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

MNWA Pty Ltd v DCT – Full Court dismisses appeal to have statutory demands set aside despite allegations of a global deal and written agreements providing security

Tax Month - November 2016

In a majority decision, the Full Federal Court dismissed the appeal of 2 corporate taxpayers to have statutory demands set aside. The taxpayers carried on property development activities. One of the directors of the companies claimed he reached a “global deal” with the ATO to bring to an end debt recovery action against the companies…

TA 2016/12 – Trusts: contrived s97(1)(a) ‘proportionate approach’ avoidance – distributable ‘trust law’ net income limited to exclude the economic substance in what would otherwise be the beneficiary’s taxable ‘net income’

Tax Month - November 2016

On Thur 17.11.2016, the ATO released Taxpayer Alert TA 2016/12, which deals with trust income reduction arrangements the ATO is reviewing. This Alert cautions against arrangements that minimise tax by creating artificial differences between the taxable net income and distributable income of closely held trusts. The ATO says the arrangements appear designed to exploit the…

PCG 2016/D17 – ATO compliance approach to exploration expenditure deductions under s8-1 or s40-730 – problem areas identified and role of systems and governance assurances to ATO

Tax Month - November 2016

On Monday 14 Nov 2016, the ATO released a draft of its Practical Compliance Guideline PCG 2016/D17 dealing with the ATO’s compliance approach to exploration expenditure deductions. Draft Taxation Ruling TR 2015/D4 (Income tax: deductions for mining and petroleum expenditure) provides the ATO’s view in relation to the deductibility under s8-1 and s40-730(1) of the…

ATO’s initiatives in Super – advice of reporting changes with new legislation; sharing data, not auditing; individualized report on 13 benchmarks for 261 large funds – ATO speech to ASFA

Tax Month - November 2016

ATO Deputy Commissioner Superannuation, James O’Halloran, gave a speech to the ASFA National Superannuation Conference on the Gold Coast on 10 November 2016 where he spoke on the ATO’s perspective on risk and compliance. Some of the points he made included: In relation to the major superannuation reform Bills introduced last week, he said the ATO has already…

Hua Wang Bank Berhad; Bywater Investments & Ors v Commissioner of Taxation – taxpayers resident; foreign income taxed – foreign directors met overseas but ‘rubber stamped’ decisions made in Australia (by Vanda Gould)

Tax Month - November 2016

On 16 Nov 2016, the High Court unanimously dismissed appeals by four companies (“the appellants”) from a decision of the Full Court of the Federal Court of Australia. The High Court held that the appellants were Australian residents for income tax purposes during the relevant years and were thus liable to tax in Australia on…

Tas stamp duty: Refund re retrospective exemption from duty on certain statutory vesting transactions

Tax Month - November 2016

The Tasmanian State Revenue Office (SRO) has noted that the Taxation and Related Legislation (Miscellaneous Amendments) Act 2016 (Tas) introduced a retrospective exemption from duty (effective 1 July 2001) for certain statutory vesting transactions, including where dutiable property vests as the consequence of the registration or cancellation of a strata plan under the Strata Titles Act 1998…

Vic: State Taxation Acts Further Amendment Bill 2016 receives Royal Assent – Payroll Tax motor vehicle allowances; Land Tax – taxable value; surcharge rate for absentee trusts

Tax Month - November 2016

The State Taxation Acts Further Amendment Bill 2016 (Vic) has passed all stages without amendment and received Royal Assent on 15/11/16 as Act No. 66 of 2016. It amends the Payroll Tax Act 2007 (Vic) to update the way the exempt rate used in the calculation of the exempt component of motor vehicle allowances is…

Re Abichandani and ASIC – AAT overturned ASIC decision to disqualify a highly qualified SMSF auditor, finding that the auditor had not been untruthful in withdrawing a complaint and that he was a ‘fit and proper person’

Tax Month - November 2016

ASIC had disqualified the Applicant from being an approved SMSF auditor on the basis that he was not a ‘fit and proper person’ but the AAT set aside ASIC’s decision. The facts are set out in the beginning of the AAT’s decision as follows. Mr Abichandani holds various bachelor degrees in commerce and accounting. He…