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taxInsight - 2014/01 – May

2014/01 – May from taxInsight

Going overseas – are you still a resident of Australia?

The question of residency is extremely important if you are going overseas.  This is because the Australian tax system is based on residency.  If you are going overseas on a permanent basis and cease to become a resident of Australia you are only taxed on Australian sourced income.  Any income earned overseas is disregarded. In a recent case, the taxpayer was a mechanical engineer who went overseas with his wife and was away for the 2006/07 and 2007/08 income years.  He had sold his Australian property and worked in various countries, including Oman, United Arab Emirates, France, Korea and the […]

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Question: CGT – Main Residence

Question: We purchased our Darwin residence in October 1988 and lived there until February 2002. We purchased a Queensland home in October 2001 and initially rented it out. From February 2002 until October 2002 we travelled around Australia and then moved into the Queensland home. Then in October 2003 we sold that Queensland home and purchased another. Our accountants have determined that we were liable for CGT on that Queensland home from the date of purchase until occupancy. We believed we were entitled to exemption because it was intended to be our main residence from purchase. We have heard that it […]

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Save Tax: Travelling Expenses

If you have to travel for business or work related purposes you can claim air fares, bus, train, tram and taxi fares, car hire, meals, accommodation and incidental expenses. Whilst travel between home and work cannot generally be claimed, you can claim the cost of travelling between two jobs or between home and work where you have to transport bulky tools or equipment. If you operate your business from home you can claim travel as part of the work. Tradesmen can claim the costs of travelling to clients whilst itinerant workers can claim deductions if they have to travel to […]

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Marriage split: Husband’s income details go to ATO

The full bench of the Family Court has ordered that documents sought in an audit of the husband’s tax affairs for the income years from 1991 to 2010 be handed over to the Tax Office, where the couple had a settlement matter before the Court.  The decision was made in April this year and the full bench overturned an earlier 2013 decision made by a single Family Court judge who originally said the ATO could not use the Court documents. Mr Darling and his wife had a settlement matter before the Family Court when the Tax Office commenced the audit […]

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Question: GST – Exports

Question: We are a GST registered company as is our customer. We provide positioning services to our customers. A particular customer claims that the services provided are used in Papua New Guinea instead of Australia. This company is a GST registered company in Australia. Is GST applicable or will it be considered as GST-free supplies? Answer: Under section 38-190 of the GST Act, a supply of services is GST-free if it is made to a non-resident who is not in Australia when the item is supplied, provided: The supply is neither a supply of work physically performed on goods situated in […]

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Britain will tax non-residents selling UK residential property

The UK Government plans to apply capital gains tax where a non-resident sells UK residential property from April 2015, the start of the next English tax year.  The new tax will be at a rate of either 18% or 28%.  The particular rate depends on your UK income level. The capital gain will be calculated from April 2015 only. The new tax won’t apply to your home or former home for the period that you held it as your main residence. The new tax won’t apply to boarding schools, nursing homes, other communal residential properties, foreign real estate investment trusts […]

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Employers, companies, trusts and super funds to give bank account details to ATO

FBT returns and tax returns for companies, trusts, super funds, body corporates will need to disclose the tax paying entity’s bank account details from July 2014.  Also, an application for refund of franking credits will have to disclose the applicant’s bank account details from that date. This follows on from the Tax Office initiative for the 2013 year tax returns where individuals were required to disclose their bank account details on their tax return and is part of a big push to eliminate the need to send out refund cheques. WTB 567/2014   Andrew Lovett 5 May 2014

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Carrying on a business?

In February, the Federal Court decided there was no primary production business being carried on despite 14 separate farming activities being planned for a 500 acre property west of Brisbane.  The Court was considering an appeal in Nelson after an earlier 2012 decision by the Tribunal to deny farm based deductions claimed for the 2004 to 2009 income years.  The Court and the Tribunal relied on factors set out in Taxation Ruling 97/11 and recognised that the indicia of carrying on a business set out in the Ruling as correct at law. The indicia of carrying on a business set […]

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