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. 

It’s hard to know what to do with a budget handed down by a Government that will not have enough time to pass any measures before it goes into an election. Do you follow the current laws or the laws as they are proposed to be changed in the future (if the Government is re-elected and if it can pass the measures in the newly constituted parliament)? That is the situation we currently find ourselves in with the proposed super changes and in particular the lifetime non-concessional contributions cap.

We have previously noted in our Snippets in September and December 2015 that, under the legislation to introduce the new managed investment trust rules, it was proposed that self managed superannuation fund(s) (SMSFs) (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. This would have resulted, from 1 July 2016, in the public trading trust rules not applying to unit trusts merely because a SMSF held more than 20% of the units in the trust.

The Federal Government has succeeded in abolishing the Road Safety Remuneration Tribunal (RSRT) after the Senate voted last night to approve the legislation that repeals the Road Safety Remuneration Act 2012. The legislation passed the Senate without the support of Labor or the Greens – with all but one cross-bencher siding with the Federal Government.

Further to our Snippet on Monday, the Federal Court has now lifted the stay on the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 (Order).

The Full Federal Court dismissed NatRoad’s application for a stay pending the hearing of its substantive application as to whether the Road Safety Remuneration Tribunal made legal errors in rejecting industry calls to defer the commencement date of the Order. The substantive application is set down to be heard on 9 and 10 May 2016.

n Fischer & Ors v Nemeske Pty Ltd & Ors ([2016] HCA 11; [2014] NSWSC 203), the High Court yesterday upheld the decisions of the Supreme Court of New South Wales and Court of Appeal.

The High Court’s decision confirmed that the resolution of a trustee of a discretionary trust to distribute an amount equal to the value of shares owned by the trustee to a beneficiary (Nemes) created a debt payable upon demand enforceable against the trustee by Nemes’ executor upon Nemes’ death.

Practical Compliance Guidelines PCG 2016/5 Income tax - arm's length terms for Limited Recourse Borrowing Arrangements established by self managed superannuation funds (Guideline) sets out further guidance as to how existing non-commercial limited recourse borrowing arrangement (LRBA) loans from related parties to self managed superannuation funds (SMSFs) can be put on commercial terms by 30 June 2016. If such loans are on commercial terms by that date and with effect for the 2015/16 year then the ATO will accept that such loans are on commercial terms and that they will not trigger the application of the non-arm’s length income (NALI) rules. The ATO has said that it will not select an SMSF for a review purely on the basis that it had a loan on a non-commercial basis for previous years.

The ATO has released Practical Compliance Guidelines PCG 2016/5 Income tax - arm's length terms for Limited Recourse Borrowing Arrangements established by self managed superannuation funds (Guideline) which sets out 2 safe harbours for limited recourse borrowing arrangement (LRBA) loans from related parties to self managed superannuation funds (SMSFs). If such loans comply with the terms of the safe harbours then the ATO will accept that such loans are on commercial terms and that they will not trigger the application of the non-arm’s length income (NALI) rules.

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).

The Federal Court of Australia has granted a last minute application by the National Road Transport Association to stay the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 (Order) for an unspecified period of time.

Blended families are more prone to dispute than is the case with first relationships and face a range of challenges, practically and legally. Superannuation, estate planning and family law disputes can often be avoided with proper planning and strategic decision making.

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.

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

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.

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.

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.

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.

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.

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.

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).