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40th South Australian State Convention: Let's Celebrate

Published on 04 May 2006 | Took place at Novotel Barossa Valley Resort, SA

This program covered the entire field of contemporary taxation practice with a focus on matters which regularly confront all practitioners. Almost all papers contain technical content supported and reinforced by practical case studies.

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Individual sessions

Managing ATO contact and tax disputes

Author(s):  Scott BRYANT

This paper concentrates on the practical implications of dealing with various levels of ATO contact which may result in an audit or dispute with the ATO. Issues include:

  • types of ATO contact
  • review / audit strategy
  • administrative powers of the ATO
  • cooperation, rights and obligations of taxpayers
  • dispute resolution and settlement
  • some observations - drawing on recent experiences, and including comments re tax risk management up-front.
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Tax issues relating to debts

Author(s):  Paul TANTI

This practical paper addresses some of the more topical tax issues, developments and ATO opinions relating to debts. It will focus on issue identification and how to deal with those issues most commonly faced by advisors including:

  • debt forgiveness - income issues
  • assignments / debt parking
  • interest deductibility (TR2005/12 - trustees and deductibility of borrowed money)
  • managing debit loans
  • accounting issues - unpaid present entitlements etc.
  • interposed entities
  • debt and equity - when it matters.
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The right side of the law - Financial Services Reform Act and investment advice

Author(s):  Shannon COATES

The introduction of the Financial Services Reform Act in March 2004 has altered the regulatory landscape for many accountants and lawyers providing investment advice as part of their normal business activities. To ensure they are not breaching the financial services laws, these professionals need to have a clear understanding of how the new laws affect them and what they can and can’t do without being licensed. This paper focusses on:

  • what falls within the definition of 'financial product advice' and what remains outside?
  • what can an accountant and lawyer can say without needing to be licensed or authorised?
  • how to differentiate between providing purely factual information and financial product advice
  • consequences for breaching the FSR laws
  • the impact of the proposed legislation deterring the promotion of tax exploitation schemes.
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The legacy of Justice Graham Hill

Author(s):  The Hon. Justice Ian GZELL Justice Graham Hill was well known to members of the Tax Institute including attendees of previous SA State Conventions. His sudden death in August 2005 was a huge loss to the Institute and to the entire tax profession. Many of his decisions (including several on Part IVA and the recent HP Mercantile case concerning GST) are seminal. One of his peers and friends is Justice Ian Gzell, a judge of the Supreme Court of NSW (who is also no stranger to tax practitioners due to his involvement as counsel in very many sales tax cases and more recently several stamp duty decisions). In this paper Justice Gzell presents an analysis of some of the cases of Justice Hill concentrating in particular on his approach to interpreting tax law.

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GST and adjustments: a GST horror!

Author(s):  David KUHNE

This paper uses examples to indicate the issues in some common situations where an adjustment to the input tax credits and GST liability is required due to adjustment events including:

  • return and exchange of goods
  • insurance recoveries
  • changes to extent of creditable purpose
  • increasing adjustments for going concerns
  • selling the farm
  • buying some commercial residential property
  • claiming credits in the wrong entity.
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Practical guide to using trust losses

Author(s):  Arlene MACDONALD

The tests for making use of trust losses have proved to be very effective in restricting or moderating their use and so great care is needed by the tax adviser to ensure that where trust losses could be properly used, all the conditions are met. This paper uses case studies to highlight the problem areas in satisfying the tests and to suggest tactics to deal with the problems. The paper also contains an overview of the trust loss provisions for reference. The case studies deal with problem areas in the following areas:

  • correctly identifying a fixed trust
  • rixed interests and the Commissioner’s discretion
  • family trust and interposed entity elections
  • the tests (50% stake, control, pattern of distribution and income injection).
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Advising a client who is buying a company from a tax consolidate group

Author(s):  Alistair Hutson

This paper focusses on the practical issues when your client acquires a company that has been part of a consolidated group. Tax consolidations creates a new set of due diligence risks to be considered to ensure your client gets the most value from the purchase and is not left with any hidden surprises. Topics covered include:

  • structuring for the acquisition
  • buying the company versus buying the assets
  • what tax history will it inherit?
  • tax sharing agreement and tax indemnities
  • asset identification and valuation
  • issues relevant to the vendor's negotiating position.
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Paying death benefits from superannuation funds

Author(s):  Tony SIMMONS

This paper deals with the taxation consequences of the death of a member of a SMSF. Issues arising with death benefits are demonstrated by way of case studies. In particular the paper reviews:

  • the rules relating to the payment of death benefits
  • the tax consequences of payment including a consideration of Lump Sum Death Benefit ETPs
  • the tax consequences of non excessive and excessive components of death benefit ETPs including RBL considerations
  • the payment of pensions after the death of a member
  • if an SMSF can pay pensions to children and any estate planning opportunities that might exist
  • the tax consequences of a life insurance payout received by a deceased estate
  • binding death benefit nominations.
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Risk managing your documentation

Author(s):  Michael FAIRLIE,  Karen ADAMS

Accounting practices with SME clients are often responsible for maintaining the statutory records and many of the accounting records for their clients. So what should advisors retain on their files? This paper discusses:

  • what records must be maintained by law for various entities?
  • what are the specific income tax and GST requirements regarding record-keeping?
  • the Commissioner's powers of access to books, records and accountants’ working papers
  • what work papers should (and should not) be maintained in files?
  • internal quality control procedures
  • what the ATO may be looking for in the event of a review / audit?
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Where's the value shift? - hits and misses

Author(s):  Marc ROMALDI

This case-study based paper looks at some of the intricacies and practical outcomes of the general value shifting regime, focusing on practical examples of common transactions, including:

  • a brief overview of the general value shifting provisions
  • thresholds and de minimis rules - some practical safeguards
  • dividend access shares
  • debt forgiveness
  • management fees and services
  • interest-free loans
  • shifting income and gains.
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Super splitting

Author(s):  Steven WILD

Since 1 January 2006, spouses have been able to split superannuation contributions. The new measures are intended to assist families to maximise the benefits of superannuation, especially where there is a non-working, or low income spouse. This paper focusses on:

  • how, when, and with whom, can contributions be split?
  • the taxation consequences for the 'splitting spouse', the 'receiving spouse' and the fund
  • trust deed amendments and other documentary requirements
  • planning opportunities
  • tricks and traps.
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Recent developments in GST and property

Author(s):  Lachlan R WOLFERS

Division 75 of the GST Act is conceptually one of the simplest and most logical provisions of Australia’s taxing legislation.

Click here to view Part 2 of this paper, which was published in the August 2006 edition of Taxation in Australia.

Part 1 and 2 were jointly presented on 5 May 2006 at the SA State Convention and on 26 May 2006 at the NSW State Convention.

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Practical CGT problems in developing residential property

Author(s):  Gordon S COOPER

The family home is often the most valuable asset owned by an individual and in rising real property markets securing the CGT main residence exemption is critical. Further, residential land holdings often give rise to subdivision and development opportunities particularly in growth regions. Gordon has significant practical experience in this area and will expose the problem tax issues which may arise in practice. This paper focusses on:

  • securing main residence exemption
  • does Janmor Nominees have contemporary relevance?
  • strategies for main residence subdivisions/developments and for land holdings exceeding 2 hectares
  • accessing CGT concessions
  • when does residential land become trading stock/a revenue asset?
  • when does a residential land owner become a property developer?
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The erosion of asset protection

Author(s):  Matthew TRIPODI

People have long sought to protect their personal and business assets by separating ownership from risk. However, the Government now seems committed to giving creditors greater access to assets (including superannuation) controlled by a bankrupt and their associates. The Government's proposals have brought into question the ongoing effectiveness of common asset protection strategies. This paper focusses on:

  • the current bankruptcy rules and common asset protection strategies
  • the content and current status of the Government's proposals
  • the 2005 'Bankruptcy and family law' amendments
  • the likely impact of the above on asset protection strategies going forward.
This paper was originally presented on 6 May 2006 at the South Australian State Convention held in the Barossa Valley. This version contains some update to cover changes that occurred since then.
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Discretionary trusts: where are we now with splitting and cloning?

Author(s):  Andrew SINCLAIR

One of the hot topics in trusts in the last few years has been using splitting or cloning as a solution to dividing control of family discretionary trusts among the next generation. It is important to understand what is being done, how and when and why it works from both a practical and tax view and what are the pitfalls. This paper focusses on:

  • practical reasons for splitting or cloning
  • can you effectively ‘divide’ a trust’s assets under trust law?
  • tax outcomes for CGT assets, trading stock and plant and equipment
  • stamp duty issues
  • family trust election constraints
  • practical issues.
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