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ConTax Newsletter May 2013

Global Leaders in Tax meet in Australia

On 19 March 2013, Chartered Tax Advisers from The Tax Institute’s sister bodies in the UK (Chartered Institute of Taxation) and Ireland (Irish Tax Institute) joined some of our very own – and new – CTAs in Sydney for an exclusive networking event.
The event was hosted by KPMG and provided CTAs with the opportunity to hear from leading tax experts on the latest hot tax topics in Australian direct and corporate tax.
Since we launched this new designation in May last year, which is the pinnacle of membership at The Tax Institute, we have had over 7,500 tax professionals claim Chartered Tax Adviser (CTA) status in Australia and be recognised as industry leaders in a number of international jurisdictions.
The Chartered Tax Adviser is the new accreditation that unites global leaders in tax. It is Australia’s only internationally recognised tax designation. And, the only way to gain confidence that your tax advice is of a worldwide standard.

A great night!

ConTax May 2013 Intro

CEO of The Tax Institute Noel Rowland with CEO of the Chartered Institute of Taxation (UK) Peter Fanning and CEO of the Irish Tax Institute Mark Redmond [L-R].

View more photos on The Tax Institute’s blog.

How to make your CV standout from the pack

For employers, graduate CV’s are all much of a muchness: they state personal details, academic results and part-time work that a graduate might have undertaken whilst at University.  While all of this information is necessary it does not really make a graduate stand out.  If you want to impress a future employer and get to the next step being invited to an interview then you need to convey to the reader of your CV that tax is where you see your future and outline extra activities that you have undertaken during your studies that will distinguish you from the other graduates.  Remember that prospective employers often receive hundreds of applications for positions and unless your CV stands out you often will not make it to second base!

This article describes a variety of different activities that you can undertake during your studies at university that may ultimately assist in getting your first graduate position within your firm of choice.

Click here to read the full article.

Feature Article - The Institutional Framework of Taxation in Australia

Contributed by Annette Morgan, Lecturer Taxation, Curtin Law School, Curtin University

Introduction.

The Australian Taxation System is one of the most complex in the world and is made up of approximately 125 taxes including Commonwealth taxes such as Income Tax, Capital Gains Tax, Fringe Benefits Tax and Goods and Services Tax, just to name a few.  There are many different organisations that play different and varied roles within this system to ensure the integrity of the tax system, including the equitable treatment of all Australians under the tax system in Australia.  It is vital that any person who is considering becoming a part of the Australian taxation profession has a full and detailed knowledge of the system and how it works.  The aim of this article is to explain the most important aspects of the institutional framework of the Commonwealth taxation system of which you as a future tax professional should be aware.

Click here to read this article in full.

Sample Exam Questions

Practice Question

This a sample of an example question in Taxation 334 dealing with CGT small business concessions.

Henry disposed of an active asset for $20,000 and derived a capital gain of $4,000.  Henry acquires two replacement assets for $12,000 and $8,000 and elects for small business roll-over relief.  Both assets are different types of active assets from the asset that was disposed of.

Two years later, Henry sells the $8,000 roll-over asset for $10,000 which results in a capital gains on that asset of $2,000.  Henry does not apply for roll-over relief.

What are the CGT implications to Henry?

Answer
The capital gain of $4,000 on the original asset is merely deferred until such time as the applicable replacement assets are disposed of, or lose their status.  The capital gain continues to be deferred on a “last out” basis , ie a capital gain does not crystallise under CGT event J2 until such time as the cost of the bundle of replacement assets still held falls below the amount of the roll-over.

Assuming a replacement asset is not acquired and the retirement exemption is not applied when the $8,000 asset is disposed of, CGT Event A1 would apply to produce a capital gain of $2,000 (being the gain on the disposal of the $8,000 asset).  At this point, CGT Event J2 does not apply to the deferred capital gain of $4,000 because Henry still holds a replacement asset that cost him $12,000 (ie an amount that is greater than $4,000).  The deferred capital gain of $4,000 would only be crystallised under CGT event J2 when Henry sells the other replacement asset that was acquired by him for $12,000.

Assuming that Henry satisfies the basic conditions, he will have access to the small business CGT concessions.  Henry will be able to access the 50% general discount (he is an individual and the assets have been held for at least 12 months) and also the 50% small business reduction in respect of the sale of the $8,000 replacement asset (CGT Event A1).  This will have the effect of eliminating 75% of the $2,000 capital gain.  The remaining $500 gain may be further reduced by the retirement exemption of small business roll-over relief.

In relation to any later capital gain of the $4,000 deferred capital gain under CGT event J2, the general CGT discount, 15 year exemption and 50% active asset reduction are not available for J2 events.  However the $4,000 gain may be reduced by either the retirement exemption or small business roll-over relief.

Any utilisation of the small business roll-over would only result in a further deferral of the gain.  Upon subsequent disposal if no new roll-over relief is or can be elected, the gain would be crystallised under CGT Event J2.  Alternatively, should a replacement asset either not be acquired or there be insufficient expenditure on a replacement asset within two years, there would be a crystallisation of the gain under CGT Event J5 or J6.

Exam question provided by Annette Morgan, Lecturer Taxation, Curtin Law School, Curtin University

Pathways to tax agent registration

The course choices you make now at university (and after) are important in starting your career, and in particular if you are considering registering as a tax agent with the Tax Practitioners Board (TPB), (the national Board responsible for the registration and regulation of tax practitioners and for ensuring compliance with the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (course).
Registering as a tax agent is a great way to establish you career as a tax professional. Our courses are the key to gaining the required confidence in undertaking practical tax compliance activities of the Australian tax system. Be informed! What do you need to do to meet the strict education requirements of the TPB.

As of 1 March 2013, the requirements state that if you register under a number of items (see summary requirements table) you must complete a course in commercial law as a minimum education criterion. To help aspiring tax agents, we have recently launched a new course in commercial law for those individuals who require this field of study.

With our Course in Australian Taxation Law this means The Tax Institute now has two course streams with the stamp of approval from the TPB - specifically designed to meet the education requirements.
To provide some insight into this new course, we interviewed Dale Pinto, CTA, Professor of Taxation Law and Head of the Department of Taxation at Curtin Law School, as well as former board member of the TPB (2009 – 2012), to present his views on why commercial law is critical to developing skills for tax professionals.

In our video, Dale also discusses the content and structure of the course, and what makes the Institute’s commercial law unique.

Watch the video on The Tax Institute’s blog.

Pathways to tax agent registration

The course choices you make now at university (and after) are important in starting your career, and in particular if you are considering registering as a tax agent with the Tax Practitioners Board (TPB), (the national Board responsible for the registration and regulation of tax practitioners and for ensuring compliance with the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (course).

Registering as a tax agent is a great way to establish you career as a tax professional. Our courses are the key to gaining the required confidence in undertaking practical tax compliance activities of the Australian tax system. Be informed! What do you need to do to meet the strict education requirements of the TPB.

As of 1 March 2013, the requirements state that if you register under a number of items (see summary requirements table) you must complete a course in commercial law as a minimum education criterion. To help aspiring tax agents, we have recently launched a new course in commercial law for those individuals who require this field of study.

With our Course in Australian Taxation Law this means The Tax Institute now has two course streams with the stamp of approval from the TPB - specifically designed to meet the education requirements.
To provide some insight into this new course, we interviewed Dale Pinto, CTA, Professor of Taxation Law and Head of the Department of Taxation at Curtin Law School, as well as former board member of the TPB (2009 – 2012), to present his views on why commercial law is critical to developing skills for tax professionals.

In our video, Dale also discusses the content and structure of the course, and what makes the Institute’s commercial law unique.

Watch the video on The Tax Institute’s blog.

Recent Tax Cases of Interest

Young Practitioner Profile

Contax JF 201302

Name: Ojas Gandhi

Employer: Moore Stephens Pty Ltd (Perth)

Position: Intermediate Accountant

Short bio: Ojas completed a double degree in Commerce and Economics at the University of Western Australia in 2009. Whilst completing his undergraduate degree, he concurrently studied towards obtaining his Private Pilot’s Licence. As a keen taxation enthusiast he went on to complete a Graduate Certificate in Taxation at Curtin University for which he was awarded the best graduating student’s prize in 2011.

He began work in the Tax division as a graduate accountant at Moore Stephens in 2011. Since beginning full-time work he has completed both the Foundations and Advanced Tax course to obtain a Diploma in Australian Taxation Law with the Tax Institute and is on the verge of completing the Chartered Accountants’ Program.

Describe you current role:

My current role within Moore Stephens involves working closely with qualified Managers and Partners in providing both tax advice to clients and assisting them in meeting their taxation obligations.

On a day to day basis I am involved in the preparation of Income Tax Returns for Individuals, Partnerships, Companies, Trusts and Superfunds. Every job is different and the issues that arise vary from job to job.

As a mid-tier firm we have a very diverse client base hence we deal with many different aspects of the taxation system. My role encompasses providing compliance and advisory services for our clients in areas from Income Tax and GST, to International Tax and Capital Gains Taxes.

I am also involved in managing taxation disputes for clients and assisting them during an audit or investigation.

Describe your Taxation Institute committee or contributing involvement: At present, I am not involved with the Tax Institute's Committee, however I do regularly attend various training seminars conducted by the Institute.

What are your career highlights?

Landing my first job as a graduate accountant would have to be the highlight of my career to date. 

Why did you join the Taxation Institute?

The Tax Institute provides me with an excellent opportunity to expand my knowledge, stay up to date with the latest news, rulings and ATO developments. It also enables me to meet like-minded professionals and be part of and promote Australia’s pre-eminent professional body for tax practitioners.   

What advice can you give to graduates? 

  1. Don’t be greedy - after all money isn’t everything. Try and learn as much as you can in the early years of your career and choose an employer who is willing to invest in your learning and development. As you learn more you will not only be highly valued by your current employer, but also amongst your peers. Take one step at a time and the money will soon follow.
  2. Further educate yourself – If you want to distinguish yourself from others and progress faster in your career, I suggest you to enrol in various Tax courses and seminars held by both the Tax Institute and other Institutions. Tax is a specialised subject, hence requires continuous reading and keeping up to date with changes in Tax Law. I strongly recommend those who are motivated to succeed as a tax practitioner to commence the Masters in Tax course, even if only one unit per semester.
  3. Enjoy your work– You need to enjoy you work and be enthusiastic. When you love your work, you will not only have the passion and energy to work, but also be excited about going to work instead of dreading it. If you love your work, nothing will be too hard to accomplish. Your first role may not be your dream job, but everyone has to start somewhere.
  4. Maintain a Work - Life Balance – In the early years of your career you may find it challenging to juggle the demands of your new job and the rest of your life. Try and prioritise your time and learn to set and enforce the boundaries between work and life that are right for you to avoid excess stress.

Who or what inspires you?

I am inspired by my clients’ success and being able to be a part of that. Taxation affects everyone at virtually all stages of the life cycle, so it is really inspiring to be able to suggest tax-effective strategies to clients and see them being implemented to save clients’ taxes and simultaneously applying the same strategies for my personal tax affairs.

Credit must go to the directors at my firm who inspire me to achieve my career goals and to participate in the firm’s goals.

What do you do to unwind?

As a keen fitness enthusiast I partake in various athletic events including triathlon competitions and charity events. On a weekend, I enjoying flying to places I have never been to.

Favourite Holiday Destination?

I’d definitely love to visit Italy.

Special offers from our Business Alliance Partners

 The Tax Institute has negotiated special rates on your behalf with our Business Alliance Partners. Some of these include companies such as CCH Australia, HSBC, Thomson Reuters, Thrifty and Wine Direct.

To access these special deals and more, please visit our website and have your member log in details handy.

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