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

CR 2013/7-10 – Early retirement; demerger; FITO and ESS; FBT parking [44]

The ATO on Wed 30.1.2013, issued the following Class Rulings: CR 2013/7: Queensland Government Department of Education Training and Employment – early retirement scheme. It applies from 30 January 2013 to 31 December 2013. The Ruling broadly states that the scheme is an early retirement scheme for the purposes of s 83-180 of the ITAA 1997. CR 2013/8: Demerger of…

*TD 2013/2 – Wind farming income is not primary production income for averaging purposes [40]

This TD, issued Wed 23.1.2013, states that ordinary income derived by an individual from allowing wind farming infrastructure to be constructed, operated and accessed on freehold land that they own and use in carrying on a primary production business does not constitute “assessable primary production income” of that individual for the purposes of Div 392 of…

TD 2013/1 – Interest is deductible on a full recourse loan used to pay the interest on another capital protected borrowing [39]

This TD, issued on Wed 23.1.2013, states that where a taxpayer enters into a limited recourse loan (investment loan) which is made under a capital protected borrowing for the purposes of Div 247 of the ITAA 1997, and a full recourse loan (interest loan) is entered into solely to fund an amount of prepaid interest on…

TR 2013/1 – Australia’s tax treaties: meaning of “employer” for short-term visits [38]

This Ruling, issued on Wed 30.1.2013, provides the Commissioner’s view on the meaning of “employer” in the general exclusion provision provided under the Income from Employment Article (or equivalent), of Australia’s tax treaties (short-term visit exception). It also outlines the approach taken in determining who the employer is for the purposes of the short-term visit…

Re Waldeck and FCT – All penalties remitted for claiming PAYG withholding credits – “based on the facts in this particular case…” [37]

The ATO on Fri 18.1.2013, released a Decision Impact Statement on the following case: AAT Case [2012] AATA 848, Re Waldeck and FCT – In this case, the AAT remitted in full a 25% penalty imposed on a taxpayer for claiming PAYG withholding credits in his tax returns which were not withheld by his employer…

FCT v Visy Industries USA Pty Ltd – conclusion that the indemnity fee was deductible was ‘open on the facts…’ [36]

The ATO on Fri 18.1.2013, released a Decision Impact Statement on the following case: FCT v Visy Industries USA Pty Ltd [2012] FCAFC 106 – In this case, the Full Federal Court dismissed the Commissioner’s appeal and confirmed that the taxpayer was entitled to a deduction under s 8-1 of the ITAA 1997 for an “indemnity…

*Mills v FCT – DIS on High Court’s decision that s177EA (Part IVA) doesn’t apply to deny franking credits on PEARLS issued for Tier 1 Capital [35]

The ATO on Mon 21.1.2013, issued a Decision Impact Statement on the High Court’s decision in Mills v FCT [2012] HCA 51. In that decision, the High Court unanimously allowed the taxpayer’s appeal and set aside the Commissioner’s determination that no franking credit was to arise in respect of distributions made on certain securities issued…