M o r g a n’ s   T a x   M o n t h

– October 2013 Developments –

This is a collection of developments in Australian tax law and practice that occurred in October 2013 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

*Repeal of the mining tax and related measures: draft legislation released [1]



*Federal Parliament will resume for 4 weeks on 12 November 2013 [2]

*Labor Party Federal Shadow Ministry announced [3]

*Coalition has agenda to clear tax announcements backlog, bring Budget back to surplus and cut ‘red-tape’ [4]

*Government commences National Commission of Audit [5]

Switzerland signs multilateral convention to tackle tax evasion [6]




High Court

Full Federal Court

*FCT v Resource Capital Fund IV LP & Ors – Commissioner wins appeal: s255 Notice held effective to withhold from foreign currency owed to taxpayer [7]

*Mulherin v FCT – Appeal re assessments based on Liechtenstein bank information dismissed [8]

*Macquarie Bank Limited & Anor v FCT – Full Federal Court refuses Macquarie Bank leave to appeal in OBU (anti ‘U-turn’) case [9]


Federal Court

*Hua Wang Bank Berhad v FCT (No 6) – Confidentiality order not appropriate [10]

*Hua Wang Bank Berhad v FCT (No 7) – Wickenby: evidence not improperly obtained [11]

*Hua Wang Bank Berhad v FCT (No 8) – Use of affidavits from previous litigation allowed [13]

*Hua Wang Bank Berhad v FCT (No 9) – Certificates protecting witness from self-incrimination granted [14]

*Hua Wang Bank Berhad v FCT – Suppression orders granted on interim basis [15]

*Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v The Sage Group plc- (No 1) – No discovery for tax documents in Cayman Islands to prove tax advantage [16]

*Roberts v DCT – Summary judgment granted to ATO for outstanding tax debts [17]


Federal Circuit Court

Administrative Appeals Tribunal (AAT)

*Re Keep and FCT– CGT exemption refused because evidence didn’t establish it became the ‘main residence’ as soon as practicable after completion etc. [18]

*Re DBTL and Innovation Australia – Activities associated with deeper mining pits fail to qualify as R&D [19]

*Re Rasmussen and FCT – taxpayer faced serious hardship but this was not caused by having to pay the $30k of tax and relief was denied [20]

*Re Schlottmann and FCT – Car and work-related expenses denied – except to extent of cents per km basis [21]


Other Courts & Tribunals

*Hancock & Anor v Rinehart & Ors – Trustee waived privilege on legal advice contained in accountants’ tax advice [22]

*Zampbeacon Pty Ltd v DCT – Application to set aside statutory demand for RBA debt dismissed [23]

*Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd – director breached fiduciary duty in making super payments to himself and family [24]

*Symond v Gadens Lawyers Sydney Pty Ltd (No 2) – Taxpayer wins damages for negligent advice re tax liability from company restructure [25]



Re Carter v FCT – decision on ATO’s benchmarks for Florists stands: taxpayer discontinues her application for an extension of time in which to appeal [26]

*Re AP Energy Investments Limited and FCT – Commissioner is appealing the AAT decision that the sale of the mining company was not taxable [27]

*DCT v Cheung Kong Infrastructure Holdings Limited (No 2) [2013] FCA 885; DCT v Power Assets Holdings Limited – taxpayers to appeal order for payment [28]

FCT v Ludekens [2013] FCAFC 100 – Taxpayers seek leave to appeal to the High Court from the decision that they were ‘promoters’ of a ‘tax exploitation scheme’ [29]

SPI PowerNet Pty Ltd v FCT – Taxpayer appeals to Full Federal Court from decision that its s163AA payments to Vic Treasury were not deductible [30]

Re Bai and FCT – the taxpayer is seeking to appeal the decision the objection be allowed only in part and remaining penalties would not be remitted [31]




Decision Impact statements

CGT maximum net asset value test: ATO view on Bell case [32]

WET producer rebates denied: ATO view on S J Buller case [33]



TR 2013/6 – FBT – expenditure subject to Div 35 non-commercial loss deferral cannot give rise to a ‘once only deduction’ for ‘otherwise deductible’ purposes [34]



TD 2013/20 – FBT: reimbursement of expenditure and otherwise deductible rule [35]

TD 2013/21 – Tax consolidated group reporting – inconsistent methodologies for converting foreign currencies don’t qualify [36]


Class Rulings & Product Rulings

CR 2013/74 – Griffith University’s Early retirement scheme [37]

CR 2013/75 – The Imperial Tobacco Australia Limited Voluntary Early Retirement Scheme [38]

PR 2013/17-20 – Timber and almond projects; Westpac Protected Equity Loan [39]

CR 2013/76 – Early retirement scheme – Victorian WorkCover Authority [40]

CR 2013/77 – FBT: frequent flyer points under LM High Flyers program – Toyota Dealers High Flyers Incentive Scheme provides property benefits [41]



ATO Interpretive Decisions (ATOIDs)

Practice Statements

PS LA 2013/4 – ATO’s role in tax law design [42]

PS LA 2011/13 – ATO Practice Statement on cross border recovery of taxation debts updated for multilateral convention on mutual administrative assistance [43]


Tax Alerts

ATO warns taxpayers against the form of ‘dividend washing’ where two franking credits are picked up [44]

TA 2013/2 – ATO warns of WET producer rebate schemes [45]


Other Commissioner news or statements

*Project Wickenby: 3 men charged in tax evasion and money laundering investigation [46]

Incorrect claims for company loss carry-back tax offset – returns delayed [47]

*Tax Commissioner’s Annual Report for 2012-13 released [48]

ATO (as part of joint agency taskforce) investigates $65m GST fraud in gold bullion trade [49]

Japan and Australia tax cooperation finds cases of undeclared property sales: ATO [50]




Legislation & Announcements (GST)

Cases (GST)

*Re Lakatos and FCT – GST: taxpayer not entitled to input tax credits [51]

*Re Hampson and FCT – GST refund claim made too late – extension of time to seek review refused [52]


Rulings & Other things (GST)

*GSTR 2013/D2 – GST: whether a moveable home estate is commercial residential premises [53]

*GSTD 2013/4 – GST and consideration for capital items that diminish in value can be counted to measure supplies that are charitable [54]

*GSTD 2013/D4 – after the Naidoo case, only objection decisions about s105-65 in a private rulings can be reviewed (if no assessment has issued) [55]




Legislation, Announcements etc. (Super)

*APRA Registrable Superannuation Entities (RSE’s) – ASIC defers start date of disclosure for trustee remuneration etc. to 1 July 2014 (from 31.10.13) [56]


Cases (Super)

Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd – director breached fiduciary duty in making super payments to himself and family [57]


Rulings & Other things (Super)

ATO concerned about drop in SMSF audit reports and SMSF trustees’ knowledge of their obligations [58]

ASIC warns consumers about ads recommending SMSFs purchase properties through NRAS [59]

*SMSF trustees who become a ‘disqualified person’: Tax Office reminder of obligation to cease being a trustee and remove their interest from the fund [60]




*Carbon tax abolition draft legislation released for comment [61]




Repeal of the mining tax and related measures: draft legislation released [62]




Certified Practicing Accountants Australia (CPA) releases new guide for charities’ accounts [63]





ATO administration of ‘personal services income’ regime: ANAO report [64]

Tax Inspector-General’s 2012-13 Annual Report released – ATO treating IGT as independent consultant; IGT raising isolated incidents with ATO [65]




Tax Practitioners Board’s has released its ‘Strategic Plan 2013-15’ [66]

Tax Practitioners Board 2012-13 Annual Report tabled in Parliament [67]




Legislation & Announcements (State)

Tas: Taxation and Related Legislation (Miscellaneous Amendments) Bill awaits Assent [68]

Vic: State Taxation and Financial Legislation Amendment Bill 2013 introduced to facilitate duty on electronic conveyances etc [69]

WA: land tax changes – Budget Bill awaits Assent [70]


Cases (State)

NSW stamp duty: Gloucester (Sub-Holdings 1) Pty Ltd v Chief Comr of State Revenue – Comr refused request to serve subpoena on non-party in Hong Kong – breach of international ‘comity’ [71]

CCM Holdings Trust Pty Ltd & Anor v Chief Comr of State Revenue – Commissioner appeals decision to revoke duty assessments relating to Sydney Tunnel [72]


Rulings & Other (State)

NSW land tax: related companies – Revenue Ruling updated [73]

SA stamp duty: concession for purchases of off-the-plan apartments – Information Circular [75]

WA stamp duty: cancelled transactions – Commissioner’s Practice released [76]



*Official interest rates unchanged at 2.5% [77]

CPI: September quarter 2013 indexation factor for FBT purposes [78]

Transfer pricing: OECD releases memo on country-by-country reporting [79]

OECD publishes comments received on transfer pricing issues [80]

Financial services sector regulation: new Assistant Treasurer’s first speech [81]

IPA adopts alternative to APES 230 on financial advisory services [82]

*Reform R&D tax systems to help young firms and boost innovation, says OECD [83]

Re Woolworths Ltd and CEO of Customs – Customs: “Ripsticks” are dutiable caster boards (not exempt ‘skateboards’ or ‘snakeboards’) [84]

Governor-General to retire in March 2014 [85]

*Government starts plan for small business and family enterprise ombudsman [86]

Son of Wallis to set a benchmark for financial services: FSC [87]

AUSTRAC Annual Report 2012-13 released [88]




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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