Greenwoods & Freehills Weekly Tax Highlights - Week Ended 2.4.10

ATO Documents

Released 31.3.10

Product Ruling
PR 2010/7: Income tax: tax consequences of investing in Westpac Deferred Purchase Agreements - Westpac Maximiser
Taxation Determinations
TD 2010/10: Income tax: can Part IVA of the Income Tax Assessment Act 1936 apply to an employee savings plan as described in Taxpayer Alert TA 2008/13?
TD 2010/11: Income tax: can Part IVA of the Income Tax Assessment Act 1936 apply to a salary deferral arrangement as described in Taxpayer Alert TA 2008/14?
TD 2010/7: Income tax: does a change of Responsible Entity of a registered agricultural managed investment scheme affect the tax outcomes for participants if the arrangement continues to be implemented in accordance with the relevant product ruling?
TD 2010/8: Income tax: does the disposal or termination of an interest in a non-forestry managed investment scheme which arises as a result of circumstances outside the control of the taxpayer result in the denial of deductions previously allowed under paragraph 8-1(1)(b) of the Income Tax Assessment Act 1997 in respect of your contributions to the scheme?
TD 2010/9: Income tax: is a payment received by an investor in a non-forestry managed investment scheme upon the winding-up of the scheme, that does not involve the disposal of your interest in the scheme to another person, necessarily ordinary or statutory income under the Income Tax Assessment Act 1997?
Addenda
TD 93/184: Income tax: capital gains: does the relocation of a building come within the meaning of 'constructed' in subsection 160P(2) of the Income Tax Assessment Act 1936?
TD 96/18: Income tax: capital gains: if after 19 September 1985 a person makes a capital improvement to a pre-CGT asset, does subsection 160P(6) of the Income Tax Assessment Act 1936 deem the improvement to be a separate asset on the person's death or on any later disposal by the legal personal representative (LPR) or a beneficiary?
TR 2001/3: Income tax: penalty tax and trusts
Notice of Withdrawal
IT 2651: Income tax: omission of trust income by beneficiaries - the effect of disclaimer

Released 1.4.10

New Interpretative Decisions
ATO ID 2010/72: Capital gains tax: trustee ceasing to hold an asset on trust and commencing to hold it in its own capacity - CGT event A1
ATO ID 2010/73: Capital gains tax: first home owners grant - cost base
ATO ID 2010/74: R&D tax concession: meaning of 'primarily' in paragraph 73B(14C)(c) of the Income Tax Assessment Act 1936
ATO ID 2010/75: Energy grants credits scheme: off-road credit - marine transport - movement of material via a pipeline
Withdrawn Interpretative Decisions
ATO ID 2001/206: Assessability of monies received for media interview
ATO ID 2001/225: Self Education Expense - cost of extended warranty on computer
ATO ID 2001/231: Mutuality Principle
ATO ID 2001/238: Pension Tax Offset - receipt of exempt pension
ATO ID 2001/257: Deductibility of interest and fees on moneys borrowed to make superannuation contributions
ATO ID 2001/26: Deductions and expenses: Child Care Expenses
ATO ID 2001/297: Deductions - home security devices
ATO ID 2001/312: Lump Sum In Arrears Rebate
ATO ID 2001/330: Deductions - work related expenses incurred while employed overseas
ATO ID 2001/331: Expenses associated with overseas travel
ATO ID 2001/336: Income tax exemption - State or Territory Bodies 
ATO ID 2001/338: Expenses in relation to lease of vacant land
ATO ID 2001/339: Medicare levy surcharge - one spouse has hospital cover, the other does not
ATO ID 2001/380: Assessability of Swedish pension derived by a resident
ATO ID 2001/405: Deductibility of income protection policy premiums
ATO ID 2001/409: Medicare Levy - Family Surcharge Threshold - Lump sum in arrears payment 
ATO ID 2001/416: Deduction - Overseas Travel to Manufacture Designs
ATO ID 2001/421: Income Tax Exemption - State or Territory Body
ATO ID 2001/423: Dependant Spouse Tax Offset - spouse living overseas
ATO ID 2001/424: Medicare Levy surcharge - private patient hospital cover - excess of $1000
ATO ID 2001/427: Zone tax offset - less than 183 days in current income year but more than 183 days in prior income year
ATO ID 2001/55: Deductions and expenses: Loss on Sale of Property on Subdivided Land
ATO ID 2001/61:  Public benevolent institution: Organisation Representing Members' Views Regarding Rural Fire Fighting
ATO ID 2001/613: Deductibility of food and accommodation expenses
ATO ID 2001/624: Private Health Insurance Tax Offset - overseas health fund
ATO ID 2001/7: Deductions: Clothing Expenses
ATO ID 2001/71: Deductibility: Overseas Travel Expenses (Teacher of Tourism)
ATO ID 2001/713: Income Tax Exemption - State/Territory Body (STB)
ATO ID 2001/714: Deductibility of Loss in Value of Shares as Trading Stock
ATO ID 2001/717: Deductibility of Money Order Purchase Fee
ATO ID 2001/738: Company expenses paid by director
ATO ID 2001/801: Assessability of South African disability pension - first payable after 1 July 1983
ATO ID 2001/86: Deductibility: Embezzlement by Employee
ATO ID 2002/150: Superannuation, retirement & employment termination: Eligible termination payments: Directors replaced by other directors. Not a bona fide redundancy payment.
ATO ID 2002/630: Capital gains tax - Taxi licence: active asset
ATO ID 2003/196: Baby Bonus: legally responsible
ATO ID 2003/276: CGT Rollover relief: disposal of asset by unit trust to its trustee company
ATO ID 2003/320: Disposal of a leased car for profit: split fully novated lease
ATO ID 2003/57: Deductions after cessation of business - professional indemnity levies
ATO ID 2003/924: Capital Gains Tax: capital proceeds - consideration not received - payment held on deposit by third party
ATO ID 2003/948: Capital gains tax: CGT event C2 - contractual or other rights
ATO ID 2004/267: Energy Grants Credits Scheme: off-road - forestry - tending - weed control spraying 
ATO ID 2004/321: Landcare operation: carbon sequestration rights - revegetation expenditure - no business being carried on
ATO ID 2004/436: Energy Grants Credits Scheme: off-road - forestry - making and maintaining of roads in an existing plantation
ATO ID 2004/465: Energy Grants Credits Scheme: off road - forestry - use of a kiln
ATO ID 2004/609: Energy Grants Credits Scheme: off-road - forestry - road-making - hardstand area
ATO ID 2004/621: Energy Grants Credits Scheme: off-road - forestry - making of roads in a new plantation
ATO ID 2004/684: Energy Grants (Credits) Scheme: Off-road - Forestry - milling of timber - debarking of timber
ATO ID 2004/686: Energy Grants (Credits) Scheme: Off-road - Forestry - milling of timber - loading and unloading of timber
ATO ID 2004/737: Energy Grants (Credits) Scheme: off-road - forestry - milling of waste timber
ATO ID 2004/738: Energy Grants (Credits) Scheme: off-road - forestry - transport of timber
ATO ID 2006/13: Energy Grants (Credits) Scheme: off-road - forestry - treatment of timber at a preservation plant
ATO ID 2006/46: Energy Grants (Credits) Scheme: off-road- forestry - transportation of oil mallee leaves and branches 
ATO ID 2006/56: Energy Grants (Credits) Scheme: off-road - forestry - preparing flitches for veneer slicing
ATO ID 2008/157: Capital gains tax: first home owners grant - cost base

Released 31.3.10

The Government has released Exposure Draft Legislation: Research and Development Tax Incentive and an accompanying explanatory memorandum. The exposure draft revises the first exposure draft released on 18 December 2009. The modifications to the legislation include a revised definition of core R&D that uses clearer language and dispenses with a range of overlapping tests. The Government has also decided not to extend the exclusions list to supporting activities and to narrow the scope of activities to which the new dominant purpose test will apply. The second exposure draft also takes a new approach to software R&D. Generally, software R&D will be subject to the same rules as all other kinds of R&D, but will be subject to a more targeted exclusion for certain in-house software.

Tax Information Exchange Agreements

Signed 31.3.10

On 31 March 2010, the Government of Australia signed a number of Agreements for the Exchange of Information Relating to Taxes. The Agreements provide for the exchange of information on request in both criminal and civil tax matters. Agreements were signed with Belize, Dominica, St Lucia, Grenada, The Cayman Islands, The Bahamas, and The Turks and Caicos Islands.

Commissioner of Taxation v Bamford; Bamford v Commissioner of Taxation [2010] HCA 10 (30 March 2010): The High Court has unanimously dismissed the appeals by both the Commissioner and the taxpayers. The Court confirmed that it is correct to apply the proportionate view where the net income of a trust for tax purposes exceeds its accounting income. The Court also upheld a decision that a capital gain made by a trust, but distributed as trust income, should be treated as income for tax purposes. For a detailed summary and analysis of the case please refer to our Tax Brief.

As at 2.4.10