Author Archives: John Morgan

CR 2016/48 – NAB Capital Notes 2 – franking credits on convertible notes (streaming, s177EA etc.); not traditional securities; CGT on conversion; no s45A/B capital benefits; etc

On Wednesday 6.7.2016, the Commissioner issued the following Class Rulings: CR 2016/48: National Australia Bank Limited – issue of NAB Capital Notes 2. It applies to Australian resident holders of NAB capital Notes 2. It applies from 1 July 2015 to 30 June 2025. [LTN 128, 6/7/16] Extract from Ruling Acquisition time of the NAB Capital Notes 2 64. Holders…

Caratti v FCT – Taxpayer gets interlocutory order preventing the Commissioner taking recovery action, despite breach of security arrangements because of alleged failure of Commissioner to give notice before taking action

A taxpayer has been successful in interlocutory proceedings before the Federal Court in preventing the Commissioner from taking recovery action in respect of a tax debt of some $11m. The Commissioner sought to institute the recovery action on the basis that the taxpayer had breached a term of a deed that the parties had entered…

Re Azer and FCT – Excess concessional super contributions salary sacrificed super from various jobs – no special circumstances and no reallocation

An individual taxpayer has been unsuccessful before the AAT in seeking to have excess concessional contributions for the 2014 financial year disregarded or reallocated pursuant to s291-465 of the ITAA 1997. The taxpayer was a full-time employee in the Victorian Public Service and also worked a number of part-time, casual jobs with approximately 4 employers.…

FCT v Oswal (No 6) – Court finds mortgages void as being an alienation of property with intent to defraud creditors (including the Commissioner as it turned out)

The Federal Court has found for the Commissioner in holding that mortgages granted by the first respondent over 2 valuable residential properties in suburban Perth in favour of the second respondent, Mercury Services Limited, were void pursuant to s 89(1) of the Property Law Act 1969 (WA) (PLA) as being an alienation of property with intent to defraud…

FCT v Oswal (No 6) – Court finds mortgages void as being an alienation of property with intent to defraud Commissioner

The Federal Court has found for the Commissioner in holding that mortgages granted by the first respondent over 2 valuable residential properties in suburban Perth in favour of the second respondent, Mercury Services Limited, were void pursuant to s 89(1) of the Property Law Act 1969 (WA) (PLA) as being an alienation of property with intent to defraud…

Re XLPZ and FCT – Tax debt not released because the ‘serious hardship’ was independent of the $58k tax debt (there were $300k of other liabilities beyond the value of his assets)

An individual taxpayer has been unsuccessful before the AAT in seeking to be released from tax debts pursuant to s340-5 of Sch 1 to the Taxation Administration Act 1953. The taxpayer had tax debts of some $58,000 which arose because of early access to his self-managed super fund (SMSF). The AAT said it was the taxpayer’s…

Car expenses rate for 2016-17 – $0.66/km (unchanged from last year)

The cents per km rate for claiming work-related motor vehicle expenses for the year commencing 1 July 2016 is 66c/km (this is the same rate as for 2015-16). The rate was set in a legislative instrument made 1 July and registered on 4 July 2016 (under s28-25(4) of the ITAA 1997, which allows the Commissioner to determine the rate for the cents…

DCT v Panayi  – DPN for $370,000 upheld: Defendant found to be a director and then other defences failed (despite bad health)

In a lengthy decision, the NSW District Court has upheld a director’s penalty notice (DPN) for $369,904.86. The taxpayer worked for a family freight and logistics business. The defendant claimed his role in this business was only to oversee the maintenance of the fleet of trucks and to supervise the mechanics working at a workshop,…

Re SRBP and Tax Practitioners Board – Tax agent cautioned with sanctions instead of having registration terminated

The AAT has decided to replace the Tax Practitioners Board’s decision to terminate an applicant’s tax agent registration with a caution accompanied with specific sanctions after taking into account the applicant’s history of personal and mental health problems. In October 2014, the Board found the applicant had failed to comply with 3 sub-sections of the Code of…

Millar v FCT – Back to Back loan from Aust’n Super Fund to Hua Wang Bank (Vanda Gould) to the taxpayers was treated as a ‘sham’ and taxed as premature payment of preserved benefits

On Monday 4.7.2016, the Full Federal Court, by majority, dismissed husband and wife taxpayers’ appeal from the October 2015 decision of Griffiths J in Millar v FCT [2015] FCA 1104 in a case concerning a property loan arrangement with a Samoan bank being a sham. The original AAT proceeding (Re Morrison and FCT [2015] AATA 114) was a review of a…