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.