Greenwoods and Freehills Weekly Tax Highlights - Week Ended 22.3.08

ATO Documents

Released 19.3.08

Class Ruling
CR 2008/26: Income tax: capital gains: Converting Preference Shares: St. George Bank Limited
Product Rulings
PR 2008/26: Income tax: deductibility of interest incurred on borrowings in relation to the Macquarie Fusion Funds - June 2008 Offer 
PR 2008/27: Income tax: ITC Sandalwood Project 2008 
PR 2008/28: Income tax: ITC Hardwood Project 2008 (High Value Timber Option)
PR 2008/29: Income tax: ITC Hardwood Project 2008 (Pulpwood Option)
Draft Self Managed Superannuation Fund Ruling
SMSFR 2008/D1: Self Managed Superannuation Funds: application of the Superannuation Industry (Supervision) Act 1993 to unpaid trust distributions payable to a Self Managed Superannuation Fund  
Notice of Withdrawal
Income Tax Ruling
IT 69: Investment allowance - hire of plant
Addenda
Product Rulings
PR 2006/145: Income tax: 2007 Timbercorp Almond Project - Early Growers (to 15 June 2007) 
PR 2006/146: Income tax: 2007 Timbercorp Almond Project - Post 30 June Growers 

Released 20.3.08

New Interpretative Decisions
ATO ID 2008/43: Capital Allowances: environmental protection activity - subscribing for shares in a company
ATO ID 2008/44: Capital Allowances: business related costs - in relation to a business proposed to be carried on 
ATO ID 2008/45: Capital Allowances: business related costs - in relation to your business
Withdrawn Interpretative Decision
ATO ID 2001/772: Foreign tax credits - UK tax paid by Australian resident on rental income earned in the UK
ATO ID 2003/887: Exempt Income: Director of US company visiting Australia
ATO ID 2003/1154: Assessability of UK sourced income by a taxpayer with dual residency
ATO ID 2004/10: Australian source income: commodity purchase and sale
ATO ID 2004/67: Assessability of compensation payment received by Australian resident from the United Kingdom
ATO ID 2004/83: Assessability of salary and wages received by a UK citizen working in Australia
ATO ID 2004/281: Assessability of royalty income received from the UK
ATO ID 2004/903: GST and attribution of GST by an insurer when insurance premium is paid by way of instalments
ATO ID 2005/233: GST and payment made in settlement of a general insurance claim when the insured does not inform the insurer of its input tax credit entitlement on the premiums
ATO ID 2005/235: GST and payment made in settlement of a general insurance claim when the insured informs the insurer of its input tax credit entitlement on the premiums
ATO ID 2005/236: GST and supply of an income protection policy that is a policy of life insurance
ATO ID 2005/271: GST and compulsory third party premium selection test 
Law Administration Practice Statements
PS LA 2008/6: Fraud or evasion

Released 20.3.08

Tax Laws Amendment (2008 Measures No 2) Bill 2008 and an accompanying Explanatory Memorandum have been introduced into the House of Representatives. The Bill contains a number of amendments to the tax law. The Bill changes the market value substitution rule to ensure it does not apply when CGT event C2 occurs in relation to interests in certain companies and trusts. The Bill also deals with misappropriated amounts, allowing taxpayers to claim a deduction in relation to an amount misappropriated by an employee or agent following the disposal of an asset that has been dealt with under the uniform capital allowance provisions, recognise the misappropriation under the CGT provisions, or both claim a deduction and recognise the misappropriation (depending on whether the use of the asset was for taxable purposes or not). The Superannuation laws are to be amended to  extend the period within which an employer can make a contribution - after the due date - and still be eligible to use the late payment offset to reduce their superannuation guarantee (SG) charge liability. Finally the Bill updates the list of Deductible Gift Recipients.

Released 20.3.08

The Review of the Income Tax Exemption for Structured Settlements (Division 54) has been completed. The purpose of the Review was to assess the effectiveness of the tax exemption and to identify any changes that need to be made to improve its effectiveness. The review was concerned solely with the tax treatment of payments made under structured settlements. Division 54 of the ITAA 1997 provides an income tax exemption for annuities and deferred lump sums made under structured settlements for people who have suffered a personal injury. The report made 4 recommendations, 3 of which the Government agreed to, including the retention of Div 54. The Government disagreed with the recommendation that state insurers be specified in the law to avoid uncertainty about whether certain government bodies are state insurers for the purpose of the exemption under Div 54.