Question:
December 2011 - A day in the tax life of ...
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
… previously on tax life …
Sam was getting business matters under control and starting to think through the long term. A financial plan was coming together including getting insurances sorted out, estate planning, building superannuation for future retirement and long-term succession planning for the business.
University
The crackling was crisp, crunchy and absolutely mouth watering.
Roast pork with baked veggies was one of the family favourites. A mix of gravy and apple sauce really set the meal off but Joe topped his culinary masterpiece with the steaming baked pudding and custard.
It was great to have Rachel, Sam's eighteen year old daughter, and her boyfriend Tim around for dinner. He was such a nice boy... Good looking, funny and very loyal to her. But a voice in Sam's motherly mind knew that he wasn't the right one for Rachel for the long term. There was a mismatch in their ambitions.
Rachel had blitzed Year 11 and looked set for top marks and entry into medicine at Uni. There was only a week of school left and then final year 12 exams. Tim had left at Year 10 and to his great credit, got himself an apprenticeship as a trainee plumber. He was doing really well with it and had a great future with the firm he was with. He really was a lovely boy!
Something about their long boyfriend/girlfriend relationship didn't quite gel. Rachel was planning to leave town next year to go to Uni in Melbourne and what would happen with them then?
The conversation turned to finances and in particular how Sam and Joe were going to support Rachel financially while she was doing her tertiary studies. She was going to have to work really hard with the medical degree and there wasn't going to be much time left for part-time jobs.
Sam was so proud of her daughter. She knew how hard Rachel had worked over the last few years. She was more than a little chuffed to have a budding doctor in the family, particularly her beautiful Rachel. Rachel was so excited. She beamed every time she spoke about going to study in Melbourne... But, thought Sam, what about poor Tim?
Joe had thought through the most effective way to support Rachel. His plan was that Sam's business trust would advance funds to cover rent and food and then at the end of the year those monies could become a distribution of profit to Rachel. Rachel would be subject to tax on the distribution but it would be at relatively low tax rates and the deal could be that the trust would pay the tax for her. It was certainly a much better tax outcome then for Sam and Joe to pay those bills out of their after tax income.
In another little twist to Joe's financing plan, he thought that if the trust could distribute some franked dividends to Rachel then she would most likely get a tax refund from the franking credits or possibly pay down the government education loans more quickly.Things were moving along really well. Everyone seemed so happy ... and then Rachel dropped her bombshell.
Tim was planning to move down to Melbourne with her! He was going to quit his apprenticeship, move down to Melbourne and planned to move in with Rachel.
The news went down like a lead balloon!
… Stay tuned …
