Notice of Rulings 14 September 2022
The Commissioner of Taxation, Chris Jordan, gives notice by notifiable instrument under subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953 of the following public rulings, copies of which can be obtained from ato.gov.au/law
NOTICE OF RULINGS |
Ruling number | Subject | Brief description |
CR 2022/83 | Prospect Resources Limited – return of capital and special dividend | This Ruling sets out the income tax consequences for shareholders of Prospect Resources Limited who received a return of capital and special dividend on 4 August 2022. This Ruling applies from 1 July 2022 to 30 June 2023. |
CR 2022/84 | SGH Australia Plus – scrip for scrip roll-over | This Ruling sets out the income tax consequences for holders of units in SGH Australia Plus who exchanged those units for units in SGH High Conviction Fund. This Ruling applies from 1 July 2022 to 30 June 2023. |
TR 2022/2 | Income tax: the games and sports exemption | This Ruling considers whether games and sporting clubs are exempt from income tax under section 50-45 of the Income Tax Assessment Act 1997. This Ruling applies both before and after its date of issue. |
NOTICE OF ADDENDUM |
Ruling number | Subject | Brief description |
CR 2022/14 | Cardno Limited – return of capital and special dividend | This Addendum clarifies the assessability of the special dividend for non‑residents. This Addendum applies from 23 February 2022. |
Overview
The Taxation Administration Act 1953, enacted by the Australian Parliament, serves to regulate and administer taxation laws in Australia. In the context of providing clarity and guidance to taxpayers, the Act empowers the Commissioner of Taxation to issue public rulings and other instruments to explain the application of tax laws. The Notice of Rulings F2022N00202 issued on 14 September 2022 under the authority of subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, addresses specific income tax issues affecting certain taxpayers. The rulings and addendums aim to ensure taxpayers understand their obligations and entitlements under the relevant tax provisions, thus facilitating compliance and reducing disputes. The policy objective is to provide clear and timely guidance on the application of tax laws to particular circumstances, enhancing certainty for taxpayers.
Scope and Application
The Notifiable Instrument F2022N00202, issued by the Commissioner of Taxation on 14 September 2022, provides public rulings and an addendum concerning various income tax matters relevant to specific entities and their shareholders or unit holders. The rulings and addendum apply to entities such as Prospect Resources Limited, SGH Australia Plus, and Cardno Limited, as well as their shareholders and unit holders, providing clarity on the income tax consequences of certain transactions such as returns of capital, special dividends, and scrip-for-scrip rollovers. The geographic reach of these rulings is national, as they pertain to entities operating within Australia and their stakeholders. The rulings are effective from 1 July 2022 to 30 June 2023, except for the addendum which applies from 23 February 2022, and the ruling on the games and sports exemption which applies both before and after its issuance. The rulings aim to provide certainty to taxpayers regarding the tax treatment of specified transactions, with the Commissioner's authority stemming from subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953.
Key Provisions
The notifiable instrument F2022N00202 issued by the Commissioner of Taxation, Chris Jordan, outlines several public rulings and an addendum, all of which provide clarity on specific income tax matters. CR 2022/83 (section 1) addresses the tax implications for shareholders of Prospect Resources Limited who received a return of capital and special dividend on 4 August 2022. This ruling is effective from 1 July 2022 to 30 June 2023, providing a timeframe for its application. Similarly, CR 2022/84 (section 2) discusses the tax consequences for unit holders in SGH Australia Plus who exchanged their units for units in SGH High Conviction Fund, with the same effective period of 1 July 2022 to 30 June 2023. TR 2022/2 (section 3) examines whether games and sporting clubs are exempt from income tax under section 50-45 of the Income Tax Assessment Act 1997, and this ruling applies both before and after its date of issue. Additionally, an addendum, CR 2022/14 (section 4), provides clarification on the assessability of the special dividend for non-residents in relation to Cardno Limited, effective from 23 February 2022.
The obligations imposed by these rulings and the addendum primarily concern the taxpayers and entities involved in the specified transactions. Shareholders of Prospect Resources Limited, holders of units in SGH Australia Plus, and members of games and sporting clubs must adhere to the tax implications outlined in the respective rulings. Specifically, taxpayers must ensure that their income tax returns accurately reflect the tax consequences as specified in the rulings. For the addendum concerning Cardno Limited, non-residents must be aware of the tax implications of the special dividend as clarified in CR 2022/14.
Violations or non-compliance with the provisions of these rulings can result in civil or criminal consequences. While the specific penalties are not detailed in the notifiable instrument, the Income Tax Assessment Act 1997 provides a framework for penalties. For instance, civil penalties may include fines and interest on unpaid taxes, while criminal penalties may include imprisonment and fines for serious offences such as tax evasion or fraud. The exact penalties would depend on the nature and severity of the breach, as well as the relevant provisions of the Income Tax Assessment Act 1997.