Category: Uncategorized
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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…
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What is a loan for Division 7A
Subsection 109D(3) gives the definition of what is a loan for the purposes of Division 7A. It has some pretty obvious definitions (“an advance of money” and “a payment of an amount … if there is an express or implied obligation to repay the amount”) and even has the wonderfully circular definition of “a transaction (whatever…
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$250 self education deduction reduction going
Finally we have a Bill that proposes to remove the $250 non-deductible threshold for work-related self-education expenses. The $250 non-deductible threshold for self-education was introduced way back 1975 alongside a concessional tax rebate for expenditure on self-education. When the concessional rebate was repealed in 1985 the forgot to repeal the $250 non-deductible threshold. So 36…
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The COVID Disaster Payment is better than JobKeeper
Under JobKeeper, employees were paid $750 a week from their employee, but as taxable salary. Under its replacement, the so called “COVID-19 Disaster Payment”, employees who are in hot spot areas and who lose more than 20 hours a week get $750 a week paid to them by Services Australia (yes they have to apply…
