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tax news | views | clues
FEBRUARY 2018
Financial advice from your accountant Are you in the market for some general financial advice about superannuation or simple managed investment schemes? Well, you don't necessarily have to see a financial adviser. Depending on the circumstances, your accountant could help you with what you need in addition to taking care of your tax return. |
ATO guidelines: profit allocation within professional firmsThe ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self managed superannuation funds (SMSFs). |
TIP: The ATO encourages anyone who is uncertain about how the law applies to their existing circumstances "to engage with us as soon as possible". |
Housing affordability measures now law
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TIP: An exemption from meeting the FHSS Scheme "first home" requirement will be available for people suffering financial hardship. "Financial hardship" criteria are likely to include circumstances where someone has limited savings, is currently renting and had a past interest in a home that was in a cheaper real estate market or when the person was in a relationship that has since broken down. |
Fringe benefits tax: employees' private use of vehiclesThe ATO has issued guidance for employers on determining an employee's private use of a vehicle. |
TIP: The guideline includes specific eligibility conditions for employers and their employees' vehicle use. Talk to us about whether the new guidance applies to your FBT circumstances. |
Tax consequences of trust vestingThe ATO has issued a long-awaited ruling on trust vesting, including changing a trust's vesting date and the CGT and income tax consequences of vesting. |
TIP: A trust's "vesting date" is the day when the beneficiaries' interests in the trust property become fixed. The trust deed will specify the vesting date and the consequences of that date being reached. Vesting does not, of itself, ordinarily cause the trust to come to an end or cause a new trust to arise. In particular, the underlying trust relationship continues after vesting while the trustee still holds property for the takers. |
The key points in the draft ruling are that:
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Disclosing business tax debt information to credit agenciesThe Federal Government has released draft legislation and a draft legislative instrument that, when passed, will authorise the ATO to disclose a business's tax debt to registered credit reporting bureaus where the business has not effectively engaged with the ATO to manage the debt. |
Taxing employee share scheme dividend equivalent paymentsThe ATO has made a new determination that dividend equivalent payments made under an employee share scheme (ESS) are assessable to an employee as income when they receive the payment for or in connection with services they provide as an employee. |
TIP: The ATO offers a safe harbour from such payments being treated as income under specific circumstances. Get in touch with us to talk about whether your situation makes you eligible. |
The new determination applies to dividend equivalent payments paid under the terms and conditions attached to ESS interests granted on or after 1 January 2018. |
Superannuation integrity changesThe Government has released a consultation paper and exposure draft legislation to give effect to the following superannuation taxation integrity measures it announced in the 2017–2018 Federal Budget:
The measures are designed to ensure that related-party transactions with super funds and LRBAs can't be used to circumvent the reduced contribution caps that apply from 1 July 2017. The changes should generally not affect LRBAs entered into with unrelated third parties for commercial rates of interest (and other expenses). |
Guidance for SMSFs on transfer balance reportingThe ATO has released further guidance on when SMSFs need to report events affecting their members' transfer balance accounts (by making a transfer balance account report, or TBAR) for the purposes of the $1.6 million pension cap.
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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. |