Legal practitioners community

Published: Monday 23 July, 2018

We have published the final determination CRP 2017/2 Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017, which had previously been open for consultation.

The modification made by this instrument applies where an entity transfers a depreciating asset or assets in the course of carrying out a genuine restructure of a small business. This will ensure that the transfer of the depreciating assets will have no direct income tax consequences.

This modification will most commonly apply where the restructure involves the transfers of depreciating assets by:

• the trustees of trusts to beneficiaries
• to shareholders, and other associated persons.

In the absence of the modification, such transfers could give rise to assessable income in the hands of the transferee. The modification made by this instrument does not apply to an entity if the modification would produce a less favourable result for the entity.

Thank you for participating in this consultation.

---

We have published draft determination CRP 2017/D2 Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017, which is open for consultation until 3 October 2017.

The modification made by this draft determination applies where an entity transfers a depreciating asset or assets in the course of carrying out a genuine restructure of a small business. This will ensure that the transfer of the depreciating assets will have no direct income tax consequences.

This modification will most commonly apply where the restructure involves the transfers of depreciating assets by:

• the trustees or trusts to beneficiaries
• companies to shareholders, and other associated persons.

In the absence of the modification, such transfers could give rise to assessable income in the hands of the transferee. The modification made by this draft determination does not apply to an entity if the modification would produce a less favourable result for the entity.

We invite you to comment on the draft determination by visiting our Consultation Hub by 3 October 2017.

This consultation is now closed.

We are currently working through the feedback provided with our Legal Practitioner Round Table members and will provide an update when it is finalised. Thank you to our members for your contributions.

Background

At the Legal Practitioners Round Table meeting on 8 May 2017, members raised the impacts of our use of garnishee and freezing orders as a topic they wanted to discuss in-depth at a separate meeting – in particular, the factors that we take into account when considering either of these actions.

The Legal Practitioner Round Table is the key forum where we discuss matters of strategic significance with the legal profession.

We are keen to hear from all legal practitioners about your experiences on this topic and encourage you to join the discussion.

Consultation is open until 28 July 2017.

Go to discussion

The consultation period for the draft FAQ for legal practitioners:What to do if your client has a debt with the ATO ended on 4 August 2017.

We are currently reviewing the feedback we received and we will post an updated FAQs when finalised. Thank you to our community members for your feedback.

Background

At the 2016 Legal Practitioner Round Table, members raised issues in relation to contacting us on behalf of their clients regarding debt matters. Specifically, they were interested in which area they should contact, and how, at various stages of a disputed or undisputed debt matter.

The draft FAQ for legal practitioners: What to do if your client has a debt with the ATO outlines what you need to do or who to contact to discuss your clients’ debt matters with us.

We are keen to hear from all legal practitioners and invite you to complete a survey and share your feedback with us. Your comments and suggestions will be considered to determine how we might improve this FAQ to better meet your needs.

The Inspector-General of Taxation (IGT) is conducting a review into:

• the opportunities, risks and challenges presented by new technological, social, policy and regulatory developments on the administration of the tax system
• the strategies necessary to assist the tax profession to meet the potential challenges posed by these developments
• how the ATO and the Tax Practitioners Board can seize opportunities presented by technological, social, policy and regulatory developments.

The IGT welcomes submissions from all interested members of the community including taxpayers, tax practitioners, professional bodies as well as other third parties such as financial advisers, software and hardware developers, data analysts, providers of banking and payment services, economists and valuers.

Further details, including the terms of reference and how to make a submission, can be found on the IGT website.

The closing date for submissions is 28 July 2017.

The Inspector-General of Taxation (IGT) will examine the ATO’s fraud prevention and detection policies and how they are practically applied to ensure that its practices reflect the required standards.

The IGT welcomes submissions from all interested members of the community, including tax and legal practitioners, fraud prevention specialists, current and former ATO officers as well as taxpayers.

Further details such as the terms of reference and how to make a submission can be found here.

The closing date for submissions is 28 July 2017.

Updated: Wednesday 24 May 2017

Thank you for attending and participating in the webinar session. You can access the webinar presentation from here or via the document library.

From 1 July 2017, you’ll need to use the ATO Business Portal to request copies of your clients’ documents such as tax returns, payment summaries and notices of assessment.

The webinar shows you what you’ll need to do, including how to:

• register for an AUSkey
• use Manage ABN Connections
• submit requests via the ATO Business Portal.

Watch the webinar recording below.

We’re seeking feedback on our draft practical compliance guideline (PCG), PCG: Cross-border related party financing arrangements and related transactions. You can access a copy of the draft ruling here.

This PCG provides guidance on the pricing of both ‘inbound’ loans (where an Australian subsidiary borrows from a foreign shareholder) and ‘outbound’ loans (where an Australian shareholder lends to a foreign subsidiary).

The guideline sets out the characteristics of arrangements which we are likely to consider high risk. It is also designed to provide more certainty to businesses by identifying arrangements which are likely to be considered low risk.

The purpose of the PCG is to help you understand:

• how we rate risks related to cross border related party financing arrangements
• how we make an assessment of your risk rating
• when we may require greater assurance in relation to a cross-border related party financing arrangement.

Lower your risk rating

A lower risk rating will reduce the likelihood of us undertaking assurance checks on your financing arrangements. A rating of green (low risk) will mean we will not dedicate resources to review your arrangement. If you find your rating is not low, we recommend you take necessary steps to restructure or make different financing arrangements. We will be checking self-assessed risk ratings to ensure they’re appropriate.

Consultation

We’re encouraging professionals and taxpayers to provide feedback on the draft PCG. In particular we would like your views on:

• Do you agree with the expectation set out at paragraph 77 of Schedule 1 to the PCG? Are there specific circumstances where this expectation is problematic?
• Are there particular industries which are disadvantaged by the scoring system used to calculate a risk rating under the ‘Related party financing risk indicator guide’ section?
• Is the description of the method and how you apply the method to determine your risk zone clear (including the definitions of risk indicators)?
• Are the exclusions from the application of the PCG at paragraph 14 appropriate? Are there any exclusions that should be removed, or additional exclusions included?
• Are the exclusions from reporting your risk assessment at paragraph 38 of the PCG clear?
• Should the PCG emphasise the importance of particular clauses to be included in legal agreements under the ‘Evidencing your self-assessment of your risk zone’ section?
• Is there sufficient guidance in the ‘Transitioning existing arrangements to ‘Green zone – low risk’’ section?

To provide feedback, join the discussion on our Public Advice and Guidance Community by 30 June 2017.