The Tax Specialist

Articles from the current issue:

• Superannuation and estate planning

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  Superannuation and its link with estate planning has taken a big step forward since the 2017 superannuation reforms and the increase in the number of cases being contested before the courts and tribunals. Superannuation provides a useful vehicle as part of the management of a client’s estate planning, but it is not exhaustive due to the limits imposed by the introduction of the transfer balance cap and the value of death benefits that can be retained in superannuation. It is essential that an adviser understands how death benefits can be retained in superannuation and who is eligible to receive lump sums and pensions. The validity of death benefit nominations, provisions of the fund’s trust deed, and the last will and testament of the deceased are material to making sure that the right amount is paid to the right person at the right time. This article covers the superannuation side of estate planning, and discusses who is eligible to receive death benefit payments and the issues with a member’s transfer balance cap.

• Fraud and evasion

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  Income tax affairs are closed after two or four years. There are many exceptions, but a general exception for “fraud or evasion” causes angst. This exception originated in measures introduced to benefit taxpayers. The beneficial origin is easy to forget when a client is dismayed at being accused by a government agency of “fraud” or “evasion”. The article explains the meaning and origin of these expressions, and examples of conduct held to fall on one or other side of the line are given. The facts, not just some oft-quoted paragraphs about the law, need to be understood in the old cases. The article revisits classic High Court cases, and explains forgotten Board of Review decisions, providing illustrations. A difficult legal issue presently is how to challenge the Commissioner’s “opinion” that there is fraud or evasion. The article suggests making it an objective test, not depending on an “opinion”, and recommends how to handle these problems pending law reform.

• In the zone: Tax relief for the Australian bush

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  This article argues that the original value of the £40 per annum zone tax concession, granted in 1945 to compensate the residents of remote areas of Australia’s outback for enduring uncongenial climatic conditions, isolation and high comparative costs of living, has eroded over time. In 1945, the zone tax offset represented approximately 12% of the average weekly income. However, by 2018, though the concession had risen to $338 per annum, the concession had fallen to just 0.39% of the average income for most residents. Against this background, this article argues that the concession should be restored to its comparative value which remote taxpayers enjoyed at the time of its inception to recognise the relativity of the concession and the equity of these taxpayers compared to those who do not have to endure the uncongenial conditions that the concession was designed to compensate for.

• Changes to the US tax rules

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  This article discusses those aspects of the 2017 US tax reform which have most relevance to Australian corporate and international taxation, both from a tax policy perspective and for inbound and outbound investment to and from the US. It also discusses how, in 2019, various elements of the US tax reform have become part of the international tax agenda of the inclusive framework on base erosion and profit shifting, which is now the main multilateral means of setting international tax norms. It suggests that the US tax reform is more complex than the common preoccupation with the reduction of the US corporate tax rate, and that the international tax system is close to a significant paradigm shift as a result of US tax reform and the success of the OECD multilateral instrument.