TD 2018/13 – Div 7A: ordinary commercial payments or loans, to interposed entities can still trigger the s109T anti-avoidance provision (but not necessarily trigger Div 7A)

On 18 July 2018, the ATO issued Taxation Determination TD 2018/13, which considers whether a Div 7A interposed entity rule (s109T of the ITAA36) can apply to an ordinary commercial payment, or loan from a private company to an interposed entity. The Commissioner concludes that it can apply, which is to say that a two step…

Whittle and ASIC – SMSF auditor disqualification upheld – breach of independence standards by auditing her brother’s fund for 9 years and her de-facto partner’s fund for 6 years

The AAT has affirmed a decision by ASIC to disqualify an approved SMSF auditor for failing to comply with the auditor independence requirements by auditing the SMSFs of close family members. The applicant, an accountant since 1975, had conducted numerous audits of SMSFs since 1999. Following an ATO compliance review, it was revealed that she had…

Takeover of Westfield by Unibail-Rodamco – no rollover so cost base has to be calculated and apportioned to 3 elements of stapled security

With 30 June clicking over, the managed funds and superannuation industry has been busily producing year end tax reporting on behalf of investors and members. A core element of this is reflecting on whether any major corporate actions took place in the preceding 12 months and the tax implications. This year was no different, but…

FCT v Chen – Asset freezing order granted over Australian and foreign assets of an Indian citizen, to secure $7.5m tax debts (94% of income omitted if Commissioner’s assessment is correct)

The Federal Court has granted the Commissioner a freezing order of the assets of a taxpayer concerning a $7.5 million tax debt. The Commissioner had sought freezing orders against the taxpayer under Division 7.4 of the Federal Court Rules 2011 (Cth).  After hearing counsel for the Commission, Colvin J made orders substantially in the terms sought.…

SuperStream to now apply to SMSFs – applying to rollovers – draft regulations released requiring Fund to advise ATO of banking details etc. 10 days prior

On Tuesday 17 July 2018, the Government released exposure draft regulations, proposing to extend SuperStream to include rollovers to and from self-managed superannuation funds (SMSFs). The Minister previously announced this measure, on 27 April 2018, at the same time as announcing that SMSFs will be allowed to have up to 6 members (instead of only 4). She announced…

Common Reporting Standard (CRS) Automatic exchange of offshore account information – OECD reports over 100 jurisdictions exchanging under 3,200+ bilateral relationships

On 5 July 2018, the OECD published a new set of bilateral exchange relationships, established under the Common Reporting Standard Multilateral Competent Authority Agreement (CRS MCAA). In total, the international legal network, for the automatic exchange of offshore financial account information, under the CRS now covers over 90 jurisdictions, with the remaining dozen set to…

Multilateral Instrument (MLI) – OECD BEPS Measure 15 – A round up of relevant international choices and resulting effects – at time legislation introduced into the Australian Parliament

  By Pointon Partners – June 21, 2018 [FJM 22.7.2018] A Bill to enact the OECD BEPS Measure 15 – the Multilateral Instrument (MLI), in Australia: the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018,  was introduced into our Lower House, on 28 March 2018. At that time the Government hoped that it would become law before the…

NSW Duty – Rubino Investments Pty Ltd v Chief Commissioner of State Revenue (NSW) – transfer of land not exempt as transfer to new trustee or transfer to rectify fraud

A transfer of land was not exempt because it did not rectify the consequences of fraudulent conduct. Mr and Mrs R were the registered proprietors of land at Galston. The properties were mortgaged to a bank and they were in danger of losing them. In 2012 a financial adviser organised for the properties to be…

DCT v Donoghue – Summary judgment for tax debt correctly entered for $48m – service effective and formalities established the statutory presumption that the debt was due and payable

The Federal Court was satisfied that relevant documents were property served on the taxpayer and entered summary judgment for the Tax Office in the amount of just over $48m. There were 2 issues for the Court. When the taxpayer’s solicitors ceased to act for him, in relation to both his appeals, against income tax assessments,…