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Income Tax Planning Stuff

Injecting income into loss trusts – everyone should be doing it

There is this fear of having losses in discretionary trusts – specifically how do you get them out… The answer is easy. You just inject income into the trust. But what about the income injection test I hear you scream… First what is the income injection test? It is a test that states that if […]

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FBT Planning Idea Tax Policy

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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Cases GST Planning Idea

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 […]

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Planning Stuff Rulings Super

Reserving strategies work…

In a new Taxation Determination (TD 2013/22) the Commissioner gives a green light to reserving strategies to avoid excess contributions. He states that if a fund receives contributions in year 1 but allocates it to a member in year 2, it is a concessional contribution in year 2. So hopefully the funds deed allows for […]

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Income Tax Planning Stuff

Moving from cash to accruals

Since the Henderson Case it has been clear that there is only one appropriate way to return income for a year – either cash or accruals. TR 98/1 covers which one is correct for each year. But what happens to your debtors when in year one you were correctly on cash and in year two […]

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Income Tax Part IVA Planning Stuff Rulings

Part IVA and partnerships of discretionary trusts

The most annoying habit of the Commissioner is to let everyone do something for years and then to finally try to close it down. Take the Commissioner’s announcement on 16 December 2009 that an unpaid present entitlement from a trust to a corporate beneficiary is a loan to which Division 7A applies. So 12 years […]

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FBT Planning Stuff Tax Policy

The post the salary packagers do not wanted you to see…

Go to any salary packager’s website and they will have a calculator. After you complete or the details the calculator will tell you how much you will save in tax by salary packaging a car. THIS NUMBER IS ABSOLUTELY RUBBISH. I don’t mean the calculation is wrong in any way at all. What I mean […]

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FBT Planning Stuff

Even crazier (and legal) salary packaging ideas

In the National Tax Liaison Group FBT Subcommittee (yes I have sat on this committee and it is full of FBT nerds…) in November 2005 the Commissioner confrimed that, as an employer can provide a benefit to an employee for their long service valued at $1,000 after 15 years, increasing by $100 every year after that, and there is […]

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FBT Planning Stuff

Crazy (but legal) salary packaging options…

An expense fringe benefit arises when an expense is reimbursed, irrespective of when the employee incurred the expense that is reimbursed. So if you forgot to salary package an expense that it would have been beneficial to salary package then just get it reimbursed today and the benefit arises. First a silly example… For ten […]

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Income Tax Part IVA Planning Stuff

Part IVA applies to small businesses

I don’t get that so many small business advisors think Part IVA can not apply to their clients. Yes it does not happen often but if it does your business is on the line. And here is where it is most likely to apply… You just read my post below and want to inject income […]