Category Archives: Tax Month – January 2014

TD 2014/D7 – capital support given to loss making subsidiary not deductible under any provision in the ATO’s view [30]

This Draft Taxation Determination, issued on Wed 29.1.2014, states that capital support payments described in the Draft are not deductible for the purposes of para 8-1(2)(a) of the ITAA 1997, or under ss 230-15(2), 230-15(3), and 40-880. The arrangement outlined in the Draft consists of a parent entity agreeing to provide a subsidiary with one…

*TD 2014/D2-D6 – Consolidation and rights to future income and residual tax cost setting rules [29]

The ATO on Wed 15.1.2014, released Draft Taxation Determinations TD 2014/D2-D6 on the consolidation changes introduced by Pt 4 of Sch 3 to the Tax Laws Amendment (2012 Measures No 2) Act 2012 (rights to future income and residual tax cost setting rules) which are relevant in ascertaining whether the pre-rules, interim rules, or prospective rules apply…

*TD 2014/D1 – Dividend washing and Pt IVA (SMSF) [28]

This Draft Determination, issued on Wed 15.1.2014, states that the application of Pt IVA of the ITAA 1936 to any particular scheme depends on a careful weighing of all the relevant facts and surrounding circumstances of each case. It states that without all relevant information, it is not possible to state definitively whether a provision in…

ATO releases 3 Decision Impact Statements [27]

The ATO on Thur 23.1.2014, released Decision Impact Statements on the following cases: FCT v Resource Capital Fund IV LP [2013] FCAFC 118 – The Full Federal Court had unanimously allowed the Commissioner’s appeal and held that s 255 notices requiring a company to retain out of Canadian currency sufficient funds to meet 2 taxpayers’ Australian…

FCT v Cancer and Bowel Research Association Inc atf the Cancer and Bowel Research Trust – AAT decision to remit charitable institution status matter [26]

The ATO on Tue 21.1.2014, released a Decision Impact Statement on the Full Federal Court’s decision in FCT v Cancer and Bowel Research Association Inc as Trustee for the Cancer and Bowel Research Trust [2013] FCAFC 140. In that case, the Full Court had unanimously dismissed the Commissioner’s appeal from a “decision” of the AAT…

Macquarie Bank (OBU) case – ATO view of the Full Federal Court decision not to apply the anti ‘U-turns’ Practice Statement (and render that issue non-justiciable) [25]

The ATO on Mon 13.1.2014, released a Decision Impact Statement on the Full Federal Court’s decision in Macquarie Bank Limited & Anor v FCT [2013] FCAFC 119. In that case, the Full Federal Court refused Macquarie Bank Ltd leave to appeal against the decision of Edmonds J in Macquarie Bank Limited & Anor v FCT [2013]…

Crown Insurance case – source of non-resident insurance company income was not Australian [24]

The ATO on Mon 6.1.2014, issued a Decision Impact Statement on the Full Federal Court’s decision in FCT v Crown Insurance Services Ltd [2012] FCAFC 153. In that case, the Full Federal Court, in a majority decision, dismissed the Commissioner’s appeal from a 2011 AAT decision that held that insurance premium income derived by a…

Australian Pipeline Limited as Responsible Entity for the Australian Pipeline Trust v FCT – taxpayer appeals decision denying depreciation on pipeline under consolidation regime [23]

The taxpayer has appealed to the Full Federal Court against the decision in Australian Pipeline Limited as Responsible Entity for the Australian Pipeline Trust v FCT [2013] FCA 1372. The Federal Court had dismissed the taxpayer’s appeal from an adverse private ruling concerning the issue of whether the conditions for the exception provided in s 705-47(5)…

Re Desalination Technology Pty Ltd and FCT – Commissioner appeals AAT decision to allow a $363k R&D tax offset [22]

The Commissioner has lodged a notice of appeal to the Federal Court against the decision of Frost DP in AAT Case [2013] AATA 846, Re Desalination Technology Pty Ltd and FCT. In that case, the AAT had held that a taxpayer company was entitled to an R&D offset of $363,281 under s 73J of the ITAA…

*Hancock v Rinehart – Commissioner denied access to court files in Rinehart case until matter completed, though could look at specified material [21]

The Supreme Court of NSW has refused the Tax Commissioner’s application to access a court file in relation to the ongoing Rinehart and Hancock proceedings in relation to the possible tax consequences of extending the vesting date of the trust (including any tax professional advice given on the matter). In refusing the Commissioner access to…