Commencement Date Delayed for Code Changes
Following intense lobbying efforts by the professional associations (including Institute of Financial Professionals Australia), the Assistant Treasurer has responded to our concerns by delaying the commencement date for the Legislative Instrument (LI) modifying the TASA Code of professional Conduct.
For smaller firms (fewer than 100 employees) the commencement date is being pushed out to 1 July 2025, while larger firms are expected to be compliant by 1 January 2025. The longer deferral will likely apply to all Institute of Financial Professionals Australia (IFPA) members.
In the meantime, the Tax Practitioners Board will continue to develop guidance material to help clarify how the new requirements will work in practice.
While the Assistant Treasurer considers that our concerns can be addressed through the TPB guidance process without having to amend the LI, he does not rule out making changes should that prove necessary as the guidance material is being developed.
Change is still coming, but we will have more time to prepare for it.
Draft TD: Section 99B and hypothetical resident taxpayer test
The ATO has released draft TD 2024/D2 Income tax: factors taken into account in applying the exceptions to section 99B of the ITAA 1936 contained in paragraphs 99B(2)(a) and 99B(2)(b). It provides guidance on the ATO’s approach to the hypothetical resident taxpayer tests contained in ss 99B(2)(a) and (b). It aims to provide clarity on the following matters: the meaning of corpus in s 9B(2)(a); the characteristics that may be ascribed to the hypothetical taxpayer; the characteristics of the amount which are relevant for the hypothetical resident taxpayer tests; and why the ultimate source of the amount paid or applied to the beneficiary is relevant. When finalised, the Determination is proposed to apply before and after its date of issue.
Draft PCG: Section 99B and hypothetical resident taxpayer test
The ATO has released draft PCG 2024/D1 Section 99B of the ITAA 1936 – ATO approach. It will provide guidance on the ATO’s approach to s 99B in respect of arrangements where property of a non-resident trust (or trust property accumulated while the trust was a non-resident) is paid to or applied for the benefit of a resident beneficiary. It aims to provide clarity on: common scenarios where s 99B may need to be considered; the practical aspects of record keeping evidencing that an exception in s 99B(2) applies to reduce the amount that s 99B would otherwise include in assessable income; and, the ATO’s compliance approach to distributions and benefits which the Commissioner considers to be low risk, and the record keeping expected to substantiate this. The Guideline will apply before and after its date of issue.
Update to PSLA re Commissioner’s administration of the tax laws
The ATO has released an update to PS LA 2009/4 Decisions made by the Commissioner in the general administration of the taxation laws. The update will improve how key concepts are explained so as to focus the guidance on the making of general administration decisions that are most commonly about the allocation of ATO resources. It also further clarifies the types of general administration decisions that should be escalated to the Commissioner and the process for that escalation.
