Birchstone Brief for the week ended 18 February 2022

ATO Updates

Rulings

The ATO has issued the following class rulings:

  • CR 2022/11 – Huon Aquaculture Group Limited – Scheme of arrangement and special dividend; and
  • CR 2022/12 – Victorian Department of Treasury and Finance – Early retirement scheme 2021-2022.

State Taxes

Payroll tax (Qld): Grouping

The Queensland Revenue Office has issued Public Ruling PTA031.3 which explains the Commissioner of State Revenue’s discretion to exclude an employer from a group for payroll tax purposes.

Land tax (Vic): Charity exemption

The State Revenue Office Victoria has issued draft revenue ruling LTA-009 which provides guidance on the land tax exemption for charitable institutions under section 74 of the Land Tax Act 2005 (Vic).

Cases

Elanor Operations Pty Ltd v Chief Commissioner of State Revenue [2022] NSWSC 104 – Payroll tax

The New South Wales Supreme Court has held that several companies with a common director (for all but one of which he was the sole director) were entitled to de-group from a single payroll tax group as the businesses were carried on independently and were not sufficiently connected in a material sense.

Mobbs v Commissioner of Taxation [2022] AATA 201 – Director’s fees

The AAT has affirmed the Commissioner’s decision and held that director’s fees paid to, and shares issued to, a taxpayer’s company were assessable income of the taxpayer.

The taxpayer had been providing consultancy services through his company, Hastcombe. The taxpayer was also a director of three other companies. Hastcombe invoiced these companies for his director’s services, which then either paid the outstanding amounts to Hastcombe or issued Hastcombe (or the taxpayer ATF his Superannuation Fund) shares in lieu of payment. The Commissioner issued amended notices of assessment on the basis that the payments and shares were assessable income of the taxpayer.

The AAT ultimately affirmed the Commissioner’s objection decision, finding that the director’s fees and share issues were assessable to the taxpayer and not Hastcombe. The AAT ultimately concluded that the taxpayer had not discharged his evidentiary burden of proving that any of the payments or share issues were not his income.

Appeals

The High Court has refused to grant the taxpayers special leave to appeal from the decision of the Full Federal Court in Peter Greensill Family Co Pty Ltd (Trustee) v Commissioner of Taxation [2021] FCAFC 99 (covered in the Birchstone Brief for the week ended 11 June 2021).

Legislation

New Bill introduced: AAT small business taxation decisions

A new Bill has been introduced into Parliament which amends the Taxation Administration Act 1953 (Cth) to enable small business entities to apply for an order staying the implementation of decisions of the Commissioner being reviewed by the AAT.

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