Administering a deceased estate can be a complex and time-consuming process, particularly when the deceased held substantial assets or had outstanding liabilities. The complexity increases significantly when assets are located across multiple jurisdictions.
In cases where an individual who owns property in Australia passes away while residing overseas, the executor may face unforeseen Australian tax consequences, especially when selling that property as part of the estate administration.
The last 12 months has seen an escalation in debt collection activities instigated by the Australian Taxation Office (ATO) with respect to businesses, resulting in a subsequent increase in the rate of insolvencies. Where the ATO is unable to recover a tax debt directly from a company due to liquidity issues, it can seek to recover those debts personally from directors, via the director penalty regime.
On 19 February 2025, the decision of the Full Federal Court in FCT v Bendel (2025) FCAFC 15 (Bendel) was handed down. In this case, the Court overturned the long-held view of the Australian Taxation Office (ATO) that an unpaid present entitlement (UPE) of a corporate beneficiary is a loan for the purposes of Division 7A of the Income Tax Assessment Act 1936 (ITAA 1936).
From 1 January 2025, the scope of the Vacant Residential Land Tax (VRLT) is significantly broadening and will impact numerous property owners.
The VRLT is wholly separate from the standard land tax and will lead to many properties being hit with both forms of taxes on an annual basis if the risk of exposure is not managed. While both taxes are contained in the Land Tax Act 2005 (Vic), the regime for the VRLT is separate from the land tax regime and any exemptions will need to be carefully considered and managed.
Legislation introducing a temporary concession from transfer duty for newly constructed dwellings in strata subdivisions has passed the Victorian Legislative Council and is currently awaiting Royal Assent.
The Duties Amendment (More Homes) Bill 2024 (the Bill) introduces a new off-the-plan concession for certain purchases where a contract to acquire property is entered into within a 12-month period commencing on 21 October 2024.
On 28 August 2024, the Australian Taxation Office (ATO) issued a draft of its Excise Determination ED 2024/D2 (Draft Determination) outlining the Commissioner’s views on the definition of ‘beer’ for the purposes of excise duty. The effect of this draft guidance is to narrow the definition of ‘beer’, meaning that alcoholic beverages which do not fall within that definition will be subject to higher rates of excise duty.
The windfall gains tax (WGT) is a new tax that is imposed on the increase in value of property in Victoria as a result of a rezoning of that land.
On 21 May 2024, the Commercial and Industrial Property Tax Reform Act 2024 received Royal Assent, officially making the Commercial and Industrial Property Tax (CIPT) law. The new CIPT regime will apply to eligible transactions from 1 July 2024.
On 14 May 2024, the Victorian Government introduced the State Taxation Amendment Bill 2024 (Bill) into Parliament. The Bill (if passed) amends the Land Tax Act 2005 to expand the exemption from the vacant residential land tax (VRLT) for holiday homes.
On 20 March 2024, the Commercial and Industrial Property Tax Reform Bill 2024 (Bill) was introduced into Victorian Parliament.
In the 2023-24 State Budget, the Victorian Government announced a reform to move away from stamp duty for qualifying commercial and industrial properties, to be replaced by the new annual Commercial and Industrial Property Tax (CIPT).
On 12 December 2023, the State Taxation Acts and Other Acts Amendment Act 2023 (the Act) received Royal Assent.
In our latest Property Tax alert, we look at the major changes introduced by the Act to Victorian property taxes, including prohibiting the apportionment of land tax and windfall gains tax in contracts for the sale of real estate.
The fuel tax credit scheme refunds fuel tax to users of heavy vehicles, machinery, plant and equipment, and light vehicles used off public roads.
A recent Victorian Civil and Administrative Tribunal (VCAT) decision has raised red flags for property developers who undertake capital raisings. The decision increases the risk that as a result of such raisings, equity interests acquired by unrelated investors in development entities may be aggregated under the landholder regime. This aggregation of interests may trigger a significant stamp duty liability, for which the developer and investors will be jointly liable.
On 7 June 2023, the Australian Taxation Office (ATO) issued its finalised ruling TR 2023/1 (the Ruling) which contains the Commissioner of Taxation’s views on the tax residency of individuals. The Ruling was issued following a period of public consultation on the draft ruling (TR 2022/D2).
On 23 May 2023, the Victorian Government delivered the State Budget.
Detailed below is a summary of the significant tax measures and a consideration of the announced measures in greater detail.
The recent case of Jamsek v ZG Operations Australia Pty Ltd (No 3) (Jamsek) has clarified the application of the superannuation guarantee (SG) regime to truck drivers.
On 9 May 2023, Treasurer Jim Chalmers handed down the Federal Budget 2023-24.
Detailed below is a summary of the significant tax measures, and a consideration of the announced measures in greater detail.
On 25 October 2022, Federal Treasurer Jim Chalmers handed down the Budget of the newly elected Government for 2022-23.
The Federal Government’s ‘Enterprise Tax Plan’ has seen a gradual reduction in the corporate tax rate applying to small and medium-sized companies over recent years. The reduced corporate rates were previously 27.5% from the 2017-18 to 2019-20 income years, and 26% in the 2020-21 income year.
We have observed a recent increase in State Revenue Office (SRO) investigations regarding payroll tax compliance.
On 29 March 2022, the Treasurer handed down the Federal Budget for 2022-23.
Almost 6 years ago, as part of the 2016-17 Federal Budget, the Government announced that it would make amendments to improve the operation of Division 7A of the Income Tax Assessment Act 1936 (ITAA 1936). The Government reiterated this intention in the 2018-19 Federal Budget, also clarifying that it will ensure that unpaid present entitlements (UPEs) come within the scope of Division 7A.
The payroll tax liability of many Victorian businesses is set to increase due to the introduction of the Mental Health and Wellbeing Payroll Tax Surcharge (the surcharge) from 1 January 2022.
The Windfall Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (the Act) received Royal Assent on 30 November 2021.
A recent decision of the NSW Civil and Administrative Tribunal (NCAT) is anticipated to increase the risk of payroll tax audits of medical and healthcare practices which use service entities to provide administrative services to practitioners.
A common method to ensure that a family member or spouse of a Willmaker will have the right to reside at a particular property for the rest of their lifetime is for the Willmaker to grant a ‘life interest’ to that individual.
During the 2021 Victorian State Budget, the Government announced that it would introduce a ‘windfall gains tax’ (WGT) that would apply to large windfall gains associated with planning decisions to rezone land.
The State Revenue Office (SRO) has released a revenue ruling (DA-064) which sets out its views on the meaning of ‘land development’ in the context of the sub-sale provisions.
As we look towards the start of the new financial year, 1 July 2021 will see the Superannuation Guarantee (SG) rate increase from 9.5% to 10% and continue to increase annually until it reaches 12% on 1 July 2025.
The various Property-related tax measures announced in the Victorian State Government Budget will now become law.
The State Taxation and Mental Health Acts Amendment Bill 2021 (the Bill) has passed Victorian Parliament and is currently awaiting Royal Assent.
The Victorian State Government Budget, released on Thursday 20 May 2021, has produced a mixed bag of tax amendments that will affect many taxpayers who own property or are involved in property development.
The Treasurer handed down the Federal Budget 2021-22 on 11 May 2021. Detailed below is a summary of the significant tax measures announced, followed by further detail regarding each of those measures.
If your family trust receives franked dividends or has tax losses, the trustee should consider the option of making a family trust election (FTE) in order to access certain tax concessions.
This article was co-authored by Marsha Laine Dungong, Tax Partner in the Withers San Francisco office.
No other movie but Star Wars comes close to explaining the tragic duality and complexity of international tax. It demands more than just a pedantic understanding of civil and common laws, tax regimes and treaties. It requires a certain mental agility and appetite for the unknown to understand foreign structures and transactions, unravel its complexity and identify its “closest of kin” in the United States (U.S.) tax regime.
Managing your own self-managed superannuation fund (SMSF) brings with it estate planning issues. In addition to contemplating who will be entitled to receive your superannuation death benefit on your death, you must also consider who will take control of your fund if you were to lose capacity or die.
The Treasurer handed down the Federal Budget 2020-21 on 6 October 2020. Detailed below is an overview of the significant tax measures announced, followed by further information regarding each of these measures.
The Full Federal Court has held that land which was used to store tools and equipment was an active asset, enabling the taxpayer to access the small business Capital Gains Tax (CGT) concessions.
The 7 September 2020 deadline for the Australian Tax Office (ATO) superannuation guarantee amnesty (the Amnesty) is fast approaching.
Since 1 April 2020, in a significant extension to the director penalty regime, company directors are now personally liable for unpaid Goods and Services Tax (GST) (including luxury car tax and wine equalisation tax). The expansion of the regime was introduced as part of the Government’s broader reform of Australia’s corporate insolvency regime.
Due to the widespread economic impact of COVID-19 which has caused financial uncertainty for many businesses, contracts for the acquisition of goods or services may be cancelled in order to mitigate against further losses.
The Australian Taxation Office (ATO) has recently released a Guidance Note (GN 2020/1) which contains information for employers, payroll software providers and intermediaries who may need to change the way they calculate their superannuation guarantee obligations.
The JobKeeper payment scheme was announced on 30 March 2020 with the objective of providing financial support to entities to assist with the impact of COVID-19. Since that time, there has been a significant amount of information released to explain the complex operation of the scheme, including Treasury Rules, Australian Tax Office (ATO) rulings and guidelines, together with amendments to the Fair Work Act 2009 to enable employers to temporarily vary work arrangements for eligible employees.
The worldwide impact of COVID-19, which has resulted in countries around the world shutting down their borders and international travel being banned, requires companies to operate online whenever possible.
The Victorian Government recently announced a range of tax relief measures in response to COVID-19 to assist landlords and businesses. The State Revenue Office (SRO) has now provided further guidance on these initiatives.
Managing your own self-managed superannuation fund (SMSF) brings with it estate planning issues. In addition to contemplating who will be entitled to receive your superannuation death benefit on your death you must also consider who will take control of your fund if you were to lose capacity or die.
Many employers seeking to take corrective action under the Superannuation Guarantee Amnesty (the Amnesty) may currently be so overwhelmed by the impacts of the COVID-19 pandemic that they do not consider they have the financial resources to apply for the Amnesty.
On 6 March 2020, the legislation introducing the Superannuation Guarantee Amnesty (amnesty) received Royal Assent.
From 1 April 2020, in a significant extension to the director penalty regime, company directors will be personally liable for unpaid GST (including luxury car tax and wine equalisation tax).
Are you considering purchasing Victorian property through a discretionary trust? Think again, because from 1 March 2020 the State Revenue Office (SRO) will deem all discretionary trusts to constitute foreign purchasers.
The ‘active asset test’ for the purpose of accessing the small business capital gains tax (CGT) concessions has effectively been narrowed, due to a Federal Court decision which held that land used to store business assets and materials was not an active asset. The decision sets a new ‘direct functional relevance’ test, which will create difficulty for business owners in accessing the concessions.
Legislative measures are currently before Parliament, which will operate to deny foreign residents the ability to access the capital gains tax (CGT) main residence exemption upon the disposal of their Australian dwelling.
Linfox Australia Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCAFC 131
The Full Court of the Federal Court recently handed down a decision in Linfox Australia Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCAFC 131 (Linfox Case) in relation to fuel tax credits claimed by Linfox pursuant to the provisions of the Fuel Tax Act 2006 (Cth) (FTA).
Businesses that provide road freight services have increased tax compliance obligations as they are now subject to the Government’s Taxable Payments Reporting System (TPRS).
The sale of a person’s main residence (ie their home) is generally exempt from capital gains tax. This exemption is ‘carried through’ to beneficiaries or executors of deceased estates who seek to dispose of the deceased’s main residence, where certain conditions are satisfied.
On 18 September 2019, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 (the Bill) was introduced into Parliament. The Bill seeks to re-introduce a superannuation guarantee amnesty, following the previous amnesty legislation lapsing due to the Federal Election being called in April 2019.
In a Bill currently before Parliament, property investors will be denied deductions for holding and financing costs incurred in owning vacant land. Ordinarily, such costs would be deductible where the land is intended to be used for the purpose of producing assessable income.
Are you overpaying land tax based on out of date council valuations?
The 2019-2020 Victorian State Budget reported that land tax revenue in 2019-2020 is expected to increase to $3.7 billion. This is a significant increase from the $1.2 billion raised in 2009-2010.
Property developers who enter into agreements to develop Victorian land with an unencumbered value of over $1 million are at significant risk of incurring a duty liability, under new legislation that received Royal Assent on 18 June 2019.
