COMMISSIONER OF TAXATION
The Acting Commissioner of Taxation, Neil Olesen, gives notice of the following Rulings, copies of which can be obtained from Branches of the Australian Taxation Office or at http://law.ato.gov.au.
NOTICE OF RULINGS |
Ruling Number | Subject | Brief Description |
CR 2016/50 | Income tax: AMP Capital Community Infrastructure Fund – capital reallocation | The Ruling sets out the Commissioner’s position for unit holders of the AMP Capital Community Infrastructure Trading Trust and the AMP Capital Community Infrastructure Holding Trust. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2016/51 | Income tax: Return of Capital and Scheme of Arrangement – Unity Mining Limited | The Ruling sets out the Commissioner’s position for holders of ordinary shares in Unity Mining Limited, excluding Diversified Minerals Pty Ltd and any associate that is a Unity shareholder. The Ruling applies from 1 July 2015 to 30 June 2016. |
LCG 2016/2 | Small Business Restructure Roll over: consequences of a roll over | The Guideline describes how the Commissioner will apply the law as amended by the Tax Laws Amendment (Small Business Restructure Roll over) Act 2016 to entities that rely on the Guideline in good faith. The Ruling applies from 1 July 2016. |
LCG 2016/3 | Small Business Restructure Roll over: genuine restructure of an ongoing business and related matters | The Guideline describes how the Commissioner will apply the law as amended by the Tax Laws Amendment (Small Business Restructure Roll over) Act 2016 to entities that rely on the Guideline in good faith. The Ruling applies from 1 July 2016 |
NOTICE OF ADDENDUM |
Ruling Number | Subject | Brief Description |
TR 2011/6 | Income tax: business related capital expenditure - section 40-880 of the Income Tax Assessment Act 1997 core issues | The Addendum amends Taxation Ruling TR 2011/6 by inserting an additional example to illustrate the application of subsection 40-880(6) of the Income Tax Assessment Act 1997. The Addendum applies to arrangements begun to be carried out from 1 July 2005. |
NOTICE OF ERRATUM |
Ruling Number | Subject | Brief Description |
CR 2016/49 | Income tax: demerger of Graphex Mining Limited by Indiana Resources Limited (formerly IMX Resources Limited) | The Erratum corrects Class Ruling CR 2016/49 to correct the title of the Ruling and other issues. The Erratum applies on and from 6 July 2016. |
Overview
The Tax Laws Amendment (Small Business Restructure Roll over) Act 2016 was enacted to address the tax implications of restructuring small businesses, particularly in terms of rollovers and restructurings. The Act was enacted by the Parliament of Australia, aiming to provide clarity and certainty for small business entities undergoing restructuring. This legislative measure was introduced to fill a gap in the tax law regarding the tax consequences of restructuring small businesses, ensuring that such activities are not inadvertently subjected to adverse tax treatments. The policy objective of the Act is to facilitate the restructuring of small businesses by offering tax reliefs and clarifications that support the continuity and viability of these entities during periods of reorganisation.
Scope and Application
The Commissioner of Taxation has issued several rulings and guidelines that provide specific interpretations of Australian income tax laws for various entities and transactions. These rulings and guidelines apply to particular classes of taxpayers and transactions, with their scope defined in the notices and documents. For instance, CR 2016/50 and CR 2016/51 provide the Commissioner’s position on income tax implications for unit holders of the AMP Capital Community Infrastructure Trading Trust and AMP Capital Community Infrastructure Holding Trust, and for holders of ordinary shares in Unity Mining Limited, respectively, with these rulings being applicable for the financial years 2015-2016. Similarly, LCG 2016/2 and LCG 2016/3 provide guidelines for the tax consequences of a roll-over in the context of small business restructures, applicable from 1 July 2016. The Addendum to TR 2011/6, concerning business-related capital expenditure, amends the original ruling to include an additional example, applying to arrangements initiated from 1 July 2005. The Erratum to CR 2016/49 corrects specific issues in the ruling relating to the demerger of Graphex Mining Limited by Indiana Resources Limited, effective from 6 July 2016. These rulings and guidelines collectively aim to clarify the tax obligations and entitlements for the specified taxpayers and transactions within the Commonwealth of Australia.
Key Provisions
The Commissioner of Taxation has issued several rulings and guidelines aimed at clarifying tax positions for specific entities and situations. The key provisions include Ruling CR 2016/50, which addresses the capital reallocation for unit holders of the AMP Capital Community Infrastructure Trading Trust and the AMP Capital Community Infrastructure Holding Trust from 1 July 2015 to 30 June 2016 (CR 2016/50). Ruling CR 2016/51 provides guidance for holders of ordinary shares in Unity Mining Limited, excluding Diversified Minerals Pty Ltd and any associate that is a Unity shareholder, from the same period (CR 2016/51). Guideline LCG 2016/2 and Guideline LCG 2016/3 pertain to the small business restructure roll over, detailing the application of the law as amended by the Tax Laws Amendment (Small Business Restructure Roll over) Act 2016, effective from 1 July 2016 (LCG 2016/2 and LCG 2016/3). An addendum to Taxation Ruling TR 2011/6, concerning business related capital expenditure, has been issued to include an example illustrating the application of subsection 40-880(6) of the Income Tax Assessment Act 1997, applicable to arrangements begun from 1 July 2005 (TR 2011/6 Addendum). Finally, an erratum to Class Ruling CR 2016/49 corrects the title of the Ruling and other issues, effective from 6 July 2016 (CR 2016/49 Erratum).
These rulings and guidelines impose specific obligations on the entities they govern. Unit holders of the AMP Capital Community Infrastructure Trading Trust and the AMP Capital Community Infrastructure Holding Trust must comply with the provisions of Ruling CR 2016/50 for the specified period. Similarly, holders of ordinary shares in Unity Mining Limited, excluding certain specified entities, must adhere to the conditions outlined in Ruling CR 2016/51. Entities relying on Guideline LCG 2016/2 and Guideline LCG 2016/3 for small business restructure roll overs must ensure they meet the criteria set out in the guidelines in good faith. Additionally, any arrangements falling under the scope of the addendum to Taxation Ruling TR 2011/6 must consider the new example provided for business related capital expenditure. Lastly, any parties affected by the erratum to Class Ruling CR 2016/49 must be aware of the corrected title and other issues as per the erratum.
Failure to comply with the provisions set out in these rulings and guidelines can lead to various consequences. While specific penalties are not detailed in the notices, breaches of tax law can result in both civil and criminal penalties. Civil penalties may include fines, interest on unpaid taxes, and penalties for late lodgment of returns. Criminal penalties can involve imprisonment, particularly for serious or repeated breaches. The exact penalties depend on the nature and extent of the breach, and are determined according to the relevant provisions of the Income Tax Assessment Act 1997 and other applicable legislation.