WA payroll tax: 1 July 2016 change to threshold – limit increasing from $800k to $850k but tapering less generous

The WA Office of State Revenue (OSR) has reminded taxpayers that from 1 July 2016, the annual payroll tax threshold will change from $800,000 to $850,000. The diminishing threshold will be calculated on annual wages between $850,000 and $7.5m. The tapering value used to calculate the deductable amount will change from 8/67 (0.199) to 17/133 (0.128). The…

Lee Group Charters Pty Ltd & Anor v FCT – ‘super yacht’ losses deductible – quarantining rule in s26-47 held not to apply because letting for hire was in the ordinary course of a business

Two taxpayers have been successful before the Federal Court in a matter concerning boating expense claims and the quarantining rule under s 26-47 of the ITAA 1997. The Commissioner concluded that s 26-47 applied to boat chartering activities conducted by the taxpayers and therefore quarantined deductions claimed by the taxpayers that exceeded the respective company’s assessable income…

Tax and Superannuation Laws Amendment (2016 National Innovation and Science Agenda) Bill 2016: Easier access to tax losses etc by adding a ‘similar’ business test

On 6 April 2016, Treasury released a draft of the Tax and Superannuation Laws Amendment (2016 National Innovation and Science Agenda) Bill 2016, which was to further the ‘National Innovation and Science Agenda’ by making it easier for companies to carry forward their tax losses and capital losses by adding a ‘similar’ business test to the…

Innovation Agenda: Easier access to company losses – draft legislation adding a ‘similar’ business test to the ‘same business test’ to satisfy a ‘business continuity test’

On 6 April 2016, the Government has released a draft of the Tax and Superannuation Laws Amendment (2016 National Innovation and Science Agenda) Bill 2016, to implement its December 2015 Innovation Agenda measure to allow increased access to company tax losses. On 7 December 2015, the Government announced a package of measures designed to incentivise and reward innovation as part of its…

PCG 2016/5 – SMSFs and arm’s length loan terms for related party Limited Recourse Borrowing Arrangements: ATO auditing “safe harbour” terms

The Tax Office on Wed 6.4.2016, issued Practical Compliance Guideline PCG 2016/5 setting out the Commissioner’s “safe harbour” terms on which SMSF trustees may structure related-party LRBAs consistent with an arm’s length dealing. The ATO generally takes the view that a SMSF may derive non-arm’s length income (taxable at 47%) if the terms of a LRBA are not consistent with…

TR 2016/D1 – Commercial websites – tax treatment: s8-1 general deductions; capital allowances (inc. ‘in-house software’); small business entities; capital gains tax; ‘black hole’ write-offs

This Draft Ruling, issued on Wed 6.4.2016, sets out the deductibility of expenditure incurred in acquiring, developing, maintaining, or modifying a website for use in carry on a business. It covers expenditure in acquiring, developing, maintaining and modifying a website. The Draft also covers the deductibility of content migration and social media accounts. Generally, it…

Fischer & Ors v Nemeske Pty Ltd & Ors – distribution of capital from asset revaluation reserve was a valid exercise of the trustee’s discretion and recoverable, including in law as a ‘debt’

On 6 April 2016, the High Court, by majority, dismissed an appeal from the Court of Appeal of the Supreme Court of New South Wales. The High Court held that a trustee had validly exercised a power to “advance” and “apply” trust capital or income by creating a debt reflecting the value of shares held by…

SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd – NSW Supreme Court ‘rectifies’ contract to make the price ‘plus GST’ despite contract saying it was ‘inclusive of GST’

In SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 362 the Supreme Court found that a Contract of Sale should be rectified to reflect the common intention of the parties that the purchase price was to be exclusive of GST. The decision is another example of the difficulties that can arise where real estate is…

NSW land tax: Metricon Qld Pty Limited v Chief Comr of State Revenue (No 2) – exempt because the dominant [current] use was primary production, despite ultimate use would be property development

A taxpayer has been successful before the Supreme Court of NSW in having land tax assessments for the 5 land tax years set aside on the basis that the primary production use of the lands in question was “the dominant use” of the lands, except for one parcel in one land tax year. The taxpayer…