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Last Wednesday, 13 June 2012, Mark Molesworth FTI (BDO) and Tax Counsel, Stephanie Caredes ATI attended a meeting of the NTLG CGT & Losses Sub-committee. At this meeting, participants discussed a number of issues, including:

  • The ATO’s CGT and Losses Compliance Report including the areas of focus for compliance in the range of market segments. One of the main issues noted by the ATO was in relation to capital losses incurred by taxpayers in most market segments. In addition, the ATO noted:
    -  They will continue with the data-matching process in relation to capital gains from shares and land and for Tax Time 2012, share transaction details would be included in the pre-fill reports for individuals;
    -  Capital losses are a focus area for taxpayers in the SME and Large Business market segments; and
    -  A more concerted effort will be made to advise tax agents when the ATO will be issuing advisory letters or other correspondence to their clients.
  • The Tax Institute sought the ATO’s view on the Federal Court decision in Carina Healey v FCT [2012] FCA 269, in particular in relation to the application of CGT Event A1 or CGT Event E2 to the circumstances set out in the case and being inconsistent with ATO ID 2003/559.
  • The Tax Institute sought the ATO”s view in relation to whether an adjustment to the cost base/reduced cost base of units in a trust is required under CGT Event E4 (section 104-70 of the Income Tax Assessment Act 1997) where the difference between accounting income and tax income of the trust was recognised as assessable income in the prior income year (ie the “non-assessable amount” is due to a timing difference).
  • The ATO’s views in relation to who is a “significant individual” for the purpose of applying the retirement exemption under Division 152 where a non-fixed trust pays an amount to a CGT stakeholder which may be non-assessable non-exempt income.

Members who seek additional information in relation to any of the above are encouraged to contact us at Tax Policy.

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