Author Archives: John Morgan

*GST – remaining changes to ‘financial supply’ provisions provisions announced in the 2010-11 Budget – draft regulations released [G1]

The Assistant Treasurer has released draft regulations implementing the remaining 4 measures of proposed changes to the financial supply provisions of the GST law that were announced in the 2010-11 Federal Budget. The 4 measures are: simplifying the treatment of hire purchase transactions by making them fully taxable; expanding the range of expenses qualifying for…

*Reportable tax position: early disclosure form 2012 [R4]

The ATO has released the Reportable tax position (RTP) early disclosure form 2012 and accompanying instructions. For taxpayers required to lodge a reportable tax position schedule for 2012, the ATO says the early disclosure form enables them to disclose RTPs prior to lodgment of the schedule. For taxpayers completing the RTP early disclosure form, the…

*TD 2012/D1 – When income tax will be a “present legal obligation” for Div 7A (distributable surplus) purposes [R3]

The Tax Office on Wed 11.1.2012, issued this Draft Determination 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 provides that if a…

*TR 2012/1 – Tax treatment of retail premiums paid to non-participating shareholders on rights issues and the like – a dividend [R2]

This Ruling, issued on Wed 25.1.2012, states the Commissioner’s view regarding the tax treatment of retail premiums paid to non-participating shareholders in companies for amounts subscribed for shares. Broadly, these schemes involve a company granting rights to its existing shareholders that allow them to subscribe for new shares at an amount (“offer price”). For shareholders…

*GE Capital Finance Australasia Pty Limited and GE Capital Australia v Commissioner of Taxation [R1]

From March 2003 until 26 May 2004, the GE Capital Corporation (GECC) group undertook extensive planning for a potential initial public offering (IPO) of its global lenders’ mortgage insurance businesses. In Australia, the businesses were conducted by two wholly owned subsidiaries of GE Capital Australia (GECA), GE Mortgage Insurance Pty Ltd (Old GEMI) and its…

Mitsui & Co (Australia) Ltd v FCT – taxpayer appeals Federal Court’s decision that expenditure on a single mining right can’t be apportioned between amortizable and deductible expenditure [C11]

The taxpayer has appealed to the Full Federal Court against the decision of Siopis J in Mitsui & Co (Australia) Ltd v FCT [2011] FCA 1423. The Federal Court had dismissed the taxpayer’s appeal and upheld the Commissioner’s disallowance of a deduction made in respect of the part of the consideration the taxpayer attributed to a petroleum production field.…

*On Call Interpreters and Translators Agency Pty Ltd v FCT (No 3) – taxpayer withdraws appeal – translators remain SGC ‘employees’ [C10]

Thomson Reuters understands that the taxpayer has discontinued its appeal to the Full Federal Court from the decision of Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v FCT (No 3) [2011] FCA 366. In that decision, which now stands, the Federal Court held that interpreters engaged by a business to provide…

*Mills v FCT – taxpayer seeks leave to appeal to the High Court against the decision that the CBA’s Pearls V Securities constituted franking benefit avoidance [C9]

The taxpayer has lodged an application for special leave to appeal to the High Court against the decision of the Full Federal Court in Mills v FCT [2011] FCAFC 158. The Full Federal Court had (by majority) confirmed that the “imputation benefit” scheme provisions in s 177EA of the ITAA 1936 applied to cancel franking…

*Re Crown Insurance Services Ltd and FCT – Commissioner appeals (like a dog that won’t give up its bone) the AAT decision that the Vanuatu insurance company was neither resident, nor had any Australian source income [C8]

The Commissioner has appealed to the Federal Court against the decision in AAT Case [2011] AATA 847, Re Crown Insurance Services Ltd and FCT. The AAT had held that an insurance company (the taxpayer) incorporated in Vanuatu neither carried on a business in Australia nor had its central management and control in Australia, and therefore,…

*Re Bell and FCT – CGT: maximum net asset value test failed – liability of family trust to make distribution not related to any assets and can’t be counted [C7]

The AAT has ruled that a taxpayer failed the maximum net asset value test for the purposes of accessing the CGT small business concessions in relation to a capital gain of over $6m made by a family trust to which he was presently entitled from the trust’s sale of units in related unit trusts. The…