Category Archives: Tax Month – January 2022

CofT v Shell Energy Holdings Australia Ltd – immediate s40-80 deduction for $2.3b costs of acquiring interests in the ‘Browse’ exploration project – ATO loses appeal

On 25 January 2022, the Full Federal Court upheld the taxpayers appeal, awarding it an outright deduction, under s 40-80 of the ITAA 1997, of the cost of acquiring another oil company’s interests in an offshore exploration project. This was the very large ‘Browse Project’, off the Western Australian coast. Acquiring these interest cost Shell $2.3m…

What’s on the radar for 2022 – some technical issues to follow

In addition to a range of macro considerations, the new President of the Tax Institute: Jerome Tse, lists some specific technical issues that will arise, for further consideration (if not resolution) in 2022. This was in the Institute’s first TaxVine email, to members, for the year. What’s on the radar for 2022? 2022 will be…

Thanabalasingam v TPB – employee working remotely, no evidence of supervision and ‘supervisor’ was deregistered for lack of supervision

On 9 Dec 2019, the AAT affirmed the decision of the Tax Practioners Board (TPB) not to register the applicant, because he had worked remotely and there was no evidence that had done relevant work “under the supervision and control” of a registered tax agent (who, incidentally was deregistered for lack of supervision). The facts…

Khanna v CofT – No deduction for personal super contribution – taxpayer gave fund s290-170 notice over 1 year late (no discretion to extend)

A taxpayer was unable to claim a deduction for personal super contributions as he was over a year late in giving the required notice to his super fund. This provision is diabolical. To claim a deduction you need to have given the fund a notice of the amount you wish to deduct and got the…

ASIC v Statewide Superannuation Pty Ltd – Statewide Super ordered to pay $4m penalty for letting group life cover laps, misleading members about this, charging premiums and not reporting it

The Federal Court has ordered Statewide Superannuation Pty Ltd to pay civil penalties totalling $4 million for providing members with misleading information about their (actually lapsed) insurance, charging them premiums for this lapsed insurance and failing to report the issue to ASIC. This conduct was not deliberate but stemmed from inadequate management and risk control…

MJ and IT Holdings Pty Ltd v CofT – no ‘cash flow boost’ available – $25k journaled directors payment breaches integrity rule

On Thur 20.1.2022, the ATO released a Decision Impact Statement (“DIS”) in relation to MJ and IT Holdings Pty Ltd and FCT [2021] AATA 3250. In that case, the AAT found that MJ and IT Holdings Pty Ltd was not entitled to the cash flow boost (“CFB”) in respect of an amount paid to its…

Certain clinical trials to be accepted as core R&D activity – draft determination and explanatory statement for consultation

On Thur 20.1.2022, the Government released for consultation the draft Industry Research and Development (clinical trials, Phase 0, I, II, III for an unapproved therapeutic good) Determination 2021. This is relevant for the development of medical products (particularly new products). By way of background, to register for the R&D tax regime, companies must conduct or…

When does a renovation make used residential premises new again – a 50% Canadian statutory solution?

On 17.12.2021, The Tax & Transfers Public Institute posted an article by Christine Peacock entitled ‘What does it take to make a house new?’ Citing her peer reviewed article, she advocates a statutory solution based on the system in Canada. It is based on the cost of the work done, to the residential premises, adds…

IGTO invites submission on its 3 investigation – ATO’s management of objections; exercise of its general powers of administration; and exercise of the Remedial Power

The Inspector General of Taxation is conducting 3 investigations and seeking submissions on the ATO’s (1) management of objections;  (2) exercise of its (unappealable) general powers of administration; and  (3) exercise of the Remedial Power. Submissions are due by 28 March and also 28 February 2022.   (1)  The ATO’s Management of Objections. The IGTO…

Actuaries’ suggestions to improve the ATO’s ‘MySuper’ comparison tool and extend it to ‘choice’ funds

On Friday 21. January 2022, the Institute of Actuaries of Australia released its submissions suggesting possible improvements to the ATO’s YourSuper Comparison Tool. The Institute said it supports the online Comparison Tool, but its key suggestions include: (i) splitting out investment and administration fees; (ii) initial ranking by net investment performance (not by fees); and…