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 2018/28 | Income tax: deductibility of donations to Bridge Housing Limited under a Payment Direction Deed | The Ruling sets out the Commissioner’s position on the deductibility of donations made to Bridge Housing Limited under a Payment Direction Deed. The Ruling applies from 30 June 2017 |
CR 2018/29 | Income tax: Tox Free Solutions Limited – Scheme of Arrangement and Special Dividend | The Ruling sets out the Commissioner’s positon on the shareholders of Tox Free Solutions 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 2018/8 | Income tax: capital gains: what is the improvement threshold for the 2018‑19 income year under section 108‑85 of the Income Tax Assessment Act 1997? | The Determination sets out the Commissioner’s position on capital gains and the improvement threshold for the 2018–19 income year under section 108‑85 of the Income Tax Assessment Act 1997. The Determination applies for the 2018–19 income year. |
TD 2018/9 | Income tax: deductibility of interest expenses incurred by a beneficiary of a discretionary trust on borrowings on‑lent interest‑free to the trustee | The Determination sets out the Commissioner’s position on the deductibility of interest expenses incurred by a beneficiary of a discretionary trust on borrowings on‑lent interest‑free to the trustee. The Determination applies to years of income commencing both before and after its date of issue. |
NOTICE OF ADDENDUM |
Ruling Number | Subject | Brief Description |
TD 93/142 | Income tax: in calculating the residual value of a leased item, may a lower residual value than those outlined in IT 28 be adopted in light of the more generous depreciation rates? | The Addendum amends amends Taxation Determination TD 93/142. The Addendum applies on and from 1 July 2002, except for paragraph 3A which applies on and from 1 July 2018. |
NOTICE OF WITHDRAWAL |
Ruling Number | Subject | Brief Description |
TD 2012/9 | Fringe benefits tax: for the purposes of section 39A of the Fringe Benefits Tax Assessment Act 1986 what is the car parking threshold for the fringe benefits tax year commencing on 1 April 2012? | Withdrawn with effect from 20 June 2018 |
Overview
The Commissioner of Taxation, Chris Jordan, has issued several rulings and determinations to clarify the application of the Income Tax Assessment Act 1997. These notices aim to address specific issues raised by taxpayers and provide guidance on the interpretation and application of the law. The rulings and determinations cover a range of topics, including the deductibility of donations to Bridge Housing Limited, the taxation of shareholders in Tox Free Solutions Limited, the capital gains improvement threshold, and the deductibility of interest expenses incurred by discretionary trust beneficiaries. These rulings are designed to assist taxpayers in understanding their obligations and ensuring compliance with the tax laws. The enactment of the Income Tax Assessment Act 1997 by the Australian Parliament was intended to provide a comprehensive framework for the administration of income tax in Australia, addressing various aspects of taxation including the assessment, collection, and refund of tax. The policy objective of the Act is to ensure that the tax system is fair, efficient, and effective in raising revenue to fund public services and infrastructure.
Scope and Application
The Commissioner of Taxation has issued various rulings and determinations that clarify the application of income tax laws in specific circumstances. Ruling CR 2018/28 addresses the deductibility of donations made to Bridge Housing Limited under a Payment Direction Deed, applicable from 30 June 2017. Ruling CR 2018/29 pertains to the shareholders of Tox Free Solutions Limited and its scheme of arrangement and special dividend, effective from 1 July 2017 to 30 June 2018, and continuing to apply to entities that entered into the scheme during this period. Taxation Determination TD 2018/8 provides the Commissioner’s position on the improvement threshold for capital gains under section 108-85 of the Income Tax Assessment Act 1997 for the 2018-19 income year. Determination TD 2018/9 concerns the deductibility of interest expenses incurred by a beneficiary of a discretionary trust on borrowings on-lent interest-free to the trustee, applicable to years of income both before and after its issue date. The Commissioner also issued an Addendum to Taxation Determination TD 93/142, which amends the calculation of the residual value of a leased item, effective from 1 July 2002, with a specific paragraph applying from 1 July 2018. Additionally, Taxation Determination TD 2012/9, concerning the car parking threshold for fringe benefits tax for the year commencing on 1 April 2012, has been withdrawn with effect from 20 June 2018.
Key Provisions
The Commissioner of Taxation has issued several Rulings and Determinations that provide guidance on specific aspects of income tax law. Ruling CR 2018/28 addresses the deductibility of donations to Bridge Housing Limited under a Payment Direction Deed, effective from 30 June 2017. Ruling CR 2018/29 pertains to the shareholders of Tox Free Solutions Limited and the Scheme of Arrangement and Special Dividend, effective from 1 July 2017 to 30 June 2018, with continuing application to entities that entered into the specified scheme during the term of the Ruling. Determination TD 2018/8 clarifies the capital gains improvement threshold for the 2018-19 income year under section 108-85 of the Income Tax Assessment Act 1997. Determination TD 2018/9 outlines the deductibility of interest expenses incurred by a beneficiary of a discretionary trust on borrowings on-lent interest-free to the trustee, applicable to years of income commencing before and after the date of issue.
The Rulings and Determinations impose obligations on taxpayers, trustees, and other entities governed by the provisions. For instance, taxpayers must ensure that donations made to Bridge Housing Limited comply with the deductibility criteria set out in Ruling CR 2018/28. Shareholders of Tox Free Solutions Limited must be aware of the implications of the Scheme of Arrangement and Special Dividend, as detailed in Ruling CR 2018/29. Additionally, trustees and beneficiaries of discretionary trusts must consider the deductibility of interest expenses in light of Determination TD 2018/9. The Determinations also require taxpayers to accurately calculate their capital gains improvement threshold and residual value of leased items as per Determinations TD 2018/8 and TD 93/142.
Failure to comply with the provisions outlined in the Rulings and Determinations may result in various consequences. Breach of these provisions can lead to disallowance of deductions, additional tax liabilities, and penalties. For instance, the disallowance of a donation deduction under Ruling CR 2018/28 may result in an increased taxable income for the donor. Similarly, non-compliance with the capital gains improvement threshold under Determination TD 2018/8 may lead to an understatement of capital gains tax liability. The maximum penalties for non-compliance are not explicitly stated in the Rulings, but they typically include fines and interest on unpaid taxes. It is important for taxpayers to carefully review and adhere to these Rulings and Determinations to avoid potential penalties and legal consequences.