This Determination was issued on Wed 30.4.2014 and states that the application of Pt IVA of the ITAA 1936, to any particular scheme, depends on a careful weighing of all the relevant facts and surrounding circumstances of each case. It states that without all relevant information, it is not possible to state definitively whether a provision in Pt IVA applies to a particular scheme.
However, according to the Determination, the Commissioner’s view is that s 177EA will generally apply to a “dividend washing” scheme as described in the example contained in the Determination. The example broadly concerns the sale of one parcel of shares on an ex-dividend basis by an SMSF, which is later brought back as a second parcel on a “special market” with the dividend attached. It says that this allows the SMSF to access additional franking credits.
ATO Deputy Commissioner Tim Dyce said that Pt IVA has always applied to dividend washing arrangements. The TD was previously issued as Draft Taxation Determination TD 2014/D1 and is unchanged.
DATE OF EFFECT: Applies both before and after its date of issue.
Self-amendment without penalties period extended to 28 May 2014
The ATO recently wrote to people about their involvement in what are known as dividend washing arrangements. The ATO said it had issued around 3,000 letters to taxpayers. They were advised to consider seeking a self-amendment of tax returns or franking credit claims and that if this was done before a certain date, no penalties would be applied. Following the release of the above final TD, the ATO has now confirmed that this no penalties period offer has been extended until 28 May 2014.
(Source: ATO media release 2014/30, 30 April 2014.)
[LTN 80, 30/4/14]
Dividend washing self-amendment deadline will be 28 May 2014
The ATO recently wrote to people about their involvement in what are known as dividend washing arrangements. They were advised to consider seeking a self-amendment of tax returns or franking credit claims and that if this was done before a certain date, no penalties would be applied. The ATO had previously advised that it intended to extend this no penalties period to a date that would be 4 weeks from the issue of the final Dividend Washing Tax Determination (currently Draft TD 2014/D1). The ATO has now advised that the final TD is expected to be released on Wed 30.4.2014 as TD 2014/10. Accordingly, it said the self-amendment without penalties period will be extended to 28 May 2014, being 4 weeks from the issue of the final TD.
[LTN 79, 29/4/14]
Dividend washing: ATO will extend self-amendment deadline
The ATO said that on 19 March 2014, it issued a number of letters that advised the recipients that the ATO holds information indicating the recipient, or an entity closely associated with the recipient, participated in a franking credit arrangement where 2 sets of franking credits have been claimed on what is effectively the same parcel of shares.
The letters, among other things, asked the recipient to consider seeking a self-amendment of tax returns or franking credit claims. The recipients were advised that penalties will not apply where a self-amendment is received before 24 April 2014. The ATO said it has extended the self-amendment without penalties period to a date that will be 4 weeks from publication of the Dividend Washing Taxation Determination (currently Draft TD 2014/D1). It said an actual date will be provided on publication of the final Taxation Determination.
[LTN 75, 22/4/14]