Safe harbour for utilisation of non-commercial losses
PCG 2022/1 provides a safe harbour allowing individuals who have incurred non-commercial losses in an income year due to special circumstances such as flooding, bushfires or the impacts of COVID-19 to utilise those losses in that income year as if the Commissioner had exercised his discretion pursuant to section 35-55(1)(a) of the ITAA 1997 if they satisfy certain criteria. The Guideline:
- sets out the criteria that must be satisfied and provides examples;
- is only relevant where an individual taxpayer does not satisfy any of the other conditions in Division 35 (such that they would be otherwise unable to utilise their non-commercial losses);
- applies to the 2019-20, 2020-21, 2021-22 and 2022-23 income years; and
- finalises PCG 2022/D2 (covered in the Birchstone Brief for the week ended 13 May 2022).
Ruling on the games and sports exemption updated
TR 2022/2 provides updated guidance to societies, associations or clubs seeking an income tax exemption under the games and sports exemption contained in item 9.1(c) of the table in section 50-45 of the ITAA 1997. At a high level, the Ruling provides that a club will qualify for the games and sports exemption where it:
- is established for the main purpose of the encouragement of a game or sport;
- is not carried on for the profit or gain of individual members (excluding communal membership benefits); and
- meets other special conditions contained in section 50-70.
The Ruling finalises TR 2021/D6 and replaces TR 97/22 (which was withdrawn with effect from 7 October 2021).
Draft legislative determination for margin scheme valuations released
The ATO has released LI 2022/D14, which specifies the requirements that must be met for a valuation of real property to be an ‘approved valuation’ for the purposes of applying the margin scheme in Division 75 of the GST Act.
Draft compliance guideline on the application of GST to certain supplies by residential colleges
PCG 2022/D3 sets out the Commissioner’s proposed compliance approach for universities and residential colleges supplying accommodation, meals, tertiary residential college courses and religious services to resident students and claiming associated input tax credits. The guideline is intended to assist residential colleges to determine if such supplies satisfy section 38-250 of the GST Act and can therefore be treated as GST-free supplies.
Class rulings and addendum issued
The ATO has issued the following:
- CR 2022/83 – Prospect Resources Ltd — Return of capital and special dividend
- CR 2022/84 – SGH Australia Plus — Scrip for scrip roll-over; and
- CR 2022/14A1 – Addendum to CR 2022/14 – Cardno Limited – Return of capital and special dividend.