Aussiegolfa Pty Ltd (Trustee) v CofT – SMSF investment in property sub-trust, where student unit leased to member’s daughter, breached the sole purpose test and in-house asset test (in s62 & s82 of the SIS Act)

The Federal Court has ruled that an investment of Mr Benson’s self-managed superannuation fund (SMSF) in a property sub-trust, breached the sole purpose test and in-house asset rules under ss 62 and 82 of  SIS Act (respectively). This was because, amongst other things, the ultimate investment was a student apartment, occupied by Mr Benson’s daughter. This underlying substance of the arrangement…

GST – reduced input tax credits (RITCs) – Govt rejects extending system for credit union services to mutual building societies and mutual banks

Under FOI, Treasury has released a policy document indicating that the Government does not support the extension of the GST reduced input tax credit (RITC) scheme for “credit union services” to cover mutual building societies and mutual banks. This follows calls by the Customer Owned Banking Association (COBA) for the RITC scheme, currently available to…

DCT v Lawson – Director Penalties Notice (DPN) liability for SGC upheld – director failed to make out lack of service, or illness defences

The ATO’s claim against the sole director of a company which failed to pay superannuation guarantee charge (SGC) amounts has been upheld. The unpaid SGC amounts were for a number of quarters between July 2013 and March 2015 and totalled just over $550,000. The defendant was potentially liable to pay a penalty equal to each unpaid SGC amount, pursuant…

ACNC – ‘Terms of Reference’ for review released – required, by law, after 5 years in operation

On 20 Dec 2017, the Assistant Minister to the Treasurer (Michael Sukkar MP) released the terms of reference for a review of the legislation governing the national regulator of charities, the Australian Charities and Not-for-profits Commission (ACNC). The Government is required to review operation of the ACNC, under legislation, now that it has been in operation…

Vic land tax: Living and Leisure Australia Ltd v Comr of State Revenue – Agreements to use of Crown land in ski resort dutiable as a ‘lease’ – exclusive possession granted

The Victorian Supreme Court has dismissed a taxpayer’s appeal against land tax assessments in respect of Crown lands within the alpine resorts at Falls Creek and Mount Hotham which were used and occupied by wholly-owned subsidiaries of the taxpayer. The Commissioner had issued land tax assessments for the 2010 to 2015 years in respect of…

Donoghue v FCT (No 2) – Commissioner’s application to dismiss action (on taxpayer failing to appear) dismissed – arguable case involving tax residence and $17m tax and penalty

The Federal Court has refused the Commissioner’s application for dismissal of a taxpayer’s taxation appeal proceedings for a want of prosecution. The taxpayer has appealed against the Commissioner’s disallowance of his objections against amended assessments for the 2005 to 2007 years inclusive. Tax and penalties total around $17 million. The substantive issue concerns whether, in…

OECD releases first ‘peer reviews’ on spontaneous exchange on private tax rulings affecting Multi-Nationals – BEPS Action 5, minimum standard

04/12/2017 – As part of continuing efforts to improve tax transparency and the international tax framework, the OECD has released the first analysis of individual countries’ progress in spontaneously exchanging information on tax rulings in accordance with Action 5 of the BEPS package of measures released in October 2015. The first annual report on the…

GIC set at and SIC rates – for Q3, 2017-18 (Jan – Mar 2018) set at 8.72% pa and 4.72% pa, respectively

The ATO has released the General Interest Charge (GIC) and Shortfall interest charge (SIC) rates for the third quarter of 2017-18 covering Jan- March 2018. They are:

  • GIC annual rate – 8.72%
  • GIC daily rate – 0.02389041%.
  • SIC annual rate – 4.72%.
  • SIC daily rate – 0.01293151%.

[ATO website: GIC, SIC; LTN 233, 5/12/17; Tax Month Dec 2017]

Audit of ATO’s ‘Reinventing’ Program – ANAO’s report on cost management showed good systems but poor use

The Australian National Audit Office (ANAO) has released its performance audit report on the Costs and Benefits of the Reinventing the ATO Program. The ATO said the overall intent of the Reinventing the ATO program was to transform the ATO’s internal culture, “providing a stronger connection to the community and an openness and willingness to…