UPEs as loans - end of an era?
Section 100A: if you want BBlood, you’ve got it: 100A and capital amounts
On 19 September 2022, Justice Thawley of the Federal Court handed down his decision in BBlood Enterprises Pty Ltd v FCT [2022] FCA 1112 (BBlood), the most recent decision on section 100A of the Income Tax Assessment Act 1936. The Australian Taxation Office (ATO) was successful in arguing that section 100A applied.
Can Part IVA apply to trustee discretions? Yes, according to the Federal Court
The recent Federal Court decision of Minerva Financial Group Pty Ltd v Commissioner of Taxation [2022] FCA 1092 (Minerva) signifies that the Federal Commissioner of Taxation (Commissioner) can successfully scrutinise a trustee’s discretion under the general anti-avoidance provisions (Part IVA).
TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others
We wrote about Draft Taxation Determination TD 2022/D1 (Draft TD) on Division 7A and unpaid present entitlements (UPEs) here. On 12 July 2022, the Australian Taxation Office (ATO) finalised the Draft TD as Taxation Determination TD 2022/11 (Final TD).
PCG 2017/13: sub-trust arrangements – welcome (continued) relief from the ATO
Draft Taxation Determination TD 2022/D1 sets out the Australian Taxation Office’s (ATO) views on when an unpaid present entitlement (UPE) with a corporate beneficiary is a loan for the purposes of Division 7A of the Income Tax Assessment Act 1936. We wrote about TD 2022/D1 here.
Section 100A: welcome Media Release by the Assistant Treasurer
We wrote that 2022 is the ‘Year of 100A’ after the Australian Taxation Office (ATO) released three guidance products, two in draft, on section 100A and the ATO’s appeal to the Full Federal Court from the decision of Logan J in Guardian AIT Pty Ltd ATF Australian Investment Trust v FCT [2021] FCA 1619 on section 100A.
Draft Practical Compliance Guideline PCG 2022/D1: are you on the highway to hell?
After our semi-serious opening statement on the Australian Taxation Office’s (ATO) recently released guidance on section 100A and unpaid present entitlements, this is one of a series of deep-dive articles on that guidance.
Capital gains, Discretionary Trusts and Foreign Residents: round 3 to the ATO
We wrote here and here about the Greensill (Thawley J) and Martin (Steward J) Federal Court decisions. In those decisions the Federal Court found in favour of the Australian Taxation Office (ATO) that section 855-10 of the Income Tax Assessment Act 1997 (ITAA 1997) did not disregard a non-taxable Australian property capital gain distributed to a foreign resident beneficiary of an Australian discretionary trust.
Sladen Snippet – Another trust deed variation found to be defective
“Stamping” Of Trust Deeds In Victoria
Defining the beneficiaries of a discretionary trust
Sladen Snippet – Addy – ATO wins backpacker tax case in the Full Federal Court
As we discussed in Coelho v FCT [2020] AATA 2474, different tax rates apply to residents and non-residents. Further, under Pt III of Sch 7 to the Income Tax Rates Act 1986, a working holiday maker pays tax at 15% on the first $37,000 of income in Australia. Commonly referred to as the ‘backpacker tax’.
Capital gains, discretionary trusts, and foreign residents – round 2 to the ATO
We wrote here on the decision of Thawley J of the Federal Court in Peter Greensill Family Co Pty Ltd (trustee) v FCT (Greensill) where the Commissioner of Taxation was successful in arguing that section 855-10 of the Income Tax Assessment Act 1997 (ITAA 1997) does not disregard a capital gain distributed to a foreign resident beneficiary of an Australian discretionary trust. The taxpayer has appealed that decision to the Full Federal Court.
Residency of a trust: don’t get it wrong
Sladen Snippet –Trust deeds of discretionary trusts holding NSW residential land must now be amended before 31 December 2020 to avoid foreign surcharges
As referred to in our previous articles, the State Revenue Legislation Further Amendment Bill 2020 (NSW) has now received royal assent on 24 June 2020.
Interpreting and Varying Trust Deeds
Trusts and the franking credits trap: can we fix it?
ATO announces extension for Division 7A compliance
Capital gains, discretionary trusts, and foreign residents – first blood to the ATO
The Australian Taxation Office (ATO) position for several years has been a foreign beneficiary distributed a capital gain made by an Australian discretionary trust on an asset that is not taxable Australian property is assessed on the capital gain even though that would not occur if the foreign resident made the gain directly, or through a fixed trust. Some commentators disagree with that view, the Federal Court in a recent case agreed with the ATO position in what may be the first skirmish of a battle through the courts on this issue.