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

*TR 2012/8 – Assessability of amounts received for legal costs incurred in ETP disputes [45]

This Ruling, issued on Wed 28.11.2012, provides the Commissioner’s views on whether amounts received in respect of legal costs incurred in disputes concerning termination of employment should be included in assessable income. It also considers the FBT consequences of legal costs incurred in a dispute but does not consider the GST and CGT consequences. The…

FCT v Kassem and Secatore & Anor – Full Federal Court dismissed the Commissioner’s appeal against recovery of a preference [43]

The ATO on Fri 23.11.2012, issued Decision Impact Statement on the following: FCT v Kassem and Secatore & Anor [2012] FCAFC 124 – In that case, the Full Federal Court dismissed the Commissioner’s appeal and upheld an earlier decision that the Liquidators of a company were able to recover as an “unfair preference” 2 payments…

*Re Nash v FCT – Commissioner appeals AAT decision that GIC is deductible in the period to which it is referable (not the period in which it is imposed) [42]

The Commissioner has lodged a notice of appeal to the Federal Court against the decision of Deutsch DP in AAT Case [2012] AATA 719, Re Nash and FCT. In that case, the AAT held that the taxpayer was entitled to deductions for General Interest Charge (GIC) accrued amounts for each year to which the GIC…

*Pratt Holdings Proprietary Limited v FCT – taxpayer appeals decision to disallow loss generated from sale of mining exploration tenements [41]

The taxpayer has lodged a notice of appeal to the Full Federal Court against the decision of Gordon J in Pratt Holdings Proprietary Limited v FCT [2012] FCA 1075. In that case, the Federal Court held that the taxpayer was not entitled to deduct a loss transferred to it from a related joint venture company…

DCT v Power – Validity of DPNs for $1m upheld – resigning as a director didn’t assist, notice didn’t need to cite Div 269 and didn’t need separate notices [40]

The NSW Supreme Court has upheld the validity of Directors’ Penalty Notices issued to a company director in respect of unpaid PAYG liabilities of close to $1m (including interest) incurred during periods in 2010 and 2011. The director sought to challenge the notices on 3 grounds – namely:  (1) for failing to state that he…

Re Lack and FCT – Commissioner not out of time to issue assessments – sham conceded by taxpayers [38]

Husband and wife taxpayers who conceded that a “profit-washing” arrangement they entered into was a “sham” have been unsuccessful before the AAT in arguing that amended assessments were issued out of time and that 50% shortfall penalties for recklessness should have been remitted. The taxpayers operated a successful grain growing business in partnership and took…

Re Watsford and FCT – ESS: share options issued under a settlement were not new and the discount was assessable in the previous year [37]

The AAT has held a taxpayer was required to include a discount from the market value of shares he acquired on the exercise of options under an employee share scheme (ESS) in the 2007 year. It also upheld the Commissioner’s decision to impose a 25% shortfall penalty for failure to take reasonable care. The taxpayer…

Re Neimanis and FCT – Tax debt not released on hardship grounds despite tax payer having few assets in his name as his wife had assets [36]

The AAT has affirmed the Commissioner’s decision to refuse to release a taxpayer from an income tax and PAYG instalment debt pursuant to s 304-5 of the TAA as it considered the taxpayer would not suffer serious hardship. The taxpayer was a retired solicitor who had been in practice since 1979. He sought a release from…