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Tax News | Views | Clues
- Tax Office Scans Car and Real Property Purchases
- Compromised TFNs Still a Problem, Says Ombudsman
- Bonus Units from Employee Benefits Trusts: Tax Office Outlines Tax Issues
- Tax Office Highlights Errors in Claiming Deductions for Super
- Unit Trust Arrangement Ineffective to Avoid Tax Bill on Shares
- HELP Debt Deferred as Special Circumstances Existed
- Excess Superannuation Contributions: Superannuation Law Changes on the Way
- GST and Dodgy Property Arrangements: Tax Office Spells Out Views
Tax Office Scans Car and Real Property Purchases
The Tax Office has advised that it will collect records relating to
motor vehicle purchases and real property transfers from relevant
government authorities building on data previously collected as part of
its ongoing data-matching projects. The data will be used as part of the
Tax Office's compliance activities to identify cash economy
participants, that is, those who are deliberately not declaring income
to the Tax Office. The Tax Office will also focus on ensuring taxpayers
involved in property transfers are meeting their GST obligations.
Specifically, the Tax Office said it will request data from motor
vehicle registries where a motor vehicle was sold, transferred or newly
registered between 1 July 2009 and 30 June 2010 and the value of the
vehicle was $10,000 or greater. In relation to real property transfers,
the Tax Office said it will collect identity and transaction details
from state revenue authorities relating to property title transfers
between 1 July 1999 and 30 June 2010.
TIP: The Tax Office uses its data-matching abilities to
identify potential cases for investigation. Not declaring income and not
meeting GST obligations are just a couple of areas of non-compliance
behaviours the Tax Office is focusing on. Other focus areas include
taxpayers not declaring capital gains, and not meeting superannuation
guarantee and fringe benefits tax obligations, when required.
TIP: State revenue authorities can share information with
the Tax Office where it is permitted under the law. For instance, in
relation to property transfers, a state revenue authority may compare
information with the Tax Office to identify non-compliance with stamp
duty obligations.
Compromised TFNs Still a Problem, Says Ombudsman
The Commonwealth Ombudsman, Allan Asher, has released a report which
expressed his concerns about how the Tax Office had handled complaints
about compromised tax file numbers (TFNs). The report examined eight
cases where taxpayers' TFNs had been compromised or incorrectly linked
by the Tax Office to another person's TFN.
Mr Asher made reference to the case of Mrs D. He said her
difficulties began when the Tax Office wrongly determined she had two
TFNs which led to income being incorrectly attributed to her. This was
upsetting for Mrs D and difficult to resolve, Mr Asher said. The Tax
Office said it has already taken action to improve its response to TFN
compromises. However, Mr Asher said, based on further complaints he had
received, the problems ‘are far from solved and the actions taken by the
ATO to date, while a start, do not fully address our concerns’.
TIP: If you believe your TFN has been compromised or incorrectly linked to another person's TFN, please contact our office.
Bonus Units from Employee Benefits Trusts: Tax Office Outlines Tax Issues
The Tax Office has issued a ruling dealing with the tax issues
surrounding the issue of bonus units to employees as part of an employee
benefits trust arrangement. The ruling sets outs the tax consequences
for employers, employees and trustees involved in such arrangements.
Tax Office Highlights Errors in Claiming Deductions for Superannuation
The Tax Office has recently highlighted common errors made by
individuals when claiming tax deductions for their personal
superannuation contributions. These include not lodging the notice to
claim the deduction with their superannuation fund on time and
incorrectly claiming their contributions as business or partnership
expenses. The Tax Office reminded individuals that personal
superannuation contributions are not work-related expenses.
TIP: The Tax Office said the errors came to light after it
had matched superannuation contributions data it received from super
funds with individual and partnership returns. As a result, the Tax
Office said it will take a closer at these claims for the 2009-10 year.
Unit Trust Arrangement Ineffective to Avoid Tax Bill on Shares
In a recent complex case, the Administrative Appeals Tribunal held a
trust arrangement entered into by a taxpayer where he transferred the
equitable interest in his shares in a company to related units trusts
before the sale of the shares did not remove from him either the legal
or beneficial ownership of the shares. As a result, the Tribunal found
the taxpayer was liable for capital gains tax on the sale of the shares.
HELP Debt Deferred as Special Circumstances Existed
A taxpayer has been successful before the Administrative Appeals
Tribunal in seeking a deferment in repaying his accumulated Higher
Education Loan Program (HELP) and financial supplement debts for the
2007 and 2008 years. The Tribunal took into account the taxpayer's
medical and psychological conditions and low family income and held that
special circumstances existed in the case to allow the deferment.
Excess Superannuation Contributions: Superannuation Law Changes on the Way
A Bill is currently before Parliament which proposes to amend the tax
law to allow the Commissioner of Taxation to exercise a discretion to
disregard or allocate to another financial year all or part of a
person's contributions for the purposes of excess contributions tax
before an assessment is issued. Currently, investors have to wait until
after the excess contributions tax assessment has been issued.
TIP: It should be noted, however, that there is no proposed
change to the criteria used by the Commissioner to determine whether
the determination should be made, that is, the Commissioner must still
be satisfied that ‘special circumstances’ exist.
TIP: In a recent case, the Administrative Appeals Tribunal
decided it could only review the Commissioner's refusal to exercise his
discretion to reallocate superannuation contributions if the discretion
could be applied before an excess contributions tax assessment was
issued. While the proposed amendments (if enacted) will not reverse the
Tribunal's decision, they could potentially ensure the refusal to
exercise the discretion would be a reviewable decision in the future.
GST and Dodgy Property Arrangements: Tax Office Spells Out Views
Entities sometimes enter into dodgy arrangements that use their
associates in an attempt to secure input tax credits on the construction
of residential premises for lease and then defer the corresponding GST
liability, in some cases indefinitely. The Tax Office has issued a
ruling which sets out the Commissioner of Taxation's views on how the
general anti-avoidance rules in the GST law would apply to these
arrangements.
Important: This is not advice. Clients should not act solely
on the basis of the material contained in this Bulletin. Items herein
are general comments only and do not constitute or convey advice per se.
Also changes in legislation may occur quickly. We therefore recommend
that our formal advice be sought before acting in any of the areas. The
Bulletin is issued as a helpful guide to clients and for their private
information. Therefore it should be regarded as confidential and not be
made available to any person without our prior approval.
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