Notice of Rulings 31 August 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 2022/78 | Vimy Resources Limited – scrip for scrip roll-over | This Ruling sets out the income tax consequences for Australian-resident holders of ordinary shares in Vimy Resources Limited who exchanged their shares for shares in Deep Yellow Limited on 4 August 2022. This Ruling applies from 1 July 2022 to 30 June 2023. |
CR 2022/79 | New World Resources Limited – return of capital by distribution of shares in Koba Resources Limited | This Ruling sets out the income tax consequences of the reduction of share capital by New World Resources Limited which was satisfied by the transfer of shares in Koba Resources Limited to the shareholders of New World on 26 April 2022. This Ruling applies from 1 July 2021 to 30 June 2022. |
PR 2022/7 | Bell Equity Lever – instalment receipts | This Ruling sets out the Commissioner’s view of the consequences of investing in the Bell Equity Lever facility offered by Bell Potter Capital Limited. This Ruling applies from 1 July 2022 to 30 June 2025. |
PR 2022/8 | Bell Geared Equities Investment | This Ruling sets out the Commissioner’s view of the consequences of investing in the Bell Geared Equities Investment offered by Bell Potter Capital Limited. This Ruling applies from 1 July 2022 to 30 June 2025. |
TD 2022/12 | Income tax: is the source concept in Division 6 of Part III of the Income Tax Assessment Act 1936 relevant in determining whether a non-resident beneficiary of a resident trust, or trustee for that trust, is assessed on an amount of trust capital gain arising under Subdivision 115–C of the Income Tax Assessment Act 1997? | This Determination describes when an amount of trust capital gain is assessable to a non-resident beneficiary or trustee. It also describes when a non-resident beneficiary’s share of taxable Australian property gains of a non-resident trust and a trustee’s share of a capital gain applies. This Determination applies to arrangements entered into before and after its date of issue. |
TD 2022/13 | Income tax: does Subdivision 855-A (or subsection 768-915(1)) of the Income Tax Assessment Act 1997 disregard a capital gain that a foreign‑resident (or temporary‑resident) beneficiary of a resident non‑fixed trust has because of subsection 115-215(3)? | This Determination describes when a capital gain that a foreign-resident beneficiary of a resident non-fixed trust has can be disregarded. This Determination applies both before and after its date of issue. |
NOTICE OF ADDENDUM |
Ruling number | Subject | Brief description |
PR 2021/12 | Challenger Lifetime Annuity (Liquid Lifetime) | This Ruling has been amended to incorporate a new Product Disclosure Statement. This Addendum applies before and after its date of issue. |
Overview
The Notice of Rulings issued on 31 August 2022 by the Commissioner of Taxation, Chris Jordan, under the authority of subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, provides public rulings on various income tax matters. These rulings, available on the Australian Taxation Office's website, are designed to clarify the tax consequences for specific transactions and arrangements, ensuring taxpayers are aware of their obligations and rights. The rulings cover topics such as the tax implications of share exchanges, return of capital, investments in certain facilities, and the taxation of trust capital gains for non-resident beneficiaries. The aim of these rulings is to enhance transparency and compliance within the tax system by providing definitive guidance on complex tax issues.
Scope and Application
The Commissioner of Taxation has issued several public rulings, determinations, and an addendum under the Taxation Administration Act 1953. These rulings and determinations provide clarification and guidance on specific income tax issues and apply to particular transactions or entities within a defined timeframe. For instance, Ruling CR 2022/78 pertains to Australian-resident holders of ordinary shares in Vimy Resources Limited who exchanged their shares for shares in Deep Yellow Limited on 4 August 2022, outlining the income tax consequences of this transaction from 1 July 2022 to 30 June 2023. Similarly, Ruling CR 2022/79 addresses the tax implications of the reduction of share capital by New World Resources Limited through the distribution of shares in Koba Resources Limited, applicable from 1 July 2021 to 30 June 2022. Public Rulings PR 2022/7 and PR 2022/8, which concern the Bell Equity Lever and Bell Geared Equities Investment facilities offered by Bell Potter Capital Limited respectively, are applicable from 1 July 2022 to 30 June 2025. Tax Determinations TD 2022/12 and TD 2022/13 provide guidance on the tax treatment of trust capital gains for non-resident beneficiaries and trustees, applicable to arrangements entered into both before and after their issuance. Additionally, an addendum to Ruling PR 2021/12, concerning the Challenger Lifetime Annuity (Liquid Lifetime), incorporates a new Product Disclosure Statement and applies both before and after its date of issue.
Key Provisions
The Notice of Rulings published on 31 August 2022 by the Commissioner of Taxation under the authority of subsection 358-5(4) of Schedule 1 to the Taxation Administration Act 1953, includes several rulings and determinations that provide guidance on specific tax issues. These rulings and determinations cover a range of topics, including scrip-for-scrip roll-overs, return of capital distributions, investments in equity facilities, and the taxation of trust distributions and capital gains. The rulings and determinations are numbered CR 2022/78, CR 2022/79, PR 2022/7, PR 2022/8, TD 2022/12, and TD 2022/13, and cover the period from 1 July 2021 to 30 June 2025.
The obligations and requirements imposed by these rulings and determinations vary depending on the specific provisions. Generally, the rulings provide guidance on the income tax consequences of specific transactions, while the determinations provide guidance on the application of the law to specific situations. For example, CR 2022/78 sets out the income tax consequences for Australian-resident holders of ordinary shares in Vimy Resources Limited who exchanged their shares for shares in Deep Yellow Limited on 4 August 2022, while TD 2022/12 describes when an amount of trust capital gain is assessable to a non-resident beneficiary or trustee.
Failure to comply with the requirements of these rulings and determinations may result in a range of civil and criminal consequences, including penalties and interest charges. For example, section 284-15 of the Income Tax Assessment Act 1997 provides for a penalty of 75% of the amount of tax or shortfall income tax that would have been payable if the taxpayer had complied with their obligations. In addition, section 284-20 of the Act provides for a penalty of 50% of the amount of tax or shortfall income tax that would have been payable if the taxpayer had provided a correct and accurate tax return. These penalties are in addition to any interest charges that may apply.
In summary, the Notice of Rulings published by the Commissioner of Taxation under the authority of the Taxation Administration Act 1953 provides guidance on a range of tax issues, including scrip-for-scrip roll-overs, return of capital distributions, investments in equity facilities, and the taxation of trust distributions and capital gains. Compliance with these rulings and determinations is mandatory, and failure to comply may result in civil and criminal consequences, including penalties and interest charges.