taxInsight - 2013/03 – October

2013/03 – October from taxInsight

Many changes in the wind

With the election of the Liberal/National Party Coalition to form a new Government, we can look forward to a number of significant changes to our taxation laws. Firstly, we have the big ticket items of getting rid of the Mining Tax and the Carbon Tax and cancelling the proposed abolition of the Statutory Method for determining Fringe Benefits Tax on motor vehicles.  This latter measure which was brought in without consultation was on the way to destroying salary packaging advisory businesses and creating considerable harm to the motor vehicle industry. To make some savings to help pay for all of […]

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Save Tax: relocation costs

Expenses paid by an employer to meet or reimburse relocation costs of an employee who is required to relocate for work purposes, are exempt from FBT.  This includes incidental purchase costs including legal and stamp duty for the purchase of a new dwelling by the employee and selling costs for the sale of an existing dwelling.  The old home must be sold within two years of the relocation and the new home must be purchased within four years.

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Question: travelling expenses

Question:  We understand that if you are an employee required to travel for work-related purposes and in receipt of a travel allowance from your employer, you can claim deductions for expenses incurred. Is the travel allowance paid to the employee taxed?  If not, why would you then be able to claim a tax deduction as well? Answer:  Allowances are generally taxed. If you receive a travel allowance from your employer, the amount should be included in your tax return and you should then claim deductions for expenses incurred. If the employer pays a travel allowance within rates set out in […]

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Are you a share trader or investor?

This is a perennial question. If you are a share investor, your shares are held on capital account and, provided you meet the CGT conditions (eg holding an asset for more than twelve months), you are subject to tax on only 50% of the gains. However, if you are a share trader, you can claim up-front deductions for any paper losses you might incur because your shares are treated as trading stock and you can value the shares you hold at the end of a financial year at either their cost or market value. So, if you want to get […]

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Question: key man insurance

Question: My client holds one share in a company with a paid up capital of $2. In October last year, the other shareholder was killed in a motor vehicle accident. Prior to his death, the company took out a life insurance policy on both shareholders. The insurance policy settlement on the deceased shareholder is over $200,000. My client wishes to pay the insurance money to the deceased shareholder’s spouse and wishes the spouse to transfer the share she holds as personal representative of the deceased shareholder to my client. The insurance policy was supposed to have been taken out in […]

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Self Managed Super Funds – Ever increasing complexities

Despite giving lip service to “red tape reduction” and setting up committees for that purpose, it seems that Governments and their associated bureaucracies cannot help themselves. Here are some extra complexities placed on Super Fund trustees just in the past several months: Abolition of excess concessional contributions tax. This is not an abolition, it will be paid by the taxpayer instead of the Super Fund and an interest charge will be added. However, you can arrange for a release of excess concessional contributions which would otherwise automatically trigger the bring forward provisions for non-concessional contributions. Division 293 Tax. This new […]

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Save Tax: taxi travel

Taxi travel provided to employees arriving or leaving the place of work at any time during the working day is FBT exempt. Hence, if you take a salary sacrifice and arrange for your employer to pay for your taxi travel to and from work, this could produce a substantial tax benefit.

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