Daily updates: 26-30 July

30 July

Superannuation: Annual balance reporting reminder  
The ATO has reminded trustees of superannuation funds that they have an obligation to report the 30 June 2021 account balance amounts and any applicable phase values, notional taxed contributions and defined benefit contributions, on or before 31 October 2021 (via the Member account transaction service for any account that is open as at 30 June 2021). The ATO also advised that if you need to correct a 30 June 2021 account balance, you are required to correct this by reporting a subsequent 30 June 2021 account balance amount (which must be corrected within 30 days of becoming aware there was an error or omission in the information provided). See also the ATO website for general reporting requirements of SMSFs.

Exposure draft legislation to reform ESS released
The Government has released draft legislation to implement the reforms to regulatory and tax arrangements for employee share schemes (ESS) that were announced in the 2021-22 Budget. The proposed measures will remove the “cessation of employment” taxing point for the tax-deferred ESS that are available for all companies. Under the regulatory reforms, employers will not have to consider the Corporations Act 2001 when making ESS offers, provided that they do not charge or lend to employees that they offer these remuneration packages to, and are not otherwise engaged in regulatory avoidance behaviour.

Remission of super-guarantee charge – Draft PS LA 2021/D1 released 
The ATO has released draft Law Administration Practice Statement PS LA 2021/D1 which sets out the matters to be considered in making a decision on the remission, in whole or part, of the additional super guarantee charge imposed under s 59(1) of the Superannuation Guarantee (Administration) Act1992 where an employer fails to lodge a super guarantee statement by the lodgment due date (i.e. “Part 7 penalty”).

NSW payroll tax reductions and deferrals 
The NSW government has announced further payroll tax relief to help employers deal with  COVID-19 lockdowns. These measures include: the option of deferring their returns due in August and September until 7 October 2021 (for monthly payers); eligibility for an interest free payment plan of up to 12 months for business that defer their payment); and a 25% reduction of 2021/22 payroll tax for businesses with wages between $1.2m and $10m that have experienced a 30% decline in turnover.

NSW First Home Buyers Assistance scheme – concessional rates to end
Revenue NSW has advised that from 1 August 2021 the “concessional” transfer duty thresholds that apply under the First Home Buyers Assistance scheme will revert to the previous concessional thresholds that applied from 1 July 2017 to 31 July 2020. Accordingly, the thresholds from 1 August 2021 will be as follows: new homes valued less than $650,000 – full exemption; new homes valued between $650,000 and $800,000 – concessional rate; vacant land valued less than $350,000 – full exemption; vacant land valued between $350,000 and $450,000 – concessional rate.

NSW Revenue Ruling DUT 012v3 amended re valuing options 
Revenue Ruling DUT12v3 Dutiable Transactions Evidence of Value has been amended to include a paragraph on when evidence of value will be required where options are exercised. The amendment provides that “where an option between related parties is exercised, evidence of value of the property will be required as at the date of the exercise. Evidence of value of the subject property will also be required where the option is between unrelated parties and is exercised more than 12 months after the grant of the option. Evidence of value may also be required if there is a change to the property between grant and exercise of the option, such as improvements or rezoning”.

Treasury consultation paper on recent foreign investment reforms
Treasury has released a consultation paper seeking evaluation of the recent foreign investment reforms enacted under the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020, and the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020. The Treasury evaluation will “consider the impact the reforms and their implementation have had on foreign investment in Australia and the broader Australian economy, and whether the right balance is struck between welcoming foreign investment and protecting Australia’s national interests”. Submissions should be lodged before midnight AEST on 31 August 2021.

Vic land tax: no exemption for primary production
In a matter involving the land tax exemption for primary production, the Supreme Court of Victoria has held that a trust was engaged mainly in the business of residential subdivision, and not primary production at the relevant time. In doing so, the Court confirmed that the test was whether the “principal business” of the taxpayer was primary production. It also considered the requirement of whether one of the specified beneficiaries was normally engaged in a substantially full-time capacity in the business of primary production of the type carried out on the land. (Lotus Oaks Pty Ltd as trustee for the Bozzo Family Trust v Comm’r of State Revenue [2021] VSC 388, 14 July 2021.)

No extension of time to object to assessments re travel allowances
The AAT has denied a taxpayer an extension of time to object to assessments for the 2007-8 to 2017-18 years. The taxpayer sought to include omitted travel allowances and claim a deduction for these expenses within the “reasonable amounts”. In refusing the application, the AAT found that the objections would have little prospect of leading to a reduction in his liability. It also noted that the exception for substantiation in this case may still require the taxpayer to show the basis for determining the amount of their claim and that the expense was actually incurred for work-related purposes. (Clark and Commissioner of Taxation [2021] AATA 2446, 22 July 2021.)

CGT active asset test – Decision Impact Statement on Eichmann 
The ATO has released its Decision Impact Statement on the decision of the Full Federal Court in Eichmann v FCT [2020] FCAFC 155 in which it was held that land used for the storage of materials and equipment relating to the taxpayer’s building and bricklaying business was an active asset for the purposes of the CGT small business concessions. In the DIS, the ATO agreed with the Court that whether an asset is an active asset is “intrinsically fact-dependent” by reference to the “identified” business being carried on.

29 July

NSW: COVID JobSaver payment expanded 
The Federal and NSW Governments have agreed to expand the COVID-19 Business Support Payment scheme. Under the arrangement, eligible entities, which includes not-for-profits, will now receive payments of between $1,500 and $100,000 per week based on the level of their payroll with the maximum turnover threshold increased from $50m to $250m. The payment will continue to be calculated based on 40% of payroll for businesses that have suffered a 30% decline in turnover.  For non-employing businesses, such as sole traders, the payment will remain set at $1,000 per week. The NSW government has also advised that businesses can expect to receive funds in their accountswithin 5 to 10 business days from their approval date. Payments will also be backdated, so businesses that have already received a first payment  under the previous arrangement will be topped up on their next payment.

Disaster payment scheme amounts increased
The Federal Government’s has expanded the national COVID-19 Disaster Payment scheme for workers in every state and territory who lose hours due to a state government lockdown or public health order. Eligible workers will now receive $750 per week if they lose 20 hours or more of work while those that lose between 8 and less than 20 hours, or a full day of work, will receive a payment of $450 per week. “The new national payment rate will commence for payments processed week commencing 2 August and will be automatically updated for those already in the Services Australia system.”

Non-arm’s length income of a super fund – LCR 202/2 released
The ATO has released Law Companion Ruling 2021/2  to clarify how the amendments to s 295-550 of ITAA 1997 (dealing with meaning of “non-arm’s length income” of a complying superannuation fund) operate in a scheme where the parties do not deal with each other at arm’s length and the trustee of a complying superannuation entity incurs non-arm’s length expenditure (or where expenditure is not incurred) in gaining or producing ordinary or statutory income. Note: These amendments apply in relation to income derived in the 2018-19 income year and later income years, regardless of whether the scheme was entered into before 1 July 2018.

Superannuation contributions – Draft TR 2010/1DC released 
The ATO has released Taxation Ruling TR 2010/1DC (superannuation contributions) which outlines proposed changes to TR 2010/1 to explain the interactions between the non-arm’s length income provisions and the rules concerning superannuation contributions. It also contains changes to reflect the removal of the maximum earnings test for the purpose of deducting personal contributions, which commenced from 1 July 2017.  

28 July

Reform of the ACNC secrecy provisions – consultation paper 
Treasury is seeking feedback and views from stakeholders on the issues identified in recommendation 17 of the Strengthening for Purpose: Australian Charities and Not-for-Profit Commission Legislation Review 2018 (ACNC Review). Specifically, the consultation paper seeks information on the following: impacts of the ACNC’s current secrecy provisions; views about the benefits and sensitivities of public disclosure of certain information about the ACNC’s regulatory activities; circumstances under which the ACNC should disclose information about its regulatory activities to the public; and factors and risks that should form the basis of a discretion when considering whether or not to disclose information to the public.

No extension of time to object to assessments re travel allowances
The AAT has denied a taxpayer an extension of time to object to assessments for the 2007/8 to 2017/18 years. The taxpayer sought to include omitted travel allowances and claim a deduction for these amounts that were within “reasonable amounts”. In refusing to grant the application, the AAT found that the objections would have little prospect of leading to a reduction in his tax liability. It also noted that “the exception from substantiation” may still require the taxpayer to show the basis for determining the amount of their claim and that the expense was actually incurred for work-related purposes. (Clark and Commissioner of Taxation [2021] AATA 2446 (22 July 2021).)

NSW Revenue: Ruling amended re valuing options 
NSW Revenue Ruling DUT12v3 Dutiable Transactions Evidence of Value has been amended to include a paragraph on when evidence of value will be required where options are exercised. The amendment provides that “where an option between related parties is exercised, evidence of value of the property will be required as at the date of the exercise. Evidence of value of the subject property will also be required where the option is between unrelated parties and is exercised more than 12 months after the grant of the option. Evidence of value may also be required if there is a change to the property between grant and exercise of the option, such as improvements or rezoning”.

Small and medium enterprise guarantee scheme
The Australian Government will guarantee 50% of the value of eligible business loans to small and medium enterprises impacted by COVID-19. Under these measures, the maximum loan value that will be guaranteed is $250,000 and there will be a repayment-free period of six months.

Extension of minimum super draw-down rules
The Federal Government has issued a Legislative Instrument to amend the Social Security (Asset-test Exempt Income Stream (Market-linked) – Payment Factors) Principles 2017The instrument extends the halving of the minimum draw-down rate for another year to allow the income stream to remain asset-test exempt due to the continuing economic impact of COVID-19.
 
Exemption from STP for payments to closely held payees.
The Government has issued a Legislative Instrument to provide an exemption from mandatory reporting through Single Touch Payroll (for the 2019-20 and 2020-21 financial years) for those employers who make payments to closely held payees.
Treasury consultation paper on recent foreign investment reforms
Treasury has released a consultation paper seeking evaluation of the recent foreign investment reforms enacted under the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020, and the Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2020. The Treasury evaluation will “consider the impact the reforms and their implementation have had on foreign investment in Australia and the broader Australian economy, and whether the right balance is struck between welcoming foreign investment and protecting Australia’s national interests”.

New Victorian Business Support Package – details
new Victorian Business Support Package has been established in conjunction with the Commonwealth. Among other things it will: establish a Business Continuity Fund to deliver $5,000 grants to businesses that remain impacted by capacity limits; the existing Licenced Hospitality Venue Fund will make grants of up to $20,000 to support licensed venues; the Commercial Tenancy Relief Scheme and Landlord Hardship Fund will provide support to landlords that provide rent relief to their tenants (and the Commercial Tenancies Relief Scheme will be reinstated to provide rent relief to small to medium commercial tenants and their landlords); a new Small Business COVID Hardship Fund will be established under which small businesses with a payroll of up to $10m who have experienced a 70% or greater reduction in revenue will be eligible for grants of up to $5,000; and, the existing Alpine Business Support scheme will deliver grants of between $5,000 and $20,000 to 430 Alpine based businesses.

27 July

Labor to support tax relief and current negative gearing and CGT regimes
The leader of the opposition, Mr Anthony Albanese MP has confirmed that an Albanese Labor Government “will deliver the same legislated tax relief as the Morrison Government”. He also said that it would “uphold the legislated changes to personal income taxes and maintain the existing regimes for negative gearing and capital gains tax”.

South Australian COVID business support program announced
The South Australian Government has announced a COVID-19 Business Support Grant Program to support South Australian small and medium-sized businesses that suffer a significant loss of income or have been forced to close as a result of the restrictions imposed from 20 July 2021. Grants of $3,000 for employing businesses and $1,000 for non-employing businesses are available for eligible businesses whose turnover has declined by 30% or more as a result of the COVID‑19 health restrictions in the week commencing 20 July 2021. To be eligible for the $3,000 grant a business must meet relevant criteria at the start of the restriction period (i.e. Tuesday 20 July 2021).

First Home Buyers Assistance scheme – concessional rates to end
Revenue NSW has advised that from 1 August 2021 the “concessional” transfer duty thresholds that apply under the First Home Buyers Assistance scheme will revert to the previous concessional thresholds that applied from 1 July 2017 to 31 July 2020. Accordingly, the thresholds from 1 August 2021 will be as follows: new homes valued less than $650,000 – full exemption; new homes valued between $650,000 and $800,000 – concessional rate; vacant land valued less than $350,000 – full exemption; vacant land valued between $350,000 and $450,000 – concessional rate.

Reminder: COVID-19 Disaster Payments are taxable income
On 15 July 2021, the Treasurer announced details of the “COVID-19 Disaster Payment” measures to support workers who are unable to work due to a State or Territory public health order that imposes restrictions on movement, such as a lockdown. For full details see the Treasury press release. However, it should also be noted that the press release stated that any such COVID-19 disaster payments are taxable income of the recipients.

Super: Annual balance reporting reminder – and error correction
The ATO has reminded trustees of superannuation funds that they have an obligation to report the 30 June 2021 account balance amounts and any applicable phase values, notional taxed contributions and defined benefit contributions, on or before 31 October 2021 (via the Member account transaction service for any account that is open as at 30 June 2021). The ATO also advised that if you need to correct a 30 June 2021 account balance, you are required to correct this by reporting a subsequent 30 June 2021 account balance amount (which must be corrected within 30 days of becoming aware there was an error or omission in the information provided).

26 July

NSW payroll tax reductions and deferrals
The NSW Government has announced further payroll tax relief to help employers deal with COVID-19 lockdowns. These measures include: the option of deferring their returns due in August and September until 7 October 2021 (for monthly payers); eligibility for an interest free payment plan of up to 12 months for business that defer their payment); and a 25% reduction of 2021/22 payroll tax for businesses with wages between $1.2m and $10m that have experienced a 30% decline in turnover.

ATO reminder: matters you can object to 
The ATO has conveniently set out the type of assessments and decisions that a taxpayer or their adviser can object to (and the time limits in which such objections must be made). Importantly, these include ATO decisions relating to the recent COVID Cash-flow Boost payments, Job-Keeper Payments and Job-Maker Hiring Credit.

Vic land tax: no exemption for primary production
In a matter involving the land tax exemption for primary production, the Supreme Court of Victoria has held that a trust was engaged mainly in the business of residential subdivision, and not primary production at the relevant time. In doing so, the Court confirmed that the test was whether the “principal business” of the taxpayer was primary production. It also considered the requirement of whether one of the specified beneficiaries was normally engaged in a substantially full-time capacity in the business of primary production of the type carried out on the land. (Lotus Oaks Pty Ltd as trustee for the Bozzo Family Trust v Comm’r of State Revenue [2021] VSC 388, 14 July 2021.)

SuperStream Rollover v3
The ATO has advised that from 31 March 2021, the SuperStream Rollover message will be extended to include self-managed superannuation funds (SMSFs) and digital release authorities. The transition period for implementation and onboarding to SuperStream Rollover v3 is from 31 March 2021 to 30 September 2021. The ATO has also provided information resources to assist with this matter.

Banking Royal Commission recommendations – draft legislation released
The Federal Government has released exposure draft legislation to implement further recommendations of the Banking, Superannuation and Financial Services Royal Commission. The legislation will establish the Compensation Scheme of Last Resort and the Financial Accountability Regime. The establishment of the Compensation Scheme of Last Resort is intended to support ongoing confidence in the financial system’s dispute resolution framework by facilitating the payment of compensation to eligible consumers who have received a determination for compensation from the Australian Financial Complaints Authority (AFCA).

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