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“But that is not fair” is not an argument!

When I explain how the tax law works some times I am told I can’t be right as that is not fair… In the case of DGSC and Commissioner of Taxation (2021) AATA 4816 the taxpayer was both an employee and ran her own business. When JobKeeper arose she completed the form from her employer […]

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The Commissioner can get any info he wants…

Yesterday I was asked for advice on whether a compensation payment was taxable. I asked what it was compensation for and was told that that was confidential. I explained that whether compensation is taxable depends on what it is compensation for, and if the Commissioner asks for the compensation agreement he can get it. I […]

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Trust “reimbursement agreements” – the new war with the Commissioner

Since 1978 there has been a scary anti avoidance provision in the back of the trust tax rules in the ITAA36 called “reimbursement agreements” that the Commissioner has generally ignored… What makes it even scarier is in February 2022 the Commissioner is about to start using this section (100A) and his first offensive will be […]

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My Pre-Budget Submission

In March this year we have an election budget… This is what I have asked the Government to promise in the budget to win all our “tax nerd” votes… Changes to the Small Business CGT Concessions Changes to Division 7A Changes to deduction substantiation for employees Changes to trust resolutions Changes to the Rental Property […]

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Allocation of Professional Firm Profits

In December 2017 the Commissioner stated he was going to suspend guidelines on alienating profits from firms. He indicated that early in 2018 he would release new guidelines… and in December 2021 he has not reissued these guidelines. These guidelines cover arrangements where: taxpayers redirect their income from a business or activity to an associated […]

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When people buy units they don’t review the GST clause

In a recent Federal Court case a person purchased a unit for their own private use. They knew the price, they were happy with the price, they paid the price… and then a class action looked at situations where the GST in the contract was different to the actual GST that had to be paid […]

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Asking for a deduction audit…

When looking at deductions taxpayers in particular occupations and locations claim, the Commissioner uses, in real time, a comparison with what they call the taxpayer’s ‘nearest neighbour’. From this real time comparison with other taxpayers in the same industry and location the Commissioner actively prompt the taxpayer in real-time that their claims are out of […]

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There may be a “tax difference” at the next election

After announcing Labor: would not reduce the CGT discount to 25% as they proposed to do in the 2017 election, would not limit negative gearing to new housing as they proposed to do in the 2017 election, would not stop SMSFs claiming refundable imputation credits as they proposed to do in the 2017 election, and […]

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Journals alone cannot make a Division 7A minimum yearly repayment

Most Division 7A loans are repaid without a single bank transaction. They are typically made by way of set-off against a dividend declared by the company. But what are the requirements we need to follow to make these set offs legal?  Some people say that we do a journal that creates a dividend that equals […]

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Another ACT Margin Scheme case

In WYPF and Commissioner of Taxation (Taxation) [2021] AATA 3050 a developer in the ACT paid $14,000,000 (‘Monetary Consideration’) for the land to the ACT Land Development Authority, and also carried out certain works described as ‘Preparatory Works’ of $29,700,648.39 and other works described as ‘Building Works’ of $77,034,265.61.  The taxpayer wanted to include all these […]