Category Archives: Tax Month – February 2021

TD 2022/D1 – Division 7A: revised ATO view on UPEs and sub-trusts

On Wed 23.2.2022, the ATO released the well signalled Draft Determination TD 2022/D1 on the application of Div 7A in relation to unpaid present entitlements (UPEs) and sub-trusts (see related TT article). Specifically, the Draft sets out the ATO’s revised draft views that a private company beneficiary provides “financial accommodation” to the trustee or a shareholder (a…

Whiddon v CofT – Foreign source gain from share swap assessable as ordinary income for taxpayer who had become resident

On 10 February 2022, the AAT upheld the Commissioner’s assessment of a gain made on a complex arrangement from an exchange of shares and options, was assessable as ordinary income – as profit making arrangement or scheme. To  uphold the assessment, the AAT also had to find that the taxpayer was resident, in the relevant…

Employee vs independent contractor: High Court rules contract is the source of the analysis (not subsequent conduct)

In the High Court CFMEU v Personnel Contracting case (see related TT article), the Court held that the characterisation of a relationship, as that of an employee or an independent contractor, is answered by considering the rights and obligations as set out in the written contract (unless the contract is challenged as a sham or its…

CFMEU (and contractor) v Personal Contracting Pty Ltd – High Court holds contractor was an ’employee’ (despite ‘contractor’ label) but basis for this finding was ‘seismic’

On 9 February 2020 the High Court held that an individual was the employee of a labour hire company (not a contractor, as described in his contract with that company). However the High Court did this on a basis that could be described as seismic, when it comes to the ’employee’ v’s ‘independent contractor’ definition…

Covid-19 Rapid Antigen Tests (RATs) costs to be made deductible (if work related) and FBT exempt – Assistant Treasurer announces

On 8 February 2021, the Government announced that it would introduce specific legislation to ensure that the cost of Covid-19 Rapid Antigen Tests (RATs) would be both tax deductible (if work related) and FBT exempt for employers. The Prime Minister assumed it was deductible/FBT exempt on 22 December 2022, when defending the Government’s decision to…

Tax Month – February 2021

T a x  T e c h n i c a l  –  M o n t h l y  N e w s – February 2021 Edition – ‘Tax Developments’ for tax practitioners by a tax practitioner.   Compiled by F John Morgan A member of the Victorian Bar (www.FJMtax.com) Table of Contents ______________________________________________________________________________ COMPILING…

CoT v MWB Accountants – Commissioner failed to extract an ‘overpaid’ refund from a tax agent (APOLOGY – if the agent’s version is correct)

Tax Technical previously published an article (in Jan ’20) about a decision, made by County Court, against the Commissioner of Taxation. That Court held that the Commissioner could not recover a taxpayer’s refund, which he alleged was overpaid, by putting the correcting debit in the tax agents ‘RBA’ (which would create a liability, for the tax agent,…