Greenwoods and Freehills Weekly Tax Highlights - Week Ended 30.5.08

New Bills

ATO Documents

Released 28.5.08

Taxation Determination
TD 2008/13: Income tax: Division 7A of Part III of the Income Tax Assessment Act 1936 - what is the meaning of 'because' in the context of the expression 'because the entity has been such a shareholder or associate at some time' in relation to payments, loans and debt forgiveness made by a private company to the entity?
Draft Goods and Services Tax Determination
GSTD 2008/D1: Goods and services tax: are supplies of food known as breakfast bars GST-free?
Goods and Services Tax Determination
GSTD 2008/1: Goods and services tax: for taxable supplies or creditable acquisitions made by a member entity of a GST group, is the representative member of the GST group liable to pay GST and entitled to input tax credits if the GST or input tax credits are attributable to a tax period other than when the entity is a member of the GST group?
Class Rulings
CR 2008/39: Income tax: demerger of Uramet Minerals Limited by Elkedra Diamonds NL
CR 2008/40: Income tax: treatment of payments received under the Western Port Commercial Netting Licence Surrender and Relocation Program
Product Rulings
PR 2008/51: Income tax: Goulburn Valley Orchards Project
PR 2008/52: Income tax: Goulburn Valley Orchards 2000 Project (8 March 2000 - 5 December 2000)
PR 2008/53: Income tax: Goulburn Valley Orchards 2000 Project (6 December 2000 - 5 June 2001) 
PR 2008/54: Income tax: Great Southern 2008 Diversified Olives Income Project - 2008 Growers
Notices of Withdrawal
Income Tax Ruling
IT 32: Investment allowance - disposal of interest in partnership within 12 months of acquisition
IT 2231: Income tax: investment allowance - unit of property
IT 2328: Income tax: capital gains provisions: interpretation and operation
Product Ruling
PR 2007/44: Income tax: Great Southern 2008 Diversified Olives Income Project - 2008 Growers
Taxation Determination
TD 94/69: Income tax: if a person and his family die at the same time, and an eligible termination payment (ETP) is paid after the death of the person to the trustee of the estate of the person, could the deceased person's family be considered to benefit from the person's estate for the purpose of applying subsection 27A(4) of the Income Tax Assessment Act 1936 ?

Released 30.5.08

Interpretative Decisions
ATO ID 2008/77: Excess Contributions Tax: notional taxed contributions - meaning of defined benefit member - person receiving a defined benefit pension 
ATO ID 2008/78: Excess Contributions Tax: notional taxed contributions - meaning of defined benefit member - person entitled to a deferred benefit
ATO ID 2008/79: Excess Contributions Tax: notional taxed contributions - meaning of defined benefit member - person not accruing benefits
ATO ID 2008/80: Foreign Hybrid Limited Partnership: Delaware Limited Partnership
Withdrawn Interpretative Decisions
ATO ID 2002/114: GST and sale of commercial premises with a residential premises attached 
ATO ID 2006/20: GST and indemnity underlying a surety bond
ATO ID 2006/21: GST and receipt of surety bond payment 

Key changes made to the draft materials since a first round of public consultation in mid-2007 include:

• The independence of the Tax Practitioners Board from the Commissioner of Taxation has been enhanced by vesting the general administration of the provisions of the Bill in the Board rather than in the Commissioner.
• Adjustments have been made to the definitions of "tax agent service" and "BAS service" to clarify their scope.
• Certain aspects of the registration system have been adjusted and simplified, including:
  
  • removing the requirement to "carry on a business"
  • removing the separate category of "nominee" registration, which is redundant with the removal of the "carry on a business" requirement
  • replacing the "sufficient resources" requirement for registration of partnerships and companies with a more specific and relevant requirement that the entity has a sufficient number of registered individuals
  • giving the Board the power to impose conditions on the registration of a "specialist" tax agent or BAS agent, to ensure that they only practise in their specialised area of taxation law or their specialised type of tax agent service.
• The wording of several of the provisions in the Code of Professional Conduct have been narrowed or otherwise adjusted to make clearer the obligations of tax agents and BAS agents. The focus of the provisions is more on the outcome rather than the process.

FCT v Word Investments Ltd [2007] FCAFC 171: The High Court has granted the Commissioner special leave to appeal against the decision of the Full Federal Court . The Full Federal Court had unanimously confirmed that a company established for Christian evangelical purposes was entitled to be endorsed as a charitable institution, despite the fact that it generated funds for these purposes from ordinary commercial and business activities.

Metlife Insurance Ltd v FCT [2008] FCA 568: The taxpayer has appealed to the Full Federal Court. The Federal Court had held that the Commissioner's power to amend an assessment is still valid where the event that gave rise to the need for amendment occurred after the original assessment had been made.