Patricia Martins

Part 2: International tax series: income tax consequences for non-resident beneficiaries

Part 2: International tax series: income tax consequences for non-resident beneficiaries

Our international tax series discusses Commonwealth tax issues relating to non-resident beneficiaries or non-resident trustees of a trust.

Part 1 International tax series: are you a resident or non-resident?

Part 1 International tax series: are you a resident or non-resident?

This is the first article in a series relating to the Australian tax consequences for resident and non-resident beneficiaries of Australian and foreign trusts.

Sladen Snippet - CGT rollover denied to sale of shares

Sladen Snippet - CGT rollover denied to sale of shares

The Administrative Appeals Tribunal (AAT) has recently held in Ransley v Federal Commissioner of Taxation that the profits derived by an individual taxpayer on the sale and exchange of shares were on revenue account. As a result, the taxpayer was not eligible for the capital gains tax rollover under Subdivision 124-M of the Income Tax Assessment Act 1997.

TD 2018/13 - a commercial transaction may not stop Division 7A

TD 2018/13 -  a commercial transaction may not stop Division 7A

The Australian Taxation Office (ATO) recently released Taxation Determination TD 2018/13 (TD 2018/13) confirming its view that the (often overlooked) interposed entity provisions in section 109T of Division 7A of the Income Tax Assessment Act 1936 can apply to ordinary commercial transactions.

Sladen Snippet - Individuals’ financial affairs at risk of being reported to foreign jurisdictions by the ATO

Sladen Snippet - Individuals’ financial affairs at risk of being reported to foreign jurisdictions by the ATO

Australia is obligated under Automatic Exchange of Information (AEOI) regimes to automatically exchange financial account information with foreign jurisdictions.

CGT marriage breakdown rollover does not apply to entities controlled by former spouses

CGT marriage breakdown rollover does not apply to entities controlled by former spouses

In Ellison v Sandini Pty Ltd [2018] FCAFC 44, the Full Federal Court overturned decision which allowed Mr Sandini (the Taxpayer) to benefit from Capital Gains Tax (CGT) marriage breakdown rollover for the transfer of shares to an entity controlled by his former spouse, pursuant to a Family Court Order (FCO).

Sladen Snippet - What is “market value” for the purpose of the MNAV test

Sladen Snippet - What is “market value” for the purpose of the MNAV test

In Commissioner of Taxation v Miley, the Federal Court overturned decision of the Administrative Appeals Tribunal (AAT) concerning the share valuation method for the purposes of the maximum net asset value (MNAV) test in s 152-15 of the Income Tax Assessment Act 1997.

Sladen Snippet: TD 2017/20 confirms the ATO interpretation of “distributes” for the purpose of the FTDT

Sladen Snippet: TD 2017/20 confirms the ATO interpretation of “distributes” for the purpose of the FTDT

As previously reported in June this year, the Australian Taxation Office (ATO) published the Draft Taxation Determination TD 2017/D1 altering their previous published interpretation of the meaning of “distributes” for the purposes of the family trust distribution tax (FTDT).

The draft tax determination has now been published in its final form as TD 2017/20, confirming that FTDT can apply where there is a “distribution” to a person who is not a beneficiary of the trust.

Sladen Snippet - Differential streaming of franked dividends and franking credits case granted special leave

Sladen Snippet - Differential streaming of franked dividends and franking credits case granted special leave

On 23 October 2017, the Commissioner was granted special leave to appeal to the High Court against the Full Federal Court’s decision from earlier this year in Thomas v Commissioner of Taxation 2017 FCAFC 57.

Court rules on “present entitlement” and “disclaimer of entitlement” to trust income

Court rules on “present entitlement” and “disclaimer of entitlement” to trust income

The concept of “present entitlement” within the meaning of section 97 of the Income Tax Assessment Act 1936 and validity of a “disclaimer of entitlement of income” were considered by the Full Federal Court in the recent case of Lewski v Commissioner of Taxation [2017] FCAFC 145 (Lewski) that illustrates the importance of having trust law and taxation law concepts properly aligned. Lewski was an appeal from a decision of the Administrative Affairs Tribunal.

ATO provides a “safe harbour” for fixed trusts

ATO provides a “safe harbour” for fixed trusts

The Australian Taxation Office (ATO) published the final version of the Practical Compliance Guidelines (PCG) 2016/16, which provides guidance in relation to what will be considered by the Commissioner when exercising his discretion to treat an interest in the income or capital of a trust as being a fixed entitlement and by extension whether a trust is a fixed trust for the purposes of the tax law.

GST on the sale of residential property – a lesson from the Sebel Manly Beach Hotel

GST on the sale of residential property – a lesson from the Sebel Manly Beach Hotel

The Administrative Appeals Tribunal (AAT) recently held in the case of MSAUS v FC of T that Division 135 of the Good and Services Tax (GST) Act did not apply to impose an increasing adjustment [an amount of GST on an otherwise GST-free transaction] to the sale of leased residential apartments

Sladen Snippet - New WET rebate eligibility criteria and cap reduction receives assent

Sladen Snippet - New WET rebate eligibility criteria and cap reduction receives assent

As previously discussed in this forum, changes to the Wine Equalisation Tax (WET) Rebate eligibility criteria and cap reduction were announced in December 2016 by the Turnbull Government. These reforms received assent on 23 August 2017 and bring significant changes to the entitlement to the WET producer rebate.

Sladen Snippet - ATO provides additional 7 years to repay UPE under sub-trust arrangements maturing in the 2017/18 income years

Sladen Snippet - ATO provides additional 7 years to repay UPE under sub-trust arrangements maturing in the 2017/18 income years

Practical Compliance Guideline (PCG) 2017/13 confirms the ability for a sub-trust arrangement using the 7-year option 1 investment agreement to be converted into a compliant loan, as described under section 109-N of Income Tax Assessment Act 1936 (ITAA 36). The ability to refinance UPE for an additional 7 years may be advantageous to taxpayers that would otherwise have been required to repay such arrangements by either 30 June 2017 or 30 June 2018.

Sladen Snippet - ATO guidance on liability of a legal personal representative of a deceased person

Sladen Snippet - ATO guidance on liability of a legal personal representative of a deceased person

The Australian Taxation Office (ATO) has released for public comment draft Practical Compliance Guideline (PCG) 2017/D12, which gives guidance to the legal personal representative (LPR) of a deceased person as to circumstances where the LPR may be personally liable for the deceased’s tax liability.