M o r g a n’ s   T a x   M o n t h

– April 2014 Developments –

This is a collection of developments in Australian tax law and practice that occurred in April 2014 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




Acts & Bills.

No withholding on payments to US sportspersons with no Australian Tax under the Aust-US DTA – instrument made under s15-15 & s16-180 TAA1 [1]

*Paying dividends: new draft of s254T of the Corporations Act released, changing ‘net assets’ test for pure solvency test, but no change to tax law [2]

Developing country relief funds declared [3]



Regulation of Coastal Shipping – Options Paper released by MInister [4]



High Court

*Thiess v Collector of Customs & Ors – No recovery of mistakenly paid customs duty and GST – High Court dismisses taxpayer’s appeal [5]

*MBI Properties Pty Limited v FCT – High Court allowed Commissioner to appeal decision that purchaser of reversion makes no supply to existing lessee [6]

*FCT v Ludekins – High Court refused taxpayers leave to appeal from decision that imposed promoter penalties for repackaged woodlots scheme [7]


Full Federal Court

*Batchelor v FCT – Repaid deposit for purchase of a retirement village was not an assessable recoupment [8]

*FCT v Resource Capital Fund III LP – Liability on $58m gain made on sale of shares by foreign resident partnership – Commissioner wins appeal [9]

*SPI PowerNet Pty Ltd v FCT – Electricity transmission business – deduction for State imposts refused – majority disallows appeal [10]


Federal Court

*FCT v Altnot Pty Ltd – CGT: maximum net asset value test and excluded assets [11]

Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Yerro and FCT – Car and travel expense claims disallowed [12]

*Re Hulsen and FCT – Serious hardship found, but release of tax debt refused as the release would not alleviate hardship and other debts paid ahead of tax [13]


Other Courts & Tribunals

*DCT v Zammitt – Commissioner wins appeal re retrospective DPN amendments [14]

*FCT & Darling and Anor – Commissioner wins appeal: documents filed in Family Court can be used for tax purposes [15]



*SPI PowerNet Pty Ltd v FCT – Commissioner appeals to Full Federal Court against decision that copyright can be written off on the taxpayer’s valuation [16]

*Re Macoun and FCT – Comm’r appeals to Federal Court against decision that early retirement pension from World Bank was exempt from income [17]




Decision Impact statements


*TR 2014/D3 – Application of new ‘transfer pricing provisions’: s 815-130 of the ITAA97 [18]

*TR 2014/D4 – Transfer pricing: documentation requirements [19]

*MT 2008/2 Addendum – amend ruling on shortfall penalties for taking a position that is not reasonably arguable deemed for transfer pricing [20]



TD 2007/14 – Adendum A2 – CGT small business concessions: meaning of “liabilities” in calculation of net value of CGT assets [21]

*TD 2007/14 Addendum A3 – CGT: Meaning of “contingent liabilities” for calculation of “net value of CGT assets” following Byrne Hotels case [23]

*TD 2014/8 – Entitlement to franking credit in head company, when franked distribution made by non-member to a trust that is a subsidiary member [24]

TD 2014/9FBT: reasonable 2014-15 food and drink amounts for LAFHA recipients [25]

*TD 2014/10 – Dividend washing and anti-avoidance rule in s177EA [26]

TD 2014/D10 – Forex realisation event 4 on repayment of a loan before it becomes the functional currency [27]


Class Rulings & Product Rulings

CR 2014/34-35 – Early retirement scheme; demutualisation of society [28]

PR 2014/5-6 – Macquarie trust; equities loan [29]

CR 2014/36-38 – Retail property trust group stapled security; early retirement schemes [30]

PR 2014/7 – Investment loan as part of mortgage reduction program [31]

CR 2014/39 – Microsoft stock plan [32]


ATO Interpretive Decisions (ATOIDs)
Practice Statements

PS LA 2003/12 Amendment – CGT treatment of trustee of testamentary trust: ATO amends Practice Statement [34]

*PS LA 3672 (Draft) – Transfer pricing: administration of penalties [35]

*PS LA 3673 (Draft) – Transfer pricing: ATO guidance to staff on reviewing documentation [36]


Tax Alerts

Other ATO news or statements

*Small Business Super Clearing House – ATO takes over responsibility [37]

ATO data-matching: childcare payments; Qld grant payments [38]

Online selling via eBay: ATO data-matching program [39]

*ATO’s Offshore Voluntary Disclosure Initiative (OVDI) – Project ‘DO IT’ (Disclose Offshore Income Today) – gets early results [40]

CPI: March quarter 2014 indexation factor for FBT purposes – running at 2.9% to the year ended 31 March 2014 [41]




Legislation & Announcements (GST)

Cases (GST)

*re Living Choice Australian Limited and FCT – Retirement village developer allowed partial ITC claims – 13% creditable purpose [42]


Rulings & Other things (GST)

GSTD 2014/D1 – GST-free supply of credit card facility for use overseas [43]

*GSTD 2014/D2 – Property rent below yield guarantee and adjustment events [44]

*PS LA 2005/2 (GA) on when margin scheme can be selected after the supply – amended to vary references [45]

Governments endorse new OECD Guidelines on applying VAT across borders [46]

*GSTR 2014/D1 – GST: Commissioner’s views on motor vehicle incentive payments after AP Group Ltd case [47]




Legislation, Announcements etc. (Super)


Cases (Super)

*Re Dominic B Fishing Pty Ltd and FCT – Super guarantee: Fishing crew members not “employees” as engaged in joint venture [48]


Rulings & Other things (Super)

Financial System Inquiry: Reserve Bank says super fees too high [49]

*TD 2014/7 – Segregation of superannuation fund bank accounts now possible (ATO’s changed its view) [50]










Most charity info statements completed on time: ACNC [51]

*ACNC review reveals charity governance concerns [52]







Inspector-General of Taxation launches Twitter account [53]

New IGT work program announced [54]




Tax Practitioners Board v Dedic – Court orders injunctive relief against unregistered tax agent [55]

TPB regulation of ‘tax (financial) advisers’ – update [56]

Tax and BAS agent presentation videos: Tax Practitioners Board [57]




ACT: Duties (Commercial Leases) Amendment Bill 2014 awaits notification – it will impose ‘premium-based’ duty on leases [58]


Legislation & Announcements (State)

Vic: State Taxation Legislation Amendment Bill 2014 – update [59]


Cases (State)

ACT payroll tax: HJA Holdings Pty Ltd & Ors v Comr for ACT Revenue – grouping decision mainly affirmed [60]

ACT land tax: Hay v Comr for ACT Revenue – taxpayer’s circumstances “extreme in nature”, so penalties reduced [61]

NSW stamp duty: Al-Saeed and Associates Pty Ltd v Chief Comr of State Revenue – “declaration of trust” – trust deed dutiable, but interest to be remitted [62]

NSW payroll tax: Starr Partners Pty Ltd v Chief Comr of State Revenue – grouping decision affirmed [63]

NSW land tax: Favello Pty Ltd & Ors v Chief Comr of State Revenue – primary production land tax exemption refused [64]

Rulings & Other (State)



Official interest rates left on hold at 2.5% [65]

Treasury Secretary ponders a greater role for indirect taxes [66]

Corporate tax base not being eroded: report [67]

*New EU rules on statutory audits of public interest entities: 10 year mandatory rotation, ban on providing tax advice and other ‘black list’ services [68]

*Australia and Japan conclude a Free Trade Agreement [69]

*Australia signs Free Trade Agreement with South Korea [70]

OECD releases comments received on BEPS draft on digital economy [71]

Australia and the US sign agreement on FATCA and enabling Act will follow [72]



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

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