Understanding taxation law 2018

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Full Title Copyright Preface How to Use Understanding Taxation Law 2018 Table of Cases Table of Statutes Table of Contents Chapter 1 Introduction Nature of taxation Historical development of income tax The constitutional basis of taxation Federal income taxation Sources of taxation law Statutory interpretation Structure of the book Chapter 2 Structure of the Acts and the Income Concept Introduction The income concept examined Income under the ITAA97 Jurisdictional matters: An overview Chapter 3 Income According to Ordinary Concepts Introduction Proposition 1: Amounts not convertible into money are not ordinary income Proposition 2: Capital amounts do not have the character of income Proposition 3: Gifts unrelated to employment, services or business do not have the character of income Proposition 4: The proceeds of gambling and windfall gains are not income Proposition 5: Mutual receipts are not income Proposition 6: To be income, an amount must be beneficially derived Proposition 7: Income is to be judged from the character it has in the hands of the recipient Proposition 8: Income generally exhibits recurrence, regularity and periodicity Proposition 9: Amounts derived from employment or the provision of services are income Proposition 10: Amounts derived from carrying on a business are income Proposition 11: Amounts derived from property are income Proposition 12: Amounts received as substitutes for or compensation for lost income are themselves income Conclusion Chapter 4 The Derivation and Measurement of Income Introduction Refinements of the accrual basis Profit as assessable income Limits of specific profit Deemed derivation Conclusion Chapter 5 Statutory Income Introduction Division 15: Some items of assessable income Division 20: Amounts included to reverse the effect of past deductions Retirement and termination payments The remaining ITAA36 and ITAA97 framework Chapter 6 Capital Gains Tax Introduction Fundamentals of CGT CGT events Entity making the gain or loss Case study on CGT event A1 Chapter 7 Fringe Benefits Tax Introduction Historical background, tax policy and alternative mechanisms for taxing fringe benefits Application of the fringe benefits tax: An overview FBTAA definition of ‘fringe benefit’ Quantifying an employer’s fringe benefits tax liability General principles applicable in valuing benefits Rules for specific types of fringe benefit Exempt fringe benefits Reconciliation with income tax Rebate for tax-exempt employers Principles of salary packaging Chapter 8 General Deductions Introduction The general deduction provision The provision analysed Conclusion Chapter 9 Specific Deductions Introduction ITAA97 Div 25: Specific allowing and qualifying provisions ITAA97 Div 26: Specific denying provisions Deductions of particular amounts The remaining ITAA36 framework ITAA97 Pt 2-42 Divs 84–87: Personal services income Limited recourse debt: ITAA97 Div 243 Forgiveness of commercial debt: ITAA97 Div 245 Chapter 10 Capital Allowances Introduction Key features of the ITAA97 Div 40 regime The meaning of ‘depreciating asset’ The meaning of ‘hold a depreciating asset’ How decline in value is calculated Key concepts used in calculating decline in value The meaning of ‘taxable purpose’ Balancing adjustments Roll-over relief Relief for involuntary disposals Low-value and software development pools Project pools: Capital allowances for ‘black hole’ expenditure Business-related costs Depreciation under the simplified tax system Capital works in ITAA97 Div 43 The basic conditions for ITAA97 Div 43 deductibility Key elements in ITAA97 Div 43 How to calculate ITAA97 Div 43 deductions Consequences of disposal of ITAA97 Div 43 capital works Uniform capital allowances: Proposed technical changes Chapter 11 Trading Stock Introduction Scheme of ITAA97 Div 70 Trading stock defined Valuation of trading stock Non-business disposals Non-arm’s length transactions Chapter 12 Taxation of Companies Introduction Types of corporate tax systems The company as a tax entity Classification of interests in companies under the debt and equity rules What is a company for tax purposes? The distinction between private and public companies The Australian dividend imputation system: The company’s perspective The franking account Franking a distribution Anti-dividend streaming rules Anti-franking credit trading rules Tainting and untainting the share capital account Anti-capital benefit streaming rules Changes in corporate ownership: Tax effects other than CGT Consolidated groups CGT from a company’s perspective CGT roll-overs and companies Chapter 13 Taxation of Shareholders Introduction Dividends as income under ordinary concepts The Australian dividend imputation system: The shareholder’s perspective The ITAA36 definition of ‘dividend’ Deemed dividends Non-share dividends Tax effects for shareholders of a receipt of dividends Alternative forms of corporate distribution: ITAA rules Gross-up and tax offset denied where imputation system manipulated CGT from a shareholder’s perspective Value shifting provisions CGT roll-overs and shareholders Demerger relief 2016 Tax incentives for investment in early stage innovation companies Chapter 14 Taxation of Partnerships What is a partnership for tax purposes? The basic tax treatment of partnership income Derivation of partnership income and incurring a partnership loss The tax treatment of partners’ salaries and other internal transactions The consequences of a change in the composition of a partnership Payments for work in progress on a change in composition Statutory provisions applicable on a change in composition The assignment of partnership interests Anti-avoidance provisions relevant to partnerships Partnerships and dividend imputation CGT and partnerships Taxation of limited partnerships Foreign hybrids Chapter 15 Taxation of Trusts Introduction Scope of the tax provisions dealing with trusts Fundamentals of the taxation of trusts The meaning of the terms used in ITAA36 Pt III Div 6 Problems where trust income and tax income differ Trusts and dividend imputation: Receipt of franked dividends CGT and trusts Trusts of deceased estates Unit trusts which are taxed as companies Trust loss provisions Measures to curtail avoidance through chains of trusts Trusts and consolidated groups Trusts and demerger relief Chapter 16 Tax Administration Introduction Legislative overview and the Commissioner’s powers of administration The self-assessment system Income tax returns Assessments Taxpayer advice Record-keeping obligations of taxpayers Commissioner’s information-gathering powers Disputes with the Taxation Office Objections, reviews and appeals Methods to improve compliance: Penalties Collection of taxes Mechanisms for enforced collection Settlement arrangements and compromise of debt Chapter 17 Anti-Tax Avoidance Measures Introduction General anti-avoidance measures Specific anti-tax avoidance measures Chapter 18 International Aspects Introduction Taxation of residents Taxation of foreign residents Thin capitalisation Transfer pricing Australia’s responses to the OECD BEPS actions on transfer pricing Double taxation agreements The Multilateral Instrument Amendments to Pt IVA in response to BEPS Other aspects of Australia’s response to the BEPS Reports and recent developments Chapter 19 Goods and Services Tax Background The basics of GST Special treatment of ‘exempt supplies’ Central provisions of GST Taxable supplies Security deposits Enterprise Registration Taxable importations Liability for GST GST-free supplies Input taxed supplies Non-taxable importations Anti-avoidance Conclusion Index