Birchstone Brief for the week ended 27 October 2023

ATO Updates

Product ruling issued

The ATO has issued PR 2023/21 – St James’s Place International Investment Bond and International Investment Account. 

State Taxes

Duties (ACT): ACT Government to introduce stamp duty exemption for dual occupancy homes

The ACT Government has announced that it will introduce a new stamp duty exemption for dual occupancies on suburban residential blocks. The stamp duty exemption will apply to the first transfer of unit-titled dwellings on suburban residential blocks (RZ1) for purchases valued up to $800,000 from 27 November 2023 until 30 June 2026.


Other News

Reforms to defined benefit income streams and fund mergers

The Assistant Treasurer has announced that the government will progress legislative amendments to the transfer balance cap for individuals with a capped defined benefit income stream to ensure they are not adversely impacted in the event of a merger or successor fund transfer between superannuation funds. The amendments are intended to apply retrospectively from 1 July 2017. 


McPartland v FCT [2023] FCA 1260 – Federal Court upholds Tribunal decision despite legal errors

The Federal Court has upheld an AAT decision affirming default assessments issued by the ATO, finding that it had not been shown the material before the AAT was capable of supporting a conclusion as to what the taxpayers’ assessments ought to have been (and therefore that the taxpayers could not have discharged their onus under section 14ZZK of the TAA 1953). This was despite the Court also concluding that the Tribunal erred in law in overlooking or misunderstanding some of the taxpayer’s evidence and arguments. 

Appeals – Michael John Hayes Trading

The Commissioner has appealed to the Federal Court against the AAT’s decision in Michael John Hayes Trading Pty Ltd as trustee for MJH Trading Trust v FCT [2023] AATA 3005. In that case, the Tribunal held a distribution of fully franked dividends following a group restructure was not made as part of a dividend stripping scheme because:

  • although the taxpayers received the dividends free of tax, the original shareholders did not receive a capital sum as a substitute for taxable dividends; and
  • the required tax avoidance purpose was not present. 



A New Tax System (Australian Business Number) Amendment (Display of Trading Names) Regulations 2023 (Cth)

Regulations have been made to extend the transitional period for individuals with trading or business names registered under old State and Territory laws to allow entities with a legacy trading name to register a business name with ASIC for inclusion on the Business Names Register until 1 November 2025. 



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