Birchstone Brief for the week ended 13 May 2022

ATO Updates

Class rulings

The ATO has issued: CR 2022/42 – Australian Government Band holders – Exchange of bonds for CHESS Depository Interests.

ATO Draft PCG: Non-commercial losses

The ATO has issued Draft Compliance Guideline PCG 2022/D2, which outlines a safe harbour for taxpayers to manage their tax affairs in certain circumstances (bushfires, floods) as if the Commissioner had exercised the discretion in section 35-55(1)(a) of the Income Tax Assessment Act 1997 (Cth) and thereby allowed them to apply their non-commercial losses in the year they were incurred.

Other News

WA Budget: 2022-23

On 12 May 2022, Mark McGowan handed down the WA Budget for 2022-23 (Budget) in his capacity as Treasurer.

The Budget contained the following measures concerning duty, land tax and payroll tax:

Duty

  • From 1 July 2022, the general rate of transfer duty will be reduced to be equivalent to the current concessional rate of duty applied to residential transactions. The concessional rate currently applied to transactions involving residential or business property worth up to $200,000 will also be amended from the same date.
  • Also from 1 July 2022, the transfer duty on prospecting licenses and derivative mining rights will be removed unless they are transferred alongside other dutiable property.
  • From 1 June 2022, eligible purchasers of off-the-plan properties will receive a transfer duty rebate:
    • equal to 100% of the duty payable for a dwelling valued under $500,000;
    • between 50% and 100% of the duty payable for a dwelling valued between $500,000 and $600,000; and
    • equal to 50% of the duty payable for a dwelling valued over $600,000 (subject to the maximum rebate value cap of $50,000).
  • Moreover, from the date the enacting legislation receives royal assent:
    • duty on Family Court Orders will be abolished (meaning that duty will only apply when property is actually transferred pursuant to an order); and
    • an exemption from vehicle licence duty will be introduced for service demonstrator vehicles and faulty vehicles returned to a seller.

Land tax

  • From 1 July 2022, the 2% surcharge currently imposed on land tax assessments paid over 3 instalments will be abolished.
  • From 1 July 2023, a 50% land tax concession for certain new eligible build-to-rent developments will commence.

Payroll tax

  • The quarterly payroll tax lodgment threshold will increase from $100,000 to $150,000 from 1 July 2022. As a consequence, payers with an annual payroll tax liability of up to $150,000 will be able to choose to pay quarterly (rather than monthly). Payers with an annual liability of less than $20,000 will be able to continue to choose to pay annually.
  • The eligibility criteria for accessing payroll tax relief has also expanded for large hospitality businesses under the Level 2 Business Assistance Package. Such businesses with annual payrolls between $4 million and $20 million that have experienced at least a 40% (down from 50%) turnover reduction over any consecutive 4-week period between 1 January and 30 April 2022 when compared to the same period last year are now eligible for a 3-month payroll tax waiver.

Cases

Landcom v FCT [2022] FCA 510 – GST margin scheme

The Federal Court has ruled that the supply of several freehold interests in land (in the form of different lots) were each a separate supply for the purposes of the GST margin scheme, notwithstanding the fact that the interests were supplied under a single contract and that their supply may have constituted a single supply under the basic GST rules.

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