Category: Tax

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.

There has been an increase in investigations by the Australian Taxation Office (ATO) into superannuation guarantee compliance within the transport and logistics industry.

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.

Surrendering a life interest – beware the tax implications

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.

Have you ever read something and thought, “I’m not sure what that means” or “is that really correct”? Welcome to our series of quickfire interviews that attempt to unravel those interesting words and phrases.

In this edition, we speak to Tax Counsel Tamara Cardan who talks to us about the word she finds interesting, which has multiple definitions, cloning.

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 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.

2020 has been a challenging year for many Australians which has seen the Government forced to intervene to provide economic support and legislative provisions in an attempt to provide ongoing assistance to many Australians and businesses.

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 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.

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.

One of the fundamental questions any business owner needs to address is how to finance their assets. On commercial grounds, the various options have important implications.

This may seem a somewhat straightforward question, but, as with many tax questions, the answer is not particularly easy. Like most of these matters, the answer depends on the circumstances.

Private binding rulings are a mechanism in the Australian tax administration system where a taxpayer may seek the ATO’s view on the treatment of a transaction without going through the formal objection or dispute process.

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.

Foreign investors in Victorian land are subject to complex State taxes, including foreign purchaser additional duty, absentee owner land tax surcharge and vacant residential land tax.

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.

Overview

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.

The Administrative Appeals Tribunal has clarified the tax treatment of gaming machine entitlement fees expenditure deciding the amounts constitute a general deduction in the income year incurred.

This paper was presented by Rigby Cooke Lawyers Tax Partner, Dr Keith Kendall at the Tax Institute Tasmania State Convention, 19 & 20 October 2017.

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.

Latest news from Rigby Cooke’s tax team. Making sense of the #austax system.

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.

Co-owners of land or parcels of land often wish to exchange ownership interests to become sole owners of specific land or specific parcels of land.

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.

This paper was presented to The Tax Institute, Western Australian Division, 29 April 2016

Quick facts:

• 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).

The Federal Treasurer handed down his first Budget (the government’s third) at 7.30 pm on 3 May 2016.

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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.