Greenwoods and Freehills Weekly Tax Highlights - Week Ended 29.5.09

ATO Documents

Released 27.5.09

Class Ruling
CR 2009/27: Income tax: payments under the Western Hardwoods Displaced Workers Assistance Scheme 
Product Rulings
PR 2009/38: Income tax: tax consequences of investing in equities using the Macquarie Geared Equities Investment plus
Erratum
TR 2005/1: Addendum; Income tax: carrying on business as a professional artist
Notice of Withdrawal
PR 2008/59: Income tax: tax consequences of investing in equities using the Macquarie Geared Equities Investment plus

Released 29.05.09

Withdrawn Interpretative Decisions
ATO ID 2002/251: Superannuation Contributions Tax: Capital gains and the calculation of adjusted taxable income 
ATO ID 2002/554: Superannuation Contributions Surcharge - calculation of adjusted taxable income
ATO ID 2002/726: Termination payments tax: Excessive component of an employer eligible termination payment  

Treasury has advised that The Convention between the Government of Australia and the Government of the French Republic for the Avoidance of Double Taxation with Respect to Taxes on Income and the Prevention of Fiscal Evasion entered into force on 1 June 2009.

Released  26.5.09

Commissioner of Taxation v Word Investments Ltd: The ATO has announced that the decision of the High Court will be taken into account in determining the charitable status of organisations in the future. The High Court had found the taxpayer to be an exempt charitable institution despite the fact that the organisation had raised its funds through ordinary business and commercial activities. The ATO noted that the decision was contrary to a number of Taxation Rulings, and stated that they will be amended to reflect the Court's views.

Victorian Women Lawyers' Association Inc v Commissioner of Taxation: The ATO has stated that, while it will take into account the Federal Court's findings, the Court's decision that the taxpayer qualified as a charitable institution for the purposes of the income tax exemption was a finding of fact based on the particular circumstances. The ATO has stated that future cases of a similar nature will be assessed on the particular facts and circumstances.

St George Bank Limited v FCT [2009] FCAFC 62, Full Federal Court, Emmett, Stone and Perram JJ, 25 May 2009:  The Full Federal Court has held that interest payments made by the taxpayer were outgoings of a capital nature within s 8-1(2)(a) of the ITAA 1997 and therefore not deductible. The taxpayer had claimed in its appeal that interest payments to a US subsidiary company pursuant to its obligations under a subordinated debenture were allowable deductions. The Full Federal Court agreed with the decision at first instance that the payments were capital in nature.