Category Archives: Tax Month – December 2013

*TR 2013/D7 – Deductibility of expenses incurred by superannuation entities partly to earn assessable income and partly to earn exempt income [58]

This Draft Ruling, released on Wed 4.12.2013, considers apportionment, for the purposes of s 8-1 of the ITAA 1997, of a loss or outgoing incurred by a superannuation entity partly in gaining or producing assessable income and partly in gaining or producing non-assessable income. The Draft Ruling states that an expense incurred by a superannuation entity…

*Albrecht & Ors v FCT – taxpayers appeal in ATO funded test case against decision that the Superannuation Contribution Surcharge applied to WA police [57]

The taxpayers have lodged a notice of appeal to the Full Federal Court against the decision of Siopis J in Albrecht & Ors v FCT [2013] FCA 1248. In a test case funded by the ATO, the Federal Court had upheld the constitutional validity of superannuation contributions surcharge tax assessments issued to commissioned officers of the…

*Re Xu and FCT – Early access to SMSF money not a loan or complying with conditions of release, so taxpayer’s assessable on it with 25% penalty [56]

The AAT has upheld the Commissioner’s decision to include in a taxpayer’s assessable income money withdrawn from a self-managed super fund (SMSF) in breach of the payment standards in the SIS Regulations. The taxpayer had withdrawn from her SMSF 4 amounts totalling $62,500 to complete the purchase of a home after she had been made…

*New Regulation registered to amend ‘cashing restrictions’ to facilitate payment to ATO under its Div 96 or Div 135 ‘release authorities’ [55]

The Superannuation Legislation Amendment (2013 Measures No 2) Regulation 2013 was registered on Mon 16.12.2013] to amend the SIS Regs and RSA Regs to facilitate the release of superannuation amounts pursuant to a release authority to pay tax liabilities arising from certain superannuation contributions. From 1 July 2013, excess concessional contributions (ECCs) are included in an individual’s…

*Draft legislation released to increase the thresholds for lost/inactive member accounts for transfer to ATO: $2k to $4k on 31.12.15 and to $6k on 31.12.16 [54]

The Government on Mon 16.12.2013, released for consultation Exposure Draft – Tax and Superannuation Laws Amendment (2014 Measures No 2) Bill 2014, that proposes to increase the account balance threshold, above which lost and inactive superannuation accounts must be transferred to the Tax Office. Currently, small lost superannuation accounts with balances of less than $2,000…

*SMSF’s limited recourse borrowing arrangements can still infringe related trust prohibition at times requiring relief via ATO draft legislative instrument [53]

The ATO has advised that it has become aware of a number of issues regarding the application of the in-house asset exemption provided by s 71(8) of the SIS Act to an investment in a related trust held by an SMSF as a required part of a limited recourse borrowing arrangement (LRBA). The ATO said the…

Div 293 tax: family law superannuation payment not an end benefit – Instrument made [52]

The Taxation Administration Act 1953 (Meaning of End Benefit) Instrument 2013 was registered on Thur 5.12.2013. Its purpose is to ensure that family law superannuation payments are not “end benefits” under s 133-130 in Sch 1 to the TAA and therefore do not trigger an individual’s liability to pay Div 293 tax that has been deferred to a…

*Withdraw GST 2013/D2 which would have ruled moveable home estates are not commercial residential premises, accepting they are like caravan parks [51]

The ATO on Fri 20.12.2013, withdrew Draft GST Ruling GSTR 2013/D2 (Supplies made by an operator of a “moveable home estate”) following consideration of comments received over the course of the consultation period, which contended that moveable home estates are sufficiently similar to caravan parks for the purposes of para (f) of the definition of commercial…

*Mattress Innovations Pty Ltd v Suncorp Metway Insurance Limited – policy construction is that Sums Insured be paid out unreduced by Input tax credits [50]

The Qld Court of Appeal has held that an insurance company was required to pay the Sum Insured to the insured owner of a building that was destroyed by fire, and that amount was not to be reduced by any input tax credits to which the insured was entitled. The appellant leased a property it…

GST: married couple not a partnership, not carrying on an ‘enterprise’ in building a residential property for short-term letting, planting olives and no ITC [49]

The AAT has held that a married couple were not a partnership for GST purposes, were not carrying on an enterprise, and were not entitled to input tax credits claimed on various acquisitions, including in relation to a residential building, during the relevant period. The couple bought a rural property in 2006 and constructed a…