John Morgan is a tax specialist lawyer of more than three decades experience now practicing at the Victorian Bar - w: www.FJMtax.com e: f.john.morgan@vicbar.com.au

Regime to centralise ‘business registers’; starting with ASIC transferring 34 registers to the ABR (ATO); ‘Director Identification Number’ requirement to be created – draft legislation released

Tax Month - October 2018

On 1 October 2018, Treasury released draft legislation proposing to implement its 2018-19 Federal Budget measures to modernise business registers and introduce Director Identification Numbers (DIN). SUBMISSIONS were due by 26 October 2018 (and are now closed). The legislative package, includes: The draft Commonwealth Registers Bill 2018 (Bill 1) – which establishes a statutory regime by which Commonwealth agencies…

New Regulation giving business names not registered on ASIC’s national register another 5 years to continue being registered on the ABR (and have an ABN)

Tax Month - September 2018

The A New Tax System (Australian Business Number) Amendment (Display of Trading Names) Regulations 2018 provides a further 5 year extension of the time, from 1 November 2018 to 31 October 2023, that unregistered  trading names, can remain on the on the Australian Business Register (ABR). These are business names that were on the ABR…

Draft legislation to prevent deductions for repayment of principal on ‘concessional loans’ owed by previously exempt State and Territory Bodies on becoming taxable (eg. privatised)

Tax Month - October 2018

On 12 October 2018, Treasury draft legislation to progress a measure announced in the 2018-19 Budget, that relates to State and Territory tax exempt entities, that become taxable, after 8 May 2018. This is described as an ‘integrity’ measure and is designed to stop such entities getting tax deductions on repayment of pre-privatising concessional loans. The deductions…

Draft Legislation – Assignments of Partnership Interests precluded from getting Div 152 ‘small business CGT relief – only assignments when the assignee becomes a partner will remain eligible

Tax Month - October 2018

ON Monday 15.10.2018, Treasury released draft legislation to give effect to its 2018-19 Budget measure to remove access to the small business CGT measures for partners that (in the main case) assign part, or all of their interest in the partnership – which was done in the well known Everett [1980] HCA 6 and Galland [1984]…

Draft legislation to disallow certain deductions in relation to vacant land – unless used in carrying on a business or incurred by a company etc (unintended consequences for ‘residential premises?)

Tax Month - October 2018

On Monday 15.10. 2018, Treasury released draft legislation to give effect to its 2018-19 Federal Budget measure to disallow deductions for expenses associated with holding vacant land, except in specified circumstances. Treasury’s explanation for the measure is [para 1.6 of the Draft EM] is: 1.6 As the land is vacant, there is often limited evidence…

Draft Anti-avoidance rules for circular trust distributions – Sch 2F ‘family trusts’ type entities to be removed from trusts ‘excluded’ from Div 6D ‘closely held trust’ Regime (sort of)

Tax Month - October 2018

On Friday12 October 2018, the Government  released draft legislation to give effect to its 2018-19 Budget measure to extend a specific anti-avoidance rule for closely held trusts engaging in circular trust distributions to  ‘family trusts’ (but note, these are discretionary trusts that have made the ‘family trust’ election under (under s272-80 of Sch 2F to…

Vic duty: MD Commercial Pty Ltd & AJ Commercial Pty Ltd v Comr of State Revenue – transfers of land not exempt under s 35(1)(a) as a transfer for the transferor without a change in beneficial ownership – taxpayers lose appeal

Tax Month - October 2018

The Victorian Supreme Court has granted taxpayers leave to appeal but then dismissed that appeal in a matter concerning exemption from duty of transfers of land under s 35(1)(a) of the Duties Act 2000 (Vic). Under the will of their deceased mother, two sons were entitled to the residue of their mothers estate, which included land…

Satyam Computer Services Ltd v CofT – DTA a sword not shield – Indian company taxable on DTA ‘royalties’ outside Australia’s withholding tax scope – because the DTA deemed those receipts to have an Australian ‘source’, so as to be assessable as ‘ordinary income’

Tax Month - October 2018

On a ‘case stated’, the Full Federal Court held that an Indian company, was taxable, on payments it received, from Australian customers, under the Australia – India Double Tax Agreement, because that DTA changed the Australian domestic tax law, to give these payments an Australian ‘source’. This case is very important, as it was fought…

PS LA 2018/1 – Guidance to ATO staff on when to refer SMSF auditors to ASIC for potential disciplinary action

Tax Month - October 2018

On 18 October 2018, the ATO released Practice Statement PS LA 2018/1 – Self-managed superannuation funds – referral of approved SMSF auditors to ASIC on Thursday, 18 October 2018. Since 31 January 2013,  ASIC has been responsible for taking actions against approved SMSF auditors, who have not met their ongoing obligations, and ATO staff have the power, under…

Labor policy to double maximum ‘civil penalties’ for ‘promoting’ ‘tax exploitation schemes’ to $10m – against the backdrop of the Appleby leak of client documents in Bermuda, including the now contentious Glencore restructuring and allegations the ‘Big 4’ accountants could have been ‘promotors’

Tax Month - October 2018

On 11 October 2018, the Labor party announced that it would double ‘promotor penalties’ from a maximum of $1m for individuals and $5.25m for corporations to $2m and $5.5m respectively. This might be fair enough, but it is important to have a sense for how low the bar is set for these penalties (it is…