Addy case – Hight Court has reserved its decision, in the taxpayer’s appeal on the validity of the ‘backpacker tax’

On 24 June 2021 the High Court heard the taxpayer’s appeal in the Addy case and reserved its decision. This is the case about the validity of Australia’s ‘backpacker tax’ – under an ‘anti-discrimination’ clause in a Double Tax Agreement – in this one, our agreement with the UK. See below for further details. [Tax Month – June…

Should directors manage ESG (environment, social and governance) – ‘too right’, argues Gerry Bean in the Law Institute Journal

Dr Gerry Bean has published an article in the Law Institute Journal assessing directors’ duty to management of environmental, social and governance (ESG) risk. He looks at the open ended duties of directors, at law, and the welter of spectacular reputational collapses, of recent, to argue that is is vital that they do manage ESG risk.…

Mussalli v Commissioner of Taxation – Prepaid rent for McDonalds stores not deductible – it was really for to acquire the right to operate the restaurants

The Full Federal Court found that payments made by a franchisee in connection with the acquisition of McDonald’s restaurants and described as prepayment of rent were not deductible in Mussalli v Commissioner of Taxation. The Full Federal Court agreed with the decision of the primary judge that the payments were not deductible because they were on…

‘Business interruption insurance’ applies to Covid-19 interruptions – at least one common exclusion doesn’t apply (High Court refuses Insurer’s application for leave to appeal)

The issue of whether policy holders can claim on ‘business interruption insurance’ on COVID related interruptions, was determined against insurers, in the NSW Court of Appeal, and on Friday, 25 June 2021, the High Court rejected the insurers leave to appeal. On 28 June, 2021, the law firm: Maurice Blackburn (well known for acting for…

Governance standards for charities strengthened: Regulations registered

        The Government today [Mon 28.6.2021] registered the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No 2) Regulations 2021 to amend the Australian Charities and Not-for-profits Commission Regulation 2013 (ACNC Regs) by extending governance standard 3 of the Regs to prohibit certain kinds of summary offences: see initial coverage of its…

Appeals update – Commissioner appeals Virgin Australia Airlines case regarding ‘car parking fringe benefits’ and taxpayer appeals Mussalli case regarding deductibility of lump-sum payment to reduce rent

VIRGIN AIRLINES: The Commissioner has filed a notice of appeal to the Full Federal Court against the decision of Griffiths J in Virgin Australia Airlines Pty Ltd v FCT [2021] FCA 523. The Federal Court had held that Virgin Airlines did not provide car parking fringe benefits to its flight and cabin crew at Sydney, Brisbane…

SMSF related-party LRBAs: ATO ‘safe harbour’ interest rate for 2021-22 is 5.10% for property and 7.10% for listed shares

For SMSF related-party limited recourse borrowing arrangements (LRBAs) used to acquire real property, the ATO’s safe harbour interest rate is expected to be 5.10% for 2021-22 (unchanged from 2020-21). Practical Compliance Guideline PCG 2016/5 sets the safe harbour interest rate each year according to the Reserve Bank Indicator Lending Rates for banks providing standard variable housing…

New Free Trade Agreement with the UK – a quick summary and a look at what this means for Australian businesses

On 15 June 2021, Scott Morrison and Boris Johnson (Scomo and Bojo) agreed on the core terms of an incredibly important Free Trade Agreement between Australia and the UK. The new Agreement will see consumers in both markets benefit from cheaper goods, while farmers, winemakers and young people looking to live abroad will have greater…