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FEBRUARY 2010
Non-commerical loans and corporate beneficiaries
When a private company pays amounts to shareholders, or lends them amounts or forgives debts owed by them, those amounts can be treated as dividends paid by the company on which those shareholders are subject to tax. These provisions, which also relate to associates of shareholders, can often be overcome by putting arrangements on a footing which the Commissioner deems to be commercial. click here for more details.
Declare offshore income or wear the consequences
The Tax Commissioner has announced that the net is closing in on tax havens and has made a new offer for people who may not have declared all income from offshore activities.
"This is a chance for people with undeclared income, for example interest earned offshore, to contact the Tax Office and sort out their affairs. The offer is open until 30 June 2010."
The Tax Office made a similar offer in 2007 which produced more than 3,000 disclosures with a total of over $306 million in omitted income. click here for more details.
Defamation payout not assessable
In the Sydney Refractive Surgery Centre case, the Full Federal Court has held that damages awarded to a company which were calculated on a 'lost profits basis' were not assessable.
The taxpayer company was awarded $844,624 in damages against the defendant for publishing false and misleading statements as to the nature and quality of laser eye surgery services provided. click here for more details.
Five new Tax Alerts
The ATO has issued a number of tax alerts on arrangements that have come to its attention and over which it has concerns. These arrangements are often marketed aggressively and we recommend that clients of ESV either avoid the arrangements or seek advice from us prior to investing any money. click here for more details. ATO appeals case – education expenses/Youth Allowance The Tax Office has now advised that it has sought special leave to appeal against this decision (the Anstis case) in the High Court. In that case, the Full Federal Court held that a taxpayer, who received a Youth Allowance as a university student, was entitled to a tax deduction for her education expenses. click here for more details. Goods taken from stock for private use The Tax Office has issued a new tax determination which estimates of the value of goods taken from trading stock for private use by taxpayers in certain industries for the 2009/10 income year. Liability limited by a scheme approved under Professional Standards Legislation.
If you can justify a lower value for goods taken from stock than that shown in the schedule you should speak to us. click here for more details.
The information in this newsletter is quite general in nature and anyone intending to apply it practically to their own circumstances should seek professional advice to verify it’s individual applicability.
If you have any queries regarding the information contained in this
update please do not hesitate to contact us.
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