Greenwoods & Freehills Weekly Tax Highlights - Week Ended 19.2.10

ATO Documents

Released 17.2.09

Product Ruling
PR 2010/2: Income tax: 2010 Grain Co-Production Project

Notices
Withdrawals
Taxation Rulings
IT 147: Income tax: wheat as trading stock
IT 2458: Income tax: Commonwealth educational allowances
IT 342: Income tax: determination of a trust estate's net income - ruling of the High Court of Australia on the Union Fidelity Trustee Company
Addendum
TR 93/9: Income tax: deferral of deductions for trading stock purchases involving prepayments 
Decision Impact Statement
Clarke, Ralph Desmond v Commissioner of Taxation & Anor:  Impact of adverse superannuation contributions surcharge decision

Released 18.2.09

Taxpayer Alert
TA 2010/1 GST: interposing an associated 'financial supply facilitator' to enhance claims for reduced input tax credits for expenses incurred in the course of a company takeover

Released 19.2.10

New Interpretative Decisions
ATO ID 2010/41: Capital works: plant - improvements partly used for accommodation of employees
ATO ID 2010/42: Amendment of assessments: exception to two year period of review if an individual is a beneficiary of trust estate
ATO ID 2010/43: Functional currency choice: initial exchange of currency under a cross-currency interest rate swap
ATO ID 2010/44: Functional currency choice: re-exchange of currency under a cross-currency interest rate swap agreement
ATO ID 2010/45: Capital allowances: mining, quarrying or prospecting right - interest in a licence
ATO ID 2010/46: Section 23AH of the Income Tax Assessment Act 1936 and drilling rig deployed outside the exclusive economic zone (EEZ) of a foreign country
ATO ID 2010/47: Medical expenses tax offset: cost of reconfiguring a standard car in preparation for the installation of medical or surgical appliances

Withdrawn Interpretative Decisions
ATO ID 2001/319: Superannuation - request for another method of calculating surcharge for pre-1996 pensioners
ATO ID 2001/461: Superannuation - Request for Approval of Another Method for Surcharge Calculations
ATO ID 2001/608: East Timor: Overseas Income of Australian Defence Force Employee - not exempt (section 23AD)
ATO ID 2002/461: Superannuation Contributions Tax: allocation of surplus in the financial year ended 30 June 1997
ATO ID 2002/728: Superannuation contributions surcharge: Holder of the contributions.
ATO ID 2003/1051: Capital gains tax: demergers - discretionary trusts choosing rollover 
ATO ID 2003/1052: Capital gains tax: demergers - superannuation funds choosing rollover
ATO ID 2003/1053: Capital gains tax: Demergers - sale of new interests via a sale facility
ATO ID 2003/1054: Capital gains tax: demergers - proportional ownership requirements
ATO ID 2003/1139: General value shifting regime: direct value shift - exempt entity 
ATO ID 2003/252:  CGT Dairy industry deregulation: cancellation of quotas - capital loss
ATO ID 2003/379: Group company loss transfers: two companies wholly-owned by a corporate unit trust
ATO ID 2003/380: Group company loss transfers: loss company and unit trust
ATO ID 2003/387: Assessability of employment income received from South Africa by an Australian resident
ATO ID 2003/388: Capital Gains Tax: trust to company roll-over - disposal of a CGT asset to a third party
ATO ID 2003/456: Capital Gains Tax: Disposal of interest in an 'off the plan' purchase contract
ATO ID 2003/485: Capital gains tax: small business concessions - disposal of shares in non-resident company
ATO ID 2003/735: Group company loss transfers: wholly owned groups - when loss company and gain company must be Australian residents
ATO ID 2003/736: Group company loss transfers - non-resident company with a permanent establishment
ATO ID 2003/737: Company losses: continuity of ownership test - shareholding change by order of the Family Court
ATO ID 2003/768: Direct value shifting - exclusions
ATO ID 2004/161: Loss multiplication: equity or debt interests in loss company held by non-resident entity
ATO ID 2004/164: Family trusts: family groups - distribution to charitable trust - Family Trust Distribution Tax
ATO ID 2004/203: Assessability of dividend received by resident from Malaysia
ATO ID 2004/386: Group company loss transfers: loss company no longer in existence
ATO ID 2004/545: Assessability of salary and wages derived by an Australian resident in Canada
ATO ID 2004/670: Energy Grants (Credits) Scheme: Off-road credit - Electricity generation - Retail or Hospitality - Staff accommodation
ATO ID 2004/671: Energy Grants (Credits) Scheme: Off-road credit - Retail/hospitality - Ready access - High cost and access problems
ATO ID 2004/749: Energy Grants (Credits) Scheme: off-road - electricity generation - retail/hospitality - 'retail sale' and 'principal purpose' 
ATO ID 2004/801: Energy Grants (Credits) Scheme: off-road - electricity generation - retail service - crematorium
ATO ID 2005/1: Energy Grants Credits Scheme: off-road credit - electricity generation - retail/hospitality
ATO ID 2005/261: Fuel Sales Grants Scheme: fuel retailer
ATO ID 2005/37: Assessability of bonus payment received by Australian resident from employment performed in the United Kingdom and Australia
ATO ID 2008/149: Capital gains tax: employee share trust - whether capital gain by trustee disregarded - payments by employees to the company issuing the shares as contributions to share capital
ATO ID 2008/64: Fuel Sales Grants Scheme: eligibility
ATO ID 2009/105: Foreign Income Tax Offset: tax paid on pension and rental income earned in New Caledonia

Appeal Update

Luxottica  Retail Australia Pty Limited and Commissioner of Taxation: The Commissioner has appealed to the Federal Court against the AAT’s decision that the supply of spectacle frames with prescription lenses fitted constituted a single supply for GST purposes.

Reynolds Wines Limited and Commissioner of Taxation [2010] AATA 121 (16 February 2010): By way of background, the Commissioner had applied Part IVA to disallow deductions claimed by investors in a tax effective agricultural investment scheme. However, in accordance with the ATO’s settlement policy for such schemes, investors were allowed deductions for actual cash outlays for fees. The issue before the AAT was how the company operating the scheme should be taxed on fees payable under the scheme. Relevantly, the AAT decided that the company, as an accruals taxpayer, had derived all the fees that had become due to it under the relevant agreements with the scheme investors. This included amounts for which investors were denied deductions. In effect, the AAT rejected any argument that as a general matter there should be symmetry between the deductions allowed for investors and the fees included in the company’s assessable income. The AAT also rejected the taxpayer’s argument that the Commissioner should have exercised his discretion to make a compensating adjustment under s.177F(3).