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…

Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2018 now law – lower tax rate (currently 27.5%) available to all companies under the turnover threshold unless they have at least 80% passive income (as defined)

The Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017  began a long passage to become law, when it was introduced into the Lower House on 18.10.2017, passed the Lower House on 8.2.2018 (as a 2018 Bill), passed the Senate on 23.8.2018 and received Royal Assent, as Act No. 94 of 2018, on 31.8.2018.…

Board of Tax – August 2018 CEO Update of Adelaide Meeting – small business tax concessions; FBT compliance costs; residency rules for individuals; Tax Transparency developments; Sounding Board – ‘policy lite’, revenue neutral gains

On 22 August 2018, the CEO of the Board of Taxation, Karen Payne, released her latest CEO update covering the Board’s recent meeting in Adelaide. The Board discussed the scope and direction of its current work program, including the following. A review of small business tax concessions. To date, the key themes emerging from the…

Gift Deductible Recipients (DGRs) – those not already registered with the ACNC will be required to do so by 1 July 2019 & certain ‘public fund’ requirements will be abolished (consultation paper released)

Whilst still Minister for Revenue and Financial Services, Kelly O’Dwyer announced the Government was taking action to deliver its package of reforms (announced 5.12.17) for the administration and oversight of organisations with Deductible Gift Recipient (DGR) status – broadly by requiring them to all register with the Australian Charities and Not-for-profits Commission (ACNC). Treasury released a…

Treasury Laws Amendment (Enterprise Tax Plan No 2) Bill 2017 – progressive reduction in corporate tax rate (to 25%) for $50m+ turnover companies, finally ‘scuttled’ in the Senate

On Wednesday 22 August 2018, the Senate (Pauline Hanson, in particular) refused to pass the Treasury Laws Amendment (Enterprise Tax Plan No 2) Bill 2017. This is the Bill that would have progressively increased the turnover threshold, to apply the lower 27.5% corporate tax rate to all companies, and then to step down the 27.5%…

PR 2018/9 & 10 – [9] Tax consequences for an Owner entering into a concurrent lease with Future Rent Pty Ltd; [10] Tax consequences for a Participant in an urBau joint venture project

The ATO issued two Product Rulings on Wed 22.8.2018: PR 2018/9 – Tax consequences for an Owner entering into a concurrent lease with Future Rent Pty Ltd. This scheme involves a concurrent lease with Future Rent Pty Ltd over a property that is subject to a residential tenancy agreement. The ruling treats the rental prepayments…

CR 2018/36 & 37 – [36] St George channel scheme – receipt of membership interests in Mallawa Irrigation Limited; [37] FBT: employers using the eROAD System for car log book and odometer records car records

The ATO issued two Class Rulings on Wed 22.8.2018: CR 2018/36 – St George channel scheme – receipt of membership interests in Mallawa Irrigation Limited. It states that these interests are received on capital account and that the first element of their cost base is nil. DATE OF EFFECT: 1 July 2017 to 30 June 2019; and CR 2018/37…