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SEPTEMBER 2009
Tax Office ignores High Court on Trusts but the decisions keep coming
On 20 August 2009, the Commissioner finally released his Practice Statement on Bamford, PS LA 2009/7. It is a disappointment.
click here for more details.
Accounting for Income Tax
Exposure Draft ED 178 has been proposed as a new standard covering accounting for income tax. It was released in April 2009 for public comment. Although officially comments closed in June, the profession has maintained discussion in the financial press.
The new standard, if it passes unchanged, will require reporting entities to disclose in their financial statements all tax matters in relation to which the outcome would be uncertain if the Australian Tax Office had full access to all material facts.
Investment allowance interpretative decisions
The small business and general business tax break (also known as the 'tax break' or 'investment allowance') was originally announced by the Government on 12 December 2008. Subject to expenditure thresholds, it gives small businesses a bonus deduction of 50% (30% or 10% for other businesses) when they acquire depreciating assets acquired between 13 December 2008 and 31 December 2009. click here for more details.
ATO: Be careful when claiming losses on shares
The ATO recognises that the global economic downturn has decreased the value of many people's investments over the past year, and that some taxpayers may be 'confused' about the difference between capital losses (share holding) and revenue losses (share trading).
click here for more details.
Main residence for NSW land tax denied
A taxpayer who purchased land adjoining his residence has been denied the principal place of residence land tax exemption as there was no ‘unity of title’ because his residence was owned as tenants in common with his wife while the adjoining land was purchased in his own name.
The NSW Administrative Decisions Tribunal rejected the taxpayer’s argument that unity of title could be established because the adjoining property could be redistributed to his wife under the Family Law Act 1975. The relevant test established in Ryan’s case was to determine the title holder/s of the properties. The Tribunal also upheld the Commissioner’s interest charge at the ‘market rate’. (Kleyne v CCSR)
SMSF lends money to related company, pays 45% tax
The Administrative Appeals Tribunal has upheld the decision of the Tax Office (ATO) to make a self-managed superannuation fund (or 'SMSF') 'non-complying' when it breached the investment rules applying to SMSFs. click here for more details. From 1 July 2009, most income earned by an Australian resident individual from continuous foreign service of more than 90 days will no longer be exempt from income tax (although some income that relates to certain development projects, and charitable or government activities will continue to be exempt). click here for more details. The increase in the low-income tax offset to $1,350 for 2009/10 (from $1,200 in 2008/09) effectively means that $3,000 can be distributed to minors tax-free in the 2009/10 year. The ESV Grasscutters, ESV’s entry in the 2009 Oxfam 100km Trailwalker Challenge, successfully completed their challenge of getting all four members of the team home. They crossed the finish line at about 7:30pm on Saturday 29 August after 36 1/2 hours of walking, with no sleep breaks. Only half of the teams that started finished in tact. They have so far raised over $7,100 towards their target of $8,000.
Changes to the taxation of foreign employment income
Ordinarily, and excluding the offset, once a minor's income exceeds $1,307, the entire amount is taxed at 45%.
However, applying the low-income tax offset of $1,350 means that no income tax will be payable until the minor's taxable income exceeds $3,000, i.e., $1,350 divided by 0.45 = $3,000.
Oxfam 100km Trailwalker Challenge
The ESV Grasscutters send their warmest thanks to everyone that sponsored them or otherwise supported and encouraged them in their physical and fundraising Challenges. Donations can still be made at http://www2.oxfam.org.au/trailwalker/Sydney/team/34
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