Treasury Laws Amendment (OECD Multilateral Instrument) Act 2018 – to give force of law to the MLI in Australia, which in turn defines when it comes ‘into force’ and then ‘affects’ the relevant ‘bilateral treaty’

Tax Month - August 2018

On Friday 24 August 2018 (the same day Australia got a new Prime Minister) the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018 gained Royal Assent as Act No. 83 of 2018 (having passed the Lower House on 14 August 2018 and the Senate on 16 August). The effect of this Bill will be to amend the…

CR 2018/34-35 – Return of share capital is not a dividend and is a G1 or C2 CGT event; ESS Rights for non-executive directors (when settled with CSL shares)

Tax Month - August 2018

On 15 August 2018, the ATO released 2 Class Rulings: CR 2018/34 – IPE Limited: return of share capital. The ATO accepts that the return of share capital paid to IPE shareholders is not a dividend and that ss 45A, 45B and 45C ITAA 1936 do not apply. Further, the relevant CGT events are CGT…

PCG 2017/13 – Div 7A treatment UPEs – ‘Option 1’ sub-fund loans for 7 years – updated to include relevant dates for UPEs created on 30 June 2011 – due to be repaid by 30 June 2019

Tax Month - August 2018

On Wed 15.8.2018, the ATO released an updated version of Practical Compliance Guideline PCG 2017/13, its guidance on unpaid present entitlements (UPE) and sub-trust arrangements. This was only to deal with UPE’s, dealt with as ‘Option 1’, 7-year interest only loans, arising from UPE’s created in the 2nd year after the 16 December 2009 grandfathering…

TR 2018/6 – Trust vesting – taxation effects: too late to extend after vesting; no E1 event (resolved interests not new trusts); no E5 event until beneficiaries entitled to particular assets

Tax Month - August 2018

On Wed 15.8.18, the ATO issued Taxation Ruling TR 2018/6, in final form, on the tax consequences of vesting a trust. These views are the same as those contained in Draft TR 2017/D10, although the final ruling includes some fine-tuning. Overview of vesting A trust’s “vesting” or “termination” date, can be the same date but…

Protecting Superannuation Package Bill – Senate Committee recommends passing these measures to ‘cap or ban’ certain fees, require ‘opt-in’ only insurance and ‘low balance’ aggregation

Tax Month - August 2018

The Senate Economics Legislation Committee has released its report into the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 and recommended that the Bill be passed. The measures include: SUPER FEES – capped at 3% per year for administration fees, investment fees and “prescribed costs” charged on super accounts with balances less than $6,000.…

ACNC – draft ‘Conduct standards’ for charities operating overseas – to protect against criminal elements, corruption and protect vulnerable persons

Tax Month - August 2018

On Monday 13 August 2018, the Treasury released exposure draft regulations proposing external conduct standards that charities registered with the Australian Charities and Not-for-profits Commission (ACNC) will need to comply with when operating outside Australia. These would be ‘reasonable steps’ and reporting standards, with regard to (1) criminal risks and obeying Australian laws (even overseas);…

Aussiegolfa Pty Ltd (Trustee) v CofT – SMSF invested in single property ‘sub-fund’ – leasing property to daughter of SMSF member did not breach the ‘sole purpose test’ but units in the sub-fund were ‘in-house assets’

Tax Month - August 2018

The Full Federal Court has ruled that a Self Managed Superannuation Fund’s (SMSF‘s) investment in a property trust, which was set up so as to perform, in line with a nominated single property: did not breach the sole purpose test under s 62 of the SIS Act (despite the property being leased to the daughter of the…

R v Agius; R v Castagna (No 14) – 70 year old cousins jailed for about 7 years each, for diverting Macquarie fees through Vanuatu without declaring them as income

Tax Month - August 2018

On 10 August 2018, the NSW Supreme Court sentenced cousins: Robert Agius and Anthony Castagna to jail, for 2 counts of what could broadly be called defrauding the Commonwealth (count 1 under s29D of the Crimes Act 1914 and count 2 under s135.4(3) of the Criminal Code 1995) and a 3rd count of dealing with…

Small Business Ombudsman calls for ‘instant asset write-off’ to be extended from a $20,000 cost cap to $100,000 – public hearing of Lower House Economics Committee on impediments to small business

Tax Month - August 2018

On 6 August 2018, the Australian Small Business and Family Enterprise Ombudsman: Kate Carnell, put out a media release, calling for (amongst other things) for the ‘instant asset write-off’ to be increased from $20,000 to $100,000 and that this be embedded in legislation (as opposed to simply being a temporary measure enacted only in the…