Sladen Snippet – Primary Production Land Tax exemption for property developers

Sladen Snippet – Primary Production Land Tax exemption for property developers

In a recent decision the New South Wales Supreme Court held that although the subject land had been purchased for future residential development, during the years relevant to the disputed Land Tax assessments, the dominant use of the land related to cattle-grazing operations under an agistment agreement. The taxpayer property developer was therefore eligible to apply the exemption applicable to land used in primary production in s 10AA(2) of the Land Tax Management Act 1956 (NSW).

Sladen Snippet – Super contribution caps, rates and thresholds for 2016/17 year released

Sladen Snippet – Super contribution caps, rates and thresholds for 2016/17 year released

The Australian Taxation Office (ATO) has released key super contribution caps, rates and thresholds for the 2016/17 year. These include:

  • Concessional contribution caps – for persons aged less than 49 on 30 June 2016 the cap will remain at $30,000 -  for persons aged 49+ on 30 June 2016 the higher cap of $35,000 will apply;
  • Non-concessional contributions cap- will remain at $180,000, while the “bring forward” cap will remain at $540,000;
  • CGT contributions cap - will increase to $1,415,000.
  • Super guarantee maximum super contribution base- will increase to $51,620 per quarter, while the super guarantee rate will remain at 9.5%;
  • Lump sum low rate cap- will increase to $195,000.

Sladen Snippet – SMSFs, unit trusts and the public trading trust rules – the end is nigh?

Sladen Snippet – SMSFs, unit trusts and the public trading trust rules – the end is nigh?

The draft legislation of the Government’s proposed new tax system for managed investment trusts proposes that super funds (and other exempt entities that are entitled to a refund of excess imputation credits) be excluded from the 20% tracing rule for the public trading trust rules.

Sladen Snippet - Another SMSF civil penalty case

Sladen Snippet - Another SMSF civil penalty case

The Federal Court has handed down another civil penalty decision for breaches by self managed superannuation fund (SMSF) trustees of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

In the case of the Deputy Commissioner of Taxation (Superannuation) v Ryan [2015] FCA 1037 the Federal Court fined the two trustees of an SMSF $20,000 each for breaching the sole purpose test, the prohibition against providing members with financial assistance, the in-house asset rules and the requirement to make investments on an arm’s length basis. This was as a result of the SMSF lending to the members over $200,000. Most of these loans were never paid back to the SMSF ultimately leaving the SMSF with about $6,000 in assets. In addition, the members were disqualified as trustees.

Sladen Snippet - “Look through” LRBAs now law – ATO extends administrative approach to pre 24 September 2007 LRBAs

Sladen Snippet - “Look through” LRBAs now law – ATO extends administrative approach to pre 24 September 2007 LRBAs

The income tax look-through treatment for limited recourse borrowing arrangements (LRBAs) is now law with the Tax and Superannuation Laws Amendment (2015 Measures No 2) Act 2015 receiving royal assent on 16 September 2015. This means that, effective from 1 July 2007, a super fund under a LRBA will generally be treated as the owner of an asset bought under the arrangement for income tax purposes (including for capital gains tax purposes). This includes that the bare trust under an LRBA does not need a tax file number and does not need to lodge a tax return.

Sladen Snippet – Review of Australian Intellectual Property Regime

Sladen Snippet – Review of Australian Intellectual Property Regime

The Productivity Commission will shortly commence a 12 month wholesale review of Australia’s intellectual property regime.  The Government has recognised that with a rapidly changing global economy and new technologies, there is a need to ensure that there is an appropriate balance between intellectual property protection and competition.  The review was recommended in the extensive Harper Report on Competition Policy, which noted that excessive intellectual property protection can ‘not only discourage adoption of new technologies but also stifle innovation’.

Victorian Powers of Attorneys to change from 1 September 2015

Victorian Powers of Attorneys to change from 1 September 2015

New powers of attorneys will come into effect in Victoria from 1 September 2015.

Sladen Snippet - Proposed changes to foreign investment regime

Sladen Snippet - Proposed changes to foreign investment regime

Legislation was introduced into Federal Parliament recently which, if passed, will significantly change the rules regarding foreign investment in Australia, particularly in relation to the acquisition of properties by foreign entities.

Sladen Snippet - ‘Repair - not replace’ – Productivity Commission releases its hotly anticipated draft inquiry report

Sladen Snippet - ‘Repair - not replace’ – Productivity Commission releases its hotly anticipated draft inquiry report

For some time now, the Productivity Commission (Commission) has been undertaking a public inquiry to examine the performance of the workplace relations framework in Australia and to identify improvements to it.

Today, the Commission released its hotly anticipated draft inquiry report. The report outlines the key issues identified so far during the inquiry, discusses some of the draft recommendations and findings, and outlines how stakeholders will be able to provide feedback.

Sladen Snippet – New financial year – new employment pay rates and thresholds

Sladen Snippet – New financial year – new employment pay rates and thresholds

The 2015/16 new financial year commencing this Wednesday will also bring into effect new minimum pay rates and thresholds.

According to the Fair Work Commission (FWC), from 1 July 2015, the following changes will take effect

Sladen Snippet – “Look through” Bill released for limited recourse borrowing arrangements

Sladen Snippet – “Look through” Bill released for limited recourse borrowing arrangements

The Government has released the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 2015 which, if passed in its current form, will provide for “look through” tax treatment for trusts set up for limited recourse borrowing arrangements (LRBA).

In effect, this means that, from a tax law perspective (except for certain limited exceptions), the asset of the LRBA trust will be deemed to be held by the super fund and the actions of the trustee of the LRBA trust in relation to the asset will be deemed to be the actions of the trustee of the super fund. This will reduce adverse tax consequences (eg capital gains tax on collapsing the trust, losses being trapped in the trust and difficulties of passing franking credits) and result in a reduction to tax administration (eg the trust will not require a TFN or be required to prepare a tax return). It also means that, from a tax law perspective, super funds no longer need a bare trust for a LRBA in order to achieve a look through approach.

Sladen Snippet – The Segelov decision: trustee not under a duty to notify discretionary objects of their entitlements

Sladen Snippet – The Segelov decision: trustee not under a duty to notify discretionary objects of their entitlements

The New South Wales Court of Appeal adopted a traditional and technical approach to the interpretation of the terms of a trust deed when dismissing an appeal in the decision in Segelov v Ernst & Young Services Pty Ltd.

Sladen Snippet - Minimum wage to rise 2.5%

Sladen Snippet - Minimum wage to rise 2.5%

Yesterday, the Fair Work Commission handed down its Annual Wage Review decision.

From 1 July 2015, the national minimum wage will be increased by 2.5% (equating to an increase of $16 per week) and the new weekly minimum wage will be $656.90 (or $17.29 an hour) .

Modern award rates will also be increased by 2.5%  from 1 July.

Sladen Snippet – Safe Work Health and Safety Statistics

Sladen Snippet – Safe Work Health and Safety Statistics

Safe Work Australia has released key statistics on work-related injuries, diseases and fatalities. While the report shows a downward trend in both worker fatalities and in the rates of serious injury over the period 2003 to 2013, the total number of serious workers’ compensation claims (117,815 in 2012-13) and worker fatalities (196 in 2013) are significant.

Facebook gives users more control with 'Legacy Contacts'

Facebook gives users more control with 'Legacy Contacts'

Digitally stored information, including records, communications, photographs and other details which are held with various internet-based organisations can be difficult to deal with when the account holder dies. Many organisations are grappling with methods of dealing with the problem or simply ignoring it.

Facebook is giving users more control over their social networking afterlives with a “Legacy Contact” setting. This allows account holders to have their account deleted after they die or alternatively appoint a Legacy Contact to manage the account.

Sladen Snippet – what is a unit trust for the public trading trust rules?

Sladen Snippet – what is a unit trust for the public trading trust rules?

The Federal Court, in the decision of Elecnet (Aust) Pty Ltd v FCOT, has ruled that a trust established to pay out redundancy benefits for employees of the electricity industry was a unit trust for the purposes of the public trading trust rules.  This was held notwithstanding that the employees’ interest in the trust is not unitised but rather operates in a way that is akin to a superannuation fund. In coming to this conclusion, the Court found, for the purposes of the public trading trust rules, that the employees have a beneficial interest in the property of the trust.

Sladen Snippet - Court awards indemnity costs where caveat lodged without proper grounds

Sladen Snippet - Court awards indemnity costs where caveat lodged without proper grounds

On 23 April 2015, the Supreme Court ordered a party who lodged a caveat without proper grounds to pay the other party’s costs on an indemnity basis.  The defendant lodged a caveat on the title of a property claiming an interest pursuant to a purchaser’s contract. 

The plaintiff landowner stated that he did not enter into any contract with the defendant and moreover had never met the defendant or had any dealings with the defendant.  The Court ordered that the defendant pay the plaintiff’s costs on an indemnity basis because the Court inferred that the defendant, at no time, had any valid basis upon which he could claim a caveat over the property. 

Sladen Snippet - VCAT imposes restrictions on recovery of costs of essential safety measures and repairs and maintenance by landlords

Sladen Snippet - VCAT imposes restrictions on recovery of costs of essential safety measures and repairs and maintenance by landlords

The President of the Victorian Civil Administrative Tribunal (VCAT) issued an advisory opinion on 1 May 2015, responding to the Victorian Small Business Commissioner’s request as to whether a landlord of commercial premises can pass on the costs of Essential Safety Measures (ESM) and certain repair and maintenance obligations for retail premises to tenants.  Measures prescribed by building law for safety and fire protection are covered by the ESM.

Sladen Snippet – The Federal Court rules against the use of agreed penalties

Sladen Snippet – The Federal Court rules against the use of agreed penalties

On 1 May 2015 a unanimous judgement was handed down by the Full Court of the Federal Court, stating that in deciding the outcome of a case, the court would no longer receive or act upon any agreement as to penalties previously agreed to between parties.

This followed a recent High Court judgement, which held that the regular practice in Victoria of permitting the prosecution to make submissions on the available sentence range or outcome in criminal cases should cease. The High Court held that such submissions by a prosecutor were inadmissible on the basis that they were a statement of opinion not a submission of law.

Sladen Snippet – insurance held in SMSFs for a buy-sell arrangement breaches the sole purpose test

Sladen Snippet – insurance held in SMSFs for a buy-sell arrangement breaches the sole purpose test

The Commissioner of Taxation has concluded, in ATO ID 2015/10, that using a self managed superannuation fund (SMSF) to hold a life insurance policy for the purpose of a buy sell agreement breaches the sole purpose test and the prohibition against providing a member (or a relative) financial assistance.

So does this mean that superannuation funds cannot be used to hold insurance in buy-sell arrangements? Not necessarily. The position of the Commissioner would appear not to apply to insurance held in public offer superannuation funds and potentially does not apply to SMSFs that don’t have any formal buy sell arrangements.