Greenwoods and Freehills Weekly Tax Highlights - Week Ended 21.11.08

ATO Documents

Released 18.11.08

Taxpayer Alerts
TA 2008/19: Foreign residents attempting to avoid Australian capital gains tax by certain staggered sell down arrangements
TA 2008/20: Foreign residents exploiting asset valuations to avoid capital gains tax

Released 19.11.08

Taxation Determination
TD 2008/26: Income tax: are bees kept for use in a honey production business trading stock as defined in section 70-10 of the Income Tax Assessment Act 1997?
Draft Taxation Determination
TD 2008/D16: Income tax: is interest on a loan fully deductible under section 8-1 of the Income Tax Assessment Act 1997 when the borrowed moneys are settled by the borrower on trust to benefit the borrower and others?
Class Rulings
CR 2008/77: Income tax: return of capital: Olea Australis Limited
CR 2008/78: Income tax: Henderson Group plc reorganisation - scrip for scrip roll-over and Foreign Investment Fund (FIF) implications
Law Administration Practice Statements
PS LA 2008/4 (GA): Calculating the value of trading stock - bees kept for use in a honey production business
Notices of Withdrawal
Income Tax Ruling
IT 2444: Taxation Ruling Income tax: self assessment of income tax returns: amendment of assessments: remission of interest on underpayments of income tax
IT 2593: Taxation Ruling Income tax: company self assessment: questions for Commissioner's attention: remission of interest on underpayment of income tax 
Taxation Determination
TD 34: Capital gains: what is meant by the term 'statutory licence' in section 160ZZPE? 
Class Ruling
CR 2007/48: Income tax: UBS AG Key employee lending incentive plan

Released 21.11.08

Interpretative Decisions
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
Withdrawn Interpretative Decisions
ATO IDs regarding commercial debt forgiveness - 54 withdrawn.

FCT v Lenzo [2008] FCAFC 50: The High Court has refused the taxpayer special leave to appeal. The Full Federal Court had held that Pt IVA applied to deductions claimed by the taxpayer in relation to his investment in a sandalwood plantation project in Western Australia.

Clarke v Commissioner of Taxation [2008] FCAFC 126: The High Court has granted the taxpayer special leave to appeal. The Full Federal Court had upheld the constitutional validity of the superannuation contributions tax (surcharge).

Business & Research Management Ltd (in liq) v FCT [2008] FCA 1652, 14 November 2008: The Federal Court has held that management fees were derived by the taxpayer as and when those fees fell due. In reaching this conclusion, the Court rejected the taxpayer's contention that the amount to be recognised as income should reflect the economic reality of the entire transaction or that alternately the income should be viewed as having been reported on a cash basis. 

Narbey & Ors v FCT [2008] FCA 1699, Federal Court, 14 November 2008: The Federal Court has dismissed the taxpayers' appeal from the decision of the AAT. The taxpayers had argued that the AAT had merely adopted the Commissioner's reasons for disallowing deductions for pre-paid interest and management fees without providing adequate reasons.  The Court found that the AAT had provided adequate reasons and that the taxpayers had not actually drawn attention to any legal deficiencies in the AAT's judgement. The Court did find however that the AAT had failed to take into account the taxpayers' intentions and allowed an appeal regarding the imposition of penalties.
 
Hua-Aus Pty Ltd AAT Case [2008] AATA 1033, 17 November 2008: The AAT has affirmed the Commissioner's decision to amend the net GST and PAYG liabilities of the taxpayer. The Commissioner issued an amended assessment increasing the taxpayer's taxable supplies after an audit uncovered unexplained deposits made to the taxpayer. The taxpayer was not able to supply evidence supporting the contention that the deposits did not relate to taxable supplies. 

As at 21.11.08