Greenwoods & Freehills Weekly Tax Highlights 01.12.06-8.12.06

Released  7.12.2006

The Tax Laws Amendment (2006 Measures No 7) Bill 2006 and accompanying Explanatory Memorandum have been released.  The Bill amends the small business CGT provisions, making a wide range of changes re the small business CGT concessions. The Bill also introduces the long awaited provisions on capital protected borrowings, treat part of the cost of borrowing as related to the capital protection. The Bill identifies those non-debenture debt interests eligible for exemption from interest withholding tax . The Bill also deals with effective life of tractors and harvesters, farm management deposits, gift funds and deductible gift recipients.

ATO Documents

Released 6.12.06

Taxation Determinations
TD 2006/75: Income tax: consolidation: can the transfer of a tax loss under section 707-120 of the Income Tax Assessment Act 1997, to the extent that it could have been utilised by the transferor in the trial year under section 165-20 of that Act, constitute a COT transfer? 
TD 2006/76: Income tax: consolidation: can a tax loss, transferred under section 707-120 of the Income Tax Assessment Act 1997 to the extent that it could have been utilised by the transferor in the trial year under section 165-20 of that Act, satisfy the condition described in paragraph 707-350(1)(c) of the Income Tax (Transitional Provisions) Act 1997?  
Product Rulings
PR 2006/154: Income tax: 2007 Timbercorp Olive Project - Early Growers (to 15 June 2007) 
PR 2006/155: Income tax: 2007 Timbercorp Olive Project - Post 30 June Growers 
Class Ruling
CR 2006/119: Income tax: assessable income: employees of the Australian Public Service and the Australian Federal Police working in Papua New Guinea as part of the Enhanced Cooperation program 
CR 2006/120: Income tax: Approved Early Retirement Scheme - Advantage Petroleum Pty Ltd 
Notice of Withdrawal 
CR 2004/73: Income tax: assessable income: employees of the Australian Public Service and the Australian Federal Police working in Papua New Guinea as part of the 'Enhanced Cooperation Package' program
Addenda
GSTR 2006/9: Goods and services tax: supplies
PR 2006/62: Income tax: Rewards Group Teak Project 2006 (Post 30 June Growers)
Erratum
TR 2006/D12: Income tax: consolidation: errors in tax cost setting amounts of reset cost base assets

Released 08.12.06

ATO ID 2006/329: Tobacco Producer Licence: conditions that relate to the control and security over the tobacco produced  

 Released Wed 6.12.2006

The Assistant Treasurer announced that the Government will amend Div 7A of the ITAA 1936. The purpose of the amendments will be to to remove the automatic debiting of a company's franking account when a deemed dividend arises. Deemed dividends will continue to be treated as assessable income in the hands of shareholders or their associates.  In circumstances in which taxpayers make an honest mistake in relation to Division 7A the Commissioner of Taxation will also be provided with a discretion to disregard a deemed dividend. The Assistant Treasurer also announced that  changes would be made in order to simplify the interaction of FBT laws with division 7A and that Section 108 of the ITAA 1936 would be repealed  as a duplicate provision.