Greenwoods and Freehills Weekly Tax Highlights - Week Ended 22.5.09
ATO Documents
Released 18.5.09
Taxpayer Alert
TA 2009/10: Non-commercial use of negotiable instruments involving self-managed superannuation funds
Released 19.5.09
TA 2009/11: Retail Premiums paid on unexercised share entitlements
Released 20.5.09
Product Rulings
PR 2009/34: Income tax: WA Blue Gum Project 2009 (Joint Venture Growers)
PR 2009/35: Income tax: WA Blue Gum Project 2009 (Growers not in Joint Venture)
PR 2009/36: Income tax: 2009 Grain Co-Production Project
PR 2009/37: Income tax: Rewards Group Premium Vineyard Project 2009
Addendum
PR 2008/70: Income tax: Kiri Park Projects - 2009 Growers
Released 21.5.09
Taxpayer Alerts
TA 2009/12: Re-characterising capital losses as revenue losses
TA 2009/13: Managed Investment Schemes: Purported partnership participation
TA 2009/14: Artificially creating capital losses through default beneficiary arrangement to offset capital gains
Practice Statement
PS LA 2009/4: Escalating a proposal requiring the exercise of the Commissioner's powers of general administration
Released 22.05.09
Interpretative Decisions
ATO ID 2009/35: Capital Allowances: project pools - project amount - ornamental trees or shrubs
ATO ID 2009/36: Capital Allowances: business related costs - limitation of deduction - in relation to a lease or other legal or equitable right
ATO ID 2009/37: Capital Allowances: business related costs - limitation of deduction - forms part of the cost of land
Audit: Management of Serious Non-Compliance
Released 20.5.09
The Australian National Audit Office (ANAO) has released a Performance Audit concerning the ATO's management of serious non-compliance. In conducting the audit, the ANAO examined the ATO's management framework and arrangements to deter, detect and deal with fraud and serious evasion. The ANAO came to the conclusion that, while the ATO's strategies to manage serious non-compliance had been effective, there was still considerable scope for improvement. The ATO has agreed to implement six of the ANAO's seven recommendations. The ATO will partially implement the recommendation concerning developing separate performance indicators for the Serious Non-Compliance Unit.
Decision Impact Statements
Released 21.5.09
Alcoa of Australia Ltd and FCT [2008] AATA 1128: The AAT found that a taxpayer was entitled to a deduction under section 25-10 for repairs carried out on equipment used in its aluminium smelting operations. The taxpayer had applied to have an adverse private ruling set aside. The ATO has stated that the decision was factually specific and should not have any significant implications for other cases.
Asciano Services Pty Ltd v FCT [2009] FCAFC 28: The Full Federal Court dismissed the taxpayer's appeal and confirmed that the taxpayer was not entitled to energy grant credits, as the credits were limited to purchases of off-road diesel fuel that were for use on a railway only.
The ATO has stated that the decision confirms its view that off-rail activities do not qualify as eligible activities.Tax Cases
FCT v Lean [2009] FCA 490, Federal Court, 14 May 2009: The Federal Court has allowed the Commissioner's appeal from the previous AAT decision. The Court held that the taxpayer was not entitled to a deduction under section 25-45 for a misappropriated sum of money that had been included in their assessable income as a capital gain. The sum of money, representing proceeds from the sale of shares, was transferred to an investment advisor who later misappropriated the money. The Court held that the amount was not deductible under section 25-45 as it had been deployed by an agent of the taxpayer. That is, for section 25-45 the misappropriated moneys must retain their character as assessable income, rather than being merely traceable to assessable income.
WRBD v FCT, [2009] AATA 368, 20 May 2009: The AAT has confirmed that a taxpayer was not entitled to a deduction under section 70B of the Income Tax Assessment Act 1936 for a loss on an off-market disposal of a traditional security. The taxpayer had satisfied the requirements for a deduction on the literal wording of the section. However, the AAT found that it was the intention of Parliament that subsection 70B(4) apply to any disposal of traditional securities that did not occur in the ordinary course of trading securities.
Legislative Update
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 has now received Royal Assent. The Bill received Assent on
22.5.09 and becomes Act No. 31 of 2009.Released 20.5.09
Treasury has released an exposure draft and draft explanatory memorandum which relate to proposed minor amendments to the taxation laws. The amendments seek to ensure the law operates as intended, by correcting technical or drafting defects, removing anomalies and addressing unintended outcomes. The proposed amendments will rectify several grammatical errors in the legislation. The areas affected include CGT events, CFC losses, FBT in terms of Deductible Gift Recipient liability and first home saver accounts.
Progress of Legislation
As at 22.5.09
|
Bill |
Explanatory Memorandum |
Intro House |
Passed House |
Intro Senate |
Passed Senate |
Date of Royal assent / Act Number |
Description |
|
27.8.08 |
13.10.08 |
14.10.08 |
3.2.09
|
|
Removes Tax Deductibility of Political Donations, GST | ||
|
13.11.08 |
11.2.09 |
12.2.09 |
12.3.09
|
26.3.09/13 |
Introduces a new legislative regime for Tax Agents | ||
|
Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 |
4.12.08 |
11.2.08 |
12.2.09 |
11.3.09
|
26.3.09/15 |
Division 230. Stages 3 and 4 of TOFA, these being hedging and non-hedging rules | |
|
3.12.08 |
25.2.09 |
10.3.09 |
12.3.09
|
26.3.09/14 |
Scrip for Scrip, International Tax collection, Superannuation Offsets | ||
|
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/5 |
Tax Bonus for Working Australians | ||
|
Tax Bonus for Working Australians (Consequential Amendments) (No.2)Bill 2009 |
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/6 |
Tax Bonus for Working Australians | |
|
13.2.09 |
13.2.09 |
12.2.09 |
12.2.09
|
18.2.09/4 |
Various Bonuses for Household Situations |
||
|
12.2.09 |
18.3.09 |
19.3.09 |
19.3.09
|
26.3.09/27 |
PAYG Instalments, Temporary Resident's Superannuation, Income Test. | ||
|
Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 |
13.3.09 |
13.5.09 |
14.5.09 |
14.5.09
|
22.5.09/31 |
Temporary Income Tax Deduction for New Investment in Tangible Depreciating Assets | |
|
19.3.09 |
|
|
|
|
CGT Concessions, Urban Water Tax Offset, Deductible Gift Recipient List, Fuel Tax Credits Regime | ||
|
19.3.09 |
|
|
|
|
Tax Information Exchange Agreement: British Virgin Islands and Isle of Man | ||
|
14.5.09 |
|
|
|
|
GDP Adjustment, GST, PRRP, Deductible Gift Recipient List | ||
|
Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 |
14.5.09 |
|
|
|
|
Carbon Production Reduction Scheme, Income Tax And GST Treatment |