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taxInsight - 2013/02 – September

2013/02 – September from taxInsight

Division 293 assessment notices: Government gouges new 15% super tax

In pursuit of its “class warfare”, the Gillard/Swan Labor Government introduced a complicated new 15% super tax on so-called “high income earners” and people will start receiving new assessments very shortly. Broadly, the new tax applies to people earning more than $300,000 and is calculated as a percentage of deductible super contributions. A high income threshold has been fixed at $300,000 and the new tax applies where your adjusted income for surcharge purposes exceeds this amount. This income amount (adjusted income for surcharge purposes) is calculated as follows: Your taxable income Plus reportable fringe benefits Plus total net investment losses […]

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Protect Assets: private use assets

Hold private use assets such as motor vehicles in a discretionary trust for use by beneficiaries rather than in a company to avoid …

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Self Managed Super Funds – Investment properties

A Self Managed Super Fund wanting to borrow to buy a property faces an unnecessary complication in that the property must be held by a separate company under a bare trust on behalf of the Super Fund. When the borrowing is repaid, it is necessary to transfer title of the property from the bare trust to the Super Fund, however in many States this would involve a substantial stamp duty cost. In Queensland, the Duties Act 2001 has been amended to exempt from stamp duty a transfer of property to the Super Fund when the loan is repaid. Due to […]

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A win for the taxpayer

Mr John Symond, the founder of ”Aussie Home Loans” needed advice about how to extract funds from his company to complete construction of his home without paying excessive tax. He went to one of the leading law firms in Australia who specialise in taxation advice and was advised that he could withdraw funds on a tax-free basis by redeeming preference shares issued by a new corporation which owned all of the entities making up the Aussie Home Loans Group. Following an audit, the Tax Office disallowed the arrangement and eventually Mr Symond had to settle with the Tax Office involving […]

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Director Penalty Notices

Heavy responsibilities are placed on directors of companies which fail to pay their PAYG withholding and SGC obligations as they fall due. Directors become personally liable for a penalty equal to the amounts unpaid on their due dates. When these amounts remain unpaid by companies, the ATO will issue Director Penalty Notices to the directors and will only remit those penalties if the company pays the outstanding amounts. The penalty will also be remitted if, within 21 days of receiving the Director Penalty Notice, the directors place the company into Voluntary Administration or Liquidation. This remission however will only take […]

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Question: stock on hand

Question: Our client is a share trader. Can he adopt either cost or market value for his closing share trading stock on hand? Answer: Yes. It is treated in the same way as stock on hand would be treated for a retailer.

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Question: salary sacrifice

Question: What is the total salary sacrifice we can claim in relation to gross wages for all staff? Would salary sacrifice result in reduced requirement for child support? Answer: There is no limit on the amount of salary which can be sacrificed, from a taxation perspective. The requirements are that the arrangement must be entered into before the wages are earned. However, keep in mind any award or other industrial instrument obligations. If you allow an employee to sacrifice her salary to the extent that the actual salary received falls below the award wage, you run the risk that the employee […]

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Save Tax: instalment warrants

Super funds are prohibited from borrowing…

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