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Asset Protection, Business Structuring, Taxation, Trusts Daniel Smedley Asset Protection, Business Structuring, Taxation, Trusts Daniel Smedley

Sladen Snippet: TD 2017/20 confirms the ATO interpretation of “distributes” for the purpose of the FTDT

As previously reported in June this year, the Australian Taxation Office (ATO) published the Draft Taxation Determination TD 2017/D1 altering their previous published interpretation of the meaning of “distributes” for the purposes of the family trust distribution tax (FTDT).

The draft tax determination has now been published in its final form as TD 2017/20, confirming that FTDT can apply where there is a “distribution” to a person who is not a beneficiary of the trust.

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Taxation Neil Brydges Taxation Neil Brydges

Sladen Snippet - GST: new rules for purchasers of new residential premises and new subdivisions of potential residential land

Following an announcement in the 2017 Budget (see our article here), the Government on 6 November 2017 released exposure draft legislation which if enacted will, subject to a transitional rule (below), require from 1 July 2018 that purchasers of taxable supplies of new residential premises or new subdivisions of potential residential land pay 1/11 of the purchase price directly to the Australian Taxation Office (ATO) at settlement. The 1/11 of the purchase price is irrespective of whether the margin scheme or otherwise applies to calculate the actual GST liability.

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Taxation Neil Brydges Taxation Neil Brydges

Sladen Snippet - foreign residents accessing the main residence CGT exemption – current status of this measure?

In the 2017 Budget on 9 May 2017, the Government announced a proposed change to the CGT main residence exemption as that exemption applies to foreign and temporary tax residents.  If enacted the announced change removed the CGT main residence exemption for foreign and temporary tax residents with effect from Budget night (9 May 2017). 

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Taxation Neil Brydges Taxation Neil Brydges

Imputation and two-tiered corporate tax rates

In light of the recent Bill to clarify which companies are eligible for the lower corporate tax rate for small companies (27.5% in the 2017 and 2018 income years), it is worth taking stock on how the imputation system applies in the context of two-tiered corporate tax rates.  

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Taxation, Tax Disputes Neil Brydges Taxation, Tax Disputes Neil Brydges

Case illustrates primacy of Part IVC in challenging assessments

The strength of the Commissioner of Taxation’s (Commissioner) hand in raising taxation assessments, and the difficulties taxpayers face in challenging a taxation assessment other than under Part IVC of the Taxation Administration Act 1953 (Administration Act) has again been illustrated in the Federal Court decision of Chhua v Commissioner of Taxation [2017] FCA 1127 (Chhua).

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Taxation, Trusts Daniel Smedley Taxation, Trusts Daniel Smedley

Court rules on “present entitlement” and “disclaimer of entitlement” to trust income

The concept of “present entitlement” within the meaning of section 97 of the Income Tax Assessment Act 1936 and validity of a “disclaimer of entitlement of income” were considered by the Full Federal Court in the recent case of Lewski v Commissioner of Taxation [2017] FCAFC 145 (Lewski) that illustrates the importance of having trust law and taxation law concepts properly aligned. Lewski was an appeal from a decision of the Administrative Affairs Tribunal.

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Taxation Neil Brydges Taxation Neil Brydges

Increased CGT discount for affordable housing with a sting-in-the-tail

On 14 September 2017, the Government released for public consultation exposure draft legislation to implement the announcement in the 2017 Budget that from 1 January 2018 the CGT discount for eligible resident investors in qualifying affordable housing to 60% (from 50%). The change is part of the government’s policy to encourage increased investment in affordable rental housing.

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Business Structuring, Tax Disputes, Taxation, Trusts Daniel Smedley Business Structuring, Tax Disputes, Taxation, Trusts Daniel Smedley

ATO provides a “safe harbour” for fixed trusts

The Australian Taxation Office (ATO) published the final version of the Practical Compliance Guidelines (PCG) 2016/16, which provides guidance in relation to what will be considered by the Commissioner when exercising his discretion to treat an interest in the income or capital of a trust as being a fixed entitlement and by extension whether a trust is a fixed trust for the purposes of the tax law.

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Business Structuring, Tax Disputes, Taxation Sladen Legal Business Structuring, Tax Disputes, Taxation Sladen Legal

GST on the sale of residential property – a lesson from the Sebel Manly Beach Hotel

The Administrative Appeals Tribunal (AAT) recently held in the case of MSAUS v FC of T that Division 135 of the Good and Services Tax (GST) Act did not apply to impose an increasing adjustment [an amount of GST on an otherwise GST-free transaction] to the sale of leased residential apartments

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Business Structuring, Family Business, Intellectual Property, Taxation Daniel Smedley Business Structuring, Family Business, Intellectual Property, Taxation Daniel Smedley

Sladen Snippet - New WET rebate eligibility criteria and cap reduction receives assent

As previously discussed in this forum, changes to the Wine Equalisation Tax (WET) Rebate eligibility criteria and cap reduction were announced in December 2016 by the Turnbull Government. These reforms received assent on 23 August 2017 and bring significant changes to the entitlement to the WET producer rebate.

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Asset Protection, Taxation, Trusts Daniel Smedley Asset Protection, Taxation, Trusts Daniel Smedley

Sladen Snippet - ATO provides additional 7 years to repay UPE under sub-trust arrangements maturing in the 2017/18 income years

Practical Compliance Guideline (PCG) 2017/13 confirms the ability for a sub-trust arrangement using the 7-year option 1 investment agreement to be converted into a compliant loan, as described under section 109-N of Income Tax Assessment Act 1936 (ITAA 36). The ability to refinance UPE for an additional 7 years may be advantageous to taxpayers that would otherwise have been required to repay such arrangements by either 30 June 2017 or 30 June 2018.

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Asset Protection, Taxation, Tax Disputes, Personal Succession, Trusts Daniel Smedley Asset Protection, Taxation, Tax Disputes, Personal Succession, Trusts Daniel Smedley

Sladen Snippet - ATO guidance on liability of a legal personal representative of a deceased person

The Australian Taxation Office (ATO) has released for public comment draft Practical Compliance Guideline (PCG) 2017/D12, which gives guidance to the legal personal representative (LPR) of a deceased person as to circumstances where the LPR may be personally liable for the deceased’s tax liability.

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Sladen Snippet, Taxation, Property & Development Sladen Snippet, Taxation, Property & Development

Sladen Snippet - Additional stamp duty trigger for option agreements

As part of the Victorian State Budget, a number of stamp duty changes have been proposed, many of which have received significant media attention (including the abolition of the off the plan duty concession for investors, the abolition of stamp duty for some first home buyers, and the removal of the blanket duty exemption for transfers between spouses).

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