Ch.12 - 2010 Reed International Books Australia Pty Limited...

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© 2011 LexisNexis Australia 1 Financial Planning in Australia 4ed – by Taylor, Juchau, Houterman Solutions by Elen Seymour Chapter 12 TAX PLANNING, TAX AVOIDANCE AND TAX ADMINISTRATION: BRINGING IT TOGETHER Solutions to Questions Question 1: Is an ATO ruling on a topic merely a useful guide as to the ATO’s likely perspective on the topic that is nonetheless ultimately subject to a case on the topic? Or can a ruling be relied upon to shield a taxpayer even in the event of the law being changed by a court after the tax year in which the taxpayer relied upon it? The ruling can be relied upon by the taxpayer if their circumstances fit within those described by the ruling. This protection occurs even if a court rules an alternative outcome to the one stated in the ruling — the ATO cannot retrospectively apply the court decision that is unfavourable to the taxpayer that relied upon the ruling. Obviously, from the time of the court decision onwards any new arrangements would have to be treated in the way decided in the court. Question 2: Is a Tax File Number compulsory for everyone? The TFN is not compulsory for anyone but given that your employer must take 46.5% of your wages in tax, financial institutions are required to tax interest at 46.5%, Centrelink will generally not pay you an allowance without one and you will not be able to defer your higher education fees it certainly seems like a good idea to get one! Question 3: Is the ATO required to give advance notice of an audit in all circumstances? If not, why not? The ATO is not required under law to give any notice in any circumstances although the better view is that if there is a risk of legal professional privilege being invoked against the audited documents the ATO should give sufficient time to do so. The principal reason for this is that by not having this requirement the ATO is better able to protect the revenue and obtain unaltered records held by relevant individuals and organisations. Question 4: An appeal may be made from the AAT to the Federal Court and the final decision made by the AAT or the ATO. Why is this? © 2011 Reed International Books Australia Pty Limited trading as LexisNexis. Permission to download and make copies for classroom use is granted. Reproducing or distributing any material from this website for any other purpose requires written permission from the Publisher. © 2010 Reed International Books Australia Pty Limited trading as LexisNexis. Ancillary for Financial Planning in Sustralia 4ed - Taylor, Juchau, Houterman
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© 2011 LexisNexis Australia 2 The Federal Court as a matter of constitutional law may only make a decision in respect of the law of the matter before them. In addition, as a consequence of the rules and procedures of evidence the court may only make a decision on those issues of law argued before it (although they sometimes suggest how alternative or similar scenarios may play out, these discussion are not binding on other courts or therefore on the ATO). Therefore to decide the
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This note was uploaded on 01/10/2012 for the course FINS 3616 taught by Professor Curry during the Three '10 term at University of New South Wales.

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Ch.12 - 2010 Reed International Books Australia Pty Limited...

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