Category: Planning Idea
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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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Partnerships of Discretionary Trusts on the nose…
Late last year the Commissioner released a Taxpayer Alert on the use of partnerships of discretionary trust by professional practices to avoid tax. In the Taxpayer Alert late last year the Commissioner stated that he was concerned that the dominant purpose for setting up a partnership of discretionary trusts for a professional practice was to…
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Thin capitalisation is a thing of the past… For most
Thin capitalisation is one of those thing many of us learned to pass a tax exam, and have never thought of again. In summary (a very, very quick summary) if you decide to fund your Australian operation with lots of debt rather than equity, you might have to pay heaps of interest but the thin…
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Super gets an indexation boost
Its time to relearn your super rules… From 2014/15 the concessional contribution cap will increased for the first time to $30,000. So remember that in the 2014/15 year there will be a $35,000 cap for those aged 49 years or over on 30 June 2014, and a $30,000 cap for everyone else. As a result the non-concessional…
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Employee Benefit Trusts And “Deep Throat”
Many years ago I received a call from a very junior ABC journalist (her career has very much blossomed since the and she is now a household name). We met in a meeting room where I worked an she provided me with two private rulings – both about employee benefit trusts. The first was a…
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The purpose of Dividend Access Shares
I have been asked for as long as I have been working in tax about dividend access shares. I have lots of profits in company but the shares are owned by high taxed individuals. Sell the shares? But there is a whopping huge uncrystalised capital gains on the shares so this does not work. So…
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Cash to accruals gets taxed
In ATOID 2014/1 (http://law.ato.gov.au/atolaw/view.htm?docid=%22AID%2FAID20141%2F00001%22) the Commissioner considers the following facts… “The taxpayer carries on a business of providing services to clients. The taxpayer had previously accounted for the income of the business on a cash basis. Due to the nature and growth of the taxpayer’s business, the taxpayer decides it is more appropriate for the…
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Another go at closing salary packaged cars
One of the arguments presented by the salary packaging companies (please note these are companies that only exist due to the combination of a tax loophole and tricky marketing – https://taxrambling.wordpress.com/2013/11/29/the-post-the-salary-packagers-do-not-wanted-you-to-see/) is that removing the statutory method for calculating car fringe benefits would hurt the local car manufacturers. But by 2017 there will be no…
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Another Federal Court versus High Court GST battle in the making…
Once again the Federal Court has found a new way to look at the most fundamental definition in the GST Act – a “supply”. In the MBI Case the Federal Court found that Division 135 did not apply. Division 135 stops this idea… I am buying your warehouse (commercial real property so GST applies) but…
TaxRambling.com 