5 minute tax updates: 25-29 January

TBC to rise to $1.7 million from 1 July, and to be indexed
Car rego details to be data matched for tax integrity
CGT and hybrid security valuation on buy-back
Super guarantee determination updated
More consultation by BOT on CGT rollovers
Temporary full expensing alternative test becomes law
APRA opens second consultation on insurance standard
ATO’s monthly performance scorecard records a few misses
Fuel tax credit rates — business and non-business

TBC to rise to $1.7 million from 1 July, and to be indexed
The ATO has announced that the general transfer balance cap (TBC), currently $1.6 million, will from 1 July 2021 be indexed to $1.7 million. When the general TBC is indexed to $1.7 million, there won’t be a single cap that applies to all individuals. Every individual will have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.

Car rego details to be data matched for tax integrity
The January Commonwealth Gazette has notice of a data matching program to be initiated to identify and address taxpayers buying and selling motor vehicles who may not be meeting their obligations to register and lodge returns (including activity statements) and ensure the correct reporting of income and entitlement to both deductions and input tax credits. The ATO will acquire motor vehicle registry data from state and territory motor vehicle registry authorities for 2019-20 through to 2021-22. The data items include names, addresses, phone numbers, date of birth for individuals or ABN and ACN for purchaser(s), seller(s), licenced dealer, fleet manager, leasing company (or representative of any of these), as well a; the registering person for an unincorporated body.

CGT and hybrid security valuation on buy-back
The ATO has issued the practical compliance guideline PCG 2021/1, which deals with CGT and the application of market value substitution rules when there is a buy-back or redemption of hybrid securities, and the methodologies for determining market value for investors holding their securities on capital account. The PCG recognises the practical problems faced by investors in determining the market value under certain circumstances. The ATO has provided extra guidance on this matter.

Super guarantee determination updated
Amendments to legislation and references has meant the ATO has had to re-issue SGD 2006/2. Re-issued as 2006/2A1, the addendum centres on the area of SG contributions concerned cover where a deemed “employer” for SG purposes is only such due to subsection 12 of the act (12(3) and 12(8) specifically), and the income tax outcomes of a “salary” sacrifice arrangement under these circumstances to ensure that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee contributions.

More consultation by BOT on CGT rollovers
The Board of Taxation has issued a second consultation paper in regard to its review of CGT rollovers, with submissions due 5 February. BOT emphasises that rationalising and simplifying CGT rollovers is not merely a matter of rewriting the existing law without disrupting the status quo. It involves confronting some quite fundamental questions about the role that rollovers should play in a mature business tax system, when relief should be available and to whom, and how it should be designed.

Temporary full expensing alternative test becomes law
Just prior to Christmas, royal assent was gained for the legislation containing the amendment to expand the availability of the temporary full expensing measure by introducing a new alternative test to satisfy the $5 billion eligibility threshold and make it optional to apply the measure.

APRA opens second consultation on insurance standard
The Australian Prudential Regulation Authority (APRA) has commenced a second round of consultation on revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250). The proposed changes are aimed at improving superannuation member outcomes by helping trustees select the most appropriate insurance policies for their members, and monitor their ongoing relationships with insurers. The key changes to the standard address two recommendations from the financial services Royal Commission. Submissions are open until 5 March, with a proposed start date of 1 January 2022.

ATO’s monthly performance scorecard records a few misses
The ATO publishes a performance report on its service commitment activities each month, and the latest shows a few areas where it could have done better. Up to 31 December, responding within timeframes to SG employee notification issues within four months rated well below expectations (a 10% score when 60% was expected) and the same issue but within nine months rated below expectations (50% when 90% was expected). Resolving complaints within 15 business days, to 31 October, was slightly down on expectations. This scored 81% when 85% had been flagged as desirable.

Fuel tax credit rates — business and non-business
Fuel tax credit rates change regularly. They are indexed twice a year – in February and August – based on the upward movement of the consumer price index (CPI). The CPI indexation factor for rates from 1 February 2021 is 1.009. Here are the ATO pages for fuel tax credits, business and non-business. Both are from 1 July 2020 to 30 June 2021, and include links to past rates.

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