Greenwoods & Freehills Weekly Tax Highlights - Week Ended 24.7.09

ATO Documents

Released 22.7.09

Notice
Addendum
Product Rulings
PR 2009/16: Income tax: Arafura Pearl Project 2009  

Released 24.7.09

New Interpretative Decisions
ATO ID 2009/70: Capital Allowances: business related costs - settlement payment - in relation to your business
ATO ID 2009/71: Deductions: interest expense on a loan to acquire options
ATO ID 2009/72: Employee Share Scheme: assessability to an employer of the option exercise price paid by an employee
ATO ID 2009/73: Capital Allowances: business related costs - when eligibility for deduction is established
ATO ID 2009/74: Capital Allowances: legal expenses incurred after taxpayer starts to hold depreciating assets - second element of cost

Withdrawn Interpretative Decisions
ATO ID 2001/407: Excise: Credit for wine equalisation tax (WET) on wine exported.
ATO ID 2002/355: Income tax: 'Tainted' Share Capital: Effect of transfer of option premiums
ATO ID 2002/665: Legal Expenses - defending disciplinary charges
ATO ID 2003/947: Commonwealth producer rebate
ATO ID 2004/108: Wine Equalisation Tax: calculating the amount of WET credit
ATO ID 2004/110: Wine Equalisation Tax: wholesale liquor merchant - Commonwealth producer rebate and producer's licence 
ATO ID 2004/16: Wine Equalisation Tax: calculation of credit for WET paid on wine that is exported 
ATO ID 2004/30: Wine Equalisation Tax: calculation of credit for WET paid on wine exported as a GST-free supply 
ATO ID 2004/88: Wine Equalisation Tax: grape wine product - additives
ATO ID 2005/268: Wine Equalisation Tax: producer rebate - meaning of 'producer of rebatable wine' 
ATO ID 2006/87: Wine Equalisation Tax: taxable value of wine sold at auction

Managed Investment Trusts - election to allow capital gains tax to be the primary code for disposals of shares, units and real property

Released 21.7.09

The ATO has released its administrative response to the Government's announcement that it will allow Australian managed investment trusts (MITs), except those that are taxed like companies, to make an irrevocable election to apply the capital gains tax (CGT) regime as the primary code for taxing certain disposals of assets. The ATO has said it will apply the existing law in the period between the announcement and enactment of the proposed law but will not undertake specific compliance activity to enforce the existing law during this period.

Appeals Update
American Express International Inc v FCT [2009] FCA 683: The Commissioner has appealed to the Full Federal Court against the decision of Emmett J. The Federal Court had held that default fees received from cardholders by 2 charge/credit card issuers did not constitute financial supplies. The Court also found that the fees were not consideration in connection with the provision of a credit arrangement or right to credit.

Watson v DCT [2008] FCA 1173: The taxpayer has appealed to the Full Federal Court. The Federal Court had affirmed the Commissioner's decision to exclude income protection insurance payments (from a disability suffered by the taxpayer) from the assessable income of the taxpayer's financial planning business, but to include the payments in the taxpayer's individual assessable income for the year ended 30 June 2004.

Tax Cases
 
DCT v Nicholls (No 3) [2009] FCA 785, 23 July 2009: The ATO has been primarily successful in seeking an order from the Federal Court that documents seized by the Tax Office and the Australian Federal Police from the taxpayer's premises were not subject to Legal Professional Privilege (LPP).