Taxation in Australia

Articles from the current issue:

• Superannuation: What ATO publications can be relied on?

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  Generally, the ATO feels bound by its published material from an administrative viewpoint. However, only certain publications bind the ATO .

• President's report: Accepting and embracing change

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  The Institute has an appetite for positive change and growth, writes president Peter Godber.

• Tax tips: Division 7A and COVID-19

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  A procedure is in place to obtain an extension of time where the minimum 2019-20 annual repayment under a complying Div 7A loan agreement was not made because of COVID-19.

• Tax education: Development of analytical and advisory skills in tax law

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  The Tax Institute’s 2019 study period 3 dux discusses how CommLaw1 provides new confidence in understanding, analysing
  and applying tax law to technical business transactions.

• SG amnesty unpacked

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  The superannuation guarantee (SG) amnesty provides a one-off opportunity for employers to self-correct historical SG non-compliance. Following the expiration of the amnesty on 7 September 2020, the standard rules revert and employers face stronger penalties for non-compliance in the future. This article considers the fundamentals of the SG regime, dispels some misapprehensions and reminds practitioners that there are no limits on the review period for SG shortfalls. The benefits of the SG amnesty are unpacked and the circumstances in which employers should consider coming forward are identified.Nuances may arise such as the effect of amnesty payments on the concessional contributions cap, Div 293 tax and how to deal with shortfalls relating to non-residents and deceased employees. The benefits offered by the amnesty are contrasted with the severe
  consequences of not coming forward during the amnesty period. Finally, the article sets out the case for extending the amnesty period beyond September. 

• Acquiring an interest in a CFC during an income year

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  The Australian controlled foreign company (CFC) rules are contained in Pt X of the Income Tax Assessment Act 1936 (Cth). Broadly, these rules seek to attribute to Australian taxpayers certain income derived by a non-resident company that is controlled by Australian residents and tax such income on an accruals basis, unless the non-resident company is subject to a tax system
  that is deemed comparable to Australia’s or the non-resident company is predominantly engaged in active business. This article focuses on the implications of the CFC rules where an Australian taxpayer acquires an interest in a CFC during an income year. The author is of the view that it could give rise to certain undesired outcomes and recommends that such taxpayers consider the
  potential impact of the transaction and possible ways to minimise such impact as part of its due diligence process.

• Alternative assets insights: Queensland land tax foreign surcharge: Ex gratia relief

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  Foreign-owned entities holding Queensland freehold land should consider their eligibility for ex gratia relief from the land tax foreign surcharge to prevent their land tax bills from almost doubling.

• Mid market focus: ASX-listed junior exploration companies and tax losses: Part 2

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  This article reviews the ability to carry forward, and utilise, tax losses and net capital losses in the absence of satisfying the continuity of ownership test.

• Tax counsel's report: Let logic prevail – Extend the amnesty

  file_download Free to download 01 Sep 2020

  At the time of writing, hopes for an extension of the SG amnesty are fading. However, we are still hoping that logic might prevail and an extension will be granted.

• Residency in a global pandemic: Advising the returning Australian

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  Principles of tax residency can be notoriously difficult to apply in practice, sometimes even in quite simple cases. The recent decision in FCT v Addy demonstrates that. In Addy, the Full Federal Court unanimously reversed the decision of the single bench in relation to whether a taxpayer was a resident according to ordinary concepts and how the 183-day test should apply. During the COVID-19 pandemic, Australians living overseas have returned in droves, often temporarily, without necessarily considering the tax implications. Many are waiting out the pandemic in Australia. What does this mean for their income tax residence and how might practitioners advise on the complex issues that can arise? Given the inherent uncertainty in how tax residency laws apply, even in simple cases, the Commissioner should issue a practice statement clarifying how he would look to apply Australia’s tax residency laws in a global pandemic.

• Tax News – At a glance: August – What happened in tax?

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  The following points highlight important federal tax developments that occurred during August 2020.

• CEO's report: Our membership: a force to be reckoned with

  file_download Free to download 01 Sep 2020

  With an army of dedicated volunteers, the Institute is set for growth, writes CEO Giles Hurst.

• A matter of trusts: Life interest trusts and their use among blended families

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  Life interest trusts are a popular strategy for blended families in estate planning, but it is important to remember that there’s no
  one-size-fits-all.