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:

• A small charity (which has annual revenue of less than $250,000) must submit an AIS and can choose to submit a financial report.
• A medium charity (which has annual revenue of $250,000 or more, but less than $1 million) must submit an AIS and a financial report that is either reviewed or audited.
• A large charity (which has annual revenue of $1 million or more) must submit an AIS and an audited financial report.

Overview

In the recent case of Featherstone v D J Hambleton as liquidator of Ashala Pty Ltd (Featherstone Case), the Queensland Court of Appeal considered the circumstances in which a shadow/de facto director may be caught under the insolvent trading provisions of the Corporations Act 2001. Section 588G of the Act deals with the liability of directors for insolvent trading by their company, which not only applies to directors, but also to any employee determined to be a ‘director’ of a company when the company incurs the debt.

In what has been hailed as a landmark decision, the Federal Court has ruled that a number of Australian internet service providers (ISPs) must hand over details of over 4,000 customers alleged to have illegally shared the film, Dallas Buyers Club. It is expected that they will now receive letters from Dallas Buyers Club requesting a settlement payment for copyright infringement.

While this is certainly a win for the rights holders, it is just one step in a process. It may also be a case of the bark being worse than the bite for Australian infringers.  Chief Executive of iinet, David Buckingham has described the decision as a ‘positive outcome’ which ensures that ‘customers will be treated fairly’.

Directors are required to act in the best interests of the company, and to fulfil this duty they must avoid conflicts between their own interests and the interests of the company. As a recent case illustrates, a failure to avoid perceived conflicts can lead to disputes with shareholders.

In the case of Hart Security Australia Pty Ltd v Boucousis & Ors, Hart Security Australia Pty Ltd’s (HSA) majority shareholders, the Hart Group, alleged that HSA’s sole director, Christian Boucousis breached his duty to avoid conflicts of interest.

In January 2015, the first part of a two-part article, written by Sladen Legal's Phil Broderick, was published in the Tax Institute’s Journal, Taxation in Australia. This article considered the tax and regulatory issues of SMSFs undertaking property development either directly or through structures such as trusts.

The second part of this article was published in Taxation in Australia in February 2015, examining various structures under which an SMSF can undertake property development, or invest in an entity which undertakes property development activities.

A delivery driver whose employment was terminated after he worked for his employer's customer during his annual leave, has been awarded $12,864 compensation after the Fair Work Commission found his dismissal was harsh, unjust and unreasonable.

Sladen Legal's Joanna Shields has written an article, published in the April edition of Prime Mover, which outlines the case of a moonlighting truck driver who was unfairly dismissed.

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).

The Queensland Supreme Court decision of Munro v Munro has found that a binding nomination signed by a member of an SMSF was invalid because it did not strictly comply with all of the provisions of the fund deed and that near enough is not good enough. 

Moving business real property out of trusts and into a self-managed superannuation fund (SMSF)1 can have significant tax advantages.

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.

Parent company of law firms Sladen Legal and Harwood Andrews – The Lantern Legal Group Pty Ltd – has been awarded certification as a B Corporation.

The Lantern Legal Group joins businesses such as well-known adventure apparel brand Patagonia, thriving online marketplace Etsy and ice-cream company Ben & Jerry’s to be awarded with the certification.  

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. 

What is one of the first questions the Shark Investors ask the hopeful start up business owner contestants on the Channel 10 television show “Shark Tank”?

Do you have a patent and trade mark?

There have already been some amazing inventions pitched before the Sharks.  Full of creativity and innovation, many of the business owners have developed a prototype for their invention and some have started trading prior to seeking investment from the Sharks.  The contestants are not coming to the Sharks with just an idea.  And lucky for the contestants that they don’t because it appears as though the Sharks are looking for more than just a significant percentage of their businesses.  The Sharks are seeking what all investors seek – security for their investment.

In January 2015, the first part of a two-part article, written by Sladen Legal's Phil Broderick, was published in the Tax Institute’s Journal, Taxation in Australia. This article considers the tax and regulatory issues of SMSFs undertaking property development either directly or through structures such as trusts.

Read the published article.

In the decision of Australian Annuities v Rowley Super, the Victorian Court of Appeal has held that over $1.6 million of super contributions made by a discretionary trust and members to a self managed superannuation fund (SMSF) could be clawed back to a liquidator on the basis that the director of the corporate trustee breached his fiduciary duties to the corporate trustee.