Monthly Archives: September 2016

Re RSPG and FCT – AAT denies taxpayer 91% credits for ITCs on construction of a retirement village – given large percentage of ‘residential premises’

On 7 September 2016, the AAT affirmed the Commissioner’s objection decision and rejected a taxpayer’s claim to input tax credits (ITCs) on 91% of the cost of acquisitions for the construction of Stage 1 of a retirement village. The case concerned the extent to which acquisitions made in the course of the construction of the…

Agricultural Land Register – First Report – 13.6% of agricultural land foreign owned and UK holds more than all the rest put together (52%)

On 7 September 2016, the Treasurer released Australia’s first report from the Agricultural Land Register, delivering on the Government’s commitment to increase scrutiny and transparency in Australian agriculture. The Land Register shows foreign investors hold just 13.6 per cent of all Australian agricultural land. The United Kingdom is Australia’s principal source of investment in agriculture with…

FCT v AP Energy Investments Ltd – non-resident’s sale of shares not taxable in Australia – ‘principal asset’ not real estate – ‘sunk cost’ method of valuing mining information was ok

A brief summary of the facts – [2016] FCA 577 The taxpayer, AP Energy Investments Pty Ltd (AP Energy), is a non-resident of Australia for taxation purposes. AP Energy (over the period December 2006 to January 2008) had purchased shares in Abra Mining Limited (Abra) an ASX listed base metals exploration and development company. On…

Transition to Retirement Income Streams (TRIS) ‘integrity’ changes – income in fund on supporting assets no longer exempt (15%) and concessions on receipt also changed

The measure – The Government will remove the tax exempt status of income from assets supporting TRIS. These earnings will now be taxed concessionally at 15 per cent. Individuals will also no longer be allowed to treat certain superannuation income stream payments as a lump sum for tax purposes. [Treasury website – Super Changes] The issue –…

Spouse contributions: 18% tax offset (up to $540) – will be extended to spouses earning up to $40k (up from $10,800)

The Measure – Currently, a tax offset of up to $540 is available for individuals who make superannuation contributions to their spouses with incomes up to $10,800. The Government will allow more people to access the offset by extending eligibility to those whose recipient spouses earn up to $40,000. There are no changes to the current…

‘Catch‑up’ concessional contributions will be allowed – unused concessional contribution limits can be rolled forward for 5 years – for account balances of $500,000 or less

The measure – From 1 July 2018, the Government will help people ‘catch‑up’ their superannuation contributions by allowing individuals with account balances of $500,000 or less to rollover their unused concessional caps (for up to 5 years) to use if they have the capacity and choose to do so. [Note: this July 2018 commencement date…

Improving access to concessional contributions for individuals – the requirement to have less than 10% employment income will be abolished

The measure – From 1 July 2017, the Government will allow all individuals to claim a tax deduction for personal contributions to eligible superannuation funds (up to the concessional contributions cap) by abolishing the rule that they couldn’t have more than 10% of their income as employment income. This will apply to: individuals under the age of 65;…

Introducing the ‘Low Income Superannuation Tax Offset’ (LISTO) – refund of 15% contributions tax if more than marginal tax rate (adjusted income up to $37k and capped at $500)

What is it? From 1 July 2017, the Government will replace the Low Income Superannuation Contribution (LISC) with the Low Income Superannuation Tax Offset (LISTO). How does it work? The LISTO effectively refunds the tax paid on concessional contributions by individuals with a taxable income of up to $37,000 – up to a cap of $500. This…

Budget Super changes – concessional contributions cap down to $25k & 30% (Div 293) income threshold lowered to $250k (from $300k)

The measures From 1 July 2017, the threshold at which high income earners pay additional contributions tax (Division 293) will be lowered from $300,000 to $250,000. The Government will also reduce the annual cap on concessional (before‑tax) superannuation contributions to $25,000 (currently $30,000 under age 50; $35,000 for ages 50 and over). Details of the $25k concessional…

Superannuation changes announced in the Budget – Exposure draft of legislation and explanatory statements (for some measures) released for consultation

On 7 September 2016, Treasury released exposure draft legislation and explanatory material on the Government’s 2016-17 Federal Budget announcements to change the superannuation system (to make it more ‘sustainable’ – read, less of a drain on the Federal Budget). The draft legislation proposes to amend the ITAA 1997 and SIS Regs to implement the following…