Category Archives: Tax Month – November 2016

Hemanshu Juneja and Three Wickets Pty Ltd appeals against suspension of registration as a tax agent – for failure to lodge its own returns on time or, more recently, at all

A tax agent and a company have appealed to the Federal Court against the decision in Re Three Wickets Pty Ltd and Tax Practitioners Board [2016] AATA 786. In that case, the AAT affirmed the Tax Practitioners Board’s decision to terminate the tax agent’s registration and the registration of the company. The Board did so…

DCT v King – the Court made the orders sought by the DCT, namely that the taxpayer’s $60k Part X ‘personal insolvency agreement’ (towards $600k of tax liabilities) be set aside and he be bankrupted to allow proper scrutiny

The Federal Court decided in favour of the Deputy Commissioner of Taxation, who sought orders that the taxpayer’s ‘personal insolvency agreement’ be set aside an order for sequestration be made (that is, that the taxpayer be bankrupted). The Commissioner obtained a judgment debt for $627,851.92 in the District Court of New South Wales on 5…

A & A Property Developers Pty Ltd v MCCA Asset Management Ltd & Anor – purchaser did not have to pay more for the vendor’s GST – ‘tick the box’ system not activated by writing ‘GST’ in the box ( ‘plus GST’ required)

The Supreme Court of Victoria has held that, under the terms of a contract for the purchase of land, the purchaser was not liable to pay an additional amount for the vendor’s obligation to pay GST. The matter involved the purchase of land with a contract price of $2.9 million. The plaintiff sought a declaration…

Re DHDF and FCT – Taxpayer subject to Div 293 tax on super contributions because arrears of income paid pushed him over the $300,000 income threshold (compensation not derived in the arrears years)

The AAT has confirmed that a taxpayer was liable to pay the additional 15% tax under Div 293 of the ITAA 1997. Div 293 imposes an extra 15% tax (a total of 30%), on a contributor, in respect of concessional (deductible) superannuation contributions made for the benefit of that individual, if their annual income is above the…

Blank v Commissioner of Taxation – USD 160,033,328, paid in 20 instalments, under a Glencore Profit Participation Plan, was held to be assessable as ‘ordinary income’ (and not a capital gain)

On Wed 9 Nov 2016, the High Court unanimously dismissed an appeal from a decision of the Full Court of the Federal Court of Australia [2015] FCAFC 154. The High Court held that a lump sum paid to a taxpayer, in instalments, pursuant, after the termination of his employment, pursuant to to an incentive profit…

Superannuation reform bills – ‘objectives’ of superannuation; the $1.6m cap; lower $25k cap; 5 year ‘catch up’; lower Div 293 threshold to $250k; remove the 10% employment income rule; remove TRIS & ‘anti-detriment’ etc.

The 3 following superannuation Bills were introduced into the House of Reps on Wed 9.11.2016, 2 of which have received Royal Assent as noted below. Superannuation (Objective) Bill 2016 (Referred to Committee (10/11/2016): Senate Economics Legislation Committee; Report due 14/02/2017). Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016 (Royal Assent on 29 Nov 2016 as…

What ‘justified trust’ means to the ATO and how they use it to reduce the ‘gap’ between what they do collect and what they should (hoping to encourage voluntary compliance)

On 8 November 2016, the ATO put the following article on its website on the (I think) deliberately ambiguous notion of ‘justifiable trust’. It is ambiguous in that it is dressed up as the public having ‘justified trust’ in the ATO (that there is no ‘gap’ between what they do collect and what they ought).…

Re Tomker Pty Ltd (In Liquidation) – the 4 year rule in s105-50 affects the existence of an unpaid GST debt, not just recovery – effect of this in insolvent trading action against a director

This case effectively holds that the 4 year limit, on the Commissioner of Taxation recovering unpaid GST, extinguishes the liability itself, rather than just barring recovery. [The 4 year limit is to be found in s105-50(1) of the Taxation Administration Act 1953 First Schedule (‘TAA1’).] The issue arose in the context of a liquidator pursuing…

Working holiday makers (backpackers) – Commissioner clarifies current practices whilst awaiting new laws: generally non-resident as they move around and 32.5% tax applies from $1

With a number of media reports circulating in relation to the tax treatment for working holiday makers and the tax that they pay, the ATO has sought to make clear the tax arrangements in place. Tax Commissioner Chris Jordan said the amount of tax that a working holiday maker may pay will depend on their residency status for…

Review of non-resident withholding tax for investors in CIV’s – consultation paper released: proposed changes include a 5% uniform WHT for all investors or only those in the ‘Asia Region Fund Passport’ countries.

On Thur 3.11.2016, the Government released a consultation paper on collective investment vehicle (CIV) non-resident withholding taxes as announced by the Minister for Financial Services on 4 May 2016 as part of the 2016/17 Federal Budget. The proposals for change centre on a uniform 5% withholding tax rate for investors in Managed Investment Trusts (MIT’s)…