Taxation in Australia

Articles from the current issue:

• Tax counsel's report: Is 40 the new 30?

  file_download Free to download 01 Apr 2020

  In this month’s column, tax counsel Stephanie Caredes discusses the Tax Practitioners Board’s proposal to increase CPE for registered agents to 40 hours a year.

• President's report: Reflections from The Tax Summit 2020

  file_download Free to download 01 Apr 2020

  President Peter Godber on the appetite for tax reform and the value of genuine connections.

• Structuring cross-border transactions: Part 1

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  TD 2019/D6 and TD 2019/D7 raise important considerations in international tax planning and the structuring of Australian investments, as all capital gains (whether foreign-sourced or not) that are attributed to a foreign resident beneficiary of an Australian resident trust are now assessable to that beneficiary, unless the trust is a fixed trust. The draft determinations are contentious due to a disconnect between the relevant legislative provisions and the ATO’s interpretation of them, and as they do not address Australia’s double tax agreements. Further, they lead to differing tax outcomes for foreign residents assessed on capital gains from the disposal of non-taxable Australian property, depending on the structure through which they derive that gain. Consequently, foreign resident taxpayers require more clarity on this aspect of Australian tax law.

• The director penalty regime and its extension to GST

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  With effect from 1 April 2020, company directors will have a heightened risk of being made personally liable for their company’s outstanding tax liabilities. Pursuant to the Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020, which received royal assent on 17 February 2020, the director penalty regime has been extended to make company directors personally liable for unpaid GST (including luxury car tax and wine equalisation tax). The measures, which were introduced as part of the government’s ongoing reform of Australia’s corporate insolvency regime, will impact many company directors as it is very common for businesses to have GST debts. It is critical that directors ensure that all business activity statements and GST returns are lodged before the statutory lockdown date, to ensure that they can achieve remission of their personal liabilities by placing the company into administration or appointing a liquidator.

• Mid market focus: The application of GST to sales of real property

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  A reminder on the importance of correctly characterising the nature of a property when considering the GST implications of a property sale.

• SMSF death benefit distributions: Lessons from Marsella v Wareham

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  Careful attention to succession planning for a self-managed superannuation fund (SMSF) can ensure a smooth transfer of wealth following the death of a member. A key part of the execution of any succession plan is the SMSF trustee(s). When the interests of the SMSF beneficiaries are not put first by the trustee(s), serious ramifications can result. The decision in Marsella v Wareham looked at both the actions of the trustees and the documentation (including correspondence between the parties) to assess
  whether the trustees had indeed breached their fiduciary duties. This case highlights key lessons for SMSF trustees, members and advisers in the planning and execution of SMSF administration after the death of a member.

• A matter of trusts: Transfer to a trustee found to be non-dutiable

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  This article examines the application of a Victorian duty exemption for transfers of land to trustees where there is no change in beneficial ownership.

• Tax news - At a glance: March – What happened in tax?

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  The following points highlight important federal tax developments that occurred during March 2020. 

• Death and income tax – Some discrete issues: part 2

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  This is the final part of a two-part series examining some standalone issues about tax and deceased estates. This article looks at the intricacies of the main residence exemption as it applies to a trustee or beneficiary of the estate. It examines how the cost base of the deceased’s dwelling is determined in the hands of the trustee/beneficiary and the conditions that need to be satisfied for a full exemption, including the Commissioner’s safe harbour for the sale of a dwelling outside the standard two-year exemption period. Importantly, the article also considers the recent changes that can deny the main residence exemption in some cases where the deceased person or beneficiary is a foreign resident. This article also considers when an agreement will be accepted by the Commissioner as satisfying the requirements of s 128-20(1)(d) of the Income Tax Assessment Act 1997 (Cth) as being a deed of arrangement under which an asset passes to a beneficiary.

• Superannuation: How the CGT rules work when a pension is in play

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  How the CGT rules interact with the pension exemption is somewhat complex so tax advisers should carefully review the legislative schema rather than relying on general rules of thumb.

• Alternative assets insights: TA 2020/1: Intangible assets

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  The ATO continues its focus on cross-border arrangements involving intangible assets with the release of TA 2020/1.

• CEO's report: At the heart of a thriving tax community

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  CEO Giles Hurst on the Tax Adviser of the Year Awards, turbulent times ahead and succeeding as part of a professional community.

• Tax tips: A transfer of goodwill?

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  A recent NSW Supreme Court decision considered issues relating to the concepts of “transfer” and “goodwill” for the purposes of the Duties Act 1997 (NSW) as previously enacted.