Greenwoods & Freehills Weekly Tax Highlights 20.7.07-27.7.07

Print Version

ATO Documents

Released 25.7.07

Taxation Determination
TD 2007/24: Income tax: is the 'applicable functional currency' for the head company of a consolidated group determined by looking at the 'accounts' of all the members of the consolidated group, for the purposes of item 1 of subsection 960-60(1) of the Income Tax Assessment Act 1997 ?
Class Rulings
CR 2007/68: Income tax: Early Retirement Scheme - Hydro Aluminium Kurri Kurri Pty Ltd 
CR 2007/69: Income tax: share buy-back: Santos Limited  
CR 2007/70: Income tax: UNiTAB Limited - Employee Share Scheme - merger with Tattersall's Limited 
Product Rulings
PR 2007/71: The Product Rulings system  
PR 2007/72: Income tax: ITC Diversified Forestry Project 2007 (Stage 2) 
Taxation Rulings
TR 2007/5: Income tax: functional currency - when is an amount not in the 'applicable functional currency'? 
TR 2007/6: Income tax: non-commercial business losses: Commissioner's discretion 
Addenda
Taxation Determination
TD 2007/21:  Income tax: what are the reasonable travel and meal allowance expense amounts for 2007-2008? 
Taxation Ruling
TR 2001/14: Income tax: Division 35 - non-commercial business losses 
Addenda
Product Ruling
PR 1999/95: Income tax and fringe benefits tax: Product Rulings system 
PR 2007/60: Income tax: Alpine Meadows Olive & Walnut Project No. 1 (Early Growers) 

Law Administration Practice Statements
PS LA 2007/15: Briefing counsel 
PS LA 2007/16: Risk management in litigation
PS LA 2007/17: Tax technical litigation in the Administrative Appeals Tribunal 
PS LA 2007/18: Tax technical litigation in Federal Court matters
PS LA 2007/19: Tax technical litigation in High Court matters

Released 27.7.07

New Interpretative Decisions
ATO ID 2007/160: Capital Works: plant - rock wall
Withdrawn Interpretative Decisions
ATO ID 2001/459: Capital Gains Tax: CGT event I1: Short term residency exception 
ATO ID 2001/732: CGT- Deceased Estate - Cost base of CGT asset - legal cost incurred by executor in relation to another family member's estate. 
ATO ID 2001/733: CGT- Deceased Estate - Cost base of CGT asset - Action for negligence in drafting the Will 
ATO ID 2001/734: CGT- Deceased Estate Cost base of CGT asset - costs incurred before taxpayer's death  

FCT v Dixon (Trustee) [2007] FCA 1079, 25 July 2007: The Federal Court has found that the AAT had taken into account irrelevant considerations in remitting a shotfall penalty. Despite the fact that no revenue was lost by the Commonwealth, the Court decided that factors relevant to the exercise of discretion can only apply to the circumstances relevant to the taxpayer. The court therefore reimposed the penalty.

Barakat & Ors and FCT, AAT Case [2007] AATA 1564, 19 July 2007:  The AAT has set aside  the taxpayer's shortfall penalty imposed after the taxpayer had claimed to misunderstand advice issued by the ATO while completing two BAS's. The AAT found that in the circumstances reasonable care was taken by the taxpayer and thus under the existing exceptions the shortfall amount should be disregarded. 

Leda Pty. Limited v. Weerden & Anor. [2007] NSWCA 174 18 July 2007:  The NSW Court of Appeal has dismissed the Company's appeal. The Court found that the Tax Agent had stressed that a document written to the company did not constitute advice, as no due diligence had been undertaken, furthermore the Court commented that the Company had undertaken the transaction solely for the purposes of obtaining a tax benefit.