Sladen Snippet - Proposed “aggregate scheme” amendments to the debt-equity tax rules
On 10 October 2016, the Federal Government released an Exposure Draft to implement changes to the debt and equity tax rules in Division 974 of Income Tax Assessment Act 1997. The Exposure Draft is intended to effect recommendations made by the Board of Taxation in its April 2015 report Review of the Debt and Equity Tax Rules.
"The mere existence of a “service agreement” will not mean “service charges” are deductible".
Sladen Snippet - Variation to foreign resident CGT withholding payments
Small Business Restructure Roll-over - $10m turnover test
Foreign person duty and land tax surcharges
Sladen Snippet - Disclaimer of an interest in a trust – can this be tax effective?
Creating Entitlements in Discretionary Trusts
Modest and infrequent maintenance activities of a property whose “main use” is to derive rent will not entitle a taxpayer to access the small business CGT concessions.
In its recent decision in The Executors of the Estate of the late Peter Fowler and Commissioner of Taxation, the Administrative Appeals Tribunal (AAT) held that Mr Fowler was not entitled to apply the small business capital gains tax (CGT) concessions in Division 152 of the Income Tax Assessment Act 1997, on the sale of a block of 10 residential units (Manly Property) as he was not carrying on a business and the Manly Property did not qualify as an “active asset”.
Sladen Snippet – Foreign person duty surcharge to increase to 7% from 1 July 2016 and related changes
The Victorian Government has passed legislation to increase the duty surcharge on purchasers of residential property by foreign persons to 7% for contracts entered into from 1 July 2016. The changes contain a number of other changes to the foreign purchaser duty regime.
Sladen Snippet - super funds can now qualify for the primary production land tax exemption (s 67 Land Tax Act)
In in an unheralded move, the Victorian government has extended the land tax exemption for primary production land in an urban zone (contained in section 67 of the Land Tax Act 2005) to include land owned by a trustee of a super fund of which all the members or beneficiaries are relatives and at least one of those members or beneficiaries is normally engaged in a substantially full-time capacity in the business of primary production of the type carried on on the land.
Profit from the development and sale of a commercial property on capital account despite development activities undertaken by private family group
The Administrative Appeals Tribunal (AAT) recently held in FLZY and Commissioner of Taxation that profit arising from the sale of a building by a family trust gave rise to a capital gain despite the property building, development and investment activities undertaken by the privately held family group (Group).
EOFY seminar - streaming issues and tips and traps for the new small business rollover.
The ATO’s administrative treatment of acquisitions and disposals of interests in ‘no goodwill’ professional practices
The ATO has recently released guidelines on its administrative treatment for the application of certain tax issues when interests in ‘no goodwill’ professional partnerships, trusts and incorporated practices (practices) are acquired or disposed.
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 - Sladen Legal Principal, Daniel Smedley, named one of Australia's Best Lawyers
On February 26, 2016, the Australian Financial Review named Sladen Legal Principal, Daniel Smedley as one of Australia's Best Lawyers of the Year in the taxation practice area.
The list is compiled by United States peer-review company Best Lawyers from close to 700,000 evaluations, and 2,870 lawyers were chosen from more than 280 law firms nationwide.
Sladen Snippet - Capital proceeds vs “market” value for the Maximum Net Asset Value test
In Miley and Commissioner of Taxation, the Administrative Appeals Tribunal (AAT) held that, for the purposes of the maximum net asset value (MNAV) test in s 152-15 of the Income Tax Assessment Act 1997, the market value of the taxpayer’s shares was not his share of the sales proceeds ($5.9 million), but the actual market value of his shareholding in the company just before the share sale.
Sladen Snippet - New Tax Incentives for Start-up Investors – Consultation Paper
On 15 February 2016 the Federal Treasury released a consultation paper on new tax incentives for early stage investors, which is part of the National Innovation and Science Agenda (NISA) announced by the Government on 07 December 2015.
The Treasury has indicated that the new tax incentives for start-ups will provide investors with:
- a 20 per cent non‑refundable tax offset based on the amount invested either directly in the qualifying startup or indirectly through a fund, up to an offset cap per investor of $200,000 per year;
- for direct investment, a capital gains tax (CGT) exemption on those investments, provided they are held in the qualifying company for at least three years; and
- for indirect investment through a fund, a CGT exemption on distributed capital gains provided the underlying investment was held for at least three years.
Small Business Restructure Roll–Over and Discretionary Trusts
The Tax Laws Amendment Bill (Small Business Restructure Roll–Over) Bill 2016 (Cth) (the Bill) was introduced to Parliament on 4 February 2016.
The Bill amends the Income Tax Assessment Act 1997 (ITAA 97) to allow small businesses to defer the recognition of gains and losses arising from the transfer of active business assets as part of a genuine restructure of their ongoing business that occurs on or after 1 July 2016.
The Bill extends capital gains tax roll-over relief to transfers to and from a range of different entity types, including transfers of assets from a company to a sole trader, partnership or trust. The small business roll-over (the Roll-Over) is in addition to current roll-over relief available for individual sole traders, partnerships and trusts that convert to a company structure (Division 122 and Subdivision 124-N ITAA 97).
The Trust Structures Guide 2016 (11th Edition) has now been released
Sladen Legal is pleased to announce that the 2016 version of the Trust Structures Guide (written by Sladen Legal and published by The Tax Institute) is now available.
The Trust Structures Guide has long been considered to be invaluable guide for professionals advising on structuring and tax matters relating to trusts.