TAX ON THE COUCH TOPICS

Transcription

1 HOT TOPICS MONTH-BY-MONTH 2011 December 2011 Tax issues with staff Christmas parties November 2011 Capitalising investment loan interest October 2011 GST and the going concern exemption September 2011 Superannuation pensions August 2011 The Carbon Tax July 2011 The PSI Rules June 2011 Budget 2011 May 2011 Excess contributions tax Tax on the Couch TAX ON THE COUCH TOPICS April 2011 Setting up a tax-effective pension under the proportioning rule March 2011 Beneficiaries claiming deductions against trust income January/February 2011 FBT and Car Parking Fringe Benefits 2010 December 2010 Xmas Parties and Gifts November 2010 Applying the CGT main residence exemption Part II October 2010 Applying the CGT main residence exemption September 2010 Non-commercial losses and the new 2010 income test August 2010 Company Losses July 2010 UPEs and Corporate Beneficiaries

2 June 2010 Henry Review and Budget 2010 May 2010 The Bamford Case April 2010 Section 23AG changes Taxation of foreign earnings of resident taxpayers March 2010 Selling a Business January/February 2010 The New Tax Agent Services Regime 2009 December 2009 The FBT treatment of employer Christmas functions and gifts November 2009 Determining departing clients Australian residency in light of changes to S.23AG of the ITAA 1936 October 2009 The Small Business Roll-over September 2009 One-off profit-making transactions August 2009 Practical Tips for Division 7A July 2009 SMSFs and Unit Trusts after 30 June 2009 June 2009 Budget 2009 May 2009 The Education Tax Offset April 2009 The Small Business and General Business Tax Break (the investment allowance) March 2009 Loss or destruction of an asset January/February 2009 Changes to the Margin Scheme 2008 December 2008 FBT and Xmas Time November 2008 Salary packaging after the 2008 Budget October 2008 First Home Saver Accounts

3 September 2008 Instalment warrants: New ability of SMSFs to borrow August 2008 Tax Time 2008: Work related expenses July 2008 Taxation of trusts: Trust income vs Net income June 2008 Budget 2008 May 2008 Deceased Estates Tax on the Couch April 2008 Common audit traps and planning tips with car expense claims March 2008 Superannuation Co-contribution January/February 2008 FBT minor benefits exemption 2007 December 2007 Superannuation issues (including Employment Termination Payments and Instalment warrants) November 2007 Salary Packaging October 2007 Issues relating to the horse industry September 2007 Div.7A Update August 2007 GST Going Concern Exemption July 2007 Tax consequences of a shareholder making payments under a guarantee for a company June 2007 Budget 2007 May 2007 Changes to the CGT small business concessions April 2007 Advanced issues in relation to rental properties March 2007 Managing an ATO audit January/February 2007 Simplified Superannuation

4 2006 December 2006 FBT and Christmas Parties November 2006 Family Trust Elections and Interposed Entity Elections October 2006 Margin scheme Division 75 of the GST Act September 2006 Rental Properties August 2006 The main residence exemption July 2006 Trust distributions to bucket companies June 2006 Budget 2006 May 2006 The ins-and-outs of superannuation pensions April 2006 FBT: LAFHA Living away from home allowance fringe benefits March 2006 Tips and traps with the CGT small business concessions January/February 2006 Taxation issues involving Partnerships of Discretionary Trusts 2005 December 2005 Rules for SMSFs investing in unit trusts November 2005 S.23AG and Foreign Earnings October 2005 : Commercial Debt Forgiveness The Basics! September 2005 Rental Properties August 2005 Service Trusts Under Attack! July 2005 Choice of super fund measures from 1 July 2005 June 2005 Year-end tax planning May 2005 Promotional CD-Rom The ATO and Part IVA

5 ATO TOPICS MONTH-BY-MONTH 2011 December 2011 Registered Agent Risk Differentiation Framework November 2011 Starting and stopping pensions and Access Manager October 2011 Auskey, SBR and updates to the ABR s Tax on the Couch September 2011 Common mistakes with rental property claims and property transactions August 2011 Employer obligations and Pre-filling of tax returns July 2011 Work Related Expenses June 2011 Tax avoidance schemes and income tax return fraud May 2011 Fringe Benefits Tax April 2011 GST compliance March 2011 Employer obligations and PAYG January/February 2011 Superannuation Update 2010 December 2010 The High Wealth Individual and the Wealthy Australian s taskforces November 2010 The Small & Medium Enterprises lodgment campaign for 2010 October 2010 Helping clients with tax debts September 2010 Rental property issues August 2010 Super Updates July 2010 Work Related Expenses June 2010 Treasury Are you SBR ready? Implementing Standard Business Reporting in your tax practice

6 May 2010 Excess Contributions Tax and SMSFs April 2010 Employee Share Schemes March 2010 Small Business Benchmarks January/February 2010 Reforms to Income Tests 2009 December 2009 International Tax Avoidance and Evasion November 2009 Small business and general business tax break October 2009 Work Related Expenses (WREs) and Partnership and Trust Distributions September 2009 Standard Business Reporting August 2009 Same sex relationships and Taxation July 2009 Luxury Car Tax June 2009 FBT and Non-Profit Organisations May 2009 Employment Termination Payments April 2009 Fringe Benefits Tax March 2009 Selling or closing a business January/February 2009 Research & Development Tax Concessions 2008 December 2008 Accessing Superannuation Benefits November 2008 Work Related Expenses October 2008 Business Real Property September 2008 Employee Share Schemes

7 August 2008 SMSFs Auditor competency requirements July 2008 Tax governance for wealthy Australians June 2008 Offshore Voluntary Disclosure Initiative May 2008 Fuel Tax Credits April 2008 Fringe Benefits Tax (FBT) March 2008 s State of the Industry research results SMSF Transitional Provisions for In House Assets January/February 2008 GST Division 129 & 135 Adjustments 2007 December 2007 Personal Services income November 2007 Gifts of shares to non-profit organisations October 2007 Small Business Concessions Program September 2007 Superannuation August 2007 Division 7A July 2007 CGT concessions for small business June 2007 Small Business Alignment focus on GST implications May 2007 Superannuation Guarantee and employer superannuation obligations April 2007 Common problems identified in rental property audits March 2007 CGT issues (including Deceased Estates, Marriage Breakdown, and Compensation payments) January/February 2007 Natural Disasters

8 2006 December 2006 Promoter Penalty Law November 2006 Identity Crime October 2006 ATO Topic Shortfall interest charge September 2006 ATO Topic Horse Racing August 2006 ATO Topic The new fuel tax system July 2006 ATO Topic Service arrangements June 2006 ATO Topic Review of Self-Assessment (ROSA) May 2006 ATO Topic The ATO's Easier, Cheaper & More Personalised Program April 2006 ATO Topic Consolidation Basics March 2006 ATO Topic Employees vs. Contractors and the ATO s New Decision Tool January/February 2006 ATO Topic Part IVA 2005 December 2005 ATO Topic Superannuation Issues November 2005 ATO Topic ATO s Strategic Framework October 2005 ATO Topic Digital Certificates September 2005 ATO Topic ATO Compliance Program August 2005 ATO Topic Security and other issues July 2005 ATO Topic Tax Time lodgment and administrative messages June 2005 ATO Topic ATO SMSF compliance strategy May 2005 Promotional CD-Rom The ATO and Part IVA

9 ALL TOPICS COVERED 2011 DECEMBER 2011 Exposure draft: Miscellaneous amendments The draft bill proposes miscellaneous amendments to improve the operation of the tax laws, including providing the Commissioner with discretion to extend the two-year ownership period to apply the CGT main residence exemption to a deceased's dwelling; and ensuring that in certain circumstances taxpayers can have a direct Small Business Participation Percentage for the purposes accessing the small business CGT concessions. Tax Laws Amendment (2011 Measures No. 8) Bill 2011 This Bill proposes to, amongst other things, provide the Commissioner with a discretion to disregard certain disentitling events to give effect to primary production elections. Exposure draft: Buy-backs of shares and non-share equity interests The draft legislation contains implements recommendations of the Board of Taxation to improve the taxation arrangements relating to the buy-back of shares and non-share equity interests. Superannuation Guarantee (Administration) Amendment Bill 2011 This Bill proposes to amend the SGAA 1992 to increase the age at which SG no longer needs to be provided for an employee from 70 to 75; and incrementally increase the SG charge percentage from 9% to 12%. TR 2011/5 Income tax: objections against income tax assessments ID 2011/77 Payment of death benefit to former stepchild: meaning of 'child' and 'dependant' ID 2011/82 Assessable income: recoupments Insurance proceeds for destruction of capital works TD 2011/D11 Income tax: when is the shortfall interest charge incurred for the purposes of S.25-5(1)(c) of the Income Tax Assessment Act 1997? GSTR 2011/D4 Goods and services tax: financial assistance payments Allowance was not a travel allowance and, therefore, taxpayer denied deductions for unsubstantiated expenses Fardell v FCT [2011] AATA 725. Maximum net asset value test (for purposes of the small business CGT concessions) includes liability for agents commission arising from the CGT event FCT v Byrne Hotels Qld Pty Ltd [2011] FCAFC 127. Alienation of PSI rules apply to income of a taxpayer not carrying on a personal services business Confidential v. FCT [2011] AATA 682. Childcare premises used predominantly for deriving rent not an active asset for purposes of accessing the small business CGT concessions Vaughan v FCT [2011] AATA 758. Assessments valid despite inconsistency with private ruling Mount Pritchard & District Community Club Limited v FCT [2011] FCAFC 129. Tax Practitioners Board releases new information sheet Reports or other advice incorporating tax agent services provided by a third party. Tax issues with staff Christmas parties. Registered Agent Risk Differentiation Framework. NOVEMBER 2011 Exposure draft Standard deductions Exposure draft MySuper Exposure draft SBE depreciation TLAB No

10 PS LA (draft) 3545 Remission of administrative penalties relating to schemes TR 2011/4: Charities Superannuation guarantee constitutionally valid - Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35 (28 September 2011) ATO not entitled to delay GST refunds subject to audit investigation - Multiflex Pty Ltd v Commissioner of Taxation [2011] FCA 1112 (30 September 2011) Ineffective salary sacrifice arrangement for former taxation officer - Turner and Commissioner of Taxation [2011] AATA 693 (6 October 2011) Monetary penalties imposed on trustees of SMSF - Olesen v Parker [2011] FCA 1096 (23 September 2011) Taxpayer not required to pay a 25% tax shortfall penalty - Helbers and Commissioner of Taxation [2011] AATA 657 (23 September 2011) Taxpayer required to pay a 25% Tax shortfall penalty - Aurora Developments Pty Ltd v Commissioner of Taxation (No. 2) [2011] FCA 1090 (23 September 2011) Small business benchmarks based on 2009 statistics released Australian Tax Forum a tax plan for our future Capital gains tax relief for taxpayers affected by natural disasters Capitalising interest on investment loans Starting and stopping pensions and Access Manager OCTOBER 2011 Exposure draft Financial supply provisions Exposure draft (revised) - Indirect tax self-assessment MT 2011/D3 - Administrative penalties: voluntary disclosures SMSFR 2011/D2 Self managed superannuation funds: limited recourse borrowing arrangements application of key concepts TR 2011/3 Fringe benefits tax: meaning of cost price of a car, for the purpose of calculating the taxable value of car fringe benefits. Fees paid on entering a franchise agreement were not deductible under the general provisions of the Blackhole provision of S of the ITAA97; however franchise renewal fees were deductible under the prepayment rules over the 5 year eligible service period Inglewood and Districts Community Enterprises Limited and Commissioner of Taxation [2011] AATA 607 GST was not payable on canceled or unused non-refundable airfare tickets Qantas airways limited v FC of T [2011] AATA 977 The Commissioner s discretion under Subsection (4) to not include an incorrectly withdrawn superannuation benefit as assessable income of the members of a SMSF was correctly not exercised. Smith V FC of T [2011] AATA 563. Consultation on excess contributions refund NTLG FBT sub-committee minutes of 12 May 2011 published 19 th of August 2011 GST and the going concern exemption AUSkey, SBR and updates to the ABR s

11 SEPTEMBER 2011 Draft legislation Removing income tax barriers to make it easier for people to contribute to a Special Disability Trust Draft Regulations Streamlining Deductions for the Cost of Disability Insurance through Superannuation PS LA 2011/27 Matters the Commissioner considers when determining whether the ATO view of the law should only be applied prospectively TD 2011/19 Tax administration: what is a general administrative practice for the purposes of protection from administrative penalties and interest charges? A payment received by a former employee of the ATO when she terminated her employment was not a 'genuine redundancy payment' The Taxpayer and Commissioner of Taxation [2011] AATA 499 Receipt of damages for 'conversion' of a taxpayer s assets (and transfer of title) was not a taxable supply Reglon Pty Limited v Commissioner of Taxation [2011] FCA 805 An amount received by a taxpayer from their super fund and then contributed to another super fund was not a roll-over superannuation benefit, meaning their excess non-concessional contributions tax assessment was upheld Player v Commissioner of Taxation [2011] FCA 869 Taxpayer not entitled to majority of work related expenses claimed Kaley and Commissioner of Taxation [2011] AATA 480 Taxpayer that bought and sold a number of shares in a relevant year was engaged in the business of share trading during that year and could claim losses or outgoings incurred in the process The Taxpayer and Commissioner of Taxation [2011] AATA 545 Taxpayer with a permanent place of abode outside Australia was not a resident of Australia despite other connections to Australia (and not liable to tax overseas either) Mynott and Commissioner of Taxation [2011] AATA 539 GST low value threshold: Draft Productivity Commission Report Commissioner s speech At your service: here to help and look after the interests of businesses making good and honest choices Superannuation pensions Common mistakes with rental property claims and property transactions AUGUST 2011 Tax Laws Amendment (2011 Measures No 6) Bill 2011 introduces amendments that: extend the FBT exemption for fly-in fly-out arrangements to Australian residents working in remote locations overseas; exempt the Outer Regional and Remote Payment from income tax; and update the list of Deductible gift recipients Fairer Private Health Insurance Incentives Bill 2011; Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2011 and Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2011 This package of Bills proposes to income test a person s entitlement to the 30% Private Health Insurance Rebate Superannuation Industry (Supervision) Amendment Regulations 2011 (No 2) introduces new rules for SMSF trustees when investing in collectables and personal use assets GSTR 2011/D2 GST: Residential premises and commercial residential premises GSTR 2000/21A3 (Addendum) GST: The margin scheme for supplies of real property held prior to 1 July 2000 GSTR 2006/7A3 (Addendum) GST: How the margin scheme applies to a supply of real property made on or after 1 December 2005 that was acquired or held before 1 July 2000

12 GSTR 2006/8A3 (Addendum) GST: The margin scheme for supplies of real property acquired on or after 1 July 2000 TD 2011/D8 Income tax: Does a taxpayer's purpose of 'paying their home loan off sooner' mean that Part IVA of the Income Tax Assessment Act 1936 cannot apply to an 'investment loan interest payment arrangement' of the type described in this Taxation Determination? ATO guide to Division 7A and unpaid present entitlements This document clarifies certain supplementary issues relating to the ATO views expressed in TR 2010/3 and PS LA 2010/4. The AAT has affirmed the Commissioner's decision to refuse to exercise his discretion and revoke the disqualification of a person as an SMSF auditor for failing to fulfil his statutory duties Confidential v. Commissioner of Taxation [2011] AATA 403 A couple are denied a deduction for interest on loans made to their discretionary trust and in relation to investment properties which they made available to the trust on the basis that there was an insufficient nexus between the interest expenses and their derivation of assessable income as beneficiaries of the trust Antonopoulos v. Commissioner of Taxation [2011] AATA 431 Federal Court orders the reinstatement of a deregistered company to enable the ATO to pursue unpaid debts Deputy Commissioner of Taxation v Australian Securities and Investments Commission [2011] FCA 524 The ATO has issued a Decision Impact Statement to provide its response to the Federal Court decision in a case concerning the tax treatment of payments made by the trustee of a unit trust on the redemption of units and, in particular, whether redeeming unitholders would be assessed on trust capital gains apportioned to them NSD 1190 of 2009: Colonial First State Investments Ltd v Commissioner of Taxation ATO Compliance program for ATO administrative guidance: Improving the taxation of trust income The Carbon Tax Employer obligations and Pre-filling of tax returns JULY 2011 Tax Laws Amendment (2011 Measures No. 4) Bill 2010 (which includes measures relating to reportable employer superannuation contributions, the low income tax offset for minors, and deductibility of premiums for certain TPD insurance policies) Tax Laws Amendment (2011 Measures No. 5) Bill 2011 (which includes measures relating to beneficiaries of trusts carrying on primary production activities, streaming capital gains and franked distributions of trusts, phasing out the dependent spouse tax offset, and providing for a single statutory rate of 20% to determine the taxable value of car fringe benefits) Draft Rules for SMSF Investment in Collectables and Personal Use Assets GSTR 2011/D1 Goods and services tax: tax invoices PS LA 2011/24 Excess contributions tax: Remission of certain administrative penalties where an individual or superannuation provider does not comply with obligations in relation to a release authority PS LA 2011/25 Reconstructing records and making reasonable estimates for taxpayers affected by disasters PS LA 3461 (draft) Remission of additional superannuation guarantee charge imposed under S.59(1) of the Superannuation Guarantee (Administration) Act 1992 TA 2011/4 Deductibility of unpaid directors fees Property developer disposed of property lots to a related party outside the ordinary course of business A & C Sliwa Pty Ltd and Commissioner of Taxation [2011] AATA 390 Legal practitioner could not claim a deduction for expenses incurred in obtaining an Australian pilot s licence and aviation training The Taxpayer and Commissioner of Taxation [2011] AATA 318

13 Deductions for study and job seeking expenses as a result of the Anstis decision The Garnaut Review 2011: Australia in the Global Response to Climate Change Non-commercial loss rules update You asked for it! Viewers queries Can a company client that is thinking about selling its business pay out a genuine redundancy payment (and get the benefit of the redundancy tax-free benefits based on years of service) to the directors of the company? The PSI Rules Work Related Expenses JUNE 2011 General Parliamentary update including Bills passed and introduced Taxation of trusts: ATO s administrative approach and practical tips leading up to 30 June TA 2011/3 Arrangements involving holiday travel claimed as a work related, investment or self-education expense TR 2011/D2 Income tax and fringe benefits tax: charities Payment held to be a transitional termination payment despite change of employer policy Perfrement and Commissioner of Taxation [2011] AATA 264 Contractors held to be employees for superannuation guarantee purposes On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 Civil penalty order imposed against the trustee of an SMSF Olesen v MacLeod [2011] FCA 229 SMSF a non-complying superannuation fund despite the fact only one out of its three trustees caused breaches Triway Superannuation Fund and Commissioner of Taxation [2011] AATA 302 Future of Financial Advice reforms (including the accountants' exemption in relation to SMSFs) ATO advice regarding FBT and the recent natural disasters Hints for tax planning for the end of the financial year Budget 2011 Tax avoidance schemes and income tax return fraud

14 MAY 2011 Tax Laws Amendment (2011 Measures No. 2) Bill 2011 includes changes to the current system for exempting Australian taxes, fees and charges from GST, provides for SIS Regulations to be introduced in relation to SMSF investments in collectables and personal use assets, and amends the ITAA 1997 to provide the Commissioner with discretion to extend the main residence exemption from CGT and to allow the nomination of controllers of discretionary trusts for the purposes of the CGT small business concessions; Exposure draft legislation on changes to enable the streaming of capital gains and franked distributions as well as changes to ensure that low tax entities, especially exempt entities, cannot be used inappropriately to reduce the tax payable on the taxable income of a trust; Senate Economics Legislation Committee report on amendments to capital protected borrowings measures in Tax Laws Amendment (2010 Measures No 5) Bill 2010 raised concerns about the reliance on amendments introduced by press release in circumstances where the legislation is released more than six months after the announcement. TD 2011/2 FBT: For the purposes of S.135C of the Fringe Benefits Tax Assessment Act 1986, what is the exemption threshold for the fringe benefits tax year commencing on 1 April 2011? TD 2011/3 FBT: For the purposes of S.28 of the Fringe Benefits Tax Assessment Act 1986 what are the indexation factors for valuing non-remote housing for the fringe benefits tax year commencing on 1 April 2011? TD 2011/4 FBT: For the purposes of Division 7 of Part III of the Fringe Benefits Tax Assessment Act 1986, what amount represents a reasonable food component of a living-away-from-home allowance for expatriate employees for the fringe benefits tax year commencing on 1 April 2011? TD 2011/5 FBT: What are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2011? TD 2011/6 FBT: What is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2011? PS LA 2843 (draft) Exercise of the Commissioner's discretion under section 109RB of Division 7A. TD 2011/D4 Tax administration: What is a general administrative practice for the purposes of protection from administrative penalties and interest charges? In a test case, the Federal Court confirms that a supply of land was not the supply of going concern under S of the GST Act Aurora Developments Pty Ltd v Commissioner of Taxation [2011] FCA 232; The NSW Supreme Court has declared that an SMSF was created as a valid and effective express trust despite some problems with the documentation Sutherland v Woods [2011] NSWSC 13; The Federal Court held that ATO audit teams investigating an accountant and two of his clients as part of Project Wickenby should have access to confidential accounting advices prepared for the taxpayers Stewart & Others v Deputy Commissioner of Taxation [2011] FCA 336; The AAT held that a taxpayer was assessable on so much of a payment of $11.6 million paid into an executive trust on his behalf which represented "accrued" bonuses foregone, but not on that part of the payment that represented future or contingent bonuses as that amount had not been derived Sent v Commissioner of Taxation [2011] AATA 198. Study expenses for full-time students receiving Youth Allowance ATO will automatically amend 2007 to 2010 assessments (inclusive) of eligible taxpayers to allow a deduction of $550 for study expenses for each year that they were eligible; Expectations/Predictions about what could be in the May 2011 Federal Budget; Financial planners exemption from tax agent regime extended to 1 July You asked for it! Viewers queries If an SMSF borrowed to buy a house that has been destroyed in a natural disaster, can it be rebuilt? Excess contributions tax. Fringe Benefits Tax.

15 APRIL 2011 Discussion paper on the proposed standard deduction for the cost of work-related expenses and the cost of managing tax affairs; Exposure draft legislation to extend the current FBT exemption for fly-in fly-out arrangements to residents working overseas; Discussion paper on proposed reforms to Division 6 of the ITAA 1936, including the introduction of a statutory definition of distributable income and amendments to allow the streaming of franked dividends (including attached franking credits) and capital gains to specific beneficiaries; Consultation paper on proposed amendments to allow, from 1 July 2012, individuals aged 50 and over with total superannuation balances below $500,000 to make up to $50,000 in concessional superannuation contributions per year; and Discussion paper on the design and implementation of proposed amendments to the rules affecting the application of GST to cross-border transactions. TR 2011/D1 Fringe benefits tax: meaning of 'cost price' of a car, for the purpose of calculating the taxable value of car fringe benefits; TD 2011/D1 Income tax: does it follow merely from the fact that an investment has been made by a trustee that any gain or loss from the investment will be on capital account? AAT confirms that the sale of land by the taxpayer was a taxable supply and not a compulsorily acquisition SXGX v FCT [2011] AATA 110; Federal Court dismisses application to impose a civil penalty on SMSF trustee for breach of the SIS Act Dolevski v Hodpik Pty Ltd [2011] FCA 54; NSW Court of Appeal finds that the 14-day period within which a director must take certain action in response to a director's penalty notice runs from the date of delivery of the notice (and not from the date of its posting) Soong v DCT [2011] NSWCA 26. An address by the Commissioner of Taxation Self-managed super: making sure it works for you and the community. You asked for it! Viewers queries If a trust distributes to a company, will this be a deemed dividend under Division 7A? Setting up a tax-effective pension under the proportioning rule. GST compliance. MARCH 2011 Tax Laws Amendment (2010 Measures No. 5) Bill 2010, including changes to the main residence CGT exemption, allowing super funds to claim deductions for insurance policies relating to terminal medical condition benefits, and including school uniforms as an eligible expense for the education expenses tax offset); Tax Laws Amendment (2011 Measures No. 1) Bill 2011, including changes to increase the flexibility of First Home Saver Accounts by allowing the money to be paid to an approved mortgage where the accountholder purchases a house in the interim; Tax Laws Amendment (2011 Measures No. 2) Bill 2011, includes changes to the current system for exempting Australian taxes, fees and charges from GST, provide GST-free treatment for the sale of recreational boats exported within 12 months, require SMSFs to comply with regulations regarding investments in collectables and personal use assets, and to clarify the definition of reportable employer superannuation contributions; Tax Laws Amendment (2011 Measures No. 3) Bill 2011, includes additional listed deductible gift recipients; Tax Laws Amendment (Temporary Flood Levy) Bill 2011 and Income Tax Rates (Temporary Flood Levy) Bill 2011, introduce a one-off, progressive levy on taxable incomes above $50,000 for the 2012 income year; and

16 Consultation paper on a proposed tax break for businesses that invest in eligible assets or capital works to improve the energy efficiency of their existing buildings. TD 2011/1 Income tax and fringe benefits tax: Non-resident employer obligations: PAYG withholding and FBT; SMSFD 2011/1 Self Managed Superannuation Funds: Superannuation benefits timing of payment by cheque. AAT upholds a superannuation excess contributions tax assessment issued for breach of the $1m transitional non-concessional contributions cap Player v FCT [2011] AATA 35; The Federal Court has ruled that a labour hire business that employed workers to provide physical assistance in the home to elderly and disabled persons was required to make SG contributions FCT v Newton [2010] FCA 1440; The AAT has upheld a non-compliance notice issued to an SMSF trustee for the provision of non-commercial loans made to the member indirectly via a related unit trust ZDDD v FCT [2011] AATA 3. All things flood, including the proposed flood levy, tax exemption for assistance payments, activity statement deferrals and disaster declaration for tax purposes; An update on the Federal Government s paid parental leave scheme. You asked for it! Viewers queries Loss of livestock due to flooding. Beneficiaries claiming deductions against trust distributions. Employer obligations and PAYG. JANUARY/FEBRUARY 2011 Tax Laws Amendment (2010 Measures No. 5) Bill 2010, including changes to the main residence CGT exemption, allowing super funds to claim deductions for insurance policies relating to terminal medical condition benefits, and including school uniforms as an eligible expense for the education expenses tax offset) Release of Discussion Papers on various proposed changes to the tax laws, including 'Improving the Operation of the Anti-Avoidance Provisions in the Income Tax Laws', Exempting Taxes, Fees and Charges from the GST, and Margin Scheme changes TR 2010/8 Income tax: Division 7A application of S.109RB(1) of the ITAA 1936 TD 2010/D9 Income tax: Division 7A unpaid present entitlements - factors the Commissioner will take into account in determining the amount of any deemed entitlement arising under S.109XI of the ITAA 1936 TD 2010/D10 Income tax: Division 7A payments and loans through interposed entities factors the Commissioner will take into account in determining the amount of any deemed payment or notional loan arising under S.109T of the ITAA 1936 TR 2010/D7 Income tax: business related capital expenditure S of the ITAA 1997 core issues ATO Decision Impact Statement on case of Commissioner of Taxation v Anstis [2010] HCA 40, and Government s response Capital gain distributed to a superannuation fund from a fixed trust was special income Allen (Trustee), in the matter of Allen s Asphalt Staff Superannuation Fund v Commissioner of Taxation [2010] FCA 1276 Property acquired was to be used predominately for residential accommodation, so purchaser unable to claim input tax credits Sunchen Pty Ltd v Commissioner of Taxation [2010] FCAFC 138 Franking credits were income of a trust that could be distributed by the trustee in accordance with the deed Thomas Nominees Pty Ltd v Thomas and Ors [2010] QSC 417

17 Proposed Changes to Trust Laws Government response to the recommendations of the Super System (Cooper) Review Retail Coalition: lobby to remove the $1000 GST-free threshold on purchases made online Regulating Financial Planners Who Provide Tax Agent Services FBT and Car Parking Fringe Benefits Superannuation Update 2010 DECEMBER 2010 New Bills, including the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010, which deals with changes to FTB and special disability trusts (amongst other things) Regulations and draft regulations, including the Tax Agent Services Amendment Regulations 2010 (No. 1) and Draft Regulations dealing with transitional relief in respect of income tax deductibility of TPD insurance premiums by superannuation funds PS LA 2010/4 Division 7A: trust entitlements To provide practical guidance on the administrative aspects of Taxation Ruling TR 2010/3 TA 2010/6 The use of an unrelated trust to access funds of a private company in an attempt to circumvent Division 7A TA 2010/5 The use of an unrelated trust to circumvent superannuation lending restrictions Expenses incurred in undertaking university study were allowable deductions against youth allowance Commissioner of Taxation v Anstis [2010] HCA 40 The obligation to pay income tax (or GIC) is a 'present legal obligation' as at the end of the income year for Div.7A purposes Commissioner of Taxation v H [2010] FCAFC 128 Husband employing his wife to assist with his rental property not entitled to claim a deduction for wages and superannuation contributions Brown and Commissioner of Taxation [2010] AATA 829 and France and Commissioner of Taxation [2010] AATA 858 Amounts received by taxpayer were ETPs that included invalidity payments Sills and Commissioner of Taxation [2010] AATA 843 Taxpayer required to make increasing adjustment for input tax credits previously claimed as there was no evidence of consideration being paid within 12 months of the invoice QFP Professional Tomato Project 98 and Ors and Commissioner of Taxation [2010] AATA 864 Government and Superannuation (including speech by the Assistant Treasurer and Minister for Financial Services and Superannuation and the release of the National Survey into Community Attitudes and Values Towards Superannuation) 50 per cent tax discount for interest income revised policy The new SMSF Member Verification System Fair Work Australia Decision regarding salary sacrificing: Casey Grammar School v Independent Education Union of Australia [2010] FWA 8218 You asked for it! Viewers queries Under our trust deed, distributions must be made each financial year (or within two months thereafter). Is this time frame required by trust law?

18 Xmas Parties and Gifts The High Wealth Individual and the Wealthy Australian s taskforces NOVEMBER 2010 Review of lapsed or previously defeated Bills re-introduced including, amongst others: o Tax Laws Amendment (2010 Measures No 4) Bill 2010 which propose to increase the net medical expenses tax offset threshold to $2,000 from 1 July 2010 and the commencement of annual indexation of the threshold from 1 July 2011; o Superannuation Legislation Amendment Bill 2010 which, amongst others, includes changes concerning fund deductions for disability insurance premiums paid for the 2005 to 2011 income years; acquiring an asset in specie from a related party following the relationship breakdown; and the Commissioner s discretion for ECT purposes; and Exposure Draft Tax Laws Amendment (First Home Saver Accounts) Bill 2010 which proposes to allow FHSA savings to be paid into an approved mortgage after the end of a minimum qualifying period, rather than into superannuation, if a home is purchased prior to the minimum release conditions being met Application of Division 165 of A New Tax System (Goods and Services Tax) Act 1999 where a land owner engages the services of an associate to arrange construction of residential premises for lease under an arrangement described in TA 2009/5 GSTR 2010/1 Income tax, PAYG Withholding and FBT: Tax consequences on the issue, holding and redemption of bonus units as part of an employee benefits trust arrangement TR 2010/6 SMSF: Limited recourse borrowing arrangement Re-financing ID 2010/169 SMSF: Limited recourse borrowing arrangement Joint investors ID 2010/172 SMSF: Limited recourse borrowing arrangement Charge ID 2010/185 The AAT confirmed that a taxpayer was not entitled to a capital loss of $2.6m in relation to the release of related party debts on the basis that the market value substitution rule applied to determine the cost base of the debts QFL Photographics Pty Ltd v FCT [2010] AATA 758; The AAT has held that only part of the interest paid or payable by a taxpayer on loans from his mother that were on-lent, interest-free, to his company were deductible Tanti v FCT [2010] AATA 549; The Supreme Court of Western Australia has confirmed that a valid trust had been created over property. As a result, the taxpayer was personally liable for CGT on sale Saunders v DCT [2010] WASC 261; AAT held that a trust arrangement entered into by a taxpayer was ineffective to divest him of ownership of shares for CGT purposes MacMahon v FCT [2010] AATA 724. New association lifts the bar on financial planners Super funds and taxation: Working together for effective compliance You asked for it! Viewers queries What are the tax implications of paying a dividend from share capital? Applying the CGT main residence exemption Part II The Small & Medium Enterprises lodgment campaign for 2010

19 OCTOBER 2010 Review of recently enacted Bills, including the: o Tax Laws Amendment (2010 GST Administration Measures No.2) Bill 2010 which, amongst other things, amends the provisions relating to GST groups, GST joint ventures and tax invoices with effect from 1 July 2010; and o Corporations Amendment (Corporate Reporting Reform) Bill 2010 which, amongst other things, amends the income tax law to ensure that dividends paid in accordance with new rules contained in the corporations law (i.e., other than out of profits ) continue to be treated as assessable income of the shareholder and are frankable for tax purposes. o Foreign income tax offset and the Medicare levy ATO administrative treatment. Business related costs: Expenditure in relation to a lease not obtained ATO interpretative decision ( ID ) 2010/157; GST and tax invoice for multiple recipients ATO ID 2010/144; GST and tax invoice issued by another entity ATO ID 2010/146; The deductibility of credit card fees incurred in paying income tax under S.8-1 (general deduction provisions), S.25-5 (the cost of managing tax affairs) or S (borrowing costs) of the ITAA 1997 ATO ID 2010/159, ID 2010/160 and ID 2010/161; Full Federal Court confirms that ordinary income derived by a taxpayer in relation to land transferred to him (and reported on a cash basis) should be based on the market value of the land on the date of transfer Tagget v FCT [2010] FCAFC 109; Court affirms purchase price of land is GST-exclusive, based on special conditions clauses A F C Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985; AAT confirms that debts of $3.8 million owed to a taxpayer by related entities were CGT assets that had to be taken into account in determining if the taxpayer passed the maximum net asset value test for purposes of applying the small business CGT concessions AAT case [2010] AATA 591, Re Cannavo and FCT; Federal Court has dismissed a taxpayer's application for a review of a Deputy Commissioner's decision to "withhold" GST refunds that were payable under the GST Act PFTF Stock Pty Ltd v DCT [2010] FCA 557. Tax Practitioners Board Exposure draft information sheet for tax software developers released. You asked for it! viewers queries [new segment] Personal services income. Applying the CGT main residence exemption Helping clients with tax debts SEPTEMBER 2010 Promises, Promises With the election being called and all bills before parliament lapsing as a result, this month we consider some of the tax related election promises from the two major parties Addendum to TD 93/29 Income tax: if an employee incurs legal expenses recovering wages paid by a dishonoured cheque, are these legal expenses an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 SMSFD 2010/D1 Self Managed Superannuation Funds: for the purposes of the Superannuation Industry (Supervision) Regulations 1994, can a benefit payable with a cheque or promissory note be 'cashed' at the time the cheque or note is issued?

20 Part IVA: "Alternative postulate" to be established by taxpayer - Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2010] FCAFC 94 No deduction for transport of bulky equipment - Brandon and Commissioner of Taxation [2010] AATA 530 Excess super contributions tax assessments effectively upheld - McMennemin and Commissioner of Taxation [2010] AATA 573 Establishing if a taxpayer is a share trader- Smith and Commissioner of Taxation [2010] AATA 576 Tax prosecution summary Increases to education tax refund limits and updated Medicare levy surcharge thresholds ATO warning on incorrect Reportable Employer Superannuation Contributions (RESCs) on payment summaries Deadline past for transitional arrangements for new registrations under the tax agent regime NTAA s Do something campaign - the response. Non-commercial losses and the new 2010 income test Rental property issues AUGUST 2010 New Bills, including the: o Superannuation Legislation Amendment Bill 2010 (which makes various minor amendments announced in the May 2010 Budget and other changes such as those in relation to claiming deductions for TPD insurance premiums); and o Tax Laws Amendment (2010 Measures No 4) Bill 2010 (which makes various amendments including those in relation to: the CGT treatment of water entitlements; foreign currency gains and losses; CGT scrip for scrip rollover; and increasing the threshold for the net medical expenses tax offset). Draft regulations to exclude certain groups (e.g., in-house advisers and asset custodians) from the operation of the tax agent services regime, and to defer the operation of the regime to financial planners. Division 7A benchmark interest rate for the 2011 income year TD 2010/18 The reasonable travel and overtime meal allowance expense amounts for the 2011 income year TD 2010/19 Taxpayer alert on the non-market value acquisition of shares or options by SMSFs TA 2010/3 ATO practice statement on disqualification and/or referral to a professional association of SMSF approved auditors PS LA 2010/2 When a dividend will be included as capital proceeds from the disposal of shares under a contract of sale or a scheme of arrangement TR 2010/4. High Court allows publication of court documents: Wickenby project Hogan v Australian Crime Commission & Ors [2010] HCA 21 Liabilities incurred after CGT event included in CGT: maximum net asset value test The Taxpayer and Commissioner of Taxation [2010] AATA 455 Meaning of "in the vicinity of" for car parking fringe benefits Virgin Blue Airlines Pty Ltd v Commissioner of Taxation [2010] FCA 631 Superannuation guarantee charge assessment disallowed Care Provider and Commissioner of Taxation [2010] AATA 475 Let s DO SOMETHING campaign Henry Report recommendation relating to deductions for expenses that are incurred wholly, exclusively and necessarily in the performance of the duties of the employment ATO Compliance program Final report of the Cooper System review

21 Company Losses Super Updates JULY 2010 New Bills, including the: o Tax Laws Amendment (2010 Measures No. 3) Bill 2010 (which makes various amendments, including those in relation to the superannuation co-contribution and special disability trusts); and o Superannuation Industry (Supervision) Amendment Bill 2010 (which makes amendments in relation to limited recourse borrowing arrangements). The ATO s response to Bamford and their approach to cases involving Division 6 of Part III of the ITAA 1936 PS LA 2010/1 and Decision Impact Statement S310 and S311/2009 (Commissioner of Taxation v. Phillip Bamford & Ors; Phillip Bamford & Anor v Commissioner of Taxation); Application of S.109RB(1) of Division 7A of the ITAA 1936 TR 2010/D3 Vacant land, without any living facilities, cannot be "residential premises" Vidler v Commissioner of Taxation [2010] FCAFC 59 Redundancy payment received by a 76 year old taxpayer not a genuine redundancy payment Coker and Commissioner of Taxation [2010] AATA 367 Settlement payment made to former employee (for unlawful termination of employment) a redundancy payment Hughes v Loy Yang Power Management Pty Ltd [2010] FMCA 81 Taxpayer could have met the unrelated clients test and was entitled to a personal services business determination Yalos Engineering Pty Ltd and Commissioner of Taxation [2009] AATA 390 Let s DO SOMETHING campaign (including a history of the removal of deductions from 1975) Prevention is the new cure speech by Second Commissioner regarding Compliance Program for 2010/11 UPEs and Corporate Beneficiaries (TR 2010/3) Work Related Expenses JUNE 2010 Draft legislation relating to: o Managed investment trusts o Paid Parental Leave scheme o Extension of Tax Deductible Donation Support to All Volunteer Fire Brigades o Superannuation Funds Acquiring Assets from Related Parties (Relationship breakdowns) o Transitional relief in respect of income tax deductibility of total and permanent disability (TPD) insurance premiums by superannuation funds; and o Taxation treatment of Special Disability Trusts Trauma insurance policies and the sole purpose test SMSFD 2010/1 S.17A of the SIS Act and enduring powers of attorney SMSFR 2010/2 Update on appeals (including Forrest s case, Darrelen Pty Ltd v FCT, South Steyne and Anstis) ATO can rely on ASIC s records to serve notices to taxpayers Robertson v Deputy Commissioner of Taxation [2010] NSWCA 58

22 As taxpayer engaged as an employee when receiving workers compensation payments, no deduction for personal superannuation contributions Van Prooyen and Commissioner of Taxation [2010] AATA 281 Contract of sale of a property rectified to add GST Ashton v Monteleone [2010] NSWSC 258 Super System Review releases phase three preliminary report: "SMSFs should focus on the main game: retirement savings" Overhaul of Financial Advice (including accountants' exemption regarding SMSF advice) Coverage of Tax Agent Services Regime: in-house advisors, custodians, financial planners Tax Practitioners Board s Exposure Drafts Code of Professional Conduct and Fit and proper person Henry Review and Budget 2010 Treasury Are you SBR ready? Implementing Standard Business Reporting in your tax practice MAY 2010 Tax Laws Amendment (2010 Measures No 2) Bill 2010 (includes changes to the operation of Division 7A and the extension of the TFN withholding arrangements to closely held trusts (including family trusts)) Tax Laws Amendment (Transfer of Provisions) Bill 2010 FBT rates and thresholds for the FBT year commencing 1 April TD 2010/2 to TD 2010/6 TA 2010/2 - SMSF trust deeds and excess contributions tax Taxation Determinations: Agricultural and non-forestry MISs and Part IVA (TDs 2010/7-11) Constitutional challenge to validity of superannuation guarantee legislation - On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 2) [2010] FCA 258 Mobile home park used to derive rent and therefore owner not entitled to small business CGT concessions on sale - Tingari Village North Pty Ltd and Commissioner of Taxation [2010] AATA 233 Court refers evidence raised in case about cash business to ATO in matrimonial dispute - First East Auction Holdings Pty Ltd v Ange [2010] VSC 72 Payments made by debtors of company directly to shareholder s account liable to Division 7A - Commissioner of Taxation v Rozman [2010] FCA 324 Report from most recent minutes of the Superannuation Consultative Committee Approved Auditors (SCCAA) Working Group meeting (including issues regarding in house assets and the SMSF annual return) Assistant Treasurer s announcements (including Tax Relief for Investors in Instalment Warrants and Additional Certainty for the Taxation of Overseas-Based Employees) Lodgment opportunity in PS LA 2004/1 (GA) has been extended until 31 May 2010 The Bamford Case Excess Contributions Tax and SMSFs APRIL 2010 Tax Laws Amendment (Political Contributions and Gifts) Bill 2010 Exposure draft legislation - GST: Cross Border Transport Services

23 TR 2010/1 - Superannuation contributions SMSFR 2010/1 - The application of S.66(1) of the SIS Act 1993 to the acquisition of an asset by an SMSF from a related party ID 2010/42 - Amendment of assessments: Exception to the two year period of review if an individual is a beneficiary of a trust ID 2010/54 - CGT: Foreign source capital gains made by a resident trust for CGT purposes ID 2010/55 - CGT: Australian source capital gains made by a resident trust for CGT purposes Taxpayer liable for luxury car tax on a Hummer vehicle imported from the USA - Dreamtech International Pty Ltd v FCT [2010] FCA 109 The AAT has affirmed the Commissioner's decision to impose an administrative penalty on a taxpayer in relation to an incorrect BAS they lodged - AAT Case [2010] AATA 148, Re Andriopoulos and FCT The AAT has affirmed the Commissioner's decision that a taxpayer operating a licensed brothel has underreported her GST liabilities - AAT Case [2010] AATA 155, Re Harrison v FCT A taxpayer fails to substantiate claims for GST input tax credits made in relation to his mowing business and, therefore, a notice of assessment issued by the Commissioner stands - AAT Case [2010] AATA 138, Re Douglass v FCT Highlights of the Commissioner's recent speech, A common caring: nest building with self-managed super funds Section 23AG changes - Taxation of foreign earnings of resident individuals Employee Share Schemes MARCH 2010 Package of three bills to effect three private health insurance tiers and increase the rate of Medicare levy surcharge (Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2], Fairer Private Health Insurance Incentives (Medicare Levy Surcharge Fringe Benefits) Bill 2009 [No. 2] and Fairer Private Health Insurance Incentives Bill 2009 [No. 2]) Tax Laws Amendment (2010 Measures No 1) Bill 2010 Tax Laws Amendment (2010 Measures No.2) Exposure Draft: TFN Withholding for closely held trusts ATO ID 2010/14 Claiming deductions for annual licence fees to use accounting and tax return preparation computer software Taxpayer entitled to deduction for interest paid on a loan used to purchase units in a Hybrid trust Forrest v Commissioner of Taxation [2010] FCAFC 6 Taxpayer not entitled to claim an input tax credit for the acquisition of a residential rental property for development Sunchen Pty Ltd V FCT [2010] FCA 21 Taxpayer not entitled to deduction for misappropriation by investment manager of proceeds from sale of shares Lean v FCT [2010] FCAFC 1 Supply of spectacles (comprising GST-free prescription lenses with taxable frames) a single supply for GST purposes; discount on frames did not need to applied to the lenses AAT Case [2010] AATA 22, Re Luxxotica Retail Australia Pty Ltd V FCT Haiti and Deductible Gift Recipients Education tax refund reminder The risk of illegal early release of super benefits