Category Archives: Tax Month – August 2018

Whistleblower Protections Bill passes Senate with 58 Government amendments

Key News Summary – The Senate passed the ‘Whistleblowers’ bill with 58 Government amendments, designed largely to meet Senator Rex Patrick’s concerns, in the Senate Committee – relating to  eligible recipients, public interest and emergency disclosures, detrimental conduct and civil remedies.   On Thursday 6 December, 2018, the Senate passed the Treasury Laws Amendment (Enhancing…

Mango Reef Pty Ltd v CofT – Taxpayer’s claim for $621k of ‘input tax credits’ on alleged purchases of 145kg of gold – failed to prove that the purchases occurred at all and 75% shortfall penalties upheld

The AAT has rejected a taxpayer’s claim for input tax credits for the purported purchase of approximately 145kg of gold. The taxpayer claimed that in May and June 2014 it purchased, in 16 transactions, a total of approximately 145kg of gold from another company. The transactions allegedly took place in Sydney at the airport carpark, in hotels or at…

CR 2018/38 – Metcash Limited – Div 16K treatment of ‘off-market’ share buy-back and various dividend anti-avoidance rules

On Wed 29.8.2018, the ATO issued Class Ruling CR 2018/38 (Metcash Limited – Off-market share buy-back). This ruling considers the tax consequences for Metcash shareholders who dispose of their ordinary shares under an off-market share buy-back announced on 25 June 2018. The ATO treats the buy-back as an off-market purchase under Div 16K ITAA 1936. Importantly, the Commissioner…

Ford v CofT – 75% shortfall penalties for failure to lodge returns, remitted by the Commissioner to 50% but not further remitted by the AAT

The AAT has confirmed an ATO decision to impose a penalty on a taxpayer who failed to lodge her income tax return on time. The facts were these. The Taxpayer was late lodging her 2014/15 tax return. She had a tax agent, and might have been able to lodge as late as May 2016, under…

Re Narumon Pty Ltd – Extension of a superannuation binding death benefit nomination (BDBN) by Powers of Attorney was binding but ‘conflicted’ change slightly benefiting a donee precluded under Attorneys legislation

The Supreme Court of Queensland has ruled that a member’s 2013 superannuation ‘binding death benefit nomination’ (BDBN), was validly confirmed and extended, in 2016 by the donees of an enduring power of attorney (Power of Attorney). However an attempt to further amend (slightly) the beneficiaries under the DBDN, failed as it benefited one of the…

McGlinn v CofT – Non-commercial loss matter referred back to the ATO – ‘similar’ horse breading ‘business activities’ carried on sequentially confuses Commissioner

On 24 August 2018, the Federal Court (recently appointed Steward J) set aside an ATO decision, in a non-commercial loss matter, and referred it back to the ATO for re-determination. The ‘non-commercial loss’ provisions are found in Div 35 of the ITAA97 and are designed to prevent individuals deducting losses, from a ‘business activity‘, against other income,…

Qld: Revenue and Other Legislation Amendment Bill introduced – charitable institution registration requirements, extend primary production transfer duty concession, Land Tax and deceased estates

On 22.8.2018, the Queensland Government introduced the Revenue and Other Legislation Amendment Bill 2018 into their Legislative Assembly (which, in Queensland, is the only House of Parliament). On the same day it was referred to their Economics and Governance Committee. The Bill will amend the Duties Act 2001, Duties Regulation 2013 and the Taxation Administration Act…

Suspected promotion and facilitation of phoenix activities and tax schemes – ‘public examinations’ commenced, in the Federal Court, in relation to a group of entities connected to pre-insolvency advisor Philip Whiteman

On 27.8.2018, the ATO announced on its website that ‘public examinations’ commenced, in the Federal Court, in relation to a group of entities connected to pre-insolvency advisor Philip Whiteman. The examinations will look at the suspected promotion and facilitation of phoenix activities and tax schemes. Deputy Commissioner Will Day confirmed that more than 45 service providers,…

Sunlea Enterprises Pty Ltd v CofT – Input tax credits denied for belatedly invoiced “unrecouped project costs” – as insufficient evidence of any ‘acquisition’, of payment, of the thing supplied being taxable; and the invoice was not a ‘tax invoice’

The AAT has decided that the trustee of a unit trust was not entitled to input tax credits, as there was insufficient evidence of a creditable acquisition and the relevant invoices did not comply with the requirements of a tax invoice for GST purposes. The facts included the following. In December 2004, the then trustee of the…

Greig v CofT – Taxpayer appeals to Full Federal Court on the deductibility of $11.85m of share losses and legal fees based on the ‘profit making undertaking or scheme’ head of income (gone ‘pear shaped’)

The taxpayer has appealed to the Full Federal Court against the decision of Thawley J in Greig v CofT [2018] FCA 1084. The Federal Court had held that the taxpayer was not entitled to a deduction under s 8-1 of the ITAA 1997 for share losses of $11.85m and legal fees. The taxpayer had argued that the…