SMSF borrowings: zero interest LRBA generates 45% tax: ATO private ruling

The Tax Office has issued a private binding ruling stating that a superannuation fund will derive non-arm’s length income under s 295-550 of the ITAA 1997 (taxable at 45%) where it enters into a related-party limited recourse borrowing arrangement (LRBA) with a 0% interest rate. As reported in Thomson Reuters Weekly Tax Bulletin (Issue 16, ...more

SMSF borrowings: ATO extends in-house asset exemption

The Tax Office has registered a Determination to extend the in-house asset exemption for self-managed superannuation fund investments in a related trust as part of a limited recourse borrowing arrangement (LRBA). Broadly, the ATO Determination seeks to ensure that such arrangements are excluded from being an in-house asset of the SMSF: at the beginning of ...more

Fishing crew members not “employees” as engaged in joint venture

The Administrative Appeals Tribunal has held that fishing crew members on a commercial fishing vessel were not “employees” at common law or under the extended meaning of that term in s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (SGAA). As such, the taxpayer company was not required to make superannuation contributions in respect of ...more

Segregation of superannuation fund bank accounts: ATO revises position

The Tax Office has issued a Determination setting out the circumstances in which a bank account of a complying superannuation fund is a “segregated current pension asset” under s 295-385 of the ITAA 1997. The application of this definition to a bank account is a key requirement for a self-managed superannuation fund (SMSF) to qualify ...more

Excess superannuation contributions tax: ATO wins test case

Taxpayers who inadvertently exceed their superannuation contributions caps have been dealt another blow after the Tax Office successfully appealed an AAT decision which had granted discretionary relief to a taxpayer with excess contributions. As reported in Thomson Reuters Weekly Tax Bulletin Issue 12 (21 March 2014), the Federal Court set aside the AAT’s decision after ...more

Tax Office amnesty for disclosing offshore assets

The ATO has launched “Project DO IT: disclose offshore income today” in a bid to urge taxpayers with offshore assets to declare their interest ahead of a global crackdown on international tax havens. The ATO said its offshore voluntary disclosure initiative (OVDI) provides a last chance opportunity for those who haven’t declared their overseas assets ...more

inTAX February 2014

Tax & audit advice; CGT-foreign residents; trust reimbursement agreements; GST-second-hand goods

The February 2014 edition of Thomson Reuters inTAX magazine features the following tax-related articles: Is giving tax and audit advice to the same client under threat? – According to Terry Hayes, Senior Tax Writer, Thomson Reuters, a recent development in Europe concerning the reform of the auditing sector should not be ignored. It also has ...more

CGT upheld for transfer of land to joint venture trust

The Federal Court has held that a taxpayer who transferred land to a joint venture trust for the purpose of developing of the land (together with adjacent landowners), was liable for CGT arising from the transaction. As reported in Thomson Reuters Weekly Tax Bulletin (Issue 5 of 2014), the taxpayer acquired the land in Melbourne in 1995 ...more

Tax Office denied access to court files

As report in Thomson Reuters Weekly Tax Bulletin (Issue 4 of 2014), the Supreme Court of NSW has refused the Tax Commissioner’s application to access a court file in relation to ongoing proceedings involving a family trust. The Tax Office is seeking access to the court file to determine any possible income tax and CGT ...more

ATO contacting tax agents who do not meet on-time lodgment requirement

The ATO says it has started contacting agents who have demonstrated consistently poor on-time lodgment performance to facilitate their entry to the guided lodgment program. The ATO has previously advised that in the 2013-14 financial year, it will focus on those agents who are performing at 40% or below and will place them on a ...more