Tax

Debt deduction creation rules – coming to a private group near you

Debt deduction creation rules – coming to a private group near you

While the thin capitalisation rules have traditionally had limited application to many private groups, the new debt deduction creation rules (DDCR) that apply from 1 July 2024 are a clear creep into that space.

Quy v FCT: less than 2 months in Australia … I still call Australia home

Quy v FCT: less than 2 months in Australia … I still call Australia home

The Administrative Appeals Tribunal (Tribunal) has held in Quy v FCT [2024] AATA 245 that a taxpayer, who was physically in Australia for less than 2 months each year, was a resident of Australian tax purposes.

When is a public company not a public company?

When is a public company not a public company?

In the realm of tax law, the differences between the definitions of private and public company for tax purposes carries profound implications, particularly within the framework of Division 7A. Advisors must understand these nuances to guarantee compliance and adeptly manage their financial matters.

UPEs as loans - end of an era?

UPEs as loans - end of an era?

If 16 December 2009 was the beginning of the Australian Taxation Office (ATO) treating an unpaid present entitlement (UPE) with a corporate beneficiary as a loan for purposes of Division 7A, could 28 September 2023 be the end of that era?

TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

We wrote about Draft Taxation Determination TD 2022/D1 (Draft TD) on Division 7A and unpaid present entitlements (UPEs) here. On 12 July 2022, the Australian Taxation Office (ATO) finalised the Draft TD as Taxation Determination TD 2022/11 (Final TD).

Is Cryptocurrency a Foreign Currency for Tax Purposes?

Is Cryptocurrency a Foreign Currency for Tax Purposes?

Taxpayers using cryptocurrency in their businesses, including as a means of paying expenses such as staff or contractors or as a means of deriving income through investments, mining or trading, is becoming more common. After a particularly volatile year for the values of cryptocurrency many taxpayers may have significant gains or losses associated with their cryptocurrency transactions.

Horse breeding found to qualify for the primary production land tax exemption

Horse breeding found to qualify for the primary production land tax exemption

The NSW Supreme Court’s (NSWSC) decision in Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2022] NSWSC 430 (Godolphin Case) is instructive as it provides guidance into the ambit and scope of the land tax primary production exemption particularly in relation to the breeding of horses.

Section 100A: welcome Media Release by the Assistant Treasurer

Section 100A: welcome Media Release by the Assistant Treasurer

We wrote that 2022 is the ‘Year of 100A’ after the Australian Taxation Office (ATO) released three guidance products, two in draft, on section 100A and the ATO’s appeal to the Full Federal Court from the decision of Logan J in Guardian AIT Pty Ltd ATF Australian Investment Trust v FCT [2021] FCA 1619 on section 100A.

Draft Taxation Determination TD 2022/D1: much ado about nothing or a seismic shift?

Draft Taxation Determination TD 2022/D1: much ado about nothing or a seismic shift?

After our semi-serious opening statement on the Australian Taxation Office’s (ATO) recently released guidance on section 100A and unpaid present entitlements, this is one of a series of deep-dive articles on that guidance. These articles look at each of the ATO guidance products separately and then we discuss what the overall impact may be.

Draft ATO guidance on 100A and UPEs: is everything awesome?

Draft ATO guidance on 100A and UPEs: is everything awesome?

After six years the ATO has released draft guidance on section 100A. Keeping with the draft theme, the ATO also released (updated) draft views on when an unpaid present entitlement held on sub-trust becomes financial accommodation for purposes of Division 7A.

Sladen Snippet – TD 2021/D5 genuine disposal restrictions in employee share schemes

Sladen Snippet – TD 2021/D5 genuine disposal restrictions in employee share schemes

Whether an employee has genuine restrictions on disposing of an option/right or share issued under an employee share scheme (ESS) can determine whether tax can be deferred, and until when, under the ESS.

McCarthy: sale of two-lot development taxed as ordinary income

McCarthy: sale of two-lot development taxed as ordinary income

A recent Administrative Appeals Tribunal (AAT) decision re-emphasizes that taxpayers who purchase, subdivide, and sell land within a short timeframe may have entered into an isolated profit-making transaction, with any gains assessed on revenue account.

2021 Victorian State Budget - Prepare for tax increases

2021 Victorian State Budget - Prepare for tax increases

The Victorian State Budget for the 2021-2022 year brings with it particularly broad-ranging state taxation measures that will impact a diverse cross-section of the Victorian community. The changes include increased land tax and transfer (stamp) duty rates as well as new tax measures such as the windfall gain tax on rezoned land and a mental health and wellbeing levy (payroll tax surcharge).

Payroll Tax Update: Commissioner’s Appeal to the High Court Denied, A Win for Taxpayers

Payroll Tax Update: Commissioner’s Appeal to the High Court Denied, A Win for Taxpayers

The NSW Chief Commissioner of State Revenue’s (Commissioner) application to the High Court for special leave to appeal the NSW Court of Appeal’s decision in Chief Commissioner of State Revenue v Downer EDI Engineering Pty Ltd [2020] NSWCA 126 has been denied, the High Court finding the appeal “would have insufficient prospects of success”.

Allocation of professional firm profits – the ATO moves the goalposts!

Allocation of professional firm profits – the ATO moves the goalposts!

On 1 March 2021, the Australian Taxation Office (ATO) released Draft Practical Compliance Guideline PCG 2021/D2 Allocation of professional firm profits – ATO compliance approach (Draft PCG) that sets out the ATO’s proposed compliance approach to the allocation of profits by professional firms.

Sladen snippet – Land tax surcharge triggered due to defective saving clause in the trust deed

Sladen snippet – Land tax surcharge triggered due to defective saving clause in the trust deed

Many state and federal taxing provisions provide different tax outcomes on the trustees of trusts depending on what type of trust is involved. One example of this is contained in the NSW land tax rules which provides for a land tax surcharge on unit trusts that are “special trusts” rather than “fixed trusts”.

Sladen Snippet – Taxpayer Appeals Federal Court Decision in Eichmann

Sladen Snippet – Taxpayer Appeals Federal Court Decision in Eichmann

In our earlier article, we noted the Federal Court in FCT v Eichmann [2019] FCA 2155 (Eichman) in late 2019 had found in favour of the Australian Taxation Office (ATO) (appealing a decision of the Administrative Appeals Tribunal) and held land used for storage was not an active asset for the purposes of the small business capital gains tax (CGT) concessions in Division 152 of the Income Tax Assessment Act 1997 (ITAA 1997).