Greenwoods and Freehills Weekly Tax Highlights - Week Ended 27.6.08

ATO Documents

Released 25.6.08

Taxpayer Alerts
TA 2008/13: Employee Savings Plans
TA 2008/14: Salary Deferral Arrangements
TA 2008/15: Profit washing scheme using a trust and a loss entity
TA 2008/16: Liquidation of entities to avoid the payment of tax liability
Taxation Determinations
TD 2008/15: Income tax: can an unincorporated association of persons acting only in Australia who do not carry on a business in common with a view to profit be a corporate limited partnership within the meaning of section 94D of the Income Tax Assessment Act 1936?
TD 2008/16: Income tax: is an exceptional circumstances relief payment paid to a farmer under the Farm Household Support Act 1992 'assessable primary production income' under subsection 392-80(2) of the Income Tax Assessment Act 1997?
Draft Goods and Services Tax Determination
GSTD 2008/D2: Goods and services tax: is a supply by way of an in specie distribution of an asset that is applied or intended to be applied in an enterprise carried on by a discretionary trust to a beneficiary of the trust made 'in the course or furtherance of' the trust's enterprise?
Draft Taxation Determination
TD 2008/D9: Income tax: consolidation: capital gains: do the core consolidation rules in Division 701 of the Income Tax Assessment Act 1997 modify the effect of the CGT contract rules if an entity contracts to buy or sell a CGT asset and the contract settles after the entity becomes, or ceases to be, a member of a consolidated group?
TD 2008/D10: Income tax: consolidation: capital gains: for the purposes of Part 3-90 of the Income Tax Assessment Act 1997, is the CGT asset that an entity has contracted to buy from another taxpayer an asset of the entity at a time it joins or leaves a consolidated group, if the contract is not completed at that time?
TD 2008/D11: Income tax: consolidation: capital gains: for the purposes of Part 3-90 of the Income Tax Assessment Act 1997, is the CGT asset that an entity has contracted to sell to another taxpayer an asset of the entity at a time it joins or leaves a consolidated group, if the contract is not completed at that time?  
Class Rulings
CR 2008/44: Income tax: scrip for scrip roll-over: merger of Zinifex Limited and Oxiana Limited
CR 2008/45: Income tax: early retirement scheme - Alcoa of Australia Ltd
Goods and Services Tax Ruling
GSTR 2008/3: Goods and services tax: dealings in real property by bare trusts
Taxation Ruling
TR 2008/4: Income tax: effective life of depreciating assets (applicable from 1 July 2008)
Draft Goods and Services Tax Ruling
GSTR 2008/D3: Goods and services tax: partitioning of land
Addenda
Income Tax Ruling
IT 2111: Income tax: taxation incentives for the Australian film industry
IT 2476: Income tax: taxation incentives for Australian film industry
IT 2629: Income tax: taxation incentives for the Australian film industry 
Product Ruling
PR 2007/100: Income tax: Kiri Park Projects - pre 30 June 2008 Growers
Taxation Determination
TD 2002/20: Income tax: if an Australian film production company alters its method of charging for film production services supplied to a foreign associate to account for the impact of the tax offset scheme under Division 376 of the Income Tax Assessment Act 1997, will the Commissioner apply Division 13 of Part III of the Income Tax Assessment Act 1936 or the Associated Enterprises article of a relevant double tax agreement to increase the charge? 
TD 2004/25: Income tax: do moneys used to acquire financial securities or which are otherwise set aside to fund a guaranteed return to investors satisfy the 'expended directly' requirement of Division 10BA of Part III of the Income Tax Assessment Act 1936?
TD 2006/2: Income tax: for the purpose of Division 376 of the Income Tax Assessment Act 1997, are some insurance premiums excluded from film production expenditure?
TD 2006/3: Income tax: to what extent are freight costs included in 'qualifying Australian production expenditure' within the meaning of section 376-40 of the Income Tax Assessment Act 1997?
Taxation Ruling
TR 2002/13: Income tax: Australian films - Division 10B - tax avoidance schemes 
Notices of Withdrawal
Draft Taxation Determination
TD 2005/D27: Income tax: consolidation: capital gains: do the core consolidation rules in Division 701 of the Income Tax Assessment Act 1997 modify the effect of the CGT contract rules if an entity contracts to sell or buy a CGT asset and the contract settles after the entity becomes, or ceases to be, a member of a consolidated group?
Taxation Ruling
TR2007/3: Income tax: effective life of depreciating assets (applicable from 1 July 2007) 

Released 26.8.07

Law Administration Practice Statements
PS LA 2008/3 (GA): Attribution rules and late registration for fuel tax credits
PS LA 2008/11: Fraudulently altered or created income tax returns or activity statements 
PS LA 2008/12: Public advice and guidance products: selection, development, publication and review processes

Legislative Update

Tax Laws Amendment (2008 Measures No 4) Bill 2008 was introduced on 26.6.2008. The Bill contains amendments which deal with relief from CGT for private health insurance policyholders when their insurance companies demutualise to a for profit insurer and Family trust measures to reduce the scope of family trusts being used to utilise losses to lower income tax. The Bill also contains several amendments dealing with grammatical and typographical errors.

Brady King Pty Ltd v FCT [2008] FCAFC 118, Full Federal Court, 26 June 2008: The Full Federal Court has allowed the taxpayer's appeal and held that the margin scheme for the supply of the stratum units in question was to be calculated under s 75-10(3) of the GST Act. The Full Federal Court agreed with the argument put by both the Commissioner and the taxpayer that the single bench of the Federal Court had erred. The Court considered that, before the commencement of GST on 1 July 2000, the taxpayer acquired or held each unit in the sense that it held the property at King St from which that unit was later carved out.

Orica Ltd v FCT [2008] FCA 906, Federal Court, 17 June 2008: The Federal Court has granted the Commissioner leave to file and serve an amended appeal statement. The issue concerned a case involving the sale of a pharmaceutical business and possible CGT consequences. The Court noted that the Commissioner had always contended that the taxpayer's rights under the Distribution Agreement in question were an asset for the purposes of Pt IIIA, that the taxpayer disposed of that asset in circumstances where there was a capital gain, and that the disposition of that asset was a taxable event.