Interim Decision Impact Statement on Bendel case
The ATO has issued an interim Decision Impact Statement (DIS) regarding the AAT‘s decision in Bendel v FCT  AATA 3074. In that case, the AAT held that unpaid present entitlements to income or capital of a trust estate owed to a corporate beneficiary did not constitute loans to the trust within the meaning of section 109D(1) of the ITAA 1936. The Commissioner has since appealed against this decision.
The interim DIS notes that, until the appeal process is finalised, the Commissioner:
- does not intend to revise his current views relating to the Division 7A implications of private company entitlements UPEs, as set out in TD 2022/11. Pending the finalisation of the appeal process for the Bendel decision, the ATO will continue to administer the law in accordance with TD 2022/11; and
- does not propose to finalise objection decisions (where a settlement is not reached) where the decision turns on whether or not a UPE was a loan for the purposes of section 109D. However, if taxpayers compel the Commissioner to make a decision, any such decisions will be made in line with TD 2022/11.
The ATO is also reviewing the impact of the decision on related guidance, determinations and rulings, including TR 2022/4, TR 2015/4, TD 2015/20, PCG 2022/2 and PCG 2017/13.
New non-binding web guidance on crypto assets
The ATO has released new non-binding guidance on its website regarding the Commissioner’s view of the taxation implications of certain crypto asset activities. The newly updated guidance covers a number of topics, including exchanges or swaps of crypto assets, crypto asset transactions with gift cards or debit cards, staking rewards and airdrops, decentralised finance and wrapping crypto assets, and crypto asset prizes and gambling winnings.
PCG 2021/2 updated
The ATO has updated PCG 2021/2, which provides a practical compliance approach for determining the market value of a hybrid security for CGT purposes when it is bought back or redeemed from an investor holding it on capital account. The update provides clarification in relation to how the ATO considers the modified volume weighted average price for a hybrid security should be calculated.
TD 2023/6 finalised
The ATO has finalised TD 2023/6, which sets out the Commissioner’s view regarding when an expense will be taken to have been incurred for the purposes of the ‘early stage test’ associated with the early stage innovation company (ESIC) regime.
TD 2023/7 finalised
TD 2023/7 sets out amounts the Commissioner will accept as estimates of the value of goods taken from trading stock for private use by taxpayers in named industries for the 2023-24 income year.
ATO ID 2003/953 withdrawn
The ATO has withdrawn its ATO ID 2003/953, which deals with the GST implications of supplies of multi-purpose compression socks. The interpretative decision has been withdrawn as the ATO considers it requires clarification and may be misleading, as compression socks will only be GST-free if they are specifically designed for people with an illness or disability and are not widely used by people without an illness or disability. This is determined by the facts in each case. The current ATO position on the GST implications of supplies of compression socks is set out in the ATO’s GST and health publication.
New reporting requirements for not-for-profits
The ATO has announced that, from the 2023–24 income year, not-for-profit entities with an active Australian Business Number must file a NFP self-review return to maintain their income tax exemption. This return, due between 1 July and 31 October each income year, requires entities to self-assess their purpose and activities against the criteria for income tax exemption. It can be lodged online or through a registered tax agent. However, government entities, charities registered with the ACNC, and taxable not-for-profits are exempt from this requirement.
SMSF rulings updated
The ATO has updated the following SMSF rulings to reflect amendments enacted by the Treasury Laws Amendment (Self-Managed Superannuation Funds) Act 2021 (Cth), which increase the maximum number of allowable SMSF members from 4 to 6 from 1 July 2021: SMSFR 2009/1, SMSFR 2009/3, SMSFR 2009/4 and SMSFR 2010/1.
Class and product rulings and addendum issued
The ATO has issued:
- CR 2023/60 – Teletrip Devices – car logbook and odometer records;
- CR 2023/61 – Argo Investments Limited – Dividend substitution share plan;
- CR 2023/62 – Argo Global Listed Infrastructure Limited – Dividend substitution share plan;
- CR 2023/63 – Carbon Revolution Limited – Employee share scheme – Exchange of shares for Carbon Revolution plc shares;
- CR 2023/64 – Sunland Group Limited – Return of capital;
- PR 2023/23 – Zurich Life Insurance (Hong Kong) Limited – Matterhorn life insurance policy;
- PR 2023/24 – Allianz Guaranteed Income for Life; and
- PR 2019/5A1 – Addendumto PR 2019/5 – Income tax: Taxation consequences of investing in the Westpac Protected Equity Loan.