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Sladen Snippet – Fed Court overturns special circumstances finding of AAT

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Sladen Snippet – Fed Court overturns special circumstances finding of AAT

The Federal Court has overturned one of the few AAT cases that found special circumstances exist for an excess contribution assessment. In FCT v Dowling there were two relevant contributions. First, a non-concessional contribution of $156,142 made by the taxpayer’s husband in the 2009 year for the purposes of increasing his age pension entitlement. This contribution was made as a result of free advice from Centrelink and a public offer super fund. The contribution triggered the bring forward rule for the taxpayer. Second, a $200,000 non-concessional contribution in the 2011 year under a recontribution strategy which caused the taxpayer to exceed her non-concessional cap under the bring forward rule.

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Sladen Snippet - ATO Decision Impact Statement on the control of a trust

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Sladen Snippet - ATO Decision Impact Statement on the control of a trust

On 19 March 2014, the ATO issued its decision impact statement (DIS) on the AAT decision in Gutteridge & Anor v FC of T 2013 ATC.

In that case, a trust made capital gains from the sale of business assets and the taxpayers, Mr and Mrs Gutteridge, sought to apply the small business capital gains tax concessions when taxed on the capital gain. The Commissioner, in applying the $6 million maximum net asset value ("MNAV") test held that the trust was controlled by the taxpayers’ daughter who was the sole director and shareholder of the corporate trustee, and included the values of the assets held by a company also controlled by her on the basis that it was “connected with” the trust. As a consequence, the trust failed to satisfy the MNAV.

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Sladen Snippet – SMSF penalty/direction/education regime to apply from 1 July 2014

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Sladen Snippet – SMSF penalty/direction/education regime to apply from 1 July 2014

The SMSF administrative penalties, rectification directions and education directions regime is now law (via the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Act 2014). From 1 July 2014, the ATO will have the power to: - issue scaled penalties to SMSF trustees for breaches of the SIS Act (in addition to the power to make a SMSF non-compliant); - order SMSF trustees/directors to attend education courses if they have breached the SIS Act; and - order SMSF trustees to rectify breaches of the SIS Act. The Bill also introduces penalties to deter and penalise persons who promote illegal early release schemes from regulated superannuation funds.

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Sladen Snippet – Separation of SMSF assets - ATOID 2014/7

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Sladen Snippet – Separation of SMSF assets - ATOID 2014/7

As we previously identified (see http://tinyurl.com/mgl5z7b) the operating standard compelling SMSF trustees to hold their assets separately is a limited obligation due to the wording of the standard in regulation 4.09A of the SIS Regs. The obligation only prevents mixing of the trustee’s personal assets or those held by a standard employer sponsor (or associate of the employer sponsor).