Basics of a testamentary trust
A testamentary trust works in tandem with a will, and is similar to a discretionary trust, with the major difference being it only takes effect upon the death of the person who made the will. The trust can be funded by some or by all of your assets, and by payments derived as a consequence […]
Interest after the business stops
An issue that sometimes arises for business owners is whether interest expenses incurred on borrowed funds used in a business remain deductible after the business’s income earning activities have ceased. As a general rule, in order for interest expenses to be deductible in the relevant income year, a taxpayer is generally required to demonstrate that […]
Managing Tax Disputes
It is sometimes said that a superhero like the DC Comics character Superman can be an uninteresting character because he is, for all practical purposes, indestructible. Critics have said the knowledge that he will most likely win can make Superman’s adventures monotonous. A similar accusation could be levelled at the Federal Commissioner of Taxation (the […]
Pension Loan Scheme
To help pensioners who are asset rich but income poor, the government launched a version of a commercially available financial product, the reverse mortgage. The government’s answer is its pension loans scheme (PLS), whereby a pensioner can apply for a non-taxable loan using some form of real property as security. The PLS does not provide […]
Tax deductions for insurance premiums
As a general guideline, the ATO will allow a deduction for certain insurance premiums if it can be shown that the insurance cover relates to earning assessable income. In other words, life insurance, trauma insurance or critical care insurance are generally out. Income protection insurance is one example of the kind of cover that may provide an allowable […]
Deduction for Vacant Land Wound Back
The government announced in May this year, as part of the 2018-19 federal budget, that it will decrease the scope of allowable deductions for expenses stemming from holding vacant land that is intended to be used for residential or commercial purposes. The measure will apply from 1 July 2019. (See page 42 of the federal budget […]
No deductions for non compliance payments
The government recently released exposure draft legislation that removes the ability of taxpayers to deduct certain payments – including payment of wages and payments to contractors – if the entity making the payment fails to comply with its obligations to withhold and report information to the ATO. If the PAYG withholding regime applied to the […]
Forgotten a GST Credit?
Most small business owners stay on top of their GST refunds, mainly because of cash flow concerns, but it’s not all that uncommon to now and then lose track of a credit. What quite a few small business owners may not know is that you have four years to claim any GST credit you’re entitled […]
Losing a tax loss
Business owners are naturally keen to be able to absorb a business loss as a tax deduction, but it also pays to not stray too far from the generally accepted rules regarding tax losses — there are circumstances where the ATO is legitimately able to deny such claims. The ATO has the discretion to disallow […]
Basics of Shares and Tax
Investing in the stockmarket is a lot more common than it was years ago, with ordinary Australians having experience with shares and the stockmarket either directly or through managed funds or via their superannuation fund. Recent research conducted by the Australian Securities Exchange (ASX) found that around 60% of Australians hold share investments outside of […]
