Category: Income Tax
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A great reminder with related party transactions
Section 82KK of the ITAA36 is one of those section that I knew existed once but have not thought about for years. This section applies where there is a timing mismatch in payments to associates so that income is recognised in a later year than the matching deduction. When this section applies the deduction is…
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A withholding tax nightmare starts in 2016…
As we have looked at before, the previous government announced it was going to introduce a new non-resident withholding tax. This would apply where a taxpayer buys certain CGT assets from non-residents. Unfortunately, late last year the current government confirmed they were going to continue with this announcement. And now they have released a discussion…
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A new”ish” CGT rollover
The Government has introduced Tax and Superannuation Laws Amendment (2014 Measures No. 6) Bill 2014 into the Parliament. Most of the amendments in this Bill will be of no consequence for the majority of taxpayers. However, as a part of making some changes to certain CGT rollovers, the Government has decided to rewrite them into…
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Capital losses and death… There still is some life in the losses
In relation to prior year net capital losses, if a deceased person had any unapplied net capital losses when they died, these can be taken into account in their final (date of death) return, but can’t be passed on to the beneficiary or legal personal representative to offset against any net capital gains. So the…
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Non-residents entities trying to legally avoid lodging Aussie tax returns
I love working for North Asian entities. When the are looking to operate in another country (like Australia), they first ask the question “can we avoid having to pay tax and lodging tax returns in the other country?” They are also willing to change their practices to simplify tax outcomes – not reduce tax payable…
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Employee Shares Schemes are back from 1 July 2015
Back in 2009 the previous Government put certain divisions of the big accounting and law firms out of business, generally called “executive remuneration”. But they need to get ready to go back to flogging their delayed tax income from 1 July 2015 as the new Government intends to reinstate one of their best ideas. In…
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More proof that journalists are lobbyists
In the fairfax papers today is another “big companies should pay more tax” article. And like most of these articles, it is just rubbish. The article states that ASX listed companies have tax rates at less than 30% – even lower than 10% – from analysing their accounts and looking at their tax expense line.…
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Using imputations credits in an entity that does not have retained earnings
I have been asked a few times about using imputations credits in an entity that does not have retained earnings. Well there are a series of ways to do this. What people often try to do in the small end of town is to drop in some tax free income (often using section 23AJ or…
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Can a new company pay a fully franked dividend in its first year?
A question I get asked regularly is can a new company pay a fully franked dividend in its first year, even if it has never paid a tax bill yet as it has not yet lodged its first tax return and so has not paid any PAYGI? The answer is a big YES without any…
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Employee Share Schemes – 4 simple rules…
The Commissioner has released a draft taxation determination on employee share schemes. While this draft determination relates a to employees who get a beneficial interest in a share subject to shareholder approval (this does not come within the employee share scheme rules) it is a great time to summarise the employee share scheme rules. Simply,…
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