COMMISSIONER OF TAXATION
The Commissioner of Taxation, Michael D’Ascenzo, 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 |
TD 2012/21 | Income tax: does CGT event E1 or E2 in sections 104‑55 or 104‑60 of the Income Tax Assessment Act 1997 happen if the terms of a trust are changed pursuant to a valid exercise of a power contained within the trust's constituent document, or varied with the approval of a relevant court? | This Determination concludes that CGT event E1 or E2 happen if the terms of a trust are changed pursuant to a valid exercise of a power contained within the trust's constituent document, or varied with the approval of a relevant court. Subject to the exception mentioned in paragraph 13, this Determination applies both before and after its date of issue. |
TD 2012/22 | Income tax: for the purposes of paragraph 97(1)(a) of the Income Tax Assessment Act 1936 (ITAA 1936) is a beneficiary's share of the net income of a trust estate worked out by reference to the proportion of the income of the trust estate to which the beneficiary is presently entitled? | This Determination concludes that a beneficiary's share of the net income of a trust estate is worked out by reference to the proportion of the income of the trust estate to which the beneficiary is presently entitled. This Determination applies to years of income commencing both before and after its date of issue. |
CR 2012/94 | Income tax: deductibility of employer contributions to the Australian Construction Industry Redundancy Trust | This Ruling outlines the tax consequences for those employers who make contributions to the Australian Construction Industry Redundancy Trust (ACIRT) on behalf of the workers who are members of ACIRT. This Ruling applies from 1 July 2012 to 30 June 2018. |
CR 2012/95 | Income tax: Department of Health and Human Services (Tasmania) Self-Directed Funding by direct payments | This Ruling outlines the tax consequences for persons with a disability receiving disability services funded by the Department of Health and Human Services (Tasmania) and nominated persons as defined in the Self-Directed Funding Direct Payments Guidelines who have an Individual Support Package and enter into a Direct Payment Deed with the Department to receive funds for the purpose of purchasing disability services. This Ruling applies from 1 July 2012. |
CR 2012/96 | Income tax: Bendigo and Adelaide Bank Limited – allotment of convertible preference shares (CPS) | This Ruling outlines the tax consequences for subscribers of Convertible Preference Shares in Bendigo and Adelaide Bank Limited who hold those CPS on capital account and are Australian residents within the meaning of subsection 995‑1(1). This Ruling applies from 24 October 2012 to 30 June 2020. |
CR 2012/97 | Income tax: Google Inc. 2004 Stock Plan: Australian Resident Employees | This Ruling outlines the tax consequences for employees of Google Inc and its subsidiaries Google Australia Pty Limited and DoubleClick Australia Pty Ltd. This Ruling applies from 1 July 2012 to 30 June 2017. |
NOTICE OF WITHDRAWALS |
Ruling Number | Subject | Brief Description |
IT 2258 | Income tax: election expenses: deductibility of expenditure incurred and effect of public funding of elections | Taxation Ruling IT 2258 is withdrawn with effect from today. |
CR 2001/81 | Income tax: exempt foreign employment income: section 23AG: Boeing Australia Limited | Class Ruling CR 2001/81 is withdrawn with effect from today. |
NOTICE OF ERRATA |
Ruling Number | Subject | Brief Description |
TR 2010/1A | Income tax: superannuation contributions | This Erratum corrects Taxation Ruling TR 2010/1A to correct paragraph references in the detailed contents list. This Erratum applies on and from 22 August 2012. |
CR 2012/38 | Income tax: merger of Xstrata plc and Glencore International plc – Xstrata plc Long Term Incentive Plan | This Erratum corrects Class Ruling CR 2012/38 to update the News Release reference at paragraph 9 and to reflect the correct ratio of shares at paragraphs 13, 20 and 22. This Erratum applies on and from 13 June 2012. |
Overview
The Commissioner of Taxation, Michael D’Ascenzo, issued several rulings in 2012 to address various income tax issues as they pertain to specific circumstances and entities, ensuring that taxpayers are aware of their obligations and entitlements. These rulings provide clarification on topics such as the capital gains tax consequences of changes to trust terms, the calculation of a beneficiary's share of trust income, and the tax implications of employer contributions to specific industry trusts. Additionally, rulings were issued to explain the tax treatment of particular financial instruments and employee incentive plans within major corporations. The rulings, published in the Gazette, aim to ensure that taxpayers understand their tax obligations in these complex areas and were issued by the Australian Taxation Office under the authority of the relevant taxation acts. The objective is to provide certainty and compliance assistance to taxpayers in navigating these intricate tax scenarios.
Scope and Application
The Taxation Determinations and Rulings issued under the Commissioner of Taxation provide detailed guidance on various aspects of income tax, addressing specific scenarios and transactions. For instance, TD 2012/21 addresses capital gains tax (CGT) events related to changes in trust terms, applying to trustees, beneficiaries, and potentially the trust itself, both pre and post the ruling's issuance. Similarly, TD 2012/22 clarifies the calculation of a beneficiary's share of trust income, relevant to trustees and beneficiaries of trusts, and applies to income years starting before and after the ruling. Class Rulings, such as CR 2012/94 to CR 2012/97, offer tax guidance on specific industry-related contributions and employment scenarios, each with defined temporal applicability. These Rulings are applicable within the Commonwealth of Australia and are subject to the specified dates unless otherwise noted. Notably, some Rulings may be withdrawn or amended as indicated, impacting their continued application.
Key Provisions
The Taxation Determinations and Rulings issued by the Commissioner of Taxation under the Income Tax Assessment Act 1997 (Cth) and the Income Tax Assessment Act 1936 (Cth) provide clarification on various tax matters. For instance, TD 2012/21 (paragraph 3) deals with the capital gains tax (CGT) implications when the terms of a trust are altered by exercising a power in the trust's document or with court approval. The determination concludes that such actions trigger CGT events E1 or E2. TD 2012/22 (paragraph 3) addresses the calculation of a beneficiary's share of a trust's net income, specifying it should be based on the proportion of the trust's income to which the beneficiary is currently entitled. Both determinations apply to income years beginning before and after their issuance dates.
The Class Rulings, such as CR 2012/94, CR 2012/95, CR 2012/96, and CR 2012/97, outline specific tax consequences for various transactions. CR 2012/94 covers employer contributions to the Australian Construction Industry Redundancy Trust, while CR 2012/95 concerns self-directed funding by direct payments for disability services in Tasmania. CR 2012/96 addresses the allotment of convertible preference shares in Bendigo and Adelaide Bank Limited, and CR 2012/97 deals with the 2004 Stock Plan for Australian resident employees of Google Inc. and its subsidiaries. These rulings apply within specified periods, ranging from 1 July 2012 to 30 June 2020.
The obligations imposed on the parties governed by these rulings include accurately applying the tax consequences outlined for specific transactions. For instance, employers contributing to the Australian Construction Industry Redundancy Trust must adhere to the tax implications specified in CR 2012/94. Similarly, individuals or entities involved in the merger of Xstrata plc and Glencore International plc must comply with the tax provisions in CR 2012/38 as corrected by the erratum. Failure to comply with these obligations may result in incorrect tax filings and potential penalties.
The rulings also delineate the consequences for non-compliance. For instance, incorrect application of the tax provisions outlined in the rulings may result in penalties under the tax legislation. These penalties can include fines and interest on any unpaid tax amounts. The maximum penalties depend on the nature and severity of the breach, and may be specified in the relevant tax acts. It is crucial for taxpayers to understand and adhere to these provisions to avoid legal repercussions.