October 2021 Newsletter

October 2021 Newsletter 1000 665 Website Admin

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

September 2021 Newsletter 4256 2832 Website Admin

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.