Legal news
On 17 August 2020, the Full Federal Court handed down its decision in FCT v Fortunatow [2020] FCAFC 139 allowing the Commissioner’s appeal from the decision of Griffiths J of the Federal Court and finding Griffiths J had erred in his construction of section 87-20(1)(b) of the Income Tax Assessment Act 1997 (ITAA 97).
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’.
In anticipation of the conclusion of the superannuation guarantee (SG) amnesty (discussed here) on 7 September 2020, the Australian Taxation Office (ATO) has released a draft Law Administration Practice Statement PS LA 2020/D1 (PSLA 2020/D1) in relation to how, post amnesty, the ATO officers may exercise their discretion to remit Part 7 penalties.
The Australian Taxation Office (ATO) has released a welcome draft legislative instrument, Self Managed Superannuation Funds (COVID-19 Rental income deferrals - In-house Asset Exclusion) Determination 2020 (SPR 2020/D2), that will exclude COVID-19 related rental deferrals from being ‘loans’ under the in-house asset rules.
In the recent decision of Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118 (16 June 2020) , the Full Federal Court found that a dentist fell within the extended definition of ‘employee’ under s12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SG Act). Section 12(3) broadly provides that an employee is a person who is working ‘under a contract that is wholly or principally for the labour of the person.’
In our earlier article, we noted the Federal Court in FCT v Eichmann [2019] FCA 2155 (Eichman) in late 2019 had found in favour of the Australian Taxation Office (ATO) (appealing a decision of the Administrative Appeals Tribunal) and held land used for storage was not an active asset for the purposes of the small business capital gains tax (CGT) concessions in Division 152 of the Income Tax Assessment Act 1997 (ITAA 1997).
As part of the broader framework of the JobKeeper scheme (discussed here) established by the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, the Superannuation Guarantee (Administration) Amendment (Jobkeeper Payment) Regulations 2020 (Amending Regulations) have now been made.
The recent Administrative Appeals Tribunal (AAT) decision of Holman v FCT highlights once again the importance of documentation and maintaining objective factual evidence to discharge the statutory burden of proof when disputing an assessment.
As previously discussed here, the ATO has now finalized the Superannuation Industry (Supervision) In-house Asset Determination — Intermediary Limited Recourse Borrowing Arrangement Determination 2020 (Determination).
As part of the 2019-20 Budget and as previous discussed here, the Australian Government announced that Australians over age 65 would have greater flexibility in making voluntary concessional and non-concessional superannuation contributions from 1 July 2020.
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.
The Court of Appeal handed down its decision in MD Commercial Pty Ltd v Commissioner of State Revenue [2019] VSCA 295 in late 2019. The decision has provided further clarity on the application of section 35 of the Duties Act 2000 (Vic) which provides an exemption from duty for transfers to bare trusts.
Further to my article on the COVID-19 JobKeeper measure, and pending the release of legislation, on 5 April 2020 Treasury further updated and expanded its JobKeeper fact sheets and included a ‘frequently asked questions’ (FAQ) document.
On 29 March 2020 the Federal Government announced changes to the foreign investment review regime as Australia continues to deal with the economic implications of COVID-19.
Once the legislation is passed, effective from 29 March 2020, all proposed foreign investment into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 will require approval, regardless of the value of the investment or nature of the foreign investor. This is to be achieved by reducing to $0 the monetary screening thresholds for all foreign investment under the Act.
As foreshadowed in our earlier article, on 30 March 2020 the Federal Government announced further COVID-19 business support – the JobKeeper Payment.
Under the JobKeeper Payment, businesses significantly affected by Coronavirus outbreak be able to access a subsidy from the Government to continue paying their employees.
