Monday
ATO Rulings re capital gains distributed to foreign residents
The ATO has advised that the following Determinations that address the taxation of capital gains that flow to foreign-resident beneficiaries via a resident trust will be released this week: TD 2022/12: Is the source concept in Div 6 of Pt III of the ITAA 1936 relevant in determining whether a non-resident beneficiary of a resident trust, or trustee for that trust, is assessed on an amount of trust capital gain arising under Subdiv 115-C of the ITAA 1997?; and, TD 2022/13: Does Subdiv 855-A (or s 768-915(1)) of the ITAA 1997 disregard a capital gain that a foreign-resident (or temporary-resident) beneficiary of a resident non-fixed trust has because of s 115-215(3)?
GST fraudster sentenced to five years’ jail
The ATO has advised that a Queensland woman has been sentenced in the District Court of Queensland at Brisbane to five years imprisonment with a non-parole period of 20 months for attempting to fraudulently obtain over $650,000 in GST refunds and other offences. She was also ordered to repay the amounts she fraudulently obtained. In relation to the GST offending, the woman submitted GST claims using two ABNs that were not linked to active businesses. In doing so, she obtained over $150,000 and was denied obtaining almost a further $500,000. The ATO welcomed the sentence saying it serves as a warning for those involved or thinking of getting involved in GST fraud.
ATO advice under development – GST issues
The ATO has advised that it is developing advice and guidance on the following GST issues: Time limits on entitlements to tax credits; GST – supply of burial rights by a government agency; GST and tax law partnerships; GST and residential colleges; GST treatment of financial supplies; and GST and retirement villages.
Tuesday
Quality of Financial Advice Review: consultation paper released
The Government has released a consultation paper seeking feedback on proposed financial advice reforms arising from the “Quality of Advice Review” (announced on 11 March 2022). The purpose of the proposed reforms is to simplify the regulatory framework to better enable the provision of high quality, accessible and affordable financial advice for retail clients. The consultation paper can be found here. To provide us with your thoughts and help build our response to Treasury, please email us at Submissions@taxandsuperaustralia.com.au with your thoughts by 16 September 2022.
Small business tax incentives – exposure draft legislation released
The Government has announced that draft legislation has been released to introduce two tax incentives intended to support small businesses to train and upskill employees, and improve their digital and technological capacity. Under the proposes measures, small businesses with an annual turnover of less than $50m will have access to a bonus 20% deduction for eligible expenditure on external training of employees by providers in Australia, until 30 June 2024. Small businesses will also have access to a bonus 20% deduction that will support the uptake of digital technologies, until 30 June 2023 (and will be backdated to 29 March 2022). The Skills and Training Boost draft legislation can be found here. The Technology Investment Boost draft legislation can be found here. Submissions are to be made by 19 September 2022.
AAT confirms decision to terminate registration of agent
The AAT has affirmed the decision of Tax Practitioners Board to terminate the registration of a tax agent and of the firm he controlled on the basis he was no longer a “fit and proper person” to be registered. Among other things, the tax agent failed to lodge his own returns and the BASs of his firm on time. He also failed to respond to requests of the TPB in a timely manner and had also failed to complete a relevant education course as requested by the TPB. The AAT also stated that “the evidence… points to a significant likelihood that the contravening conduct will be repeated”. (Alan Gough and Vision Business Group Pty Ltd and Tax Practitioners Board [2022] AATA 2757, 23 August 2022.)
NSW Super: Super Regulation 2016 “remade”
The NSW Government has registered the Superannuation Regulation 2016 (NSW) (which was due to be repealed on 1 September 2022). The Regulation provides for: (a) the reduction of benefits payable in relation to contributors or former contributors to whom a benefit has been released on the grounds of severe financial hardship or on compassionate grounds, (b) the reduction of benefits if a contributor fails to provide a tax file number to STC, (c) matters relating to the super contributions surcharge, (d) the making of family law super payments in relation to spouses or former spouses of contributors or former contributors, and (e) the cancellation of breakdown pensions at the direction of the pensioner to whom the pension would have been paid.
Wednesday
Modernising business communications: draft laws released
The Australian Government has announced that it will reintroduce a revised Bill to modernise business communications across a range of Treasury portfolio laws. The rationale for the measures is to give people more choices in how business relationships are conducted in the light of Australia’s current economic environment where traditional methods of communication have been hampered by the COVID-19 pandemic. The revised Bill will clarify that Treasury portfolio regulators can hold hearings and examinations virtually. This will help ensure that hearings and examinations can be held in an expeditious and efficient way for the benefit of all parties. The Exposure draft laws can be found here. Consultations will close on 23 September 2022.
ATO: Payment plan information
The ATO has released information on “payment plans” which are agreements with the ATO to pay a tax liability in instalments over a period of time. The information deals with: setting up a payment plan; interest-free payment plans for overdue activity statement amounts; managing your payment plan; important information for taxpayers entering a payment plan; checking the status of your payment plan; and secured payment plans.
APRA: Consultation on Phase 2 of the SDT project released
APRA has announced that it has released a response paper emphasising the timelines and scope for Phase 2 of the Superannuation Data Transformation (SDT) project. The project aims to drive better industry practices and improve member outcomes through heightened transparency. It will explore new and better approaches to data reporting, across all areas of superannuation fund operations. The response paper, including the revised timeline, and non-confidential submissions are available here.
Thursday
Determinations: Trust capital gains of foreign resident beneficiaries
The ATO has released two Tax Determinations dealing with the taxation of capital gains that flow to foreign-resident beneficiaries via a resident trust. They are as follows: TD 2022/12 Income tax: is the source concept in Div 6 of Pt III of the ITAA 1936 relevant in determining whether a non-resident beneficiary of a resident trust, or trustee for that trust, is assessed on an amount of trust capital gain arising under Subdiv 115-C of the ITAA 1997? It confirms that following the 2011 trust streaming amendments, the source rules in the trust provisions are no longer relevant in determining whether a capital gain is assessable to a foreign-resident beneficiary, as this is determined solely under the capital gains tax provisions; and TD 2022/13 Income tax: does Subdiv 855-A (or s 768-915(1)) of the ITAA 1997 disregard a capital gain that a foreign-resident (or temporary-resident) beneficiary of a resident non-fixed trust has because of s 115-215(3)? It confirms the ATO’s longstanding view that Div 855 does not enable a foreign-resident beneficiary of a resident non-fixed trust to disregard their share of a non-taxable Australian property trust capital gain.
Leg Instrument: Nil withholding for low income minors
The Government has made Taxation Administration: Withholding Variation to Nil for Low Income Minors Legislative Instrument 2022. It varies to nil the amount of PAYG withholding for low income minors who do not provide a TFN declaration or quote their ABN to a person making a payment to them. It also removes the need for a low income minor to make a TFN declaration or to quote an ABN if their earnings are below the tax-free threshold.
NSW: Regulation for transactions excluded from duty
The NSW Government has made the Duties Regulation 2022 to set out when a transaction is excluded from duty for the purposes of s 8(3) of the Duties Act 1997 (NSW). These transactions include: a change in default beneficial interests under a discretionary trust; a change in beneficial ownership of dutiable property that occurs under a testamentary instrument or the laws of intestacy; the grant or termination of a life estate in dutiable property for no consideration; the variation or surrender of an easement for no consideration; the grant, creation, variation or extinguishment of a mortgage, charge or other security over land; and, the creation, variation or surrender, for no consideration, of a tenant’s interest in fixtures that are fit-out for commercial premises.
Friday
ATO: Approach to resolution of LPP claims
The ATO has issued information on its “recommended approach to guide taxpayers and their advisors when making Legal Professional Privilege (LPP) claims in response to formal notices requiring production of information and documents to the Commissioner and the accompanying compendium”. Among other things, the ATO states that in dealing with LPP claims, taxpayers and their advisors can expect the following from the ATO: ATO staff will follow the information gathering principles as set out in our approach to information gathering guidance; and ATO staff will gather information in a fair and professional manner, and for the proper application of the laws we administer.
IGTO’s Corporate plan for 2023-26.
The Inspector-General of Taxation and Taxation Ombudsman (IGTO) has released its Corporate Plan for the income years ending 30 June 2023 to 2026. The plan has been developed in compliance with the requirements under the Public Governance, Performance and Accountability Act 2013. An underlying rational of the plan is to help “build confidence in the fairness of the tax system and its integrity and deliver improvements to the administration of taxation laws for the benefit of all taxpayers, tax practitioners and other entities”.
Vic duty: assessment can only be disputed via one forum
In a matter relating to a stamp duty assessment issued to a taxpayer for some $82m, the Victorian Court of Appeal has ruled that a taxpayer can only seek a review of such an assessment through one forum – namely, by way of the Civil and Administrative Appeals Tribunal or by way of appeal to the Supreme Court. The taxpayer had sought to dispute the assessment through both forums by seeking the Commissioner to refer the matter to the Tribunal when its objection was disallowed, having already requested the Commissioner to treat the objection as appeal to the Supreme Court. The Victorian Court of Appeal ruled that the relevant provisions of the Taxation Administration Act 1997 (Vic) did not allow a taxpayer to dispute an assessment in this way. (The Vicinity Funds v Commissioner of State Revenue [2022] VSCA 176, 24 August 2022.)
Domainname.com.au
Members are reminded that, from 24 March 2022, anyone with a local connection to Australia (including businesses, associations and individuals) has been able to register a new category of domain name. These shorter simpler domain names end in .au rather than .com.au, .net.au, .org.au, .gov.au or .edu.au.
Existing domain name licence holders have been provided priority to register the .au direct equivalent of their domain names until 20 September 2022, after which domain names that have not been allocated will become available to the general public.
This new option for domain names creates opportunities for businesses, organisations and individuals, however, could also provide another opportunity for cybercriminals, such as by facilitating fraudulent activity like business email compromise. For example, by registering yourbusiness.au where you have already registered yourbusiness.com.au, in order to impersonate your business.
Members are urged to consider their particular circumstances and take the appropriate action.
