Greenwoods & Freehills Weekly Tax Highlights - Week Ended 28.8.09

ATO Documents

Released 26.8.09

Final Draft Taxation Ruling
TR 2009/D4: Income tax, Pay As You Go Withholding and fringe benefits tax: tax consequences on the issue, holding and redemption of bonus units as part of an employee benefits trust arrangement
Final Taxation Determination
TD 2009/18: Income tax: does the term 'real property' in paragraph 855-20(a) of the Income Tax Assessment Act 1997 include a leasehold interest in land? 
Final Draft Taxation Determinations
TD 2009/D5: Income tax: can Part IVA of the Income Tax Assessment Act 1936 apply to an employee savings plan as described in Taxpayer Alert TA 2008/13?
TD 2009/D6: Income tax: can Part IVA of the Income Tax Assessment Act 1936 apply to a salary deferral arrangement as described in Taxpayer Alert TA 2008/14? 
Final Class Ruling
CR 2009/45: Income tax: research and development: membership funding for the Australian Coal Association Research Program

Released 28.8.09

Interpretative Decision
ATO ID 2009/94: On-market Share Buyback

Australia-Gibraltar Tax Information Exchange Agreement

Released 26.8.09

The Assistant Treasurer has announced that Australia and Gibraltar have signed a Tax Information Exchange Agreement (TIEA). The agreement will provide a legal basis for the bilateral exchange of information, on request, for both civil and criminal tax law purposes and will allow the Commissioner of Taxation to request information relevant to an Australian tax investigation directly from the authorities in Gibraltar. The TIEA will come into force after Australia and Gibraltar have completed their respective domestic requirements for ratification.

Super System Review

Released 25.8.09

The Government's Super System Review has released a scoping paper and an issues paper dealing with phase one of the review entitled "Phase One: Governance - Issues Paper". The Governance discussion paper deals with ideas, laws, processes and systems by which organisations dealing with superannuation related issues are operated, governed and controlled for the benefit of their stakeholders. The closing date for submissions on the first issues paper is 16 October 2009.   

Tax Cases

Bruton Holdings Pty Limited (in liquidation) v Commissioner of Taxation [2009] HCA 32 (26 August 2009): The High Court has found that the Commissioner of Taxation did not have the power to issue a garnishee notice to a debtor of a company after it had been placed into liquidation. The Commissioner had issued the notice under s.260-5 of the Taxation Administration Act 1953 (TAA). The High Court found that the specific regime dealing with companies placed into liquidation under s.260-45 of the TAA overrode the general provision in s.260-5, and that the Commissioner therefore did not have the power to issue a s.260-5 notice.

National Mutual Life Association of Australia Ltd v Commissioner of Taxation [2009] FCAFC 96 (21 August 2009): In a majority decision the Full Federal Court has allowed the taxpayer's appeal. The Court found that a capital contribution made by the taxpayer to a subsidiary company could be included in the cost base of its shares in the subsidiary company under fourth element cost base expenditure (as it then applied). The Court found that the expenditure was reflected in the "state or nature" of the shares at the time of their disposal.  

Progress of Legislation

As at 28.8.09