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18 Feb 2021 ATO Rulings

Rulings

The ATO has issued the following Rulings and Practical Compliance Guideline:

Return of capital

  • CR 2021/14 Metgasco Ltd  return of capital by way of in specie distribution

This Ruling sets out the tax consequences of the return of capital paid on 29 December 2020 (Payment Date) by Metgasco Ltd (Metgasco).

This Ruling applies to you if you were a holder of Metgasco shares who:

  • was listed on the Metgasco share register on 18 December 2020 (Record Date), being the date for determining entitlements to receive the return of capital, and continued to be listed on the register up to and including the Payment Date;
  • held your Metgasco shares on capital account, that is, your Metgasco shares were neither held as revenue assets nor as trading stock; and
  • was paid the return of capital on the Payment Date by Metgasco.

Date of effect: This Ruling applies from 1 July 2020 to 30 June 2021.

Accommodation, food and drink expenses, travel allowances, LAFHA

  • TR 2021/D1 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances

This draft Ruling should be read in conjunction with PCG 2021/D1 (see below). It explains:

 

 

  • when an employee can deduct accommodation and food and drink expenses under s 8-1 of the ITAA 1997 when they are travelling on work, including where it is necessary to apportion;
  • the FBT implications, including the application of the ‘otherwise deductible rule’, where an employee is reimbursed for accommodation and food and drink expenses, or where the employer provides or pays for these expenses;
  • the criteria for determining whether an allowance is a travel allowance (as defined in s 900-30(3)) or a living-away-from-home allowance (LAFHA) benefit (see s 30 of the FBTAA 1986) and the differences between them.

Date of effect: Retrospective

  • PCG 2021/D1 Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location – ATO compliance approach
  • This draft Guideline outlines the ATO’s compliance approach to determining if employees in certain circumstances are travelling on work or living at a location away from their normal residence (living at a location). This Guideline should be read in conjunction with TR 2021/D1 (see above).

Date of effect: Retrospective

  • TR 2021/1 Income tax: when are deductions allowed for employees’ transport expenses?

This Ruling sets out when an employee can deduct transport expenses under s 8-1 of the ITAA 1997. This includes the cost of travel by airline, train, taxi, car, bus, boat, or other vehicle.

This Ruling explains that transport expenses incurred for ordinary travel between home and a regular place of work are not deductible. In contrast, transport expenses incurred by an employee in travelling between work locations usually are deductible.

Date of effect: Retrospective

Notice of withdrawal

Completed public advice and guidance issues

The following public advice and guidance issues have been completed:

 

Issues

Purpose

Outcome

Personal services income – attribution and deductions [3768]

To provide a consolidation of TR 2003/6 Income tax: deductions that relate to personal services and TR 2003/10 Income tax: attribution of personal services income.

The ATO has reconsidered the need for this Ruling and is exploring whether other products, such as web content, may provide the appropriate guidance on this topic.

OECD hybrid mismatch rules [3950]

To provide the Commissioner’s proposed view in relation to the hybrid mismatch targeted integrity rule in Subdiv 832-J of the Income Tax Assessment Act 1997.

Law Companion Ruling LCR 2021/1 OECD hybrid mismatch rules – targeted integrity rule was published on 13 January 2021.

Hybrid instruments – market value [3988]

To provide a practical compliance approach for determining the market value of certain hybrid securities when they are bought back or redeemed (as relevant) from an investor holding their hybrid securities on capital account.

Practical Compliance Guideline PCG 2021/1 Application of market value substitution rules when there is a buy-back or redemption of hybrid securities - methodologies for determining market value for investors holding their securities on capital account was published on 13 January 2021.

Fuel tax credits – basic heavy vehicle apportionment method [4010]

To provide simple formulas which allow small claimants in the transport industry to apportion fuel used (on public roads and for other purposes) and to calculate their fuel tax credit entitlement.

Practical Compliance Guideline PCG 2021/2 Fuel tax credits – basic heavy vehicle apportionment method was published on 5 February 2021.

 

COVID-19 related guidance

The ATO is currently preparing the following COVID-19 related guidance:

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