The Tax Specialist

Articles from the current issue:

• Family law

  shopping_cart Add to cart 01 Aug 2019

  With relationship breakdowns becoming more common and the structures of client’s wealth becoming more complex, it is important for advisers to be aware of the tax implications that can arise when dealing with a property settlement following a relationship breakdown. Exemptions and concessions are available for both capital gains tax and stamp duty; however, in each case, there are specific requirements that must be met in order for them to apply. Advisers need to be aware of these requirements when drafting or negotiating property settlements in order to prevent significant unintended tax consequences from arising. This article examines common tax implications arising under property settlements, the relevant exemptions and concessions that are available, and the requirements that must be met in each case.

• Anti-hybrids: The current state of play

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  The anti-hybrid rules introduced in Australia in August 2018 started to take effect for entities with a 30 June year end on 1 July 2019. The recent start date means that taxpayers have started to focus on how the new rules will apply to them and the ATO has started to develop guidance products on the provisions. The provisions are complex and potentially broad in their application and will result in changes to the Australian tax treatment of many instruments and arrangements. This article provides a general overview of the rules and their development, before considering a series of practical examples exploring how the rules may affect a range of common instruments and structures.

• New Victorian economic entitlement duty

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  Property developers, investors and service professionals may need to review and restructure development services arrangements so that fees calculated by reference to the distributions, receipts, profits or proceeds of a landowner’s land are not a synthetic acquisition of an interest in the land subject to duty. The economic entitlement provisions establish an economic equivalence alternative postulate test. The alternative postulate test should not be limited to equivalent profit effect and should include other rights, obligations and risks of similarity, fungibility or functional equivalence to land ownership. An alternative postulate test based on other rights, obligations and risks provides a predictable basis to exclude from duty arrangements that are not equivalence to land ownership. More informative guidance on the scope of the economic entitlement test and equivalence is needed.

• Tax consolidation for SMEs

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  Tax consolidation is often misunderstood as an area of tax law only applying to big, diverse companies. Many advisers do not understand the potential uses for it in a small-to-medium enterprise (SME) environment. This article provides an SME adviser with an understanding of: different situations where tax consolidation may benefit their client; the tax consolidation calculation and issues that may arise when they apply it; how to structure into a tax consolidation environment and achieve an appropriate outcome for their client; how to manage tax losses in a consolidation environment; and how to set up a client for a future transaction involving tax consolidation. The article enables an adviser to understand the potential benefits such that they are not afraid to suggest to their client that they use tax consolidation in their structuring decisions.