News & Tax Insights

When subdividing a main residence property, sell your existing home and build a new main residence on the subdivided vacant lot. The sale of the family home is CGT exempt as it is your main residence. When your new home is constructed on the vacant lot, this becomes your next main residence and the subsequent sale of this property would be partially CGT exempt. If you build a house on the vacant lot and sell it, you would not be able to claim main residence exemption because you never lived in it.

The benchmark interest rate for Division 7A loans has reduced from 6.2% to 5.95% for the 2014-15 financial year. Where a company makes a loan to a shareholder or their associate and the loan is not paid back before the lodgement date of the tax return for the year that the loan was made, the loan will be deemed to be a unfranked dividend unless it is put on a commercial footing with terms compliant with Division 7A of the 36 Tax Act including repayments and interest charges at this benchmark rate. The deemed unfranked dividend penalty can also apply…

If you travel away from home for more than five nights, you must keep a travel diary in addition to receipts, invoices and other travel documents that prove your travel expenses, including meals and accommodation. The travel diary should include details of: Where the activity took place The nature of the activity The date and approximate time the activity began The time taken for the activity The date the entry was made in the diary Although this refers to a 'diary', the substantiation does not specifically have to be a physical diary, but can also be a calender event or…

There are a number of changes to personal income tax that apply from the beginning of the 2014/15 financial year.  Here is a list: Medicare levy increases from 1.5% to 2% to fund the disability insurance scheme; Debt and deficit levy of 2% is introduced to increase the top marginal tax rate from 45% to 47% for taxable income over the $180,000 threshold.  Together with the increase in the Medicare levy, this temporary levy which is in place for three financial years, means the effective top marginal tax rate will become 49%; Superannuation guarantee rate increases from 9.25% to 9.5%;…

You can claim a deduction for fees paid to a tax agent for preparing and lodging your income tax return, costs in relation to a Tax Office audit or objecting against an assessment, applying for an extension of time or valuations required for tax purposes. Travelling costs to see your tax agent are also deductible.

The Administrative Appeals Tribunal (the Tribunal) refused an appeal by a NSW train guard for a deduction of $3,700 against his 2010 tax for car expenses on the cents per kilometre basis.  The guard made the claim because he carried mandatory work items to and from work including: Full folders of railway instructions; A watch showing the correct time; Multi-coloured torch; Notebook; Working timetable; Diagram book; A red and a green flag; Identification card; Hand-held radio; Key kit; Train status book; Departmental issue mobile phone; A pager; A whistle; A safety vest; and A pad of “delay slips”. The claim…

Bert Lancaster is an enterprising young mining engineer who has just been offered a new job in New Zealand. He recently bought his first home in Brisbane in January. He starts work in NZ in June on a three year contract and can take a leave of absence from his old Australian employer for up to a year; a policy they have to retain staff. Bert has moved into the home and made best use of the State Government first home owners’ duty concession. He will not rent the property out until February next year. The NZ employer will pay…