Category Archives: Tax Month – June 2021

SMSF related-party LRBAs: ATO ‘safe harbour’ interest rate for 2021-22 is 5.10% for property and 7.10% for listed shares

For SMSF related-party limited recourse borrowing arrangements (LRBAs) used to acquire real property, the ATO’s safe harbour interest rate is expected to be 5.10% for 2021-22 (unchanged from 2020-21). Practical Compliance Guideline PCG 2016/5 sets the safe harbour interest rate each year according to the Reserve Bank Indicator Lending Rates for banks providing standard variable housing…

Div 7A benchmark interest rate unchanged for 2021-22 – 4.52%

Amounts which Division 7A would deem to be a dividend, will avoid that result, if they are recorded as a s109N complying loan, prior to the private company lodging its return, for the year in which the payment, or loan, was made to the shareholder/associate. There is a minimum interest rate for such loans, known…

New Free Trade Agreement with the UK – a quick summary and a look at what this means for Australian businesses

On 15 June 2021, Scott Morrison and Boris Johnson (Scomo and Bojo) agreed on the core terms of an incredibly important Free Trade Agreement between Australia and the UK. The new Agreement will see consumers in both markets benefit from cheaper goods, while farmers, winemakers and young people looking to live abroad will have greater…

LCR 2021/D1 – draft Law Companion Ruling on ‘Temporary Full Expensing’ – ‘instant asset write-off’ and ‘accelerated depreciation’ Covid stimulus measures

Late last year (2020), Parliament passed legislation providing for ‘temporary full expensing’ of capital amounts incurred on depreciable assets used, or held ready for use in COVID affected years. Of recent, the Commissioner has issued a form of ‘public ruling’ known as ‘Law Companion Rulings’ to support the introduction of new legislation. The Commissioner has…

Board of Taxation – Review of ‘dual agencey’ R&D Tax Incentive – both Innovation & Science and also ATO

‘Research and Development’ (R&D) tax concessions involve a two step process – first to get the project registered with the Industry Innovation and Science Australia (IISA) as R&D and then to claim the concessions with the ATO, both of which involve separate appeals. The Board of Taxation is investigating the wisdom of this ‘dual-agency’ approach. See…

Problems liaising with ATO Debt – establishing authority to act and access to relevant senior officers

Tax practitioners not already authorised, with the ATO, as a agent for a taxpayer (typically legal practitioners) have 2 particular problems when acting for taxpayers attempting to forestall ATO collection proceedings, which are being addressed by the Law Council of Australia tax committee. See below for an extract of a meeting agenda item relating to…

Deloitte settles partner age discrimination case for millions – ‘UberEats your heart out’….

On Thursday 24.6.21, the Press reported that Deloitte had settled the action, against it, by a partner who alleged they required him to retire as a partner – entitling him sue for unlawful age discrimination. I reported on in an earlier TT article. It was a test case as important, in my opinion, as the…

Year-end tax planning Part 4 – 2020-21 full expensing and accelerated depreciation; maturing UPE ‘sub-trust’ arrangements; Div 7A Minimum Yearly Payment Covid relief again; ‘working from home’ deductions; first ‘loss carry back’ offset year

For the financial year ended 30 June 2021 (2020-21 financial year) this article surveys: claiming the ‘Temporary full expensing’ deductions or the Backing Business Investment accelerated depreciation deductions; the need for an extension of ATO guidance, to ‘unpaid present entitlement’ sub-trust arrangements, maturing in the 2020–21 income year (broadly that a Div 7A, s109N complying loan agreement can satisfy…

Your Future, Your Super Bill passed with amendments – “stapled” single default accounts, a best “financial” interests duty for trustees and APRA benchmark testing of investment performance

The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 has passed both houses of Parliament making changes including: “stapled” single default accounts, a best “financial” interests duty for trustees and APRA benchmark testing of investment performance. See related TT article about the detail in this Bill. See below for further details about the Bill…

Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 – SMSF membership limit increased from 4 to 6

On Thursday 17.6.2021, the Bill that increases the maximum number of allowable members, from 4 to 6, in new and existing SMSFs and small APRA funds, passed both houses of Parliament, without amendment. See below for further detail. [Tax Month – June 2021]     The Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020…