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

Board of Taxations Report on Australian individual tax residency rules – modernise and include ‘bright line’ (count the days) tests to avoid growing and invasive disputation

Tax Month - July 2018

On 9 July 2018, the Board of Taxation (BoT) made public its August 2017 report to the Government, Review of the Income Tax Residency Rules for Individuals. on the same day, Minister for Revenue: Kelly O’Dwyer requested that the Board of Taxation undertake further consultation with regard to its recommendation to introduce a new set of…

Travelex Limited v FCT – interest on overpaid GST held to be payable from 14 days after the ‘surplus arose’ under s12AD of the Overpayments Act (not from notice of refund amount)

Tax Month - July 2018

A taxpayer has been successful before the Federal Court when it argued that interest on overpaid GST accrued from the day on which the GST ‘surplus arose’ under the relevant definition: ‘RBA interest day’ s12AA, s12AD & s12AF of the Taxation (Interest on Overpayments and Early Payments) Act 1983 (Overpayments Act). This sounds boring, but…

NSW: Foreign person Duty and Land Tax ‘surcharges’ as applied to discretionary trusts – foreign beneficiaries must be removed irrevocably or the surcharge will apply

Tax Month - July 2018

On 5 July 2018, the NSW Commissioner of State Revenue issued Commissioner’s Practice Note No CPN 004 on Foreign surcharges and discretionary trusts. It applies from 21 June 2016 and outlines how surcharge purchaser duty and surcharge land tax will be applied in certain situations where land is held by a discretionary trust. CPN 004 further expands…

HELP and SFSS repayment thresholds and rates 2018-19 – nil% up to $51,957 rising to 8% above $107,214 of ‘repayment income’

Tax Month - July 2018

The ATO has released the repayment thresholds and rates for 2018-19 for the compulsory repayment of Higher Education Loan Program (HELP) debts and Student Financial Supplement Scheme (SFSS) debts. HELP repayment thersholds and rates 2018-19 Repayment income* Repayment rate Below $51,957 Nil $51,957 – $57,729 2% $57,730 – $64,306 4% $64,307 – $70,881 4.5% $70,882…

Board of Taxation – July Update from CEO – ‘earn-outs’ review; Small Business Concessions review; FBT compliance costs; Residency Rules review; aligning tax and accounting treatments; Tax Transparency Code; not-for-profits review

Tax Month - July 2018

In July, the CEO of the Board of Taxation released her July 2018 Update. The Board held meetings in Canberra on 25 May 2018 and in Melbourne on 5 July 2018. At these meetings, the Board discussed the progress and direction of its current projects, including: Post implementation review of contingent consideration rules (earn-out arrangements). A review of small…

PR 2018/7 – Tax consequences of investing in PTrackERS – Portfolio Tracking Exchangable Redeemable Securities

Tax Month - July 2018

On Wed 11.7.2018, the ATO released Product Ruling PR 2018/7 on the tax consequences of investing in PTrackERS, being exchangeable notes offered by PM Capital GO 2025 Limited. In particular, PR 2018/7 provides that security holders have a non-share equity interest in the company and that various anti-avoidance rules do not apply. DATE OF EFFECT:…

PCG 2018/3 – when employers can let employees drive ordinary vehicles home without FBT under s47(6) of the FBT Act – ATO guidance for allocation of audit resources

Tax Month - July 2018

On 11 July the Australian Taxation Office (ATO) released Practical Compliance Guide PCG 2018/3 (the PCG).  The PCG sets out circumstances in which the ATO will generally accept that certain vehicles used privately by employees may be exempt from fringe benefits tax (FBT).  The PCG applies from the year of tax commencing 1 April 2018.…

Harding v FCT – Taxed on Saudi employment income as a ‘resident’ despite long history of Middle Eastern work because he retained an Australian ‘domicile’ and his serviced apartment was not sufficiently ‘permanent’

Tax Month - July 2018

A taxpayer has been unsuccessful before the Federal Court, in establishing that he was not a ‘resident’, for Australian income tax purposes, on a basis that centred around whether he had a ‘permanent place of abode outside of Australia’ for the purposes of the Australian ‘domicile’ arm of the definition of ‘resident’ in s6(1) of…

Harding v FCT – Taxpayer appeals Federal Court decision he was a ‘resident’ and taxable on his Saudi Arabia income despite not intending to return to Australia to live

Tax Month - July 2018

The taxpayer has appealed to the Full Federal Court against the decision of Derrington J in Harding v FCT [2018] FCA 837. The taxpayer had been unsuccessful in arguing that he had a permanent place of abode outside of Australia for the relevant income tax year. In June 2009, the taxpayer left Australia to work in Saudi Arabia as…