Tax Month – February 2012

M o r g a n’ s   T a x   M o n t h

– February 2012 Developments –

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

ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

Mining tax Bills introduced in the Senate [A1]

Tax Bill (No 9) passes Reps [A2]

Means testing private health insurance rebate – Bills pass Reps by one vote [A3]

Corporations Amendment (Phoenixing and Other Measures) Bill introduced [A4]

Draft legislation on Commissioner’s ability to retain refunds: Multiflex decision [A5]

TOFA and tax hedging provisions – discussion paper released [A6]

Announcements

Reform of transfer pricing rules: Treasury releases submissions made [A7]

*Trust law rewrite – public consultation about to start [A8]

Compensation to flow to Trio collapse victims [A9]

*Charitable fundraising – consultation paper released [A10]

*Shipping industry tax reforms: Govt seeks comment on draft legislation [A11]

CASES AND APPEALS

High Court

*High Court special leave results [C1]

Full Federal Court

*Esso Australia Resources Pty Ltd v FCT – PRRT: Esso loses on deductibility of contract payments [C2]

Federal Court

*Australian Crime Commission v Stewart & Ors – Wickenby case: privilege attaches to some documents, but not all those claimed [C3]

*White v FCT – CGT: Maximum net asset value test met – exclusion for assets of affiliate applies [C4]

Federal Magistrates Court

Administrative Appeals Tribunal (AAT)

Re Ma and FCT – Income from business derived partly by taxpayers, and partly by their children [C5]

*Re Gunawan and FCT – Taxpayer a resident of Australia (not enough to be away 183 days), so assessments and penalties affirmed [C6]

Other Courts

R v Boughen; R v Cameron – sentences increased for Wickenby case involving false claims for expenses paid to Vanuatu, evading id=”mce_marker”.75m in tax [C7]

Appeals

Re Bell and FCT – CGT small business concessions – Beneficiary appeals to Federal Court against AAT decision that he failed the maximum net asset value test on a the trust’s capital gain of over $6m [C8]

COMMISSIONER’S PUBLICATIONS

Decision Impact statements

*Syttadel Holdings Pty Ltd and FC of T – claimed income tax concessions found inapplicable [R1]

Rulings

*GSTD 2012/1 and GST 2012/2 – Sale of residential and commercial premises subject to leases [R2]

*GSTR 2012/D1 – Meaning of “residential premises” and “commercial residential premises” [R3]

Determinations

*TD 2007/28 – Erratum to Taxation Determination on ‘present legal obligation’ [R4]

*TD 2012/D2 – CGT trust streaming: “reasonably expected to receive net financial benefit” [R5]

Class Rulings

CR 2012/6-9 – Returns of capital: Centro group [R6]

CR 2012/10 Bonus share plan: investment company [R7]

CR 2012/11-12 – Return of capital; equity incentive plan [R8]

CR 2012/14 – Off-market share buy-back and return of capital [R9]

ATO Interpretive Decisions (ATOIDs)

Practice Statements

Tax Alerts

Other Commissioner news

GST DEVELOPMENTS

Legislation (GST)

*GST treatment of property in possession of mortgagee – draft legislation released [G1]

*Indirect Tax Laws Amendment (Assessment) Bill 2012 was introduced – GST returns are assessments and past mistakes can be corrected in current returns [G2]

Cases (GST)

Rulings & Other things (GST)

GSTR 2012/D2 – Exit payments by retirement village residents generally input taxed [G3]

SUPERANNUATION DEVELOPMENTS

Legislation (Super)

SuperStream data and payment standards – draft legislation released [Su1]

*Super pension drawdown relief for 2012-13: SIS Regs amended [Su2]

*Super borrowing arrangements to be financial products: draft regs released [Su3]

*Pay slip reporting of superannuation contributions – draft legislation released [Su4]

*Tax Office disclosure of superannuation information – draft legislation released [Su5]

*New superannuation trustee duties and prudential standards: Bill introduced [Su6]

Cases (Super)

*Re Montgomery Wools Pty Ltd and FCT – SMSF non-compliance notice upheld for loans via related unit trust [Su7]

*Re Schuurmans-Stekhoven and FCT – no special circumstances for discretion to reallocate super amounts to another year [Su8]

*Re Strasser and FCT – Excess contributions tax: ATO letter not misleading [Su9]

*FCT v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund – SMSF: undertaking to pay benefit in full breached enforcement order made [Su10]

*Re General Aviation Maintenance Pty Ltd and FCT SGC: tandem master parachutist was an employee as his services were integral, controlled by the employer and they supplied the equipment [Su11]

Rulings (Super)

Announcements etc (Super)

SMSF audit compliance update: ATO speech [Su12]

Default super funds in modern awards – Productivity Commission will consult on whether all ‘MySuper’ funds should be eligible [Su13]

CARBON TAX

MINERALS & PETROLEUM RENT RESOURCE RENT TAX

Scope of AASB 112 and MRRT and PRRT bills: AASB agenda decisions

BOARD OF TAXATION

INSPECTOR-GENERAL OF TAXATION

TAX PRACTITIONERS BOARD & LEGISLATION

Renew tax agent and BAS agent registrations – time is running out! [has now run out…]

STATE TAXES

Legislation (State)

Cases (State)

AES Wiring Pty Limited & Anor v Chief Comr of State Revenue – NSW payroll tax: penalty and interest for tax defaults affirmed [St1]

Aston (Aust) Properties Pty Ltd & Ors v Comr of State Revenue (Taxation) – Vic land tax and stamp duty: no existence of trusts, but related corporations, so grouping decision affirmed [St2]

Loyalty Connection Pty Ltd v Comr of State Revenue (Taxation) – Vic land rich provisions: “just and reasonable” exemption denied [St3]

Hannagan v Chief Comr of State Revenue – NSW stamp duty: property transfer between spouses – assessment to be halved [St4]

O’Brien v Comr of State Revenue – WA land tax: primary residence exemption denied [St5]

Kalomel Nominees Pty Ltd & Anor v Comr of State Taxation – SA land tax: previously granted PPR exemption cannot be revoked [St6]

Port Augusta Medical Centre Pty Ltd v Comr of State Taxation – SA payroll tax: medical services company grouping – taxpayer loses appeal [St7]

Verra Pty Ltd as trustee for the Pharmacies Services Trust & Ors v Comr of State Revenue – Qld payroll tax: pharmacies denied de-grouping discretion [St8]

Rulings (State)

Other (State)

OTHER DEVELOPMENTS

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