Category Archives: Tax Month – August 2016

Oswal v FCT (No 6) – Taxpayers succeed in application for mediation of tax dispute, with the same mediator in a commercial dispute, as one might affect the other (despite mediation having failed and judgement being reserved in the tax case)

Husband and wife taxpayers (“the Oswals”) have been successful in their application before the Federal Court to seek mediation of their tax dispute with the Commissioner to be heard by a judge in Victoria who was also conducting the mediation of their commercial dispute with another party. The Court arrived at its decision essentially on…

Vic land rich provisions: Master Solutions Australia Pty Ltd v Comr of State Revenue – duty chargeable on acquisition of shares in land rich company

A taxpayer has been unsuccessful before the Victorian Civil and Administrative Tribunal in a matter concerning the land rich provisions under the Duties Act 2000 (Vic). The background facts were complex. Among other things, the Tribunal heard moneys were given by a sister to her brother and the taxpayer company was incorporated to purchase an investment property.…

Re Ogden and FCT – AAT imposes penalties reflecting Commissioner claim of recklessness and intentional disregard 

In Re Ogden and FCT [2016] AATA 32 the AAT found that the taxpayer, a salesman, had significantly over claimed deductions in the 2001 and 2012 income years which reduced his taxable income by some 30%. The AAT has now ruled that the taxpayer should be subject to administrative shortfall penalties that reflected the Commissioner’s claim that 50%…

Tas Duties Act: amendments introduced to replace ‘land-rich’ (60% of value) with ‘Landholder’ provisions ($500k land & 50% change for ‘private landholders’ and 90% for ‘public’) and legislated exemption for ‘Corporate Reconstruction and Consolidations’

On 17 August 2017, the Tasmanian Treasurer introduced the Duties Amendment (Landholder and Corporate Reconstruction and Consolidation) Bill 2016 was introduced into the Tasmanian House of Assembly. The Bill will amend the Tasmanian Duties Act to replace their ‘land-rich’ provisions with ‘landholder’ provisions and also to introduce their ‘corporate reconstruction’ exemptions into the Act (rather than have…

CR 2016/59 – rollover effect of Royal Dutch Shell’s ‘takeover’ of the BG Group on Australian employees who swapped their Employee Share Scheme interests in BG shares for ESS interests in Shell shares

On 17 August 2016, the Commissioner issued a class ruling on the Royal Dutch Shell plc takeover of BG Group plc, so far as it affected the Australian resident employees who held ESS interests under the BG Group employee share scheme (Participants). Broadly, these Participants had their ESS interests in the BG Group replaced by…

TD 2016/D3 – Employee Share Schemes – What sort of rights (indeterminate rights) ‘become a right to acquire a beneficial interest in shares’ and thus deemed to be ESS interest all along under s83A-340

On 17 August 2016, the Commissioner issued draft Determination TD 2016/D3, which is about a technical point to do with the employee share scheme (ESS) provisions in Div 83A of the Income Tax Assessment Act 1997 (ITAA97) and the Income Tax (Transitional Provisions) Act 1997 (Transitional Act). The draft determination asks the question: in what circumstances does a…

FCT v Bosanac (No 2) – Grant of stay for $9.3m debt recovery – “extreme personal hardship” if bankrupted and (in practice) was precluded from pursing his complex appeal on the objection decision

The Federal Court has granted a taxpayer’s application for a stay of the execution of summary judgment previously granted in favour of the Commissioner in FCTv Bosanac [2016] FCA 448 for $9.3m. In doing so, it found that there were special circumstances to grant a stay on the basis of “extreme personal hardship”. In particular, the Court…

Provision of general purpose financial statements by significant global entities ($1b plus global turnover) who don’t already lodge this with ASIC – s3CA of the TAA – ATO consultation process

On 15 August 2016, the Commissioner uploaded the following statement about the consultation he is carrying out on gathering ‘general purpose financial statements’ from ‘significant global entities’ under the 11 December 2015 insertion of s3CA of the Taxation Administration Act 1953. [ATO website – s3CA of the TAA consultation] [LTN 156, 15/8/16] Provision of general…

Rigoli v Commissioner of Taxation – 2nd Full Federal Court held that the taxpayer could not discharge his onus of proof by relying on the Commissioner’s accounting report tendered as the basis for the quantum of his default assessment (after no records and no returns)

On 12 August 2016, the Commissioner issued a Decision Impact Statement of the Full Federal Court decision in Rigoli v Commissioner of Taxation [2016] FCAFC 38. Brief Summary of Facts – During the 1994 to 2001 income years, the taxpayer carried on business in partnership. The partnership did not keep business records. The taxpayer did not…

Vic land tax: Frontlink Pty Ltd v Comr of State Revenue – primary production exemption mainly refused to a developer (lack of evidence a big issue)

On 9 August 2016, the Victorian Civil and Administrative Tribunal decided largely against a taxpayer seeking the primary production land tax exemption for various properties over a number of years. The taxpayer was a land developer and lessor of land. At relevant times, the taxpayer owned land at Lyndhurst and Clyde North, Victoria. The taxpayer…