Taxation

October 2021 Newsletter

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In this issue:

2021 has been, even more so than 2020, the year of working from home for so many of us – but what are the tax implications of using your home as a place of business? Turn to page 3 of our October newsletter to find out.

On the subject of homes, we also cover off what happens when multiple children inherit multiple rental properties – and how to solve the issue of co-owning a property with others. We’ve also got two articles on superannuation – our leading story examines the implications of compensation payments for super fund trustees, while on page 6 we outline the process for SMSFs having to use SuperStream from 1 October for certain contributions and rollovers.

Finally, October means that it’s almost that time of year again – Christmas, as your local supermarket will no doubt be reminding you soon – and our final story looks at the tax treatment of gifts and events in the workplace context.

‘Need to knows’ for October

  • The ATO is now closely reviewing arrangements where Australian resident taxpayers fail to declare foreign income and may conceal the character of the funds by disguising them as a purported “gift” or “loan” from a related overseas entity.
  • It’s also important to be aware of the CGT consequences of using part of your home as a place of business during the current pandemic – and the potential application of the CGT small business concessions to eliminate, reduce or roll-over any partial CGT liability that may arise.
  • In SMSF news, individuals who receive compensation payments from financial institutions and insurance providers may have the amount count towards their superannuation contribution caps, depending on the circumstances in which the payment is received.
  • Individuals can now recontribute amounts they withdrew under the ‘COVID-19 early release of superannuation program’ without them counting towards their non-concessional cap.

September 2021 Newsletter

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In this issue:

  • How to treat work-related travel and living away from home costs;
  • SMSFs and property development – emerging risks;
  • Claiming GST credits for employee reimbursements;
  • Buying a new house before selling the old one;
  • Trust distributions to non-residents;
  • and ‘Stapling super’ – reducing multiple accounts for employees.
  • Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Need to knows’ for September

Legislation has been amended that makes NSW and Victorian government grant programs eligible for treatment as non-assessable, non-exempt income (NANE). This has important tax consequences as it means the amount is not only exempt and not assessable, but also not required to be used to reduce any existing tax losses of the taxpayer (unlike exempt income per se) – in a nutshell, it has a totally neutral effect on a taxpayer’s tax situation.

In a somewhat significant decision, the AAT has allowed a taxpayer’s objection against an adverse private ruling and found that he was carrying on “a business of renting properties” in relation to several rental properties he owned (and which he later transferred to his SMSF). Nevertheless, it’s unusual for a taxpayer to be found to be carrying on a business in relation to such activities, and the ATO (and courts) set a very high bar in order to be able to say that person is carrying on such a business.

In SMSF news, the ATO has released their final ruling (LCR 2021/2) on how a loss, outgoing or expense of a superannuation fund can cause a fund’s income to be taxed at ‘non-arm’s length income’ (i.e. taxed at 45%) where a superannuation fund and another party are not dealing at arm’s length. The ATO has also released a draft ruling (TR 2010/1DC) which proposes that any non-arm’s length income dealings are not considered superannuation contributions on the same transaction.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Client Information Newsletter – July 2021 Lodgment Rates and Thresholds 2021-22 issue

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This guide includes tax rates, including individual minor and non-resident rates, corporate rates, offset limits and benchmarks, rebate levels, allowances, and essential super as well as FBT rates and thresholds (including current grossup factors) and student loan repayment rates. There is also essential Medicare information and foreign currency exchange information.

Click here to download the latest newsletter

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

July 2021 Newsletter

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In this issue:

  • The ATO has seen a lot of mistakes being made on business tax returns over the years, but has kept a record of these so we can all learn from other people’s errors. Laundry expenses can be a legitimate tax deduction, but claims need to follow certain rules, which we sketch out.
  • Every SMSF will come to the end of its functioning life at some stage, but the way in which a fund is wound up can leave members with differing retirement benefit outcomes. And if this tax time’s end result is a tax bill, not a refund, there may be a straightforward explanation.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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June 2021 Newsletter

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In this issue:

  • Cryptocurrencies, once again surging in popularity, have a unique tax treatment that every taxpayer dealing with cryptocurrency should be aware of.
  • The ATO has recently updated its guidance material on the operation of the personal services income (PSI) and personal service business (PSB) rules.
  • When you’re faced with a complex or high-risk question in tax or super, briefing a barrister can provide you with the expertise and perspective to help you move towards a solution with confidence.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

Federal Budget Update

2021-22 Federal Budget Update

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The Government has decided not to go down the austerity path, which will be a relief for many taxpayers and businesses.

Click here to download the Federal Budget update

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

May 2021 Newsletter

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  • It’s getting very close to the business end of the financial year, so we have gathered some tax planning tips that could set you up for a better tax outcome. And as that outcome can be ruined by having to deal with an excess super contribution charge, we look at how best to avoid it.
  • The ATO has tightened the evidence requirements for real property valuations for SMSFs, so we look at how to keep your fund compliant, and also bring some good news with the recently launched SME Recovery Loan Scheme, plus an expansion of the ATO’s independent review service.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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April Newsletter 2021

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  • It is possible to receive amounts that are not expected by the ATO to be included as income in your tax return. However some of these amounts may be used in other calculations, and may therefore need to be included elsewhere in your tax return.
  • The Australian Government has made changes to the ATO’s insolvency framework to help more small businesses restructure and survive the economic impact of COVID-19.
  • Most people think of retirement as a time to put your feet up and relax, but it can also be a time when pre-retirees and retirees alike actually need to flex the grey matter.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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March Newsletter 2021

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Government agencies sometimes use ABN registration to contact businesses for emergency help or even grants of support, so it’s important to keep your business’s ABN details current. And the perennial problem of dealing with cash flow gets some advisory help from the ATO.

A new Director Identification Number regime is something companies may need to get familiar with very soon, and we re-visit the changes that COVID-19 has made to FBT. There’s also details about the unstoppable SMSF sector, and the tax treatment of unexpected lump sums.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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February Newsletter 2021

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The JobMaker Hiring Credit scheme was passed into law in mid-November 2020. JobMaker was part of the 2020-21 Federal Budget, and will operate until 6 October 2021. It is designed to improve the prospects of young individuals getting employment, by incentivising employers to hire them, following the devastating impact of COVID-19 on the labour market.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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