Greenwoods and Freehills Weekly Tax Highlights - Week Ended 25.7.08

ATO Documents

Released 23.7.08

Product Rulings
PR 2008/59: Income tax: tax consequences of investing in equities using the Macquarie Geared Equities Investment plus
PR 2008/60: Income tax: 2009 Willmott Forests Premium Forestry Blend Project
Class Rulings
CR 2008/49: Income tax: Demerger of Impedance Cardiology Systems Inc. by ImpediMed Limited
CR 2008/50: Income tax: Distribution of VISA proceeds by Cuscal Limited via the issuance of a special class of share
Notices of Withdrawal
Product Rulings
PR 2007/68: Income tax: tax consequences of investing in equities using the Macquarie Geared Equity Investment plus 
PR 2008/46: Income tax: Curtis Eastern Project 

Released 25.7.08

New Interpretative Decision
ATO ID 2008/109: Controlled foreign companies: financial intermediary business
Withdrawn Interpretative Decisions
ATO ID 2001/410: Rental Property Expenses - GST component
ATO ID 2002/249: Assessability of bonuses received upon termination of a life insurance policy
ATO ID 2002/817: Deductibility of interest under a line of credit facility - mixed purpose loans
ATO ID 2002/830: Deductibility of Interest on a Loan Used to Finance a Share Trading Operation

Released 18.7.08

The Board of Taxation has released an issues paper , "Review of the Legal Framework for the Administration of the Goods and Services Tax".  The paper emphasises that the focus of the review is to be on streamlining and improving the operation of the GST, reducing compliance costs, and removing anomalies. The Board will not be examining any changes to the current rate of the GST.

Released 23.7.08

The Assistant Treasurer has announced that the Government is seeking comments on draft legislation to reform the trust taxation rules in Div 6C of the ITAA 1936. The Government had made an election commitment to examine options to introduce a managed investments tax regime, to effectively replace the current Div 6C. Key changes include:

• clarifying the scope and meaning of investment in land for the purpose of deriving rent;
• introducing a 25 per cent safe harbour allowance for non-rental, non trading income from investments in land;
• expanding the range of financial instruments that a managed fund may invest in or trade; and
• following consultation with industry, providing a further 2 per cent safe harbour allowance at the whole of trust level for non-trading income.

Tax Case

Command Recruitment Group (Qld) Pty Ltd and FCT, AAT Case [2008] AATA 619, 16 July 2008: Due to the absence of any provision, within either the Income Tax Assessment or Taxation Administration Acts, relating to objections concerning running balance accounts, the AAT has held that it did not have the jurisdiction to review the Commissioner's decision not to transfer withholding tax payments. The AAT found that the decision was not an "appealable objection decision" under Pt IVC of the TAA 1953.

Progress of Legislation