Australian-owned private companies are now exempt from public disclosure taxation rules, as the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 (the Bill) passed through the Senate yesterday.

The Bill amends the Taxation Administration Act 1953 to exempt Australian-owned private companies from the requirement that the Commissioner of Taxation publish information about a corporate tax entity with a total income equal to or exceeding $100 million for an income year.

The Senate has passed a number of amendments to the Fair Work Act 2009, however the Government has been unable to attract sufficient support from cross-benchers for several key proposed changes, which have now been omitted from the Fair Work Amendment Bill 2014.

The passed amendments are significant and include:

• establishing a new process for negotiation of greenfields agreements by extending good faith bargaining to the negotiation of these agreements and providing an optional six month negotiation timeframe for the parties to reach agreement (following which an employer can apply to the Fair Work Commission (Commission) for approval of its agreement);
• providing new requirements to prevent employees from taking protected industrial action unless bargaining has commenced (either voluntarily or because a majority support determination has been made);
• imposing an obligation on employers to discuss with employees a refusal to grant an extension to unpaid parental leave.

This month we unveil our new quarterly newsletter from the Employment, Industrial Relations & OHS team, Employment Essentials.

Employment Essentials will be reporting on topical issues in HR and bringing you the latest updates in employment law. Plus much more.

A typical Self Managed Superannuation Fund (SMSF), being the classic “mum and dad” SMSF, generally transitions pretty smoothly through the lifecycle of its members. This includes the accumulation of assets in the growth/accumulation stage and managing benefit payments through the pension stage. It also usually transitions smoothly on the death of the first with the ability to pay a death pension to the survivor.

However, there is one event that can create significant transition issues for SMSFs, being the death of the surviving spouse, particularly in instances where the fund holds lumpy assets such as real estate.

The Victorian Civil and Administrative Tribunal (VCAT) has found that a confectionary company directly discriminated against a 63 year-old production worker when it dismissed him because of a disability, and has ordered the company to pay him $20,000 compensation for the shock caused by the dismissal.

The worker had been employed by the company for almost 30 years and had previously suffered chronic “tennis elbow” (which had arisen as a result of his employment but had fully resolved at the time of dismissal). Relying upon a medical report that warned the company the condition could flare up if he maintained his regular duties, the company terminated the employee’s employment effective immediately.

The draft legislation of the Government’s proposed new tax system for managed investment trusts proposes that super funds (and other exempt entities that are entitled to a refund of excess imputation credits) be excluded from the 20% tracing rule for the public trading trust rules.

The Workplace Relations Management Plan (WRMP) requirements under the Building Code 2013 (Code) have been amended to include a requirement that principal contractors have a fitness for work policy to manage alcohol and other drugs in the workplace.

Amongst other things, the policy must include:

• detection methods;
• substances tested;
• a requirement for frequent and periodic random testing of the workforce; and
• an outline of how workers affected by drugs and alcohol will be counselled, assisted and disciplined.

The Federal Court has handed down another civil penalty decision for breaches by self managed superannuation fund (SMSF) trustees of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

In the case of the Deputy Commissioner of Taxation (Superannuation) v Ryan [2015] FCA 1037 the Federal Court fined the two trustees of an SMSF $20,000 each for breaching the sole purpose test, the prohibition against providing members with financial assistance, the in-house asset rules and the requirement to make investments on an arm’s length basis. This was as a result of the SMSF lending to the members over $200,000. Most of these loans were never paid back to the SMSF ultimately leaving the SMSF with about $6,000 in assets. In addition, the members were disqualified as trustees.

The income tax look-through treatment for limited recourse borrowing arrangements (LRBAs) is now law with the Tax and Superannuation Laws Amendment (2015 Measures No 2) Act 2015 receiving royal assent on 16 September 2015. This means that, effective from 1 July 2007, a super fund under a LRBA will generally be treated as the owner of an asset bought under the arrangement for income tax purposes (including for capital gains tax purposes). This includes that the bare trust under an LRBA does not need a tax file number and does not need to lodge a tax return.

Swisse, one of Australia’s biggest wellness companies has reported a sale of its 83% share to a Hong Kong based company for $1.67 billion.

Their secret to success?

Hard work, dedication, focus and commitment to delivering quality and safety in their products.

There’s something else…

The Australian Taxation Office (ATO) has published guidance on penalties that could apply for deficient valuations. Valuations for income tax purposes of assets such as real property, shares in companies and units in unit trusts, are relevant in a number of contexts, including the capital gains tax provisions, the maximum net asset value test, the market value substitution rule, the GST Margin Scheme, and for assets held in self-managed superannuation funds.

The ATO warns that taxpayers who undertake their own property valuations or use valuations from unqualified people may be liable to pay administrative penalties where the valuations later prove to be deficient.

Powerful business figure, Janet Dore, has been appointed as chair of the Lantern Legal Group, parent company of Sladen Legal.

Janet, who last month ended a seven-year tenure as chief executive of the Transport Accident Commission (TAC), will bring high-level organisational experience to the firm. In her role at TAC she was responsible for the successful implementation of a six-year strategy to achieve a $600m reduction in liabilities.

On 20 August 2015, Sladen Legal’s Phil Broderick delivered a presentation on Transferring Real Estate In and Out of SMSFs, as part of The Tax Institute’s National Superannuation Conference.

Phil’s presentation considered a number of issues in relation to the holding of real estate in SMSFs and the transfer of real estate in and out of SMSFs.

On 1 September 2015, Sladen Legal’s Phil Broderick delivered a presentation on Seamlessly Integrating Superannuation into Effective Estate Planning, as part the Legalwise seminar topic of Estate Planning: Maximising Asset Protection.

On 1 September 2015, the Powers of Attorney Act 2014 (The Act) introduced new civil and criminal penalties for misuse of an enduring power of attorney. The new penalties include a fine of up to $91,000 or up to five years imprisonment.

The Productivity Commission will shortly commence a 12 month wholesale review of Australia’s intellectual property regime.  The Government has recognised that with a rapidly changing global economy and new technologies, there is a need to ensure that there is an appropriate balance between intellectual property protection and competition.  The review was recommended in the extensive Harper Report on Competition Policy, which noted that excessive intellectual property protection can ‘not only discourage adoption of new technologies but also stifle innovation’.

From 1 September 2015, the witnessing requirements for an enduring power of attorney have been significantly tightened.

The signing of an enduring power of attorney by the principal (the person giving the power) must be witnessed by two people. One of these witnesses must be either a person who is authorised to witness affidavits (such as lawyers, judges, members of the police force ranked sergeant or above, parliamentarians or justices of the peace) or a medical practitioner. Previously, it was only a requirement that one of the witnesses needed to be authorised to witness statutory declarations.

The very public dispute between mining magnate Gina Rinehart and her children over access to family wealth held in a Family Trust came to a head this year, when the NSW Supreme Court appointed one of Gina’s 4 children (Bianca) as the new trustee of the Family Trust in place of Gina. 

The Family Trust, in effect, owned a 24% shareholding in Hancock Prospecting Pty Ltd (HPPL) and HHPL owned all the shares in the company which has an interest in an iron ore mine at Hope Downs.  Bianca and her brother, John, had issued court proceedings against their mother to remove her as trustee so they could access their share of the Trust’s assets. 

A new type of power of attorney is now available, effective 1 September. A person (referred to as the principal) can now appoint a “supportive attorney”.

New powers of attorneys will come into effect in Victoria from 1 September 2015.