Author Archives: John Morgan

TD 2012/13 – TOFA: tax treatment under a hedging financial arrangement, when a ‘cessation event’ happens is the gain or loss over the specified years [49]

This TD, released on Wed 6.6.2012, provides clarification on the appropriate tax treatment of the gain/loss from a hedging financial arrangement when a cessation event happens to the arrangement. The TD says that a gain or loss resulting from the expiration, sale, termination or exercise (collectively “Cessation Events”) of a hedging financial arrangement to which…

*TD 2012/12 – Division 7A can still operate via the interposed entity rules in Subdiv E, even though the exclusion rules in Subdiv D apply [48]

This TD, released on Wed 6.6.2012, states that the rules in Subdiv D of Div 7A of Pt III of the ITAA 1936 (which exclude certain payments or loans from being treated as dividends under Subdiv B) do not necessarily affect the circumstances in which a deemed payment or notional loan arises under Subdiv E.…

*TD 2012/11 – CGT streaming – beneficiaries can “reasonably expect to receive net financial benefit” if the capital gain is realised [47]

This Determination, released on Wed 6.6 2012, expresses the ATO view that it is possible (depending on the circumstances) for a beneficiary of a trust estate to be “reasonably expected” to receive a share of the net financial benefit referable to a capital gain for the purposes of s 115-228(1)(a) of the ITAA 1997 (ie…

*TD 2012/10 – When income tax will be a “present legal obligation” for Div 7A purposes [46]

The Tax Office on Wed 6.6.2012, released this TD which deals with the issue of when income tax of a private company will be a “present legal obligation” for the purposes of the distributable surplus calculation under s 109Y(2) of Div 7A of Pt III of the ITAA 1936. It was previously released as Draft…

*TD 2012/8 – Temporary absences from foreign service under s 23AG [45]

This TD, released on Wed 27.6.2012, provides the Commissioner’s views on the types of temporary absences from foreign service, which would form part of a continuous period of foreign service under s 23AG of the ITAA 1936. Broadly, the TD provides that certain temporary absences that are related to the foreign service will not be…

*TR 2012/5 – Taxation of dividends and s 254T of the Corporations Act [44]

This Ruling, released on Wed 27.6.2012, is about the taxation of dividends paid in compliance with s 254T of the Corporations Act 2001 from 28 June 2010. The Corporations Amendment (Corporate Reporting Reform) Act 2010 changed the prohibitions in s 254T of the Corporations Act governing the circumstances in which a company can pay a…

*TR 2012/4 – TOFA: determining what is an “arrangement” [43]

This Ruling, released on Wed 20.6.2012, discusses the operation of s 230-55(4) of the ITAA 1997 in determining whether a number of rights and/or obligations are themselves an arrangement or are 2 or more separate arrangements for the purposes of Div 230. Broadly, the Ruling states that whether a number of rights and/or obligations are…

TR 2012/3 – TOFA: gains and losses related to exempt and NANE income [42]

This Ruling, released on Wed 12.6.2012, provides guidance on the nexus test for hypothetical losses relevant to the application of s 230-30(2) of the ITAA 1997. It explains how that subsection applies to a gain made from a financial arrangement. Where this provision applies, a gain is to some extent exempt income or non-assessable non-exempt…

*TR 2012/2 -Effective life of depreciating assets, from 1 July 2012 [41]

This Ruling, released from Wed 27.6.2012, applies from 1 July 2012, and explains the methodology used by the Commissioner in making determinations of the effective life of depreciating assets under s 40-100 of the ITAA 1997. The Ruling replaces Taxation Ruling TR 2011/2, which is withdrawn on and from 1 July 2012. To the extent…

Re Mehta and FCT – Taxpayer held to be a share trader: ATO view [40]

The ATO on Fri 1.6.2012, released a Decision Impact Statement on the AAT’s decision in AAT Case [2012] AATA 208, Re Mehta and FCT. In that case, the AAT held the taxpayer was a share trader for the year ended 30 June 2009 as it was satisfied that the taxpayer’s activities amounted to carrying on…