Greenwoods & Freehills Weekly Tax Highlights - Week Ended 23.4.10
ATO Documents
Released 21.4.10
Self Managed Superannuation Funds Determination
SMSFD 2010/1: Self Managed Superannuation Funds: can a trustee of a self managed superannuation fund purchase a trauma insurance policy in respect of a member and still satisfy the sole purpose test in section 62 of the Superannuation Industry (Supervision) Act 1993 ?
SMSFR 2010/2: Self Managed Superannuation Funds: the scope and operation of subparagraph 17A(3)(b)(ii) of the Superannuation Industry (Supervision) Act 1993
Notice of Withdrawal
TD 95/8: Income tax: capital gains: can a subsection 160ZZQ(11A) election made for the purposes of subsection 160ZZQ(11) of the Income Tax Assessment Act 1936 cover more than one period of absence from a taxpayer's sole or principal residence (SPR)?
TD 96/32: Income tax: capital gains: can an index number for a quarter of a year of income be estimated in calculating the indexation factor under subsection 160ZJ(5) or (5A) of the Income Tax Assessment Act 1936 ?
Addenda
TD 92/158: Income tax: capital gains: can the following comprise a 'dwelling' and therefore be eligible for exemption as a main residence (i) a structure built underground? (ii) a yacht? (iii) a tent?
TD 92/171: Income tax: capital gains: does the principal residence exemption extend to additional land acquired after the time of acquisition of the residence?
TD 93/180: Income tax: capital gains: how is the removal of a building from a block of land that does not amount to a loss or destruction, treated for CGT purposes?
TD 93/182: Income tax: capital gains: when will a building which is relocated to pre-CGT land be treated as a separate asset under subsection 160P(2)?
TD 93/183: Income tax: capital gains: what are the CGT implications of removing a post-CGT building from post-CGT land and relocating it on pre-CGT land?
TD 93/36: Income tax: capital gains: what are the capital gains tax consequences where a legal personal representative (LPR) purchases an asset to satisfy a general legacy?
SMSFR 2009/4: Self Managed Superannuation Funds: the meaning of 'asset', 'loan', 'investment in', 'lease' and 'lease arrangement' in the definition of an 'in-house asset' in the Superannuation Industry (Supervision) Act 1993
Henry Review to be released Sunday 2 May 2010
Released 23.4.10
The Treasurer has issued a press release announcing that the "Australia's Future Tax System Review" (the Henry Review) will be released along with the Government's initial response on Sunday 2 May 2010. Greenwoods & Freehills will be issuing a tax brief shortly after the release.
TOFA and Upper/Lower Tier 2 instrument changes
Released 20.4.10
The Assistant Treasurer has issued a press release announcing three sets of changes affecting financial arrangements/transactions.
1. The release of draft legislation containing amendments to the TOFA rules, previously announced in late 2009. The amendments cover a number of areas, including the deductibility of dividends paid on debt interests (such as redeemable preference shares), and the application of the TOFA rules to interests in partnerships and trusts.
2. The extension of the debt/equity transitional period for “Upper Tier 2” instruments to 1 July 2010. No indication is given as to when the Upper Tier 2 debt/equity regulations are likely to be finalised.
3. Confirmation that the Government had registered the “Lower Tier 2” / term subordinated notes debt/equity regulations (registered on 14 April 2010).
CGT scrip for scrip roll-over requirements to be aligned with Corporations Act – exposure draft bill
Released 22.4.10
Treasurer has released an exposure draft bill: Aligning the Capital Gains Tax Scrip for Scrip Roll-Over Requirements with the Corporations Act 2001 and an associated explanatory memorandum. Broadly, the Government proposes that certain takeovers and mergers governed by the Corporations Act 2001 will no longer have to satisfy the “substantially the same” participation requirements of the CGT scrip for scrip roll-over rules.
Australia-Vanuatu sign Tax Information Exchange Agreement
On 21 April 2010, the Government of Australia signed an Agreement for the Exchange of Information Relating to Taxes. with Vanuatu (Australia’s 24th such agreement). The Agreement provides for the exchange of information on request in both criminal and civil tax matters.
Appeals Update
South Steyne Hotel Pty Ltd & Ors v FCT [2009] FCA 13: The taxpayer has been refused special leave to appeal to the High Court. The Full Federal Court’s decision concerned the character of supplies for GST purposes – in this case made in relation to serviced apartments separately leased but collectively managed by a management company. The Full Federal Court held, inter alia, that the granting of leases over the apartments were input taxed supplies, whilst certain sales of individual apartments were GST-free supplies.
Commissioner of Taxation v Tasman Group Services Pty Ltd [2009] FCAFC 148 (22 October 2009): The taxpayer has been refused special leave to appeal to the High Court. The Full Federal Court held that the commercial debt forgiveness rules applied to the forgiveness of loans made by a Japanese parent company to an Australian subsidiary.
Commissioner of Taxation v Anstis [2009] FCAFC 154 (4 November 2009): The Commissioner of Taxation has been granted, in part, special leave to appeal to the High Court. At the time of publication the details of the part grant were not known. The Full Federal Court held that education expenses incurred by the taxpayer whilst at university were allowable deductions. The expenditure was found to be deductible under s.8-1, on the basis that it was incurred in the course of gaining or producing the taxpayer’s assessable income, being Youth Allowance payments.
Progress of Legislation
Federal Parliament is now in recess until its scheduled resumption on 11 May 2010 (the day the Federal Budget will be handed down).As at 23.4.10
|
Bill |
Explanatory Memorandum |
Intro House |
Passed House |
Intro Senate |
Passed Senate |
Date of Royal assent / Act Number |
Description |
|
Customs Tariff Amendment (2009 Measures No 1) Bill 2009 [No 2] |
22.6.09 |
22.6.09 |
23.6.09 |
13.8.09 |
27.8.09/74 |
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 |
13.8.09 |
27.8.09/73 |
Bill to increase the excise rate applying to certain alcoholic beverages | |
|
21.10.09 |
16.11.09 |
17.11.09 |
2.12.09 |
14.12.9/132 |
Bill to increase the excise rate applying to certain alcoholic beverages | ||
|
19.3.09 |
16.9.09 |
17.9.09
|
17.9.09
|
8.10.09/105 |
Tax Information Exchange Agreement: British Virgin Islands and Isle of Man | ||
|
25.11.09 |
10.2.10 |
22.2.10
|
25.2.10
|
11.3.10/13 |
New Zealand Treaty, Belgian Protocol; Jersey Allocation of taxing rights | ||
|
Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 |
24.6.09 |
27.10.09 |
29.10.09 |
29.10.09 |
16.11.09/114 |
Employee Share Schemes | |
|
25.6.09 |
7.9.09 |
8.9.09 |
10.9.09 |
18.9.09/88 |
R&D, Prescribed private funds, Demutualisation of friendly societies, Consolidation | ||
|
21.10.09 |
16.11.09 |
17.11.09 |
2.12.09 |
14.12.09/133 |
Employee Share Schemes, Non-Commercial Losses, Lost Superannuation | ||
|
Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009 |
19.11.09 |
|
|
|
|
Disclosure and Secrecy Provisions | |
|
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 | |
|
Tax Laws Amendment (2009 GST Administration Measures) Bill 2009 |
25.11.09 |
10.2.10 |
22.2.10
|
11.3.10
|
24.3.10/20 |
GST | |
|
27.8.08 |
13.10.08 |
14.10.08
|
25.210
|
|
Removes Tax Deductibility of Political Donations, GST | ||
|
16.9.09 |
29.10.09 |
16.11.09
|
26.11.09
|
4.12.09/118 |
GST, PAYG Instalments, Bushfire Appeal | ||
|
25.11.09 |
10.2.10 |
22.10.10
|
11.3.10
|
24.3.10/19 |
CGT Cloning Exemption, Super Fund Mergers, DGR, Flood Victim Payments, Spirits Excise Rates | ||
|
10.2.10 |
10.3.10 |
11.3.10
|
|
|
Consolidation, Superannuation Clearing House, Managed Investment Trust, Forestry Managed Investment Schemes, Entrepreneurs Tax Offset. | ||
|
Tax Laws Amendment (2010 GST Administration Measures No. 1) Bill 2010 |
10.2.10 |
10.3.10 |
10.3.10
|
11.3.10
|
24.3.10/21 |
GST | |
|
17.2.10 |
|
|
|
|
Division 7A, TFN, Carbon Technology exemptions, DGR | ||
|
Tax Laws Amendment (2010 GST Administration Measures No. 2) Bill 2010 |
18.2.10 |
|
|
|
|
GST | |
|
17.2.10 |
|
|
|
|
Tax Law Rewrite |