newsletters
client alert |
tax news | views | clues |
DECEMBER 2015/JANUARY 2016 |
Why Corporate Trustee Vs Individual Trustee |
There are many reasons as to why we believe that having a corporate trustee is a much better option than that of an individual. The following short 3 minute video runs through rationale. http://vimeo.com/73835181 |
Tax negotiation limited to known debt amounts |
Two company taxpayers have been unsuccessful before the Federal Court in seeking to set aside statutory demands issued by the ATO. |
TIP: The above case demonstrates that to avoid confusion among negotiating parties, particularly in relation to future treatment of liabilities, agreements as to arrangements and the terms must be reached and agreed to by the parties in a subsequent written Deed of Agreement. |
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CGT roll-over for small business restructures on the way |
The Government has released exposure draft legislation that proposes to provide roll-over relief for small businesses that change their legal structure. The proposed measures were announced in the 2015–2016 Federal Budget, and will apply to the transfers of assets occurring on or after 1 July 2016. Public consultation closes on 4 December 2015. |
TIP: The proposed new roll-over is in addition to roll-overs currently available where a sole trader or partner in a partnership transfers assets to, or creates assets in, a company in the course of a business restructure. Note also that, with any proposed "tax relief", the devil is in the detail. Please contact our office for further information. |
ATO starts issuing "certainty" letters |
The ATO has commenced contacting more than half a million individual taxpayers to let them know that their recently submitted tax returns "are shipshape and will not be subject to further review". The ATO said people who receive one of its "certainty" letters (also known as "A-OK" letters) can be assured that the ATO is happy with their tax returns, and has closed its books permanently on their returns, providing there is no evidence of fraud or deliberate avoidance. |
TIP: Despite the aim to provide "certainty", it remains to be seen how the letters will operate in practice, particularly if the Commissioner can change his position on the issued letter if taxpayers amend their 2015 tax return or if the Commissioner relies on the concept of fraud or evasion to invalidate the certainty letter. |
Government rejects SMSF borrowing ban recommendation |
Direct borrowings by superannuation funds via limited recourse borrowing arrangements (LRBAs) are safe (at least for the next three years), following the Government's decision to reject the Murray Financial System Inquiry recommendation to ban or restrict LRBAs. This is welcome news for trustees of self-managed superannuation funds (SMSFs) who have faced uncertainty about the future of such borrowing arrangements, which have become popular for investments in direct property and shares. |
TIP: Despite the Government's "green light" for LRBAs, a decision to establish an SMSF and invest in property using an LRBA is not one to be taken lightly. It would be prudent to obtain professional tailored advice on any possible LRBA issues that should be considered before committing to purchase a property via an SMSF. |
Car expenses and FBT concessions on entertainment |
A Bill is currently before Parliament that introduces two important changes. Key details are as follows. |
TIP: So the Government will set 66 cents/km as the rate for using the "cents per kilometre method", irrespective of a car's engine size. Based on 2012–2013 figures, this would see those who drive smaller vehicles getting a slight increase in deductible expenses, and those who drive larger cars having a decrease in their deduction. |
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TIP: Note that organisations affected include public and not-for-profit hospitals, public ambulance services, public benevolent institutions (except hospitals) and health promotion charities. It may be prudent to discuss with your adviser as to whether the above changes apply to your circumstances. |
Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval |