Legal news
The Full Federal Court case of Commissioner of Taxation v Liang [2025] FCAFC 4 serves as a reminder that when challenging an ATO decision at a court or tribunal, it is the taxpayer who carries the burden of proving that an assessment is excessive and what the assessment should have been.
On 19 February 2025, the Full Federal Court handed down its decision in FCT v Bendel [2025] FCAFC 15. On 18 March 2025, the ATO applied for special leave and, on 19 March 2025, the ATO updated its interim decision statement (DIS) on the case.
We review the updated DIS below.
#Division 7A, #UPE, #Unpaid present entitlements, #Tax, #Trusts, #TD2022/11, #Bendel, #109D #Special leave #Decision Impact Statement
On 19 February 2025, the Full Federal Court, in FCT v Bendel [2025] FCAFC 15 (Bendel), held that an unpaid present entitlement (UPE) with a corporate beneficiary is not a loan under subsection 109D(3) of Division 7A of the Income Tax Assessment Act 1936 (ITAA 1936).
The ATO has finalised its practical compliance guidance Practical Compliance Guideline PCG 2024/3 (Guideline) to clarify how the ATO will apply its compliance resources in relation to the application of section 99B when Australian residents receive payments or benefits from non-resident trusts. The guideline outlines common scenarios, record-keeping expectations, and low-risk arrangements.
The Federal Court of Australia’s judgment in ASIC v Retail Employees Superannuation Pty Ltd highlights that if a corporation honestly relies on advice from their lawyers that may provide reasonable grounds to defend the making of a representation that concerns the present state of affairs.
The Federal Court found that representations made by Retail Employees Superannuation Pty Ltd (REST) regarding their rules and practice were opinions expressed as to the law based on reasonable grounds due to reliance on advice received from their lawyers and other trusted sources. Therefore, the representations made could not amount to misleading or deceptive conduct.
On 28 August 2024, the Australian Taxation Office (ATO) published Draft Practical Compliance Guideline PCG 2024/D2 (Draft PCG) on Personal services businesses and Part IVA of the Income Tax Assessment Act 1936.
We wrote about the decision of the Administrative Appeals Tribunal (Tribunal) in Quy v FCT [2024] AATA 245 here. In that decision, the Tribunal held that Mr Quy, who was physically in Australia for less than 2 months each year, was a resident of Australia for tax purposes.
In 2022, the decision of the Federal Court in Minerva Financial Group Pty Ltd v Commissioner of Taxation [2022] FCA 1092 raised the question that tax benefits emanating from trustee decisions could be subject Part IVA. At that time, we said we think ‘no’ (see here).
The Administrative Appeals Tribunal (Tribunal) has held in Quy v FCT [2024] AATA 245 that a taxpayer, who was physically in Australia for less than 2 months each year, was a resident of Australian tax purposes.
