10 Apr 2019 | Tax Brief | Energy & Resources | Corporate and Mergers & Acquisitions | International | Private Equity
Resource Capital Fund case again: Two steps forward, one step back in Full Federal Court
The Resource Capital group of funds is doing its best to clarify Australian domestic tax law and tax treaty treatment of private equity purchases and sales of Australian mining companies through limited partnerships. Its latest foray into the Full Federal Court represents an advance in resolving the difficult technical and practical issues that arise, but there are also unresolved issues that require prompt action to bring the ongoing uncertainty in this area to an end.
02 Apr 2019 | Tax Brief
Budget Tax Brief 2019-20
As expected, so far as tax is concerned, the main focus of this year’s Budget is delivering cuts for individuals, and increasing investment in infrastructure. Nevertheless, there are a few tax proposals which will have important elements on business, subject of course, to the outcome of the election. Our Budget Brief outlines the key elements for Australian businesses.
16 Oct 2018 | Tax Brief | Private Wealth
Taxing private trusts - a moving target
Our revenue authorities have been very active recently issuing judgments, making pronouncements and intensifying enforcement activity, all directed to the way the tax system operates in relation to income made from, and gains arising on transactions with, assets that are held on trust. This Tax Brief highlights the effects of some of the more important developments affecting private trusts.
Tax Brief - Taxing private trusts – a moving target (322 kb)
21 Sep 2018 | Tax Brief
Reflections on the Rulings System
The original policy behind the rulings system was to give taxpayers certainty about their tax position so that they could correctly report their past transactions, and plan their future transactions with some certainty. But a recent Federal Court decision reveals another problem in the way the private ruling system has evolved in the last 25 years, and the difficulty taxpayers face in getting certainty about proposed transactions. It may be time for Parliament to revisit the design.
08 May 2018 | Tax Brief
While much of the ‘good news’ in this year’s Budget was already well known by Budget night, there were still a few surprises in the package. Our Tax Brief unpicks the major tax components of Australia’s 2018-19 Budget.
Tax Brief - Budget 2018-19 (318 kb)
28 Mar 2018 | Tax Brief | Real Estate
Stapled structures: integrity measures
Following on from the Australian Taxation Office’s concerns in TA 2017/1, the Government has proposed sweeping changes to the tax laws that will impact on a range of stapled and non-stapled structures. The measures will: (i) apply a 30% withholding tax rate to most income derived from cross-stapled arrangements; (ii) treat ownership of agricultural land as a trading business, even if used for rental purposes; (iii) expand the thin capitalisation rules to require gearing to be calculated on a look-through basis for interests of 10% or more; and (iv) limit the exemptions currently enjoyed by foreign sovereign entities and pension funds.
This Tax Brief focuses on the impact of the measures on the real estate sector. A separate Riposte addresses the impact on the infrastructure sector.
Generally, the measures should not affect stapled groups that do not have material cross-staple dealings.
Tax Brief - Stapled groups integrity measures 28 March 2018 (261 kb)
13 Feb 2018 | Tax Brief
US Tax Reform and its Implications for Australia
This tax brief discusses those aspects of the US tax reform which have most relevance to Australian corporate and international taxation, both from a tax policy perspective and for inbound and outbound investment to and from the US. The reform is complex particularly in relation to cross-border transactions and surprisingly adopts much of the OECD BEPS work. Taxpayers around the world with investments in the US need to scramble to adjust to the many tax changes which are already in effect, as do the US Treasury and the IRS to provide the necessary guidance. And other countries need to consider how to react, which is not as straightforward as often suggested.
04 Dec 2017 | Tax Brief
More ruminations on valuation issues
The market value of an asset is a pervasive feature of tax law, but the process of valuing assets is almost always problematic. This Tax Brief examines what the recent decision in Placer Dome  WASCA 165 adds to our knowledge about the law governing valuation for duty and income tax.
24 Aug 2017 | Tax Brief
Chevron - What did we learn?
The long running debt transfer pricing dispute between Chevron Australia and the Australian Taxation Office is over which means the Full Federal Court’s decision handed down in April this year will remain the leading authority on Australian transfer pricing law for some time. This Tax Brief outlines some key practical lessons from the case.
08 Aug 2017 | Tax Brief
Australia's Future Tax System?
If the opinion polls are to be believed, and nothing remarkable happens in the next 18 months, the ALP will win the 2019 election. That makes their tax agenda worthy of attention. This Tax Brief catalogues a few important policies that may be just around the corner.
09 May 2017 | Tax Brief
While Budget 2017-18 contains few tax measures, many of them are not especially welcome. Our Tax Brief explores the main elements of the tax announcements.
27 Apr 2017 | Tax Brief | International
Lessons from Chevron
The Full Federal Court decision in Chevron offers valuable lessons to multinational companies when it comes to managing the transfer pricing risks involved in intra-group financing.
16 Feb 2017 | Tax Brief | International
Diverted Profits Tax
The Diverted Profits Tax legislation is now before Parliament. Its broad and draconian application should concern foreign and domestic multinationals alike.
13 Feb 2017 | Tax Brief | Projects & Infrastructure
Draft infrastructure & privatisation framework
The ATO has released a draft framework which sets out the ATO’s overall non-binding position on a number of infrastructure related tax issues.
31 Jan 2017 | Tax Brief | Real Estate
TA 2017/1: impact on property groups
Stapled property groups need to look closely at their cross staple arrangements or risk raising the ire of the ATO.
31 Jan 2017 | Tax Brief | Projects & Infrastructure
TA 2017/1: impact on infrastructure groups
Stapled infrastructure groups need to look closely at their cross staple arrangements or risk raising the ire of the ATO.
11 Nov 2016 | Tax Brief
Tax in the age of blockchain
Blockchain will radically change everything you currently know and do, the way you do it and how it is taxed. Or maybe not. We ruminate on the future.
20 Oct 2016 | Tax Brief
A draft of the rules to repeal the much-maligned s.974-80 is finally available, but the replacement is a disappointing melange of indecisive text. It could well cause as much heartache as the provision being replaced. We examine the good, the bad and the decidedly curious in the draft legislation.
Debt-equity Amendments (235 kb)
04 May 2016 | Tax Brief
Australia’s 2016-17 Budget
The 2016-17 Budget revealed the usual mixture of revenue-depleting measures (personal income and small business tax cuts) paid for by increased taxes on superannuation and the promise of a huge windfall from greater scrutiny of multinationals. Details are in our Tax Brief.
09 Oct 2015 | Tax Brief | International
G20/OECD deliver BEPS project but it’s not over
The OECD's final deliverables for the BEPS project have been released with Final Reports to be approved by the G20 Finance Ministers on 8 October 2015. Although it was proposed that some BEPS work would not be completed until December 2015, the OECD Press release says these Reports are “the final package of measures”. If only they were!
06 Oct 2015 | Tax Brief
Amendments to Part IVA
A Bill expanding the operation of Part IVA for multinationals and increasing associated administrative penalties was recently introduced into Parliament. The amendments reflect a move away from the traditional operation of Part IVA and are indicative of the future direction of anti-avoidance legislation.
21 Jul 2015 | Tax Brief | International
Collecting non-residents’ tax liabilities
An ED has been released of legislation that will impose a liability on buyers to remit 10% of the purchase price when they purchase certain land and resource-related assets from non-residents. It is likely to catch some sellers unaware and will undoubtedly lead to changes in the way sales transactions are handled. This Tax Brief outlines the key elements of the measure.
16 Jul 2015 | Tax Brief
Amendments to the company loss rules
Amongst other amendments, Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 2015 (introduced into Parliament on 24 June 2015) contains some changes to the company loss integrity rules. This Tax Brief details those changes.
15 May 2015 | Tax Brief
Part IVA & consolidations: Channel Pastoral
The Full Federal Court decision in Channel Pastoral Holdings Pty re-considered the interaction between Part IVA and the tax consolidation rules previously considered by the Full Federal Court in Mongoose. The majority’s conclusion that the Commissioner can give effect to a Part IVA determination by issuing an assessment to a subsidiary member of a tax consolidated group is likely to raise a number of difficulties.
12 May 2015 | Tax Brief
Australia’s 2015-16 Budget
Even though many Budget measures had been formally announced already and the Government is still in the midst of its tax White Paper process, the Budget did contain a few tax surprises. This Tax Brief outlines the main tax measures in the Budget.
10 Apr 2015 | Tax Brief | Real Estate
The New Attribution MIT Regime
The recently released exposure draft legislation proposes a new regime for taxing income derived through “attribution managed investment trusts”. This Tax Brief considers each of the key measures of the new regime and certain other measures in the ED as well as some changes we might expect in the ultimate legislation.
The New Attribution MIT Regime (412 kb)
09 Apr 2015 | Tax Brief
IMR - Fourth Time Lucky?
Treasury has released the fourth draft of the Investment Manager Regime Element 3. The draft is a considerable advance over the previous versions, but incorporates a significant change in structure and drafting. This Tax Brief highlights the changes from previous drafts of the legislation.
27 Feb 2015 | Tax Brief | International
The BEPS avalanche
The G20/OECD base erosion and profits shifting (BEPS) project rolls on and has recently developed the momentum of an avalanche. This Tax Brief reviews the Brisbane and Istanbul outcomes and the recent OECD discussion papers on the definition of permanent establishment, transfer pricing, interest deductions and dispute resolution.
21 Oct 2014 | Tax Brief | Corporate and Mergers & Acquisitions | Employment & Superannuation
Employee share & option plan changes
The Government confirmed in its 14 October 2014 Industry Innovation and Competitiveness Agenda announcement that it will roll-back at least part of the 2009 changes to the taxation of employee share and option plans, with start-up companies to be the major beneficiaries.
Employee share and option changes (40 kb)
23 Sep 2014 | Tax Brief | International
BEPS on Steroids?
This Tax Brief provides an overview of the BEPS Action Plan items released by the OECD and welcomed by G20 Finance Ministers at their recent meeting in Cairns.
BEPS on Steroids? (118 kb)
07 Jul 2011 | Tax Briefs | Financial Services
Limited Recourse Debt
The recent High Court decision in the BHP-Billiton Finance case brings to an end the ATO’s long, and ultimately fruitless, litigation against the BHP-Billiton group. This Tax Brief analyses the significance of the final judgment in this long and complex series of cases.
Limited Recourse Debt (50 kb)
24 Aug 2011 | Tax Briefs
ATO continues the distribution confusion
The ATO has released two draft fact sheets relating to the 2010 amendments to corporate law and the income tax in relation to dividends. This Tax Brief relates the background to the amendments, provides an analysis of the fact sheets and the problems they will cause, and then sets them against a broader context of increasing taxpayer confusion in relation to corporate distributions.
ATO continues the distribution confusion (127 kb)
02 Nov 2012 | Tax Briefs | Real Estate
Some Progress on Trust Tax Reform
This Tax Brief analyses Treasury's two proposals in presented in Options Paper concerning the new regime to tax income passing through trusts. It also considers what the future might look like for those managed investment trusts (‘MITs’) which will not qualify for the new MIT attribution regime, and for the trusts into which MITs and non-MIT trusts will invest.
Some Progress on Trust Tax Reform (157 kb)
20 Jan 2012 | Tax Briefs
Distribution clarity? Round 3
On 21 December 2011 the ATO released TR 2011/D8 dealing with the relationship of the new corporate law rule for dividends and the tax legislation, along with counsel’s legal opinion it has obtained as part of the process. Unfortunately the draft ruling creates as many uncertainties as it solves.
Distribution clarity? Round 3 (64 kb)
28 Mar 2012 | Tax Briefs | Energy & Resources
Energy Tax Reform Packages
Despite the precarious state of the Parliament, the Government has managed to enact both its carbon tax package and the minerals resource rent tax Bills. This Tax Brief is a snapshot of what has happened and what happens next.
Energy Tax Reform Packages (54 kb)
11 May 2011 | Tax Briefs
This Tax Brief provides insights into the tax measures announced in Australia's Budget for 2011-12.
Budget 2011-12 (120 kb)
05 Sep 2011 | Tax Briefs | Energy & Resources
Tax certainty for farm-outs?
This Tax Brief reviews recent draft rulings on the income tax and GST consequences of farm-out arrangements and concludes that the rulings go some way to addressing the uncertainty but leave many uncertainties remaining.
Tax certainty for farm-outs? (145 kb)
24 Jan 2013 | Tax Briefs | Financial Services
Reforms to TOFA Rules
This Tax Brief outlines the main impacts of the proposals in an Exposure Draft of amendments to the rules governing the taxation of financial arrangements (‘TOFA’).
Reforms to TOFA Rules (106 kb)
12 Mar 2012 | Tax Briefs | Energy & Resources
Minerals Resource Rent Tax
Australia’s Mineral Resource Rent Tax (MRRT) on iron ore and coal projects commences on 1 July 2012. The MRRT was passed by the Australian Parliament on 19 March 2012. This Tax Brief summarises the main provisions of the enacted legislation.
Minerals Resource Rent Tax (89 kb)
07 Dec 2011 | Tax Briefs
This Tax Brief comments on a Discussion Paper by Treasury on further possible amendments to the Corporations Act and a communication from the ATO which seems to retract in part the conclusion in the draft fact sheets.
Distribution Clarity? (68 kb)
11 Aug 2011 | Tax Briefs | Energy & Resources
Minerals Resource Rent Tax
On 10 June, the government released for public comment preliminary and still incomplete Exposure Draft legislation for the proposed minerals resource rent tax (‘MRRT’). This Tax Brief summarises the main provisions of the draft legislation in its current form.
Minerals Resource Rent Tax (115 kb)
08 Apr 2011 | Tax Briefs
Part IVA Outbreak
This Tax Brief examines recent decisions by the Australian Courts addressing the application of Part IVA both for the light they shed on the current operation of Part IVA and for what they reveal about how Part IVA might be changing in the near future.
Part IVA Outbreak (139 kb)
23 Dec 2010 | Tax Briefs
Collective Investment Vehicles
On 17 December 2010 the Assistant Treasurer announced changes to allay Australian tax concerns of US fund managers and the Board of Taxation released its discussion paper on further revamping Australia’s tax rules for collective investment vehicles.
Collective Investment Vehicles (71 kb)
03 May 2010 | Tax Briefs
The Henry Tax Review
The Government released final report of the Henry Review of Australia’s Future Tax System. The report is far reaching and intended to shape Australia’s tax system for the first half of the 21st Century. In this Tax Brief we examine the background to the Henry Review of Australia's Future Tax System, the key recommendations for Australian business which the Government has indicated it will adopt, the second term initiatives still under consideration, the recommendations rejected out of hand and the recommendations which have not been specifically addressed at this stage but which business might want to encourage the Government to revisit.
The Henry Tax Review (144 kb)
18 Jun 2009 | Tax Briefs
Bamford: Taxation of Trusts Clarified
In its recent decision in Bamford v Commissioner of Taxation  FCAFC 66, the Full Federal Court has settled (at least at the level of the Federal Court) two issues in relation to the taxation of trusts that have been the source of debate between taxpayers and the ATO, especially in recent times when the ATO has been developing views partly at odds with the general professional understanding.
Bamford: Taxation of Trusts Clarified (48 kb)
05 Feb 2009 | Tax Briefs
Investment Allowance Mk II
The Treasurer has announced an investment allowance in the form of an additional allowable deduction of a percentage of the amount spent on a tangible depreciating asset. This Tax Brief considers the features of the incentive.
Investment Allowance Mk II (30 kb)
12 Oct 2010 | Tax Briefs
This Tax Brief outlines the measures announced by the Government before and after the 2010 election.
Election 2010 (118 kb)
08 May 2012 | Tax Briefs
Australia's Budget 2012-13
The central theme of the 2012-13 Budget is the cancellation, limitation or deferral of a range of measures that were beneficial to taxpayers, as part of the political strategy of returning the Budget to surplus. Some of these changes reflect significant reversals of previous policies and could have significant impacts on the local superannuation industry and on levels of foreign investment into Australian managed funds in particular. These changes are outlined in our Tax Brief.
Australia's Budget 2012-13 (129 kb)
13 May 2008 | Tax Briefs
This Tax Brief outlines the 2008-09 Federal Budget measures. These include: new tax rates and income thresholds, scrip for scrip relief, debt/equity measures, final withholding tax regime for managed investment trusts, superannuation changes.
2008-09 Budget (207 kb)
08 May 2007 | Tax Briefs
The Government has handed down its 2007/08 Budget. The headline announcement is cuts to personal tax. This Tax Brief provides an overview of that change and the other tax announcements.
Budget 2007-08 (280 kb)
19 Feb 2010 | Tax Briefs
New Tax Agents' Regime: Time to Act is Now!
The legislation to replace the current regulation of tax agents has passed along with separate transitional legislation in 2009. The regime gets underway on 1 March 2010. This Tax Brief explores the uncertain in its application and the potential for many corporate group service companies, funds management entities, financial advisers and others to have to register as tax agents.
New Tax Agents' Regime: Time to Act is Now! (43 kb)
05 Apr 2004 | Tax Briefs
A Bet Each Way
This Tax Brief considers an AAT decision which held that a choice to claim a Division 123 small business replacement asset roll-over can only be made once the replacement asset has been acquired.
A Bet Each Way (250 kb)
09 May 2006 | Tax Briefs
This Tax Brief discusses the headline items in the 2006 Budget.
Budget 2006 (282 kb)
04 May 2004 | Tax Briefs
Blackhole in the Bitumen
This Tax Brief analyses the February 2004 Federal Court decision in Transurban City Link Limited v FCT. It was held that annual concession fees payable by Transurban to the State of Victoria for a concession to establish and operate the Melbourne City Link were not allowable deductions.
Blackhole in the Bitumen (194 kb)
06 Oct 2004 | Tax Briefs
Trust Losses Remain Idle
The Federal Court held in Idlecroft that a trust stripping scheme was caught by the reimbursement agreement provision s.100A of the ITAA36. This Tax Brief analyses the Court’s reasoning.
Trust Losses Remain Idle (189 kb)
10 May 2005 | Tax Briefs
Mind your Ps and Qs with Trusts
This Tax Brief considers the Federal Court decision in Pearson v Commissioner of Taxation. Thee judgement considers the operation of Division 6 in circumstances where the net income of a trust is increased subsequent to the conclusion of an income year.
Mind your Ps and Qs with Trusts (184 kb)
03 Mar 2005 | Tax Briefs
Stamp Duty Tail Wags CGT Dog?
This Tax Brief considers the High Court decision in Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd involving NSW stamp duty and whether it has any implications for the interpretation of the capital gains tax provisions.
Stamp Duty Tail Wags CGT Dog? (181 kb)
04 Aug 2003 | Tax Briefs
Is Playing Sport A Business?
This Tax Brief considers the Full Federal Court's decision in Stone in which a former Olympic athlete's appealed against a Federal Court decision that prize money she won and grants she received were assessable income.
Is Playing Sport A Business? (160 kb)
14 May 2003 | Tax Briefs
The Textured Issue of Beneficial Ownership
This Tax Brief considers the Full Federal Court's decision in Commissioner of Taxation v Linter Textiles Australia Ltd. Though the case provides a useful discussion of the term 'beneficial ownership', it stops short of eliminating any lingering ambiguity in the ownership of assets held by a company subject to a winding up order.
The Textured Issue of Beneficial Ownership (186 kb)
09 Apr 2013 | Tax Briefs | Financial Services | Employment & Superannuation
Changes to Superannuation
The Treasurer has put an end to the frenzied pre-Budget speculation by announcing the government’s plans for changing superannuation. This Tax Brief examines the seven measures announced by the Treasurer and the likely effects of the proposals.
Changes to Superannuation (187 kb)
26 Apr 2013 | Tax Briefs | Corporate and Mergers & Acquisitions | Projects & Infrastructure
Tax Losses from Infrastructure Projects
This Tax Brief discusses draft legislation explanatory memorandum and rules that will be implemented as a legislative instrument recently released concerning the special treatment of tax losses of infrastructure projects.
Tax Losses from Infrastructure Projects (119 kb)
24 Mar 2014 | Tax Briefs | International
OECD Recommendations on Cross Border Hybrids
Another piece of the ‘base erosion’ puzzle has appeared with the release of the
OECD’s recommendations for addressing cross-border hybrids. This Tax Brief
analyses the 2 OECD Public Discussion Drafts on ‘neutralising the effects of hybrid
mismatch arrangements’ and their implications, both for Australia’s future treaty
practice and for some common cross-border structures and instruments. I
OECD Recommendations on Cross Border Hybrids (316 kb)
18 Oct 2013 | Tax Briefs | International
This Tax Brief examines a Memorandum by the OECD in October on transfer pricing documentation and the development of a common template for country-by-country reporting and its implications.
Country-by-Country Reporting (111 kb)
20 Feb 2013 | Tax Briefs | International
Transfer Pricing Bill
This Tax Brief describes the transfer pricing provision of the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill mainly focusing on changes from the Exposure Draft (ED) and the related international events.
Transfer Pricing Bill (113 kb)
26 Jul 2013 | Tax Briefs | International
BEPS Action Plan and More
This Tax Brief considers the outcome of the G20 Finance Ministers and Central Bank Governors meeting last week as it concerns the OECD Action Plan on Base Erosion and Profit Shifting (BEPS)
BEPS Action Plan and More (287 kb)
22 Nov 2011 | Tax Briefs | Projects & Infrastructure
Losses from Infrastructure Projects
The Government has released a Discussion Paper outlining the design of new rules to govern the treatment of losses arising from infrastructure projects considered to be of national significance. This Tax Brief examines the current plans for how these rules will operate.
Losses from Infrastructure Projects (131 kb)
19 Dec 2011 | Tax Briefs | International
Transfer Pricing Consultation Paper
This Tax Brief discusses what the proposed retrospective amendments to the law to support the Australian Taxation Office view that tax treaties provide a separate power to make transfer adjustments may mean and comments on the recent Transfer Pricing Consultation Paper.
Transfer Pricing Consultation Paper (134 kb)
21 Oct 2014 | Tax Briefs | Corporate and Mergers & Acquisitions | Employment & Superannuation
Employee share and options changes
The Government confirmed in its 14 October 2014 Industry Innovation and Competitiveness Agenda announcement that it will roll-back at least part of the 2009 changes to the taxation of employee share and option plans, with start-up companies to be the major beneficiaries.
Employee share and options changes (40 kb)
05 Jul 2010 | Tax Briefs | Real Estate
New Definition of Managed Investment Trust
The definition of a “managed investment trust” was significantly amended in 2010. The definition is relevant for the application of the MIT withholding and elective CGT regimes. This Tax Brief examines the new definition and how it has changed the range of trusts that are eligible to access the MIT withholding tax and CGT election concessions.
New Definition of Managed Investment Trust (79 kb)
30 Apr 2010 | Tax Briefs | Financial Services
TOFA - Refinements to the Puzzle
On 20 April 2010, the Assistant Treasurer released a number of proposed refinements to the TOFA puzzle, contained in an exposure draft and accompanying draft explanatory memorandum. This Tax Brief considers whether all the pieces of the TOFA puzzle fit together.
TOFA - Refinements to the Puzzle (45 kb)
23 Mar 2010 | Tax Briefs | GST
Indirect Tax Sharing Agreements
From 1 July 2010, indirect tax sharing agreements (ITSAs) will become part of the GST landscape. Under the proposed measures, GST group members and participants in an approved GST joint venture can limit their indirect tax liability by entering into an ITSA with the representative member / joint venture operator similar to the effect that tax sharing agreements (TSAs) have for consolidated groups under Division 721 of the Income Tax Assessment Act 1997.
Indirect Tax Sharing Agreements (38 kb)
19 Mar 2010 | Tax Briefs | Corporate and Mergers & Acquisitions
This Tax Brief outlines the main changes to the consolidation provisions introduced by the Tax Laws Amendment (2010 Measures No.1) Bill 2010 – the changes primarily affect the tax cost setting process when a group is formed, or entities join or leave a group.
Consolidating Consolidation (50 kb)
05 Mar 2010 | Tax Briefs | Real Estate
CGT Treatment for MITs - New Draft Legislation
The Tax Laws Amendment (2010 Measures No 1) Bill 2010 contains the proposed final form of the measures that permit eligible managed investment trusts to elect to apply the capital gains tax regime as the primary measure for taxing gains and losses on assets. This Tax Brief examines the changes from the Exposure Draft of these provisions.
CGT Treatment for MITs - New Draft Legislation (70 kb)
15 Jan 2010 | Tax Briefs | International
Treasury issued a consultation paper directed at the high-level design of the new controlled foreign company (CFC) rules. This Tax Brief sets out the design principles that will make up the new CFC rules and replacement for the current s23AJ.
CFC Review (490 kb)
23 Dec 2009 | Tax Briefs | Private Equity
ATO Christmas Present for Private Equity
On 16 December 2009 the ATO released two draft tax rulings on the main issues arising in its notorious recent court action involving the private equity group, TPG. The rulings effectively leave the revenue capital treatment and treaty shopping issues to case by case treatment, though making clear the ATO view of the TPG situation.
ATO Christmas Present for Private Equity (135 kb)
23 Dec 2009 | Tax Briefs | International
Transfer Pricing and Thin Capitalisation
The ATO has replaced its 2007 draft determination on the relationship of the thin capitalisation and transfer pricing rules with a draft ruling, and the release of a draft practice statment and two opinions it has obtained from counsel on the technical issues. This Tax Brief contemplates the ATO's current position.
Transfer Pricing and Thin Capitalisation (172 kb)
08 Dec 2009 | Tax Briefs | International
Sovereign Wealth Funds
The tax treatment of sovereign wealth funds (SWFs) in domestic and international tax law has recently been occupying the minds of tax officials in Australia and overseas. This Tax Brief examines recent proposals discussing the tax treatment of SWFs, proposals that will affect both the Australian tax position of SWFs themselves, and the Australian tax position of the entities into which they invest.
Sovereign Wealth Funds (53 kb)
06 Nov 2009 | Tax Briefs | Corporate and Mergers & Acquisitions
Accessing Corporate Losses
Treasury has released an Exposure Draft of legislation to facilitate access to corporate losses for companies with multiple classes of shares on issue. This Tax Brief examines the strengths and weaknesses of the proposed regime and identifies some issues with the way it is designed to work.
Accessing Corporate Losses (36 kb)
04 Sep 2009 | Tax Briefs | Financial Services
TOFA for Managed Funds
This Tax Brief considers the issues that the TOFA regime will present for managed funds such as domestic and international cash and bond funds, share funds and property trusts.
TOFA for Managed Funds (57 kb)
27 Aug 2009 | Tax Briefs | Employment & Superannuation
Proposed Loss Transfer Regime for Superannuation Funds
In December 2008, the Government announced a temporary tax measure to assist in the consolidation of superannuation funds, the goal being to allow the industry to merge into fewer, more efficient, larger and presumably more stable funds, by removing some of the tax impediments to consolidation. The announcement proposed an optional loss transfer system for any net capital losses that resulted from the CGT events that would be triggered by the merger of funds. This Tax Brief examines the refinements to that proposal culminating with the release by Treasury of Exposure Draft legislation.
Proposed Loss Transfer Regime for Superannuation Funds (34 kb)
04 Aug 2009 | Tax Briefs | International
Reforming the Taxation of Offshore Income
A number of reports, papers and recommendations for changing the anti-tax deferral regime, and the taxation of non-portfolio dividends from foreign companies, were released by Treasury and the Board of Taxation in the period 2007 to 2009. This Tax Brief sets out the key recommendations from those documents, and summarises the position on the reform of Australia’s international taxation laws.
Reforming the Taxation of Offshore Income (72 kb)
05 Jun 2009 | Tax Briefs | Financial Services
Deductibility of Interest on Subordinated Debt
In an earlier Tax Brief [available at http://www.gf.com.au/477_634.htm ] we reported on a case denying St George Bank a deduction for interest paid on a subordinated loan issue. The Full Federal Court recently heard the taxpayer’s appeal in this case and unanimously confirmed that the interest expense was not deductible. In this Tax Brief we review the Court’s reasoning and the ongoing significance of this case.
Deductibility of Interest on Subordinated Debt (35 kb)
29 May 2009 | Tax Briefs | Employment & Superannuation
Shares & Option Plans Still on Hold
Changes to the rules governing the treatment of new grants of shares and options to Australian employees have been stalled by proposed tax changes announced within the Budget. This Tax Brief contemplates the issues and opportunities this presents.
Shares & Option Plans Still on Hold (35 kb)
19 May 2009 | Tax Briefs | Corporate and Mergers & Acquisitions
The Impact of TOFA on M&A Activity
This tax brief explores the impact of TOFA on a number of corporate transactions, including mergers, acquisitions, disposals, restructures, demergers and capital management (capital raisings, buy-backs, etc).
The Impact of TOFA on M&A Activity (70 kb)
15 May 2009 | Tax Briefs | Financial Services
In-house Finance Companies
The ATO has long been concerned about the tax issues arising from in-house finance companies operating within large listed groups. This Tax Brief considers the substantive issue of whether an in-house finance company is entitled to a deduction for the loss crystallised on writing off as a bad debt the principal and accrued but unpaid interests on loans made to other entities in the same group is addressed in light of the Federal Court’s decision in the BHP Billiton case.
In-house Finance Companies (42 kb)
09 Apr 2009 | Tax Briefs | Financial Services
Debt for Equity Swaps
It may be possible to find a silver lining in the cloud of economic woes being experienced by many struggling businesses unable to meet their interest and principal obligations. One option that may be open to a debtor is to recapitalise the business by entering into a debt for equity swap arrangement. This Tax Brief considers some of the tax outcomes for creditors and debtors arising from a debt for equity swap.
Debt for Equity Swaps (44 kb)
26 Mar 2009 | Tax Briefs | Energy & Resources | GST
Tax Issues Arising from the CPRS
The Government released exposure draft legislation for its proposed Carbon Pollution Reduction Scheme (CPRS). This Tax Brief sets out the main tax issues that businesses will need to grasp arising from a CPRS.
Tax Issues Arising from the CPRS (46 kb)
09 Feb 2009 | Tax Briefs | Financial Services
TOFA: What you Need to Consider Now
A Bill containing the final stages of the taxation of financial arrangements (TOFA) reform project, was introduced into the House of Representatives on 4 December 2008. This Tax Brief provides an overview of the elections available within the regime.
TOFA: What you Need to Consider Now (53 kb)
29 Jan 2009 | Tax Briefs | Financial Services | Real Estate
TOFA for the Property Sector
After much delay, the regime for taxing financial arrangements (‘TOFA’) now seems likely to be passed early this year. TOFA can affect both the investments made in the property sector and the financing of those investments, but just how – and how much – activity in the property sector will be affected is neither obvious nor straightforward. This Tax Brief examines some of the issues that the TOFA regime will present for the property industry.
TOFA for the Property Sector (60 kb)
21 Oct 2008 | Tax Briefs | International
Capital Gains and Tax Treaties
This Tax Brief considers the implications of the Federal Court's decision in Virgin Holdings SA concerning the liability for tax of a non-resident shareholder on the profit made from the sale of shares in its Australian subsidiary.
Capital Gains and Tax Treaties (45 kb)
14 Aug 2008 | Tax Briefs | Financial Services
TOFA's Long March Continues
The TOFA journey took an important step with the announcement of optional and compulsory start dates, together with proposed TOFA/consolidation interactions. This Tax Brief examines these two recent developments.
TOFA's Long March Continues (43 kb)
12 Jul 2007 | Tax Briefs | International
Further International Tax Reforms
The Government announced in May 2005 that it would remove the rules which limit the utilisation of foreign losses and which require the allocation of foreign tax credits against separate classes of income. This Tax Brief considers the Bill introduced to give effect to the announcement.
Further International Tax Reforms (118 kb)
26 Jun 2007 | Tax Briefs | Corporate and Mergers & Acquisitions
This Tax Brief considers the 26 June 2007 announcement by the Assistant Treasurer that the Government will amend the tax legislation to ensure that the value of rights issues is not subject to tax at the time of issue. This reverses the outcome of the High Court decision in McNeil's case.
Rights Issues (208 kb)
07 Jun 2007 | Tax Briefs | Financial Services
Further TOFA Developments
This Tax Brief outlines the effects of two Treasury releases outlining further elements of the TOFA jigsaw puzzle covering details of interactions and proposed measures to address synthetic financial arrangements.
Further TOFA Developments (122 kb)
29 May 2007 | Tax Briefs | International
New International Tax Measures
A number of important international tax changes were made by the Tax Laws Amendment (2007 Measures No.3) Bill 2007 in the areas of s.128F, MIT withholding, conduit foreign income and thin capitalisation.
New International Tax Measures (264 kb)
24 Jan 2007 | Tax Briefs | Financial Services
The Revised TOFA Regime
The Assistant Treasurer has released a second Exposure Draft of legislation for the taxation of financial arrangements. The new version fills in some of the gaps evident in the last version and changes some of the policy and legislative detail.
The Revised TOFA Regime (410 kb)
09 Jun 2006 | Tax Briefs | Corporate and Mergers & Acquisitions
Share Capital Tainting Rules
After the share capital tainting rules were rendered inactive in 2002, the Government moved to reinstate these rules from 26 May 2006. This Tax Brief considers what constitutes share capital tainting and its tax consequences.
Share Capital Tainting Rules (135 kb)
13 Oct 2005 | Tax Briefs | GST
GST & Property Update
This tax brief provides an update on cases, legislative change and new or revised rulings in the GST and property context between March and October 2005
GST & Property Update (207 kb)
07 Sep 2005 | Tax Briefs | Corporate and Mergers & Acquisitions
Selling a buy-back
This tax brief provides comments on the decision of the Full Federal Court in Commissioner of Taxation v McNeil  FCAFC 147
Selling a buy-back (248 kb)
01 Jun 2005 | Tax Briefs | Corporate and Mergers & Acquisitions
Losses Due to Lack of Control
This Tax Brief considers the 26 April 2005 decision of the High Court in Linter Textiles Australia. The case establishes that where a corporate group is liquidated the persons who hold shares in the parent company will not be treated as satisfying continuity of ownership in
relation to the subsidiaries.
Losses Due to Lack of Control (222 kb)
10 May 2005 | Tax Briefs | Financial Services | International
Further Changes to Foreign Exchange Rules
This Tax Brief looks at recently release regulations designed to facilitate translating foreign currency into either Australian dollars or into a taxpayer’s functional currency by permitting taxpayers to adopt exchange rates and computational methods which are not strictly in accordance with the dictates of the legislation.
Further Changes to Foreign Exchange Rules (122 kb)
23 Mar 2005 | Tax Briefs | International
New International Tax Arrangements No 3 - Now Law
This Tax Brief outlines the amendments to the law to provide capital gains tax exemptions for foreign resident investors in certain Australian resident managed funds, to provide an exclusion from CGT cost base reductions for certain payments received by foreign resident investors from Australian resident managed funds and to extend the section 128F withholding tax exemption from debenture interests to debt interests.
New International Tax Arrangements No 3 - Now Law (218 kb)
29 Jan 2005 | Tax Briefs | GST
Recovering Input Tax Under the GST Act
This Tax Brief discusses the Recoveries Trust v Commissioner of Taxation decision which examines one of the key concepts in the GST legislation, namely that of whether an acquisition is made for a “creditable purpose”
pursuant to section 11-15 such that an input tax credit can be claimed.
Recovering Input Tax Under the GST Act (135 kb)
06 Jan 2005 | Tax Briefs | Private Wealth
The Review of Self-Assessment - Overview
Treasury’s report to the Government on aspects of the self assessment system, and the Government’s response to the Report, accepting all of the recommendations was released in January 2005. This Tax Brief is the first of three focussing on the recommendations of the Report.
The Review of Self-Assessment - Overview (163 kb)
06 Jan 2005 | Tax Briefs | GST
No room at the Inn
This Tax Brief considers the decision of the Full Federal Court in Marana Holdings Pty Ltd v Commissioner of Taxation. The decision provides guidance on the definition of ‘residential premises’ and ‘commercial residential premises’ for the purposes of the GST Act.
No room at the Inn (202 kb)
02 Aug 2004 | Tax Briefs | GST
GST Transition Surprise for Packer
This Tax Brief considers the Federal Court decision in ACP Publishing Pty Ltd v Commissioner of Taxation which held that sale of a 50% interest in a business pursuant to a “Savoy Clause” in an agreement executed in 1980 was GST-free even though it allowed the parties to determine the price for a supply after 1 July 2000.
GST Transition Surprise for Packer (250 kb)
02 Aug 2004 | Tax Briefs | Financial Services
Quiet Texan Drawl Puzzles Commissioner
This Tax Brief considers the cases of Rataplan Pty Ltd v FCT and its companion case, Westrac Equipment Pty Ltd v FCT which illustrate the inability of the tax law in force in 1991 to deal appropriately with related-party dealings producing what might be seen as mischievous tax results.
Quiet Texan Drawl Puzzles Commissioner (241 kb)
22 Apr 2004 | Tax Briefs | Corporate and Mergers & Acquisitions
Equivocal Changes Proposed for Corporate Loss Rules
This Tax Brief analyses the April 2004 Treasury discussion paper on Loss Recoupment Rules for Companies. The impetus for the paper was the apparent belief in Treasury that companies excessively rely on the same business test to recoup prior year losses because of growing concern and cost associated with demonstrating the continuity of ownership test has been met.
Equivocal Changes Proposed for Corporate Loss Rules (251 kb)
03 Mar 2005 | Tax Briefs | Employment & Superannuation
Pride Comes Before a Fall
This Tax Brief considers the decision of the Full Federal Court in Pridecraft Pty Ltd v Commissioner of Taxation  FCAFC 339, upholding the decision of Merkel J and confirming the Commissioner’s stance against what he viewed as a harmful tax scheme cloaked as an employee rewards system.
Pride Comes Before a Fall (602 kb)
04 May 2004 | Tax Briefs | Private Wealth
Packer Wins Battle, Commissioner Wins War
This Tax Brief analyses the Full Federal Court’s decision in Asiamet (No.1) Resources Pty Limited v FCT. The Court upheld the decision at first instance on the Commissioner’s discretion to grant extensions of time for loss transfers under s.80G(6A)(b) of the Income Tax Assessment Act 1936.
Packer Wins Battle, Commissioner Wins War (255 kb)
02 Mar 2004 | Tax Briefs | Employment & Superannuation
New Superannuation Measures
This tax brief provides a summary of the Government’s discussion paper on superannuation and retirement income proposals, “Australia’s Demographic Challenges”, released on 25 February 2004.
New Superannuation Measures (163 kb)
13 Jan 2004 | Tax Briefs | Employment & Superannuation
The Search for the Holy Grail
This Tax Brief considers the case of Walstern v Commissioner for Taxation wherein the taxpayer had attempted to find the holy grail of unlimited deductions for contributions made to a superannuation fund without tax or FBT.
The Search for the Holy Grail (273 kb)
13 Jan 2004 | Tax Briefs | Corporate and Mergers & Acquisitions
Dividend Trap Catches Taxpayer
This Tax Brief considers the 8 December 2003 decision of the Full Federal Court rejecting the taxpayer's appeal against the judgment of Lindgren J. in Spassked Pty Limited and others v Commissioner of Taxation.
Dividend Trap Catches Taxpayer (47 kb)
02 Dec 2003 | Tax Briefs | Financial Services | International
Forex Measures Enacted
This Tax Brief outlines the proposed introduction (as part of the TOFA project) of foreign exchange gain and loss measures which are intended to provide a single systematic regime for dealing with the conceptual issues that foreign exchange transactions raise.
Forex Measures Enacted (267 kb)
10 Nov 2003 | Tax Briefs | Private Wealth
FCT v Zoffanies Pty Ltd
This Tax Brief considers the Federal Court decision in FCT v Zoffaines in which the a decision of the AAT that the provisions of Part IVA did not apply to the circumstances of
the case which involved an R&D syndicate was set aside and remitted to the AAT for re-hearing.
FCT v Zoffanies Pty Ltd (206 kb)
10 Nov 2003 | Tax Briefs | Employment & Superannuation
Casuals' Overtime Far From Ordinary
This Tax Brief considers the High Court decision in Australian Communication Exchange Ltd v
DCT in relation to the meaning of ‘ordinary time earnings’ in the context of causal employees covered by a Queensland award for the purposes of the superannuation guarantee charge.
Casuals' Overtime Far From Ordinary (177 kb)
03 Oct 2003 | Tax Briefs | Employment & Superannuation
FCT v MacArthur
This case emphasises the importance of careful consideration in setting up companies to act as contractors where the principal business of the company is to supply the services of the major shareholder. The Commissioner argued that if the taxpayer had not contracted in the name of his company, it would be reasonable to assume he would have contracted in his own name. The appeal was allowed.
FCT v MacArthur (230 kb)
09 Sep 2003 | Tax Briefs | Private Wealth
This Tax Brief considers the decision of the Full Federal Court in Harts Case which upheld the decision decision to deny deductions for outgoings incurred in connection with the conduct of air-show activities by the taxpayer and ruled that the taxpayer was reckless in claiming those losses as deductions.
Harts Case (289 kb)