Birchstone Brief for the week ended 11 November 2022

ATO Updates

Decision Impact Statement – Decleah Investments Pty Ltd & Anor as trustee for the PRS Unit Trust v FCT [2021] AATA 4821

The ATO has released a Decision Impact Statement (DIS) concerning the AAT’s decision in the Decleah case, which concerned whether a land valuation made on an ‘as-is basis’ using hindsight information was an approved valuation for the purposes of the GST margin scheme. In the DIS, the ATO states it accepts that:

• the relevant enquiry under subsection 75-10(3) of the GST Act is whether there has been an approved valuation, not whether the correct market value has been identified; and 
• different valuers can adopt different approaches and arrive at different conclusions as to the market value of land on 1 July 2000 for the purposes of the margin scheme, without necessarily failing to comply with the professional standards applicable to the relevant valuation exercise. 

Class rulings issued

The ATO has issued the following class rulings:

• CR 2022/99 – Central Equity Ltd – Off-market share buy-back;
• CR 2022/100 – Child Dental Benefits Schedule – Payments assigned to representative public dentists; 
• CR 2022/101 – Blackmores Ltd – Employee and Director Rights Plan; and 
• CR 2022/102 – McMillan Shakespeare Ltd – Off-market share buy-back. 

State Taxes

Transfer Duty (NSW): Guidance on leases and changes in beneficial ownership released

Revenue NSW has released CPN 027, which outlines the circumstances when the grant of a lease will be dutiable and must be read in conjunction with CPN 025. The guidance follows changes to the Duties Act 1997 (NSW) which took effect on 19 May 2022 and provides that duty will be payable on transactions that result in a change in beneficial ownership of dutiable property other than specified excluded transactions. 

Other News

Consultation Paper on beneficial ownership register

Treasury has published a Consultation Paper for public comment regarding the design features for the first phase of a publicly available beneficial ownership register. The register forms part of the government’s multinational tax integrity package. As currently designed, the first phase will require specified unlisted entities managed under the Corporations Act 2001 (Cth) to maintain accurate, up-to-date and publicly accessible beneficial ownership registers. 

Cases

Duff v FCT [2022] AATA 3675 – AAT rules cruise liner chef remained an Australian resident

In this case, the AAT held that an Australian chef who worked on Norwegian cruise liners for much of the 2016 income year remained a resident of Australia for tax purposes as:

• he had not changed his domicile to a place outside Australia during that year; and 
• he did not have a permanent place of abode outside Australia.

Willard v FCT [2022] AATA 3723 – Income of ABF officer seconded to PNG not exempt from tax

The AAT has ruled that the foreign earnings of the taxpayer, who was a sworn member of the Australian Border Force seconded to Papua New Guinea under the Strongim Gavman Program, were not exempt under section 23AG(1AA)(d) of the ITAA 1936 as:

• he was not a member of a ‘disciplined force’; and
• his secondment was not a ‘deployment’ within the meaning of the provision.

Legislation

Crimes Amendment (Penalty Unit) Bill 2022 (Cth) – Bill to increase Commonwealth penalty unit to $275 introduced

A Bill has been introduced into Federal Parliament to increase the penalty unit value from $222 to $275 in respect of offences committed on or after 1 January 2023. 

Property Tax (First Home Buyer Choice) Bill 2022 (NSW)  – NSW First Home Buyer Property Tax Bill now law 

The Bill (first covered in the Birchstone Brief for the week ended 14 October 2022) passed the NSW Legislative Council on 10 November, received royal assent on 11 November, and is now law.