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 |
TD 2018/15 | Income tax: capital gains: does CGT event D1 happen if a taxpayer grants an easement, profit à prendre or licence over an asset? | The Determination sets out the Commissioner’s view on whether a capital gains tax event happens if a taxpayer grants an easement, profit à prendre or licence over an asset. The Determination applies to years of income commencing both before and after 31 October 2018 however it will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before 31 October 2018. |
TR 2018/7 | Income tax: employee remuneration trusts | The Ruling sets out the Commissioner’s views on how the taxation laws apply to an employee remuneration trust arrangement that operates outside of the employee share scheme rules in Division 83A of the Income Tax Assessment Act 1997. The Ruling applies to years of income commencing both before and after 31 October 2018 however it will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the 31 October 2018. |
LCR 2018/8 | Expansion of the taxable payments reporting system to courier and cleaning services | The Ruling sets out the Commissioner’s position on the expansion of the taxable payments reporting system where the Taxation Administration Act 1953 requires entitles that provide courier or cleaning services to report details of transactions where they pay contractors to provide a courier or cleaning service for them. The Ruling applies from 1 July 2018. |
CR 2018/42 | Income tax: Theodore channel scheme – receipt of shares in Theodore Water Pty Ltd | The Ruling sets out the Commissioner’s position on Australian residents who received shares in Theodore Water Pty Ltd. 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. |
NOTICE OF WITHDRAWALS |
Ruling Number | Subject | Brief Description |
TD 93/79 | Income tax: capital gains: if a taxpayer owns pre-CGT land and trees and after 19 September 1985 the taxpayer cuts the trees, are there any CGT consequences arising from the subsequent sale of the timber by the taxpayer? | Withdrawn with effect from 31 October 2018. |
TD 93/81 | Income tax: capital gains: a taxpayer owns pre-CGT land and trees. The taxpayer sells timber according to two post-CGT contracts: - a contract for granting the purchaser of the timber the right to enter the taxpayer's property over a period of time and remove timber as and when required; and
- a contract for the sale of the uncut timber.
How is the sale treated for capital gains tax purposes? | Withdrawn with effect from 31 October 2018. |
TD 93/235 | Income tax: capital gains: how are grants of easements treated for the purposes of the capital gains tax (CGT) provisions of the Income Tax Assessment Act 1936? | Withdrawn with effect from 31 October 2018. |
TD 93/236 | Income tax: capital gains: does the principal residence exemption apply to the amount received for the granting of an easement or profits à prendre over land adjacent to a dwelling? | Withdrawn with effect from 31 October 2018. |
TD 96/35 | Income tax: capital gains: when does a person, who on or after 21 September 1989 grants to another a right to cut and remove timber from the grantor’s land, dispose of the right? Is it when the right is granted or when the trees are felled? | Withdrawn with effect from 31 October 2018. |
TD 2008/20 | Income tax: where a taxpayer has supplied or acquired property under an international agreement and that gives rise to a debt interest or an equity interest as defined for the purposes of Division 974 of the Income Tax Assessment Act 1997, does Division 974 bear upon the characterisation to be adopted for the purposes of the application of Division 13 of Part III of the Income Tax Assessment Act 1936 to the transaction? | Withdrawn with effect from 31 October 2018. |
Overview
The Taxation Determinations and Rulings Notice 2018 (C2018G00855) issued by the Commissioner of Taxation, Chris Jordan, provides updated and withdrawn tax rulings on various topics related to income tax. Enacted by the Parliament of Australia, this legislation aims to clarify specific issues and provide guidance to taxpayers and practitioners regarding complex tax scenarios. The policy objective is to ensure consistent application of the taxation laws and to provide certainty to taxpayers in their compliance with the law. Rulings such as TD 2018/15, TR 2018/7, LCR 2018/8, and CR 2018/42 outline the Commissioner's views on particular tax matters, while the withdrawal of older rulings like TD 93/79 and TD 93/81 reflects the updating of tax guidance to remain relevant and accurate. This notice applies to income years commencing both before and after 31 October 2018, with some rulings having specific application periods as detailed in the text.
Scope and Application
The notice of rulings and withdrawals issued by the Commissioner of Taxation provides clarity and guidance on various aspects of income tax laws, including capital gains tax (CGT) events, employee remuneration trust arrangements, the expansion of the taxable payments reporting system, and specific tax treatments for certain transactions. These rulings apply to taxpayers who are subject to the Income Tax Assessment Act 1997 and other relevant legislation, with specific effective dates for each ruling depending on the subject matter. For instance, the ruling on the expansion of the taxable payments reporting system to include courier and cleaning services applies from 1 July 2018, while the ruling on employee remuneration trusts applies to years of income commencing both before and after 31 October 2018. The rulings may also have specific application to entities within certain schemes or arrangements. Notably, these rulings do not apply to taxpayers to the extent that they conflict with the terms of a settlement of a dispute agreed to before the specified effective dates. Additionally, several older rulings have been withdrawn with effect from 31 October 2018, reflecting updates and changes in the law.
Key Provisions
The Commissioner of Taxation, Chris Jordan, has issued several Rulings and withdrawn older Rulings, which are crucial for understanding and applying the relevant tax laws in Australia. Firstly, the key provisions include Ruling TD 2018/15 (Section 104-10) which clarifies whether a capital gains tax (CGT) event happens if a taxpayer grants an easement, profit à prendre or licence over an asset. This Ruling applies to income years commencing both before and after 31 October 2018, but it does not apply to the extent that it conflicts with a pre-existing settlement of a dispute. Similarly, Ruling TR 2018/7 (Section 83A) addresses the taxation of employee remuneration trusts that operate outside the employee share scheme rules. This Ruling also applies to income years beginning before and after 31 October 2018, unless it conflicts with a prior dispute settlement.
Additionally, Ruling LCR 2018/8 pertains to the expansion of the taxable payments reporting system for courier and cleaning services. This Ruling, under Section 284-160 of the Taxation Administration Act 1953, requires entities providing these services to report details of transactions where they pay contractors. This Ruling has been effective from 1 July 2018. Another Ruling, CR 2018/42 (Section 104), provides the Commissioner’s position on Australian residents who received shares in Theodore Water Pty Ltd. This Ruling applies from 1 July 2018 to 30 June 2019 and continues to apply to entities within the specified class who entered into the scheme during the Ruling’s term.
Furthermore, several older Rulings, including TD 93/79, TD 93/81, TD 93/235, TD 93/236, TD 96/35, and TD 2008/20, have been withdrawn with effect from 31 October 2018. These older Rulings covered various aspects of capital gains tax related to the sale of timber and the granting of easements, but they are no longer applicable as of the withdrawal date.
In terms of obligations, entities and taxpayers must adhere to the specified Rulings to correctly apply the taxation laws. They must report relevant details as required by LCR 2018/8 and consider the impact of TD 2018/15 and TR 2018/7 on their tax positions. Any failure to comply with these Rulings may result in penalties. Under the Taxation Administration Act 1953, penalties can include fines for non-compliance with reporting requirements or for providing false or misleading information. The maximum penalties can be substantial, depending on the nature and extent of the non-compliance, potentially involving significant financial and reputational consequences for the entities involved.