Opening address
Louise Clarke, Deputy Commissioner Private Wealth, opened the meeting acknowledging the contribution members make to this and other ATO forums, particularly the newly established Build to Rent working group.
Economic forecast – Master Builders Australia
Detached housing
Home Builder propelled detached houses to immense heights.
The 2021 financial year was the strongest year on record since the 1970s.
Recently deceleration is being seen post-Home Builder stimulus.
High-Medium density housing
Forecast to grow, driven in part by deteriorating housing affordability and demand from increasing overseas migration.
Home renovations
Renovations have increased substantially, and approval figures are significantly elevated. Home renovations are expected to remain high for the foreseeable future.
Non-residential
Demand for industrial property surged during Covid-19 due to a strategic shift on the part of companies and government. The shift is away from reliance on international supply chains towards domestic manufacturing and storage options for example, warehousing.
Is it expected to fall back from its Covid-19 peak, however retaining permanent and long-lasting growth.
GST withholding credits processing delays
Several clients have had delays in receiving their GST property credits after their BAS has been lodged. The ATO is actively addressing this with several treatments, including:
- Getting the Forms Right – 98% of delays are due to clients and/or representatives making errors on the forms for GST on settlement. The ATO actively engages conveyancers monthly providing them with updates on common errors and how to avoid them.
- Streamlining Processes – Enhanced workflows, prioritisation and using ATO models to pick up required information where possible. The ATO is continuing to work with industry to make sure we get this right.
- Promotion of clients to take ATO calls – ATO staff are making outbound calls to address this issue, with more than 60% of form errors requiring us to talk to the client. However 80% of calls from the ATO to clients are not answered. To improve this, we are looking to do a pre-call SMS, providing clients with an allocated time.
Action item |
GST withholding credits processing delays |
Due date |
Ongoing |
Responsibility |
Loretta Bishop-Spalding |
Action item details |
Members are to contact Loretta Bishop-Spalding if they have concerns about any delays. |
Corporate liabilities determination project
The purpose of the Corporate liabilities determination project is to raise awareness about Director penalty notices (DPN) and that Directors maybe personally liable for certain debts, Super, pay as you go withholding, GST.
Further information on Director penalty notices warning letters to directors and notice of intent to disclose a tax debt to credit reporting agencies is available.
Action item |
Corporate liabilities determination project |
Due date |
To be advised |
Responsibility |
Janine Laidler |
Action item details |
Provide an update on the findings of this program in a future session. |
Australian Securities and Investments Commission insolvency update
Insolvencies have increased in 2021–22 on last financial year.
Comparing 2021–22 financial year to the base year (an average of the 3 financial years 2017, 208 and 2019, pre covid), we see that insolvencies are down 42%.
There has been an increase in insolvencies over the last few months, but still down on last year. Expected this is an upwards trend towards normal.
More information about ASIC insolvency statisticsExternal Link is available.
Build to Rent working group
The ATO has formed a build to rent working consultation group with the main aim to get a common understanding across the ATO, states and territories and industry to reduce the administrative burden and cost of compliance for build to rent projects.
Valuations for margin scheme
The Administrative Appeals Tribunal (AAT) decision regarding valuation professional standards was handed down, the Decleah decision. The ATO is reviewing the impact of this decision, once approved internally this will go to public consultation.
Action item |
Valuations for margin scheme |
Due date |
To be advised |
Responsibility |
Loretta Bishop-Spalding |
Action item details |
Organise out of session meeting when internal endorsement is completed. |
Vacant land deductions
Discussion regarding vacant land deductions in scenarios where there are large plots of agricultural land with small portions dedicated to residential property.
Draft Taxation Ruling TR 2021/D5 Income tax: expenses associated with holding vacant land which has been put out for consultation, with commentary, sets out preliminary view.
Action item |
Vacant land deductions |
Due date |
To be advised |
Responsibility |
Sian Sinclair, Grant Thornton Australia |
Action item details |
Provide Kelly Kalisz, ATO with examples, scenarios to be considered in the Taxation Ruling. |
Capital verses revenue guidance
The ATO have commenced production on web guidance which is expected to be available this year. It will provide guidance on capital verses revenue and encourage clients to get in touch with the ATO for assistance.
Other business
Update on ATT decision in Ian Mark Collins & Mieneke Mianno Collins ATF The Collins Retirement Fund and Commissioner of Taxation (Taxation) [2022] AATA 628: The Decision Impact Statement is being prepared by the ATO and will be circulated once finalised.
The ATO is returning to pre-covid approaches with Extension Requests with each request being considered on a case-by-case basis.
Action item |
Extension requests |
Due date |
Ongoing |
Responsibility |
Members |
Action item details |
Where members believe individual circumstances have not been considered, send details of deferral requests to Loretta Bishop-Spalding. |
Income tax treatment of the windfall gains tax (WGT) in Victoria: The ATO recommends taxpayers approaching us for individual advice on their circumstances.
Action item |
Income tax treatment of the windfall gains tax |
Due date |
Ongoing |
Responsibility |
Peter Chester |
Action item details |
Peter Chester to follow up regarding guidance on WGT and its interaction with income tax |
Temporary Full Expensing for commercial landlords: This will be taken offline and followed up with the group in a future session.
Action item |
Temporary Full Expensing |
Due date |
To be advised |
Responsibility |
Peter Chester |
Action item details |
Peter Chester to contact Sian Sinclair, Grant Thornton Australia. |