COMMISSIONER OF TAXATION
The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from http://ato.gov.au/law.
NOTICE OF RULINGS |
Ruling Number | Subject | Brief Description |
PR 2018/13 | Income tax: tax consequences for Australian Policyholders of an Executive Investment Bond | The Ruling sets out the Commissioner’s position tax consequences for Australian Policyholders of an Executive Investment Bond. The Ruling applies prospectively from 1 July 2018 to entities that entered into the scheme and are residents of Australia for taxation purposes during 1 July 2018 to 30 June 2021, and will continue to apply to those entities even after its period of application has ended (as long as the Policyholder remains a resident of Australia for taxation purposes). |
CR 2018/44 | Income tax: APN Outdoor Group Limited – Scheme of Arrangement and payment of Special Dividend | The Ruling sets out the Commissioner’s position on shareholders of APN Outdoor Group Limited – Scheme of Arrangement and payment of Special Dividend. The Ruling applies from 1 July 2018 to 30 June 2019 and continues to apply after 30 June 2019 to all entities within the specified class who entered into the specified scheme during the term of the Ruling. |
CR 2018/45 | Income tax: scrip for scrip roll-over: exchange of CHESS Depositary Interests in fourteen BlackRock iShares Funds for units in fourteen new BlackRock Trusts | The Ruling sets out the Commissioner’s position on scrip for scrip roll-over: exchange of CHESS Depositary Interests in fourteen BlackRock iShares Funds for units in fourteen new BlackRock Trusts. The Ruling applies from 1 July 2018 to 30 June 2019 and continues to apply after 30 June 2019 to all entities within the specified class who entered into the scheme during the term of the Ruling. |
CR 2018/46 | Income tax: ‘Macquarie University Academic Staff Early Retirement Scheme 2018–2019’ | The Ruling sets out the Commissioner’s position on employees of Macquarie University who received a payment under the Macquarie University Academic Staff Early Retirement Scheme 2018–2019. The Ruling applies from 14 November 2018 to 1 November 2019 and continues to apply after 1 November 2019 to all entities within the specified class who entered into the scheme during the term of the Ruling. |
NOTICE OF ADDENDA |
Ruling Number | Subject | Brief Description |
PR 2018/2 | Income tax: taxation consequences of investing in Macquarie Equity Lever Instalment Receipts | The Addendum amends Product Ruling PR 2018/2 to incorporate the Supplementary Product Disclosure Statement dated 30 October 2018 as a scheme document. The Addendum applies on and from 14 February 2018. |
CR 2017/68 | Income tax: ‘Colanda Department of Health and Human Services Early Retirement Scheme 2017’ | The Addendum amends Class Ruling CR 2017/68 to reflect an extension to the period to which the ruling applies. The Addendum applies on and from 1 July 2019. |
TR 2006/3 | Income tax: government payments to industry to assist entities (including individuals) to continue, commence or cease business | The Addendum amends Taxation Ruling TR 2006/3 to provide further examples of government payments made. The Addendum applies to years of income commencing both before and after its date of issue. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued several rulings and addenda related to income tax, which provide clarity on the tax consequences for various schemes and arrangements. The rulings, published in Gazette C2018G00905, are designed to address specific issues concerning Australian taxpayers, including the tax implications for policyholders of an Executive Investment Bond, shareholders in APN Outdoor Group Limited, participants in Macquarie University’s Academic Staff Early Retirement Scheme, and entities involved in the exchange of CHESS Depositary Interests in BlackRock iShares Funds for units in new BlackRock Trusts. These rulings aim to provide certainty and guidance to taxpayers engaged in these arrangements, applying from various dates between 1 July 2018 and 1 November 2019, with some provisions extending beyond their initial periods. The objective is to ensure that taxpayers understand their tax obligations in relation to these specific transactions and arrangements.
Scope and Application
The Commissioner of Taxation has issued several Rulings and an Addendum, each addressing specific tax scenarios under the Income Tax Assessment Act 1997. These Rulings and the Addendum provide guidance on various tax consequences, applicable to particular entities or transactions within Australia. For instance, Ruling PR 2018/13 pertains to Australian residents who are policyholders of an Executive Investment Bond, outlining the tax implications of such investments from 1 July 2018 to 30 June 2021, with continued application thereafter as long as the policyholder remains a resident of Australia for tax purposes. Similarly, Ruling CR 2018/44 addresses shareholders of APN Outdoor Group Limited, focusing on the tax treatment of a special dividend and the associated scheme of arrangement from 1 July 2018 to 30 June 2019, with the ruling remaining applicable to entities entering the scheme during this period. The Addendum to Ruling PR 2018/2 modifies the taxation consequences of investments in Macquarie Equity Lever Instalment Receipts, reflecting an updated Supplementary Product Disclosure Statement. This Addendum applies from 14 February 2018. These rulings and the Addendum are instrumental in providing clarity and ensuring compliance with tax laws within specified timeframes and for particular transactions.
Key Provisions
The Rulings issued by the Commissioner of Taxation provide clarity on the tax consequences of specific financial schemes, and are designed to assist taxpayers in understanding their obligations under the law. PR 2018/13 (section 1) addresses the tax implications for Australian policyholders of an Executive Investment Bond, effective from 1 July 2018 to 30 June 2021, and continuing thereafter if the policyholder remains a resident. CR 2018/44 (section 2) concerns the tax treatment of shareholders of APN Outdoor Group Limited in relation to a scheme of arrangement and special dividend payment, applying from 1 July 2018 to 30 June 2019 and beyond for entities that entered into the scheme. CR 2018/45 (section 3) outlines the tax implications of exchanging CHESS Depositary Interests in fourteen BlackRock iShares Funds for units in new BlackRock Trusts, applicable from 1 July 2018 to 30 June 2019 and thereafter for entities involved in the scheme. CR 2018/46 (section 4) addresses the tax consequences for employees of Macquarie University who received payments under the Macquarie University Academic Staff Early Retirement Scheme 2018–2019, applying from 14 November 2018 to 1 November 2019 and beyond for relevant entities.
These Rulings impose specific obligations on the entities and individuals involved in the schemes outlined. For instance, Australian policyholders of an Executive Investment Bond must ensure their tax affairs are managed in accordance with the provisions set out in PR 2018/13. Shareholders of APN Outdoor Group Limited must adhere to the tax implications specified in CR 2018/44, while entities exchanging CHESS Depositary Interests for units in new BlackRock Trusts must follow the guidelines in CR 2018/45. Employees of Macquarie University who received early retirement payments need to comply with the tax requirements detailed in CR 2018/46. These Rulings require affected parties to maintain accurate records and provide necessary disclosures to the Commissioner of Taxation.
Failure to comply with the provisions set out in these Rulings may result in various consequences. While the specific penalties are not detailed in the Rulings themselves, breaches of tax laws generally can lead to both civil and criminal penalties. Civil penalties may include fines and interest on unpaid taxes, while criminal penalties can encompass imprisonment and fines for more serious breaches. The exact penalties depend on the nature and severity of the breach, and are determined in accordance with the general provisions of the Income Tax Assessment Act 1936 and other relevant legislation. It is important for taxpayers to understand and adhere to these obligations to avoid potential legal and financial repercussions.