MONDAY
Taxpayer assessable on dividend: company still in existence
The AAT has ruled that the taxpayer was assessable on a franked dividend of $40,000 paid to him from his wholly owned company. The taxpayer argued that a decision by Centrelink in March 2016 to “attribute” the value of the company’s assets to him for Austudy benefit purposes, meant that the assets of the company became his personal property and that, in accordance with the separate entity principle, the company “ceased to exist” in March 2016. However, the AAT held that the company remained in existence in the 2016 income year as a company only ceases to exist when it is deregistered (and this did not occur until the 2019 income year). The AAT also noted that the effect of the Centrelink order was merely to deem an amount equal to the value of the assets of the company to the taxpayer for the purpose of the relevant “assets” test. (Aukram and FCT [2022] AATA 4691, 23 December 2022.)
CPI for December 2022 quarter
The Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) number for the December 2022 quarter. It is 130.8. (Note that, among other things, the CPI number is used for indexation in a range of taxation matters, including the luxury car limit, the CGT improvement threshold, the several dependant tax offsets).
ACNC: Guide to assist for 2022 Annual Information Statement
The Australian Charities and Not-for-profits Commission (ACNC) has released a guide to assist in the process of completing a charity’s “2022 Annual Information Statement”. The ACNC also recommended that reference be made to its 2022 Annual Information Statement Checklist for the purposes of completing the Annual Information Statement.
TUESDAY
ATO: Advice under development
The ATO has advised that it is developing advice and guidance on a range of tax issues including the following:
- Income tax: capital allowances – composite items; corporate limited partnership ‘credits’; infrastructure privatisation framework; early stage innovation company – expense tests; Division 7A – undue hardship and corporate trustees; construction of capital assets; royalties and software; expenses associated with vacant land; use of an individual’s image; residency tests for individuals; Commissioner’s discretion to determine that an entity does not control another entity; working from home deductions; financial advice fees; and decline in value of a depreciating asset.
- CGT: back-to-back CGT roll-overs; appointment of capital – CGT event E5 or E7; Australian currency denominated asset – CGT events E5 to E7; unit trust – CGT events E5 to E8; and water rights.
- Superannuation: superannuation income stream; self-managed super funds – rectification directions; SMSFs – education directions; super benefits in breach of rules; non-arm’s length expenditure; and ordinary meaning of the term “employee”.
- GST: time limits on entitlements to tax credits; supply of burial rights by a government agency; treatment of financial supplies; and retirement villages.
APRA’s priorities for superannuation in 2023
The Deputy Chair of APRA, Margaret Cole, has outlined APRA’s priorities for superannuation in 2023, which include a continued focus on industry practices, fund performance and sustainability, and retirement outcomes. She also said that one of APRA’s most important policy priorities in superannuation for 2023 is to improve member outcomes more broadly through updates to prudential standard SPS 515 Strategic Planning and Member Outcomes.
WEDNESDAY
Your Tax Practitioner Board details
Later this month, the Tax Practitioner Board (TPB) will be commencing a communications campaign in order to bring their data up to date in respect of those registered tax practitioners who rely on their voting membership status of recognised professional associations for their registration with the TPB. The TPB will be emailing these registered tax practitioners to ask them to update their voting member details in tranches, with approximately 300 registered tax practitioners receiving the email each week. The aim of this campaign is to:
- Enhance data validity (which assists in managing our obligations to notify RPAs of the outcomes of investigations concerning their members);
- Ensure the accuracy of information on the TPB’s public register; and
- Ensure tax practitioners are meeting their ongoing registration requirements.
It is recommended that members check and update their details early to avoid being contacted by the TPB.
Registration of SMSF s auditors cancelled for failing to lodge annual statements
ASIC has advised that it cancelled the registration of 374 auditors of SMSFs who failed to lodge their annual statements. In doing so, ASIC Commissioner, Danielle Press, said that it is crucial that SMSF auditors comply with their regulatory obligations and that ASIC will continue to take action where they do not meet these obligations. ASIC also advised that as part of its current compliance program, it communicated to over 1,400 SMSF auditors that they had outstanding annual statements.
ATO: Matters under consultation
The ATO has advised that it is consulting with the community on a range of matters, including:
- Individuals: Legacy payment system – cheques; Tax deductions – fees paid for financial advice; Tax liability of legal personal representative of a deceased person; ABRS companies release; and Corporate Collective Investment Vehicle.
- Business: FBT record keeping legislative instruments; Sharing Economy Reporting Regime; Improve small business tax performance; ABRS companies release; Undisputed tax debt data reporting; GST offsetting between unrelated entities; Corporate Collective Investment Vehicle; and Build-to-rent.
- Superannuation: ABRS companies’ release; Undisputed tax debt data reporting; and Corporate Collective Investment Vehicle
IGTO releases Quarterly Reporting Pack
The Inspector-General of Taxation and Taxation Ombudsman (IGTO) has released its Quarterly Reporting Pack for Quarter 1, 2022-2023. The report provides a range of information including the number of complaints received and their nature, as well as investigations commenced and finalised. In addition, it contains a case study involving a Director Penalty Notice (DPN) where the IGTO found that the ATO had made errors in their calculation of the company debt and hence the DPN.
THURSDAY
ATO: Verifying and checking for scams
The ATO has released information about checking or reporting an ATO impersonation scam. It provides material on some warning signs of phone, email and SMS tax scams. It points out, among other things, that scammers often pretend to be from trusted organisations like the ATO. The ATO stresses that if you’re not really sure about whether the ATO is contacting you, you should not reply to a communication and that you should phone the ATO on 1800 008 540 to check.
Withdrawal of TD 2019/1:
Meaning of “use” of a mining, quarrying or prospecting right
The ATO has withdrawn Tax Determination TD 2019/1 (what constitutes “use” (and potentially first use) of a mining, quarrying or prospecting right, that is a depreciating asset, for the purposes of s 40-80(1) of the ITAA 1997) following the decision of the Full Federal Court in FCT v Shell Energy Holdings Australia Limited [2022] FCAFC 2, and the High Court’s refusal to grant the Commissioner special leave to appeal. In TD 2019/1 the ATO states that “use” for depreciation purposes under s 40-80(1) in the mining context requires more than merely holding, or meeting the conditions for holding. However, the Full Federal Court held that the time when a mining right is “first used” is when the asset is “first used or installed ready for use, for any purpose”.
FRIDAY
ASIC: Financial Advisers Register displays whether advisers can provide tax advice
ASIC has advised that it’s “Financial Advisers Register” now displays information about whether a specific financial advisers (ie “relevant providers”) can provide tax (financial) advice. This information is displayed under each relevant provider’s appointment details. Note: By way of background, from 1 January 2022, advisers who provide tax (financial) advice services to retail clients, must meet the requirements set out in the Corporations (Relevant Providers—Education and Training Standards) Determination 2021.
Exposure Draft legislation: Administration of fuel and alcohol
The Federal government has released exposure draft legislation (and accompanying material) to deliver 2 components of a previously announced package of measures to streamline the administration of fuel and alcohol excise. The proposed measures deal with 2 main areas of administration: small-scale repackaging of beer into smaller containers; and aligning excise and customs reporting with other indirect taxes. Comments are due by 16 February 2023.
APRA’s policy and supervision priorities for 2023
APRA has released its policy and supervision priorities for 2023. Consistent with the strategic objectives in APRA’s latest Corporate Plan, the papers outline APRA’s key focus areas as it continues to protect financial stability and the interests of bank depositors, insurance policyholders and superannuation members. The annual papers set a series of goals for the next 12-18 months to provide stakeholders with a consolidated and transparent workplan with timeframes that enables more efficient forward-planning.
