Decision Impact Statement – Domestic Property Developments
The ATO has issued a Decision Impact Statement (DIS) concerning the AAT’s decision in Domestic Property Developments Pty Ltd as trustee for Dals Property Trust v FCT  AATA 4436 (covered in the Birchstone Brief for the week ended 20 January 2023). In that case, the AAT held that the taxpayer’s active marketing for sale of residential premises (that it had rented out for five years) in the course of its development enterprise constituted “use” for the purposes of section 40-75(2)(a) of the GST Act, with the effect that those premises constituted new residential premises (the disposal of which was not input taxed).
The DIS provides that the Commissioner considers the AAT’s decision:
- confirms the ATO’s view that marketing a premises for sale constitutes “use” of that premises for the purposes of section 40-75(2)(a); and
- is consistent with the views set out in GSTR 2009/4.
However, as the AAT did not provide reasoning for its position regarding when the 5-year period commences for the purposes of section 40-75, the Commissioner will seek to clarify the issue at the first available opportunity before the AAT or Federal Court.
Draft guidance on deductibility of self-education expenses
TR 2023/D1 sets out the Commissioner’s views regarding when self-education expenses incurred by an individual will be deductible under section 8-1 of the ITAA 1997. It provides numerous examples of expenditure that the Commissioner considers can be deducted as a self-education expense, as well as examples of that which cannot.
The draft ruling replaces TR 98/9 and TR 92/8, both of which were withdrawn with effect from 27 September 2023.
TR 2022/4 updated to reflect recent Full Federal Court decisions
The ATO has issued an addendum to TR 2022/4 (which sets out the Commissioner’s views regarding the application of section 100A of the ITAA 1936) to reflect the decisions in:
The main changes made are to clarify that:
- advisers may be a party to a reimbursement agreement (per Bblood); and
- a beneficiary may need to be a party to a reimbursement agreement (per Guardian).
Draft changes to ruling regarding superannuation income streams
The ATO has issued TR 2023/5DC1, which proposes changes to guidance regarding when a superannuation income stream commences and ceases as set out in TR 2013/5. The proposed changes reflect legislative amendments and are intended to clarify how the general principles expressed in TR 2013/5 apply in the context of successor fund transfers.
The Commissioner’s preliminary view is that a superannuation income stream will cease for income tax purposes when the liability to pay benefits under the income stream is transferred to a successor fund without the member’s consent. A new superannuation interest and superannuation income stream will arise if the successor fund is required to pay superannuation income stream benefits to the member as a result of the successor fund transfer.
TR 2021/D5 finalised
TR 2023/3, originally issued in draft as TR 2021/D5, sets out the Commissioner’s view on the application of, and exclusions to, section 26-102 of the ITAA 1997. Section 26-102 limits deductions for losses or outgoings that relate to holding vacant land. TR 2023/3 has effect from 1 July 2019.
Draft changes to PCG 2018/4
PCG 2018/4DC1 proposes changes to PCG 2018/4, which deals with the ATO’s compliance approach regarding the legal liability of legal personal representatives for any outstanding tax-related liabilities of a deceased person.
The changes proposed:
- increase the market value of estate assets threshold for an estate to be considered less complex from $5 million to $10 million;
- set out additional guidance regarding when a legal personal representative will be taken to have acted reasonably; and
- include additional examples.
If finalised, the draft guideline is proposed to apply both before and after its date of issue.
Class ruling and addendum issued
The ATO has issued:
- CR 2023/52 – Horizon Minerals Limited – Distribution of shares in Richmond Vanadium Technology Limited; and
- PR 2022/7A1 – Addendum to PR 2022/7 – Bell Equity Lever – Instalment receipts.