Transitional compliance approach for corporate tax residency extended
The ATO has amended PCG 2018/9 to further extend the transitional compliance approach period for eligible foreign incorporated companies to change their governance arrangements so that their central management and control is exercised outside Australia until 30 June 2023. The Commissioner has emphasised that the transitional period will not be extended any further beyond this date.
ATO expresses concerns about SMSF schemes involving asset protection
The ATO has expressed its concerns about SMSFs entering into certain schemes involving asset protection. The relevant schemes are those that claim to protect SMSF assets from creditors by mortgaging them to an ‘asset protection trust’ commonly referred to as a ‘Vestey Trust’. A Vestey Trust is a discretionary trust set up to acquire the equity in an SMSF’s assets through an equitable mortgage, which is supported by the execution of a promissory note from the SMSF in favour of the Vestey Trust and a caveat over the SMSF’s real property in the name of the Vestey Trust. Some schemes also allow for a transfer of an SMSF’s cash holdings to the Vestey Trust’s bank account.
The ATO is concerned about such schemes for the following reasons:
- firstly, these kinds of arrangements are unnecessary because the superannuation system already protects SMSF assets from creditors; and
- secondly, a scheme such as that described above is a compliance risk that may contravene one or more superannuation laws.
The ATO encourages trustees involved in such schemes to make a voluntary disclosure. This will be taken into account by the ATO when determining its compliance action.
Lodgment dates for large and medium taxpayers
Taxpayers and their advisors are reminded that the due date for lodgment of 2022 income tax returns for all large and medium entities that were taxable in the 2021 income year is 31 January 2023, unless required earlier.