FBT exemption for electric cars Bill passed

The Treasury Laws Amendment (Electric Car Discount) Bill 2022 Bill has been passed by the Senate. It amends the FBTAA 1986 to exempt from fringe benefits tax cars that are zero or low emissions vehicles held by the provider and used by or made available for private use of employees. Additionally, to be eligible for the exemption the value of the car at the first retail sale must be below the luxury car tax threshold for fuel efficient cars. The operation of the amendment will be reviewed after three years in light of electric car take up. Date of effect: The Bill applies to fringe benefits provided on or after 1 July 2022 for cars that are eligible zero or low emissions vehicles that are first held and used on or after 1 July 2022.

Failure to discharge onus re assessments based on gambling activities

Two taxpayers, who were brothers, have been unsuccessful before the AAT in their review against amended assessments issued to them which increased their taxable incomes by some $3.5m over 3 income years. The amended assessments were based on records obtained by the ATO from the Crown Casino Melbourne in relation to their gambling activities undertaken there. In finding that the taxpayers failed to discharge the onus of proving that the assessments were “excessive”, the AAT took into account the fact that the taxpayers declined to give evidence in the proceedings, including being cross examined. It also found there was no substantive evidence as to the actual source of the funds used in their extensive gambling activities. (Cammarano and FCT [2022] AATA 3910, 21 November 2022.)

Capital gain could not be offset by debt due to partnership

The Federal Court has confirmed that a capital gain made by a retiring partner for goodwill of the partnership could not be reduced by debts the partner owed to the partnership that were payable on his retirement under to a “set-off” clause” in the partnership deed. In arriving at this conclusion, the Court  found that the relevant capital gain crystallised before the “set-off” clause in the partnership deed came into operation. The Court also noted that even though  the capital gain was to be applied to offset the partner’s obligation to repay debts he owed the partnership, nevertheless the capital proceeds from the CGT event were not reduced by the reason of that offset. (Hedges v FCT [2022] FCA 1389, 23 November 2022.)