45th Victorian State Convention: Finding buried treasure
45th Victorian State Convention: Finding buried treasure
Published on 05 Oct 2006
| Took place at Cumberland Lorne Resort
The sessions at this convention were “packed with buried treasure”:
- with a very strong technical and practical focus
- covering a broad range of topics
- with appeal to practitioners from all walks of life
- presented by speakers who have an acknowledged expertise and experience in each of
Get a 20% discount when you buy all the items from this event.
Despite this year’s budget announcements, superannuation remains as complex as ever. The rules have changed and so have the strategies for those wishing to maximise their superannuation benefits. This paper provides you with a practical insight into new superannuation strategies, and demonstrates the growing importance of financial modelling in strategic wealth creation. Topics covered include:
Digging for gold in black holes: Black hole expenditure - what's fixed and what isn't?
“The Lord giveth and the Lord taketh away”. He’s not the only one. The welcome reform of the provisions for deductibility of expenditure otherwise unrecognised in the tax system (so-called “black hole expenditure”) was accompanied by an expansion of the rules defining amounts included in the CGT cost base, thus making those amounts non-deductible under the black hole rules. This paper discusses that feature of the reform, including:
identifying “capital expenditure”, especially in start up contexts
the meaning of “in relation to” the relevant “business”, for example, in a business acquisition context
what expenditure on someone else’s business will be deductible.
It is said that “if anything in life is constant, it is change”. With this change comes the need to review and renew – and tax is no exception. Economic, social and institutional change both domestic and international, require governments to be vigilant about their tax systems. In this paper we look 5 to 10 years ahead and ask:
what will be the source of future stresses and strains on the Australian tax system?
what will be the scope for funding future tax reforms?
what will be the future direction for the tax mix, tax rates and the taxation of super?
how are future tax reforms likely to impact on the tax agent of the future?
Do the ownership structures of your SME clients satisfy their fundamental needs? These case studies apply contemporary restructuring techniques using realistic case studies relevant to enterprises with a turnover of 5 million to 500 million. Identifying what actions are possible and what are not, the case studies provide a practical response to the various and convoluted restructuring rules. They include discussing the capability of corporate groups to restructure given the various ATO pronouncements on demergers and section 45B. The case studies demonstrate techniques to change asset ownership including:
Navigating through corporate restructuring tax provisions
There is now a veritable menu of rollovers, reliefs and consolidation rules which can potentially apply to mergers, demergers and asset transfers. Each item on the menu has its own pre-requisites and there are some common rules to observe. Overlaying that are specific and the general anti-avoidance provisions. This paper will help you understand how they all come together and identify traps to avoid. We will not be cooking the books, but you will learn how to choose from the menu without getting egg on your face. Topics covered in this paper include:
pulling companies apart using the demerger rules
the section 45B ATO practice statement
putting companies back together using the CGT rollover rules
using the consolidation regime to move assets between companies
theoretical possibilities versus practical realities.
Tax issues for property developers, one-off builders and developers
Lachlan R WOLFERS
In 1968 Professor Stone listed as one of a number of “apparently meaningless categories” what he called “the distinction over an unusually penumbral area between capital and income”. That uncertainty continues and now affects property investors and developers both in an income tax/CGT context, and also in a GST context. This paper examines the current issues affecting property investors and developers, with a view to providing some certainty and clarity in an increasingly difficult area. Issues covered include:
distinguishing income from capital for small scale developments - a new take on an age-old theme
how long does it take before a profit or gain is taxed on capital account?
what is the number or scale of developments required before a gain is taxed as ordinary income?
the practical implications of land becoming trading stock
interaction issues between the income tax/CGT position and GST.
In the recent Federal Budget changes arising from the Board of Taxation’s post implementation review of the small business CGT concessions were announced, together with a new significant stakeholder test. This paper re-examines the small business CGT concessions from a practical perspective, highlighting some of the proposed changes and considering the traps that practitioners must continue to monitor. The paper considers:
can a taxpayer’s structure result in a failure to satisfy the threshold tests?
is there an active asset?
what does need to be included in the maximum net asset value test?
how does the connection test operate?
what are the compliance traps?
what are the implications of choosing some concessions over others?
This was also presented by Ron Jorgensen on 21 Octobe 2006 at the Tasmanian State Convention.
This paper discusses the very latest remuneration packaging options and techniques that all organisations should be considering if they want to be employers of choice and retain their valued employees. They are particularly important in today’s highly competitive employment market. Topics discussed include:
HWI audits target a particular segment of the community, thus are approached by all concerned differently to other types of audits. HWI audits have a different dynamic; a different cadence. Between the initial questionnaire from the ATO to the final settlement deed or court decision, many things can, and do, happen. Don’t expect things to be resolved quickly: they rarely will be. This paper takes you through the life-cycle of a “typical” HWI audit (if there is such a thing) and will cover the following:
who are the targets of HWI audits and why?
let’s get it straight: the ATO is not there to help
audit process management - the do’s and don’ts
who should or should not be involved
access to documents - by the ATO and from it
“know when to fold them, know when to hold them, know when to walk away, know when to run” - negotiations and settlement
when to stand and fight it out before the AAT or courts.
The development of IP can be extremely costly. Practitioners therefore need to focus on the best ways to maximise deductions. The commercialisation of IP through licensing and disposal also presents challenges, with different types of IP having different tax treatments. Examining the traps and opportunities for both costs and commercialisation, this paper focuses on:
International tax - there's treasure buried all over the world
Australian taxpayers operating in an international context often face a delicate balancing act between the requirements of one country’s tax rules over another. This paper focusses on some of the common taxation issues faced by Australian inbound and outbound investors, with a focus on our major trading partners, including:
common structures for foreign entities investing in Australia
common structures for Australian entities investing offshore
what the new non-resident CGT rules will mean in practice
recent developments to Australia’s international tax system.
As the ATO ramps up the intensity of its Compliance Program, tax risk reviews, audits and disputes are increasingly important to not merely the tax specialists but to anyone doing business in Australia, including Boards, top management and shareholders. As a result, tax controversy has emerged as a specialist discipline, especially in dealing with issues at the big end of town. This paper focusses on current and emerging developments in practice, with key areas including:
responding to the latest ATO Compliance strategies
recent developments in legal professional privilege and other access and information gathering issues
balancing corporate governance imperatives and practical tax controversy issues
dealing with Part IVA issues in audits and disputes
the impact of the review of self assessment legislation on penalties and interest.
New land tax and stamp duty issues and planning techniques
Following from the recent State and Territory Budgets, stamp duty is going... going... but definitely not gone. The abolition of a number of duties has lead to a sharper focus on real property. We can also see that the impact of CPT Custodian is becoming apparent in both a land tax and stamp duty context. Does it clear or muddy the waters? This paper outlines:
signifi cant stamp duty/land tax outcomes from the 2006/7 State and Territory Budgets
practical application of the High Court decision in CPT Custodian and other recent changes
impact on the application of land rich and “look-through” duty
property and options: how options can be used in a development context
This presentation is centered around the work of the NTLG consolidation subcommittee in addressing the remaining gaps in the measure and escalating issues to Treasury where problems with the existing law have been identified. It also talks about the corporate experience in “living” consolidation (including formation, entries and exits and ATO compliance activity), and where corporate priorities lie in regards to the resolution of those issues identified at the NTLG level. Other topics discussed include:
filling the gaps - the job ahead for the ATO and Treasury
the corporate experience - pressure points and outstanding issues and concerns.
The pending taxation of financial arrangements regime - practical analysis
The policy behind Treasury’s long-awaited proposals relating to the taxation of financial arrangements (TOFA) remains unsettled. However, this paper considers possible practical implications of TOFA for those outside of the finance sector, in relation to common-place transactions including:
the acquisition or construction of major assets
the disposal of significant assets on deferred settlement terms
Holding on to your treasure: bankruptcy and the implications for asset protection
In today’s business world superior enemies often come from unexpected quarters and this particularly applies when insolvency laws have not been adequately addressed when structures have been established. For example in recent years there has been a concerted push by Government to broaden the claw back provisions upon bankruptcy. In this paper we closely examine how these new provisions operate, the planning issues that necessarily arise, opportunities for good structural defence and associated issues including:
the extent of the Bankruptcy Act claw back provisions
the operation of the Bankruptcy Legislation Amendment (Anti-avoidance) Act 2006
implications of the recent High Court decision in Cummins case
an analysis of how specific structures may be subject to challenge by bankruptcy trustees.
Winning treasure from the courts - treatment of compensation payments and damages awards
Suppose a client is offered compensation either for his consent to the cancellation of valuable rights, or to settle a claim for personal injury or unfair discrimination. To deliver the best after tax outcome tax practitioners need to be aware of the possible pitfalls. This paper considers a number of practical case studies exploring:
how damages, costs and pre and post judgement interest are taxed
when they are deductible on ordinary principles or under the new black hole expenditure provisions
when they are consideration for taxable supplies or give rise to an entitlement to an input tax credit
indemnities, damages for breach of warranty, reimbursements and liquidated damages clauses in contracts
difficulties arising when taxation of damages becomes an issue in the conduct of litigation.
Many clients can no longer rely on a simple will or power of attorney to address their complex business and investment affairs and structures. More complex estate planning techniques need to be considered. Techniques addressed in this paper include:
drafting provisions to deal with the offices of trustee, appointor and guardian - particularly in case of the appointment of multiple successors: how most fail and how to get it right
powers of attorney - dealing with companies and trusts
the 'ins' and 'outs' of testamentary trusts including the latest techniques
the principles concerning the payment of executors.