Tax Month – April 2012

M o r g a n’ s    T a x    M o n t h

– April 2012 Developments –

This is a collection of developments in Australian tax law and practice that occurred in April 2012 and which aims at being of relevance to tax lawyers.*

F John Morgan
A member of the Victorian Bar (www.FJMtax.com)

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Health Insurance means testing and related legislation gets Royal Assent [A1]

Car expenses – rates per km for 2011-12 – Income Tax Regulation registered [A2]

*Tax concession entities and “in Australia” conditions: revised draft legislation released [A3]

Directors’ penalty regime – draft legislation (making directors liable after 3 months without a liquidation option) re-released with only modest further relief [A4]

Consolidation tax cost setting and TOFA rules: draft legislation released [A5]

Nil withholding re low income minors – variation made [A6]

Announcements

*Not-for-Profit restrictions on tax concessions for unrelated profits not applied for altruistic purposes – start date to be deferred to 1 July 2012 [A7]

*Australia signs new tax info exchange agreements with Guernsey, Cook Islands, Samoa and Aruba [A8]

Student Financial Supplement Scheme (SFSS) – Income thresholds and repayment rates for the 2012-13 financial year gazetted [A9]

Higher Education Loan Program (HELP): 2012-3 income thresholds and repayment rates gazetted [A10]

*Carry-back of tax losses: Business Tax Working Group report released [A11]

CASES AND APPEALS

High Court

Full Federal Court

*FCT v Noza Holdings Pty Ltd & Anor – Full Federal Court confirms that deduction for dividends under s 25-90 partly allowable [C1]

Federal Court

Quality Publications Australia Pty Limited v FCT – CGT: “Payment by direction” does not affect capital proceeds entitled to be received [C2]

Weeks v FCT – Voluntary redundancy not a genuine redundancy – taxpayer’s appeal dismissed (no error of law) [C3]

*DCT v ABW Design & Construction Pty Ltd – ATO fails to secure winding up order because post code obscured and service of statutory demand could not be proved [C4]

*DCT v Bayconnection Property Developments Pty Limited – ATO winding up application (for BAS liabilities) was deferred to allow the result of a Part IVC appeal to be known [C5]

*Binetter v DCT – Court orders gives taxpayer interim relief from compliance with a s264 notice to allow trial on clarity of one question [C6]

*Sent v FCT – Managing director assessable on accrued bonus amounts [C7]

Kelly v FCT – Partner partly unsuccessful in claiming assignment of partnership interest [C8]

Federal Magistrates Court

Administrative Appeals Tribunal (AAT)

*New appointments to the AAT with Tax Expertise – including Fiona Alpins in Melbourne [C9]

*Re Phillips and FCT – CGT: Maximum net asset value test failed – liability not related to assets of the same entity [C10]

*Re Mehta and FCT – Taxpayer held to be a share trader and he should be allowed deductions for losses [C11]

Other Courts & Tribunals

*Legal Services Commissioner (Vic) v Stirling – Barrister’s practising certificate suspended for 3 years for tax offences stretching over 10 years [C12]

Appeals

Kocic v DCT – High Court refuses taxpayer leave to appeal against Directors Penalty Notice liabilities [C13]

*ANZ v Konza – Taxpayer appeals the decision that a s264 notice was effective to get details of their Vanuatu customers from an Australian computer [C14]

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

Rulings

*TR 2012/D2 – Assessability of legal costs in termination of employment disputes: are not assessable as ETP’s but are an assessable recoupment of deductible legal costs [R1]

*MT 2012/1-2 – Tax and GST consequences re transfer of farm-out arrangements [R2]

Determinations

*TD 2012/2 – time at which the Shortfall Interest Charge (SIC) and General Interest Charge (GIC) is ‘incurred’ for s25-5 deduction purposes [R3]

Class Rulings

CR 2012/22-23 – Demerger relief available; football umpires payments are not assessable [R4]

CR 2012/24 – Early retirement scheme [R5]

CR 2012/25 – Issue of convertible preference shares by Insurance Australia Group Ltd are ‘debt interests’ [R6]

CR 2012/26 – Scrip-for-scrip rollover – merger of Adamus Resources Limited and Endeavour Mining Corporation [R7]

ATO Interpretive Decisions (ATOIDs)

Practice Statements

*PS LA 2012/1 – principles guiding the management of high risk technical issues [R8]

Tax Alerts

Other Commissioner news

Project Wickenby results update [R9]

*Wickenby: man charged; $40m in assets restrained [R10]

ATO writes to charities re updating details [R11]

GST DEVELOPMENTS

Legislation (GST)

*GST: adjustment note and recipient created invoice requirements information requirements – Determination made [G1]

GST: deferred transfer farm-out arrangements – legislative instrument under Div 29 registered [G2]

*Indirect Tax Laws Amendment (Assessment) Bill 2012 gets Royal Assent – making returns into assessments (self assessment) [G3]

Cases (GST)

*Qantas GST Appeal to High Court – written submissions on High Court Website and appeal will be heard in Brisbane on 4 June 2012 [G4]

Rulings & Other things (GST)

*GSTR 2012/1 – GST: loyalty programs – the customer’s payment is for the goods or services purchased and should not be apportioned to the points [G5]

GSTD 2012/4 – GST-free supply of hospital treatment [G6]

*PS LA 3521 – Draft Practice Statement on GST: treatment of ITCs claimed where Commissioner does not give a refund to supplier under s105-65 TAA1 [G7]

GST Announcements (Other)

4 Year GST Compliance Program (from 2010 Federal Budget) – ATO updates details [G8]

SUPERANNUATION DEVELOPMENTS

Legislation (Super)

MySuper and transparency measures – draft legislation released [Su1]

Cases (Super)

*Re Brazil and FCT – Early access superannuation benefit included in taxpayer’s assessable income [Su2]

Rulings (Super)

Announcements etc (Super)

*CGT relief for superannuation fund mergers – law to be amended [Su3]

*APRA releases 11 draft prudential standards for superannuation [Su4]

CARBON TAX

*Carbon tax unconstitutional – according to a legal opinion by Bryan Pape given to the Institute of Public Affairs

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

*Mining tax to be challenged on constitutional grounds by Fortescue Metals Group Ltd

*ATO administration of MRRT and PRRT: early guidance

BOARD OF TAXATION

INSPECTOR-GENERAL OF TAXATION

ATO compliance activities re SMEs: Tax Inspector-General’s report released

TAX PRACTITIONERS BOARD & LEGISLATION

*Financial Planning Association recognised by Tax Practitioners Board

STATE TAXES

Legislation (State)

ACT Duties Act amendments for ‘land rent leases’ and transfers of short-term commercial subleases; Rates and Land Tax on common areas in community titles [St1]

*NSW: State Revenue Legislation Amendment Bill now law [St2]

*Vic: landholder duty model draft Bill released [St3]

Cases (State)

*Regis Investments Pty Ltd v Comr of State Revenue – Vic land rich provisions didn’t acquire to acquisition of shares by trustee (as per Landrow and Challenger decisions) [St4]

Comr of State Revenue v Challenger Listed Investments Ltd – Commissioner appealing to High Court – decision that acquisition of land-rich shares by trust is not dutiable (not beneficial owner) [St5]

Perry Properties Pty Ltd v Chief Comr of State Revenue (RD) – NSW land tax: boarding house exemption – taxpayer loses appeal [St6]

*WestNet Rail Holdings No 1 Pty Ltd & Anor v Comr of State Revenue – WA stamp duty: railway infrastructure rights not “land”, so rail freight company not a landholder and assessment of share transfer set aside [St7]

Rulings (State)

*Vic stamp duty: Rulings and form updated for post-1 April 2012 reduction of period for payment of duty from 3 months to 30 days [St8]

Other (State)

OTHER DEVELOPMENTS

ABS releases Taxation Revenue, Australia 2010-11 [O1]

ATO Taxation Statistics 2009-10 [O2]

*Financial planners get extended exemption from tax agent regime [O3]

THE END

*NB: I have gathered these articles from various sources for the purposes of study and teaching and I have acknowledged the sources. None of this publication should reproduced in breach of copyright belonging to the acknowledged source. The headings to the articles are often mine (and shouldn’t necessarily be attributed to the publisher).

Source Abbreviations: ‘EDTN’ = Electronic Daily Tax News, published by CCH; ‘LTN’ = Latest Tax News published by Thomsons; and ‘Taxvine’ is the weekly publication by the Tax Institute of Australia; Greenfields = Greenfields Financial Services; TaxBar = Melbourne Tax Bar Association Newsletter at www.vicbar.com.au/ Members / Bar Associations / Tax