Greenwoods & Freehills Weekly Tax Highlights 19.01.07-26.01.07

26 January 2007

ATO Documents

Released 24.1.07

Class Ruling
CR 2007/5: Income tax: return of capital: Central Glass Pty Ltd
Product Rulings
PR 2007/1: Income tax: Agriwealth 31 March 2007 Radiata Pine Project
PR 2007/2: Income tax: Bioforest Sustainable Timber and Biofuel Project 2007
PR 2007/3: Income tax: Australian Bight Abalone Project 2007
PR 2007/4: Income tax: Macquarie Almond Investment 2007 - Early Growers (to 15 June 2007)
Draft Taxation Ruling
TR 2007/D1: Income tax: non-commercial business losses: Commissioner's discretion
Erratum
Product Ruling
PR 2006/88: Income tax: Moora Citrus Project - 2007 Growers
Addendum
Taxation Ruling
TR 2001/14: Income tax: Division 35 - non-commercial business losses

Released 25.1.07

Interpretative Decisions
ATO ID 2007/15: GST and right to a share of net profit in return for a contribution of money - not a credit arrangement
ATO ID 2007/16: GST and right to a share of net profit in return for a contribution of money - not an interest in a debt
ATO ID 2007/17: GST and right to a share of net profit in return for a contribution of money - not a supply of money
ATO ID 2007/18: GST and right to a share of net profit in return for a contribution of money - a taxable supply
ATO ID 2007/19: Excise: conditions on a permit to receive concessional spirit
ATO ID 2007/20: United States Convention: whether packing machines are 'substantial equipment'
ATO ID 2007/21: Assessability of an Australian state government pension received by a Sri Lankan resident
ATO ID 2007/22: Assessability of an allocated pension from an Australian superannuation fund received by a Sri Lankan resident
ATO ID 2007/23: Assessability of an Australian sourced interest income received by a Sri Lankan resident
ATO ID 2007/24: Assessability of an Australian sourced eligible termination payment paid to a Singaporean

Submissions on Simplified Super

Released 15.1.07

The Senate Economics Committee has released the submissions received in relation to its inquiry into the Tax Laws Amendment (Simplified Superannuation) Bill 2006 and 5 related Bills. The Committee intends to hold a public hearing into the Bills on Tuesday, 30 January 2007.

Tax Cases

Re Macpherson and FCT, [2007] AATA, 22 January 2007: The Tribunal has found the Taxpayer liable for Part IVA assessments issued by the ATO. The Tribunal found that the complex investment scheme the taxpayer had enterted into had been for the dominant purpose of minimising taxable income. The Taxpayers liability will not be decided in full until two other schemes into which she entered are reviewed by the tribunal.

Starr & Anor v FCT [2007] FCA 23, 23 January 2007: The Federal Court has set aside the previous decision of the AAT and found that the taxpayer was not liable for shortfall penalties imposed by the Commissioner. The Court decided that as the Commissioner had levied the penalties under s 226L it was necessary to prove that the taxpayers subjective intentions were to pay less tax. The Court accepted the evidence by the taxpayer that the scheme had been entered into for the purpose of commercial gain and accordingly set aside the previous decision.

Progress of Legislation

As at 25.1.07

Bill	Intro House	Passed House	Intro Senate	Passed Senate	Date of Royal assent / Act Number	Description
Tax Laws Amendment (2006 Measures No 6) Bill 2006	2.11.06	7.12.06	.	.	.	Transfer of Power of Appointment, Deductible Gift Recipients
Tax Laws Amendment (2006 Measures No 7) Bill 2006	7.12.06	.	.	.	.	Small Business CGT, Capital Protected Borrowings, Effective Life of Tractors, DGRs
Tax Laws Amendment (Simplified Superannuation) Bill 2006	7.12.06	.	.	.	.	Simplified Benefits Tax, Anti-avoidance, Employer ETPs, Concessional and Non-concessional contributions, TFNs, SMSFs, Asset Tests.
Superannuation (Departing Australia Superannuation Payments Tax)	7.12.06	.	.	.	.	.
Superannuation (Excess Concessional Contributions Tax) 2006	7.12.06	.	.	.	.	.
Superannuation (Excess Non -Concessional Contributions Tax) 2006	7.12.06	.		.	.	.
Superannuation (Self Managed Superannuation Funds) Supervisory Levy Amendment 2006	7.12.06	.	.	.	.	.
Superannuation (Excess Untaxed Roll-over Amounts Tax) 2006	7.12.06	.	.	.	.	.

These notes are in summary form designed to alert clients to tax developments of general interest. They are not comprehensive , they are not offered as advice and should not be used to formulate business or other fiscal decisions.

Liability limited by a scheme approved under Professional Standards Legislation.