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.
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A collection of case studies and articles highlighting the latest in legal news.
This article was first published on 8 February 2021 by Tax Notes International.
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.
A recent amendment to the Land Tax Act has abolished “special land tax”. Special land tax was a one off tax charge at the rate of 5% of the unimproved value of the land. The abolition of the tax came into effect from the 16 December 2020.
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.
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.
Tamara is a Tax Counsel in our Tax and Wealth group. Tamara has over 12 years of tax expertise and has represented a broad range of clients including Australian and foreign based corporates, entities in the financial services, high wealth individuals, and non-profit organisations.
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.
Important changes to employer superannuation guarantee obligations and salary sacrifice arrangements
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 23 March 2020, the Federal Government urgently passed legislation to introduce economic stimulus measures to address the impact of the coronavirus pandemic.
The two packages of measures, worth $17.6 billion and $66 billion, combined with the relief provided by the Reserve Bank of Australia and the Government’s support to smaller lenders, brings total support to $189 billion.
On 12 March 2020, the Government announced a stimulus package totalling $17.6 billion to address the economic impacts of the Coronavirus outbreak. Included in the package are tax incentives and cash flow assistance for businesses, in order to support investment and help small businesses manage short-term cash flow challenges.
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.
New hurdle to overcome in accessing the small business CGT concessions – Federal Court narrows the active asset test
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  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  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.
Do you claim tax deductions on vacant land you own? An unwelcome surprise for property investors from 1 July 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.
In follow up to our recent article titled Independent Contractors or Employees, while it’s one thing to know the difference between employees and independent contractors, an important issue to consider is the consequences for getting the classification wrong.
New laws have been passed affecting the GST obligations of property developers. These laws take effect from 1 July 2018, but may affect contracts entered into prior to this date.
The development and operation of commercial accommodation raises complex regulatory, contractual, commercial and taxation issues.
The reconstitution of a general law partnership or a tax law partnership may have different income tax, capital gains tax (CGT) and goods and services tax (GST) consequences that should be addressed in preparing a Partnership Reconstitution Deed.
A general law partnership may be reconstituted without the tax consequences associated with reconstituting a tax law partnership, a joint venture or co-ownership.
Rigby Cooke Lawyers’ Tax & Wealth and Wills & Estates teams have been recognised by independent survey and review source Doyle’s Guide for their expertise in their respective practice areas.
Foreign purchaser additional duty and absentee owner surcharge land tax may apply to Australian discretionary trusts transacting in Victorian residential land where the discretionary trust has potential foreign beneficiaries.
A number of recent changes affecting foreign purchasers of property in Victoria have either come into, or are soon to come into effect. These changes are already impacting on the sale of property.
- From 1 July 2016, any purchaser who acquires an Australian property with value of $2 million or more from a foreign resident vendor will be required to withhold and pay 10% of the purchase price to the Australian Taxation Office (ATO).
In structuring 30 June transactions it is often desirable to sign a contract before 30 June, but defer payment of capital gains tax (CGT) or the CGT event until a subsequent income year; particularly where settlement is deferred to a subsequent income year so there are no sale proceeds for the vendor to pay the tax or it is desired to set-off losses in the subsequent income year.
Disclosure statistics released
- The ATO has announced that, at 30 June 2014, there had been 166 disclosures, 250 expressions of interest (where taxpayers have identified themselves and said they will be making a disclosure) and more than 600 general enquiries in relation to Project DO IT.