The week in review:
Dividend streaming/Division 7A
Senate Committee Report - The Senate Economics Legislation Committee has reported on Taxation Laws Amendment Bill (No 7) 1997 (TLAB No 7). The Report outlines the major concerns raised by industry in respect of dividend streaming and distributions by private companies as well as the Government's response.
Questions in Parliament - The Assistant Treasurer has responded to a Parliamentary question concerning the anti-dividend streaming rules in TLAB No 7 and their potential application to differential dividend amounts paid to different classes of shareholders where all shareholders receive franked dividends. According to Senator Kemp, if all shareholders in a company are equally capable of using franking benefits, the proposed dividend streaming provisions will not apply.
Taxi drivers not employees for PAYE and super guarantee purposes - The Full Federal Court has held that the relationship between taxi operators and taxi drivers was one of bailment, rather than of employment or the provision of labour and not one of employer and employee for PAYE and superannuation guarantee purposes (FC of T v De Luxe Red and Yellow Cabs Co-Operative (Trading) Society & Ors).
Taxpayer unsuccessful in negligence action - The South Australian Supreme Court has dismissed a taxpayer's claim of negligence against his accountant and solicitor. The Court held that the transaction which the taxpayer entered into was not the transaction his accountant and solicitor had advised and that the tax return was lodged by the taxpayer knowing the consequences if the deduction was disallowed and that the taxpayer decided to take a deliberate and calculated risk that the deduction would not be discovered (Tip Top Dry Cleaners Pty Ltd v Mackintosh & Ors).
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