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taxInsight - 2016/01 – February

2016/01 – February from taxInsight

Can’t claim $20k loss: Share trading not a business

In a tough decision, the Tribunal has refused a $20k deduction for losses in share trading activities for a casual childcare educator in the 2011 tax year (Devi v FCT [2016 AATA 67]). In that year, the taxpayer earned $40k in childcare wages working between 25 and 30 hours per week and commenced trading shares using $60k of savings and a $40k margin loan. 71 purchases of bank, mining and smaller company shares were made to a value of $380k.  37 sales to a value of $315k were made.  Most transactions took place in the first half of the year. […]

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Netflix tax before Parliament

At the moment, internet supplies of movies, music, apps, games, eBooks, other digital products and services such as consultancy and professional services made by a foreign supplier are generally exempt from GST. In line with previous Government Budget announcements, legislation has been introduced to Parliament to apply GST to these digital supplies when they are made to an Australian consumer. Under the new law, the supplier or the digital platform, will have a limited and simplified GST registration and will remit GST on a quarterly basis but not be able to claim any input tax credits. The new law will […]

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Appeal lost: Foreign companies were tax residents of Australia

The Full Bench of the Federal Court declined an appeal by multiple foreign companies against an assessment based on them being Australian tax residents. The foreign companies included: Hua Wang Bank Berhad (offshore bank incorporated in Samoa); Bywater Investments Limited (incorporated in the Bahamas); Chemical Trustee Limited (incorporated in the UK); and Derrin Brothers Property Limited (incorporated in the UK). Documents provided in evidence indicated that all of the companies were ultimately owned and controlled by an accountant based in Sydney.  Each company made profits buying and selling ASX listed shares.  If they were non-resident and the shares were held […]

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Sale of land for $2m or more? Buyer beware (and seller)!

Foreign resident capital gains withholding payments will apply where a foreign owner sells land or land interests with a market value of $2m or more requiring the purchaser to withhold and pay 10% of the purchase price to the Tax Office.  At the time of writing, the legislation is before the Senate and expected to become law.  The new law will apply to contracts signed from July 2016. This is another step in the Government becoming tougher on capital gains for non-residents.  It follows the removal of the 50% CGT discount for non-residents from the budget night in May 2012. […]

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