Legal news
On 6 May 2015, the Honourable Joe Hockey with the Honourable Bruce Billson disseminated a media release on Supporting start-ups and entrepreneurship.
The media release announces new measures which will apply to small business and start-ups proposed to take effect from 1 July 2016. These new measures will provide much needed relief for small business and start-ups and are another step towards ensuring that Australia provides the right environment for small business, start-ups and entrepreneurs.
The Administrative Appeals Tribunal (AAT) has held that the existence of a dividend access share (DAS) arrangement did not affect the taxpayer’s ability to apply the capital gains tax (CGT) small business concessions to a capital gain arising from the disposal of ordinary shares in the applicant company.
The primary issue considered in this case was whether the existence of the DAS caused the required small business participation percentage (SBPP) of 90% to be failed.
On 1 May 2015, the Australian Taxation Office (ATO) issued a Taxpayer Alert (TA 2015/1) in relation to dividend stripping arrangements involving the transfer of private company shares to a self managed superannuation fund (SMSF).
These arrangements essentially involve a private company with accumulated profits paying franked dividends to a new SMSF shareholder and the original shareholders benefitting as members of the SMSF from franking credit refunds to the SMSF. This could include, for example, the transfer by a member to their SMSF of shares in a corporate beneficiary that holds retained earnings sourced from trust distributions.
Charities have a number of ongoing reporting obligations, including the requirement to submit an Annual Information Statement (AIS) and annual financial report to the Australian Charities and Not-for-profits Commission (ACNC).
The reporting requirements depend on the size of the charity:
The decision of the Victorian Court of Appeal in Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd 1 (Rowley Super) concerns the ability of a liquidator to claw back contributions made to a superannuation fund where such contributions are made as a result of a director breaching his fiduciary duties to the corporate trustee of a discretionary trust.
Our previous article Tax disputes – what to do discussed some of the general stratagems taxpayers can employ when in dispute with the Australian Taxation Office (ATO).
As previously highlighted, quick and early professional advice, assessment of the nature and extent of a dispute and engagement with the ATO can lead to better ultimate outcomes.
Similarly, there are certain things that a taxpayer in dispute with the ATO should not do
The Australian Tax Office (ATO) has issued ATO Interpretative Decision (ATO ID) 2015/8 providing further guidance to trustees of unit trusts seeking to satisfy the basic conditions for access to the capital gains tax (CGT) small business concessions.
The ATO ID states where the trustee of a unit trust has the power to accumulate income, that does not of itself cause the unit trust to fail the fixed trust tests relevant for the purposes of calculating an entity’s small business participation percentage in the trust (item 2 of the table in subsection 152-70(1) of the ITAA 1997).
On Thursday 19 March the Australian Taxation Office (ATO) released their program blueprint “Reinventing the ATO”. The ATO stated that the blueprint describes the kind of experience that Australians expect to have when they deal with the ATO and that it will guide everything that the ATO does in the coming years.
The ATO state that the blueprint has been in development for close to 12 months and has had input from thousands of different people involved in different market segments, members of the accounting and legal professions, other agencies and ATO staff.
As the old saying goes there are two certainties in life; death and taxes. Every man, woman, child and business entity in this country, whether they realise it or not, will have their day-to-day lives impacted by Australian taxation laws whether in their work, what they buy, their assets or investments, how their business operates or the cost of goods and services.
As it is the Australian Taxation Office (ATO) that administers and enforces Australian taxation laws it pays to know what to do should you ever wish to dispute a decision by the ATO. Fundamentally, if you do not agree with a decision made by the ATO in relation to your taxation liability or position you are in dispute. The real question is what are you do about any such dispute.
Underpinning any discussion of the shape and demographics of Australia into the future must consider migration.
Recently, the Commonwealth government released the ‘2015 Intergenerational Report’ which assesses the long-term sustainability of current Government policies and how changes to Australia’s population size and age profile may impact on economic growth, workforce and public finances over the next 40 years.
The recent Federal Court case of Krok v Commissioner of Taxation has provided a reminder that a taxpayer may impliedly waive their right to legal professional privilege by disclosing documents which refer to the purpose and reasoning of legal advice. As a result of the implied waiver, the taxpayer may be required to discover documents that would otherwise have been protected by legal professional privilege.
This article was written by Renuka Somers for the Tax Institute’s Journal, Taxation in Australia, published in November 2014.
It discusses some of the taxation and trusts issues encountered when structuring family law settlements. Managing these issues appropriately through careful planning and the preparation of appropriate documentation can ensure the best financial and taxation outcome for clients.
Self-managed superannuation funds1 (SMSFs) have been carrying on property development activities ever since they came into existence. Such activities are either done directly by the SMSF or more commonly through a structure (typically, a trust). Yet, despite this, there is still a common concern that such activities will cause the SMSF to become non-complying, or subject to penalties, on the basis that such activities, and in particular undertaking a property development business, are prohibited
This article was written by Renuka Somers for the Tax Institute’s Journal, “Taxation in Australia”, and published in April 2014.
This article discusses the complexity associated with a trust satisfying the maximum net asset value test for the purposes of accessing the capital gains tax (CGT) small business concessions, where it is unclear whether an unpaid present entitlement would be classified as a liability relating to the CGT assets of the trust.
The Tax and Superannuation Laws Amendment (2014 Measures No 6) Bill 2014 (the Bill) was introduced to Parliament on 30 October 2014.
Schedule 1 of the Bill seeks to amend the Income Tax Assessment Act 1997 to extend the CGT roll-over relief afforded under certain replacement asset roll-overs to revenue assets and trading stock.
Proposed amendments to the employee share scheme provisions for start-ups.
On 14 October 2014, the Honourable Bruce Billson, the Honourable Tony Abbott and the Honourable Joe Hockey issued a media release titled "Encouraging employee share ownership and entrepreneurship".
The position of the Government in respect of the application of the employee share scheme (ESS) provisions to start ups has been long awaited, with it being seen as fundamental to the innovative nature of start-up companies, and the need to ensure that they retain a work environment that fosters new ideas.
A recent case in the Administrative Appeals Tribunal (Pope v FC, known as Pope’s Case) is of interest to taxpayers and their advisers, with respect to the characterisation of unpaid trust entitlements (UPEs) as loans.
In this case, Deputy President Hack characterised amounts previously distributed to the taxpayer, Pope, from the Pope Family Trust, and remaining unpaid as being debt at the time, that the amounts were written off by the Pope as being bad. Pope had previously included the UPEs in his assessable income in the income years in which the distributions were made and sought to obtain a deduction for those UPEs when they were irrecoverable from the Trust.
A reminder that voluntary disclosures pursuant to the Australian Tax Office’s (ATO) “Project DO IT” initiative must be made before 19 December 2014. Having regard to the difficulties often encountered and the general time frames required to obtain necessary information sourced from offshore third parties, the time to prepare for, and draft, voluntary disclosures taxpayers considering making a voluntary disclosure pursuant to the Project DO IT program would be well advised to consider their eligibility for the Project DO IT initiative and begin their disclosure preparation as soon as practicably possible.
