Tax debt release applications refused

nn   n ThenAdministrative Appeals Tribunal (AAT) has recently refused the applications ofntwo individuals who sought to be released from their tax debts under the taxnlaw. n n n n n n n   n Case 1 n n n nAn individualnsuffering from Parkinson’s disease had received income protection policynpayments and sought to be relieved […]

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Payment was assessable as “deferred compensation”

n n The High Court has unanimously dismissed a taxpayer’s appeal and held that payments of US$160 million made to him pursuant to an incentive “profit participation plan” after termination of his employment was income according to ordinary concepts. In particular, the Court found that the payments were “deferred compensation” for the services the taxpayer performed […]

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Contrived trust arrangements in ATO sights

The ATO hasncautioned taxpayers against arrangements that seek to minimise tax by creatingnartificial differences between the taxable net income and distributable incomenof closely held trusts. Deputy Commissioner Michael Cranston said the ATO isninvestigating arrangements where trustees are engineering a reduction in trustnincome to allow taxpayers to improperly gain favourable tax breaks, ornsometimes to pay no […]

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GST and countertrade transactions

The ATO hasnissued a Practical Compliance Guideline which sets out the Tax Commissioner’sncompliance approach, in the context of GST, to entities that enter intoncountertrade transactions as part of carrying on their enterprise.n“Countertrade” refers to the direct exchange of things by one entity for thingsnprovided by another entity, and does not include transactions where any of […]

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Budget superannuation changes on the way

n The Federal Government has been consulting on draftnlegislation to give effect to most of its 2016–2017 budget superannuationnproposals. Here are some of the key changes. n Deducting personal contributions n All individuals up to age 75 will be able to deduct personalnsuperannuation contributions, regardless of their employment circumstances. Ofncourse, such deductible contributions would still […]

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Primary producer income tax averaging

n Legislation has been introduced in Parliament that proposes tonallow primary producers to access income tax averaging 10 income years afternchoosing to opt out, instead of the opt-out choice being permanent. The FederalnGovernment says this will assist primary producers, as averaging onlynrecommences when it is to their benefit (ie they receive a tax offset) and […]

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Research and development tax incentive rates change

n The Federal Government has reduced the rates of the tax offsetnavailable under the research and development (R&D) tax incentive for thenfirst $100 million of eligible expenditure by 1.5 percentage points. Thenhigher (refundable) rate of the tax offset has been reduced from 45{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} to 43.5{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70}nand the lower (non-refundable) rate of the offset has been reduced from […]

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SMSF related-party borrowing arrangements

n The ATO has issued a taxation determination (TD 2016/16) concerning whether thenordinary or statutory income of a self managed super fund (SMSF) would bennon-arm’s length income (NALI) under the tax law, and therefore attract 47{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} tax,nwhen the parties to a scheme have entered into a limited recourse borrowingnarrangement (LRBA) on terms which are not […]

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Travel expense and transport of bulky tools claim denied

n An individual has been unsuccessful before the AdministrativenAppeals Tribunal in a matter concerning certain deduction claims fornwork-related travel expenses. The individual was a sheet metal worker whosenhome was located some 60 km from his employer’s main work site. The individualnmade a number of work-related deduction claims. However, after variousnconcessions made by both the individual […]

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Small business tax breaks in the pipeline

n A Billnhas been introduced in Parliament which proposes to: n •       increasenthe small business entity turnover to $10 million from 1 July 2016; n •       increasenthe unincorporated small business tax discount from 5{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} to 16{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} over a 10-yearnperiod; n •       increasenthe turnover threshold to qualify for the lower company tax rate; and n •       lowernthe […]

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