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TAX | NEWS | VIEWS & CLUES Welcome to the February 2018 edition of the Spry Roughley Report. The 2018 year is now well under way. Wage rises are on the agenda, with a number of sectors looking for increases. The Australian cash rate is on hold at 1.5% for the foreseeable future, but our stock market is showing volatility driven by the activity in the US.
The new rules start from 1 July 2018, so if you are over 65 years of age, have owned your home for 10 years or more and are considering downsizing, these rules just might work for you.
As usual, please do not hesitate to call us on (02) 9891 6100 should you wish to discuss how any of the points raised in the report specifically affect you, or click here to send us an email. Warm regards, Shaun
Liability limited by a scheme approved under Professional Standards Legislation ATO guidelines: profit allocation within professional firms The ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self managed superannuation funds (SMSFs). The guidelines have been suspended from 14 December 2017 to allow the ATO to consult with stakeholders on replacement guidelines. Anyone considering new arrangements beginning after the cut-off date should contact the ATO to discuss the arrangement risk profile and the possibility of a private ruling. Arrangements beginning before the cut-off date that comply with the guidelines and do not exhibit high risk factors shouldn't require action, but arrangements with high risk factors may be subject to ATO review. The ATO encourages anyone who is uncertain about how the law applies to their existing circumstances "to engage with us as soon as possible".
Housing affordability measures now law
An exemption from meeting the FHSS Scheme "first home" requirement will be available for people suffering financial hardship. "Financial hardship" criteria are likely to include circumstances where someone has limited savings, is currently renting and had a past interest in a home that was in a cheaper real estate market or when the person was in a relationship that has since broken down. Fringe benefits tax: employees' private use of vehicles Draft Practical Compliance Guideline PCG 2017/D14 should provide more certainty and transparency about the circumstances where the ATO won't apply compliance resources to investigating whether private vehicle use meets the car-related FBT exemptions. Eligible employers who rely on this guideline won't need to keep records to prove that an employee's private use of a vehicle is minor, infrequent and irregular. The guideline includes specific eligibility conditions for employers and their employees' vehicle use. Talk to us about whether the new guidance applies to your FBT circumstances. Tax consequences of trust vesting A trust's "vesting date" is the day when the beneficiaries' interests in the trust property become fixed. The trust deed will specify the vesting date and the consequences of that date being reached. Vesting does not, of itself, ordinarily cause the trust to come to an end or cause a new trust to arise. In particular, the underlying trust relationship continues after vesting while the trustee still holds property for the takers. The key points in the draft ruling are that:
Disclosing business tax debt information to credit agencies The draft legislation intends to place tax debts on a similar footing as other debts, to encourage timely payment or engagement with the ATO for businesses that want to avoid having their debt information affect their creditworthiness. Disclosure to credit reporting bureaus will only be permitted if the ATO has given the taxpayer at least 21 days' notice beforehand. Taxing employee share scheme dividend equivalent payments A "dividend equivalent payment" is a cash payment to an employee participant and beneficiary an ESS funded from dividends on which the trustee has been assessed in previous income years because no beneficiary of the trust was entitled to the income at the time. A trustee that makes a dividend equivalent payment under an ESS must withhold an amount from the payment, even though the trustee is not the employee's employer. The ATO offers a safe harbour from such payments being treated as income under specific circumstances. Get in touch with us to talk about whether your situation makes you eligible. The new determination applies to dividend equivalent payments paid under the terms and conditions attached to ESS interests granted on or after 1 January 2018. Superannuation integrity changes
The measures are designed to ensure that related-party transactions with super funds and LRBAs can't be used to circumvent the reduced contribution caps that apply from 1 July 2017. The changes should generally not affect LRBAs entered into with unrelated third parties for commercial rates of interest (and other expenses). Guidance for SMSFs on transfer balance reporting From 1 July 2018, SMSFs that have any members with a total superannuation balance of $1 million or more must report events impacting that member's transfer balance account within 28 days after the end of the quarter in which the event occurs. SMSFs where all members have total super balances of less than $1 million can choose to report events which impact their members' transfer balances at the same time that the fund lodges its annual return. The guidance also covers reporting requirements for retirement phase income streams and commutations (including commutation authorities). |
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