Birchstone Brief for the week ended 1 September 2023

ATO Updates

Market valuation guidance updated

The ATO has updated its guidance on market valuation for tax purposes. The changes:

• remove specific references to institutes that provide certification and standards for valuers; and 
• insert general statements on the need for valuers to have appropriate certification and registrations or licenses. 

Rulings and addenda issued

The ATO has issued:

• CR 2023/47 – Blackmores Limited – Scheme of arrangement and special dividend; 
• PR 2023/16 – Chess depository interests over interests in the SPDR S&P 500 ETF Trust; 
• PR 2023/13A1 – Addendum to PR 2023/13 – UBS Structured Option and Loan Facility;
• PR 2020/10A1 – Addendum to PR 2020/10 – Income tax: taxation consequences of investing in CDIs over interests in the SPDR S&P 500 ETF Trust – 2020; 
• PR 2020/5A1 – Addendum to PR 2020/5 – Income tax: UBS Structured Option and Loan Facility. 

State Taxes

Duties (Qld): Guidance on ex gratia relief from AFAD for significant developments

The Queensland Revenue Office has updated its ruling on ex gratia relief from additional foreign acquirer duty (AFAD) for significant developments. DA000.15.4 outlines the factors that may be taken into account when determining whether to grant ex gratia relief from AFAD imposed on acquisitions of residential land by foreign entities for development purposes. 

Duties (Qld): Guidance on AFAD concession for build-to-rent developments

The Queensland Revenue Office has released DA000.17.1, which clarifies the Commissioner’s position regarding how to determine whether an AFAD concession may apply to land used, or to be used, for a build-to-rent development (as defined within the meaning of the Land Tax Act 2010 (Qld)). As such a concession can only apply where a developer is eligible to obtain a build-to-rent land tax concession, regard should be had to LTA000.5.1 for the Commissioner’s interpretation of when those criteria will be met. 

Duties (Qld): Guidance on ‘AFAD residential land’ updated 

The Queensland Revenue Office has updated its ruling on the meaning of ‘AFAD residential land’ for the purposes of determining whether an acquisition of land is liable to AFAD. DA232.1.3 clarifies the Commissioner’s interpretation of the meaning of the phrases ‘solely or primarily used for residential purposes’ and ‘designed or approved by a local government for human habitation by a single-family unit’, which are relevant to the definition of AFAD residential land. The ruling also lists some relevant factors which will be taken into account when determining whether the requirements of the phrases are met. 

Duties (Qld): Guidance on interests for purposes of AFAD updated

DA 000.14.4 clarifies how the Queensland Revenue Office will consider interests of foreign persons and related persons for the purposes of determining whether foreign persons have a controlling interest in a corporation or at least 50% of the trust interests in a trust, for the purposes of determining those entities’ liability to AFAD. 

Duties (Vic): Committee recommends abolition and replacement of transfer duty

The Victorian Legislative Council’s Economy and Infrastructure Committee has recommended that the Victorian government consider replacing land transfer duty with a broad-based land tax in its final report on its inquiry into land transfer duty fees. This was originally recommended in the Henry Review, but to date no State or Territory has implemented this recommendation. 

Payroll tax (ACT): Temporary exemption for payments to GPs

The ACT government has announced a number of temporary payroll tax measures for payments made by relevant medical centres to GPs. These include:

• waiving payroll tax liabilities until 30 June 2023 for medical practices that have not previously paid payroll tax on payments made to GPs (thereby ensuring such businesses are not subject to retrospective assessments); 
• providing further time for medical practices which support the community with reasonable levels of bulk billing to review their arrangements, seek advice and implement necessary changes to ensure future compliance through to 2025; and 
• a payroll tax exemption on payments made to GPs until 30 June 2025 where the payments are to GPs who bulk bill at least 65% of all patients, have registered for MyMedicare, and register with the ACT Revenue Office by 29 February 2024. 

Other News

Updated ACNC guidance on meaning of public benevolent institution

The ACNC has updated its Commissioner’s Interpretation Statement (CIS) dealing with the meaning of the phrase ‘Public Benevolent Institution’ (PBI), which explains the ACNC’s view of the meaning of PBI and describes how it applies that definition in considering applications for registration in that charity subtype. The updated CIS takes into account the recent decisions of Equality Australia Ltd v Commissioner of Australian Charities and Not-for-profits Commission [2023] AATA 2161 (covered in the Birchstone Brief for the week ended 28 July 2023) and Global Citizen Ltd v Commissioner of Australian Charities and Not-for-profits Commission [2021] AATA 3313 (discussed in the Birchstone Brief for the week ended 22 October 2021).

Modernising Business Registers program cancelled

Following an independent Treasury review, which found that the expected benefits of the Modernising Business Registers program do not justify its expected costs and that the program would not be able to be delivered in full until 2029, the Assistant Treasurer has announced that the Albanese Government will cancel the program. 

IGTO 2024-27 Corporate Plan

The Inspector-General of Taxation and Taxation Ombudsman (IGTO) has released its 2024-27 Corporate Plan. The strategic priorities of the watchdog over the next 4 years indicate a focus on helping to ensure integrity and fairness in tax and superannuation administration actions, decisions and systems. 

Legislation

Exposure draft legislation: objective of superannuation

Treasury has released exposure draft legislation and explanatory materials to implement the government’s proposal to legislate the objective of superannuation. The proposed objective is ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’. The stated intention of legislating the objective of superannuation is to ensure that future changes to the superannuation system are consistent with its objective by requiring policymakers to:

• assess the compatibility of proposed changes with that objective; and 
• include a statement of compatibility in the explanatory material accompanying all Commonwealth bills and regulations relating to superannuation, unless an exception applies.