Full Federal Court rules on entitlement to marriage breakdown roll-over relief

The Full Federal Court in Ellison v Sandini Pty Ltd [2018] FCAFC 44 has granted the appeal against the decision of the Federal Court, finding that the taxpayer was not entitled to Capital Gains Tax (CGT) roll-over relief in relation to a marriage breakdown as the conditions in section 126-15(1) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) were not satisfied. The Court, in rejecting the declarations made by the Primary Judge, held that the transfer by the corporate trustee of shares was not ‘because of’ the family court orders and, as such, there was no ‘change of ownership’ as a result of such orders. The Court did however, find that CGT Event A1 occurred either upon the execution of the share transfer form or the registration of the share transfer.

Tribunal considers entitlement to work-related expense deductions

The Administrative Appeals Tribunal (AAT) has considered taxpayer entitlement to work-related deductions in the following cases:

  • PSJF v Commissioner of Taxation AATA 678. The Tribunal found that certain ‘work-related expenses’ claimed by the taxpayer were not deductible as they were of a private nature. The Tribunal held that the taxpayer, who was employed as a photographer, had failed to provide adequate evidence to substantiate the relevant claims. The Tribunal also upheld a 25 per cent shortfall penalty imposed on the taxpayer for failure to take reasonable care in complying with tax obligations.
  • MMFT v Commissioner of Taxation [2018] AATA 772. The AAT affirmed the Commissioner’s objection decision and held that the taxpayer was not entitled to deductions in relation to work-related travel and property rental expense claims as these could not be substantiated. The Tribunal further held that the taxpayer failed to discharge the onus of proving that the default assessments were excessive as evidence was not provided to support PAYG withholding being remitted in relation to contracting work.

Labor Party to exempt pensioners from its dividend imputation reforms

The Australian Labor Party (ALP) has announced that it will introduce a new Pensioner Guarantee to protect pensioners from changes it has proposed to deny refunds from excess dividend imputation credits. If the ALP is elected, the Pensioner Guarantee will mean Australian Government pensioners and allowance recipients will be protected from the abolition of cash refunds for excess dividend imputation credits when the policy commences in July 2019. Self-managed superannuation funds (SMSF) with at least one Australian Government pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes. For further information on the Labor Party's policy, refer to this fact sheet.