Notice of Rulings

Overview

The Australian Taxation Office has issued a series of rulings under the Commissioner of Taxation, Chris Jordan, to clarify specific areas of income tax law. CR 2018/8 addresses the deductibility of funds contributed by Australian Taxation Office employees to the Australian Services Union Taxation Officers’ Branch Litigation Fund. This ruling was introduced to provide clarity on the tax implications of such contributions for ATO employees and was made applicable from 1 July 2017. Similarly, CR 2018/9 pertains to the income tax implications for holders of ordinary shares in Cedar Woods Properties Limited under the Bonus Share Plan, effective from 1 July 2017 to 30 June 2022, with continued application to entities that entered into the scheme during this period. These rulings were enacted to ensure taxpayers are properly informed and compliant with tax obligations in these specific contexts.

Scope and Application

The Commissioner of Taxation has issued two rulings, CR 2018/8 and CR 2018/9, which provide specific guidance on particular income tax issues for certain taxpayers. Ruling CR 2018/8 pertains to employees of the Australian Taxation Office who contribute to the Australian Services Union Taxation Officers’ Branch Litigation Fund. This ruling is relevant for any Australian Taxation Office employee who contributes to the specified fund and applies from 1 July 2017. It provides clarity on the deductibility of these contributions under income tax law. Similarly, Ruling CR 2018/9 addresses the income tax implications for holders of ordinary shares in Cedar Woods Properties Limited in relation to a bonus share plan. This ruling applies from 1 July 2017 to 30 June 2022 and continues to apply to entities that entered into the specified scheme within this period. Both rulings aim to provide certainty to taxpayers regarding their specific circumstances and tax obligations under the relevant provisions of Australian income tax law.

Key Provisions

Ruling CR 2018/8 (paragraph 1) specifies the Commissioner's position on the deductibility of contributions made by Australian Taxation Office (ATO) employees to the Australian Services Union Taxation Officers’ Branch Litigation Fund. This ruling applies from 1 July 2017, setting the framework for how these contributions are treated for income tax purposes. Similarly, Ruling CR 2018/9 (paragraph 2) outlines the Commissioner's position on holders of ordinary shares in Cedar Woods Properties Limited in relation to the Bonus Share Plan. This ruling, applicable from 1 July 2017 to 30 June 2022, provides clarity on the tax treatment of these shares during the specified period, and it continues to apply to all entities within the specified class who entered into the scheme during the term of the ruling. Under these rulings, the Commissioner has established specific guidelines for taxpayers to follow. For Ruling CR 2018/8, ATO employees contributing to the Australian Services Union Taxation Officers’ Branch Litigation Fund must ensure their contributions adhere to the criteria set out by the Commissioner for tax deductibility. For Ruling CR 2018/9, shareholders in Cedar Woods Properties Limited involved in the Bonus Share Plan need to understand and comply with the tax implications as detailed in the ruling, particularly concerning the period specified. Compliance with these rulings involves ensuring all contributions and transactions are appropriately documented and reported in tax returns. Failure to comply with the provisions outlined in these rulings may result in various consequences. For CR 2018/8, if ATO employees do not correctly claim their contributions to the Litigation Fund as deductible expenses, they may face assessments for unpaid tax, interest, and potential penalties. Similarly, for CR 2018/9, shareholders who do not correctly account for the Bonus Share Plan may be subject to additional tax liabilities, interest, and penalties for non-compliance. The Commissioner has the authority to take action against taxpayers who do not adhere to the rulings, which may include audits, reviews, and the imposition of penalties under the relevant tax laws.