Greenwoods and Freehills Weekly Tax Highlights 11.1.08 -18.1.08

ATO Documents

Released 16.11.07
Taxation Determination
TD 2008/1:  Income tax: if a private company provides trade credit to a shareholder (or their associate) on the usual terms it gives to parties at arm's length, will a failure by the shareholder (or their associate) to repay the amount within the agreed payment term prevent section 109M of the Income Tax Assessment Act 1936 from applying?
Class Ruling
CR 2008/1: Income tax: proposed return of capital: Globe International Limited
CR 2008/2: Fringe benefits tax and income tax: employer contributions to the Electrical Industry Training Foundation
CR 2008/3:  Income tax: early retirement scheme - OneSteel Wire Pty Limited
Product Ruling
PR 2008/1: Income tax: Oak Valley Truffle Project 2008
PR 2008/2: Income tax: Early Season Apple Project - Late Growers
PR 2008/3: Income tax: Australian Bight Abalone Project 2008
PR 2008/4: Income tax: TFS Sandalwood Project 2008 - pre 30 June 2008 Growers
Taxation Ruling
TR 2008/1:  Income tax: application of Part IVA of the Income Tax Assessment Act 1936 to 'wash sale' arrangements
Draft Taxation Ruling
TR 2008/D1: Income tax: tax consequences for a company of issuing shares for assets
Notices of Withdrawal
Taxation Determination
TD 92/167: Income tax: where a 'non-employer sponsored superannuation fund' has paid tax on a member's contributions, what can that member do to have the tax recovered to his/her superannuation account if the member is not eligible to claim, or has chosen not to claim, a tax deduction for the contributions?
TD 93/224: Income tax: what is the approved form and manner of notices required by section 82AAT of the Income Tax Assessment Act 1936 (the ITAA) to be given to the trustees of a superannuation fund by taxpayers who wish to claim a deduction for their personal contributions to the fund?
TD 94/5: Income tax: can expenditure incurred on cosmetic surgery qualify as medical expenses for the purpose of section 159P and therefore qualify for a medical expenses rebate?
TD 96/36: Income tax: in what circumstances will an eligible termination payment (ETP) be accepted as having been 'immediately' paid to a roll-over fund for the purposes of subsection 27A(12) of the Income Tax Assessment Act 1936?
Released 11.11.08
New Interpretative Decisions
ATO ID 2008/2: Discount capital gains 
ATO ID 2008/3: Assessability of dividends under Article 10.3 of the UK Convention: determination made under Article 10.3(c) of the UK Convention. 
ATO ID 2008/4: Obtaining of treaty benefits under UK Convention 
ATO ID 2008/5: Controlled Foreign Companies: attribution of foreign income to Australian entity with de facto control of foreign entity - no direct or indirect attribution interest in that entity 
ATO ID 2008/6: Assessability of UK War Widows pension 
ATO ID 2008/7: Assessability of UK War Widows supplementary pension 
ATO ID 2008/8: Offshore Banking Units: Application of paragraph 128AE(2)(ba) to wholly owned non-bank subsidiaries of non-bank OBUs 
ATO ID 2008/9: Transferor trusts: attribution of income to deceased transferor 
ATO ID 2008/10: Transferor trusts: attribution of income to executor of estate of deceased transferor 
ATO ID 2008/11: Superannuation interest: proportioning rule - release authority 
ATO ID 2008/12: Company Tax Losses: loss company is a 100% subsidiary of more than one listed public company during the test period - whether the former concessional tracing rules apply 
ATO ID 2008/13: Company Tax Losses: loss company during the test period was initially a 100% subsidiary of a listed public company, and then a listed public company itself - whether the former concessional tracing rules apply 
ATO ID 2008/14: Company Tax Losses: 'no detriment' exception to concessional tracing rules - can an eligible Division 166 company form a belief on reasonable grounds by applying the former concessional tracing rules
Withdrawn Interpretative Decisions
ATO ID 2002/429: Assessability of UK War Widows Pension
ATO ID 2002/669: Exempt income - UK War Widows Supplementary Pension
Released 18.11.07
Interpretative Decisions
ATO ID 2008/15: Superannuation: deductibility of superannuation contribution made to a director of a corporate trustee  18 January 2008
ATO ID 2008/16: GST and claiming input tax credits where GST ceases to be payable 

Released  11.1.08

The Assistant Treasurer has announced that the Government has asked Treasury to consult with industry regarding changes to the consolidation tax cost setting rules when an entity joins a consolidated group. These changes had been announced by the previous government but had led to concerns that the changes may be hindering scrip for scrip transactions.  The Assistant Treasurer  has said the consultation will focus "on ensuring non-contrived commercial takeovers involving an exchange of scrip are not affected by the changes". The consultation is expected to be completed by mid-February.

Released 14.1.08

The Tax Office has released Taxpayer Alert TA 2008/1 - Certain stapled securities involving notes and preference shares. The Tax Office is warning taxpayers that certain losses may not be allowable. The Alert describes arrangements where an Australian resident public company issues a stapled security consisting of a note and a preference share to resident investors. In many of these arrangements the company issuing the securities is suggesting that the investor may claim deductions for losses in certain circumstances. These circumstances include the assignment, transfer or surrender of the note, or conversion or disposal of the stapled security.

Released 17.1.08

The Treasurer has met with NZ Finance Minister, Dr Michael Cullen and has announced that there will be a  renegotiation of the Australia-NZ bilateral tax treaty. This will be part of a larger effort to strengthen economic ties between the two countries.

Tax Cases

National Mortgage Company Pty Ltd v FCT [2008] FCA 9, 15 January 2008:  The Federal Court has held that a mortgage broker that had entered into an agreement with a bank to organise and manage loans on the bank's behalf had not discharged the onus of proving that "management fees" paid to it under the agreement were not assessable income. The broker had argued that the "management fees" were advances by way of a loan.