Tax News

The Australian Taxation Office (ATO) on Monday ruled that taxpayers can no longer presume asset sales made by trusts will be eligible for the 50% CGT discount.

This Tax Determination (TD 2011/21) flags the intention of the Tax Office to target trusts and capital gains.   http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD201121/NAT/ATO/00001

It is vital that you keep proper documentation to support a particular investment plan in respect of the various share portfolios that you may have.  You should also seek taxation advice if you are unsure of your position.

Now is the time to appoint a tax agent to prepare your income tax return.  If you appoint a tax agent before October you may be eligible for an extension of time (up to May 2012) to lodge and pay your income tax.  Sydney Accountants and Tax Agents can be found by contacting 02 8264 0755.

This concession is generally only available where you have a registered tax agent prepare your tax return.  There are many other reasons you may want to consider having a tax agent and Chartered Accountant prepare your return, such as specific tax expertise.

Given the complex nature of the Australian Tax law, it is almost vital to have an experienced tax advisor assist with the preparation of your tax return.

Last financial year:

• 28 people were prosecuted for over $17 million worth of GST-related fraud offences
• The ATO's verification checks of taxpayers Business Activity Statements resulted in over 30,000 statements being adjusted to reflect correct circumstances
• The ATO received over 44,000 'contacts' including calls, letters, faxes and emails from the community relating to those who may be doing the wrong thing towards their obligations via ATO Tax Evasion Referral Centre
• The ATO increased scrutiny of businesses deliberately not reporting cash income, with over 1.4 million small businesses evaluated against our sophisticated risk detection systems.

On 13 July 2011, the ATO issued Taxation Determination TD 2011/20 entitled "Income tax: what is the benchmark interest rate applicable for the year of income that commenced on 1 July 2011 for the purposes of Division 7A of Part III of ITAA 1936 and how is it used?"

For the income year that commenced on 1 July 2011, the benchmark interest rate for the purposes of ss109N and 109E of ITAA 1936 1 is 7.80 % per annum (up from 7.40% per annum for 2010-11).

 

Assistant Treasurer Bill Shorten today released a discussion paper outlining the Government’s proposed approach to introducing a 50 per cent tax discount for interest income, as announced in the 2010-11 Budget.

"The introduction of the discount will benefit more than five million taxpayers, with particular benefits for low- and middle-income savers who are more likely to put their savings into banks, credit unions or building societies, rather than investments," Mr Shorten said.

"A tax discount for interest income is an important step towards a more consistent taxation regime for savings."

In 2012-13, individuals will be entitled to a tax discount equal to 50 per cent on up to $500 of interest income received.

 

 

The Prime Minister today released details of the Government's plans to put a price on carbon. From 1 July 2012, the scheme proposes to set a price of $23 for each tonne of carbon pollution released into the atmosphere by Australia's biggest polluters. The price will rise by 2.5% a year in real terms during a 3-year fixed price period until 1 July 2015.

Small Business (a business with turnover of less than $2m) will benefit with an immediate tax deduction for assets costing up to $6,500.  This is an increase of $1,500 on the election promise of $5,000.

In addition to small business incentives there are also incentives to householders.  These changes include an increase in the tax free threshold and family tax benefit changes.

 

 

The Jobs Action Plan is designed to give businesses an incentive to employ new workers and expand their enterprises, Under the plan, businesses that increase the number of full -time equivalent (FTE) employees for a period of at least two years, will receive a payroll tax rebate following the employment of each additional employee in a position that is a new job .

The Jobs Action Plan:

• provides a payroll tax rebate of up to $4000 per employee for the first 100 000 new payroll tax paying jobs created in NSW 40 000 of the new jobs will be prioritised for non-metropolitan areas of NSW with the remaining 60 000 in metropolitan areas,

• provides for payment of the rebate in two equal parts, on the first and second anniversary of the employment of an additional employee in a new job

• applies to the first 100 000 new jobs created on or after 1 July 2011

The following occupation specific guide was released by the Australian Tax Office on 6th July 2011.  It provides some useful information for flight attendants when claiming work related expenses.   If you are not sure of your situation you should speak with a qualified chartered accountant.  If you require assistance please contact us.

When you can make a claim

In most situations you can claim tax deductions for work-related expenses as long as your claim meets the following conditions:

• you incurred the expense in doing your job
• the expense is not private (personal)
• you can show you incurred the expense by producing receipts or other written evidence.

The following occupation specific guide was released by the Australian Tax Office on 6th July 2011.  It provides some useful information for real estate agent employees when claiming work related expenses.   If you are not sure of your situation you should speak with a qualified chartered accountant.  If you require assistance please contact us.

If your total claims add up to more than $300 (excluding claims for car, meal allowance, award transport payment allowance and travel allowance expenses), you must keep written evidence, such as receipts. Your written evidence must show you have incurred the full amount of your claim, not just the amount over the first $300.

If the total amount you are claiming is $300 or less, you do not need to keep receipts, but you must be able to show how you worked out your claims.

The following occupation specific guide was released by the Australian Tax Office on 6th July 2011.  It provides some useful information for building construction workers when claiming work related expenses.   If you are not sure of your situation you should speak with a qualified chartered accountant.  If you require assistance please contact us.

When you can make a claim

In most situations you can claim tax deductions for work-related expenses as long as your claim meets the following conditions:

• you incurred the expense in doing your job
• the expense is not private (personal)
• you can show you incurred the expense by producing receipts or other written evidence.

Employee share schemes

Some companies encourage employees to participate in employee share schemes by offering employees shares, stapled securities or rights (including options) to acquire them (ESS interests) at a discount. Employee share scheme (ESS) income tax rules apply to this discount.

Shares and rights acquired before 1 July 2009

The ESS tax rules contained in Division 13A of Part III of the Income Tax Assessment Act 1936 that applied to shares and rights acquired before 1 July 2009 have been repealed. However these rules will continue to apply to any shares or rights acquired before 1 July 2009 on which tax has already been paid or was due to be paid.

ESS interests acquired after 30 June 2009

For ESS interests acquired after 30 June 2009, the ESS tax rules contained in Division 83A of the Income Tax Assessment Act 1997 apply.

The Australian tax office released today an overview of the trust streaming measures. 

These changes have been introduced pending a broader review of the taxation of trusts - including a rewrite of Division 6 of Part III of the Income Tax Assessment Act 1936 (ITAA 1936).

The amendments enable the streaming of capital gains and franked distributions to beneficiaries for tax purposes and introduce targeted anti-avoidance rules.

Tax Laws Amendment (2011 Measures No. 5) Act 2011 became law on 29 June 2011, giving effect to these changes.

The following extract is from the Australian Tax Office and details when various tax returns are due for lodgement and payment.

Note, if you registered with a tax return, the due date can be extended from 31 October 2011 to 15 May 2012.  If you need to register with a tax agent please contact us.

The Lodgment Program 2011-12 provides details of when, within the 2011-12 financial year, you need to lodge documents with us. The program is structured so you can progressively lodge 2011 income tax returns and other documents throughout the year.

The lodgment program focuses on lodgment requirements and also details when payment is required. The payment due date for an income tax return depends on the following:

• the lodgment due date
• when the return is lodged
• the type of taxpayer.

The Australian Tax Office publish detailed guides that are industry specific to help individuals determine what type of tax deductions the may be entitled to.  The guides not only cover occupations but also include common deductions in the industry you are likely to be able to claim.  Generally the guides are released each year.

We have attached direct links to the Australian Tax Office to assist.

Occupations include:

Airline Employees

Building Workers

Lawyers

School Teachers

Police Officers

Real Estate Employees

Truck Drivers

and more...

 

The Tax Office have relaeased on their website the following details in relation to the preparation of income tax returns. If you require electronic lodgement of your tax return for a speedy refund, please contact us.

From the ATO "In line with our service standards, we plan to process 94% of individual electronic returns within 14 days. Our experience shows that most of the remainder are processed within 30 days. Returns lodged on paper do take longer to process, however we plan to process 80% of these within 42 days.

It is important to note that some income tax returns will take longer to process. For example returns where:

• we require more information from you or need to cross-check information with Centrelink (for example if you have received family tax benefits) or the Child Support Agency
• items on the return need to be manually checked by a tax officer (for example if the name and address on your return does not match our records), or
• the return is identified as being potentially fraudulent or includes overstated claims"

The list of top 100 accounting firms is compiled each year by the BRW.  The list is current as at 2010.  There have been a few changes in the middle of the rankings mainly due to mergers and acquisitions, however the big end of town appear to remain constant.  The ranking is not an indication of which firm is the 'best' firm, rather it gives you an indication which is the largest.

The list includes:

PricewaterhouseCoopers

KPMG

Ernst & YOung

Deloitte

WHK Group

PKF

BDO

Grant Thornton

PKF

Pitcher Partners

Plus more...

The ATO has reminded private companies who received UPEs from a related trust between 16 December 2009 and 30 June 2010 that the UPE amounts may be treated as dividends paid to the trust. To avoid this, the ATO says, the trustee can hold the funds in a sub-trust for the sole benefit of the company and invest the funds into the main trust.

The ATO says the investment agreement between the main trust and the sub-trust must be in place by 30 June 2011. Further, the ATO provides an example agreement and says that regard should be had to PS LA 2010/4 (Div 7A: trust entitlements).

Annually the ATO provide a guide as to the areas of focus they will have for the coming year.  They do this to provide taxpayers the opportunity to get their affairs in order and achieve compliance.

This year's compliance program focuses on a broad community cross section. Its features include:

• use new risk filters and upgraded risk models to detect incorrect or fraudulent refund claims including business activity statement (BAS) credits
• continue an empathetic approach to taxpayers and viable businesses experiencing financial difficulty
• focus on the timely lodgment of BASs and the correct payment of employer obligations including superannuation guarantee and pay as you go withholding obligations and to ensure appropriate superannuation payments are made and claimed
• use data matching of 500 million transactions to identify non-lodgers and people who have under reported income or over claimed entitlements
• benchmark over 100 industries to deal with under reported or omitted income and cash transactions used to hide or evade tax obligations

On 10 May 2011, Deputy Prime Minister and Treasurer Wayne Swan MP announced the Federal Budget for 2011-12. The Budget contained a number of items that apply to superannuation, in particular excess contribution tax.

Eligible individuals will be provided with the option to have excess concessional contributions refunded out of their superannuation funds. Refunded amounts will be taxed at the individual’s marginal tax rate, rather than paying excess contributions tax.