Distribution Resolutions And Trust Income
New South Wales State Budget 2024-25 – Increase to foreign surcharges and payroll tax relief for GP contractors
Franchising Update: Franchisor liable for Franchisee non payments of employee entitlements - Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd
On 4 June 2024 the Federal Court of Australia handed down the decision of Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2024] FCA. This decision resulted in the Fair Work Ombudsman penalising the Australian franchisor of the 85 Degrees brand $1.44 million for its “systemic failure to ensure compliance within its franchise network” which included underpayments at several of their Sydney franchisee outlets.
Sladen Snippet – Merristock – primary production exemption applies as trust can beneficially own shares
In a case run by Sladen Legal, Merristock Pty Ltd v Commissioner of State Revenue (Review and Regulation) [2024] VCAT 535, the taxpayer has successfully appealed against a Victorian State Revenue Office (SRO) determination that land owned by the taxpayer was not eligible for the primary production land tax exemption.
Godolphin case: High Court decision considers the “dominant use” test under the NSW land tax primary production exemption
The High Court has dismissed an appeal by Godolphin Australia Pty Ltd (Godolphin) and confirmed that it cannot claim the primary production land tax exemption, as it was unable to show that the “dominant use” of its properties was for primary production where it also had substantial horseracing activities. The decision illustrates the issues that can arise when primary production land is used as part of business models that include other interrelated activities.
GP Tax – Payroll tax changes flagged in Victoria
Discrimination & Art: The ‘Ladies Lounge’ Legal Challenge
Restructuring – To Roll Or Not To Roll?
In the current economic landscape, business owners may be considering a restructure, merger, or demerger to adapt, survive, or enable growth. A change in the structure of a business typically involves either the transfer of ownership interests in the entire business or of specific assets of the business.
Trust Vesting: The Tax Implications
1. The High Court has described the trust as a “…creature of equity…” subject to the jurisdiction of a court of equity. The essential feature of every trust is that one person is an owner of property, but is bound to use their position as owner for the benefit of another or for the advancement of a purpose.
Selling to a trust: is it only a matter of time?
Bill Implementing New Commercial and Industrial Property Tax Replacing Stamp Duty From 1 July 2024 Passed Without Amendments - Future Changes Flagged
The new Commercial and Industrial Property Tax reform that progressively abolishes stamp duty on commercial and industrial property from 1 July 2024 is one of the most significant Victorian property tax reforms in the past 30 years. Anyone looking to buy or sell commercial or industrial property will be impacted.
State Taxation Amendment Bill 2024 – Welcome expansion of holiday home exemption for vacant residential land tax to properties in trusts
On 14 May 2024, the State Taxation Amendment Bill 2024 (Vic) (the Bill) was released after having its second reading speech in the Victorian Legislative Assembly.
Government Response to December 2023 Franchising Independent Review
Sladen snippet - S&H Investments - Company cannot contract out of super guarantee
In the decision of S&H Investments Pty Ltd and Commissioner of Taxation [2024] AATA 893, the Administrative Appeals Tribunal (AAT), the Tribunal affirmed the decision of the Commissioner of Taxation to assess the taxpayer for the superannuation guarantee charge for failing to pay superannuation for their employee/contractor referred to as “TW”.
Victorian State Budget 2024-25 - Small Changes to State Taxes
On 7 May 2024, the Victorian State Government presented the Victorian State Budget for 2024/25.
No substantial tax measures were announced. There were only new State Tax measures in the Victorian State Budget 2024-25 which are listed within this article.
Sladen Legal Property Team Recognised in Doyles Guide Victoria 2024
Sladen Snippet - ATO attempts to read down NALI defeat in BPFN decision
As noted previously, the recent Administrative Appeals Tribunal (AAT) decision of BPFN and Commissioner of Taxation (Taxation) [2023] AATA 2330 (28 July 2023) (BPFN) had struck a blow to the ATO’s strict approach to non-arm’s length income (NALI) and taken a more general commercial approach to NALI.
It’s a Small World: Jurisdictional considerations when contract drafting.
Bare trusts, resulting trusts and dealings in land
A Matter of Trusts
A failure to document a trust relationship at the time of acquisition may not always be fatal.
Introduction
Typically, but not always, land is legally and beneficially owned by the person registered on the title. However, sometimes the legal owner owns the land as trustee, the terms of which are supported by a written trust deed.
In the absence of a written trust deed, your client may maintain that the land is owned pursuant to a “bare trust” and the person registered on the title is the trustee (the legal owner) holding the land on trust for a beneficiary (the beneficial owner, or owners if there is more than one beneficiary).
Where the bare trust relationship is undocumented, the client might be concerned as to whether expected dealings in respect of the land trigger undesired tax outcomes.
In particular, issues can arise when:
the parties wish to vary the land title deed to record the beneficiary on the title (ie remove the trustee from the title);
a party has passed away and there is uncertainty about whether the land forms part of their estate; or
a party asserts that they qualify for the CGT main residence exemption in respect of the disposal of the land (and dwelling).
Is the absence of a written trust deed or declaration of trust at the time of purchase fatal? As discussed below, not necessarily, as objective facts can be persuasive in supporting the intentions of the parties.
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