Greenwoods & Freehills Weekly Tax Highlights - Week Ended 2.10.09

ATO Documents

Released 23.9.09

Final Taxation Ruling
TR 2009/6: Income tax: entitlement to foreign income tax offsets under section 770-10 of the Income Tax Assessment Act 1997 where income is derived from investing in fiscally transparent foreign entities
Final Class Rulings
CR 2009/55: Income tax: assessable income: Football Umpires: Latrobe Valley Umpires Association Incorporated
CR 2009/56: Income tax: partial repayment of principal of Debenture Stock: Hastings Capital Limited (Receivers and Managers appointed) (in liquidation)
CR 2009/57: Income tax: Shell Group - 2009 Performance Share Plan Award
CR 2009/58: Income tax: early retirement scheme - Queensland State Government
Draft Taxation Determinations
TD 2009/D10: Income tax: does the disposal or termination of an interest in a non-forestry managed investment scheme which arises as a result of circumstances outside the control of the taxpayer result in the denial of deductions previously allowed under section 8-1(1)(b) of the Income Tax Assessment Act 1997 in respect of the taxpayer's contributions to the scheme?
TD 2009/D11: Income tax: is a payment received by an investor in a non-forestry managed investment scheme upon the winding-up of the scheme, that does not involve the disposal of the taxpayer's interest in the scheme to another person, necessarily ordinary or statutory income under the Income Tax Assessment Act 1997?
TD 2009/D9: Income tax: does a change of Responsible Entity of a registered agricultural managed investment scheme affect the tax outcomes for participants if the arrangement continues to be implemented in accordance with the relevant product ruling?

Released 2.10.09

Interpretative Decisions
ATO ID 2009/108: Disability superannuation benefit: medical certificates

Appeals Update

Commissioner of Taxation v  Star City  Pty Limited (No 2) [2009] FCAFC 122 (10 September 2009): The taxpayer has been refused special leave to appeal to the High Court. The Full Federal Court had held that the taxpayer was not entitled to a deduction for prepayment of rent to a state government under a contractual agreement to acquire a casino licence.  

Tax Cases

News Australia Holdings Pty Limited and Commissioner of Taxation [2009] AATA 750 (29 September 2009): The Administrative Appeals Tribunal has found that the Commissioner of Taxation's application of Part IVA to a capital loss tax benefit was deficient. The taxpayer had undertaken a complex company restructure in order to relocate the head company of a consolidated group from Australia to the US. This restructure included a share buy-back by a US member of the consolidated group from the taxpayer. The Commissioner claimed that this part of the scheme triggered the Part IVA anti-avoidance provisions. The AAT found that the dominant purpose of the taxpayer was to relocate the company and was not primarily designed to avoid paying tax. The AAT therefore upheld the taxpayer's claim to the capital tax benefit.

Travelex Limited v Commissioner of Taxation [2009] FCAFC 133 (29 September 2009): In a majority decision the Full Federal Court has affirmed the decision at first instance that a sale of foreign currency for use outside Australia is not GST free supply. The Court found that although the policy intent of the GST Act may have been to tax final and private consumption in Australia, the language of the relevant statute in the context of the GST Act left no room for interpretation.

Progress of Legislation

As at 2.10.09