News & Tax Insights

Foreign companies investing in Australia will have new obligations to co-operate with the Tax Office, and if they don’t keep the tax man happy they could face prosecution, fines and potentially be forced to divest the asset, according to Treasurer Morrison’s media release on 22 February. Significant foreign investment into Australia requires approval by the Foreign Investment Review Board (FIRB) and approvals can have conditions applied.  The investor is required to comply with those conditions or face sanctions.  The approval requirements depend on a number of factors including: Whether the investor is a foreign Government; The type of investment (agricultural,…

Question:  Last year, we moved out of our home to relocate and signed an agency agreement and got the real estate agent to find tenants and set up a rental arrangement for the house.  There are some repairs that really should be done to the house including carpentry repairs to the deck at the back of the house, replacement of the dishwasher, replacement of the carpet and painting of the exterior of the house.  Can I get a deduction for the money spent on those items? Answer:  For the money spent on carpentry repairs to the back deck and painting, you can get an immediate…

Under the US Foreign Account Tax Compliance Act (known as FATCA) Australian banks have provided details of over 30,000 customer accounts worth over $5 billion to the US Internal Revenue Service (IRS – the US equivalent of our Tax Office). These are accounts of US citizens and tax residents with Australian bank accounts.  There is a wave of transparency measures being implemented world-wide.  By 2017 close to 100 countries will be sharing non-resident data under the OECD Common Reporting Standard. The Australian Tax Office will receive data from the IRS about Australians with financial accounts in the US and will…

Log on to ASIC’s website – www.asic.gov.au and you can obtain information about how to make a complaint or report misconduct.  This is divided into different categories, many of which must be dealt with by other organisations.  But those matters which are within its responsibilities include troubles with investments, companies which have gone into liquidation or administration, shares, insider trading and operation of companies.  It also carries regulatory responsibility for company auditors and financial planners.  It has a very broad set of responsibilities. Will your complaint or problem be dealt with expeditiously?  Probably not.  The word around the traps is that ASIC doesn’t have the manpower to…

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.…

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…

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.…