Tax update

[Extract] The latter part of 2005 and the early part of 2006 have not seen the wide range of major ground-breaking judicial decisions that we have seen in the last four to five years. The cases have, by and large, been divided between those relating to large, complex commercial transactions involving corporate restructures, complex attempts at avoidance (usually involving trusts), a crop of decisions on the liability of directors for non-payment by their companies of corporate tax liabilities and a wide range of cases dealing - usually at AAT of Federal Court level - with the minutiae of day-to-day tax issues. Parliament has contributed with a number of reforms and of course the Treasurer has recently announced that significant parts of the legislation, no longer relevant, will be repealed. More substantive changes were made as the result of the Review of Self Assessment to rulings, reviews of assessment, penalties and the GIC and, of course, the revision of the continuity of ownership and small business tests for companies seeking loss recoupment have modified how and when those rules apply. Other significant legislative changes can be seen in the proposed promoter penalties legislation as well as in the proposed Anti-Money Laundering and Counter-Terrorism financing Bill which when finalised is intended to replace the Financial Transactions Reports Act. A number of new rulings have also emerged - though most, following on from earlier Draft rulings, have contained few surprises and they have been largely non-contentious. This paper will cover (briefly) some of the more important, relevant or simply quirky changes that have occurred. Of necessity it will not cover them all and many issues, particularly those that will be covered in greater detail by other speakers, will be dealt with by a quick review. The paper deals only with income taxation and its administration and, for convenience, I have once again grouped the developments into major generic groupings and sub-groupings