Principles of Taxation Law Part 8 - Index

INDEX
A attributable taxpayers ...................... [22.190]

attribution percentage ..................... [22.190]
listed countries ................................. [22.200]
ABC Lumber Pty Ltd mills .................... [24.700] tainted income ................................. [22.200]
Absentee owners tests to determine ............................ [22.180]
land tax surcharge .............................. [26.275] components of regime ....................... [22.160]
foreign investment fund (FIF) .............
Absolute liability ................................... [24.203] [22.160], [22.240]
Access to corporate board advice overview ................................. [22.70], [22.160]
papers ......................................... [24.595] purpose of regime .............................. [22.160]
review of provisions ........................... [22.160]
Access to information
accountants’ papers ........................... [24.590] Ad valorem duty —s ee Transfer duty
Commissioner’s powers ...... [24.510], [24.540] Administrative Appeals Tribunal
full and free access ............................. [24.530] decisions ............................................. [24.270]
legal professional privilege ................ [24.560] reasons for decision ........................... [24.270]
ATO access manual ......................... [24.580] review by ............................................. [24.260]
Ombudsman .................................... [24.660] Small Business Taxation Division ...... [24.260]
substantiation of claims ................... [24.570] Small Taxation Claims Tribunal ......... [24.280]
third party communications ............ [24.570] Administrative penalties ...................... [24.201]
notice requiring production ............... [24.540] false or misleading statement
validity .............................................. [24.550] penalties in Division 284 ............ [24.201]
Ombudsman ....................................... [24.660]
safety deposit box .............................. [24.550] Age limits
secrecy ................................................ [24.620] superannuation contributions ............ [18.125]
statutory privilege ............................... [24.600] Agricultural schemes
taxpayers’ rights ................................. [24.630] carrying on a business ....................... [23.330]
conditionally exempt documents .... [24.640] mass-marketed schemes ................... [23.330]
freedom of information .................... [24.640] non-recourse loans ............................. [23.330]
Accounting, financial round-robin finance ............................ [23.330]
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advice ...................................................... [1.50] sham transactions .............................. [23.330]

tax advice, distinction .......................... [1.50] tax avoidance ...................................... [23.330]
entity relationships ............................... [1.130] Alcohol, tax on .......................................... [3.10]
expenses ............................................... [1.110] Allowable deductions —s ee Deductions
financial reporting standards ................. [1.30]
gross income ............................. [1.90], [1.100] Amendment determinations .................. [14.90]
policy considerations ........................... [1.120] Anti-avoidance provisions —s ee Tax
problem solving ...................................... [1.60] avoidance schemes
recognition of receipts ........................... [1.80] Appeal or review
tax law distinguished ......[1.20], [1.70], [1.140] Administrative Appeals Tribunal ........ [24.260]
timing rules ........................................... [1.140] decisions .......................................... [24.270]
Accounting, tax —s ee Tax accounting reasons for decision ........................ [24.270]
administrative review ......................... [24.650]
Accruals based accounting —s ee Tax appealable objection decision ........... [24.250]
accounting application for ..................................... [24.240]
Accruals taxation regime choice for proceedings ....................... [24.260]
background ........................................... [22.50] Federal Court ....................... [24.260], [24.270]
components of regime ....................... [22.160] overview ............................... [24.210], [24.250]
controlled foreign company (CFC) ..... [22.160] procedure ............................................ [24.210]
active income test ............................ [22.200] reviewable objection decision ........... [24.250]
application of regime ....................... [22.170] Small Taxation Claims Tribunal ......... [24.280]
attributable income .......................... [22.210] test case litigation program ................ [24.290]
Sadiq, E. A. (2020). Principles of taxation law 2021. ProQuest Ebook Central <a
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Created from unimelb on 2021-07-24 08:56:01.
966 PRINCIPLES OF TAXATION LAW 2021
Assessable income —s ee also partnership ............................................ [19.40]

Ordinary income; Statutory income Australian Government general
business income —s ee Business income government receipts Table ............. [3.1]
capital gains —s ee Capital gains tax
compensation or damages —s ee Australian tax regime
Compensation or damages annual return ......................................... [24.10]
definition .................................. [1.160], [3.140] Commonwealth
development of concept ...................... [1.100] Government expenditure,
dividends —s ee Dividends projected ......................................... [3.10]
foreign residents ........................ [4.30], [4.230] Government revenue,
hobbies ................................................... [8.50] projected ......................................... [3.10]
income tax formula ............................... [3.120] power to tax ......................................... [3.20]
interest —s ee Interest composition .......................................... [26.00]
lease premiums .................................... [9.170] government functions ............................ [3.10]
overview ....................................... [1.90], [6.10] income tax .............................................. [3.30]
partners ................................................. [19.60] overview ....................................... [3.10], [3.30]
personal exertion income —s ee revenue from taxes ...................... [3.10], [3.30]
Personal exertion/services income Australian Taxation Office —s ee also
rental income ........................................ [9.160] Commissioner of Taxation
royalties ................................................. [9.190] access to information —s ee Access
source .................................................... [4.230] to information
taxable income determination ............. [3.130] audits and reviews .............................. [24.510]
taxable income formula ........... [3.120], [3.130] accountants’ papers ......................... [24.590]
trading stock —s ee Trading stock Black Economy, and ........................... [24.300]
Assessment business line ....................................... [24.310]
amendment ......................................... [24.140] compliance model .............................. [24.360]
rulings and ........................................ [24.400] data-matching ..................................... [24.330]
appeal —s ee Appeal or review decision impact statements ............... [24.500]
assets betterment statement .............. [24.100] disallowable legislative
challenging .......................................... [24.225] instrument ................................... [24.305]
onus of proof .................................... [24.225] division of taxpayers .......................... [24.310]
default assessments ............................. [24.90] freedom of information ...................... [24.640]
proof that excessive ........................... [24.90] GST administration ............................. [25.300]
definition .................................. [24.40], [24.50] adjustments ...................................... [25.310]
notice of ................................................ [24.50] GST groups ...................................... [25.315]

evidence of assessment .................. [24.130] non-residents ................................... [25.313]
service .............................................. [24.110] tax invoice ........................................ [25.306]
technical shortcomings ................... [24.120] timing ................................................ [25.304]
objections —s ee Objections Inspector General of Taxation
overview ................................... [24.10], [24.50] (IGT) .............................. [24.660], [24.670]
presumption of validity ...................... [24.130] overview .............................................. [24.300]
risk assessment by ATO ..................... [24.300] policy documents ............................... [24.500]
self-assessment system ........ [24.40], [24.300] powers of access and
tax returns ................................ [24.10], [24.20] investigation ............................... [24.510]
tentative assessments .......................... [24.80] Project Refresh ..................... [24.300], [24.410]
validity .................................. [24.120], [24.130] publications .......................... [24.320], [24.370]
what constitutes .................................... [24.50] role of .................................................. [24.300]
rulings —s ee Rulings
Assets betterment statement .............. [24.100] secrecy ................................................ [24.620]
Assignments —s ee Study skills tax administration ................................. [24.10]
risk assessment ................... [24.50], [24.300]
Associates
tax and superannuation systems ....... [24.320]
Everett assignments ........................... [19.150]
Taxpayer Alerts ................................... [24.500]
excessive payments to ....................... [23.120]
taxpayer support ................................ [24.370]
fringe benefits provided by .................... [7.50]
non-ruling guidance ......................... [24.500]
fringe benefits provided to ..................... [7.60]
rulings —s ee Rulings
Australian Business Number (ABN) Taxpayer’s Charter ............................. [24.350]
GST registration ..................... [24.340], [25.50] test case litigation program ................ [24.290]
overview .............................................. [24.340] third party reporting ........................... [24.330]
INDEX 967
B Business
black hole expenditure —s ee Black
hole expenses
Backpacker tax ........................... [3.200], [4.155] carrying on —s ee Carrying on a business
Bad debts cessation of
deduction .............................................. [13.80] breach of contract ............................ [10.190]
companies .......................................... [13.80] expenses after .................................. [16.150]
money-lending business ................... [13.85] commencement of ............................... [8.110]
timing ................................................ [16.220] definition ................................................. [8.20]
determination of ................................... [13.83] Business Activity Statement (BAS)
overview ................................................ [13.80] intersection with GST ............ [1.260], [25.300]
provisions for ...................................... [16.220] overview .............................................. [24.160]
Banks service providers ................................ [24.690]
TFN, failure to give to ......................... [24.330] taxpayers ............................................... [24.35]
thin capitalisation —s ee Thin capitalisation Business continuity test
BAS —s ee Business Activity (BCT) .............[21.320], [21.330], [21.330]
Statement (BAS) Business income —s ee also Personal
Beneficiaries exertion/services  income
capital gains distributed to ................. [20.130] bounties and subsidies ......................... [8.280]
discretionary trusts ............................... [20.40] carrying on a business —s ee
default beneficiary provision ........... [20.150] Carrying on a business
splitting income between .................. [20.40] commencement of business ................ [8.110]
dividends ............................................. [20.130] compensation or damages —s ee
foreign resident ................................... [20.170] Compensation or damages
income distributed to, character extraordinary transactions ...... [8.170], [8.265]
preserved .................................... [20.130] capital gains tax ................................. [8.270]
legal disability ..................................... [20.140] categories of ....................................... [8.170]
minors .................................... [20.40], [20.160] FCT v Myer Emporium case study .... [8.210]
tax rates ............................................ [20.160] ordinary income under first strand
overview ................................................ [1.160] of Myer ............................. [8.220]–[8.250]
presently entitled ................................ [20.110] ordinary income under second
legal disability, under ....................... [20.140] strand of Myer .............................. [8.260]
meaning ............................................ [20.110] transaction forms business in itself .... [8.190]
no knowledge of distribution .......... [20.110] isolated transactions ................ [8.170], [8.265]

not under legal disability ................. [20.110] capital gains tax ................................. [8.270]
statutory present entitlement .......... [20.120] categories of ....................................... [8.170]
taxation of trust income ...... [20.70], [20.140] definition ............................................. [8.170]
share in trust income, meaning ........... [20.90] ordinary income, calculation ............. [8.200]
taxation ................................................. [20.10] ordinary income under first strand
default beneficiary provision ........... [20.150] of Myer ............................. [8.220]–[8.250]
foreign resident beneficiaries .......... [20.170] ordinary income under second
presently entitled, not under legal strand of Myer .............................. [8.260]
disability ...................................... [20.110] transaction forms business in itself ... [8.180]
presently entitled, under legal nature of business ................. [8.140], [10.150]
disability ...................................... [20.140] broad definition .................................. [8.140]
Black hole expenses narrow approach ................................ [8.140]
business-related costs ........................ [14.200] nexus of receipt with business ............ [8.150]
overview .............................................. [14.180] non-cash business benefits .................. [8.160]
project pools ....................................... [14.190] normal proceeds of
start-up expenses ............................... [14.215] business ........................... [8.130], [8.170]
ordinary income ...................................... [8.10]
Board of Taxation ................................. [24.680] under first strand of Myer ..... [8.220]–[8.250]
Bonuses ..................................................... [6.40] under second strand of Myer ............ [8.260]
overview ......................[8.10], [8.265], [10.150]
Buildings preliminary expenses, deductibility ..... [8.120]
CGT asset ............................................ [11.170] profit-making undertaking or plan ....... [8.290]
separate CGT assets ........................... [11.200] sale of asset acquired for resale ........ [8.300]
Burden of tax ........................................... [3.110] receipt, treatment of ............................. [8.265]
Business losses net capital loss ..................... [11.510], [11.570]

carrying on a business —s ee overview ................................................ [1.110]
Carrying on a business return of capital ..................................... [21.60]
compensation or damages ... [10.10], [10.150] trading stock ....................................... [11.275]
anticipated profits ............................ [10.170] trust distributions ................................ [20.130]
breach of contract ............. [10.170]–[10.190] Capital gains tax
GST consequences .......................... [10.150] buildings and land .............................. [11.200]
insurance proceeds ......................... [10.230] capital allowances .............................. [14.118]
loss of capital asset .......................... [10.210] capital proceeds .................................. [11.470]
loss of depreciable assets ............... [10.200] CGT assets .......................................... [11.170]
loss of trading stock ......................... [10.220] definition ........................................... [11.170]
types of compensation .................... [10.160] examples .......................................... [11.170]
partnerships ..................................... [19.130]
separate assets ................................ [11.200]
C time of acquisition ........................... [11.210]
CGT discount ...................................... [11.540]
Capital allowances —s ee also beneficiary ........................................ [20.130]
Depreciating assets temporary residents not
black hole expenses entitled ........................... [4.150], [22.330]
business-related costs ..................... [14.200] CGT events —s ee CGT events
overview ........................................... [14.180] CGT small business entity .................. [11.330]
project pools .................................... [14.190] collectables .......................... [11.170], [11.180]
capital works deductions .................... [14.170] definition ........................................... [11.180]
categories of expenditure .................... [14.10] exemption ..........[11.180], [11.220], [11.240]
depreciation —s ee Depreciating assets sets ................................................... [11.180]
overview ................................... [1.110], [14.10] compensation ........................ [10.20], [11.290]
breach of contract ............................ [10.190]
Capital assets composite claims .............. [10.240], [10.250]
CGT events —s ee CGT events discrimination .....[10.120], [10.125], [11.290]
compensation for loss of .................... [10.210] financial institutions ......................... [10.130]
sale of —s ee Disposal of assets loss of physical abilities ................... [10.100]
Capital gains or losses medical expenses ............................ [10.110]
amount of ............................................ [11.440] pain or suffering ............................... [10.110]
beneficiaries, distributed to ................ [20.130] trustee, received by ......................... [10.100]
calculation ........................................... [11.460] undissected lump sums ................... [10.250]

capital gain, what is ............................ [11.450] determining application .......... [11.20], [11.30]
capital loss, what is ............................. [11.450] exemptions ......................................... [11.220]
capital proceeds .................................. [11.470] anti-overlap provisions .................... [11.310]
apportionment rule .......................... [11.470] cars ................................................... [11.230]
assumption of liability rule .............. [11.470] collectables ........[11.180], [11.220], [11.240]
market value substitution rule ......... [11.470] compensation .................................. [11.290]
non-receipt rule ................................ [11.470] death ................................................. [11.425]
repaid rule ........................................ [11.470] depreciating assets ............. [11.270], [14.30]
carry forward losses ............ [11.530], [21.230] exempt assets ................... [11.230]–[11.270]
CGT events —s ee CGT events exempt income-producing
cost base ............................................. [11.480] assets .......................................... [11.250]
GST and ............................................ [11.480] exempt transactions ......... [11.280]–[11.300]
indexation .......................... [11.490], [11.540] gambling .......................................... [11.300]
modification rules ............................ [11.490] main residence .................. [11.380]–[11.420]
reduced cost base ............................ [10.500] PDF shares ....................................... [11.260]
determining ........................................... [11.30] personal use
discount capital gains ......................... [11.540] assets ............[11.190], [11.220], [11.240]
meaning .............................................. [11.450] prize competitions ........................... [11.300]
net capital gain ..................... [11.510], [11.560] start-up companies .......................... [11.265]
calculation ......................... [11.520]–[11.560] trading stock ..................................... [11.310]
CGT discount .................................... [11.540] valour decorations ........................... [11.230]
prior year losses ............................... [11.530] foreign residents ................................. [22.320]
reducing gains by taxable Australian
losses ........................... [11.520], [11.530] property ....................... [22.330], [22.335]
small business concessions ............ [11.550] history of ............................................... [1.230]
INDEX 969
Capital gains tax — cont expenses —s ee Travel expenses

fringe benefits —s ee Car fringe benefits
improvements ..................................... [11.200]
threshold .......................................... [11.200] Car expenses —s ee Travel expenses
income tax, part of .................................. [3.30] Car fringe benefits
legislation .............................................. [1.230] exempt benefits .................................... [7.110]
main residence exemption ................. [11.380] overview ................................................ [7.100]
absence from dwelling .................... [11.400] private use ............................... [7.100], [7.110]
basic case .......................... [11.380], [11.390] taxable value ......................................... [7.120]
conditions for exemption ................ [11.390] cost basis method .............................. [7.140]
extension of exemption ................... [11.400] statutory formula method .................. [7.130]
limitation of exemption .................... [11.410] Carried forward offsets .......................... [15.60]
more than one dwelling ................... [11.410]
partial exemptions ........................... [11.420] Carry forward losses
tax shelters ......................................... [23.90] capital losses ....................................... [11.530]
ordinary income, and .............. [5.40], [11.310] companies ............................ [21.230], [21.310]
overview ................................................ [11.10] continuity of ownership test ............ [21.330]
partnerships ........................................ [19.130] realised losses .................................. [21.320]
assignment of interests ................... [19.150] same business test .......................... [21.340]
disposal of CGT assets .................... [19.130] similar business test (SiBT) ............. [21.340]
new partner ...................................... [19.130] unrealised losses ............................. [21.350]
personal use assets ............. [11.170], [11.190] franking offsets, and ........................... [21.230]
definition ........................................... [11.190] Carrying on a business
exemption ..........[11.190], [11.220], [11.240] agricultural schemes .......................... [23.330]
roll-over relief ....................... [11.430], [14.120] commencement of business ................ [8.110]
royalties ................................................. [9.190] deductibility of preliminary
separate CGT assets ........................... [11.200] expenses ....................................... [8.120]
small business commercial purpose ............................... [8.50]
concessions ................. [11.320], [11.550] factors in determining ............................ [8.20]
basic conditions ............................... [11.330] gambling ...................................... [8.60]–[8.70]
15-year exemption ........................... [11.340] hobbies distinguished ............................ [8.50]
50% reduction .................................. [11.350] indicators of ................................. [8.30]–[8.50]
retirement concession ..................... [11.360] investment activities ............................... [8.90]
roll-over relief ................................... [11.370] land sales .............................................. [8.100]
turnover test ..................................... [11.330] losses or outgoings —s ee Losses or

statutory income, and ......................... [11.310] outgoings
tax avoidance ........................................ [23.80] overview .................................................. [8.20]
discretionary trusts ............................ [23.80] partnerships .......................................... [19.40]
wash sales ........................................ [23.340] share trading ........................................... [8.90]
tax liability affected by .......................... [11.10] sportspeople ........................................... [8.80]
trusts ................................................... [20.130] termination of business ........................ [8.110]
CGT events .......................... [11.90], [20.180] CGT events
discretionary trusts ............................ [23.80] bringing asset into existence ............... [11.80]
Capital or income cancellation or surrender of asset ....... [11.70]
characteristics of income —s ee capital gain or loss ............... [11.450], [11.460]
Ordinary income capital proceeds ..................... [11.50], [11.470]
converting income to capital ................ [23.70] categories of .......................... [11.40], [11.150]
flow concept .............................. [5.100], [9.10] cessation of residency ........................ [11.130]
relevance of distinction .......................... [5.40] consolidated groups ........................... [11.160]
restrictive covenants ............... [6.160]–[6.170] cost base ................................ [11.50], [11.480]
trusts .........................[1.160], [1.160], [20.130] indexation ......................................... [11.495]
Capital or revenue expenses ................. [1.110] reduced cost base ............................ [11.500]
disposal of asset .................... [11.50], [11.450]
Capital works deductions .................... [14.170] end of an asset ...................................... [11.70]
Car exceptions ........................................... [11.220]
CGT exemption ................................... [11.230] forfeited deposits ................................ [11.120]
definition ............................................. [11.230] leases .................................................. [11.100]
depreciating asset —s ee also liquidation ............................ [11.110], [21.140]
Depreciating assets loss or destruction of asset .................. [11.70]
cost of car, limit ................................ [14.125] MEC groups ........................................ [11.160]
CGT events — cont Commissions

assessable income ................................. [6.40]
options ..................................... [11.70], [11.80]
overview ................................... [11.20], [11.40] Commonwealth Department of Public
roll-overs ............................................. [11.140] Prosecutions (CDPP) .................. [24.203]
shares .................................................. [11.110] Commonwealth power to tax ................. [3.20]
special capital receipts ....................... [11.120] Companies —s ee also Consolidated groups
trading stock ........................ [17.250], [17.260] central management and control
trusts ...................................... [11.90], [20.180] test ................................................. [4.190]
use and enjoyment of asset ................. [11.60] board of directors .............................. [4.200]
Child care determination, criteria ....................... [4.200]
deductibility of expenses ................... [12.370] examples ............................................ [4.200]
GST-free supply .................................. [25.148] question of fact .................................. [4.190]
Clothing expenses test of residency ................................. [4.200]
capital in nature .................................. [12.800] corporate limited partnerships taxed
conventional clothing ......................... [12.750] as .................................... [19.190], [21.20]
abnormal expenditure ..................... [12.760] corporate tax entities taxed
working conditions .......................... [12.780] as ................................................... [21.20]
deductibility ........................................ [12.740] corporate unit trusts taxed
occupation-specific clothing .............. [12.790] as ...................................... [20.30], [21.20]
protective clothing .............................. [12.790] definition ............................................... [21.20]
uniforms .............................................. [12.790] dividends —s ee Dividends
dual residency ....................................... [4.220]
Collectables flat or proportional tax .......................... [3.210]
CGT ....................................... [11.170], [11.180] landholders ......................................... [26.250]
exemption ..........[11.180], [11.220], [11.240] liquidation —s ee Liquidation
definition ............................................. [11.180] listed companies ................................. [21.120]
losses from ......................................... [11.180] losses
sets ...................................................... [11.180] anti-avoidance provisions .[21.310]–[21.340]
Collection of tax carry back ......................................... [21.320]
departure prohibition orders .............. [24.190] carry forward ......[11.530], [21.230], [21.310]
due for payment ................................. [24.150] continuity of ownership test ............ [21.330]
general interest charge (GIC) ............. [24.150] loss trafficking .................................. [21.310]
late payment ....................................... [24.150] multiplication of ............................... [21.360]
Mareva orders ..................................... [24.180] overview ........................................... [21.310]

methods of collection ......................... [24.160] pre-consolidation losses .................. [21.440]
overview .............................................. [24.150] realised ............................................. [21.320]
PAYG instalments ............................... [24.160] same business test .......................... [21.340]
PAYG withholding .............................. [24.160] similar business test (SiBT) ............. [21.340]
person receiving/controlling foreign unrealised ......................................... [21.350]
resident’s money, from .............. [24.175] non-profit-making club taxed as .......... [21.20]
shortfall interest charge (SIC) ............. [24.150] overview ................................................ [21.10]
third parties, from ............................... [24.170] passive investment companies ............ [3.210]
Commissioner of Taxation PAYG instalments ............................... [24.160]
access to information .......... [24.510], [24.540] private ................................................. [21.120]
accountants’ papers ......................... [24.590] public ................................................... [21.120]
full and free access .......................... [24.530] public officer ......................................... [21.30]
legal professional public trading trusts, taxed
privilege ....................... [24.560]–[24.580] as ...................................... [20.30], [21.20]
notice requiring production ............. [24.540] residency ..........[4.10], [4.170], [22.40], [22.45]
offshore information notices ........... [24.610] central management and control
record-keeping requirements .......... [24.520] test .................................... [4.190], [4.200]
remedial amendment power ........... [24.305] controlling shareholders .................... [4.210]
statutory privilege ............................ [24.600] dual residency .................................... [4.220]
validity of notices ............................. [24.550] incorporation test ............................... [4.180]
access to premises ............................. [24.510] voting power test ............................... [4.210]
full and free access .......................... [24.530] share capital account ............................ [21.70]
investigative powers ........................... [24.510] start-up, investments in ...................... [11.265]
overview .............................................. [24.510] tax losses —s ee Tax losses
rulings, and ........................................... [1.280] tax rate .................................................. [3.210]
INDEX 971
Compensation or damages —s ee entry and exit history rules ................ [21.420]

also Reimbursement of expenses intra-group
breach of contract ............................... [10.170] transactions ...................................... [21.410]
fundamental structure of transfers of assets ............................ [21.450]
business ...................................... [10.190] liability to tax ....................................... [21.430]
ordinary trading membership requirements ................. [21.390]
contract ........................ [10.170], [10.180] multiple entry consolidated (MEC)
business losses ...................... [10.10], [10.150] groups ......................................... [21.400]
anticipated profits ............................ [10.170] overview .............................................. [21.370]
breach of contract ............. [10.170]–[10.190] policy objectives ................................. [21.380]
capital assets .................................... [10.210] pre-consolidation losses .................... [21.440]
depreciable assets ........................... [10.200] single entity rule ................................. [21.410]
GST consequences .......................... [10.150] tax cost setting rules .......................... [21.450]
insurance proceeds ......................... [10.230] tax sharing agreement ........................ [21.430]
trading stock ..................................... [10.220] Continuity of ownership test
types of compensation .................... [10.160] (COT) ............................ [21.320], [21.330]
categories of compensation ................. [10.50]
CGT exemption ................................... [11.290] Controlled foreign company (CFC)
character of receipts ............................. [10.20] accruals taxation regime .................... [22.160]
composite claims ................. [10.240], [10.250] exemption from ............................... [22.200]
apportionment ................................. [10.240] active income test ............................... [22.200]
lump sum payment .......................... [10.250] application of regime .......................... [22.170]
defamation .......................................... [10.210] assumed control test .......................... [22.180]
discrimination claims ........... [10.120], [11.290] attributable income ............................. [22.210]
examples of awards ......................... [10.125] attributable taxpayers ......................... [22.190]
earning capacity, loss of ....................... [10.80] attribution percentage ........................ [22.190]
explanatory flowchart ........................... [10.30] de facto control test ............................ [22.180]
financial institutions, paid by .............. [10.130] listed countries ................................... [22.200]
income replacement ............................. [10.20] overview .............................................. [22.160]
individuals .............................. [10.40]–[10.140] strict control test ................................. [22.180]
insurance proceeds tainted income .................................... [22.200]
business ........................................... [10.230] tests to determine ............................... [22.180]
individual ............................... [10.60], [10.90] Conveyance duty —s ee Transfer duty
interest .................................................... [9.80] Corporate Plan for 2018–19 ................. [24.300]
capital gains tax ................................. [9.120]

damages for personal Cost base
injury ................................ [9.100], [9.110] apportionment rule ............................. [11.490]
damages for property .......................... [9.90] assumption of liability
medical expenses ............................... [10.110] rule .............................................. [11.490]
ordinary income .................................... [5.140] elements .............................................. [11.480]
overview ................................... [10.10], [10.30] excluded amounts .............................. [11.480]
pain and suffering ............................... [10.110] indexation .............[11.490], [11.540], [11.580]
personal exertion income .................... [10.40] market value substitution
physical abilities, loss of ..................... [10.100] rule .............................................. [11.490]
replacement principle .............. [10.20], [10.30] merged assets ..................................... [11.490]
salary or wages, loss of ........... [6.230], [10.60] modification rules ............................... [11.490]
insurance or indemnity ......... [10.60], [10.90] overview .............................................. [11.480]
loss of earning capacity ..................... [10.80] reduced cost base .............................. [11.500]
lump sum ........................................... [10.70] split assets ........................................... [11.490]
payment to employer ........................ [10.70] Country-by-country
replacement principle ........................ [10.60] reporting ...................... [22.375], [24.330]
structured settlements ........................ [10.140] Crisis Couriers ....................................... [26.360]
trustee, received by ............................ [10.100]
undissected lump sum ....................... [10.250] Crowdfunding activities
unlawful dismissal ............... [10.125], [11.290] contributions ......................................... [8.107]
income tax impact ................................ [8.107]
Compliance Approach .......................... [24.310] initiator (recipient) ................................. [8.107]
Consolidated groups intermediary .......................................... [8.107]
available fraction rule ......................... [21.440] raising funds ......................................... [8.107]
CGT events .......................................... [11.160] tax implications ..................................... [8.107]
D exploration/prospecting for
minerals ........................................ [14.40]
future expenses .................................. [12.100]
Damages —s ee Compensation or damages insurance companies ........ [16.230]–[16.240]
Death benefit provisions for leave .......... [16.190]–[16.210]
superannuation fund .......................... [18.220] reduction of ...................................... [16.160]
binding death benefit timing of ............................ [16.190]–[16.240]
nomination .................................. [18.225] future income ....................... [12.130], [16.170]
entitlement ....................................... [18.225] gearing ................................................ [12.825]
taxation ............................................. [18.230] general
taxation case study .......................... [18.230] deductions ........[12.20], [12.30], [16.120]
termination payment, taxation of ......... [6.380] explanatory flowchart ........................ [12.50]
Debt losses or outgoings ........................... [12.40]
bad debts —s ee Bad debts negative limbs ................... [12.160]–[12.260]
collection ............................................. [24.620] positive limbs ...................... [12.40]–[12.150]
recoverable, accounting for ................. [16.40] requirements ...................................... [12.20]
gifts ....................................... [13.130], [13.160]
Debt waiver fringe benefits limitations ......................................... [13.140]
overview ................................................ [7.150] political contributions ...................... [13.150]
taxable value ......................................... [7.160] home office expenses —s ee Home
Deductions —s ee also Losses or outgoings office expenses
allowable, overview .............................. [12.20] immediate ............................................. [14.40]
amount of ............................................ [12.290] insurance companies ......................... [16.230]
actual or reasonable expense ......... [12.300] estimates of claims .......................... [16.240]
purpose of incurring expense ......... [12.310] interest expenses ................................ [12.810]
apportionment .................................... [12.270] capital ............................................... [12.830]
bad debts —s ee Bad debts penalty interest payments,
black hole expenses —s ee Black deductibility of ............................ [12.810]
hole expenses involuntary losses or outgoings ......... [12.110]
business-related expenses ................. [14.200] laundry expenses ............................... [12.320]
business taxpayers ............................. [12.350] legal expenses ..................... [12.840], [12.850]
capital works ....................................... [14.170] loss or outgoing —s ee Losses and
car expenses —s ee Travel expenses outgoings
carrying on a business membership fees ................................ [13.100]
future expense reduction . [12.100], [16.160] overview .........[3.180], [12.10], [12.20], [13.10]
future income .................... [12.130], [16.170] partnership losses ................................ [19.70]
past income ....................... [12.140], [12.150] past income ......................... [12.140], [12.150]
categories of ......................................... [3.180] personal services income .................. [23.180]
charitable donations ........................... [13.160] political contributions ......................... [13.150]
clothing expenses —s ee Clothing prepaid expenditure ............ [16.180], [16.182]
expenses prior year losses .................. [13.180], [16.140]
depreciation —s ee Depreciating assets companies, and ................................ [13.190]
dual purpose expenses ...................... [12.270] limitations ......................................... [13.200]
expenses not deductible ..... [12.160]–[12.260] provisions for leave
assistance to students ..................... [12.240] actual payment .................. [16.190], [16.200]
capital or capital in nature ............... [12.170] timing ................................. [16.190]–[16.210]
denied deductions ........................... [12.240] year of payment ............................... [16.210]
entertainment expenses .................. [12.250] repairs —s ee Repairs
form and substance ......................... [12.200] self-education expenses —s ee Self-
gaining exempt or non-assessable education expenses
non-exempt income ................... [12.230] specific deductions ............................... [13.10]
gifts or donations ............................. [12.240] examples .......................................... [13.210]
judicial tests ...................................... [12.180] start-up expenses ............................... [14.215]
non-compliant payments for substantiation ...................... [12.320], [24.520]
work and services ....................... [12.240] tax accounting .................................... [16.120]
private or domestic .......................... [12.220] bad debts .......................................... [16.220]
rebatable benefits ............................ [12.240] future expenses .[16.160], [16.190]–[16.210],
reimbursed expenditure .................. [12.260] [16.230]–[16.240]
relatives travel expenses ................. [12.240] future income ................................... [16.170]
explanatory flowchart ........................... [12.20] incurred, meaning ............. [16.120], [16.130]
INDEX 973
Deductions — cont resides ..................................................... [4.60]

royalty .................................... [9.190], [22.310]
insurance companies ........ [16.230]–[16.240] scheme ................................................ [23.280]
post-cessation of business .............. [16.150] share capital account ............................ [21.70]
prepaid expenses .............. [16.180], [16.182] shareholder ........................................... [21.50]
previous years’ expenses .[16.140], [16.150] statutory income ..................................... [5.10]
provisions for leave .......... [16.190]–[16.210] superannuation ..................................... [18.10]
tax agent fees ........................................ [13.20] supply .................................................. [25.100]
tax losses —s ee Tax losses tax benefit ........................................... [23.290]
tax-related expenses ............................ [13.20] taxable income ..................................... [1.160]
preparation of objections ................ [24.220] trading stock ......................................... [17.20]
trading stock ............................ [17.60], [17.70] traditional security .................................. [9.60]
non-arm’s length transactions ........... [17.70] trust ....................................................... [20.20]
travel expenses —s ee Travel expenses
value of .................................................. [3.180] Departure prohibition orders ............... [24.190]
work expenses .................................... [12.320] Dependant tax offset ............................ [15.150]
wrongdoing by taxpayer ...................... [12.80] Depreciating assets
Deemed dividends —s ee Dividends amount of deduction ............................ [14.40]
Definitions balancing adjustment on
acquisition ........................................... [25.200] disposal of ................................... [14.110]
adjusted taxable income .................... [15.150] reduction where non-income
assessable income .......[1.90], [1.160], [3.140] producing purpose ..................... [14.120]
assessment .............................. [24.40], [24.50] black hole expenses —s ee Black
Australian resident ................... [4.40], [22.250] hole expenses
benefit ..................................................... [7.30] capital works ....................................... [14.170]
business .................................................. [8.20] cars [14.125]
business income ................................... [8.170] CGT exemption ...................... [11.270], [14.30]
capital proceeds .................................. [11.470] CGT rules and ........................ [14.30], [14.118]
car ...................................................... [11.230] compensation for loss of .................... [10.200]
CGT asset ............................................ [11.170] composite items ................................... [14.35]
collectable ........................................... [11.180] conditions for deduction ...................... [14.40]
company ............................................... [21.20] cost of asset .......................................... [14.90]
consideration ...................................... [25.110] car limit ............................................... [14.90]
depreciating asset ................................. [14.30] GST ..................................................... [14.90]
derive .................................................... [16.20] less than $300 .................................... [14.40]

distribution .......................................... [21.160] non-arm’s length acquisitions ......... [23.120]
dividend ................................... [9.150], [21.60] decline in value ..................................... [14.70]
employee ................................................ [7.60] base value of asset ............................ [14.90]
employer ................................................. [7.50] calculation methods .............. [14.70]–[14.90]
enterprise .............................................. [25.60] cost of asset ....................................... [14.90]
foreign resident ..................................... [4.160] diminishing value
foreign service ...................................... [22.80] method ........................... [14.80], [14.110]
franking entity ..................................... [21.160] effective life ........................................ [14.90]
fringe benefit ................................ [7.20], [7.80] examples .......................................... [14.190]
income .................................................... [5.20] low value pools ................................ [14.150]
income from personal exertion ............ [10.40] prime cost
income from property ............................ [9.10] method .............. [14.70]–[14.90], [14.110]
net income of partnership .................... [19.60] residential rental premises ................ [14.20]
non-share dividends ............................. [21.80] start time ............................................ [14.70]
ordinary income ......................... [3.150], [6.20] deduction, claiming .............................. [14.40]
paid ........................................................ [21.90] definition ............................................... [14.30]
partnership ............................... [19.20], [19.30] diminishing value method ...... [14.70]–[14.90],
partnership loss .................................... [19.70] [14.110]
personal use asset .............................. [11.190] disposal of ........................................... [14.110]
primary production business ............... [17.20] balancing adjustment on .. [14.110], [14.120]
private company ................................. [21.120] effective life ........................................... [14.90]
profits .................................................. [21.100] excluded assets .................................... [14.30]
public company .................................. [21.120] buildings ............................................. [14.35]
qualifying security .................................. [9.60] intangible assets ................................ [14.30]
resident ...........................[4.40], [4.50], [4.170] land ..................................................... [14.30]
Depreciating assets — cont Disposal of assets

capital gain or loss .............................. [11.450]
holder of asset ...................................... [14.50] CGT event .............................. [11.50], [11.450]
immediate deductions ........... [14.40], [14.140] depreciating assets ............................. [14.110]
jointly held assets ................................. [14.60] trading stock ......................................... [17.80]
low-value pool .................................... [14.140] explanatory flowchart ........................ [17.10]
balancing adjustment events .......... [14.155] non-arm’s length dealings .....[17.70], [23.120]
decline in value ................................ [14.150] ordinary course of business ............ [17.900]
taxable purpose ............................... [14.145] outside ordinary business ............... [17.110]
medium and large businesses ........... [14.165]
overview ................................................ [14.20] Diverted Profits Tax
partnerships .......................................... [14.60] proposed introduction ........................ [22.517]
changes in composition .................. [19.180] Dividend imputation
pooling of assets ................................. [14.130] anti-avoidance provisions
low-value pool ................... [14.140]–[14.155] benchmark rule ................................ [21.270]
software development pool ............ [14.160] qualified person ............................... [21.290]
prime cost benchmark rule ................................... [21.270]
method .............. [14.70]–[14.90], [14.110] carry forward losses and .................... [21.230]
roll-over relief ....................... [11.430], [14.120] corporate tax entity ............................ [21.160]
small business entity current year losses and ...................... [21.240]
concessions ................................ [14.165] disqualifying accounts ........................ [21.160]
taxable purpose .................................. [14.100] distribution, meaning ......................... [21.160]
Derivation of income frankable distributions ........................ [21.160]
cash or accruals accounting ................. [16.40] franked distributions
deferring, tax avoidance ....................... [23.50] non-resident shareholders .............. [21.160]
derive, definition ................................... [16.20] franking account ................................. [21.180]
disputed amounts ............................... [16.110] franking credits .................... [21.170], [21.180]
dividend income ................................. [16.100] franking debits .................................... [21.180]
earnings method ................................... [16.40] franking deficit tax ............... [21.170], [21.190]
explanatory flowchart ........................... [16.20] franking entity ..................................... [21.160]
lay-by sales ........................................... [16.95] New Zealand exception ................... [21.160]
overview ................................... [1.140], [16.20] gross up and tax offset ........ [21.200], [21.260]
prepayments ............................ [16.90], [23.50] overview ................................................ [21.10]
receipts method .................................... [16.40] partnerships ........................................ [21.250]
timing of derivation .............................. [16.30] purpose ............................................... [21.150]

qualified person
Director Penalty Notice regime ........... [24.160] 45-day holding period rule .............. [21.290]
Director Penalty Notices ...................... [24.202] related payment rule ........................ [21.300]
Discretionary trusts —s ee also Trusts shareholders
appointor ............................................... [20.40] non-resident ...................... [21.160], [21.260]
beneficiaries .......................................... [20.40] obligations ........................................ [21.200]
default beneficiary provision ........... [20.150] resident corporate ............................ [21.220]
present entitlement ........... [20.110], [20.120] carry forward losses ...................... [21.230]
splitting income between .................. [20.40] current year loss ............................ [21.240]
trust property administered on resident individual ............................ [21.210]
behalf of ........................................ [20.40] resident partnerships ....................... [21.250]
deed of settlement ................................ [20.40] trusts ................................................. [21.250]
dividend imputation ........................... [21.250] tax offsets —s ee Dividend tax offsets
minor beneficiaries ............................... [20.40] trusts ................................................... [21.250]
overview ................................... [20.20], [20.40] unfrankable distributions .................... [21.160]
reasons for use ........................ [20.10], [20.40] Dividend tax offsets ................... [15.70], [15.80]
settlor .................................................... [20.40] gross up and tax offset ........ [21.200], [21.260]
share in trust income ............................ [20.90] non-resident shareholders ................. [21.260]
tax minimisation ................................... [23.80] overview ................................................ [15.80]
trustee refundable ............................................. [15.80]
obligations .......................................... [20.40] resident corporate shareholders ........ [21.220]
ownership of trust property .............. [20.40] resident individual shareholders ........ [21.210]
Discrimination resident partnerships .......................... [21.250]
compensation or damages ................ [10.120] shareholders, for ................................... [15.70]
examples of awards ......................... [10.125] trusts ................................................... [21.250]
INDEX 975
Dividends shares, from .......................................... [4.280]

assessability ............................ [4.280], [21.40], source of income .................................. [4.280]
[21.60] tax offsets —s ee Dividend tax offsets
capital gains and ................... [21.60], [21.140], taxation of, overview ............................ [21.40]
[21.350] trusts .................................... [20.130], [21.250]
debt/equity rules ...................... [21.50], [9.150] withholding tax —s ee Dividend
deemed withholding tax
anti-avoidance provisions ............... [21.110] Doctrine of precedent —s ee Precedent
distributable surplus ........................ [21.130]
forgiven debts to shareholders ....... [21.130] Double tax agreements
liquidator’s distributions .................. [21.140] annuities and pensions ....................... [22.490]
loans to shareholders ...................... [21.130] business profits ................................... [22.460]
meaning ............................................ [21.130] dependent services ............................ [22.490]
payments to shareholders ............... [21.130] dual resident companies ...................... [4.220]
private company tax employer, meaning ............................ [22.490]
avoidance ..................... [21.110], [23.140] entertainers ......................................... [22.490]
definition .................................. [9.150], [21.60] individuals ........................................... [22.490]
return of capital list of agreements ............................... [22.440]
exception ......................... [21.60], [21.70] negotiation .......................................... [22.450]
derivation of income ........................... [16.100] overview ................................. [22.20], [22.440]
foreign, exemption for .......................... [22.90] passive income ................................... [22.470]
franking —s ee Dividend imputation primary function ................................. [22.450]
imputation system —s ee Dividend real property ....................................... [22.480]
imputation sportspersons ..................................... [22.490]
interim dividends ................................ [21.140] Tax Information Exchange
liquidator’s distributions ..................... [21.140] Agreements ................................ [22.450]
meaning of paid .................................... [21.90] Duties —s ee also Stamp duty;
non-assessable ...................... [21.60], [21.260] Transfer duty
non-share dividends ............................. [21.80] additional, for foreign purchasers ...... [26.135]
partnerships ........................................ [19.120] aggregation ......................................... [26.120]
private company substantially one location, of ........... [26.120]
deemed dividends ............ [21.110]–[21.130] calculation of duty
definition ........................................... [21.120] payable ......................... [26.130], [26.135]
profits .................................................. [21.100] concessions ........................................ [26.152]
deemed dividends ........................... [21.130] COVID-19 relief measures .................. [26.155]

meaning ............................................ [21.100] dutiable property .................................. [26.70]
paid out of ......................... [21.100], [21.140] apportionment ................................... [26.80]
share capital account location ............................................... [26.80]
definition ....................................... [21.70] trade receivables, jurisdictional
shareholders nexus ............................................. [26.80]
definition ............................................. [21.50] types ................................................... [26.70]
equity interest holders as .................. [21.50] dutiable property, declaration of
forgiven debts .................................. [21.130] trust over ....................................... [26.90]
loans to ............................................. [21.130] dutiable transactions ............................ [26.90]
non-resident ...................... [21.160], [21.260] form .................................................. [26.100]
obligations ........................................ [21.200] provisions ........................................... [26.90]
partnerships ..................................... [21.250] related parties .................................. [26.115]
payments to ..................................... [21.130] types ................................................... [26.90]
registration ......................................... [21.50] dutiable value ...................................... [26.110]
resident exemptions ......................................... [26.154]
assessable income ............ [4.280], [9.150], foreign purchasers of residential
[21.40] property ...................................... [26.135]
definition .......................................... [21.50] land —s ee also Landholder
paid or credited to ............. [21.60], [21.70], lease duty ............................................ [26.200]
[21.130] motor vehicle duty .............................. [26.200]
resident corporate ............................ [21.220] overview ................................................ [26.00]
carry forward losses ...................... [21.230] payable, calculation ............. [26.130], [26.135]
current year loss ............................ [21.240] related parties ..................................... [26.115]
resident individual ............................ [21.210] share transfer duty .............................. [26.160]
trusts ................................................. [21.250] tax base .................................... [26.40], [26.50]
E Fees or commissions
assessable income ................................. [6.40]
Education Finance leasing
GST-free supplies ............................... [25.146] sale and leaseback .............................. [23.320]
Higher Education Contribution tax avoidance schemes ...................... [23.320]
Scheme (HECS) .............................. [3.90] Financial accounting —s ee Accounting
HELP debt repayment rates ................... [3.90] Financial arrangements —s ee also
persons living overseas ....................... [3.90] Options
Electronic delivery ................................ [24.110] TOFA rules .............................................. [9.70]
Electronic distribution platform Financial reporting standards
(EDP) ........................................... [25.297] interpretation .......................................... [1.30]
Employment —s ee also Payroll tax Fixed trusts —s ee Trusts
expenses related to —s ee Deductions Food
income from —s ee Personal GST-free supply .................................. [25.142]
exertion/services  income
Foreign branch income ......................... [22.100]
Employment termination payments
(ETPs) ............................................ [6.260] Foreign companies —s ee also
Controlled foreign companies
Entertainment expenses dividends, exemption for ..................... [22.90]
deductibility .......................................... [7.430] tax rates ............................................... [22.270]
fringe benefits ....................................... [7.430]
Foreign income tax offset
Entities —s ee Companies; calculating ........................................... [22.140]
Partnerships; Trusts example ............................................ [22.150]
Exams —s ee Study skills double taxation relief .......................... [22.130]
Exempt income foreign income tax, definition ............ [22.130]
categories of ......................................... [3.170] foreign tax credit replaced by ............ [22.110]
foreign source income ............ [4.260], [22.70] maximum amount .............................. [22.130]
employment income .......................... [22.80] overview ................[15.100], [22.120], [22.130]
foreign service, definition .................. [22.80] Foreign investment fund (FIF)
list of provisions ................................... [3.170] accruals taxation regime .................... [22.160]
not subject to tax .................................. [3.170] application of rules ............................. [22.240]
overview ......................[1.120], [3.140], [3.170] overview ............................... [22.160], [22.240]
Expense payment fringe benefits Foreign losses

exempt benefits .................................... [7.210] offset against domestic income ......... [22.240]
external benefits ................................... [7.220] overview .............................................. [22.240]
otherwise deductible rule .................. [7.390] quarantining ........................................ [22.240]
in-house benefits ..................... [7.220], [7.370] Foreign persons
no-private-use declaration ................... [7.210] land ownership by .............................. [26.275]
overview ................................................ [7.200]
taxable value ......................................... [7.220] Foreign residents
otherwise deductible rule .................. [7.390] assessable income .................... [4.30], [4.230]
reduction ............................... [7.370], [7.390] assessment ......................................... [22.270]
Australian sourced income ........ [4.10], [4.30],
Exports [22.30], [22.260]
GST-free supply .................................. [25.148] tax avoidance ..................................... [23.40]
beneficiaries ........................................ [20.170]
F capital gains tax .................................. [22.320]
non-final withholding tax applied
to capital gains on Australian
FCT v Myer Emporium property ...................................... [22.335]
case study ............................................. [8.210] taxable Australian property ............. [22.330]
ordinary income under first definition ............................................... [4.160]
strand ............................... [8.220]–[8.250] dividends
ordinary income under second imputation ......................... [21.160], [21.260]
strand ............................................ [8.260] timing of derivation .......................... [22.290]
Federal Court withholding tax —s ee Dividend
appeal to .............................. [24.260], [24.270] withholding tax
choice of proceedings in .................... [24.260] interest withholding tax ....... [22.280], [22.300]
INDEX 977
Foreign residents — cont employment, in respect of ......... [6.20], [7.70],

[7.75]
Medicare levy exemption ........... [3.40], [4.30], exclusions ............................................... [7.80]
[22.270] non-assessable non-exempt income
non-residents ...................................... [25.313] of employee .................................. [7.440]
overview .......[4.160], [22.10], [22.30], [22.250] reporting on Payment Summary ......... [7.440]
personal exertion income .................. [22.340] tax on —s ee Fringe benefits tax
residence according to ordinary
concepts .......................................... [4.90] Fringe benefits tax (FBT) ........................ [24.10]
residency tests ......................... [4.90], [22.250] associate
domicile test ....................................... [4.120] benefit provided by .............................. [7.55]
royalty withholding tax ........ [22.280], [22.310] benefit provided to .............................. [7.65]
source of income ........[4.10], [4.230], [22.250] types of ................................................. [7.55]
natural resources ............................... [23.40] car fringe benefits ................................. [7.100]
tax avoidance ..................................... [23.40] cost basis method .............................. [7.140]
tax-free threshold ............................... [22.270] exempt benefits ................................. [7.110]
tax rates .......................[3.200], [4.30], [22.270] private use ............................. [7.100], [7.110]
withholding tax ................................ [22.280] statutory formula method .................. [7.130]
taxation ....................................... [4.10], [4.30], taxable value ......................... [7.120]–[7.140]
[22.30], [22.260] categories of benefits ............................. [7.90]
debt waiver benefits ............................. [7.150]
Foreign source income —s ee also taxable value ...................................... [7.160]
Accruals taxation regime; employee
Foreign tax credits benefit provided to ........ [6.70], [7.50]–[7.60]
Australia’s jurisdiction to tax ................ [22.30] definition ............................................... [7.60]
double taxation, preventing ................. [22.50] former ................................................... [7.60]
employment income ............................ [22.80] future .................................................... [7.60]
exempt income ........................ [4.260], [22.70] interaction with income tax ............... [7.440]
explanatory flowchart ........................... [22.60] employer
foreign branch income ....................... [22.100] benefit provided by .............................. [7.50]
foreign dividends .................................. [22.90] definition ............................................... [7.50]
foreign service, definition ..................... [22.80] former ................................................... [7.50]
overview ......................[22.10], [22.30], [22.50] future .................................................... [7.50]
tax avoidance schemes ...................... [23.310] imposed on .......................................... [7.10]
taxation .................................... [22.30], [22.60] interaction with income tax ............... [7.430]
temporary residents ............................. [4.150] employment relationship ....................... [7.70]

Foreign tax credits exempt benefits ....................... [7.310], [7.430]
abolition .............................................. [22.110] membership fees ............................... [7.340]
foreign income tax offset ................... [22.120] minor benefits ....................... [7.320], [7.430]
prior to 1 July 2008 ............................. [22.110] single-trip tax travel ........................... [7.350]
Forfeited deposits subscriptions ...................................... [7.340]
CGT event ........................................... [11.120] work-related items ............................. [7.330]
expense payment benefits ................... [7.200]
Franking of distributions —s ee exempt benefits ................................. [7.210]
Dividend imputation external benefits .................... [7.220], [7.390]
Fraud in-house benefits .................. [7.220], [7.370]
amendment of assessment ................ [24.140] otherwise deductible rule .................. [7.390]
ATO risk-assessment measures ........... [24.50] taxable value ............[7.220], [7.370], [7.390]
Freedom of information FBT rate ................................................. [7.420]
overview .............................................. [24.640] grossing-up ........................................... [7.410]
unavailable documents ...................... [24.640] GST and ....................[7.410], [7.450], [25.330]
historical background ................ [1.240], [7.10]
Freezing orders ..................................... [24.180] imposition of tax .......................... [7.10], [7.40]
Frequent flyer schemes income tax and
assessability .......................................... [6.130] employees .......................................... [7.440]
Fringe benefits —s ee also Fringe benefits tax employers .......................................... [7.430]
benefit, definition .................................... [7.30] separate tax ............................... [3.30], [7.10]
benefits in kind ........................................ [6.70] legislation .............................................. [1.240]
categories of ........................................... [7.90] liability ................................................... [7.420]
deduction for cost of providing ........... [7.430] loan fringe benefits ............................... [7.170]
definition ................................................. [7.20] exempt benefits ................................. [7.180]
Fringe benefits tax (FBT) — cont Going concerns

GST-free supply .................................. [25.148]
otherwise deductible rule .................. [7.390]
taxable value ......................... [7.190], [7.390] Goods and services tax (GST) ............... [24.10]
meal entertainment benefits ................ [7.230] administration ..................................... [25.300]
taxable value ......................... [7.240], [7.320] adjustments ...................................... [25.310]
otherwise deductible rule ..................... [7.390] GST groups ...................................... [25.315]
overview .................................................. [7.10] non-residents ................................... [25.313]
portable electronic devices .................. [7.330] tax invoice ........................................ [25.306]
property benefits .................................. [7.250] timing ................................................ [25.304]
exempt benefits ................................. [7.260] agents .................................................. [25.235]
external benefits ................................. [7.270] application ............................................. [25.20]
in-house benefits .................. [7.270], [7.370] Australian Business
taxable value ......................... [7.270], [7.370] Number .......................... [24.340], [25.50]
provision of benefit ...................... [7.40], [7.50] Business Activity
associate, by ........................................ [7.55] Statement ....................... [1.260], [25.300]
associate, to ......................................... [7.65] carrying on an enterprise ..................... [25.50]
employee, to ........................................ [7.60] enterprise, definition .......................... [25.60]
employer .............................................. [7.50] excluded activities ............................. [25.60]
former ................................................... [7.50] composite supplies ............................ [25.175]
future .................................................... [7.50] consumption tax ................................... [25.10]
in respect of employment ........ [7.70], [7.75] creditable acquisition ......................... [25.190]
third party arranger .............................. [7.58] acquisition, definition ....................... [25.200]
recipient’s contribution ........................ [7.380] consequences of making ................. [25.230]
reductions in taxable value .................. [7.360] creditable purpose ............ [25.210], [25.220]
in-house benefits ............................... [7.370] financial supplies, related to ............ [25.217]
otherwise deductible rule .................. [7.390] input taxed supplies, related to ....... [25.214]
recipient’s contribution ...................... [7.380] non-deductible expenses ................ [25.240]
residual benefits ................................... [7.280] partly creditable purpose ................. [25.220]
exempt benefits ................................. [7.290] solely creditable purpose ................ [25.220]
external benefits ................................. [7.300] special rules ..................................... [25.235]
in-house benefits .....[7.300], [7.370], [7.380] taxable supply .................................. [25.225]
recipient’s contribution ...................... [7.380] creditable importations ...................... [25.280]
taxable value ............[7.300], [7.370], [7.380] consequences of making ................. [25.290]
explanatory flowchart ........................... [25.40]
tax liability ............................................. [7.420]

tax year ......................................... [7.10], [7.40] financial supplies ................................ [25.163]
benefits provided during ..................... [7.40] acquisitions related to ...................... [25.217]
taxable amount ..................................... [7.410] input taxed supplies ......................... [25.163]
third party arranger providing fringe benefits tax and ............ [7.410], [7.450],
benefit ............................................. [7.58] [25.330]
type of benefits ..................................... [7.400] GST-free supplies ................ [25.140], [25.180]
child care .......................................... [25.148]
consequences of making ................. [25.150]
G education .......................................... [25.146]
examples .......................................... [25.140]
exports .............................................. [25.148]
Gambling
food .................................................. [25.142]
business or hobby .................................. [8.60]
going concerns ................................ [25.148]
CGT exemption ................................... [11.300]
health ................................................ [25.144]
General interest charge .......... [24.30], [24.140], international mail ............................. [25.148]
[24.150] GST groups ......................................... [25.315]
Gifts importations ........................................ [25.250]
assessability ............................................ [6.90] creditable importations ..... [25.280], [25.290]
deductions ........................... [13.140], [13.160] digital products and low value
incurred in producing assessable goods .......................................... [25.295]
income ........................................ [13.160] digital supplies ................................. [22.255]
parliamentarians, to low value .......................................... [25.260]
constituents ................................ [13.160] non-taxable importations ................ [25.260]
personal gifts .......................................... [6.90] services ............................................ [22.255]
political contributions ......................... [13.150] taxable importations ......... [25.260], [25.270]
voluntary payments ................................ [6.90] income tax and ...........[1.260], [3.30], [25.320]
INDEX 979
Goods and services tax (GST) — cont Higher Education Loan Program (HELP) debt
overview .................................................. [3.90]
indirect tax .............................................. [3.30] repayment rates ...................................... [3.90]
input tax credits, entitlement to ......... [25.235]
input taxed supplies ............ [25.160], [25.180] Hobbies
acquisitions related to ....... [25.170], [25.214] assessable income ................................. [8.60]
consequences of making ................. [25.170] carrying on a business ........................... [8.20]
financial supplies .............................. [25.163] Home office expenses
residential premises ......................... [25.167] apportionment and capital
residential rent ................................. [25.165] expenses ..................................... [12.730]
intangible supplies .............................. [25.297] categories ............................................ [12.700]
legislation .............................................. [1.250] for convenience only .......................... [12.720]
mixed supplies .................................... [25.175] genuine ............................................... [12.710]
offshore supplies ................................ [25.295]
overview ...................... [1.250], [25.10]–[25.40]
rate ....................................................... [25.10] I
registration ............................................ [25.50]
annual turnover, meaning ................. [25.70] Illegal activities
choosing to register ........................... [25.80] deductibility of expenses ..................... [12.80]
partnership ......................................... [19.40] proceeds as assessable income .......... [5.150]
taxi travel and ride-sourcing .............. [25.70]
Improvements
turnover threshold ............................. [25.70]
capital expenditure ............................... [13.50]
reporting requirements ...................... [25.300]
repairs —s ee Repairs
residential premises ........................... [25.165]
separate CGT assets ........................... [11.200]
definition ........................................... [25.165]
rent ................................................... [25.165] Imputation —s ee Dividend imputation
sale or long-term lease .................... [25.167] Income
services, importation of ...................... [25.255] assessable —s ee Assessable income
special rules ........................................ [25.235] capital distinguished —s ee Capital
stock on hand ..................................... [25.235] or income
taxable importations ........................... [25.260] categories of ........................................... [5.30]
consequences of making ................. [25.270] concept of ............................................. [1.160]
digital products and low value constructive receipt .............................. [5.160]
goods .......................................... [25.295] converting to capital ............................. [23.70]
low value .......................................... [25.260] definition ................................................. [5.20]

taxable supplies ..................... [25.90], [25.180] exempt —s ee Exempt income
acquisitions where supply was ....... [25.225] gross ........................................... [1.90], [1.100]
connection with indirect tax mutuality ............................................... [5.170]
zone ............................................. [25.120] legislation —s ee Tax legislation
consequences of making ................. [25.130] ordinary —s ee Ordinary income
consideration ................................... [25.110] personal exertion, from —s ee
in the course/furtherance of an Business income; Personal
enterprise ..................... [25.115], [25.150] exertion/services  income
supply, definition ............................. [25.100] property —s ee Property income
Gross income source of —s ee Source of income
accounting ................................. [1.90], [1.100] Income splitting
tax purposes .............................. [1.90], [1.100] discretionary trust beneficiaries,
GST rulings (GSTR) .............................. [24.410] between ........................................ [20.40]
partners ............................................... [19.150]
tax arbitrage .......................................... [23.60]
H tax avoidance ........................................ [23.60]
transfer of right to income from
property ...................................... [23.130]
Health —s ee also Medicare levy
Income tax
GST-free supplies ............................... [25.144]
Australian system ........................ [3.10], [3.30]
Medicare benefits ................................... [3.40]
burden ................................................... [3.100]
private health insurance offset ........... [15.160]
concept of ............................................... [3.30]
Higher Education Contribution ETP, calculation of tax payable on ....... [6.370]
Scheme (HECS) formula .................................................. [3.120]
overview .................................................. [3.90] introduction ........................................... [3.100]
Income tax — cont legislation .............................................. [1.245]

OECD Measures to Address Base
liability to pay ........................................ [3.110] Erosion and profit sharing .......... [22.517]
partnerships .......................................... [3.110] overview ...................... [1.245], [22.10]–[22.30]
rates .............................[1.245], [3.190], [3.210] tax avoidance ...................................... [23.100]
trusts ..................................................... [3.110] anti-avoidance regimes ...... [22.20], [23.250]
Indexation hybrid entities .................................. [23.104]
cost base, of ......................... [11.490], [11.540] hybrid instruments ........................... [23.106]
index reference base .......................... [11.580] tax rate arbitrage .............................. [23.102]
Innovative Income Stream ................... [18.200] tax information exchange
agreements .................. [22.500], [22.510]
Inspector General of Taxation (IGT) Automatic Exchange of Information
Ombudsman and ................. [24.660], [24.670] (AEOI) .......................................... [22.513]
role [24.670] common reporting standard (CSR) .[22.513]
Insurance companies tax treaties ............................................. [1.245]
deductions .......................................... [16.230] thin capitalisation —s ee Thin capitalisation
estimates of claims .......................... [16.240] transfer pricing —s ee Transfer pricing
Insurance proceeds —s ee also Interpretation
Compensation or damages financial reporting standards ................. [1.30]
business .............................................. [10.230] precedent, and ........................................ [1.30]
individual .................................. [10.60], [10.90] tax legislation .......................................... [1.30]
Interest interpretative decisions —s ee Rulings
compensation —s ee Compensation
discounts and premiums ........................ [9.30]
expenses, deductibility ....................... [12.810] J
capital ............................................... [12.830]
gearing ................................................ [12.825] Junior Minerals Exploration Incentive
instalment payments, interest (JMEI) ............................................ [15.00]
portion ........................................... [9.140]
meaning .................................................. [9.20]
ordinary income, as ................................ [9.40] L
overpayment and early payment of
tax .................................................. [9.130]
Labour related income —s ee
overview .................................................. [9.20]

securities Business income; Personal
qualifying .............................................. [9.60] exertion/services  income
traditional ............................................. [9.60] Land
source of income .................................. [4.270] CGT asset ............................................ [11.170]
taxation of financial arrangements ........ [9.70] separate CGT asset ............................. [11.200]
timing of receipts .................................... [9.50] trading stock, as .................................... [17.30]
withholding tax —s ee Interest Land ownership —s ee also Landholder
withholding tax absentee owners ................................ [26.275]
Interest withholding tax aggregation of landholdings .............. [26.240]
foreign residents subject to ................ [22.280] constructive ........................................ [26.180]
overview .............................................. [22.300] corporations ........................................ [26.250]
rate [22.280], [22.300] foreign owners .................................... [26.275]
International taxation —s ee also grouping .............................................. [26.250]
Foreign residents; Foreign joint ...................................................... [26.260]
source income trusts, by SA and Vic .......................... [26.270]
accruals taxation —s ee Accruals Land tax
taxation regime calculation ........................................... [26.290]
anti-avoidance regimes ......... [22.20], [23.250] COVID-19 relief measures.......... [26.295]
Australia’s jurisdiction to tax ................ [22.30] exemptions and concessions............. [26.280]
base erosion and profit shifting ........... [22.30] others exemptions ........................... [26.286]
Australian measures ........................ [22.518] primary production .......................... [26.284]
diverted profits tax ............................. [22.517] principal place of residence ............. [26.282]
double tax agreements —s ee land value measurement time ........... [26.230]
Double tax agreements landholder, imposition on .................. [26.220]
explanatory flowchart ........................... [22.20] legislation ............................................ [26.210]
INDEX 981
Land tax — cont form and substance ......................... [12.200]

judicial tests ...................................... [12.180]
liability calculation .............................. [26.290] summary .......................................... [12.210]
overview ................................. [26.00], [26.210] cessation of business ......................... [16.150]
key issues ......................................... [26.210] child care expenses ............................ [12.370]
possession of land .............................. [26.220] clothing —s ee Clothing expenses
rates (Qld) ........................................... [26.290] company losses —s ee Companies
surcharge rates employment-related expenses
absentee/foreign owners ................. [26.275] child care .......................................... [12.370]
ownership of land by trusts clothing —s ee Clothing expenses
(SA and Vic) ................................ [26.270] commonly incurred expenses ......... [12.330]
vacant residential land tax (Vic) ...... [26.278] gaining employment ........................ [12.340]
taxable value of land .......................... [26.230] home office —s ee Home office expenses
tax-free threshold ............................... [26.230] relocation .......................................... [12.360]
Landholder —s ee also Land ownership self-education — s ee Self-education
duty ..................................................... [26.160] expenses
landholding entities ......................... [26.170] travel —s ee Travel expenses
landholder provisions ...................... [26.160] foreign losses ...................................... [22.240]
landholders ...................................... [26.170] future expenses
landholding thresholds .................... [26.170] insurance companies ........ [16.230]–[16.240]
land-rich test .................................... [26.170] provisions for leave .......... [16.190]–[16.210]
land tax imposed on ........................... [26.220] reduction of ....................... [12.100], [16.160]
possession of land .............................. [26.220] timing of deduction ........... [16.190]–[16.240]
Law Companion Rulings (LCRs) .......... [24.415] future income ....................... [12.130], [16.170]
home office expenses —s ee Home
Leases office expenses
amount for obligation to repair ............ [9.180] illegal activities ...................................... [12.80]
CGT events .......................................... [11.100] incurred in gaining assessable
duty ..................................................... [26.200] income ........................................ [16.120]
finance leases ..................................... [23.320] future income ................................... [12.130]
premiums .............................................. [9.170] incurred, meaning ............. [16.120], [16.130]
tax avoidance ...................................... [23.320] involuntary expenses ....................... [12.110]
Legal expenses past income ....................... [12.140], [12.150]
deductibility ......................... [12.840], [12.850] temporal connection ........................ [12.120]
Legal professional privilege (LPP) insurance companies ......................... [16.230]

Commissioner’s access powers ........ [24.560] estimates of claims .......................... [16.240]
ATO access manual ......................... [24.580] interest expenses ................................ [12.810]
substantiation of claims ................... [24.570] legal expenses ..................... [12.840], [12.850]
elements .............................................. [24.570] non-commercial losses —s ee
Ombudsman ....................................... [24.660] Non-commercial  losses
statutory privilege ............................... [24.600] non-deductible ..................... [12.160]–[12.260]
third party communications ............... [24.570] partnership losses ................................ [19.70]
loans to partners .............................. [19.100]
Liability to pay tax .................................. [3.110] partner’s salary ................................... [19.90]
Limited GST-registration ..................... [25.313] positive limbs ......................... [12.40]–[12.150]
Liquidators’ distribution to previous year expenses ..................... [16.140]
shareholders ............................... [21.140] cessation of business ....................... [16.150]
provisions for leave
Live stock actual payment .................. [16.190], [16.200]
trading stock, as .................................... [17.20] timing of deduction ........... [16.190]–[16.210]
Loan fringe benefits year of payment ............................... [16.210]
exempt benefits .................................... [7.180] reimbursed expenditure ..................... [12.260]
overview ................................................ [7.170] relocation expenses ........................... [12.360]
taxable value ......................................... [7.190] self-education expenses —s ee
otherwise deductible rule .................. [7.390] Self-education expenses
Losses or outgoings —s ee also Deductions tax accounting .................................... [16.120]
amount of deduction .......................... [12.290] future expenses . [16.160], [16.190]–[16.210]
actual or reasonable expense ......... [12.300] future income ................................... [16.170]
capital allowances —s ee Capital allowances incurred, meaning ............. [16.120], [16.130]
capital or capital in nature .................. [12.170] insurance companies ........ [16.230]–[16.240]
Losses or outgoings — cont N

post-cessation of business .............. [16.150]
previous year expenses .... [16.140], [16.150] National Tax Practitioners Board ........ [24.690]
provisions for leave .......... [16.190]–[16.210] Non-arm’s length dealings
travel expenses —s ee Travel expenses tax avoidance ....................... [22.350], [23.120]
trusts ...........................[1.160], [1.160], [20.60] trading stock .......................... [17.70], [23.120]
Lost or destroyed assets transfer price manipulation ................ [22.350]
CGT event ............................................. [11.70] Non-assessable non-exempt  income
compensation for foreign branch income ....................... [22.100]
capital assets .................................... [10.210] foreign dividends .................................. [22.90]
depreciable assets ........................... [10.200] fringe benefits as .................................. [7.440]
trading stock ..................................... [10.220] list of provisions ................................... [3.170]
Low income rebate ............................... [15.170] not subject to tax .................................. [3.170]
Low income superannuation tax overview ......................[3.140], [3.170], [10.40]
offset ........................................... [18.120] Non-commercial  losses
Low income tax offset anti-avoidance rules ........................... [23.150]
(LITO) ........................................... [15.30], hobby farms ........................................ [23.150]
[15.140], [15.170] partnerships .......................................... [19.70]
Low value goods ................................... [25.299] Non-compliant payments for work
and services ................................ [12.240]
Non-residents — s ee Foreign residents
M
Mareva orders ....................................... [24.180] O
Meal entertainment fringe benefits
overview ................................................ [7.230] Objections —s ee also Appeal or review
taxable value ......................................... [7.240] amended assessment ......................... [24.210]
50/50 split method ................ [7.240], [7.320] approved form .................................... [24.210]
12-week register method ................... [7.240] Commissioner’s decision ................... [24.230]
Medicare levy lodgment ............................................. [24.210]
basic levy principle ................................. [3.50] preparation expenses ......................... [24.220]
review of decision —s ee Appeal or
exemptions ............................................. [3.70]

foreign residents not liable ......... [3.40], [4.30], review
[22.270] rulings, against
low-income earners ................................ [3.60] private rulings ..................... [1.290], [24.400]
Medicare benefits ................................... [3.40] public rulings ....................... [1.300], [24.410]
NDIS, funding .......................................... [3.50] time limit ............................................. [24.210]
overview .................................................. [3.40] withdrawal ........................................... [24.220]
reduction ................................................. [3.60] Occupation-specific clothing —s ee
surcharge ................................................ [3.80] Clothing expenses
Membership fees Offences and penalties
deductions .......................................... [13.100] prescribed offences ............................ [24.200]
exempt fringe benefits ......................... [7.340] promoters ........................................... [24.690]
Mining industry penalties ........................................... [24.207]
tax avoidance ........................................ [23.40] rationale .............................................. [24.200]
remission of penalties ........................ [24.206]
Minor beneficiaries return prepared by tax
discretionary trusts ............................... [20.40] practitioner .................................. [24.205]
overview .............................................. [20.160] taxation offences ................. [24.200], [24.203]
tax rates ............................................... [20.160]
Offshore information notices ............... [24.610]
Multiple Entry Consolidated Group
(MEC group) Ombudsman
CGT events .......................................... [11.160] Inspector General and ......... [24.660], [24.670]
overview .............................................. [21.400] powers and functions ......................... [24.660]
Mutuality principle Options
clubs, co-operatives, associations CGT asset ............................................ [11.170]
and Owners’ Corporations ........... [5.170] CGT events ............................... [11.70], [11.80]
INDEX 983
Ordinary income —s ee also Personal co-ownership distinguished ................. [19.30]

exertion/services  income corporate limited partnerships .......... [19.190],
assessable income, part of ................... [3.140] [21.20]
benefit saving taxpayer money ............ [5.165] death of partner .................................. [19.160]
business income —s ee Business income definition .....................[19.00], [19.20], [19.30]
capital gains tax, and ............... [5.40], [11.310] depreciating assets ............................... [14.30]
categories of income .............................. [5.30] changes in composition of
characteristics ......................................... [5.80] partnership .................................. [19.180]
flow concept .......................... [5.100]–[5.110] dissolution of partnership .................. [19.160]
nexus with earning dividend imputation ........................... [21.250]
source .............................. [5.110], [5.130] dividends ............................................. [19.120]
regular or periodic ............................... [5.90] Everett assignments ........................... [19.150]
severable from earning source ......... [5.110] general taxation rules ........................... [19.10]
compensation ....................................... [5.140] GST, registration for ............................. [19.40]
constructive receipt ................. [3.150], [5.160] income splitting .................................. [19.150]
definition ..............[3.150], [5.10], [5.20], [6.10] interest payments ............................... [19.100]
development of concept ...................... [1.100] law of ..................................................... [19.20]
examples .................................. [1.170], [5.120] liability to pay tax .................................. [3.110]
exceptions ........[5.40], [5.145], [5.165], [8.265] limited partnerships ............... [19.190], [21.20]
gifts [6.90] loans to partners ................................. [19.100]
interest —s ee Interest nature of ................................... [19.10], [19.20]
judicial tests .......................................... [1.170] net income ............................... [19.40], [19.60]
supplementary tests .......................... [1.170] assessable income of partner
legality of ............................................... [5.150] includes share of .......................... [19.60]
overview ...............[1.90], [1.170], [5.10], [6.10] definition ............................................. [19.60]
personal exertion —s ee Personal dividends .......................................... [21.250]
exertion/services  income new partner, admission of ................. [19.160]
personal gifts .......................................... [6.90] CGT consequences .......................... [19.130]
prerequisites ........................................... [5.50] overview ................................... [19.00], [19.10]
cash or cash convertible ...................... [5.60] partners’ salaries ................................... [19.90]
real gain ................................................ [5.70] partnership agreement .......... [19.20], [19.160]
property —s ee Property income partnership income .............................. [19.60]
receipts assignment of share of .................... [19.150]
characterisation in taxpayers’ hand .... [5.50] net income ............................ [19.40], [19.60]
extraordinary income ........................ [8.265] uncontrolled ..................................... [19.140]

reward for services, as —s ee partnership losses ................................ [19.70]
Personal exertion/services income passive investment income .................. [19.30]
unrealised gains .................................... [5.145] refinancing principle ........................... [19.100]
Overseas civilian tax offset .................. [15.190] retirement of partner .......................... [19.160]
CGT consequences .......................... [19.130]
Overseas forces rebate ......................... [15.190] work in progress .............................. [19.170]
statutory provisions .............................. [19.20]
P superannuation contributions ............ [19.110]
tax advantages ...................................... [19.10]
tax consequences ................................. [19.50]
Partnerships tax law definition ..................... [19.00], [19.30]
alienation of share of partnership tax returns ............................................. [19.40]
income ........................................ [19.150] tax treatments ....................................... [19.80]
assessable income of partner .............. [19.60] trading stock
capital gains tax .................................. [19.130] changes in composition of
assignment of interests ................... [19.150] partnership .................................. [19.180]
disposal of CGT assets .................... [19.130] uncontrolled partnership income ...... [19.140]
new partner ...................................... [19.130] work in progress ................................. [19.170]
carrying on a business ......................... [19.40]
PAYG instalments ................................. [24.160]
changes in composition ..................... [19.160]
depreciating assets .......................... [19.180] PAYG withholding ................................ [24.160]
trading stock ..................................... [19.180] Payroll tax
work in progress .............................. [19.170] calculation ........................................... [26.330]
characteristics .......................... [19.20], [19.30] contractor provisions ......................... [26.370]
compliance obligations ........................ [19.40] COVID-19 relief measures .................. [26.355]
Payroll tax — cont sportspeople ........................... [6.120], [8.80]

third-party payments ................ [6.40], [6.80]
employees and independent timing of payment ................................ [6.40]
contractors ................... [26.360], [26.370] tips ............................................. [6.70], [6.80]
case study ........................................ [26.362] voluntary payments .....[6.70], [6.90], [6.100]
contractual relationship ................... [26.364] wages ................................................... [6.30]
control .............................................. [26.362] overview ................................................ [10.40]
relevant contract, exemptions to .... [26.380] restrictive covenants ............... [6.160]–[6.170]
risk .................................................... [26.366] entering a contract, on ....................... [6.170]
tools and equipment ........................ [26.368] genuine capital payment ................... [6.170]
exempt organisations ......................... [26.390] ordinary income ................................. [6.170]
exemptions ......................................... [26.380] restraint of trade ................................. [6.170]
grouping .............................................. [26.350] shared economy ................................... [8.105]
legislation ............................................ [26.300] source .................................................... [4.260]
“maximum deduction” amounts ........ [26.330] statutory income .......................... [6.10], [6.20]
overview ................................. [26.00], [26.300] compensation receipts ...................... [6.230]
rates ..................................................... [26.330] fringe benefits .................................... [6.240]
rebates ................................................ [26.340] nexus with service ............................. [6.220]
taxable wages ..................................... [26.320] requirements of s 15-2 .......... [6.190]–[6.220]
thresholds ........................................... [26.330] return-to-work payments ................... [6.250]
Penalties termination payments —s ee
administrative ..................................... [24.201] Termination of employment
deductibility, interest payments ......... [12.810]
Personal gifts —s ee Gifts
general interest charge (GIC) ............. [24.150]
prescribed offences ............................ [24.200] Personal services business
rationale .............................................. [24.200] business premises test ....................... [23.230]
shortfall interest charge (SIC) ............. [24.150] determination ....................... [23.190], [23.240]
taxation offences ................. [24.200], [24.203] employment test ................................. [23.220]
Pensions personal services entity ...................... [23.190]
account-based superannuation personal services income regime
pensions, taxation ...................... [18.200] not applicable ............................. [23.190]
double tax agreements ....................... [22.490] results test ............................ [23.190], [23.200]
tests for ............................................... [23.190]
Personal services income —s ee also unrelated clients test .......................... [23.210]
Business income; Personal unusual circumstances ....................... [23.240]

services income
vs business income ................................ [8.20] Personal services income
capital receipts ............[6.140], [6.150], [6.170] anti-avoidance provisions ....... [6.60], [23.160]
compensation receipts ......................... [6.230] application of PSI regime ................... [23.160]
convertibility to cash ............................ [6.130] personal services business
customer loyalty programs .................. [6.130] excluded ..................................... [23.190]
double tax agreements ....................... [22.490] deductions .......................................... [23.180]
foreign residents ................................. [22.340] meaning .............................................. [23.170]
foreign service income ......................... [22.80] overview .............................................. [23.170]
non-cash benefits .........[6.20], [6.130], [6.240] personal services business
frequent flyer schemes ...................... [6.130] exclusion from PSI regime .............. [23.190]
fringe benefits ......................... [6.20], [6.240] tests for —s ee Personal services
ordinary income ........................... [6.10], [6.20] business
bonuses ..................................... [6.40], [6.70] statutory provisions ............................ [23.160]
commission .......................................... [6.40] tax avoidance ...................................... [23.160]
definition ............................................... [6.20] Personal use assets
fees for service ..................................... [6.40] CGT ....................................... [11.170], [11.190]
gifts, personal ........................... [6.30], [6.70], exclusions ........................................ [11.190]
[6.90], [6.100] exemption ..........[11.190], [11.220], [11.240]
nexus with service .........[6.20], [6.30], [6.50] definition ............................................. [11.190]
prizes and chance
winnings ................[6.70], [6.110], [6.120] Plant or equipment —s ee Capital
salary .................................................... [6.40] allowances; Leases
salary sacrifice ...................................... [6.60] Pooled development fund (PDF)
sign-on fees ........................................ [6.180] CGT exemption ................................... [11.260]
INDEX 985
Practical Compliance Guidelines Real property —s ee also Land

(PCG) ........................................... [24.360] double tax agreements ....................... [22.480]
Precedent Rebates —s ee Tax offsets
doctrine of ............................................... [1.30] Record keeping
interpretation, and .................................. [1.30] overview .............................................. [24.520]
study approach ....................................... [1.30] substantiation ..................................... [24.520]
problem solving ........................ [1.40], [1.60]
using ........................................................ [1.40] Refundable tax offsets ........................... [15.40]
Prepayment of expenses Reimbursement of expenses
apportionment rule ............................. [16.180] assessability ......................... [10.260]–[10.290]
exceptions ........................................ [16.182] capital receipts .................................... [10.270]
deductions .......................................... [16.180] deductibility ........................................ [12.260]
deferring derivation of income ............ [23.50] incident of business ............................ [10.280]
derivation of income ............................. [16.90] indemnity or recoupments ................. [10.290]
tax avoidance ........................................ [23.50] ordinary course of business ............... [10.280]
timing of deductibility ......................... [16.180] previously deducted expense ............ [10.260]
statutory provisions ............................ [10.290]
Prior year losses —s ee Capital gains
or losses; Tax losses Relocation expenses
deductibility ........................................ [12.360]
Private rulings —s ee Rulings
Repairs
Prizes capital expenses ................................... [13.37]
CGT exemption ................................... [11.300] deductibility .......................................... [13.30]
ordinary income ......................... [6.70], [6.110] improvements distinguished ............... [13.50]
sportspersons ....................................... [6.120] income-producing purpose .................. [13.35]
Property, dutiable —s ee Dutiable property initial repairs .......................................... [13.40]
Property fringe benefits meaning ................................................ [13.33]
exempt benefits .................................... [7.260] notional repairs ..................................... [13.70]
external benefits ................................... [7.270] replacements ........................................ [13.60]
in-house benefits .................................. [7.270] Repayment income thresholds and
reduction in taxable value ................. [7.370] rates for the 2018–19 Table ............. [3.4]
overview ................................................ [7.250] Residency —s ee also Foreign
taxable value ......................................... [7.270] residents; Source of income
reduction ............................................ [7.370]
Australian resident, definition ..... [4.40], [22.250]

Property income cases ..................................................... [22.45]
annuities ................................................ [9.210] cessation, CGT event .......................... [11.130]
dividends —s ee Dividends companies .....................[4.10], [4.170], [22.40]
financial arrangements —s ee central management and control
Financial arrangements test .................................... [4.190], [4.200]
interest —s ee Interest controlling shareholders .................... [4.210]
investment income as ............................ [8.90] dual residency .................................... [4.220]
lease incorporation test ............................... [4.180]
amount for obligation to repair ......... [9.180] voting power test ............................... [4.210]
premiums ........................................... [9.170] determination .......................................... [4.50]
meaning .................................................. [9.10] domicile, meaning ................................ [4.100]
overview .................................................. [9.10] domicile test ............................... [4.50], [4.100]
rent ........................................................ [9.160] considerations .................................... [4.120]
royalties —s ee Royalties examples ............................................ [4.120]
Protective clothing —s ee Clothing expenses period of absence .............................. [4.120]
permanent place of abode ............... [4.110],
Public companies —s ee Companies
[4.120], [4.145]
Public officers .......................................... [21.30] individuals .......................[4.10], [4.50], [22.40]
Public rulings —s ee Rulings domicile test .......................... [4.100]–[4.120]
Public trading trusts .................. [20.30], [21.20] ordinary concepts test .............. [4.60]–[4.90]
reforming individual residency
rules ............................................... [4.165]
R superannuation test ........................... [4.140]
tests for determining ............................ [4.50]
Rates of tax —s ee Tax rates legislative framework ............................. [4.20]
Residency — cont further information, request for ....... [24.400]

future event, assumptions
183-day rule ..................[4.50], [4.130], [4.145] about ........................................... [24.400]
ordinary concepts test ................. [4.60]–[4.90] inconsistent ruling ............................ [24.390]
considerations ........................... [4.80], [4.90] interpretative decisions ..................... [1.290]
examples .............................................. [4.90] objection against .............................. [24.400]
question of fact and degree ................. [4.70] register of ......................................... [24.480]
resides, definition ................................. [4.60] product rulings .................................... [24.420]
overview ..........................[4.10], [4.40], [22.40] public rulings ......................... [1.300], [24.410]
period of ................................................ [4.145] inconsistent private ruling ............... [24.390]
resident, definition ..........[4.40], [4.50], [4.170] Project Refresh .................................... [24.410]
statutory provisions ................................ [4.20] taxation determinations ...................... [24.440]
superannuation test ................... [4.50], [4.140]
tax rates and ........................................... [4.30]
temporary residents ............................. [4.150] S
Residential premises
definition ............................................. [25.165] Salary or wages —s ee also Payroll tax
GST, input taxed supplies compensation for loss of ......... [6.230], [10.60]
rent ................................................... [25.165] insurance or indemnity ......... [10.60], [10.90]
sale or long-term lease .................... [25.167] loss of earning capacity ..................... [10.80]
Retirement lump sum ........................................... [10.70]
early retirement scheme payment to employer ........................ [10.70]
payments ......................... [6.340], [6.350] replacement principle ........................ [10.60]
threshold ............................................ [6.360] partners’ salaries ................................... [19.90]
small business CGT concessions ....... [11.360] salary sacrifice ........................... [6.60], [23.90]
transition to retirement accounts ....... [18.215] tax benefits ....................................... [18.140]
source of services income ................... [4.260]
Returns —s ee Tax returns
taxable wages ..................................... [26.320]
Royalties
Sale and leaseback
assessability of ..............[8.265], [9.10], [9.200]
tax avoidance ...................................... [23.320]
definition ................................ [9.190], [22.310]
overview ................................................ [9.190] Sale of capital assets —s ee Disposal
source of income .................................. [4.290] of assets
Royalty withholding tax Sale of property —s ee also Trading stock
definition of royalty ............................. [22.310] source of income .................................. [4.250]

foreign residents subject to ................ [22.280] Secrecy .................................................. [24.620]
overview .............................................. [22.310]
Self-education expenses
rates ...................................... [22.280], [22.290]
deductibility ........................................ [12.580]
Rulings apportionment ................................. [12.690]
amendment of assessments .............. [24.400] capital expenses .............................. [12.660]
class rulings ........................................ [24.430] nexus, establishing .......................... [12.610]
Commissioner’s assumptions ............ [24.400] private or domestic expenses ......... [12.670]
common rules ..................................... [24.380] production of assessable
GSTR 2018/1 ....................................... [25.120] income ........................................ [12.590]
GSTR 2018/2 ....................................... [25.120] relating to current career ................. [12.600]
inconsistent rulings ............................ [24.390] travel expenses ................................ [12.620]
interpretative decisions ........................ [1.290] unrelated to employment
legislative regime ................................ [24.370] income ........................................ [12.640]
oral rulings .......................................... [24.490] up-to-date requirement ................... [12.630]
application for .................................. [24.400] Youth Allowance deduction ............ [12.640]
further information, request for ....... [24.400] definition ........................................ [12.640]
future event, assumptions employment income, not
about ........................................... [24.400] related to ..................................... [12.640]
inconsistent ruling ............................ [24.390] non-deductible .................................... [12.680]
overview ................................. [1.280], [24.370]
Seminars
private rulings ........................ [1.290], [24.450]
deductibility of registration fees ........ [12.690]
application for ................... [24.400], [24.460]
application only to rule .................... [24.460] Serious Financial Crimes
delay in issue .................................... [24.470] Taskforce .................................... [24.203]
INDEX 987
Services income —s ee Personal interest .................................................. [4.270]

exertion/services  income legislative framework ............................. [4.20]
Shareholders overview ........................[4.10], [4.230], [22.30]
definition ............................................... [21.50] royalties ................................................. [4.290]
dividends —s ee Dividend salary or wages ..................................... [4.260]
imputation; Dividends sale of property ..................................... [4.250]
registration ............................................ [21.50] services income .................................... [4.260]
tax offsets for ........................... [15.70], [15.80] tax avoidance ........................................ [23.40]
trading stock ......................................... [4.240]
Shares
CGT assets .......................................... [11.170] Sportspersons
CGT events .......................................... [11.110] carrying on a business ........................... [8.80]
liquidation ......................................... [21.140] double tax agreements ....................... [22.490]
PDF shares ....................................... [11.260] ordinary income ......................... [6.110], [8.80]
debt/equity rules ................................... [9.150] playing fees ............................................. [8.80]
dividend income from —s ee Dividends prizes ........................................ [6.110], [6.120]
liquidation ............................ [11.110], [21.140] sign-on fees .......................................... [6.180]
Sharing economy Stamp duty —s ee also Duties
Air BNB .................................................. [8.105] failure to lodge documents for
Airtasker ................................................ [8.105] stamping ..................................... [26.140]
ATO’s Black Economy legislation .............................................. [26.20]
Taskforce ........................ [8.105], [24.680] harmonisation .................................... [26.30]
income tax obligations ......................... [8.105] overview ................................... [26.00], [26.20]
personal services .................................. [8.105] key issues ........................................... [26.50]
tax base .................................... [26.40], [26.50]
Shortfall interest charge ......... [24.30], [24.150]
Standard GST-registration .................. [25.313]
Similar Business Test (SiBT) ................ [21.340]
Start-up companies
Single Touch Payroll ............................. [24.160] GST exemption for investments ........ [11.265]
Small business entities State taxes
cash or accruals accounting ................. [16.50] overview ................................... [26.00], [26.10]
CGT concessions ................ [11.320], [11.550], revenue authorities ............................... [26.10]
[21.350] stamp duty —s ee Stamp duty
basic conditions ............................... [11.330] States and territories
15-year exemption ........................... [11.340]
governance ........................................... [26.10]

50% reduction .................................. [11.350] powers .................................................. [26.10]
retirement concession ..................... [11.360] taxes —s ee State taxes
roll-over relief .................... [11.370], [11.430]
turnover test ..................................... [11.330] Statutory income —s ee also Capital
concessional unincorporated gains tax
offset ........................................... [15.130] assessable income, part of ................... [3.140]
deductions, timing .............................. [16.185] capital gains tax, and .......................... [11.310]
depreciating assets ............................. [14.165] constructive receipt rule ....................... [3.160]
roll-over relief ...................................... [11.430] definition .................................... [3.160], [5.10]
tax rates .................................. [3.210], [15.130] dividends ............................................... [9.150]
employment and services, from .......... [6.190]
Small Taxation Claims Tribunal .......... [24.280] overview ..........................[3.160], [5.10], [6.10]
Source of income —s ee also Foreign receipts .................................................. [8.265]
source income; Residency royalties ................................................. [9.190]
ascertaining source ................. [4.230], [22.40] Strict liability ......................................... [24.203]
assessable income ............................... [4.230]
categories of income ............................ [4.230] Structured settlements ........................ [10.140]
companies ............................................... [4.10] Study skills
dividends ............................................... [4.280] assignments
foreign residents .........[4.10], [4.230], [22.250] applying the law to problem ............. [2.180]
Australian sourced income approach ............................................ [2.110]
taxed .................................... [4.10], [4.30] authority ............................................. [2.240]
natural resources ............................... [23.40] body text ............................................ [2.230]
tax avoidance ..................................... [23.40] conclusion ............................. [2.190], [2.260]
tax rate .................................................. [4.30] glossary of terms ............................... [2.490]
individuals ............................................... [4.10] identifying issues ............................... [2.140]
Study skills — cont benefits —s ee Superannuation benefits

contributions —s ee Superannuation
introduction ........................................ [2.220] contributions
note-taking ......................................... [2.170] definition ............................................... [18.10]
plan ........................................ [2.200], [2.210] Fund Ruling 2009/1 ................................. [8.90]
referencing ......................................... [2.250] funds —s ee Superannuation funds
research —s ee resources, —s ee guarantee charge .................................. [18.10]
also below overview ................................... [18.00], [18.10]
short answer ...................................... [2.105] preservation age .................. [18.170], [18.215]
structure ............................................. [2.220] transition to retirement
understanding question ..................... [2.130] accounts ...................................... [18.215]
writing [2.200] residency test ........................................ [4.140]
course salary sacrifice ........................... [6.60], [23.90]
aims ...................................................... [2.20] tax benefits ....................................... [18.140]
assessment ........................................... [2.40] self-managed funds ................. [18.20], [18.30]
exam format ......................................... [2.50] simplified law ........................................ [18.10]
knowledge level required .................... [2.30] superannuation guarantee charge ....... [18.10]
development, problem-solving tax offsets ................................. [15.70], [15.90]
skills ............................................... [2.310] tax shelters ............................................ [23.90]
exams taxation of .............................. [18.50], [18.130]
applying law to problem .................... [2.410] transition to retirement accounts ....... [18.215]
conclusion .......................................... [2.420]
format ................................................... [2.50] Superannuation benefits
glossary of exam terms ..................... [2.490] death benefit ....................................... [18.220]
identifying relevant law ...................... [2.400] binding death benefit
multiple-choice ................................... [2.370] nomination .................................. [18.225]
preparation ............................ [2.280]–[2.330] entitlement ....................................... [18.225]
problem-type questions .................... [2.390] taxation ............................................. [18.230]
resources to take in .............................. [2.50] taxation case study .......................... [18.230]
sample question and income streams, taxation .... [18.200], [18.210]
answers ............................ [2.430]–[2.450] lump sum payments taxation
supervised open-book ....................... [2.360] taxed fund, from .............................. [18.180]
take-home .......................................... [2.365] untaxed fund, from .......................... [18.190]
techniques ................[2.340], [2.460], [2.470] pension or annuity, taxation .............. [18.200]
self-managed funds ................. [18.20], [18.30]
mistakes ................................... [2.120], [2.330]

notes and summaries simplified law ........................................ [18.10]
detailed .................................... [2.90], [2.170] tax offset .................................. [15.70], [15.90]
overviews ............................................. [2.80] taxation of ........................................... [18.160]
purpose ................................................ [2.70] income stream ................................. [18.200]
sample ....................................... [2.70], [2.80] lump sum payments ......... [18.180], [18.190]
resources Superannuation contributions
allowed in exams ................................. [2.50] age limits ............................................. [18.125]
case law ....................[2.160], [2.165], [2.180] co-contribution scheme ..................... [18.110]
casebooks .......................................... [2.100] concessional contributions .................. [18.70]
citing authority ...................... [2.240], [2.400] cap ...................................................... [18.80]
guidebooks ......................................... [2.100] contribution caps
legislation .............................. [2.150], [2.180] carried forward cap ............................ [18.80]
list of helpful links .............................. [2.480] concessional ....................................... [18.80]
referencing ......................................... [2.250] non-concessional ............................. [18.100]
study plan employer contributions ........................ [18.70]
overview ............................................... [2.60] government co-contributions ............ [18.110]
Subscriptions low income superannuation tax
exempt fringe benefits ......................... [7.340] offset ........................................... [18.120]
Substantiation of deductions non-concessional contributions ........... [18.90]
requirements ....................................... [24.520] cap .................................................... [18.100]
partnerships ........................................ [19.110]
Superannuation
self-employed taxpayer, by .................. [18.70]
age limits ............................................. [18.125]
taxation of .............................. [18.60], [18.140]
age for access ..................................... [18.170]
transition to retirement Superannuation funds ............................ [14.20]
accounts ...................................... [18.215] access to ............................................. [18.170]
INDEX 989
Superannuation funds — cont lay-by sales ......................................... [16.95]

prepayments ...................................... [16.90]
transition to retirement timing of derivation ............................ [16.30]
accounts ...................................... [18.215] financial accounting
complying superannuation funds ........ [18.30] distinguished ................. [16.10], [16.120]
taxation ............................................. [18.130] financial year ......................................... [16.10]
Constitutionally Protected Funds ......... [18.40] income year .......................................... [16.10]
contributions received by, lay-by sales ........................................... [16.95]
taxation of ................................... [18.140] overview ................................................ [16.10]
death benefit ....................................... [18.220] prepayment of expenses
binding death benefit nomination ... [18.225] apportionment rule .......................... [16.180]
entitlement ....................................... [18.225] derivation of income .......................... [16.90]
taxation ............................................. [18.230] exceptions to 12-month rule ........... [16.182]
taxation case study .......................... [18.230] timing of deductibility ...................... [16.180]
earnings, taxation of ........................... [18.150] recoverable debt ................................... [16.40]
income .................................................. [18.10] small business entities
non-complying superannuation cash or accruals ................................. [16.50]
funds ............................................. [18.30] deductions, timing ........................... [16.185]
overview ................................................ [18.20] trading stock —s ee Trading stock
preservation age ................................. [18.170]
transition to retirement Tax administration
accounts ...................................... [18.215] assessment —s ee Assessment
Self-Managed Superannuation ATO role —s ee Australian Taxation Office
Funds (SMSF) .................. [18.20], [18.30] collection —s ee Collection of tax
taxation of ............................ [18.140], [18.150] explanatory flowchart ........................... [24.10]
contributions received ..................... [18.140] legislation .............................................. [1.245]
deeming provisions for “income overview ................................................ [24.10]
stream mode” ............................. [18.150] self-assessment .................................... [24.40]
earnings ............................................ [18.150] Tax advice
taxed and untaxed ................................ [18.40] accounting advice, distinction ............... [1.50]
trust, form of ......................................... [18.20] overview .................................................. [1.50]
Superannuation guarantee charge ........ [18.10] Tax arbitrage
income splitting .................................... [23.60]
multinational entities .......................... [23.100]
T
tax rate arbitrage ................................. [23.102]

Tax practitioners, regulation of
Tax accounting code of professional conduct ............ [24.695]
advice ...................................................... [1.50] complaints and investigations ........... [24.698]
cash vs accruals .................................... [16.40] “safe-harbour” provisions .................. [24.690]
large business .................................... [16.60] Tax Practitioners Board (TPB) ............ [24.690]
small business entities ....................... [16.50]
Taxation officers ................................... [24.620]
switching between
methods ........................... [16.70], [16.80] Tax avoidance —s ee also Tax minimisation
deductions, timing of .......................... [16.120] capital gains tax .................................... [23.80]
bad debts .......................................... [16.220] converting income to capital ................ [23.70]
future expenses .............................. [16.160], deemed dividends for private
[16.190]–[16.210], [16.230]–[16.240] companies ................... [21.110], [23.140]
future income ................................... [16.170] deferring derivation of income ............ [23.50]
incurred, meaning ............. [16.120], [16.130] discretionary trusts ............................... [23.80]
insurance companies ........ [16.230]–[16.240] Diverted Profits Tax ............................ [22.517]
non-business expenditure ............... [16.186] excessive payments to associates ..... [23.120]
post-cessation of business .............. [16.150] explanatory flowchart ........................... [23.10]
prepaid expenses .............. [16.180], [16.182] general anti-avoidance
previous years ................... [16.140], [16.150] regime ............................ [23.20], [23.260]
provisions for leave .......... [16.190]–[16.210] amendments to Pt IVA ...... [23.270], [23.290]
small business entities ..................... [16.185] historical background ...................... [23.260]
derivation of income ................ [16.20], [16.40] key elements of Pt IVA ..................... [23.270]
derive, definition ................................ [16.20] specific provisions and ...................... [23.20]
disputed amounts ............................ [16.110] tax avoidance scheme —s ee Tax
dividend income .............................. [16.100] avoidance schemes
Tax avoidance — cont interposed entities .............................. [23.310]

key elements of Pt IVA ....................... [23.270]
hobby farms ........................................ [23.150] leasing ................................................. [23.320]
income splitting ..................... [23.60], [23.130] mass-marketed schemes ................... [23.310]
partners ............................................ [19.150] agricultural schemes ........................ [23.330]
international ........................................ [23.100] promoter penalties ........................... [24.690]
anti-avoidance regimes ...... [22.20], [23.250] partners, income-splitting .................. [19.150]
hybrid entities .................................. [23.104] sale and leaseback .............................. [23.320]
hybrid instruments ........................... [23.106] scheme, definition ............. [23.280], [23.3210]
tax rate arbitrage .............................. [23.102] sole or dominant
non-arm’s length purpose ........................ [23.270], [23.300]
dealings ........................ [22.350], [23.120] factors for determining .................... [23.300]
non-commercial losses ...................... [23.150] tax benefit, to gain ............ [23.270], [23.280]
overview .......[1.130], [23.00], [23.10], [23.110] tax benefit ............................ [23.270], [23.290]
personal services income .................. [23.160] definition ........................................... [23.290]
prepayments ......................................... [23.50] dominant purpose of
scheme —s ee Tax avoidance schemes gaining ......................... [23.270], [23.280]
source of income .................................. [23.40] trusts ..................................................... [23.80]
specific provisions ................. [23.20], [23.110] anti-loss trafficking provisions ........... [20.60]
priority over general discretionary trusts ............................ [23.80]
provisions ..................................... [23.20] unilateral scheme ................................ [23.270]
statutory provisions ................. [1.130], [23.20] value shifting ....................................... [23.310]
general ................................. [23.20], [23.260] wash sales ........................................... [23.340]
specific ................................. [23.20], [23.110]
tax evasion distinguished ..................... [23.10] Tax contextual information ................. [24.600]
tax planning distinguished ................... [23.10] Tax evasion —s ee also Tax avoidance
tax rate arbitrage ................................. [23.102] amendment of assessment ................ [24.140]
tax shelters ............................................ [23.90] overview ................................................ [23.10]
techniques ............................................. [23.30] tax avoidance distinguished ................ [23.10]
trading stock tax planning distinguished ................... [23.10]
non-arm’s length Tax exploitation scheme ...................... [24.207]
dealings .......................... [17.70], [23.120]
purchase at overprice from Tax file number
associate ..................................... [23.120] ATO data-matching services .............. [24.330]
financial institution, failure to
transfer of right to income from

property ...................................... [23.130] give to ......................................... [24.330]
transfer price manipulation ................ [22.350] no-TFN withholding mechanism ........ [24.160]
partnership ............................................ [19.40]
Tax avoidance schemes
agricultural schemes .......................... [23.330] Tax gap .................................................... [24.30]
mass-marketed schemes ................. [23.330] Tax information exchange agreements
non-recourse loans .......................... [23.330] current TIEAs ...................................... [22.510]
round-robin finance ......................... [23.330] DTAs compared .................................. [22.500]
sham transactions ............................ [23.330] OECD/G20 BEPS project .................... [22.517]
alternative postulate ........................... [23.290] Automatic Exchange of Information
amendments to Pt IVA ........ [23.270], [23.290] (AEOI) .......................................... [22.513]
retrospective application ................. [23.270] common reporting standard
capital gains tax .................................. [23.330] (CRS) ........................................... [22.513]
wash sales ........................................ [23.340] other tax agreements ......................... [22.513]
case law ............................................... [23.310] purpose ............................................... [22.500]
definition of scheme ........................... [23.280] Tax law —s ee also Tax legislation
Diverted Profits Tax ............................ [22.517] accounting, distinction ..... [1.20], [1.70]–[1.140]
dominant purpose ............... [23.270], [23.300] entity relationships ............................. [1.130]
criteria for determining .................... [23.300] expenses ............................................ [1.110]
dominant, meaning .......................... [23.300] gross income ........................... [1.90], [1.100]
tax benefit, to gain ............ [23.270], [23.280] policy considerations ......................... [1.120]
Everett assignments ........................... [19.150] recognition of receipts ............ [1.80]–[1.100]
explanatory flowchart ........................... [23.10] timing rules ........................................ [1.140]
finance leasing .................................... [23.320] anti-avoidance provisions .................... [1.130]
foreign source income ....................... [23.310] capital or revenue expenses ................ [1.110]
High Court cases ................................. [23.310] exempt income ..................................... [1.120]
INDEX 991
Tax law — cont Tax minimisation —s ee also Tax avoidance

choice of entity ..................................... [23.80]
gross income ............................. [1.90], [1.100] conversion of income to capital ........... [23.70]
judicial concepts ................................... [1.150] discretionary trusts ............................... [23.80]
income ................................... [1.160], [1.170] entitlement to minimise tax .................. [23.10]
ordinary income ................................. [1.170] legal and illegal ..................................... [23.10]
origins of ............................... [1.150]–[1.170] overview ................................................ [23.10]
taxable income ................................... [1.160] prepayments ......................................... [23.50]
trust law, and ...................................... [1.160] source of income .................................. [23.40]
ordinary income ............[1.90], [1.100], [1.170] tax shelters ............................................ [23.90]
judicial tests ........................................ [1.170]
precedent ................................................ [1.30] Tax offsets
recognition of receipts ........................... [1.90] carer .................................................... [15.150]
sources .................................................. [1.180] carried forward ..................................... [15.60]
case law ....................[1.270], [2.160], [2.180] claimable in year in which arise ........... [15.20]
legislation —s ee Tax legislation concessional tax offsets ........ [15.20], [15.140]
list of ................................................... [2.480] capping income tax rates ................ [15.130]
rulings .................................... [1.280]–[1.300] concessional deductions and .......... [15.120]
study —s ee also Study skills phased out ....................................... [15.200]
approach ................................... [1.10], [1.20] subsidies ........................................... [15.110]
precedents ............................................ [1.30] dependency offset .............................. [15.150]
problem-solving ........................ [1.40], [1.60] dividend tax offsets —s ee Dividend
tax law rewrite ...................................... [1.210] tax offsets
foreign income tax offset ... [15.100], [22.120],
Tax legislation [22.130], [22.140], [22.150]
administration rules .............................. [1.245] invalid .................................................. [15.150]
assessable income definition ................. [1.90] invalid carer ........................................ [15.150]
capital gains tax .................................... [1.230] low income rebate .............................. [15.180]
concurrent income tax Acts ................. [1.220] low income superannuation
fringe benefits tax ................................. [1.240] tax offset ..................................... [18.120]
goods and services tax ......................... [1.250] low income (LITO) .............................. [15.140]
income tax .................. [1.200]–[1.220], [1.240] order of taking .................................... [15.210]
rates .................................................... [1.245] overseas civilian tax offset ................. [15.190]
international tax agreements ............... [1.245] overseas forces rebate ....................... [15.190]
interpretation ................[1.30], [2.150], [2.180] overview ................................... [3.220], [15.10]
precedent ................................................ [1.30] payroll tax ........................................... [26.340]

rewrite ................................................... [1.210] recognition for taxes previously
Tax losses levied ................................ [15.20], [15.70]
calculation ........................................... [13.180] refundable offsets ................................. [15.40]
carry forward ...................................... [13.180] shareholders ............................ [15.70], [15.80]
companies ..........[13.190], [21.310], [21.320] subsidies ............................................. [15.110]
continuity of ownership superannuation fund
test ............................................... [21.330] members .......................... [15.70], [15.90]
franking offsets, and ......... [21.220], [21.230] superannuation funds ......................... [18.120]
individuals ........................................ [13.190] tapered offsets ...................................... [15.30]
limitations ......................................... [13.200] tax benchmarks and variations
same business test .......................... [21.340] statement .................................... [15.140]
SiBT .................................................. [21.340] transferable offsets ............................... [15.50]
unrealised losses ............................. [21.350] types ...................................................... [15.20]
companies ........................................... [21.310] zone rebate ......................................... [15.180]
anti-avoidance
Tax planning —s ee also Tax minimisation
provisions .................... [21.310]–[21.340]
tax avoidance, and ................................ [23.10]
carry back ......................................... [21.320]
carry forward .................... [11.530], [21.230], Tax rates
[21.310], [21.320] companies ............................................. [3.210]
loss trafficking .................................. [21.310] concessional tax offsets to
multiplication of ............................... [21.360] cap .................................. [15.90], [15.130]
pre-consolidation losses .................. [21.440] FBT rate ................................................. [7.420]
realised losses .................................. [21.320] foreign companies .............................. [22.270]
unrealised losses ............................. [21.350] foreign residents .........[3.200], [4.30], [22.270]
overview ................................... [3.20], [13.180] GST ........................................................ [25.10]
Tax rates — cont Business Activity Statements ............... [24.35]

Pay As You Go (PAYG) instalment
HELP repayments ................................... [3.90] system ........................................... [24.30]
individuals ............................................. [3.200]
legislation .............................................. [1.245] Taxpayer’s Charter ............................... [24.350]
progressive changes to corporate Temporary residents
rate ................................................ [3.210] CGT discount, no
residency, and ........................................ [4.30] entitlement ..................... [4.150], [22.330]
small business entities ......................... [3.210] CGT main residence exemption .......... [4.150]
study and training support loans ........... [3.90] foreign source income ......................... [4.150]
tax-free threshold ................................... [4.30] non-final withholding tax applied
foreign residents .............................. [22.270] to capital gains on Australian
taxpayers, types of ............................... [3.190] property ...................................... [22.335]
withholding tax ................................... [22.280] requirements ......................................... [4.150]
working holiday markers ......... [3.200], [4.155] tax relief ................................................. [4.150]
Tax-related expenses Termination of employment
deductibility .......................................... [13.20] compensation for wrongful
preparation of objections ................... [24.220] dismissal ...................... [10.125], [11.290]
Tax returns death benefit termination payment,
approved form ...................................... [24.20] taxation of ..................................... [6.380]
Business Activity early retirement scheme
Statement ....................... [1.260], [25.300] payments ......................... [6.340], [6.350]
lodgment ............................................... [24.20] threshold ............................................ [6.360]
overview ................................... [24.10], [24.20] employment termination payments
partnerships .......................................... [19.40] (ETPs) ............................................ [6.260]
pre-filing items ...................................... [24.30] examples ............................................ [6.280]
process .................................................. [24.30] exclusions .......................................... [6.280]
proposed reform ................................ [24.30] “in consequence of” ............. [6.290], [6.300]
risk assessment by ATO ........ [24.50], [24.300] non-excluded components ............... [6.370]
self-assessment system ....................... [24.40] preservation age, and ........................ [6.370]
trusts ..................................................... [20.10] redundancy payment ......................... [6.370]
requirements for ................................ [6.280]
Tax rulings —s ee Rulings tax calculation .................................... [6.370]
Tax shelters ............................................. [23.90] tax rebate ............................................ [6.370]
Tax treaties —s ee Double tax agreements types ................................................... [6.270]

“whole of income cap” ...................... [6.370]
Tax year genuine ................................................. [6.310]
fringe benefits tax ........................ [7.10], [7.40] genuine redundancy
income tax .............................................. [7.10] payments ............[6.320], [6.330], [6.350]
Taxable income threshold ............................................ [6.360]
definition ............................................... [1.160] thresholds ............................................. [6.360]
determination ........................................ [3.130] unused annual and long service
formula ..................................... [3.120], [3.130] leave payments ............................. [6.390]
Taxation law —s ee Tax law Territories —s ee States and territories
Taxation of crowdfunded donation ...... [8.107] Tertiary education
Taxation of financial arrangements HECS and HELP debts ............................ [3.90]
(TOFA) —s ee Financial arrangements HELP repayment rate .............................. [3.90]
persons living overseas ....................... [3.90]
Taxation power of Commonwealth ........ [3.20] study and training support loans ........... [3.90]
Taxation Ruling 2019/D1 .......................... [8.90] Testamentary trusts ............................... [20.50]
Taxes Thin capitalisation
composition .......................................... [26.00] application of rules ............. [22.390], [22.400],
Taxi travel and ride-sourcing [22.430]
GST registration .................................... [25.70] exceptions ........................................ [22.400]
Uber ....................................................... [25.70] categories of entities .......................... [22.410]
Taxpayer alerts ..................................... [24.500] debt-to-equity ratio ............................. [22.390]
entities affected ................................... [22.390]
Taxpayer lodgements financial entities .................................. [22.410]
annual tax returns ................................. [24.20] former rules ........................................ [22.380]
INDEX 993
Thin capitalisation — cont value at end of year ............................ [17.140]

absorption cost method .................. [17.150]
inward-investing entities ..... [22.400], [22.410] cost .................................... [17.150], [17.160]
application of rules .......................... [22.430] direct cost method ........................... [17.150]
maximum allowable debt ................... [22.420] market selling value ......................... [17.170]
outward-investing new livestock from reproduction .... [17.200]
entities .......................... [22.400], [22.410] obsolescence ................................... [17.190]
application of rules .......................... [22.430] replacement value ........................... [17.180]
overview ................................. [22.20], [22.380] value at start of year ........................... [17.130]
Third parties year-end adjustments ......................... [17.120]
collection of tax from .......................... [24.170] Training support loans
TOFA —s ee Financial arrangements rates of repayment ................................. [3.90]
persons living overseas ....................... [3.90]
Trading stock Transfer duty —s ee also Duties
accounting for ........................ [17.50]–[17.140] additional for foreign purchasers ....... [26.135]
acquisitions .............................. [17.60], [17.70] calculation of duty payable ................ [26.130]
explanatory flowchart ........................ [17.10] determination steps .............................. [26.60]
non-arm’s length foreign purchasers of residential
dealings .......................... [17.70], [23.120] property ...................................... [26.135]
assessable income ............................... [17.90] overview ................................... [26.00], [26.60]
deemed disposal .............................. [17.260] rates (NSW) ......................................... [26.130]
non-arm’s length transactions ........... [17.70] relevant acquisition ............................ [26.190]
outside ordinary business ............... [17.110] acquisition ........................................ [26.192]
capital gains tax .................................. [11.310] significant interest ............................ [26.194]
ceasing to be ........................ [17.260], [17.270]
CGT events ............[17.250], [17.260], [17.280] Transfer pricing
common items ......................... [17.30]–[17.50] application of provisions .................... [22.350]
compensation for loss of .................... [10.220] arm’s length principle .......... [22.350], [22.360]
computer spare parts ........................... [15.50] compliance with requirements .......... [22.370]
cost ....................................... [17.150], [17.160] country-by-country reporting ............. [22.375]
definition ............................................... [17.20] disclosure of information ................... [22.370]
disposals ................................ [17.80]–[17.110] International Dealing Schedule .......... [22.370]
becoming trading stock methodologies .................................... [22.360]
deemed ....................................... [17.250] new rules ............................................. [22.350]
ceasing to be trading stock non-arm’s length agreements ............ [22.370]

deemed ....................................... [17.260] OECD guidelines ................................. [22.350]
deemed disposals ............. [17.250], [17.260] overview ................................. [22.20], [22.350]
explanatory flowchart ........................ [17.10] tax avoidance ...................................... [22.350]
non-arm’s length Transferable offsets ................................ [15.40]
dealings .......................... [17.70], [23.120] Transportation
ordinary course of business .............. [17.90] bulky items .......................................... [12.420]
outside ordinary business ............... [17.110]
explanatory flowcharts ......................... [17.10] Travel expenses
intangible items .................................... [17.30] alternative workplaces ........................ [12.430]
land ........................................................ [17.30] between home and work ................... [12.390]
livestock ................................................ [17.20] outside normal work
obsolescence ...................................... [17.190] hours ............................ [12.390], [12.400]
other tax provisions ............................ [17.290] between workplaces ............ [12.440], [13.110]
overview ................................................ [17.10] car expenses ....................................... [12.450]
partnership calculation [12.380]
changes in composition .................. [19.180] “cents per kilometer”
purchase at overprice from method ......................... [12.460]–[12.480]
associate ..................................... [23.120] “log book” method ............ [12.550]–[12.570]
roll-over relief ...................................... [11.430] carrying bulky items ........................... [12.420]
source of income .................................. [4.240] “fly in-fly out” employees ................... [12.390]
stock on hand ..................................... [17.220] itinerant workers ................................. [12.410]
stocktake ............................................. [17.120] self-education ..................................... [12.620]
taxpayer’s asset substantiation ..................................... [12.320]
becoming trading stock ................... [17.250] Treasury Laws Amendment Bill
ceasing to be trading stock ............. [17.260] 2018 ............................................... [15.00]
Trust income legislative provisions relating to

Bamford case ........................................ [20.90] taxation of ..................................... [20.10]
interim measures in liability to pay tax .................................. [3.110]
response to ................................. [20.100] losses or outgoings ................. [1.160], [20.60]
capital and income ................ [1.160], [20.130] nature of ................................................ [20.10]
capital gains overview ................................... [20.00], [20.10]
CGT discount .................................... [20.130] public trading trusts .............................. [20.30]
distributed to beneficiaries .............. [20.130] taxed as companies .............. [20.30], [21.20]
compensation or damages reasons for use ..................................... [20.10]
received by trustee ..................... [10.100] superannuation funds —s ee
definition ............................................... [20.80] Superannuation funds
discretionary trusts ............................... [20.40] tax avoidance ........................................ [23.80]
default beneficiary provision ........... [20.150] anti-loss trafficking provisions ........... [20.60]
share in, meaning .............................. [20.90] discretionary trusts ............................ [23.80]
distributed to beneficiaries ................. [20.130] tax returns ............................................. [20.10]
character preserved ......................... [20.130] taxation of, overview ............... [20.10], [20.60]
dividend imputation ........................... [21.250] taxation of income —s ee Trust income
dividends ............................................. [20.130] testamentary trusts ............................... [20.50]
income of the trust estate .................... [20.80] types of trusts ....................................... [20.20]
losses .................................................... [20.60] unit trusts .............................................. [20.30]
minor beneficiaries ................ [20.40], [20.160] corporate unit trust ............... [20.30], [21.20]
tax rates ............................................ [20.160] public trading trusts .............. [20.30], [21.20]
net income ............................... [20.60], [20.80] taxed as companies .............. [20.30], [21.20]
adjustment of ..................................... [20.80]
trust income distinguished ................ [20.80]
share in, meaning ................................. [20.90] U
proportionate vs quantum
view ............................................... [20.90] Uniforms —s ee Clothing expenses
taxation of ................................ [20.00], [20.60]
Unit trusts
beneficiary presently entitled, not
beneficiaries’ entitlement to
under legal disability .................... [20.70]
income .......................................... [20.30]
beneficiary presently entitled,
corporate unit trusts ................ [20.30], [21.20]
under legal disability .................. [20.140]
overview ................................................ [20.30]
no beneficiary presently
public trading trusts .............................. [20.30]
entitled ........................................ [20.150]

taxed as companies .............. [20.30], [21.20]
trustees ............................................. [20.150]
units compared to shares ..................... [20.30]
trust and tax law ................................... [1.160]
Trusts
bare trusts ............................................. [20.20] V
beneficiaries —s ee Beneficiaries
CGT events ............................. [11.90], [20.180] Valour decorations
corporate limited .................................. [21.20] CGT exemption ................................... [11.230]
definition ............................................... [20.20]
discretionary trusts .................. [20.20], [20.40] Value shifting
appointor ............................................ [20.40] tax avoidance scheme ........................ [23.310]
beneficiaries ....................................... [20.40]
deed of settlement ............................. [20.40] W
default beneficiary provision ........... [20.150]
dividend imputation ......................... [21.250]
Wages —s ee Salary or wages
minor beneficiaries ............................ [20.40]
reasons for use ..................... [20.10], [20.40] Wash sales
settlor .................................................. [20.40] tax avoidance ...................................... [23.340]
splitting income between Withholding tax
beneficiaries .................................. [20.40] dividends —s ee Dividend withholding tax
trustee obligations ............................. [20.40] interest ................................. [22.280], [22.300]
fixed trusts ............................... [20.20], [20.30] PAYG withholding .............................. [24.160]
income —s ee Trust income purpose of regime .............................. [22.280]
land ownership by (SA and Vic) ........ [26.270] rates ..................................................... [22.280]
INDEX 995
Withholding tax — cont Y
royalties ................................ [22.280], [22.310]
Work in progress Youth Allowance
partnership, change in self-education expenses and ............. [12.640]
composition ................................ [19.170]
Working holiday makers ........... [3.200], [4.155] Z
Wrongful dismissal
compensation ...................... [10.125], [11.290] Zone rebate ........................................... [15.180]

Principles of Taxation Law Part 8 - Index

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Principles of Taxation Law Part 8 - Index

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INDEX

A attributable taxpayers ...................... [22.190]

advice ...................................................... [1.50] sham transactions .............................. [23.330]

Assessable income —​s​ ee also partnership ............................................ [19.40]

notice of ................................................ [24.50] GST groups ...................................... [25.315]

no knowledge of distribution .......... [20.110] isolated transactions ................ [8.170], [8.265]

Business losses net capital loss ..................... [11.510], [11.570]

calculation ........................................... [11.460] undissected lump sums ................... [10.250]

Capital gains tax — cont expenses —​s​ ee Travel expenses

turnover test ..................................... [11.330] losses or outgoings —​s​ ee Losses or

CGT events — cont Commissions

Mareva orders ..................................... [24.180] overview ........................................... [21.310]

Compensation or damages —​s​ ee entry and exit history rules ................ [21.420]

capital gains tax ................................. [9.120]

Deductions — cont resides ..................................................... [4.60]

derive .................................................... [16.20] less than $300 .................................... [14.40]

Depreciating assets — cont Disposal of assets

timing of derivation .............................. [16.30] purpose ............................................... [21.150]

Dividends shares, from .......................................... [4.280]

deemed dividends ........................... [21.130] COVID-​19 relief measures .................. [26.155]

Expense payment fringe benefits Foreign losses

Foreign residents — cont employment, in respect of ......... [6.20], [7.70],

temporary residents ............................. [4.150] employment relationship ....................... [7.70]

Fringe benefits tax (FBT) — cont Going concerns

tax liability ............................................. [7.420]

low value .......................................... [25.260] definition ................................................. [5.20]

Income tax — cont legislation .............................................. [1.245]

overview .................................................. [9.20]

Land tax — cont form and substance ......................... [12.200]

Legal professional privilege (LPP) insurance companies ......................... [16.230]

Losses or outgoings — cont N

exemptions ............................................. [3.70]

Ordinary income —​s​ ee also Personal co-​ownership distinguished ................. [19.30]

extraordinary income ........................ [8.265] uncontrolled ..................................... [19.140]

Payroll tax — cont sportspeople ........................... [6.120], [8.80]

Business income; Personal unusual circumstances ....................... [23.240]

Practical Compliance Guidelines Real property —​s​ ee also Land

Australian resident, definition ..... [4.40], [22.250]

Residency — cont further information, request for ....... [24.400]

definition of royalty ............................. [22.310] source of income .................................. [4.250]

Services income —​s​ ee Personal interest .................................................. [4.270]

governance ........................................... [26.10]

Study skills — cont benefits —​s​ ee Superannuation benefits

mistakes ................................... [2.120], [2.330]

Superannuation funds — cont lay-​by sales ......................................... [16.95]

tax rate arbitrage ................................. [23.102]

Tax avoidance — cont interposed entities .............................. [23.310]

transfer of right to income from

Tax law — cont Tax minimisation —​s​ ee also Tax avoidance

precedent ................................................ [1.30] payroll tax ........................................... [26.340]

Tax rates — cont Business Activity Statements ............... [24.35]

Tax treaties —​s​ ee Double tax agreements types ................................................... [6.270]

Thin capitalisation — cont value at end of year ............................ [17.140]

ceasing to be trading stock non-​arm’s length agreements ............ [22.370]

Trust income legislative provisions relating to

entitled ........................................ [20.150]

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Assessable income —s ee also partnership ............................................ [19.40]

Business losses net capital loss ..................... [11.510], [11.570]

Capital gains tax — cont expenses —s ee Travel expenses

turnover test ..................................... [11.330] losses or outgoings —s ee Losses or

CGT events — cont Commissions

Compensation or damages —s ee entry and exit history rules ................ [21.420]

Depreciating assets — cont Disposal of assets

deemed dividends ........................... [21.130] COVID-19 relief measures .................. [26.155]

Expense payment fringe benefits Foreign losses

Income tax — cont legislation .............................................. [1.245]

Land tax — cont form and substance ......................... [12.200]

Legal professional privilege (LPP) insurance companies ......................... [16.230]

Ordinary income —s ee also Personal co-ownership distinguished ................. [19.30]

Payroll tax — cont sportspeople ........................... [6.120], [8.80]

Practical Compliance Guidelines Real property —s ee also Land

Services income —s ee Personal interest .................................................. [4.270]

Study skills — cont benefits —s ee Superannuation benefits

Superannuation funds — cont lay-by sales ......................................... [16.95]

Tax law — cont Tax minimisation —s ee also Tax avoidance

Tax treaties —s ee Double tax agreements types ................................................... [6.270]

ceasing to be trading stock non-arm’s length agreements ............ [22.370]

Trust income legislative provisions relating to