Professional firms income allocation (income splitting) – no real pre-30 June 2018 replacement guidance from the ATO

On 25 June 2018, the Commissioner updated his website page on his suspended ‘guidelines’ for income allocation for professional firms (which is really about how much income principals in professional firms can ‘split’ with family members, without attracting audit attention from the Commissioner). He suspended his previous guidelines on 14 December 2017, citing various alleged…

GST withholding on purchase of certain ‘new’ residential premises and ‘potential residential land’ – Commissioner releases relevant online forms and instructions

From 1 July 2018, purchasers of new residential premises or potential residential land are required to withhold an amount of the contract price and pay this directly to the ATO as part of the settlement process. The ATO has released instructions on how to complete the new GST property settlement forms. Purchasers of new residential premises or…

TR 2018/4 – Effective life of depreciating assets from 1 July 2018 – Commissioner’s determination under s40-100

On 27 June 2018, the Commissioner issued TR 2018/4, setting out his determination of the effective life of depreciating assets, for the purposes of depreciation deductions under Division 40 of the ITAA97 (s40-25). Though taxpayers can choose their own ‘effective lives’ s40-100 allows the Commissioner to determine effective lives, which are widely used as they avoid…

Superannuation – ‘Member Information Accounts’ under s390-5 – Commissioner’s determination of ‘Approved Form’ registered – applies from 1 July 2018

A superannuation related Legislative Instrument: the Taxation Administration Member Account Transaction Service – the Reporting of Information Relating to Superannuation Account Transactions 2018 was registered on 27.6.2018. The Deputy Commissioner – Superannuation made the determination on 24 May 2018, but it was a little over a month until it was registered. The Determination will apply…

PR 2018/6 – Investment in Chan & Naylor Property Investor Trust – interest deductible and Part IVA doesn’t apply

On Wed 27.6.2018, the ATO released Product Ruling PR 2018/6 (Deductibility of interest in relation to an investment in a Chan & Naylor Property Investor Trust). This ruling considers the tax consequences of investing in a trust offered by CNIP Pty Ltd, using borrowings that are on arm’s length and commercial terms. In particular, it…

‘Government services’ articles in Australia’s DTAs – Addendum to TR 2005/8 to update various changes

Today [Wed 27.6.2018], the ATO issued an Addendum to Taxation Ruling TR 2005/8, its ruling on the government services articles in Australia’s tax treaties. The ruling is amended to: incorporate the revised DTA between Australia and Germany, which came into force on 7 December 2016; remove outdated guidance concerning s 23AG of the ITAA 1936; and remove the…

LCR 2018/4 – purchasers’ obligation to pay GST amounts on taxable supplies of certain ‘new’ residential premises and potential residential land – including ‘clarification’ of wrongly withheld refunds

On 27 June 2018, the ATO issued Law Companion Ruling LCR 2018/4 on the recently enacted measure requiring purchasers of newly constructed residential premises (or new subdivisions) to remit GST directly to the ATO as part of the transaction (finalising LCR 2018/D1). For a fuller discussion about the operation of these provisions, and the draft…

Non-core Procurement Hubs – draft ‘Second Schedule’ to PCG 2017/1 – transfer pricing ‘green zone’ 25% markup or 100% attribution

On 27 June 2018, the ATO released a draft updated version of Practical Compliance Guideline PCG 2017/1, its guidance on transfer pricing issues related to centralised operating hubs (PCG 2017/1DC). PCG 2017/1 contains a hub risk assessment framework and one schedule covering offshore marketing hub arrangements. When PCG 2017/1 was first issued, the ATO indicated…

Super protection Bill – ‘exit fee’ prohibition; sub$6k small accounts: 3% fee cap, ‘opt-in’ insurance (under 25’s & ‘inactive’), transfer ‘inactive’ accounts to Commissioner; transfer ‘inactive’ to ‘active’ accounts

On 21 June 2018, the Minister for Revenue and Financial Services, Kelly O’Dwyer, introduced the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 into the House of Representatives, which it passed on 28 June 2018. Also, on 21 June 2018, the Senate referred the provisions of this Bill to its Economics Legislation Committee for inquiry and…