill (which lapsed when Federal Parliament was prorogued for the Federal election). See…