Sladen Snippet – Super contribution caps, rates and thresholds for 2016/17 year released
The Australian Taxation Office (ATO) has released key super contribution caps, rates and thresholds for the 2016/17 year. These include:
- Concessional contribution caps – for persons aged less than 49 on 30 June 2016 the cap will remain at $30,000 - for persons aged 49+ on 30 June 2016 the higher cap of $35,000 will apply;
- Non-concessional contributions cap- will remain at $180,000, while the “bring forward” cap will remain at $540,000;
- CGT contributions cap - will increase to $1,415,000.
- Super guarantee maximum super contribution base- will increase to $51,620 per quarter, while the super guarantee rate will remain at 9.5%;
- Lump sum low rate cap- will increase to $195,000.
Employment Essentials - 2nd Edition
This month we bring you the latest newsletter from the Employment, Industrial Relations & OHS team, Employment Essentials.
Employment Essentials reports on topical issues in HR and brings you the latest updates in employment law. Plus much more.
If you would like further information, want to ask a question or subscribe to receive Employment Essentials via email, contact us at employmentessentials@sladen.com.au.
If you would like further information, want to ask a question or subscribe to receive Employment Essentials via email, contact us at employmentessentials@sladen.com.au
Sladen Snippet - The Fair Work Ombudsman targets Accountants
A Melbourne accounting firm is being prosecuted by the Fair Work Ombudsman (FWO) for its alleged involvement in the underpayment of two Taiwanese backpackers working for one of its clients, who operated a fast-food outlet.
The accounting firm provided payroll services for its client.
According to the FWO, the workers were paid a flat rate of $16.50 an hour, which was below the minimum hourly rate payable to the workers under the Fast Food Industry Award 2010 (Award). The workers were also not paid a casual loading or penalty rates when they worked on weekends, evenings and on public holidays. In just a little over 6 months, this resulted in an alleged underpayment of $9,549.
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 – non-commercial LRBA loans must be rectified with effect from 1 July 2015
In our previous Sladen Snippet, we confirmed that the Australian Taxation Office (ATO) will not take active steps to review non-commercial limited recourse borrowing arrangement (LRBA) loans prior to 30 June 2016, but that such LRBA loans should be put on arm’s length terms by 30 June 2016. If that occurs then the ATO has stated that it will not actively review such non-commercial LRBAs in prior years.
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.
Asset Protection Strategies
On 16 February, 2016 Sladen Legal delivered a presentation on Asset Protection Strategies.
Topics presented were:
- Protecting distributions, gifts and loans including the use of gift and loan arrangements – by Rob Jeremiah;
- Super contributions and asset protection – including the bankruptcy clawback rules – by Phil Broderick;
- Secured intra-family group loans and the Family Court – by Daniel Smedley.
Handouts from the presentation are now available to download.
Further information on SMSFs and Asset Protection are available from a presentation delivered by Phil Broderick, on SMSFs and Asset Protection, as part of the Television Education Network’s 3rd Annual Asset Protection Conference, on 15 October 2015.
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.
CGT issues when creating and dealing with UPEs
In December 2015, an article written by Sladen Legal's Sam Campbell was published in the Tax Institute’s Journal, Taxation in Australia.
The article discusses the tax issues raised when creating and dealing with unpaid present entitlements by trusts, including CGT issues, which should always be carefully considered before embarking on a proposed transaction.
Sladen Snippet - National Innovation and Science Agenda - Tax Incentives and Insolvency Reform for Innovative Business
The recent release of the Federal Government’s National Innovation and Science Agenda outlines key measures to promote and support the growth of innovation and entrepreneurial ventures in Australia.
Sladen Snippet - “Statute barred” loans and the Maximum Net Asset Value Test
The Full Court of the Federal Court has dismissed the taxpayer’s appeal in Breakwell v Commissioner of Taxation [2015] FCA 1471 and confirmed the earlier Administrative Appeals Tribunal decision to include an allegedly statute-barred loan of $1.1m in the calculation of the taxpayer’s net assets for the maximum net asset value (MNAV) test when determining the taxpayer’s eligibility for small business CGT concessions.
The taxpayer was the beneficiary and trustee of a family trust (ABFT), which was in turn the beneficiary of a unit trust (ETUT). In July 2007 the ETUT sold its finance broking business for $500,000. In its 2008 income tax return, the ETUT excluded the capital gain from the sale of the business by applying the small business CGT concessions.
Amendments to Private and Public Ancillary Fund Guidelines
An exposure draft and explanatory statement have been released for public comment with proposed amendments to the Private Ancillary Fund Guidelines 2009 and the Public Ancillary Fund Guidelines 2011.
The Private Ancillary Fund and Public Ancillary Fund Amendment Guidelines 2015 (amending guidelines) include a number of amendments, including to update the Private Ancillary Fund Guidelines 2009 to incorporate improvements in the later made Public Ancillary Fund Guidelines 2011, and to reflect the introduction of the Australian Charities and Not-for-profits Commission (ACNC).
Sladen Snippet - Sunday Rates should be Reduced - Recommendations from the Productivity Commission
The Final Report by the Productivity Commission (PC) was released yesterday. As expected, the PC did not recommend a complete overhaul of the workplace relations system.
Sladen Snippet – concept of unit trust clarified for the public trading trust rules
The Full Federal Court has provided some welcome clarification as to what constitutes a unit trust when it upheld an appeal by the Commissioner of Taxation, in the decision of CoT v ElecNet (Aust) Pty Ltd (Trustee). In the original decision (discussed in a previous Sladen Snippet) the Federal Court found that a trust established for the purpose of assisting workers when they are retrenched was a unit trust, on the basis of the expanded definition of “unit” in the public trading trust rules.
CGT Hotspots in Restructuring Trusts in Estate Planning
On 22 October 2015, Rob Jeremiah delivered a presentation at the ‘Taxation Aspects of Estate Planning and Business Succession – The First Annual Symposium’ held in Melbourne by Television Education Network.
At this event, Rob presented a paper called ‘CGT Hotspots in Restructuring Trusts in Estate Planning,’ written by Sam Campbell, Will Monotti, Ashleigh Eynaud and himself.
Sladen Snippet – public trading trust rules no longer to apply for super funds - transitional rules announced
The Government has released the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 which, if enacted, will mean that, from 1 July 2016, the fact that self managed superannuation fund(s) (SMSFs) hold more than 20% of the units in a unit trust will not cause the unit trust to be a public trading trust.
The public trading trust rules result in a unit trust being treated as a company in certain ways (for example, it is taxed at the corporate rate and its distributions can be franked). These changes are to apply to existing unit trusts (that are public trading trusts) as well as unit trusts set up after 1 July 2016.
Sladen Snippet – Full Federal Court confirms Dividend Access Share arrangement did not affect access to CGT small business concessions
The Full Federal Court dismissed the Commissioner’s appeal in Commissioner of Taxation v Devuba Pty Ltd [2015] FCAFC 168, confirming the earlier Administrative Appeals Tribunal (AAT) decision 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 that case was whether the existence of the DAS caused the taxpayer to fail to meet the small business participation percentage (SBPP) of 90%.