COMMISSIONER OF TAXATION
The Commissioner of Taxation, Chris Jordan, 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 |
TR 2015/3 | Income tax: matters relating to strata title bodies constituted under strata title legislation | The Ruling applies to strata title bodies and persons that own strata title lots in a strata scheme and explains specific income tax issues that affect strata schemes as detailed within the Ruling. With the exception of paragraph 21 of the Ruling, the Ruling applies to all strata title schemes for the years of income commencing both before and after its date of issue. |
TR 2015/4 | Income tax: CGT small business concessions: unpaid present entitlements and the maximum net asset value test | The Ruling sets out the Commissioner’s preliminary views on how an unpaid present entitlement of a beneficiary connected with a trust is treated for the purposes of working out whether the trust satisfies the maximum net asset value test in section 152‑15 of the Income Tax Assessment Act 1997. The Ruling applies to years of income commencing both before and after its date of issue. |
TD 2015/20 | Income tax: Division 7A: is a release by a private company of its unpaid present entitlement a ‘payment’ within the meaning of Division 7A of Part III of the Income Tax Assessment Act 1936? | The Determination concludes that a release by a private company of all or part of its unpaid present entitlement is a ‘payment’ within the meaning of Division 7A of Part III of the Income Tax Assessment Act 1936? The Determination applies to years of income commencing both before and after its date of issue. |
CR 2015/100 | Income tax: EcoBiotics Limited - demerger of QBiotics Limited | The Ruling sets out the Commissioners position for shareholders of EcoBiotics Limited. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2015/101 | Income tax: Qantas Airways Limited - capital return and share consolidation | The Ruling sets out the Commissioners position for ordinary shareholders of Qantas Airways Limited. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2015/102 | Income tax: Equity Trustees Limited - exchange of shares for shares in EQT Holdings Limited | The Ruling sets out the Commissioners position for ordinary shareholders of Equity Trustees Limited. The Ruling applies from 1 July 2015 to 30 June 2016. |
CR 2015/103 | Income tax: TGR Biosciences Pty Ltd – return of capital | The Ruling sets out the Commissioners position for ordinary shares in TGR Biosciences Pty Ltd. The Ruling applies from 1 July 2015 to 30 June 2016. |
NOTICE OF WITHDRAWAL |
Ruling Number | Subject | Brief Description |
TR 2004/8W | Income tax and fringe benefits tax: health promotion charities | The Ruling is withdrawn with effect from 25 November 2015. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued several tax rulings and withdrawn one ruling, all published in Gazette C2015G01921. The rulings cover a range of topics including specific income tax issues for strata title bodies, treatment of unpaid present entitlements under the capital gains tax small business concessions, the characterisation of a release of unpaid present entitlements by a private company under Division 7A, and the tax treatment of shareholders in various corporate restructurings. These rulings provide clarity and guidance on complex tax issues affecting taxpayers in different scenarios. The withdrawn Ruling TR 2004/8W concerning health promotion charities is no longer applicable from 25 November 2015. These rulings aim to assist taxpayers in understanding their obligations and rights under the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936.
Scope and Application
The Commissioner of Taxation, Chris Jordan, has issued several rulings and one determination that provide clarification on specific income tax issues relevant to various entities and transactions. Ruling TR 2015/3 addresses income tax matters relating to strata title bodies constituted under strata title legislation, applying to all strata title schemes for years of income commencing before and after its date of issue, with the exception of paragraph 21. Ruling TR 2015/4 outlines the Commissioner's views on how unpaid present entitlements are treated for the purposes of the maximum net asset value test under the Income Tax Assessment Act 1997, applying to years of income commencing before and after its date of issue. Determination TD 2015/20 concludes that a release by a private company of its unpaid present entitlement is a 'payment' within the meaning of Division 7A of the Income Tax Assessment Act 1936, also applying to years of income commencing before and after its date of issue. These rulings and the determination extend their application through subordinate instruments to provide comprehensive guidance on the respective tax issues.
Key Provisions
The Australian Taxation Office (ATO) has issued several rulings and one withdrawal notice under the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936. TR 2015/3 (section 1) addresses income tax matters specific to strata title bodies and owners of strata title lots, providing clarification on tax issues affecting strata schemes. TR 2015/4 (section 2) outlines the Commissioner’s preliminary views on the treatment of unpaid present entitlements in the context of the capital gains tax small business concessions and the maximum net asset value test. TD 2015/20 (section 3) clarifies that a release by a private company of its unpaid present entitlement constitutes a ‘payment’ under Division 7A of Part III of the Income Tax Assessment Act 1936. CR 2015/100, CR 2015/101, CR 2015/102 and CR 2015/103 (sections 4-7) detail the Commissioner’s positions on specific tax issues related to the demerger of QBiotics Limited, a capital return and share consolidation by Qantas Airways Limited, an exchange of shares for shares in EQT Holdings Limited, and a return of capital by TGR Biosciences Pty Ltd, respectively.
These rulings impose certain obligations on the entities and individuals they govern. Strata title bodies and owners of strata title lots must ensure compliance with the specific income tax issues outlined in TR 2015/3. Trustees of entities subject to Division 7A must consider the implications of TD 2015/20 when releasing unpaid present entitlements. Shareholders of the companies mentioned in CR 2015/100, CR 2015/101, CR 2015/102, and CR 2015/103 need to be aware of the specific tax positions outlined in these rulings for their respective transactions. Additionally, the withdrawal of TR 2004/8W means that entities previously relying on this Ruling for health promotion charities need to seek updated guidance on income tax and fringe benefits tax.
Breach of the provisions set out in these rulings can lead to civil and criminal consequences. While the specific penalties are not detailed in the Rulings themselves, general provisions under the Income Tax Assessment Acts allow for penalties for non-compliance, including fines and imprisonment for serious offences. The maximum penalties vary depending on the nature and severity of the breach, and the ATO has the authority to impose these penalties in cases of non-compliance.