Legal news
There has been a lot published in the traditional media about the 2014-15 Federal Budget’s taxation and expenditure measures including the new temporary deficit levy, the increase to the FBT rate, the company tax rate reduction, the paid parental leave levy, indexation of fuel excise, the choice to withdraw excess contributions to superannuation, increases to the superannuation guarantee charge and the medicare co-payments.
Many people in the super industry approach each budget with some trepidation given the number of changes to the superannuation system over the years. This year, however, the industry received a pleasant surprise with only two changes, one being the ability to withdraw excess non-concessional contributions and the second being changes to the increases to the super guarantee rate.
The Victorian Government has announced that effective from 1 July 2015, it will change the way it collects contributions towards the provision of infrastructure from developers.
At present, developers of land may be required to pay infrastructure levies at different rates and using different methods of calculation depending on whether the land is in a development contributions plan (DCP), the use of the land, the area of land being developed, and other criteria determined by the municipality in which the land is located. It is widely believed that the existing system is onerous, expensive, lacks flexibility and accountability and delays the development approval process.
The Australian Taxation Office (ATO) updated its Practice Statement PS LA 2003/12 on 10 April 2014. The Practice Statement confirms that the Commissioner will not depart from the long-standing administrative practice of treating the trustee of a testamentary trust in the same way as a legal personal representative (LPR).
The Australian Taxation Office (ATO) has released a private binding ruling extract in which it found that a nil interest limited recourse borrowing arrangement (LRBA) loan triggered the non-arm’s length income rules.
Just as everyone has gotten their heads around the Personal Property Securities Act 2009 (Act) and implemented the necessary policies and procedures, the Act is now being reviewed by the Australian Government to assess its operation and effect on businesses with particular attention being paid to how the Act has impacted small businesses.
Ever copy a photograph from the internet without permission?
An American photographer has pursued a travel agent operating in Melbourne for the unauthorised use of a picture of Hawaii. Mr Tylor takes photographs and sells or licenses them through photo stock libraries (e.g. Getty Images). Ms Sevin published one of Mr Tylor’s photographs on her website to advertise flights to Hawaii. She is now liable to pay Mr Tylor $24,000 for copyright infringement and costs.
The Federal Court has overturned one of the few AAT cases that found special circumstances exist for an excess contribution assessment. In FCT v Dowling there were two relevant contributions. First, a non-concessional contribution of $156,142 made by the taxpayer’s husband in the 2009 year for the purposes of increasing his age pension entitlement. This contribution was made as a result of free advice from Centrelink and a public offer super fund. The contribution triggered the bring forward rule for the taxpayer. Second, a $200,000 non-concessional contribution in the 2011 year under a recontribution strategy which caused the taxpayer to exceed her non-concessional cap under the bring forward rule.
On 19 March 2014, the ATO issued its decision impact statement (DIS) on the AAT decision in Gutteridge & Anor v FC of T 2013 ATC.
In that case, a trust made capital gains from the sale of business assets and the taxpayers, Mr and Mrs Gutteridge, sought to apply the small business capital gains tax concessions when taxed on the capital gain. The Commissioner, in applying the $6 million maximum net asset value ("MNAV") test held that the trust was controlled by the taxpayers’ daughter who was the sole director and shareholder of the corporate trustee, and included the values of the assets held by a company also controlled by her on the basis that it was “connected with” the trust. As a consequence, the trust failed to satisfy the MNAV.
The SMSF administrative penalties, rectification directions and education directions regime is now law (via the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Act 2014). From 1 July 2014, the ATO will have the power to: - issue scaled penalties to SMSF trustees for breaches of the SIS Act (in addition to the power to make a SMSF non-compliant); - order SMSF trustees/directors to attend education courses if they have breached the SIS Act; and - order SMSF trustees to rectify breaches of the SIS Act. The Bill also introduces penalties to deter and penalise persons who promote illegal early release schemes from regulated superannuation funds.
As we previously identified (see http://tinyurl.com/mgl5z7b) the operating standard compelling SMSF trustees to hold their assets separately is a limited obligation due to the wording of the standard in regulation 4.09A of the SIS Regs. The obligation only prevents mixing of the trustee’s personal assets or those held by a standard employer sponsor (or associate of the employer sponsor).
