M o r g a n’ s   T a x   M o n t h

– November 2014 Developments –

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





Acts & Bills

*Tax and Superannuation Amendment (2014 Measures No 6) Bill 2014 – passes House of Representatives [1]

Customs (Korean Rules of Origin) Regs made [2]

Japan-Australia Economic Partnership Agreement: Bills pass Reps [3]

Freeze on income thresholds for Medicare levy surcharge – Bill passed [4]

*Trusts and phoenix taskforces info sharing; defence force tax exemption: regs amended [5]

*Publication of company tax information to start 1 year earlier if Private Member’s Bill passes (2012/13 year onwards) [6]




Employee incentive schemes: ASIC disclosure relief expanded [7]

*China and Australia complete negotiations for Free Trade Agreement; revised DTA to follow [8]

*BEPS: OECD releases discussion drafts on Action 7 (Artificial avoidance of PE status and Action 10 (transfer pricing guidance of management fees etc.) [9]

*Institutional investors back global tax reform modernisation and transparency at G20 Summit [10]

*Developing countries to play greater role in BEPS project [11]

*G20 Leaders endorse reporting standard on tax info, commit to finalise BEPS in 2015 [12]

*Asia-Pacific tax administrators plan to tackle multinational profit shifting [13]

*Asia-Pacific tax taskforce announced to share compliance tactics [14]

*BEPS discussion draft released on preventing treaty abuse [15]

OECD releases 2013 mutual agreement procedure statistics [16]




High Court

Full Federal Court



Federal Court

*DCT v Vasiliades & Ors – Asset freezing orders issued including against a trust in which it was alleged Mr Vasiliades had a contingent interest [17]



Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Watson and FCT – No hardship release: circumstances of taxpayer’s own making [18]

Re Jones and FCT – Work-related expenses denied [19]

Re Farshidian and FCT – Dependant spouse tax rebate denied [20]

*Re Agius and FCT: Taxpayer not a resident, but derived Australian-sourced income [21]

*Re Byrt and FCT – Proceeds from sale of mining tenements assessable as ordinary income [22]

*Re The Trustee for the Confidential Trust and FCT – Minor trust beneficiaries not excepted persons and taxed at 45% [23]



Other Courts & Tribunals

*DCT v Shears – Default judgment against taxpayer stands [24]




*MBI Properties Pty Ltd v FCT – High Court hears appeal against decision that after the grant of a lease there is no ongoing ‘supply’ [25]

*Lend Lease Development Pty Ltd & Ors v Comr of State Revenue – HC hearing – construction payments to vendor NOT ‘transfer’ consideration [26]

*Re Scanlon and FCT – ETP’s were not taken into account as liabilities for the purpose of the maximum net asset value test [27]

*FCT v Australian Building Systems Pty Ltd (in liq) & Anor – Commissioner applies for special leave re Liquidator’s s254(1)(d) for CGT [28]

FCT v Desalination Technology Pty Limited – relevant R&D expenditure ‘incurred’ [29]




Decision Impact statements

ATO Decision Impact Statements: ATS Pacific; Retirement Village Operator; PTTEP Australasia [30]

ATO Decision Impact Statements: Gleeson; Bentivoglio [31]



*TR 2014/6 – Transfer pricing “reconstruction” power – actual commercial or financial relations and what wholly independent parties would do [32]

*TR 2005/7 Addendum – regarding ‘partnership salary’ agreements in a ‘Corporate Limited Partnership’ [33]



*TD 2014/D18 – Non-resident investing in debt interests – s974-80(1)(d) of the ITAA 1997 [34]

*TD 2014/D19 Meaning of interest held by ultimate recipient for the purposes of s974-80(2) of the ITAA 1997 [35]


Class Rulings & Product Rulings

Class Ruling re: ‘scrip for scrip’ rollover and Product Ruling re: AgriWealth Softwood Timber Project [36]

Class Rulings on expiry of leases & membership funding of research development [37]

Class Rulings on FBT, Capital Reallocation and Return of Capital – Addendum to Tax Ruling on Retirement Villiages [38]


ATO Interpretive Decisions (ATOIDs)

*ATO ID – Is a term deposit a qualifying forex account? [39]



Tax Alerts

Other ATO news or statements

*Div 7A ‘corrective action’ and the Commissioner’s 109RB discretion – usually making a ‘complying loan’ agreement and making ‘catch-up payments’ [40]

*No “red flag” for taxpayers coming forward under Project DO IT – ATO more concerned with those who don’t come forward than with those who do [41]

*Commissioner says ATO is rethinking its compliance approaches – including seeking ‘declaratory relief’ [42]

*Share transactions from 20 September 1985 to 30 June 2016 from share registry companies: ATO data-matching program [43]

Cash economy in Geelong and Wagga Wagga – ATO statement [44]

Project DO IT: ATO scenarios on dealing with offshore structures [45]

Building and construction industry: last chance for 2013-14 Annual Report due on 21 July 2014 to be lodged without penalties [46]




Legislation & Announcements (GST)

Cases (GST)

*MBI Properties Pty Ltd v FCT – High Court hears appeal against decision that after the grant of a lease there is no ongoing ‘supply’ [47]

*Re Ryan and FCT – Input tax credit claims partly allowed [48]

*RV Investments (Aust) Pty Ltd as Trustee for the RV Unit Trust v FCT – burden of proving creditable acquisition on taxpayer and no question of law [49]

*Re Giuseppe Caporale Structural Engineers Pty Ltd and FCT – GST: Some ITC claims allowed: partial win for taxpayer [50]


Rulings, Determinations & Other things (GST)

*GSTR 2014/D5 – GST: development lease arrangements and government agencies – when there are supplies for consideration [51]




Legislation, Announcements etc. (Super)

Cases (Super)

*ASIC seeks court order to stop property promoter from providing unlicensed financial product advice on SMSFs [52]

*Re Hope and FCT – Excess super contributions tax – no relief for late contributions via clearing house [53]


Rulings & Other things (Super)

*SMSFD 2014/1: Superannuation transition to retirement pensions – partial commutation [54]

*Releasing excess concessional contributions from super – operation and ATO timing [55]

SMSF compliance and regulation update: ATO speech [57]

*Small business super clearing house expansion; choice of fund changes: Government announcement [58]




*Charity financial info to be made publicly available (in the one place and free of charge: ACNC [59]

*Charity registration revoked for 408 missing charities: ACNC [60]

*Health promotion charity: ACNC seeks comments on ACNC Commissioner’s Interpretation [61]





ANAO releases report on ATO admin of Annual Compliance Agreements (ACA’s) [61]

ANAO releases report on ATO contact centres [62]

IGT releases 2 follow-up reports [63]

Oversight of the ATO: second parliamentary report released [64]



*Tax Practitioner Board approved course lists updated [65]

Re Frugtniet and Tax Practitioners Board – practitioner appeals 5 year ban to the Federal Court [66]



Legislation & Announcements (State)

NSW land tax: increase in tax threshold for 2015 [67]

NSW payroll tax: rebate under Fresh Start Support: Amendment Bill No 2 introduced [68]

Qld: Revenue and Other Legislation Amendment Bill introduced [69]

SA: Stamp Duties (Off-The-Plan Apartments) Amendment Bill – introduced [70]

Tas: stamp duty; land tax; first home builders boost: update on Bills [71]

WA: modernisation of primary production land tax exemption: Bill introduced [72]


Cases (State)

NSW land tax: Ferella & Anor v Chief Comr of State Revenue – primary production exemption refused by NSW Court of Appeal [73]

*NSW payroll tax – Newcastle Airport Ltd v Chief Comr of State Revenue – assessments revoked because wages exempt as paid by a ‘council’ [74]

Vic – Duty – Lend Lease Development Pty Ltd v Comr of State Revenue –whether payments to the vendor for construction works were part of the consideration for the land transfer? [75]

Vic land rich duty provisions: Denison Funds Management Ltd v Comr of State Revenue – assessment confirmed on “reconstruction” of property trusts [76]


Rulings & Other (State)

Qld payroll tax: employment agencies and workers on-hired to government [77]

Vic payroll tax: reduced penalty for voluntary disclosure of payments to private security industry licensees as exempt ends after 30.11.14 [78]




Foreign Acquisitions and Takeovers Regs amended re Korea and Japan FTAs [79]

FoFA regulations disallowed by Senate [80]

Enhanced register of financial advisers: draft reg released [81]

Foreign Investors to pay administration fee to FIRB – recommendation by Parliamentary Committee [82]




: 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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