HELP and SFSS repayment thresholds and rates 2018-19 – nil% up to $51,957 rising to 8% above $107,214 of ‘repayment income’

Tax Month - July 2018

The ATO has released the repayment thresholds and rates for 2018-19 for the compulsory repayment of Higher Education Loan Program (HELP) debts and Student Financial Supplement Scheme (SFSS) debts. HELP repayment thersholds and rates 2018-19 Repayment income* Repayment rate Below $51,957 Nil $51,957 – $57,729 2% $57,730 – $64,306 4% $64,307 – $70,881 4.5% $70,882…

Board of Taxation – July Update from CEO – ‘earn-outs’ review; Small Business Concessions review; FBT compliance costs; Residency Rules review; aligning tax and accounting treatments; Tax Transparency Code; not-for-profits review

Tax Month - July 2018

In July, the CEO of the Board of Taxation released her July 2018 Update. The Board held meetings in Canberra on 25 May 2018 and in Melbourne on 5 July 2018. At these meetings, the Board discussed the progress and direction of its current projects, including: Post implementation review of contingent consideration rules (earn-out arrangements). A review of small…

PR 2018/7 – Tax consequences of investing in PTrackERS – Portfolio Tracking Exchangable Redeemable Securities

Tax Month - July 2018

On Wed 11.7.2018, the ATO released Product Ruling PR 2018/7 on the tax consequences of investing in PTrackERS, being exchangeable notes offered by PM Capital GO 2025 Limited. In particular, PR 2018/7 provides that security holders have a non-share equity interest in the company and that various anti-avoidance rules do not apply. DATE OF EFFECT:…

PCG 2018/3 – when employers can let employees drive ordinary vehicles home without FBT under s47(6) of the FBT Act – ATO guidance for allocation of audit resources

Tax Month - July 2018

On 11 July the Australian Taxation Office (ATO) released Practical Compliance Guide PCG 2018/3 (the PCG).  The PCG sets out circumstances in which the ATO will generally accept that certain vehicles used privately by employees may be exempt from fringe benefits tax (FBT).  The PCG applies from the year of tax commencing 1 April 2018.…

Harding v FCT – Taxed on Saudi employment income as a ‘resident’ despite long history of Middle Eastern work because he retained an Australian ‘domicile’ and his serviced apartment was not sufficiently ‘permanent’

Tax Month - July 2018

A taxpayer has been unsuccessful before the Federal Court, in establishing that he was not a ‘resident’, for Australian income tax purposes, on a basis that centred around whether he had a ‘permanent place of abode outside of Australia’ for the purposes of the Australian ‘domicile’ arm of the definition of ‘resident’ in s6(1) of…

Harding v FCT – Taxpayer appeals Federal Court decision he was a ‘resident’ and taxable on his Saudi Arabia income despite not intending to return to Australia to live

Tax Month - July 2018

The taxpayer has appealed to the Full Federal Court against the decision of Derrington J in Harding v FCT [2018] FCA 837. The taxpayer had been unsuccessful in arguing that he had a permanent place of abode outside of Australia for the relevant income tax year. In June 2009, the taxpayer left Australia to work in Saudi Arabia as…

Cam & Bear Pty Ltd v McGoldrick – SMSF auditor found negligent for failing to detect an unsecured loan was not ‘cash’ as recorded (when borrower later became insolvent and was wound up)

Tax Month - July 2018

In a negligence claim, the NSW Court of Appeal has ruled that an SMSF auditor breached his duty of care by failing to qualify the fund’s audit reports in relation to an unsecured loan which had been classified as cash. The plaintiff is the corporate trustee of an SMSF for a doctor and his wife.…

Three-yearly SMSF audits ‘problematic’ – Auditors worried about reality of ‘cost savings’, self-assessment and the details

Tax Month - July 2018

In the May Federal Budget, the government made a number of superannuation announcements, including that compulsory audit cycle for SMSFs would be extended from one to three years (another was to raise the SMSF membership limit from 4 to 6). Treasury has released a ‘discussion paper’, which says that allowing SMSFs, with a good history of…

Three year audit cycle for SMSFs with 3 years of clear audit reports and timely lodgement of returns – Treasury Discussion Paper (for 2018 Federal Budget announcement)

Tax Month - July 2018

In its May 2018 Federal Budget, the Government announced that SMSFs could move to a 3 year audit cycle, if they were compliant and timely. The measure was to take effect from 1 July 2019. On Friday 6 July 2018, the Government released a Consultation Paper regarding this measure, seeking feedback by 31 August 2018. The Consultation…