News & Tax Insights

QLD Absentee land tax

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Governments have been cracking down with increased taxation on non-residents that own land here in Australia. That’s happening at a Commonwealth and State level. From July 2018, the Queensland Government implemented Absentee land tax rules. Usually, somebody’s home is exempt for land tax purposes. If you are undertaking expatriate duties overseas, it’s important with these relatively new Absentee land tax rules to check your status against the criteria to make sure you don’t get a surprise land tax bill. The recent 2019 Queensland State Budget contained both “carrots” and “sticks” here with a carveout for Australian citizens and permanent residents…

Payroll tax update for Queensland

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This is good news for small and particularly regional employers, and includes the following changes: • Reduction in tax payable for small businesses by increasing the exemption threshold to $1.3m • A 1% rate reduction for regional employers • A temporary rebate of up to $20,000 for businesses taking on new employees • Continuing the 50% payroll tax rebate on the wages of apprentices and trainees until 30 June 2021 and • Increasing the payroll tax for employers with taxable wages above $6.5m. The Government is delivering a package of targeted payroll tax measures to drive employment in Queensland businesses,…

Tax advantages for celebrities, sports people and entertainers

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This video is about Government moves to prevent high profile sportspeople, celebrities and entertainers from gaining income splitting tax advantages by licencing their fame or image to a related company or trust. There was a budget announcement, consultation paper but, as yet, no legislation. Nonetheless, high profile people should take care with licencing arrangements with related entities as the Tax Office has changed its interpretation of existing law and removed earlier guidance that provided a “safe harbour”.

Can you claim a tax deduction for cleaning up an environmental mess?

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Broadly yes, provided the expenditure is for the sole or dominant purpose of environmental protection activities that are sufficiently linked to your earning activities. You can claim an immediate tax deduction for the costs of environmental protection activities which are undertaken by you, or on your behalf, to: prevent, fight or remedy pollution or treat, clean up, remove or store waste where that pollution or waste results from or is likely to result from: your earning activity the site of your earning activity, or a site where a business was carried on and you acquired and continue to carry on…

Tax credits for junior minerals explorers

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Investors in junior minerals explorers will benefit from a new tax credit system with Government legislation now under consideration in the Senate. The new rules replace the Exploration Development Incentive and allow junior explorers to sacrifice their carry forward tax losses and distribute a refundable tax credit to new investors. This article will be of interest to mining professionals generally, leadership of junior minerals explorers and investors interested in that sector and that are seeking tax effective securities for their portfolio. You can use this information to keep up to date, monitor the progress of the legislation, optimise the management…

Big tax breaks for investors in new innovative companies

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Sophisticated investors in early stage innovative companies can receive a tax credit of 20% of their investment, up to a limit of $200,000, and subsequent sale of the company shares will be capital gains tax free provided they are held for 12 months to ten years. There are also concessional capital gains tax outcomes if the shares are held for longer than ten years. Smaller investors that don’t meet the “sophisticated investor” test are eligible for the tax incentives only if their investment in early stage innovative companies is $50,000 or less, for any particular tax year. Question: What are…

New rules to help directors save their company

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The Government changed the Corporations Act in September 2017 to provide, so called, ‘safe harbour’ rules to help directors rescue their company if they are concerned that it can’t or may not be able to pay its debts when they fall due. The new rules soften the subsisting insolvent trading regime which sheets home to directors the personal liability for the debts a company incurs whilst trading at a time that it is insolvent and place a responsibility on directors to put their company into administration or liquidation. Personal responsibility for a company’s insolvent trading debts applies: to someone who…

Government tries to fix the glitch in company tax cut. Does it make things worse?

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Earlier in 2017, the Government introduced legislation to cut all company tax rates progressively from 30% to 25%, over the next decade.  They did not get the full suite of tax cuts through the Senate but the Parliament did pass amended legislation providing tax cuts for smaller companies conducting a business.  Unfortunately, there was a glitch in how eligible companies were determined.  The Government has now introduced amending legislation to the Parliament to fix that glitch but there may be problems remaining. Under the current law, companies that operate a business have their tax rate cut to 27.5% where: Aggregated…

Warning – Your home sale may be subject to big tax if you go overseas

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Treasury has released draft legislation to impose capital gains tax on the sale of your Australian home if you have become non-resident, punishing ordinary Australians that need to travel internationally for work. It follows an announcement made in the May 2017 Budget. If you sell your home, broadly, there is an exemption from tax on the gain you make during the period that you use the property as your main residence - the main residence exemption. Further, if you are away from your home the main residence exemption is extended indefinitely or if you rent your house out, you can…

Family trusts allow the rich to dodge tax, hurting Australia’s poor. Not!

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Family trusts are used extensively in Australia, much more so than other countries. Why is that? Is it so the Australia’s evil rich folk can dodge tax forcing the poor to pay more? We don’t believe so. Family trusts are used to solve real financial problems in an efficient way. They offer several distinct advantages including: Providing corporate limited liability by using a company as trustee protecting assets from malicious litigation Protecting family assets from children’s gold digging partners Succession planning to allow business and other assets to seamlessly transfer from one spouse or generation to another Providing flow through…

FIFO workers now have superannuation opportunity

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A big superannuation disadvantage existed for fly-in fly-out resources professionals working overseas for a foreign company.  The foreign company is not obliged and probably not able to make superannuation contributions and the professional was not able to make deductible personal contributions. The problem for an overseas FIFO professional was this: She is likely a resident of Australia for tax purposes The foreign employer can’t or won’t make superannuation contributions The mining professional would like to get tax deductions for personal contributions The requirement was, in effect, to be ‘self-employed’ and satisfy the 10% test That test requires less than 10%…

Who we are

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The Lovetts team are focused on getting the best outcomes for our clients. For over 50 years, Lovetts has been helping businesses solve complex problems and take advantage of lucrative opportunities. Our team also works with individuals who require personal accounting advice to manage their portfolio of wealth affairs. By offering specialised and tailored services, we can solve almost all financial situations. Our portfolio of work spans many industries including; mining services, tourism, property development, dental, rural and complex international tax business matters. We have a dedicated team of specialists in our Brisbane office who are ready to take on…

Foreign resident or Australian overseas? Banks and governments automatically sharing your information around the world

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Parliament has just passed legislation that requires local banks, on an annual basis, to provide detailed information to the Tax Office who will then automatically share that information with the relevant foreign tax authority where an Australian bank account is held by a foreigner or a company, trust or other entity that is controlled by a foreigner.  The purpose of the new legislation is a global crackdown on people holding funds offshore and not declaring income to their home country tax authority. It is a multi-way, reciprocal arrangement with many national governments planning on gathering and cross-sharing information under the…

New foreign investors beware: Co-operate with the Tax Office or be forced to sell-up

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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,…

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