Tax on the Couch

Talking Points
 Tax on the Couch – Talking Points
TAX ON THE COUCH
Talking Points – April 2024
The following issues were discussed in this month’s edition of Tax on the Couch.
Legislative Update
The following legislative developments were discussed on the Couch this month.
Title
Treasury Laws Amendment
(Cost of Living Tax Cuts) Bill
2024
Treasury Laws Amendment
(Cost of Living – Medicare
Levy) Bill 2024
Treasury Laws Amendment
(Support for Small Business
and Charities and Other
Measures) Bill 2023
Treasury Laws Amendment
(Tax Accountability and
Fairness) Bill 2023
Superannuation (Objective)
Bill 2023
Treasury Laws Amendment
(Better Targeted
Superannuation Concessions
and Other Measures) Bill 2023
© National Tax & Accountants’ Association Ltd: April 2024
Description
This bill amends the Income Tax Rates Act 1986 to modify
income tax rate thresholds and tax rates for individuals from
1 July 2024.
Royal Assent was received on 5 March 2024.
This bill amends the A New Tax System (Medicare Levy
Surcharge—Fringe Benefits) Act 1999 and Medicare Levy
Act 1986 to increase the Medicare levy and Medicare levy
surcharge low-income threshold amounts for individuals,
families and individual taxpayers and families eligible for the
seniors and pensioners tax offset.
Royal Assent was received on 5 March 2024.
This bill includes the $20k instant asset write-off threshold
for small businesses, the energy incentive which will provide
a 20% bonus deduction on up to $100k of eligible
expenditure for small and medium businesses, and the NALI
non-arm's length expense measures that will apply to
SMSFs and small APRA regulated funds.
This bill is currently before the Senate.
This bill contains provisions that are in response to the PwC
matter, including promoter penalty law reform, whistleblower
protections, Tax Practitioners Board reform and information-
sharing powers.
This bill is currently before the Senate.
This bill enshrines the purposes of superannuation into law,
including the aim of preserving savings for a dignified
retirement, alongside government support, in a way that is
equitable and sustainable.
This bill is currently before the Senate.
This bill includes provisions that relate to the additional 15%
of tax on earnings that relate to super balances above $3m.
This bill is currently before the House of
Representatives.
1
 Tax on the Couch – Talking Points

Title Description

Better Targeted These draft regulations relate to the proposed additional

Superannuation – Draft 15% tax that will apply to earnings on superannuation
regulations balances exceeding $3m.
Consultation closes on 26 April 2024.

Crimes Legislation
Amendment (Combatting
Foreign Bribery) Bill 2023
This bill has updated legislation relating to foreign bribery,
including the definition of foreign bribery. There are
consequential amendments to the Income Tax Assessment
Act 1997 to align the definition of foreign bribery for tax
purposes with that contained in the criminal code.
Royal Assent was received on 8 March 2024.

Rulings
The following rulings were discussed on the Couch this month.

Reference Description Date of issue

GSTR 2006/6DC2 Goods and services tax: improvements on 20 March 2024

the land for the purposes of Subdivision 38-
N and Division 75

TD 2024/D1 Income tax: hybrid mismatch rules - 13 March 2024

application of certain aspects of the 'liable
entity' and 'hybrid payer' definitions

GSTD 2024/1 Goods and services tax: supplies of 28 February 2024

combination food

LI 2024/4 Fringe Benefits Tax Assessment (Adequate 19 March 2024

Alternative Records – Fly-in Fly-out and
Drive-in Drive-out Employees)
Determination 2024

LI 2024/5 Fringe Benefits Tax Assessment (Adequate 20 March 2024

Alternative Records – Living-Away-From
Home – Maintaining an Australian Home)
Determination 2024

LI 2024/6 Fringe Benefits Tax Assessment (Adequate 20 March 2024

Alternative Records – Otherwise Deductible
Benefits) Determination 2024

LI 2024/7 Fringe Benefits Tax Assessment (Adequate 18 March 2024

Alternative Records – Private Use of
Vehicles Other Than Cars) Determination
2024

LI 2024/8 Fringe Benefits Tax Assessment (Adequate 19 March 2024

Alternative Records – Temporary
Accommodation Relating to Relocation)
Determination 2024

© National Tax & Accountants’ Association Ltd: April 2024 2

 Tax on the Couch – Talking Points

Reference Description Date of issue

LI 2024/9 Fringe Benefits Tax Assessment (Adequate 19 March 2024

Alternative Records – Car Travel to Certain
Work-Related Activities) Determination
2024

LI 2024/10 Fringe Benefits Tax Assessment (Adequate 21 March 2024

Alternative Records – Remote Area Holiday
Transport) Determination 2024

LI 2024/11 Fringe Benefits Tax Assessment (Adequate 20 March 2024

Alternative Records – Travel Diaries)
Determination 2024

LI 2024/12 Fringe Benefits Tax Assessment (Adequate 20 March 2024

Alternative Records – Relocation Transport)
Determination 2024

LI 2024/13 Fringe Benefits Tax Assessment (Adequate 20 March 2024

Alternative Records – Overseas
Employment Holiday Transport)
Determination 2024

LI 2024/14 Fringe Benefits Tax Assessment (Adequate 19 March 2024

Alternative Records – Car Travel to
Employment Interview or Selection Test)
Determination 2024

Cases Update
The following cases were discussed on the Couch this month.
Decision Impact Statement – Bowerman and Commissioner of Taxation (Taxation) [2023]
AATA 3547
The ATO has released a Decision Impact Statement on Bowerman and the Commissioner of
Taxation (Taxation) [2023] AATA 3547. In this AAT case, the taxpayer was successful in arguing
that she could claim a revenue loss on the sale of a property that she had acquired for rental, but
used solely as her private residence.
Bechtel Australia Pty Ltd v Commissioner of Taxation [2024] FCAFC 33
The Full Federal Court affirmed the decision that the travel expenses for fly in fly out workers were not
otherwise deductible. Therefore, the value of that travel was not reduced to nil for FBT purposes by the
otherwise deductible rule.
Commissioner of Taxation v Hannover Life Re of Australasia Ltd [2024] FCAFC 23
The Full Federal Court dismissed an appeal by the Commissioner and found that it was correct that a
life insurance company was entitled to input tax credits for overhead expenses to the extent that they
were related to its GST-free supplies.
Minerva Financial Group Pty Ltd v Commissioner of Taxation [2024] FCAFC 28
The Full Federal Court found that Part IVA did not apply to certain trust distributions.

© National Tax & Accountants’ Association Ltd: April 2024 3

 Tax on the Couch – Talking Points

Stern v Commissioner of Taxation [2024] FCAFC 21

The Full Federal Court dismissed the taxpayer’s appeal arguing that his capped defined benefit income
streams should not be included in the calculation to ascertain whether he had an excess transfer
balance.
Quy and Commissioner of Taxation (Taxation) [2024] AATA 245
The AAT found that the taxpayer remained a resident of Australia for tax purposes while working
overseas.
Delbake Pty Ltd and Commissioner of Taxation [2024] AATA 449
The AAT found that exceptional circumstances did not prevent the company from providing information
to the Commissioner regarding its superannuation guarantee shortfall before the Commissioner took
compliance action. As such, the Commissioner did not have the discretion to remit the penalties that
applied in relation to shortfall amounts for quarters ending on 31 March 2018 and earlier.

Other Developments
The following ‘other developments’ were discussed on the Couch this month.
Tax Administration (Reporting Exemptions for Electronic Distribution Platform Operators)
Determination 2024
This instrument will provide an exemption for reporting certain transactions under the sharing
economy reporting regime for periods starting on or after 1 July 2024.
Online lodgment deferrals
The ATO has provided instructions for requesting lodgment deferrals online. The ATO has advised
that the old spreadsheet forms are no longer available and will not be processed if submitted.
Gazette notice: Commissioner of Taxation – Notice of a rental bond data-matching program
The ATO has advised of a data-matching program through which it will acquire rental bond data
from state and territory rental bond regulators bi-annually for the 2024 through to the 2026 financial
years.
Gazette notice: Commissioner of Taxation – Notice of a novated leases data-matching
program
The ATO has advised of a data-matching program through which it will acquire novated lease data
from various organisations that provide vehicle leasing, such as LeasePlan. Data will be obtained
for the 2024 through to the 2026 financial years.
Small business industry benchmarks for the 2022 income year
The ATO has released its latest data on the small business industry benchmarks.

© National Tax & Accountants’ Association Ltd: April 2024 4

 Tax on the Couch – Talking Points

HOT TOPIC: CGT exemption for granny

flat arrangements
Division 137 of the ITAA 1997 provides that no CGT arises as a result of entering into, varying or
terminating an eligible granny flat arrangement.

A granny flat arrangement may arise where an older person provides money to a relative in
exchange for the right to live in a dwelling.
For the CGT exemption to apply, certain conditions must be met, including that:
• The person who is granted the right to live in the accommodation is either of pension age or has
a disability;
• The right to live in the accommodation must be for life;
• The agreement cannot be commercial in nature; and
• The agreement must be in writing.

The ATO provides guidance on the CGT exemption for granny flat arrangements in its fact sheet
‘Granny flat arrangements and CGT’ QC 66038.

ATO Topic: Common issues in complying

with Division 7A
This month Fatma Hashim caught up with Assistant Commissioner Kasey MacFarlane from the
ATO, to discuss some common compliance issues that arise with Division 7A.

Some key matters covered include:

• Breaches of Division 7A continue to be a common issue.

• The majority of the non-compliance relates to fundamental aspects of the Division 7A rules.

• The ATO is engaging with professional associations to raise awareness of Division 7A.

• Certain payments are not subject to Division 7A, including wages and loans made under a
complying loan agreement (and the minimum yearly repayments are made as required).

• Some common errors made by taxpayers, including in relation to loan agreements and
minimum yearly repayments.

• Tips on how to get Division 7A correct.

The ATO provides some fact sheets on Division 7A, including how it operates, decision tools and
calculators for the minimum yearly repayments. These resources include ‘Loans by private
companies’ QC 17341 and ‘Private company benefits – Division 7A dividends’ QC 17861.

© National Tax & Accountants’ Association Ltd: April 2024 5