Legal news
The AAT has rejected the Federal Commissioner of Taxation’s (Commissioner) view that a discretionary payment received by an employee upon his termination should be taxed as ordinary income. Despite the payment being made upon the termination of the employee the Commissioner argued that it was received in respect of their employment as it was calculated in relation to fees earnt.
The Full Federal Court in FCT v Healius [2020] FCAFC 173 has upheld the Australian Taxation Office’s (ATO) appeal of the Federal Court decision in Healius v COT [2019] FCA 2011 which considered whether lump sum payments made by a medical centre to its doctors were assessable on revenue or capital account.
Over the last 18 months several decisions of the Administrative Appeals Tribunal, Federal and Full Federal Courts considered the application of Australian tax residency laws including Harding v FCT [2019] FCAFC 29, FCT v Addy [2020] FCAFC 135, Stockton v FCT [2019] FCA 1679, Handsley v FCT [2019] AATA 917 and Coelho v FCT [2020] AATA 2474.
An employment agency contract involves a contract between two parties where one of the parties (the employment agent) procures the services of a person for a client. The relevant test is whether the employment agent provided individuals who would comprise, or who would be added to, the workforce of the client for the conduct of the client's business.
In our earlier articles we discussed the Administrative Appeals Tribunal (AAT) and Federal Court decisions in Eichmann v FCT [2019] AATA 162 and FCT v Eichmann [2019] FCA 2155. The Full Federal Court in Eichmann v FCT [2020] FCAFC 155 recently allowed the taxpayer’s appeal of the Federal Court decision.
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’.
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.
An individual in Australia for more than 183 days for an income year, whether continuously or intermittently, is an Australian tax resident unless the Commissioner of Taxation is satisfied the individual’s usual place of abode is outside Australia and the individual does not intend to take up residence in Australia.
Annat v Commissioner of State Revenue [2020] VSC 108 (Annat) highlights the real risk faced by some farm owners in qualifying for a primary production land tax exemption .
Due to the Victorian State Revenue Office’s approach and scrutiny on primary production lands of late, traditional farming land owners are finding that they now must understand the difficult legislative requirements surrounding primary production land tax exemptions, the resulting structuring and record keeping requirements to ensure that they are not unintentionally exposing themselves to large land tax liabilities.
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.
Recently, the Australian Taxation Office (ATO) announced an expansion to its ‘Tax Avoidance Taskforce’, increasing its focus on “supporting and ensuring private groups and high wealth individuals pay the right amount of tax”.
The Australian Taxation Office (ATO) recently released Taxation Determinations TD 2019/D6 and TD 2019/D7 (together the Determinations) that concern Australian discretionary trusts distributing capital gains to foreign beneficiaries.
When involved in a dispute with the Australian Taxation Office (ATO), dealing with the interest and penalties that may be imposed by the ATO in relation to a tax liability by seeking remission of those amounts, objecting, or having a reasonably arguable position opinion can be an important part of any dispute resolution strategy.
