Tax Month – March 2015

M o r g a n’ s   T a x   M o n t h

– March 2015 Developments –

This is a collection of developments in Australian tax law and practice that occurred in March 2015 and which aims at being of relevance to tax lawyers.*

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

Liability limited by a scheme approved under Professional Standards Legislation

Table of Contents

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ACTS, BILLS AND ANNOUNCEMENTS

Acts & Bills

*Tax and Superannuation Laws Amendment (2014 Measures No. 5) Bill 2014 – passed with Labor amendments – seafarer and R&D offsets preserved [1]

*Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014 – passed without amendment and awaits assent [2]

*R&D Bill (finally) receives Royal Assent [3]

Higher education loan program: repayment income and rates [4]

*Employee Share Schemes: Amendment Bill introduced [5]

Norfolk Island re taxation and social security: package of Bills introduced [6]

 

Announcements

*‘Re:think’ tax system reform discussion paper: no options, but dialogue begins [7]

*Tax Disputes – Report by House of Representatives Standing Committee – ATO must improve handling of these disputes [8]

Multinationals’ use of tax loopholes – Labor’s approach to combat them [9]

*Labor’s Multi-national Enterprise anti-avoidance measures: thin cap world-wide debt deduction limit; standardize hybrids (no double-dips) [10]

*Tax and [Social Security] Transfer Policy Institute’s new report: stocktake of tax system and directions for reform – five years after the Henry Review [11]

Australia and Switzerland agree to tackle tax evasion: Treasurer [12]

Tax Institute Senior Tax Counsel: Rob Jereminko appointed to head Tax White Paper Unit [13]

Investment Manager Regime reforms – Element 3 – draft legislation released [14]

Overseas Banking Unit (OBU) reforms: draft legislation released [15]

Wine equalisation tax rebate: Senate Inquiry launched [16]

Lifting standards in financial services industry: Govt paper released [17]

 

 

CASES AND APPEALS

High Court

*Korda & Ors v Australian Executor Trustees (SA) Limited – High Court: Sale proceeds from timber investment scheme not held on trust for investors [18]

 

Full Federal Court

*FCT v McGrouther – Commissioner’s appeal allowed: taxpayers can withdraw s14ZYA notice that could lead to a deemed disallowance of an objection [19]

 

Federal Court

FC of T v Moignard – Taxpayer did not establish not ‘presently entitled’ to the Trust’s gain beneficially or that the assessment was excessive [20]

*Donoghue v FC of T – ‘conscious maladministration’ using legally privileged information resulted in assessments being set aside [21]

Roberts v DCT – No leave for taxpayer to appeal summary judgment [22]

*FCT v Oswal (No. 3) – Taxpayer fails to stay Commissioner’s action to have mortgage declared void (because it was to ‘defraud creditors’) [23]

 

Administrative Appeals Tribunal (AAT)

*Re Morrison and FCT – Superfund’s loan to Hua Wang Bank etc a sham; ‘fraud or evasion’; assess loan as benefits; no interest deductions [24]

Re WWXY and FCT – Profit from sale of property assessable as ordinary income [25]

*Re Clemens, Jaczenko, Koustrup and FCT – Backpackers not residents of Australia – over 182 days but ‘usual place of above’ outside Australia [26]

Re James and FCT – Entitlement to PAYG credits not reviewable by AAT [27]

Re HVZZ and FCT – Non-commercial loss deferral discretion – AAT confirms horse breeding losses cannot offset other income [28]

*Re Ting and FCT – Teacher denied deduction for post-graduate studies in management [29]

Re Rigoli and FCT – AAT again finds that taxpayer failed to discharge onus [30]………… 30

 

Other Courts & Tribunals

DCT v Aitken – Directors’ Penalty Notice (DPN) liability upheld [31]

Healy v DCT – Court rules DPN effectively served on company director by post to the address listed in ASIC records [32]

*Gadens Lawyers Sydney Pty Ltd v Symond – Taxpayer’s damages for negligent advice re tax liability from company restructure reduced [33]

*R v Dickson (No 18) – Individual sentenced to 11 years for conspiracy to defraud the Commonwealth of $135m through false depreciation claims [34]

 

Appeals

*Financial Synergy Holdings Pty Ltd v FCT – ‘time of acquisition’ for consolidation purposes of deemed pre-CGT asset 19 September 1985 [35]

Yazbek v FC of T – taxpayer discontinues his appeal [36]

Rio Tinto Services Ltd v FCT – appeal from decision that taxpayer not entitled to input tax credits to build and maintain mining accommodation [37]

 

 

COMMISSIONER’S PUBLICATIONS & NEWS

Decision Impact statements

Engineering Manager and FCT – Individual returning to Australia mid-year was not resident for the whole year – no question of law (really?) [38]

Rulings

TR 2015/D1 – ‘Bodies Corporate’ under strata title legislation – tax consequences [39]

 

Determinations

TD 2015/2 – ‘debt interest’ issued by AusCo is not an ‘equity interest’ under s974-80(1)(d) just because non-resident co invests in debt interest holder [40]

TD 2015/3 – ‘The interest’ referred to in the phrase at the end of subsection 974-80(2) is the interest held by the ‘ultimate recipient’ [41]

TD 2015/4-8 – FBT rates, thresholds and other amounts for 2015-16 [42]

 

Class Rulings & Product Rulings

Class Rulings – off-market share buy back – assessability of grant [43]

Class Rulings – off-market share buy back – Bonus Share Plan [44]

Class Ruling – tax treatment of ANZ non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes [45]

CR 2015/23 & PR 2015/2 – issue of NAB Capital Notes 7 a discounted home loan interest calculated under Loan Reducer [46]

 

ATO Interpretive Decisions (ATOIDs)
[-]

 

Practice Statements
[-]

 

Tax Alerts
[-]

 

Other ATO news or statements

GIC and SIC rates for April to June 2015 [47]

Tax practitioners’ personal tax obligations: ATO’s focus on obligations [48]

Surveying and Map Services Industry – ATO to consult on draft effective lives determination for depreciating assets [49]

Serious financial crime: ATO leads taskforces on phoenix companies and misuse of trusts after information sharing laws passed [50]

Net medical expenses tax offset: ATO reminder about eligibility [51]

Jeremy Hirschhorn takes on role of Deputy Commissioner – Public Groups [52]

Tax transparency reporting of 2013/14company tax tax paid details for $100m income plus – ATO releases consultation paper for first report late 2015 [53]

Tax consolidation – possible options re MEC tripartite review: Treasury proposals paper [54]

ATO visits to Adelaide restaurants, cafes and takeaways [55]

 

 

GST DEVELOPMENTS

Legislation & Announcements (GST)
[-]

 

Cases (GST)

*Re Anderson and FCT – Trustee of trust liable to pay GST re property development [56]

Trustee for SBM Trust v FC of T – ‘input tax credits’ lost after 4 years under s93-5 under transitional provisions [57]

 

Rulings, Determinations & Other things (GST)

*GSTR 2015/1 – GST refunds: meaning of “passed on” and “reimburse” [58]

 

 

SUPERANNUATION DEVELOPMENTS

Legislation, Announcements etc. (Super)
[-]

 

Cases (Super)

Super surcharge and WA police officers: ATO seeks comments [59]

Ward v FC of T – AAT had jurisdiction – decision NOT to make a determination for excess contributions relief – s292-465(9)(a) absurd – EM mischief [60]

*Munro v Munro – a death benefit nomination form completed by a member of a SMSF was not a binding nomination [61]

 

Rulings & Other things (Super)

2015/16 relevant superannuation rates and thresholds [62]

Accessing super to buy a home – Prime Minister’s view [63]

SMSF investments that result in loans to members – ATO scrutinising breaches sole purpose test [64]

Accountants providing SMSF advice: limited license exemption and external dispute resolution [65]

 

 

AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR

Charities face losing tax concessions for not meeting reporting requirements: ACNC [66]

Charity status of 1,380 “double defaulters” revoked: ACNC [67]

 

 

BOARD OF TAXATION
[-]

 

 

EXTERNAL SUPERVISORS – IGT; OMBUDSMAN, JCPAA & ANAO

 

 

TAX PRACTITIONERS BOARD & LEGISLATION

Tax Practitioners Board v Li – Court declares that former tax agent made reckless statements, but declined to impose a pecuniary penalty [68]

Tax Practitioners Board v Kim (No 2) – Tax agent fined $4,000 for making false statements [69]

 

 

STATE TAXES

Legislation & Announcements (State)

Qld: Payroll Tax Rebate, Revenue and Other Legislation Amendment Bill introduced [70]

SA: Stamp Duties (Off-The-Plan Apartments) Amendment Bill awaits Royal Assent [71]

Vic: Back to Work Bill will give relief for employing unemployed and now awaits Assent after amendment requiring quarterly operational reports [72]

WA: Taxation Legislation Amendment Bill receives Royal Assent [73]

WA: Taxation Legislation Amendment Bill 2015 – introduced [74]

 

Cases (State)

NSW land tax: Joukhador & Anor v Chief Comr of State Revenue – exemption for child care facility denied [75]

NSW land tax: Theophilas v Chief Comr – PPR exemption not applied to Randwick property whilst absent for extended rennovations [76]

 

Rulings & Other (State)
[-]

 

 

OTHER DEVELOPMENTS

Intergenerational Report; 2015 released by Treasury [77]

ASIC Financial Advisers Register launched [78]

 

THE END

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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