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

Taxation Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 – update on passage to law

The Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 was passed, on Mon 8.2.2016, by the House of Representatives, without amendment. The Bill proposes to amend Sch 1 to the Taxation Administration Act 1953 to insert a new Subdiv 396-C (as part of Div 396 – Third Party Reporting, along with the FATCA provisions). It will require certain financial…

Tax and Superannuation Laws Amendment (2015 Measures No 6) Bill 2016 – CGT treatment of ‘earn-out rights’ and a 10% non-final withholding for CGT on certain sales by non-residents

The Tax and Superannuation Laws Amendment (2015 Measures No 6) Bill 2015 was passed by the House of Reps on Thursday 4.2.2016 without amendment and now moves to the Senate. The Bill proposes the following amendments: Will amend the ITAA 1997 to change the CGT treatment of the sale and purchase of businesses involving certain earn-out rights –…

Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 and Explanatory Memorandum (4 Feb 2016)

The Bill and Explanatory Memorandum for the Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 (in the House of Reps on Thur 4.2.2016) are attached. Bill (4.2.16) EM (4.2.16) The Bill effectively seeks to allow small businesses to change the legal structure of their business and have the CGT liability disregarded and deferred until eventual disposal. It will allow…

Tax Laws Amendment (Small Business Restructure Rollover) Bill 2016 – any entity type to any entity type, any active asset and income tax neutral

The Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 was introduced in the House of Reps on Thur 4.2.2016. It was passed in the House of Representatives on 22 February 2016 and finally passed both houses on 29 February 2016. The Bill will amend the ITAA 1997 to provide greater flexibility for small businesses to change their legal…

CR 2016/7 & 8 – tax treatment of fishing licence compensation and an early retirement scheme

On Wed 3.2.2016, the ATO released the following Class Rulings: CR 2016/7: treatment of compensation payments received under Div 5 of Pt 8 of the Fisheries Act 1995 (Vic) relating to phasing out commercial net fishing in Port Phillip Bay. The Ruling explains the tax treatment of various compensation payments to commercial fishing licensees whose licences…

Re Lau and FCT – Hardship relief denied to taxpayers with substantial assets, failure to report cash income and paying other creditors before the ATO

The AAT has affirmed the Commissioner’s decision to refuse to release 2 taxpayers from their tax liabilities, after finding they owned considerable assets and would not suffer serious hardship. The AAT heard that the taxpayers, Ms L and Mr P, had outstanding tax debts of $2.26m and $676,285, respectively, and had a history of failing…

Update on Multi-National Enterprise tax avoidance measures – ‘permanent establishment’ avoidance; thin capitalisation; OECD BEPS measures; and new ‘tax taskforce’

Whilst speaking at the Press Club in Canberra, on the importance of ‘free-enterprise, the Assistant Treasurer: the Honourable Kelly O’Dwyer reprised the Government’s actions to deal with avoidance of tax by ‘multi-national enterprises’ and also elaborated about progress in some of those areas. Saying that it was a matter of ‘fairness’, she said the following.…

NFF lobbies against ‘backpackers’ tax – un-legislated 2015 Budget measure imposing minimum 32.5% tax through denying ‘resident’ status

The National Farmers’ Federation (NFF), along with its member organisations, on Tuesday 2.2.2016, launched a campaign encouraging the Federal Government not to proceed with the proposed so-called “backpacker tax” which the NFF says will erode the agriculture workforce and the prosperity of regional communities. The campaign has been supported by the Tourism & Transport Forum Australia.…

Thomas v FCT – Taxpayer appeals decision that franking credits and their respective dividends cannot be separated (for tax purposes at least)

The taxpayer has appealed to the Full Federal Court against the decision in Thomas v FCT [2015] FCA 968. In that case, the Federal Court held that a discretionary trust could not distribute franking credits to an individual beneficiary differently from the manner in which the net income of the trust was resolved to be distributed. At the same…