Greenwoods & Freehills Weekly Tax Highlights - Week Ended 21.8.09
ATO Documents
Released 19.8.09
Final Class Rulings
CR 2009/42: Income tax: assessable income: soccer referees: Football NSW referees
CR 2009/43: Income tax: payment made to compensate for loss of benefits resulting from termination of former employment
CR 2009/44: Income tax: proposed Special Dividend and Lion Nathan Limited Scheme of Arrangement
Released 20.8.09
Practice Statement
PS LA 2009/7: Approach to certain trust issues involving Division 6 of Part III of the Income Tax Assessment Act 1936 pending resolution of the Bamford litigation
Released 21.8.09
Interpretative Decisions
ATO ID 2009/90: Fuel Tax: apportionment of fuel and statistical sampling.
ATO ID 2009/91: Capital Allowances: business related costs - limitation of deduction - incurred in relation to gaining or producing exempt income or non-assessable non-exempt income
ATO ID 2009/92: Income Tax: tax treatment of losses realised by a complying SMSF on disposal of shares
ATO ID 2009/93: Income Tax: assessability of rental income received by Australian resident from the United Kingdom
Withdrawn Interpretative Decisions
ATO ID 2005/72: Assessability of rental income received by Australian resident from the United Kingdom
Interest Withholding Tax - Exemption of Commonwealth Government Securities
Released 21.8.09
The Treasurer has announced that the Government will remove interest withholding tax (IWT) on Commonwealth Government Securities. This will address the anomaly that has existed since IWT was removed from publicly issued corporate bonds in 1999 and state government securities in 2008. It will also bring Australia's tax treatment of Commonwealth Government Securities into line with most other countries, including the United States and the United Kingdom. Treasury has released an Exposure Draft and Explanatory Material which sets out the proposed changes in detail. These changes will apply to interest paid after the day the Bill making the amendments receives Royal Assent.
Sovereign Immunity Announcement
Released 20.8.09
The Assistant Treasurer has announced that the Government will introduce amendments to the income tax law to formalise the existing tax practice of exempting certain income earned by foreign governments. These changes will provide greater certainty to foreign governments investing in Australia as to the income tax treatment of passive investments. At present, such income is not taxed because of the doctrine of sovereign immunity. An exposure draft of the proposed amendments will be released as soon as practicable.
CGT on Family Homes
Released 15.8.09
The Treasurer has announced that, contrary to media reports, the Government is not considering introducing Capital Gains Tax on family homes. The Treasurer stated that 'there has been no request from the Government to the Australia’s Future Tax System review to model such proposals, we are advised that no such modelling is being carried out by the review, and therefore no recommendation of this sort will be made to us by the panel'.
APRA Draft Guidance
Released 14.8.09
The Australian Prudential Regulation Authority (APRA) has released draft guidance on a number of prudent practices for APRA-regulated superannuation trustees. The four prudential practice guides address measures that might be employed by a trustee and its directors to satisfy obligations imposed under legislated licence conditions, various operating standards and other provisions under the Superannuation Industry (Supervision) Act 1993 and its regulations. The Guides consist of:
APRA has also released an accompanying discussion paper.
Tax Cases
White v FCT [2009] FCA 880, 18 August 2009: The Federal Court has held that a partnership was not an entity for the purposes of the $5m maximum net asset value test under the former s.152-15 (CGT small business relief). The effect of this was that the partnership could not be a "connected entity" for the purposes of aggregating the net value of its assets with those of the taxpayer. The taxpayer argued that, whilst the net value of her assets in two partnerships may have been over the maximum allowable sum, it was clearly stated in the explanatory memorandum that introduced the former s.152-15 that the control test for connected entities only referred to the "control of a company or trust" or the "control of a discretionary trust". Sundberg J agreed with the taxpayer's line of argument and dismissed the Commissioner's argument that the legislative scheme of the CGT small business provisions was clearly intended to include partnerships as entities as evidenced by the mechanism to exclude double counting of both interests in a partnership and the assets of the partnership for the purposes of the maximum net asset value test.
RCI Pty Ltd v FCT [2009] FCA 910, 19 August 2009: The Federal Court has found that the company, which was a subsidiary of the then James Hardie Group of companies, had not waived its right to legal privilege. The Court found that the company had a right to legal professional privilege over documents that the Commissioner had sought under a "notice to produce" in relation to litigation over $478m of disputed income.
Progress of Legislation
As at 21.8.09
|
Bill |
Explanatory Memorandum |
Intro House |
Passed House |
Intro Senate |
Passed Senate |
Date of Royal assent / Act Number |
Description |
|
Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 |
14.5.09 |
4/6/09 |
15/6/09
|
|
|
Carbon Production Reduction Scheme, Income Tax And GST Treatment | |
|
Customs Tariff Amendment (2009 Measures No 1) Bill 2009 [No 2] |
22.6.09 |
22.6.09 |
23.6.09 |
|
|
Bill to increase the customs duty rate applying to certain alcoholic beverages | |
|
Excise Tariff Amendment (2009 Measures No 1) Bill 2009 [No 2] |
22.6.09 |
22.6.09 |
23.6.09 |
|
|
Bill to increase the excise rate applying to certain alcoholic beverages | |
|
13.2.09 |
13.2.09 |
12.2.09
|
12.2.09
|
18.2.09/4 |
Various Bonuses for Household Situations | ||
|
19.3.09 |
|
|
|
|
Tax Information Exchange Agreement: British Virgin Islands and Isle of Man | ||
|
13.11.08 |
11.2.09 |
12.2.09
|
12.3.09
|
26.3.09/13 |
Introduces a new legislative regime for Tax Agents | ||
|
Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 |
24.6.09 |
|
|
|
|
Facilitating the introduction of the new legislative regime for Tax Agents | |
|
13.2.09 |
13.2.09 |
12.2.09
|
12.2.09
|
18.2.09/5 |
Tax Bonus for Working Australians | ||
|
Tax Bonus for Working Australians (Consequential Amendments) (No.2)Bill 2009 |
13.2.09 |
13.2.09 |
12.2.09
|
12.2.09
|
18.2.09/6 |
Tax Bonus for Working Australians | |
|
12.2.09 |
18.3.09 |
19.3.09
|
19.3.09
|
26.3.09/27 |
PAYG Instalments, Temporary Resident's Superannuation, Income Test. | ||
|
19.3.09 |
27.5.09 |
15.6.09
|
17.6.09
|
23.6.09/42 |
CGT Concessions, Urban Water Tax Offset, Deductible Gift Recipient List, Fuel Tax Credits Regime | ||
|
14.5.09 |
27.5.09 |
15.6.09
|
18.6.09
|
24.6.09/47 |
GDP Adjustment, GST, PRRP, Deductible Gift Recipient List | ||
|
25.6.09 |
|
|
|
|
R&D, Prescribed private funds, Demutualisation of friendly societies, Consolidation | ||
|
27.5.09 |
1/6/09 |
15/6/09
|
24/6/09
|
29.6.09/62 |
Superannuation Contributions, Foreign Income Exemption, GDP, PAYG Instalments, Deductible Gift Recipients, | ||
|
Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2009 |
28.5.09 |
4.6.09 |
15.6.09
|
15.6.09
|
23.6.09/41 |
Medicare Levy and Medicare Levy Surcharge | |
|
27.8.08 |
13.10.08 |
14.10.08
|
3.2.09
|
|
Removes Tax Deductibility of Political Donations, GST | ||
|
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 |
13.3.09 |
13.5.09 |
14.5.09
|
14.5.09
|
22.5.09/31 |
Temporary Income Tax Deduction for New Investment in Tangible Depreciating Assets | |
|
Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 |
4.12.08 |
11.2.08 |
12.2.09
|
11.3.09
|
26.3.09/15 |
Division 230. Stages 3 and 4 of TOFA, these being hedging and non-hedging rules |