Byline: Tamara Cardan

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.

Court of Appeal Superannuation Case

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.