CPA Australia Tax News
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ATO rental bond and novated leases data matching program
The ATO has registered two data matching program notices:
- Gazette notice: Commissioner of Taxation - Notice of a rental bond data-matching program - 23 February 2024 - the ATO will acquire rental bond data from state and territory rental bond regulators bi-annually for 2023-24 to 2025-26.
- Data items include (i) individual client details, (ii) landlord and managing agent identification details and (iii) rental bond transaction details.
- Identification of properties producing income and individuals who fail to meet their lodgment.
- Gazette notice: Commissioner of Taxation - Notice of a novated leases data-matching program 23 February 2024 - the ATO will acquire novated lease data for 2023-24 to 2025-26.
- Date items include (i) lessee/employee identification details, (ii) employer identification details and (iii) lease transaction details.
- Novated leases are not tax-deductible.
Commissioner's farewell speech
The outgoing ATO Commissioner, Chris Jordan AO, has given a final address to the National Press Club. His term ends 29 February 2024, replaced by Mr Rob Heferen. Highlights include the number of small businesses increasing from 2.5 to 4.6 million (from 2013 to 2022).
Options for simplified arm's length principle: Amount B of Pillar One
The OECD has released the report on Amount B of Pillar One, introducing two options for jurisdictions that opt into the simplified and streamlined approach from January 2025. It describes the circumstances under which a distributor is within scope of Amount B including where it performs certain non-distribution activities, for example manufacturing. It also sets out the activities that may exclude a distributor from the scope of the simplified and streamlined approach, for example distribution of commodities/digital goods.
SUPERANNUATION AND FINANCIAL PLANNING
Superannuation rates and thresholds for 2024-25
CONTRIBUTIONS CAPS:The concessional contributions cap increases to $30,000. The non-concessional contributions (NCC) cap will increase to $120,000 (or $360,000 under the 3-year bring-forward rule). The "total superannuation balance" threshold for making NCCs will remain at $1.9m. The CGT cap amount for NCCs is $1.780m..
SUPER GUARANTEE: The "maximum contribution base" is $62,980 per quarter.
CO-CONTRIBUTIONS: The "lower income threshold" is $45,400 and the "higher income threshold" is $60,400.
SUPER BENEFITS: The following indexed thresholds apply:
- Lump sum low-rate cap - $245,000 and untaxed plan cap - $1.78m.
- ETP cap amount - $245,000.
- Genuine redundancy and early retirement payments - tax-free amounts: base amount - $12,524 and service amount - $6,264.
PENSION CAPS: The general transfer balance cap will remain at $1.9m. The "defined benefit income cap" will remain at $118,750.
ATO estimate of illegal early access of super
The ATO has published that $381 million of super has been illegally withdrawn by trustees in 2020 and $256 million in 2021. The ATO also found SMSFs entered into over $200 million in prohibited loans in each of those years.
The ATO will undertake new registrant reviews, and remove SMSFs from superfund lookup where they fail to comply and has a number of investigations underway.
Risk to retirement outcomes from Choice super products
ASIC has released its Report 779 Superannuation and choice products: What focus is there on performance? It states of the 29 Choice options reviewed, 24 options did not meet or exceed the performance benchmark disclosed in the PDS for five or more years.
Professional Development
LEGISLATION
2024-25 exploration cap for junior explorers
The government has registered the Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2024. The Regulations provide that an additional $4.77 million is added to form part of the annual exploration cap for the 2024-25 income year.
RULINGS and GUIDANCE
Deductibility of self-education expenses
Taxation Ruling TR 2024/3, with retrospective effect, considers the deductibility of self-education expenses under s 8-1 of the ITAA 1997. It consolidates and updates the views expressed in TR 92/8 and TR 98/9, both of which were withdrawn. There are no changes to the ATO's approach.
ATO DIS on FCT v Wood: settlement payment
The ATO issued a Decision Impact Statement on FCT v Wood [2023] FCA 574. In that case, an individual provided consultancy services to a company (Alleasing) via his family company. The Federal Court held that a settlement payment made by the individual to Alleasing after his employment had ended was deductible under s 8-1 of the ITAA 1997. The ATO says the decision has "limited application beyond its own factual circumstances".
Corporate limited partnership: "crediting" an amount to a partner
Taxation Ruling TR 2024/2, with retrospective effect, sets out the ATO's views on when a corporate limited partnership (CLP) "credits" an amount to a partner within the meaning of s 94M of the ITAA 1936. Section 94M deems the amount credited to be a dividend paid to the partner out of profits derived by the CLP.
Class ruling updates
Four Class Rulings and a Product Ruling were released:
- CR 2024/9 (InvoCare Limited - employee share scheme - shares disposed of under a scheme of arrangement).
- CR 2024/10 (InvoCare Limited - scheme of arrangement and special dividend)..
- CR 2024/11 (Incitec Pivot Limited - reduction of share capital).
- CR 2024/12 (A2B Australia Limited - special dividend).
- PR 2024/1 (FTC Automator platform - use by clients to calculate fuel tax credits).
The ATO also issued an Addendum to TR 2005/13 on deductible gifts.
CASES
Taxpayer fails to show default assessments excessive
During an audit of the taxpayer’s company, the taxpayer had been withdrawing funds from the company's bank accounts to pay for his personal expenses. As a result, the ATO issued default assessments and imposed administrative penalties to which the AAT agreed. (The Counsellor and FCT [2024] AATA 220, AAT, Lazanas SM, 13 February 2024.)
Div 615 rollover relief for scheme restructuring stapled group
The Federal Court held that Div 615 of the ITAA 1997 (that provides rollover relief for transactions under a scheme to restructure a company's or unit trust's business) applied to a scheme restructuring a stapled group and found in favour of the ATO. (AusNet Services Limited v FCT [2024] FCA 90, Federal Court, Hespe J, 16 February 2024.)
PRRT - win for Esso
The Federal Court has agreed with Esso Australia Resources that monthly "reservation fees" it received under a gas processing agreement were neither assessable tolling receipts nor assessable property receipts for PRRT purposes. (Esso Australia Resources Pty Ltd v FCT [2024] FCA 87, Federal Court, Hespe J, 16 February 2024.)