Taxation in Australia

The Taxation in Australia Journal

Written by practitioners for practitioners Taxation in Australia® is continually ranked as Australia's leading tax journal.

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With a readership exceeding 35,000, Taxation in Australia is published 11 times per year and available exclusively to members in hard copy and online format, and now as an app on the Apple iPad and on Android tablets. This comprehensive publication features articles with a strong, practical approach to the latest tax issues and professional development. It is affectionately known as the Blue Journal.

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Articles from the current issue:

  • Trusts, powers and default appointment clauses Add to cart

    01 Dec 2014

    A default appointment clause in a trust deed is a clause which operates where the trustee fails to exercise the discretion to either distribute or accumulate trust income, or distribute the capital on the trust vesting. Must a valid discretionary trust include a default appointment clause? After all, the consequence of incompetent or inappropriate drafting may be that the trust is void for uncertainty, resulting in there being no trust.

    This article argues that a default appointment is not necessary, provided the trust deed is drafted appropriately, the intentions of the parties establishing the trust are clear, and the trust deed suits the client’s circumstances and objectives. The article provides an overview of trusts, powers and default appointment clauses, and examines the underlying English and Australian case law, to conclude that a default appointment is not required when the correct trust or power is bestowed on the trustee.

  • Superannuation: SMSF succession strategies Add to cart

    01 Dec 2014

    Unless appropriate prior planning is in place, who ends up controlling your super and with your super moneys largely depends on trust and, if the trusted person is not willing to implement your wishes, then your super is subject to a great deal of uncertainty.

  • Review of Div 7A: What to expect Add to cart

    01 Dec 2014

    Division 7A (which is about private company distributions) of Pt III of the Income Tax Assessment Act 1936 has recently been the subject of a post-implementation review by the Board of Taxation. So far, the Board has released two discussion papers for consultation, the second of which outlines five proposed reforms to improve the operation of Div 7A. Those five proposed reforms consist of a unified set of rules based on the principle of transfers of value, a better targeted framework for calculating a company’s profits, a simpler, more flexible and better targeted system of complying loans, greater flexibility for trusts that reinvest unpaid present entitlements as working capital, and a self-correcting mechanism.

    This article examines selected issues considered in the second discussion paper and proposes some alternative options. The authors believe that these reforms would significantly improve the operation of Div 7A and assist both taxpayers and advisers alike.

  • A hidden tax cost for infrastructure projects Add to cart

    01 Dec 2014

    Infrastructure assets are sometimes constructed by private sector entities which then pass ownership of the assets to government trading enterprises, which are typically responsible for operating, maintaining and controlling the assets. Conversely, the private sector may have ownership of an asset which has been financed by funds contributed by the government. Passing ownership of an asset for no consideration may give rise to substantial hidden costs resulting from the application of certain tax laws which seek to tax “benefi ts” where no cash consideration is exchanged.

    This article considers a critical tax issue for recipients of gifted assets, in particular, the possibility of an unfunded tax liability pursuant to the non-cash business benefit provisions outlined in s 21A of the Income Tax Assessment Act 1936. The question of qualifying for capital allowance deductions is also an area of uncertainty.

  • Tax tips: Market value issues Add to cart

    01 Dec 2014

    Practitioners will invariably encounter market value issues from time to time. This article refers to several general points and then considers a recent decision of the Western Australian Court of Appeal which is of some interest.

  • Tax design, international philanthropy and the “in Australia” special conditions Add to cart

    01 Dec 2014

    The newly elected federal government announced in December 2013 that it would abandon many of the proposed changes to the tax laws announced by its predecessor. One of the proposed changes not to be abandoned was amendments to the laws limiting the overseas activities of charities. The legislation, known colloquially as the “in Australia” amendments, is now expected to be introduced in 2015.

    In this article, the author argues that review of Australia’s international philanthropic engagement is timely. Locating 12 issues to consider within the rubric of the fi ve design principles which are to inform Australia’s Future Tax System, the author suggests that the “in Australia” discussion is a part of a wider discussion about international philanthropy and Australia’s future international engagement.

  • Protecting your lifestyle from bankruptcy Add to cart

    01 Dec 2014

    Becoming a partner of a law firm or a director of an incorporated legal practice is a notable milestone in a legal career, and can be greatly rewarding both professionally and fi nancially. It opens up opportunities to accumulate signifi cant wealth, but also exposes the appointee to signifi cant risks and responsibilities. Structuring one’s affairs to minimise exposure to one of those risks, namely, bankruptcy, is regarded as essential for all partners, medical practitioners and company directors, both on initial appointment and subsequently, whenever one’s circumstances change. Asset protection is an integral part of tax-effective structuring and estate and succession planning.

    This article outlines how bankruptcy laws operate in Australia, explains what assets are exposed to creditors’ claims, and suggests steps that partners, medical practitioners and company directors can take to protect their wealth from creditors’ claims and protect their lifestyle from bankruptcy.