Budget Measure – limiting CGT Concessions to partners of ‘small’ partnerships, resulting in many ‘Everett’ assignments of partnership interests being subject to prohibitive CGT again

In the 2018 Federal Budget, the Government announced a change to the Small Business CGT Concessions (in Div 152 of the ITAA97) that would adversely affect many partners who ‘alienate’ their partnership income assigning their interest in the professional partnership, to a related entity (and thus ‘split’ what would otherwise be, their income). Such assignments…

IGT will investigate the ‘Four Corners’ allegations that the ATO has abused its garnishee collections powers

On 16 May 2018, the Inspector General of Taxation’s (IGT) announced his investigation into the allegations made during the ABC Four Corners Program (aired on 9 April 2018), regarding the ATO’s use of ‘garnishee notices’. The Program quoted an ATO collections officer and the nub of his allegations was that ATO collections officers, particularly in…

Guss v Storace (Australian Taxation Office) – Service of the Final Notice was proved and the offence for failing to lodge his 2010 – 2013 returns was upheld

The Victorian Court of Appeal has affirmed a decision that a notice, requiring the taxpayer to lodge his 2010 – 2013 income tax returns, was properly served on him, and that he was, therefore, guilty of an offence (under s8C of the TAA) for failing to lodge those returns. On the facts this was ‘common…

The Budget war on phoenix activity – DPN liability of directors will extend to unpaid GST liabilities of their companies (but which GST liabilities?)

Phoenixing property developers, were a sufficient problem, that Parliament recently legislated a regime that requires purchasers, of certain types of real property, to withhold a GST amount, from the purchase price, and remit it to the ATO. (This applies to certain problem areas: ‘new residential premises’ and ‘potential residential land’ – under new s14-250 of…

Measures to target ‘illegal phoenixing’ – including extending the DPN regime to GST (to make directors liable), restricting ‘related creditors’ voting rights, withholding refunds when returns outstanding

In the 2018 Federal Budget, the Government announced it will reform the corporations and tax laws and provide the regulators with additional tools to assist them to deter and disrupt illegal phoenix activity. Illegal phoenixing involves the deliberate misuse of the corporate form by allowing a company to run up debts, the company does not…

Exemption from ‘at least part-time’ Work test for member and employer contributions – for first year the 65-74 year old fails the test, if balance under $300k

In the 2018 Federal Budget, the Government announced it will introduce a measure designed to give recent retirees flexibility to get their financial affairs in order in the transition to retirement. In essence, this means a year when they can still make contributions, even if they are no longer working ‘at least part-time’. This exemption will…

GST – turnover on selling Australian hotel rooms now counts again for registering for GST – ‘levelling the playing field’ for online bookings

In the 2018 Federal Budget, the Government announced it will extend the GST, by ensuring that offshore sellers of hotel accommodation, in Australia, calculate their GST turnover, in the same way as local sellers. This will be from 1 July 2019. Currently, unlike GST-registered businesses in Australia, offshore sellers, of Australian hotel accommodation, are exempt from…

Managed Investment Trusts (MITs) – 56 countries added to the list entitled to the lower 15% withholding rate (new information sharing countries since 2012)

In the 2018 Federal Budget, the Government announced it will update the list of countries whose residents are eligible to access a reduced withholding tax rate, of 15 per cent, instead of the default rate of 30 per cent, on certain distributions from Australian Managed Investment Trusts (MITs). Listed countries are those which have established…

Significant Global Entity’ – change to definition – same $1b global turnover but wider group of ‘parent entities’ that can establish the ‘global’ group

In the 2018 Federal Budget, the Government announced it will broaden the definition of a large multinational (or significant global entity (SGE)) to ensure that Australia’s multinational tax integrity rules operate as intended. The SGE definition identifies entities which are required to prepare Country-by-Country (CbC) reports and is used to determine entities which may be…