Notice of Rulings, Notice of Addenda

Administered by Department of the Treasury

Legislation au C2017G01339 In force Gazette

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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
CR 2017/84	Income tax: off‑market share buy‑back: Rio Tinto Limited	The Ruling sets out the Commissioner’s positon on the off-market share buy-back for ordinary shareholders of Rio Tinto Limited. The Ruling applies from 1 July 2017 to 30 June 2018 and continues to apply after 30 June 2018 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
CR 2017/85	Income tax: demerger of Clime Private Ltd by Clime Investment Management Limited	The Ruling sets out the Commissioner’s positon of ordinary shareholders in the demerger of Clime Private Ltd by Clime Investment Management Limited. The ruling applies from 1 July 2016 to 30 June 2017 and continues to apply after 30 June 2017 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
CR 2017/86	Income tax: The National Pharmacies Early Retirement Scheme 2017	The Ruling sets out the Commissioners positon on The National Pharmacies Early Retirement Scheme 2017. The Ruling applies from 13 December 2017 to 30 June 2018 and continues to apply after 30 June 2018 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
CR 2017/87	Income tax: Suncorp Group Limited: Suncorp Group Limited Capital Notes 2	The Ruling sets out the Commissioners positon on investors who are allotted perpetual, convertible, subordinated and unsecured notes by Suncorp Group Limited called Suncorp Group Limited Capital Notes 2. The Ruling applies from 1 July 2017 to 30 June 2026 and continues to apply after 30 June 2026 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
CR 2017/88	Income tax: scrip for scrip: exchange of Kore Potash shares, options and performance rights for Kore UK CDIs, options and performance rights	The Ruling sets out the Commissioners positon on shareholders, option holders and employees of Kore Potash Limited and the exchange of Kore Potash shares, options and performance rights for Kore UK CDIs, options and performance rights. The Ruling applies from 1 July 2017 to 30 June 2018 and continues to apply after 30 June 2018 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
CR 2017/89	Income tax: return of capital: IWIF Holdings Limited (IWIFH)	The Ruling sets out the Commissioners positon on holders of ordinary shares in IWIF Holdings Limited. The Ruling applies from 1 July 2017 to 30 June 2018 and continues to apply after 30 June 2018 to all entities within the specified class who entered into the specified scheme during the term of the Ruling.
TD 2017/23	Income tax: does the residency assumption in subsection 95(1) of the Income Tax Assessment Act 1936 (ITAA 1936) apply for the purpose of section 855‑10 of the Income Tax Assessment Act 1997 (ITAA 1997), which disregards certain capital gains of a trust which is a foreign trust for CGT purposes?	The Determination sets out the Commissioner’s position on the residency assumption where a Capital Gains Tax (CGT) event happens to a CGT asset of a foreign trust for CGT purposes and that asset is not a ‘taxable Australian. The Determination applies to years of income commencing both before and after 13 December 2017.
TD 2017/24	Income tax: where an amount included in a beneficiary’s assessable income under subsection 99B(1) of the Income Tax Assessment Act 1936 (ITAA 1936) had its origins in a capital gain from non‑taxable Australian property of a foreign trust, can the beneficiary offset capital losses or a carry‑forward net capital loss (‘capital loss offset’) or access the CGT discount in relation to the amount?	The Determination sets out the Commissioner’s position on whether a beneficiary’s assessable income under subsection 99B(1) Income Tax Assessment Act 1936 is not treated as a capital gain for capital loss offset or CGT discount purposes. The Determination applies to years of income commencing both before and after 13 December 2017.

NOTICE OF ADDENDA
Ruling Number	Subject	Brief Description
MT 2012/1	Miscellaneous Taxes: Application of the income tax and GST laws to immediate transfer farm‑out arrangements	The Addendum is necessary because the income tax guidance in the ruling no longer reflects the law in respect of an immediate transfer farm-out arrangement entered into after 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013, because of the enactment of the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Act 2014 and the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Act 2015. The Addendum applies after 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013.
MT 2012/2	Miscellaneous Taxes: Application of the income tax and GST laws to deferred transfer farm‑out arrangements	The Addendum is necessary because the income tax guidance in the ruling no longer reflects the law in respect of a deferred transfer farm‑out arrangement entered into after 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013, because of the enactment of the Tax and Superannuation Laws Amendment (2014 Measures No. 3) Act 2014 and the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Act 2015. The Addendum applies after 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013.

Overview

The Australian Taxation Office, under the authority of the Commissioner of Taxation, has issued a series of rulings and determinations to clarify the tax treatment of specific transactions and arrangements. These rulings, including CR 2017/84 to CR 2017/89 and TD 2017/23 and TD 2017/24, address various income tax issues such as off-market share buy-backs, demergers, early retirement schemes, capital notes, scrip for scrip exchanges, and returns of capital, as well as questions regarding residency assumptions and capital gains tax (CGT) offsets for foreign trusts. The rulings provide clear guidance to taxpayers and tax practitioners by outlining the Commissioner's position on these complex tax matters. Additionally, two addenda (MT 2012/1 and MT 2012/2) have been issued to update the application of income tax and GST laws to farm-out arrangements, reflecting legislative changes enacted in 2014 and 2015. These rulings and determinations aim to ensure compliance with tax laws and to provide certainty for taxpayers affected by these specific transactions.

Scope and Application

This Gazette notice issued by the Commissioner of Taxation provides rulings and determinations that clarify the application of income tax laws in specific scenarios, particularly focusing on transactions involving shares, demergers, retirement schemes, capital notes, and scrip exchanges. The rulings (CR 2017/84 to CR 2017/89) apply to entities and individuals engaged in the specified transactions during the terms outlined, which range from 1 July 2016 to 30 June 2026. These rulings provide guidance on the tax treatment of these transactions, ensuring that all parties involved understand their tax obligations. The determinations (TD 2017/23 and TD 2017/24) address questions around the residency assumption and capital gains tax implications for foreign trusts, applying to years of income before and after 13 December 2017. Additionally, the addendums to rulings MT 2012/1 and MT 2012/2 provide updated guidance on the application of income tax and GST laws to farm-out arrangements entered into after 14 May 2013, reflecting changes in the law due to subsequent legislative amendments. These instruments are part of the Commonwealth’s legislative framework, aiming to provide clarity and certainty to taxpayers and their advisors.

Key Provisions

The Commissioner of Taxation has issued several rulings and determinations that clarify the application of Australian income tax laws to specific situations. Rulings CR 2017/84 to CR 2017/89, along with Determinations TD 2017/23 and TD 2017/24, provide guidance on a range of issues, including the tax treatment of off-market share buy-backs, demergers, early retirement schemes, and the exchange of shares, options, and performance rights. These rulings apply to specified classes of entities and to transactions occurring within the stated periods. For example, Ruling CR 2017/84 concerns the tax treatment of Rio Tinto Limited's off-market share buy-back for ordinary shareholders, applying from 1 July 2017 to 30 June 2018 and continuing to apply to relevant entities thereafter. Determination TD 2017/23 addresses the residency assumption for capital gains tax (CGT) purposes when a CGT event affects a foreign trust's asset, applicable to income years both before and after 13 December 2017. These rulings and determinations impose specific obligations on taxpayers and entities involved in the specified transactions. They require taxpayers to correctly classify and report income and capital gains in accordance with the Commissioner's position, ensuring that all relevant transactions are documented and disclosed accurately. For instance, entities involved in a share buy-back scheme must comply with the tax treatment outlined in Ruling CR 2017/84, which may include reporting the transaction as income or capital gains and adjusting the basis of shares accordingly. Failure to adhere to these requirements can lead to discrepancies in tax reporting and potential audits by the Australian Taxation Office (ATO). Non-compliance with these rulings and determinations can result in various penalties and consequences. The ATO may impose administrative penalties for errors or omissions in tax returns, which can include fines and interest on unpaid taxes. Additionally, taxpayers may face legal action if they are found to have deliberately or negligently failed to comply with the tax laws. In some cases, the ATO can pursue criminal charges against individuals or entities that engage in tax evasion or fraud, which can lead to substantial fines and imprisonment. The penalties vary depending on the severity and intent behind the non-compliance, but they are designed to enforce adherence to the tax laws and ensure that all taxpayers contribute their fair share to the revenue system.

Area of Law: Taxation Law
Instrument: Gazette Notice
Concepts: Definitions & Interpretation; Offence Provisions; Compliance Obligations; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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